Transparency is an increasingly popular term but what is it, why is it important and what is its relations to social media? Camilla Oelman explains all.
What is transparency and why is it important?
Cohen and Wolfe defined transparency in business terms as ‘the willingness of a company or organization to share information openly and ethically with its stakeholders’. This means showing a product or service for exactly what it is – from supply to production, materials, labor or realization. Transparency is an increasingly popular term and an augmenting pressure from the side of the consumer. As these consumers claim that they want the choice to purchase sustainably, they require all the details in order to make this informed moral decision. Seven out of ten consumers say that they would switch brand loyalty to a company that is trying to ‘do good’. Now it seems that the old fashioned method of solely advertising the best parts of a company is no longer enough.
Advantages to this new pressure of transparency
Firstly, it forces companies to up their game and perfect what is already embedded in the business. If they know that they cannot hide any parts of the business process, efforts will be made to improve and become as sustainable as is practical. Secondly, if a company refuses be more transparent, consumers will automatically wonder what they are hiding - even if there is nothing remotely shocking being held back suspicions will arise thus giving transparent competitors an advantage. The third advantage arrives in the over popularized yet heavily focused upon term Unique Selling Proposition (USP). If a company is transparent and reveals sustainable actions which were not being marketed previously, they automatically have this unique quality and highlighting this will only drive their competitive advantage forward. Furthermore, this could open a new door to a different type of consumer who may not have otherwise been considered.
Is transparency enough?
With all of these advantages, it seems difficult to argue against transparency in business. It must however be questioned whether focusing on ‘transparency’ alone is enough. The answer to this is of course no. It is not sufficient to simply show that the company is not doing anything wrong; rather, they need to show that they have positive additions to their company, for example through sustainability. They must then go a step further and measure the effectiveness of these actions. Providing quantifiable, measurable results from these initiatives (as can be obtained through third party verification as for example is provided by Planet First) provides proof and pushes past transparency and through into promoting the most positive actions out of the background of other operations, really making them stand out whilst constructively contributing to society. Transparency and social media
"Whether or not these sustainable initiatives are pushed to consumers or left to be discovered, organizations will no longer be able to hide."
Whether or not these sustainable initiatives are pushed to consumers or left to be discovered, organizations will no longer be able to hide. Transparency provides a source of accountability largely taken charge of by the millions of dedicated users of the internet. Social media platforms are the friend and enemy of most businesses, whether or not they themselves have a self-managed online presence. Control of information has switched from the business to the consumer and wider public. Although an organization can choose to publically talk about any aspect of the business, any reputation provided by the company can be easily overruled or completely validated by the users of social media.
Social media has created a hugely beneficial free and self-sustaining tool for transparent businesses, getting feedback and spreading positive reviews to millions of people in many different countries in a matter of minutes. They are a whole team providing free promotion and advertising. Having these third party reviews can lead to long-term trust of the public and loyalty from consumers.
Conversely, social media can be the demise of a transparent business if they slip-up. It has been argued that previously transparency has only exited in terms of companies making a mistake, publically apologizing and expressing actions to rectify the situation, but now with modern expectations this behavior is unacceptable and the public are unforgiving. With the power of social media platforms, small mistakes which in the past could easily have been hushed up can now quickly snowball into a witch hunt with not only companies being held accountable but individuals with little chance of defence and no chance of denial.
With people relentlessly surfing the web, with the click of a button the public can get their opinions heard like never before and companies have no hope of trying to control them. So is social media the friend or foe of a transparent company and are they reason enough to stay hidden? This largely depends on how far a company is willing to go to ensure that transparency reveals that they only have positive and honest actions- they cannot hide wrong doings. If they are transparent, listen to their on-line critics and manage the business in a way that the social media supports them; the rewards could far outweigh the benefit of staying hidden.