It’s much easier to trust a company or stand with their mission when you understand the ins and outs of their decision-making and operational processes. Not sure if this is true? A recent study discussed on the Harvard Business Review shows this to be the case.
Ryan Buell, an associate professor of service management at Harvard University, developed a fake traveling site with a few colleagues. With it, he tested the notion that customers will value and use a travel service if they can see the work that goes on behind the scenes.
While customers searched for discount ticket prices, Buell set the website to show the airline companies the system was searching through for pricing information. When compared to just showing customers a progress bar, customers favored the approach of seeing the actual process the website went through to find deals.
This process perfectly represents the concept of operational transparency. It is when companies “raise the curtain,” and show consumers what happens behind the scenes to meet their needs. If done correctly, operational transparency can build trust among customers as well as employees.
So, how vital are these ideas to your internal and external stakeholders? Read on to see why operational transparency is essential.
Why Internal Transparency is Important
While much of the talk around operational transparency centers around consumers, it can also have a powerful impact on your employees and their overall satisfaction. Here are a few reasons why internal openness is necessary to explore.
1. It Strengthens Ties Between Employees and Customers
In the Harvard Business Review article referenced above, another study revealed the impact of customers seeing how employees do their jobs. When Buell and a few other colleagues installed iPads and video conferencing software in Harvard’s Annenberg Hall dining facility, chefs could see the customers enjoying the food. Additionally, customers could see their food being made. As a result, customer satisfaction rose 14 percent while the chef’s satisfaction rose 22 percent. In short, employees are more likely to be satisfied when they can see that their work is having an impact on who they serve.
2. It Can Promote Innovation and Creativity
When employees are transparent internally, it creates a company culture that can promote optimization and innovation. For example, Google encourages frequent brainstorming sessions for workers to collaborate to develop new ideas for the company. Employees are taught that it is accepted to share information and learn from one another. In turn, the company has been able to capitalize on these ideas to better serve their customers.
3. It Will Expose Issues That Need to Be Addressed
While operational transparency will hopefully expose the good, it can also reveal the bad. Transparency can cast a spotlight on things that need to change. For instance, an employee may be mishandling a procedure. If other customers and employees are allowed to see this, then the problem can be corrected before it becomes a more significant issue.
How to Bring This Concept to Your Company
First, take a look at your company’s culture. Are you facilitating a work environment that promotes authenticity and transparency? If not, sit down with employees and ask for their feedback. Transparency is not a one-size-fits-all approach. They can provide some insight on how to institute operational transparency. Then, meet with leadership and create a strategy that benefits both employees and customers.
Why External Transparency is Important
Your customers care about how genuine you are. They want to know that they can trust you, and operational transparency is an excellent way to earn their trust. Here are three reasons why establishing external transparency is crucial to your audience.
4. It Can Engage Customers
“Raising the curtain,” lets customers know you trust them enough to share information with them, which in turn increases their trust. For example, the Domino’s Pizza Tracker is an excellent example of engaging and involving customers in the process. As referenced in the Harvard Business Review article mentioned above, customers could watch a live feed of the preparation of their pizza, and could even share messages of encouragement as the employees made their pizzas.
5. It Fosters Trust
Back in 2014, McDonald’s was facing some serious allegations about the quality of their food. As a result, the company answered over 42,000 questions on their food quality website. McDonald’s also shared footage of how their burgers were made, shutting down critics who said the burgers were not produced from real beef. While McDonald’s is not the healthiest option, it can fall back on the fact that they committed to being honest with customers.
6. It Can Breed Long-Term Investment
Customers love to be a part of causes, and companies who recognize this can effectively institute operational transparency. Patagonia is an excellent example of a company who has been open about their motivations. The company champions environmental sustainability and fair manufacturing processes. In the past, Patagonia has shared information regarding its supply chain. They discuss where the materials used in their clothing comes from and even outlines how they are attempting to better the wages of workers who make their clothing. This openness is sure to lead to higher customer investment over the long-term.
How to Establish It In your Customer Experiences
Go directly to the source, your customers. Ask them what they care about, and how you can improve your operational transparency practices. Offer surveys and also use social media to get their input. Take time to listen, and then take the information they have provided and implement what is feasible for your company. Your customers will feel appreciated and valued as a result.
Operational transparency can be intertwined with all functional departments. Employees should know the ins and outs of the companies they work for. In turn, customers should also feel like they should know whom they are purchasing goods and services from.
This approach can have a direct correlation on sales as a study revealed that 73 percent of consumers said they were willing to pay more for a product that promises total transparency. So, operational transparency not only improves your brand’s reputation, but it can end up adding to your bottom line.
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This has been a JBF Business Media production.