Transparency Matters for Startups. Here’s Why
A look at how transparency can bolster your business beyond a simple marketing tactic.
Transparency is a tricky word with many conflicting associations. Business owners may think of it as nothing more than a buzzword, pushed as a label purely for PR purposes. There’s a school of thought that looks at transparency and sees restrictive measures and an unprofitable business strategy. For these people, transparency is a marketing tool to brand yourself with honesty in mind, but barring that, it doesn’t do anything helpful for your business.
There are others who disagree. There has been a growing movement in the startup world over the last few years that takes transparency seriously and sees real value in applying it to many different component parts of a strong business.
So let’s take a closer look at how these people define it and three core ways to empower your business with a strong commitment to transparency.
Feedback when you need it most
Many startups see real value in making transparency a part of their business model. Being transparent with your audience is a core tenant of an incredibly popular and successful business development methodology. The lean startup, the strategy behind some of the most successful innovations of the day (Facebook, Spanx, Uber, and AirBNB), encourages companies to invite their audience to be a part of the development process.
Rather than hiding your efforts behind a screen and waiting for feedback only after you’ve released your final product, the lean startup is all about an open-ended development process working within an iterative cycle of building, gauging response, learning, and going back to the drawing board. This degree of transparency leads to better products tailor fit to what your audience is really looking for.
A good leader inspires trust and the best way to make that possible is to have a policy of aggressive transparency. The workplace runs more smoothly when uncertainty is eliminated and everyone is working on the same page. Transparency culls rumors before misinformation can confuse and distract. If your team has clear sense of your expectations and what they mean then they can act more quickly and more efficiently.
Companies like Yesware have even found that sharing the concerns of executives to the rest of the team managed to cut down infrastructure costs dramatically (from 60% of their top line to as little as 17%).
Building a culture
Being transparent in your internal comms and your leadership as a whole will help to build a stronger company culture as a whole. When team members have a context for what they are doing and a sense of how meaningful their part is in the greater whole then they are more invested and ultimately more productive. Communicating a strong sense of what that whole is, what it will do for your customers, and what part each individual has to play is an incredibly powerful means of uniting your team and getting the kinds of results you want.
How much is too much?
It’s important to keep in mind that there are limits to transparency and what you should and should not be sharing. For example, sharing compensation levels is usually more harmful than it is helpful. A good rule of thumb is to look at whatever you are being transparent about and identify ways that it has a positive impact on your business. If there aren’t any, then it’s probably not worth sharing. At the end of the day, this is about results and making your company run better, not worse.
Everyone doesn’t need to know everything at all times, but they should have access to information if they want it. That’s the key factor. Overloading your team with information is far less useful and more distracting than providing them with what they need to know when they need to know it.
How can you be more transparent?
It’s good to know that transparency is a powerful tool in your toolbox, but it’s better to have specific strategies to put those tools to work. Here are some of the best actionable directives for a more transparent and more successful business.
- Hold Q&As where team members can get the information that they are looking for.
- If you’re having an issue staying afloat, share the data that you have and what the strategy is going forward, not your guesses at the future.
- Decentralize the strain and the responsibility. A benefit of transparency is that, if done in the right way, you can delegate and create new leaders to share the load.
- Source feedback from your audience as a part of development. There is definite value in checking out the lean startup strategy, especially for tech-based products and services.
If customers see an issue then it’s important to take that feedback seriously. People are better than ever at detecting BS, so an honest show of your intentions and your plan to make their lives better is usually the best way to go. A transparent business model that leverages your audience to build the best kind of product is a proven strategy for great results. Your team works, delegates, and interacts better when you emphasis transparency from the top down. Transparency in your business dealings isn’t just about putting on a good face. If managed the right way, it can lead to real, quantifiable success.