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Why Transparency Is Instrumental for Small Business Success

by BBB Staff | Nov 20, 2019 5:30:08 PM

Transparency is a word that is often used today. From politicians to news agencies to corporate spokesmen, it seems that everyone is either calling for transparency or promising it. The reasons for this are very simple. With worldwide web access at close to 60% and nearly 90% of North Americans now using the Internet daily, people have become accustomed to finding the information they want almost instantly.

Beyond this, as we have
become more of a global society, facing global issues like climate change,
people are taking a greater interest in how things are actually done. They want
to know not only that they are getting their dollars’ worth but that they are
doing business with socially responsible people. For the small business owner,
this trend presents both some unique opportunities and possible pitfalls that
should be looked out for.

The road to becoming a transparent company that consumers trust may seem a little daunting to business owners used to the old-fashioned “need to know” mentality, but it is well worth traveling. To help ease your way, here are a few points to keep in mind as you build your company’s transparency policies and stronger relationships with your clients.

Defining Transparency in Business Today

It is difficult to hit a target that you can’t see, so let’s begin by defining transparency as clearly as possible. A popular online business dictionary defines transparency as a “lack of hidden agendas or conditions, accompanied by the availability of full information required for collaboration, cooperation, and collective decision making.” This is well and good if you are looking at what could be termed strategic transparency: the release of honest information when it is necessary.

For today’s consumers,
this falls far short of what is expected. A better definition would be “open
and honest communications in a timely manner, always without omissions,
misrepresentations, or hidden agendas.” In other words, what you see today is
what you get today, with none of those “I didn’t lie; I just didn’t tell the
whole truth” games kids play.

Now, let’s look at how to
convey this idea and build on it.

Personal Transparency

This an area where the
small business owner truly has an edge on the big corporations. It would be
difficult if not impossible for the CEO of an international conglomerate to
create a personal connection with his client base.

For you as a small
business owner, it is possible to make your clients feel a part of your family.
Sharing your personal triumphs and trials will not only help build trust but
will greatly improve that all-important feeling of relationship that builds
customer loyalty. It also offers the opportunity to share your involvement in
the community without sounding like you’re tooting your own horn.

Operational Transparency

In what has become a classic study of transparency, Harvard Business School researchers found that when customers and cooks in a restaurant could see each other, customer satisfaction increased by 17.3%, and service was 13.2% faster. True, it is not practical for all business types to have their customers looking over their shoulders. Still, being open and honest about your operational procedures will greatly improve client trust and inclusiveness. If your accounting firm uses bookkeepers, introduce clients to the people who will actually be handling their receipts and entries.

Internal Transparency

Just as important as your
public transparency, if not more important, is the internal transparency of
your company. Your published pay scale showing your equity of treatment and the
reasoning behind your policies and procedures are areas that should be common
knowledge within your business. This form of transparency can help you avoid
personnel issues, foster an atmosphere of trust, and help build a feeling of
ownership among your staff.

More importantly, when your entire staff feels a part of a common culture and understands how their role coincides and meshes with the overall goals of the company, they feel empowered and have a sense of belonging. Just as a family will pull together to help their own, they will be more likely to support weaker members or departments and more willing to contribute to the overall health of the enterprise as a whole.

A common expression that
has been fashionable for some time is “Keep it real.” That is the heart and
soul of transparency as it should be practiced today. Don’t be afraid to share
the bad with the good. Owning your mistakes is a great way to build trust and
maybe get some free advice. Most importantly, be honest and timely. Old news is
no news, and today’s sophisticated customers and employees can smell BS from miles

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