Note: This is the first blog post in a three-part series where Eric Morgenstern, CEO of Morningstar Communications, examines three macro trends transforming society: transparency, privacy and connectivity. In this post, Eric discusses the increasing demand for transparency.
Before the Google era, if I was interested in looking up information about a company, I ordered a hard copy of a Dun & Bradstreet or Hoovers report. These lengthy business information reports listed sales volume, growth, industry information, and a wealth of other business statistics.
Today, gathering information about a company doesn’t require sifting through lengthy paper reports. Instead, information is only a few mouse clicks and keystrokes away. We can Google the company, check out their website, look up recent news involving the company, and check social media sites including LinkedIn, Twitter and Facebook for quick updates.
Consumers today expect information that is up-to-date, easily accessible, honest and authentic. Anything less makes us think either the company is lagging behind the times, or worse, hiding something.
Beyond the walls
Just as we can look through a transparent piece of glass, consumers want to feel as if they can look beyond the walls of the organization and understand its inner workings. Consumers expect companies to be upfront about their values, practices, products & services they offer consumers, company news, and even mistakes if they have an effect on consumers. Obviously we don’t expect the company to share trade secrets. However, we do expect open communication so we can both receive information from the company and provide feedback.
While companies may express fear about pulling back the curtain, customers will reward transparency. Being up front and honest with customers will foster trust, respect and loyalty.
Honesty is the best policy
Being transparent isn’t just sharing the good – it is about being honest. Companies must be honest when they make a mistake. BusinessWeek recently examined a new program the University of Michigan Health System started to increase transparency. If doctors made a medical error, the new program required that they admit the error to the patient and their family, offer an apology and compensation, and explain how the error will be avoided in the future. A study of the program found that when doctors were transparent and apologetic about errors, their chance of getting sued for malpractice was much less. People understood that they were human, and they appreciated the honesty.
A transparent world is a better world
Transparency is better for both the consumer and the company. Consumers benefit from having a wealth of information at their disposal so they can pick and choose which company meets their needs and matches their values.
Companies will make better decisions, because they know they will get caught if they don’t! Companies that are open with their customers and respond to their feedback will also be able to adapt better to their customers’ needs. As Josh Bersin of Bersin & Associates states, “Only when people feel free to disclose customer feedback, talk about problems in an open way, deal with issues quickly, and share best-practices, can an organization truly respond and innovate with world-class speed.”
The Public Affairs Council offers some great tips for organizations ready to increase their transparency. The council says that “openness creates opportunities for dialog with customers, shareholders, employees, local communities and government officials. If you make the effort to engage your critics – and those who may become your critics- you can correct problems before they get out of hand. You also will have developed a long term ‘feedback loop’…”
Business people should invite customers to peek around in their house, as if to say, “Come in, take a look—I have nothing to hide!” The mantra for good public relations can no longer just be “get caught doing good.” In this transparent world, you can get caught doing nearly anything. Make sure that being good is completely ingrained in your company mentality. Then you can easily open up and foster trust with those who matter the most to your business.
We hope that this three part blog series will provide you with insight into how to best approach your marketing and communication programs in 2011.Tagged Authenticity, Corporate Culture, Eric Morgenstern, honesty, transparency