Why Businesses Need to Act Openly, Inside as Well as Out

by Mar 16, 2016Blog, Culture, Strategy1 comment

Why Businesses Need to Act Openly, Inside as Well as Out

“Word spread because word will spread. Stories and secrets fight, stories win, shed new secrets, which new stories fight, and on.”

― China Miéville, Embassytown

If ever a case needed to be made for greater openness in business, then Volkswagen have inadvertently made it. The lies and secrets around emissions from their vehicles, which continue to be uncovered week by week, month by month, have done the company huge damage. Human beings are wired to understand the world through stories, and in the public imagination this story of deception outweighs many facts about the quality of Volkswagen cars.

This is no isolated case. It represents a wider social shift that shows why businesses will benefit from being more open.

The Need for Openness

The rise of Generation X was meant to see the end of idealism. The fractured moral landscape of postmodernity and the lack of clear sides that came with the supposed ‘end of history’ were set to turn us all into cynics.

Instead, we live in a more idealistic age than ever before. Customers have realized that their food is full of chemicals and their financial institutions riddled with corruption, and instead of accepting this they demand something better. Research by Morgan Stanley shows that millennials are three times more likely to seek employment with a company they consider to have good ethics, and twice as likely to buy or invest in products aiming for better social and environmental results.

These idealists won’t just believe a company when it smiles and says that it is good. They want proof, and the result isn’t just scandals like that hitting Volkswagen. It’s also long term changes like the clean label movement, where food manufacturers are increasingly cleaning up what they put into food, because consumers are checking the labels, looking for the products with the least additives. The success of companies such as drinks manufacturer Innocent stem from the goodwill they can achieve by acting cleanly and being open about what they do.

There is no guarantee that any company, even one as powerful as Volkswagen, can keep its dirty secrets hidden. Better to be open and reap the benefits.

Open to the Core

Openness isn’t just beneficial when dealing with customers and investors. It also brings benefits within a company.

Think about performance reporting or the growing use of analytics. These things don’t work if people don’t share their data within the organization. You need them to be open with you about how they’re doing, good or bad. This lets you measure achievements and improve upon flaws. It’s the foundation of good management.

Openness is also vital to employee engagement. Openly sharing plans and information helps to build trust, to show employees that they are a valued part of the business. The sudden springing of surprises, or the leaking out of secrets through rumors within the organization, undermines that sense of being valued. By being open you show employees that you value them, and that in turn will encourage them to value you. They’ll be more committed, and put more into their work.

Learning From Volkswagen

Your brand is one of your most important assets. It’s an ephemeral thing, woven of stories and vague impressions. The taint of deception can corrupt your brand for a long time, making you seem untrustworthy. It’s a problem Volkswagen will have to work hard to overcome.

Being open about your business practices protects you from the risk of being seen as deceptive. It also opens you up to a growing group of modern customers who are interested in working with ethical companies. It even helps your business to run more smoothly internally.

So set aside the temptation to secrecy.

Be more open.

Mark Lukens, MBA

Mark Lukens, MBA

Founding Partner at Capatus
Mark Lukens is a founding partner at Capatus and located in the New York office. He leads the Capatus’ Global Talent and Advisory practice. He is also an expert in the firm’s research and nonprofit practice. Lukens has more than 20 years of c-level executive and consulting experience delivering strategies and transformational programs to firms ranging from start-up to Fortune 50. He has worked with clients in Europe, North America, South America, and Asia. Lukens worked extensively in various product and service categories including health care, life sciences, government, nonprofit, technology, and professional services. He also advises clients in other industries including commercial and industrial, retail, logistics and transportation, media and more. Lukens serves on several Nonprofit Boards and is a professor at the State University of New York where he teaches in the School of Business and Economics with a focus on marketing, international management, entrepreneurship, HR, and organizational behavior to name a few. Lukens has a technical background as a MCSE and earned an MBA from Eastern University.
Mark Lukens, MBA
You miss 100% of the shots you don't take. ~Wayne Gretzky - 8 hours ago
Mark Lukens, MBA


Subscribe to our updates

%d bloggers like this: