Transparency and openness challenges in 2015’s organizations

Written by Diana Zărnescu on February 12, 2015. Posted in Articles, Organisational performance, Trending

Partly willing, partly strained, organizations today have made drastic changes within their strategies and general management processes. Companies face the highest degree of public exposure ever known in history. Technically, every little bit of information, whether disclosed or not, can, and it will, eventually, find its way to a public. The sole solution for a company is to purposely expose itself or, simply put, to lay the cards on the table.

However, being completely exposed in front of the general public is now regarded as one of the best management practices, with studies revealing that companies employing this strategy outperform their more secretive competitors by as much as 30%.

How much do employees get to say in the matter?

If transparency within governments is completely understandable, why has it become specific to private companies likewise? In this case, the new generation of workers were drivers of the disclosure process.

If, during the early 2000s and earlier on, the employee was the one who had to adapt and comply with an organization’s imposed conditions, nowadays the situation may have turned as much as 180 degrees around. The bottom line is that, today, when an employee feels he no longer fits with the company he works for, there is no force capable of retaining that person from leaving. Therefore, an employee will change jobs as many times as it is necessary until he finds a working environment which he can relate with.

Another characteristic specific only to the younger generation within the workforce is that every single individual is a “knowledge worker,” meaning that their education is not restricted to one field. They are complex thinkers and problem solvers. Above all, they want to be included in the managerial vision and want to clearly see the impact their work has on the organization. Because of these specific employee traits, any company that willfully isolates personnel from its managerial processes will eventually be rendered as dysfunctional. Those employees that will not quit, will be completely disengaged.

Can social media interactions drive business growth?

In addition to workers’ ambition to be employees of a company they relate to, there come the multiple demands of internationally-based customers, not only for purchases, but also for feedback. Social media is the tool that made this aspect happen. To ignore, as a company, customer engagement processes means taking the straight path towards a new crisis. Ignoring a situation does not mean it will fade away, but rather that it will increase to the point it is out of control. Customers will talk and spread rumors, worsening a possibly inexistent situation. This situation could be easily avoided through timely feedback by using social media platforms. No business decision should rely on the saying that “bad publicity is better than no publicity.”

The reaction from the managerial side was very quick-paced. If, in 2012, when an IBM CEO study revealed that only 16% out of 1,700 CEOs employed social media platforms to interact with their customers, the situation in 2014 showed a different, but not surprising reality. The 2014 Social Media Marketing Industry Report pointed out that as much as 92% of marketers place social media interaction as a highly-valuable driver for business growth.

Transparency and openness. To what extent?

Now, although this situation comes as no surprise, the question is to what extent does a company share information to customers and employees? When can the openness and transparency strategies become harmful to the business? The most frank way to answer is: never. Although this may sound frightening, it represents the best strategy. It can be viewed as choosing the lesser of two evils.

Namely, due to the high degree of employed technology within the business environments today but, at the same time, the numerous security issues this raises, there is no safe way to ensure that a piece of information will remain hidden from public eyes. If such an information takes the public by surprise, in a negative sense, then whatever trust they had with the company may be lost forever. Additionally, based on this, the following crisis management measures may show no results.

What’s in it for you?

By disclosing information willingly, whether good or bad, a relationship of trust is created among both employees and clients. Moreover, the organization appears, to them, more humane and, thus, easier to relate with. If an organization appears humane, whether it is in its customers’ eyes, or in the employees’, then a feeling of empathy is triggered and the process of forgiveness is more than likely to occur. This prevents employees from leaving in high numbers and clients from turning to the competition for the products or services they need.

A recent, revealing, example in this case is the Toyota recalling crisis. In 2010, the car maker recalled over 8.8 million vehicles due to safety defects which were, for a long period, unclear even for Toyota itself. However, even though Toyota’s initial response was to partly ignore the gravity of the situation, it soon reconsidered its strategy and started going public with both good (future safety initiatives) and bad information (safety issues identified at that time). What surprised most analysts was that, through this sincere response, even if it came later than it should have, Toyota still bounced back and regained the public’s trust.

Being publicly exposed may be a difficult, overwhelming process and it may seem to place the organization in a particularly vulnerable position. However, even if this is, indeed, the case, in today’s complex business environment being vulnerable does not necessarily mean being weak. In fact, truly transparent and open companies seem to come out stronger and more trustworthy out of unavoidable challenges and obstacles.

References:

• Institute for Public Relations (2011), Media impact on Toyota’s corporate brand reputation
• IBM (2012), IBM CEO Study: Command and control meets collaboration
• Social Media Examiner (2014), 2014 Social Media Marketing Industry Report

Image source:

•  Pixabay

Tags: Organizational Strategy, Strategic Management