Part 1: Trustworthiness and Transparency
Every business wants to find ways to be more efficient, effective and fiscally successful. With the start of 2014, the focus for most businesses is likely to be on how to spend less, waste less, produce more and earn more. Ask any CFO or Controller and they all are sure to agree that their main goal for 2014 is a better, brighter bottom line. That is, arguably, the point of business.
However, it could also be argued that today’s workplace should focus instead on becoming more trustworthy, transparent, ethical, collaborative and mindful of its employee needs. Do those goals sound lofty and idealistic… and completely unrelated to achieving a better bottom line? Not in today’s world. Given the increased connectivity and clatter of the global marketplace, those goals are more than just high ideals. Those goals have become essential workplace practices for any business that wants to achieve that better bottom line. Consider how each of these goals contributes to a more efficient, effective and fiscally-successful company.
1. Increase Trustworthiness
Any company that wants to increase sales should focus on increasing the company’s perceived (and actual) trustworthiness. After all, people do business with people they know, like and trust. Conversely, lack of trust hurts sales. In Stephen M. R. Covey’s book, The Speed of Trust, he introduces the concept of trust taxes— the price companies pay for low trust. Covey confirms that there is a price paid for broken trust. While, in corporate America, trust is flaunted on marketing materials and in sales pitches to convince customers that one company is more honest than the next, in reality no quality is more over-claimed and under-practiced than trustworthiness. What does corporate trustworthiness look like in action, and how can a company increase its actual — and thus its perceived — trustworthiness?
Trustworthiness begins with companies that choose to stay on the right side of the law in all matters, big and small. It involves not making promises a company can’t or won’t keep. Trustworthy companies don’t take shortcuts, manipulate or withhold information, or rationalize unethical behavior to suit its needs. They don’t deliberately cut corners. A trustworthy company teaches and promotes honest business practices to its employees every step of the way.
The truth is that the trustworthiness of a company begins with the integrity and character of its people, and especially its leadership. Each employee’s character – from entry level to senior staff — is always on display for the world to see. It shows in promises made and kept. It shows in playing by the rules even when it’s more profitable to break the rules and even when no one else will ever know the rules were broken. It shows when an employee gives a client an answer that the client may not like because it is the truth and it may mean that the client takes his business elsewhere.
The biggest problem is that, in business, people allow themselves “little deceptions” which slowly erode the company’s trustworthiness. Trust begins with being honest and completely truthful in even the little things. Facts are not omitted for the sake of convenience. Sales and customer service people tell it like it is – politely but honestly. Leadership does not encourage staff to spout half-truths and shades of gray aren’t tolerated or encouraged. Real deadlines are communicated. Truthful delivery times are touted. Quotes are consistent, reliable and fair. It is through actions, big and small, that trust is built with customers, vendors, employees and regulating agencies. The cumulative effect – more than anything – builds trust, which then increases sales.
2. Improve Transparency
Transparency and trustworthiness go hand in hand. Transparency is the currency of a trust relationship. It is not enough for a company to be honest and trustworthy. In order for that trustworthiness to positively impact a company’s success, it must be perceived. In order for clients and the marketplace to perceive a company’s trustworthiness, the company’s business practices must be transparent, clear and visible for all to see.
What does business transparency look like in practice? Transparency is seen in a company’s willingness to share both its successes and failures… achievements and mistakes. It is visible when the leadership of a privately-held company is willing to talk about the company’s financial health, sales and profits. (Publicly-traded companies are, of course, required to file quarterly and annual reports.) It is evident in a company’s willingness to provide clients with real-time online tracking of their funds, files or other work product. It is seen in the management’s willingness to discuss what they do and how they do it not only internally, but with customers, vendors and even competitors. Like trustworthiness, transparency is evident in matters big and small.
If information is power, then transparency may seem like throwing away power. Many business leaders hoard information as if it were gold. To them, transparency seems unwise… perhaps even foolish. But transparency is apparently working for a number of highly-successful companies.
For example, Molding Box, which Inc. 500 called the second-fastest growing company in Utah and 71st in the nation, doesn’t hide the fact that it hires workers with criminal backgrounds. They are open with customers and staff alike about the fact that they hire ex cons through a state Corrections program that teaches job skills and openness to discuss questionable pasts and pursuit of a better future. This transparency doesn’t seem to be hurting their bottom line.
GoBRANDgo!’s co-owner and head of sales, Brandon Dempsey, posts the company’s financials on the wall in his office for employees, partners and clients to see. The marketing firm, based in St. Louis, shares its revenue, profit, cash flow, cash account balances, credit card balances, payroll, lines of credit, expenses, and the previous year’s history. Everyone knows exactly where the company stands.
If that degree of transparency seems extreme, consider that Rand Fishkin of SEOmoz, a marketing analytics software company, posted his own Performance Review for all to see. It showed that Rand challenges himself quite a bit. But his transparency doesn’t end there. SEOmoz has even made its funding decks open to the public, which basically no one does. The company shares all of its failures and successes. Fishkin indicates on his blog, www.moz.com/blog, that their core values dictate they be extremely transparent about their progress to date, their financing process, the road ahead and even their new investor. Theirs is a no-secrets approach to business.
These are but a few examples of companies that understand the value of being real with people. Holding cards close to the vest may make sense in Poker but it is becoming obsolete in business. In today’s marketplace, where information is becoming easier to obtain and secrets tend to be revealed anyway, it is good for a business to show that it has nothing to hide.
Over the new few weeks, we will look at the value of companies becoming more ethical, collaborative and mindful of its employees. Stay tuned.
Quote of the Week
“The keys to brand success are self-definition, transparency, authenticity and accountability.” Simon Mainwaring
© 2014, Keren Peters-Atkinson. All rights reserved.
