What is transparency in business?
It’s the process of having active and effective communication channels across the business’s various stakeholders – from employees, suppliers, customers/ clients, investors to community.
Transparency is a means to an end, not an end in itself – It’s important for an organisation and management to be clear on why transparency is necessary; What are the business goals that it will help achieve? What insights are you trying to gain, and how will you use them to develop the business? Once you understand this, you need to be clear on how it will be attained. There are associated risks with increased transparency and these need to be identified and managed across the business.
Why is transparency in business so important?
Being transparent reflects a value and respect for people. Openly sharing information internally and externally with stakeholders on matters that are important to them fosters a culture of trust, communication, and social responsibility. Within our business it reflects how employees engage and collaborate with each other. Transparency makes peoples’ actions more accountable so it’s important to highlight the goal is learning not compliance.
1. It Creates Trust and Loyalty
Creating an open workplace that supports transparency and the free exchange of ideas enables trust. Teams that trust each other, perform better – they remain loyal to each other and their company. When team members have a clear understanding of the decisions and actions they own through a culture of communication, they feel empowered. Not only does it improve employee retention if you become a transparent business, but it will also attract top talent.
Similarly, customers and clients are more likely to remain loyal to organisations they trust. Consumers are pushing the demand for full traceability of ingredients and products. All of our raw materials are fully traceable from origin to export, and transparent production is an integral part of our supply chain. With co-manufacturing a large part of what we do, we’ve experienced the value of this in our process.
2. It Increases Adaptability across an Organisation
Organisations who share internally relevant information are flexible – this means they can pivot when needed, adapting faster to changes in the marketplace, in technology, or during product development.
Employees who understand the reasons for business decisions and are encouraged in two-way communication are more likely to support management. They understand the context of decisions and trust the decision-making process. This creates a culture that can deal more effectively with bottlenecks or challenges.
3. It Strengthens Innovation
Being open to your stakeholders – employees, clients/ customers, suppliers, investors, etc enables your organisation to gain new opinions, perspectives, and insights. Transparency leads to feedback and suggestions for improvements that you may otherwise not receive. These insights are beneficial as they support innovation and the development of business solutions.
By managing the associated risks with transparency, and being open to competition and constructive criticism, we’ve learnt an organisation can harness it to pave the way for sustainable and enhanced long-term business growth.