Recently, an article appeared in a HIT trade publication that described how, when a CEO was asked by analysts during a quarterly earnings call why the FDA didn’t approve his company’s surgical device, he gave a non-answer. Several other analysts posed the same question but the CEO continued to be evasive. Needless to say, this company now has more pressing issues to resolve, such as regaining the trust and confidence of its stakeholders and the media.
If there is a lesson to be learned here, it’s about transparency.
Transparency in business has been described as an overlooked value. Indeed it is. We now live in an age where, regardless of the industry you’re in, transparency has never been more important to success.
Most often, companies view transparency as a tool that should only be used when a mistake has been made and usually, when that mistake has escalated to crisis mode. But this perspective is short-sighted. To build brand loyalty, companies must first build trust. And only being transparent in times of mistakes or crises isn’t an effective way of building trust. In fact, people are far more likely to forgive errors or missteps if a company has established a reputation for being forthright with all interactions, not just the negative ones.
In addition to customers, employees place a high premium on transparency in the workplace, particularly with senior leaders. Says Robert Craven, CEO of MegaFood, “No one wants to work for a company if they don’t know what it stands for and what its long-term plans are.”
Former Twitter CEO Dick Costolo agrees that transparency in the workplace is key to success, but points out that, “It’s a particular challenge for companies going public to think about how they can maintain open lines of communication and share as much as possible. There’s a tendency among functioning organizations, a natural tendency, that we shouldn’t share that info.”
John Hall, CEO of Influence & Co., says that “transparency has always been a critical component of leadership. When you’re transparent, you invite trust by revealing that you have nothing to hide. You establish yourself as an honest, credible person in the eyes of others.” Hall also mentions that a transparent leader is not someone who indulges in the culture of oversharing, revealing every intimate detail of their day on social media. Instead, he says “transparency is strategic, targeted and purposeful.”
So, how can leaders and the companies they lead be more transparent? CEO Craven suggests the following:
- Be personally transparent – Share your personal thoughts, ideas, likes and dislikes on a social media platform that’s right for you. LinkedIn for example, if ideal for the B2B world such as healthcare IT. Remember that the concept of transparency must start at the top.
- Be internally transparent – Transparency starts from within. If your employees don’t believe the company or CEO is transparent, they’ll have a difficult time portraying transparency to the marketplace. Craven recommends activities such as town halls to update staff on company progress, risks and opportunities.
- Be transparent with your corporate objectives, then give updates – Let people know what you’re doing and why you’re doing it. For example, if you have to find a new supplier in order to take quality to another level, tell them that, and ask for their help.
- Be bold – If people learn to trust your company through transparency, they’ll be far more forgiving when you explain why something didn’t work or when you make a mistake. Also, seek out innovative ways to develop a deeper, trust-building dialogue with your customers.
We live in an age where success is measured by building loyalty and trust. The best way to achieve this is by being transparent.