Transparency can improve the performance of small and medium-sized enterprises (SMEs)
Transparency, whether of a political, financial or economic nature, is essential for everyone today. We live in a world that tends to become transparent.
A new global space-time has been created, punctuated by the acceleration and densification of information and by the unlimited means offered by digital tools. Transparency is also imposed on the company as a necessity, if not an obvious one, with search engines as an indelible collective memory and social networks as vectors of deforming images in real time.
Why transparency is fundamental in business?
Transparency and ethics are intimately linked. They are the two pillars of good governance. Both are inextricably linked since there is no ethics without transparency and vice versa. They can be seen as a result or as a process. Viewed as a result, good governance results from the application of the Company’s ethics and transparency principles applied at the corporate level. Seen as a process, adherence to the principles of good governance and transparency often amplify a company’s good economic performance.
Financial scandals, sanitary, environmental recurring, do not stop penalizing the image and activity of many large companies. Yet transparency is essential to their ability to build trust. Ultimately, it encourages creativity, engages employees and strengthens customer loyalty.
As clients, our behavior is most often guided by emotional as well as functional needs. In the everyday business it’s the same thing. There is a combination of functional and emotional needs. Unfortunately, all too often, the company strives to meet the material needs to the detriment of the emotional. An open and transparent corporate culture also nourishes the emotional needs of all those involved in the eco-system (employees, suppliers, etc.). It establishes a framework for trust to emerge and flourish.
But transparency also favors the functional side of the equation. By exposing its objectives and constraints more clearly to its employees, by involving its suppliers more in its research and development, by being more open to its practices with its customers, the company sets up a positive dynamic around its project in the long term. . Open and transparent communication stimulates both engagement and focuses on priorities, both internally and externally.
Transparency as a project for small business
At the age when the “start-up” innovation model imposes its codes, many small businesses sometimes lose sight of the fact that one of the simplest tools of differentiation at their disposal is transparency. While their big competitors are often paralyzed by highly hierarchical and sometimes secret corporate cultures, small businesses can use openness as a competitive advantage. An atmosphere of trust contributes greatly to creating long-term attachment and improving the effectiveness of employees seeking meaning. But small businesses that embrace this culture could also see their growth and profits improve. According to a US study by the organization “The Great Game of Business”, companies that use an open and transparent management style experience an annual growth of 11% higher than that of unopened companies.
Transparency may seem difficult to implement at first, but for a small business, it’s an investment to consider. Maintaining transparency and openness sometimes comes against the reality of everyday life. To avoid this, it is essential to do more than an ideal to aspire to. While transparency and good governance are often experienced in large companies, forced by external pressure, why not make it the base of a more virtuous model for small business.