According to Forbes: “Business transparency is the process of being open, honest, and straightforward about various company operations. Transparent companies share information relating to performance, small business revenue, internal processes, sourcing, pricing, and business values.” With social media, it’s virtually impossible not to be transparent. Just about everything gets disclosed on social media sites…by your customers, your employees, and everyone else. As a result, it makes sense to think about how transparency can be best employed in your business practices. (The following is an update of an earlier blog post of mine on the subject.)
Ways to implement transparency in your business:
Management transparency means managers let employees know what they are thinking and doing. Even more, it means that employees are brought into the decision-making process.
Benefit: Increased worker engagement. Instead of “quiet quitting,” employees have more trust in their employers and feel more engaged.
When I started in business, one of the unspoken rules was never to share information about what you earned or what your employees were paid. Now there’s a 180 on this. Many companies have adopted open salaries and pay transparency among staffers. The NLRB says employees have a right to communicate with other employees at their workplace about wages. And an SEC rule requires publicly-traded companies to disclose the ratio of their CEOs’ pay to median employee compensation.
Benefit: Increased productivity. According to one research reported in the Harvard Business Review, pay transparency can lead to increased productivity, depending on the circumstances.
Note: California, Connecticut, Maryland, Nevada, New York (effective September 2023), Rhode Island, and Washington have pay range transparency laws that require employers to include pay range for job postings. Find more on this from ADP.
Transparent pricing is a practice that tells the consumer what a product costs to make (e.g., the cost of each component, labor). The practice is a way to convince consumers that the items are worth the price being charged. A local deli near me posted a sign with 2 columns listing the cost of eggs, flour, etc. in 2019 and in 2023, and a postscript saying don’t blame us for price increases. The federal No Surprises Act, which became effective on January 1, 2022, requires disclosures so there are no surprises to patients from unexpected bills due to out-of-network providers or facilities.
Benefit: Consumer loyalty. It’s been suggested that transparency in pricing, as well as other activities with customers (e.g., when orders ship) can build trust and increase customer loyalty.
John Gerzema, CEO of the Harris Poll, said: "Transparency, honesty, kindness, good stewardship, even humor, work in businesses at all times."
Given the new laws and regulations, as well as social media, transparency isn’t a choice, it’s a requirement. What can your business do to be more transparent?