4 Reasons Why Transparency Is Critical to Business Success

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Your employees are the backbone of your company. Things wouldn't run without them, and your company relies on their happiness, engagement, and productivity.

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In order for your workers to give you their best, they need to know what they're working toward. They need to know what your company's mission is and how they can contribute.

Here are four reasons why transparency matters for today's businesses:

1. Transparency Increases Trust

Nearly 25 percent of employees don't trust their employers, and only about half believe their employers are open and upfront with them.

When you're transparent with employees, they're likely to be more engaged. In fact, a Harvard Business Review survey found that 70 percent of  employees are more engaged when senior leadership continually communicates strategy. Why? Because then employees actually understand what is going on and how they can contribute.

To bring more transparency – and trust – to your workplace, start by simply communicating with employees. Live your work life by a simple rule: If you can tell your employees something, then tell them! Be upfront about employees' behavior by offering honest feedback, and encourage them to give you feedback on your actions.

2. Transparency Builds Relationships

We'e all heard that "people don't leave jobs – they leave managers." While that's debatable, a 2014 CareerBuilder survey found that 37 percent of workers say they are more likely to leave their jobs of they have a low opinion of their boss's performance.

Good relationships of any kind begin with transparency, which is why bosses should roll out the welcome mat for their employees. While an open-door policy may not work for every company, it's worth a try wherever feasible. Do what you can as a boss to encourage more open communication between yourself and employees. Your employees may be hesitant to take you up on your open-door policy at first, so don't be afraid to take the first step and initiate conversations yourself.

3. Transparency Increases Productivity

Many employees feel their employers do not give them all the information they need to successfully do their jobs. In fact, only 42 percent of employees know their organization's vision, mission, and values. Employees may lack this knowledge because company leaders fail to communicate it.

Instead, tie the company's mission, vision, and values to employee performance reviews and feedback. That way, employees will learn how to live the company's values and align their work with the company's mission.

4. Transparency Boosts Innovation

As a leader, your goal should be to train your employees so they can handle bigger and more complex problems. Doing so involves trust and transparency. In a recent Harvard Business Review article, coauthors Holly Henderson Brower, Scott Wayne Lester, and M. Audrey Korsgaard write:

"Employees who are less trusted by their manager exert less effort, are less productive, and are more likely to leave the organization. Employees who do feel trusted are higher performers and exert extra effort, going above and beyond role expectations. Plus, when employees feel their supervisors trust them to get key tasks done, they have greater confidence in the workplace and perform at a higher level."

When you let your employees in on company problems, they will either be able to offer their own solutions or help you work on a solution. Plus, you will get to a solution a lot faster than you would if you tried to handle the problem all alone. By sharing information with employees, you can get new perspectives, new opinions, and better insight. Problems will be solved faster and more efficiently if you learn to be open and honest.

It costs almost nothing to make a business more transparent, and your organization will benefit tremendously. Be open, be honest, and communicate effectively. You will see improvements in company culture, employee morale, and employee productivity.

A version of this article originally appeared on the iRevü blog.

Michael Heller is the CEO and founder of iRevü.