By Sherry Lutz Herrington
When a topic surfaces repeatedly in my life, I always feel like it’s trying to tell me something. It’s time to examine it further and share the concept with all of you.
Lately, it’s been about transparency in companies.
What is transparency and why is it important? Let’s unpack that a bit.
It seems obvious at first, but maybe it’s not as straightforward as we might expect. When we think of transparency, we think of something we can see through. However, when we aren’t talking about a physical object, we figuratively mean that the subject is open, lacking secrets or hidden information.
How does this apply to businesses?
Companies that are transparent share information with their employees and their customers.
Of course, you say, companies share information all the time. But what are they sharing? Is it information that is important and meaningful? Or is it just marketing hype that projects an image to their employees and the world?
Let’s say company A sells toilet paper. They tell their employees that they want to be the best toilet paper company in the world. They are going to accomplish that by creating an outstanding product and selling it to retailers. Then they tell the retailers that they are making superior quality toilet paper and have it available for purchase.
Sounds transparent, right? Or is it?
Let’s look at company B and see how they operate. They also sell toilet paper to retailers. But before they go out and market the product they sit down with their employees and explain the company’s goals of being the best toilet paper company in the world. They plan to accomplish that by doing product research until the toilet paper has been tested and approved by market research groups. Then they ask the employees for input as to how best to produce and sell the toilet paper. Management explains that they have a set budget and need the employees’ help to produce the product profitably.
Once they have explained everything and laid it all out to their employees, they establish their marketing campaign. They tout the extensive market research they’ve done to help them develop the best product on the market. And they show the world that their product is superior because it’s been tested by their fellow shoppers.
Which company has true transparency?
Company B. They have gone out of their way to get their employees to “buy in” to what they are doing and how they are doing it.
Because the employees are actively involved in the development of not only the product, but the company policies, procedures, and standards, they have a sense of ownership. So they tend to care more about the results.
At Company A, the employees have not been involved in the process. They don’t know whether the company is making money until they find out at the end of the year if they are getting raises. They just go to work, and they punch in and out. Then they go home without a second thought about how successful the business might be.
Surprisingly, perhaps today’s employees want to know what’s going on.
In companies that still operate with heavy management directives and little transparency, employees tend to be less invested in the organization’s success. However, in businesses that value their employees’ input and share openly with them how the business is doing financially and otherwise, the loyalty, commitment, and enthusiasm tend to be higher. In addition, employee turnover goes down as people have a sense of ownership and belonging. They want to contribute to the success of the organization.
People inherently want to belong. They want to fit in and be part of something bigger than themselves.
Now more than ever, finding that place to contribute is about where people work. Do they feel valued and included in where the company is going? If so, then they are going to be more likely to stay and care about the success of the business.
This is especially true of younger people. The management style we used to see of secrecy and directives coming from the top without any employee input are a thing of the past.
The same holds true for customers.
They want to know and understand the kind of company they are buying from. They want to know the mission of the company, how it operates, and what its core values are. More and more, people care about whether a company is treading lightly on the earth, if it hires a variety of individuals, if it values its customers, and gives back to its community.
Being transparent with your customers as well as your employees is good business practice.
Transparency does not mean you have to share every trade secret or even how much you’ve earned during the year. It means allowing your true colors to shine and being proud of what you are doing and how you are doing it. Let the world and your employees know that you are living your truth and doing the best you can to be a good employer and a responsible organization.
Every company is unique and how transparent they choose to be is up to them.
It is part of their company culture that they need to cultivate and nurture. It may not happen overnight. But with forethought and planning any company can move toward a more transparent and open attitude with both their employees and their customers. The payoff will be worth the risk.
Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She is also the author of Strong Women Thriving (https://strongwomenthriving.com/), a blog which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. Sherry is currently writing a new book that both shares her personal story and addresses financial abuse. She can be reached at email@example.com.