“A basic tenet of a healthy democracy is open dialogue and transparency.” Is your business a democracy? Politician and author Peter Fenn would argue that it should be. When constructive ideas flow freely and everyone invested in the success of the business has a hand in its big-picture mission, vision and goals, mountains are moved. Transparency in business has not always been prioritized – much less celebrated – but it is an essential element of a healthy, thriving organization.
Transparency begins at the top. When owners and managers value transparency and open communication, the results trickle through the ranks. In fact, experience shows organizations with transparent leadership function better (more here: https://blog.taskque.com/how-transparency-can-help-your-team-to-perform-better-at-workplace/).
As a leader in your business, your transparency matters more than you might realize. Here are four groups that rely on your open, honest communication and appropriate and timely disclosure of information.
Opportunity cost – the transactional phenomenon of giving up buying ability elsewhere upon investing in a business’ offerings – is real, and its importance to the customer relationship cannot be overstated. When your customers buy from you, they limit their spending power somewhere else. When viewed from this perspective, it becomes easy to see why transparency matters, as it shows respect for the customer’s investments of time, money and trust. It also increases the likelihood customers will stay with your business for the long term – the fewer gray areas your customers are forced to navigate, the less likely they will be to find fault with the business or the work performed. Of course, it goes without saying: transparency with customers is only effective if it is genuine and employed with both the customer’s and your business’ best interest in mind.
For countless centuries, individuals and groups have put people in leadership positions on pedestals. While competent, supportive leadership is essential for the successful advancement of societies and businesses, the pursuit of it can lay the groundwork for unrealistic expectations. Too often, organizational leaders are stuck in an impossible dichotomy: they are expected to allow others to fail without being permitted to fail or show weakness themselves. Honesty and transparency show teams that it is possible for a leader to exemplify strength and intelligence while still falling short of perfection. This, in turn, gives team members a safe place to learn, grow, and – yes – fail without fear of reprisal. Consistently transparent communication from leadership also gives team members the opportunity to be equal stakeholders in the business, which leads to greater buy-in and commitment.
Investors and Lenders
In a perfect world, you would operate your business independently of outside sources of support. While financial autonomy for your business is an admirable goal and an ideal worth pursuing, there will be times when it becomes necessary to secure stakeholder investments and bank-issued loans and lines of credit to grow your business. Like you, banks and independent lenders are in the business to make money. And, like you, they want to know without a doubt that they will receive a return on investment. Honesty with investors shows you respect and appreciate their decision to invest in your business. Honesty with lenders ensures you do not borrow beyond your business’ ability to repay, and that you are committed to using the money for its intended purpose, reducing both the lender’s and your business’ liability.
Consultants and Coaches
When you enlist the guidance and support of individuals and groups outside your business, you trust them to be candid with you about what you can do to further strengthen and grow the organization. In turn, they depend on you to be transparent about financial, operational, management and personnel factors that could potentially stand in the way of progress. Just as a doctor can only make an accurate diagnosis when presented with a full list of symptoms, a consultant or coach working with you and your team can only make accurate recommendations for improvement when presented with a complete picture of how your business currently operates.
Are you as transparent as you need to be? Take this quiz to find out.
- Are you up front with your customers about costs, scope of work and terms and conditions of the sale?
- Do you regularly provide financial and operational reports and updates to your team members?
- Do you allow yourself to make mistakes and own up to those mistakes with your teams?
- Are you forthright with investors and lenders about the financial state of your business?
- Do you disclose all necessary information when working with outside sources of support?
If you answered no to most of these questions, you may be holding yourself, your team and your business back. Visit www.landopt.com today to find out how LandOpt can help you open up and move ahead.