3 Reasons Private Companies Need to be Transparent

Over the years, I worked with a lot of small, privately owned companies.  After awhile, you get a sense of the companies that seem to get it right and the ones that never do.  Of course, much goes into making a successful company, but I would argue that the culture is at the top of the list. 

Part of a healthy, corporate culture is that of transparency.  Unfortunately, too many of my former clients refused to share basic information like financial statements, employee turnover and client retention statistics.  I’ve even seen this secrecy within units and divisions of larger, public companies.   I don’t get it.  Providing full disclosure creates several positive outcomes:

1.     Your employees become more engaged. I’m not sure how you can feel part of something you know little about. Every employee wants to know how he or she is contributing to the success of the company or their team. If you don’t give them the data, they’re only guessing.  If you’re afraid they might all bail because you’ve had a bad quarter, you might challenge them to provide suggestions on how to improve the results. By doing that you now not only have a more engaged workforce you have an empowered one.

2.     You create a sense of team.  Good or bad, by fully disclosing information, your staff feels like they are part of the team, A “rising tide” does lift all boats and so just when you need everyone to pull together, they will. On the flip side, when you’ve exceeded your goals or won a new big client, you can celebrate as a team and everyone feels like they were part of the success.

3.    You build trust.  It may not be intentional, but when you aren’t forthcoming about information, people feel like you’re trying t hide something, which then fosters a culture of distrust.  This is when your top talent starts looking elsewhere. It’s not when you’ve stumbled or missed, especially if they feel they can contribute to the turnaround, it’s when they just don’t believe you anymore.

Full transparency doesn’t mean you share personal information, only the information that impacts the people doing the work. When asked if they share their financial statements, I’ve heard more than one business owner say, “ that’s none of their business.” Would you want to work for that owner?