People are increasingly demanding transparency, not only from other people in their lives, but also organizations and institutions they follow, the companies they buy from, and the companies they work for. Transparency, the practice of consistent, open, and honest disclosure, isn’t just a matter of placating the demands of the masses, however. In fact, operating with greater transparency in your organization can benefit it in many ways.
How is this the case?
Types of Transparency
First, understand that there are many different types of transparency that your organization can adopt and foster.
- Decision and strategic transparency. At the highest level, you can practice decision and strategic transparency. This means making sure that everyone in your organization knows exactly what the directives of your business are and why you’re pursuing them. When all your workers are aligned with this vision, they’ll become a stronger force.
- Operational transparency. You can also practice operational transparency, making many of the internal mechanisms of your business open and available to the public. For example, you can report on emission rates in an annual sustainability report to show your efforts in reducing your environmental impact.
- Relationship/mutual transparency. Organizations should also consider practicing relationship transparency, mutually exchanging details with partners and vendors. For example, supply chain transparency allows every organization in this network to readily exchange information in pursuit of mutual benefits.
- Interpersonal transparency. At the lower levels of your organization, you may also foster an environment of interpersonal transparency. For example, you can encourage employees to openly discuss their thoughts and feelings with their immediate supervisors, and maintain a general open door policy.
- Other forms of transparency. There are many other types of external and internal transparency that can come into play within your organization.
The Benefits of Transparency in an Organization
So what are the benefits of pursuing these types of transparency?
- Trust. Perhaps the most obvious benefit of transparency is increased trust with whoever benefits from that increased transparency. If you’re open and honest about how you make and distribute products, your customers are going to trust you more. If you practice open transparency within your supply chain, your suppliers and vendors are going to trust you more. If you maintain an open, honest environment within your organization, your employees are going to trust their superiors and each other more.
- Alignment. High-level transparency is important for organizational alignment. Only if all your employees understand your strategic directives, in full, will they be able to effectively coordinate and collaborate with each other. You don’t necessarily have to disclose every fact or idea you considered, but you need your team to be all on the same page.
- Accountability. Transparency and accountability go hand in hand. When you’re open and honest about what’s going on, people will have the opportunity to call out the problems that they recognize. If your team members understand that this environment is a transparent one, they may be naturally incentivized to engage in more ethical, palatable behaviors. And if anyone violates expectations in an egregious way, they’ll be more likely to pay the consequences for it.
- Open discourse. Fostering an environment of transparency leads to more open discourse. People are going to feel more confident and comfortable voicing their opinions, even if they dissent from the majority. This leads to a much more creative, imaginative environment where people feel like their voices are heard.
- Growth opportunities. Higher levels of transparency allow for growth opportunities as well. When everyone is openly witnessing the operations of your business, they can identify and recommend changes to areas of inefficiency.
- Productivity. Transparency increases productivity in several ways, such as by increasing collaborative potential, building a sense of teamwork, and generally increasing morale. When people fully understand their working environment, and when they’re happy with that working environment, they’re much more likely to do their best work.
- Cost savings. Operating transparently reduces costs in a few different ways as well. With greater efficiency, you’ll be able to spot and eliminate waste and redundancy more easily. On top of that, you’ll be in a position to prevent and mitigate problems, rather than reacting to them once they become more complex.
- PR improvement. If you want your organization to enjoy a better reputation, consider making an effort to be more transparent and proactive. If you take accountability for problems early on, and if you’re willing to identify areas of your business that need improvement, you’ll have a much better reputation in the public eye. Businesses that operate in secrecy lose both public trust and respect.
Making your organization more transparent isn’t going to guarantee its success. However, organizations benefit from operating more transparently, both inside and out, and as public demands for transparency increase, it’s only going to become more important.
