By Fraser P. Seitel
Public Relations Society of America's "Statement of Professional Values" includes, among the profession's most important ethical standards, the practice among its members of "transparency."
And who among us would dispute the importance of communicating clearly, without obfuscation or deception?
President Obama told his departments, "My Administration is committed to creating an unprecedented level of openness in Government. We will work together to ensure the public trust and establish a system of transparency, public participation, and collaboration."
Google the words "transparency + corporation," and you'll come up with 48 million listings.
Herb Baum, former CEO of Dial Corporation and Quaker State, and author of the book, "The Transparent Leader," says, "Transparency is a long-term commitment of being honest and open in everything you do."
CNN's Anderson Cooper agrees, "It's a good thing that there are bloggers out there watching very closely and holding people accountable. I'm for as much transparency in the newsgathering process as possible."
And then there's everybody's favorite, WikiLeaks founder Julian Assange, who intones, "Transparent government tends to produce just government."
Transparency, in short, has become the new "watchword" for openness in society. And since PR professionals should be the "keepers of the transparency flame" within the organization, here's a primer on what each of us ought to know about the subject.
(1) A DEFINITION
Transparency is about being open, honest, and accountable in how you conduct your business and how you communicate.
A transparent organization demonstrates its integrity through the quality and reliability of information – financial and non-financial – that management provides to key constituents.
In other words if even a good company hides information that would be of "material" knowledge to its shareholders – like the extent of the illness of its CEO, for example – than that organization is suspect when it comes to transparency.
Literal translation: It can't be trusted.
(2) CONSTITUENTS
Every organization has a number of key constituents with which it must communicate and about which it must be sensitive. Among them:
Investors – Stockholders and bondholders have a clear right to know what's going on in terms of the institution's business and finances. Regular communication with investors is usually the best policy. Just ask Warren Buffet, whose Annual Letter to Shareholders is not only cherished but, more important, believed.
Consumers/Customers/Clients – Client "transparency" is the primary 21st century thrust of state and federal legislation – whether dealing with hospital patients, mortgage borrowers, or consumers of every stripe.
Employees – With recession-inspired salary freezes and layoffs abroad in the land, the employee public has become increasingly brittle in the 21st century. Winning management trust isn't easy and requires constant credible communication.
Media – Like 'em or not, the local media play a key role in most communities. They're the last public you need as enemies when you're on the wrong side of a crisis.
Legislators/Regulators – It also makes sense to keep on the right side of legislators and regulators, with periodic updates of how the organization is doing.
General public – The public needs to look at each local institution as a "community resource." To accomplish that task demands regular communication.
(3) THE BENEFITS
There are a number of presumed benefits to greater transparency. Here are three:
Presumed benefit #1: If organizations report more information about their philosophies, policies, and programs, in a meaningful, consumer-friendly format, customers can make better and more informed decisions.
This assumes, first, that the material is presented clearly without legalistic overkill; and, second, that consumers are motivated to make a more informed decision. Some will be; others will not.
Take hospitals, for example. In a setting of third party payment, many consumers find hospital cost data to be meaningless because their insurance pays the bill. So they will welcome quality data, but may ignore pricing. And, if data on quality is absent or confusing, some patients will tend to view higher prices as a signal of better quality.
Presumed benefit #2: Inside the organization, there's another result: Supervisors and staff will become more aware of the organization's performance, understand where improvement can be made, and know their role in improving it.
This assumes an enlightened culture of continuous improvement and constant communication.
It is axiomatic in public relations that: You won't be able to persuade the people outside that you are a top-quality organization, unless the people inside believe it first.
Stated another way, for them to be with you, employees must be told "why" decisions have been made. Answering the "why" is the critical question.
Presumed benefit #3: Nationally, if organizations share actions taken and lessons learned, they will be considered by markets, evaluators and commentators as the "top of class."
The world is awash in ratings agencies – from J.D. Power rankings of airlines and banks to Consumer Reports ratings of autos and cribs to US News & World Reports assessments of colleges and hospitals. Such rankings are important in a society overwhelmed by uber competition in every sector.
One way to enhance an organization's status in these competitive rankings is to practice "transparency."
(4) THE RISKS
Becoming a "transparent" organization is not without risks. Among them:
Presumed risk #1: Great expectations.
Transparency in communication presumes "leadership." And a leader is held to great expectations. Once an organization is perceived as a "leader," it is expected to offer up information on a constant and consistent basis.
Presumed risk #2: No turning back.
Once an organization discloses data, "the horse has left the barn," and barn, it's too late to lock the door. You're now committed to a policy of disclosure.
A hospital which discloses cost and quality data or a university that discloses admissions policies and results are forever obligated to releasing these data. There is no turning back.
Presumed risk #3: More, more, more!
When asked "what he wanted," the legendary labor leader Samuel Gompers famously replied, "More." So it is when an organization proclaims itself, "transparent." The stark reality is that transparency is "inelastic;" it knows no bounds. Constituents always want "more disclosure." A CEO and board must be prepared for the inevitable demands for "more."
Presumed risk #4: Accountability.
Finally, transparency about your actions is de facto acknowledgement that management and board accept "accountability." And sometimes, it's tough to be "accountable" to all constituencies simultaneously. For example, securities holders might feel entitled to certain information that if exposed to the staff might cause problems. Since management is "accountable" to both constituent groups, walking the tightrope of transparency is not always easy.
All of this suggests that the decision to become more "transparent" should not be taken lightly. Some of the nation's most formidable companies – Apple, Goldman Sachs and Disney, to cite three – are among the least "transparent."
In the end, "disclosure" is generally preferable to "exposure." And so, an organization must ask, "Do we want the light to shine from your own institution -- or emerge from somewhere else?
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