18 Ways to Practice Business Transparency [and Build Trust]
Why is business transparency important and how does it enable trust in your organization? Learn how (and why) to practice transparency in your organization right now.
Business transparency is all about being fair and truthful in your dealings with others while possessing a quality that helps make the stuff of business easy to understand. It’s a philosophy that values the free flow of knowledge for the benefit of a company and the people who run it.
How can a business create transparency? By operating in a way that strengthens open communication and information-sharing among leaders and team members at all levels of the organization.
Experts say transparency:
- Creates trust among leaders and team members.
- Helps to improve morale in an organization.
- Lowers job-related stress for employees at all levels.
- Increases employee happiness and improves their performance.
In order to reap these benefits, a collective effort from everyone is required. A company culture of transparency doesn’t hurt, either.
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The Connection Between Accountability and Transparency in Business
Company leaders and teams can learn a lot about the connection between accountability and transparency from the Transparency and Accountability Initiative (TAI). According to TAI, transparency and accountability must work together to help people:
- Speak out on things that matter to them.
- Influence decision-makers and affect outcomes.
- Hold decision-making entities accountable.
TAI’s work as a non-governmental organization (NGO) focuses on expanding “the impact and scale of transparency, accountability and participation” in our society so “citizens are informed and empowered, governments (and companies) are open and responsive, and collective action advances the public good.”
The organization uses specific definitions of transparency and accountability that help illuminate the connection between them:
Transparency is the duty of company leaders, public officials and civil servants “to act visibly, predictably and understandably,” which encourages accountability and helps activate each person’s participation in society.
Transparency in communication happens when information is not only available publicly — it also needs to be accessible in a variety of ways to reach different audiences. It should be relevant, accurate, complete and obtainable in a timely manner so that others can comprehend and evaluate its worth.
Accountability is when decision-makers and other officials are answerable for their actions, and “there is redress when duties and commitments are not met.”
TAI describes accountability as “an arena of challenge, contestation and transformation.” It’s a four-stage process that starts with setting standards for transparent behavior and then moves on to determine if the behavior is meeting those expectations. If there are questions, people usually answer them, explain their thinking or defend their actions based on whether they’ve received critical or positive feedback. Finally, people are recognized, rewarded or sanctioned for behavior that achieves, exceeds or falls short of expectations for transparency.
Transparency is the goal, and accountability is the checkpoint for its success.
Number One Benefit of Transparency for Companies
Transparency builds trust – among your leaders and teams, your customers, partners, vendors, investors and other stakeholders of your organization. Survey after survey confirms it.
Companies enjoy increased advocacy, loyalty, engagement and commitment when their employees trust them.
80% of workers want to know more about how decisions are being made by their employers.
94% of all consumers are more likely to be loyal to a brand that commits to full transparency.
Have you been wondering how to increase levels of trust within your company? Your answer: Transparency.
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Top Three Focal Points of Earning Trust Through Transparency
Focus on authenticity.
Be clear about who you really are. Always stay true to yourself. Be accountable for your actions. When you make commitments to customers, employees, partners, investors and other stakeholders, they will hold you to a higher standard, especially in today’s leadership environment. You want them to focus on the real you and connect with that strength — every time they take to social media, review sites, discussion forums and industry stages to share their opinions of your organization.
Focus on thought leadership.
When you share your knowledge, insight and expertise to benefit others, you can contribute to transformative conversations, improve credibility of your brand, build influence among your peers and earn the trust of others. Thought leaders are masters at guiding their audiences with messaging that wins their admiration.
Focus on sharing knowledge.
You can create real value for others when you focus on educating them rather than selling to them. Your knowledge share enables people to make better choices when it comes to partnering, investing, buying from or championing your organization or your causes. This will help you create better opportunities for relationship-building and earning trust.
More Ways to Practice Transparency in Business
Believe transparency is valuable.
When leaders convince their employees that transparency is valued and expected across the entire organization, it demonstrates trust, respect and value for the whole workforce in return. Quite the motivator!
Revealing some company secrets could be a superpower.
Some experts say transparency is the gold standard in The New Age of Work™. That means companies have a lot to gain from sharing information, like how diverse their workforce is to where they source materials. It enables employees who want more happiness and consumers who make decisions based on it.
Let open communication be your mantra.
Open, communicative and inclusive leadership inspires other team members to share information, too. That information may include anything from:
- Innovative ideas,
- Finding gaps in the process,
- Asking questions like, “Why do we do it this way?”
- New processes to improve workflows,
- Or feedback during performance reviews.
When people trust that they can express their thoughts safely among leaders and other team members, your company will thrive.
Aim for smart transparency.
Be careful not to jeopardize your intellectual property, proprietary information, trade secrets and anything else that makes your company unique in the name of transparency. Consider implementing confidentiality agreements to discourage too much transparency.
Tell the whole story about your business experiences.
Be candid about the ups and downs of your work. Use those experiences to paint a complete picture of your company, warts and all. Every mistake, setback, failure, triumph, closed deal, happy customer, industry award, excellent review — and the story behind them — helps humanize your company and makes it easier for your customers to connect to your greatness.
Keep the good and the bad in perspective.
Whether the information is favorable or not, don’t hesitate to share it all. Keeping people up to date with the latest company news will crush the rumor mill and keep a culture of gossip at bay. Plus, your open evaluation of where the company stands at all times can win over employees and customers alike, especially when it comes to building trust.
Apply open-book leadership practices.
An open approach and a willingness to explore new ideas no matter where they come from can create a culture where team members think and plan for the company in the same way that leaders do. This enables true collaborative relationship-building, meaningful discussion and more honest communication.
Use your company’s core values as your guide.
Creating and following a set of core company values that include concepts like openness and integrity will guide all decision-making and keep transparency top of mind. Documenting core values and making them accessible to the entire workforce makes it Almost Easy™ for everyone to understand and follow them. There are even software systems that can help you do that.
Define the intent behind transparency policies.
Be aware that the unsavoriness of a toxic work environment like political maneuvering, backstabbing, offensive behavior and harassment can live under the auspices of “just being honest.” To alleviate this pain, introduce company values early and reinforce them constantly through internal communications and activities.
Make sure workers understand what constructive communication means, the exact limits and boundaries and what to expect from others in the company. Present core values within a value framework; this helps people see each value’s relationship to the next. This discourages restless minds from thinking they have free reign with the intent of transparency in your workplace.
Get everyone to care about company performance.
Being fair and truthful with your employees contributes to better experiences for your customer. Why? Because they will care how they’re able to create better customer relations and help the company succeed and grow.
Use surveys to measure openness.
Surveys are a great way to gauge the perception of business transparency, whether you’re surveying employees, customers or other stakeholders. Ask questions about company integrity and goodwill, types of communication, what transparency means to people, information disclosure and overall trust. From the compiled data, you can see trends that shed light on goal-setting options, areas of improvement, policy changes or whether you’re headed in the right direction.
Attract the right people for the right seats.
Recent survey research reveals that 87% of workers hope their next job will be transparent. People want to work for ethical companies, now more than ever. That elevates transparency as an aspect of company culture to a new level.
Inspire better performance.
Transparent companies are more open to decentralizing strategies for decision-making to include team members along with leaders. That means more and more employees are encouraged to act on new ideas without waiting for approval from leadership. It could be a game-changer for creating extraordinary value and elevated outcomes.
Recognize people’s hard work.
When successes are recognized, leaders and team members are always happier and more engaged with their hard work. They feel more valued and trusted.
Make pricing a way to highlight your company’s value.
Not only should you try to disclose the truth about your pricing, but you should also present it in an understandable way, so it’s easy to see how you’re creating value for the customer.
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Frequently Asked Questions About Business Transparency
“What does transparency in business mean?”
“Being transparent” means being open and honest about sharing information that relates to your organization’s mission, core values, processes, sourcing, pricing and performance. Transparent companies communicate clearly with all stakeholders about all their operations, no matter their status. They’re upfront about the challenges as well as successes and rewards.
Companies must extend these policies to all their employees and stakeholders for true business transparency (and to build a culture of trust).
“Why is transparency important in business?”
Business transparency is essential for establishing and nurturing trust and goodwill among various stakeholders, including leaders and teams, customers, partners and investors. It’s a way to build recognition for your company as one that values openness and honesty in communication, operations and creating value.
“What does transparency mean in the workplace?
Creating an open and inclusive environment at work encourages everyone to share information about direction, strategies, values and performance. In turn, leaders and team members will be happy to work for a company that helps to improve relationships and enable more trust among all stakeholders. When you create a culture of transparency, everyone knows what they are working toward, and they can find suitable opportunities, create value and deliver results.
“How is transparency practiced in business?”
Leaders practice transparency with four different groups of collaborators:
Transparency is practiced through open communication among workers at all levels. This can include honest, two-way discussions with team members and peers about company mission, strategy and objectives, potential challenges, individual and companywide performance and how to create value for stakeholders.
Companies make available to customers relevant and accurate information about their brands, products and services. They respond to customer questions, reviews and other feedback quickly and honestly. They acknowledge customer concerns and company mistakes, working fairly to alleviate pain points. This can result in an improved experience and more brand loyalty from customers, as well as increased employee satisfaction.
Transparency among organizations and their suppliers is enabled by clear communication about sources of materials or labor. This promotes productive working relationships and ensures ethical supply chains that are constantly audited by consumers, government entities and NGOs.
4. Investors and shareholders
Transparency is practiced when companies make informative, accurate and independently audited financial information accessible to investors, like pricing, performance levels and financial reports.
“How do you show transparency in a business?”
What does transparency look like in your organization? Here are a few clues.
1. Using best practices for recruiting and hiring
Provide detailed job descriptions that include an accurate salary range, often the most important part for candidates. During the interview process, have open discussions and clear answers to candidates’ questions. Afterward, seek out timely and honest communication from recruiters.
2. Prioritizing performance reviews for career development
Evaluating performance more frequently enables leaders and team members to include timely goals, current projects and peer evaluations in the discussion. This can provide a clearer and more accurate picture of an employee’s performance multiple times throughout the year. It can also support and improve their engagement.
There are even tools that can help facilitate two-way feedback between employees and leaders, like Ninety’s Feedback tool.
3. Opening up about company performance and future plans
Support your employees’ trust in the company by being open with them about organizational performance and plans for the future. Rather than anxious speculation, workers will take on a sense of pride and ownership and will likely feel more engaged.
Tracking this data and making it accessible to everyone in the organization through something like Ninety’s Scorecards can encourage company-wide accountability toward hitting future goals.
4. Implementing good processes for group projects
Transparency in group projects is seen when leaders provide documented processes for working together. These include effective collaboration methods, setting measurable goals and expectations, working towards achievable outcomes and providing accessible outlets for feedback for leaders, teams, service providers and other stakeholders.
Transparency and mutual trust go hand-in-hand. So to create a culture of genuine trust and goodwill in your organization, improving transparency will be the first and most important step you take. Find out how Ninety can help you immediately and easily improve company-wide communication and transparency with a comprehensive system of tools.
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