Full Transparency Is More Than a Morale Booster — It's a Critical Growth Driver. Here's How to Embrace It. Being transparent is key to earning consumer trust, building and maintaining a strong reputation with the public and empowering employees — all of which ultimately drive business growth, but more importantly, lend the privilege of building integrity with confidence.

By Mary Hagen Edited by Kara McIntyre

Key Takeaways

  • Outdated transparency models in business leadership are dangerous and ineffective in fostering public trust and internal growth.
  • True leadership calls for honest communication and a culture of openness, both internally with employees and externally with consumers and partners.
  • Commitment to transparency strengthens brand-consumer relationships and empowers teams, leading to improved performance and company integrity.

Opinions expressed by Entrepreneur contributors are their own.

Aside from being published nearly 200 years ago, there are countless reasons for business leaders to leave Goldilocks' rule of "too much, not enough, just right" behind when it comes to transparency models.

This old-school invisible barrier of what's "safe" to share vs. what to conceal out of fear, revealing just enough to satisfy employees, partners and consumers isn't just limiting and outdated; it's extremely dangerous.

True leadership in today's world — where every type of consumer, whether they're employees, clients, partners, customers — has access to their pick of platforms for sharing experiences, posing questions and leaving reviews, should fully embrace, reflect and uphold transparency.

Modernizing your internal and external transparency practices will only strengthen the brand's relationship with the public, its employees and its business partners.

Related: I Hit $100 Million in Annual Revenue by Being More Transparent — Here Are the 3 Strategies That Helped Me Succeed

Transparency: The key to consumer trust

Having consumer trust in your business is a luxury — an essential one — and one that has to be earned.

Too often, leaders are taught to believe that keeping information close to the vest is the key to success. But in reality, honesty and integrity are the real power moves. Today's consumers are savvy, with instant access to more information than ever before, so attempting to "hide the ball" is a losing strategy.

Transparency is the foundation of trust; and while consumers don't always have to agree with a company's policies, actions, messaging or mission, respect is built on the understanding and accessibility of these things.

I've personally exercised full transparency very recently in response to a false company accusation. How I chose to demonstrate transparency was at the forefront: Instead of ignoring this false, negative rumor or issuing a carefully worded statement, I went live on Instagram in front of millions of concerned, confused and angry consumers. I looked straight into the camera and said, "Here I am. What you've heard is untrue — here's what we really do, and I'm here to answer any questions you may have."

That single act of transparency flipped the narrative overnight, and by morning, the crisis had subsided, leaving the rumor with absolutely zero credibility.

The takeaway? Public trust is built on a foundation of ethical decision-making, swift action and accountability. As a business leader, do yourself a favor — don't make it hard to stand by your company's name. It's a true privilege if you're able to defend your company's reputation with confidence.

Related: Transparency Can Make Life and Business Much Easier for Entrepreneurs

Knowledge is power: Communicate with employees as you would stakeholders

Implementing internal company transparency isn't just good practice — it's essential for fostering strong morale, empowering your employees and ultimately driving business growth.

Transparent communication is essential to building a high-performing team, one that's equipped to make better decisions, take ownership of their roles and contribute in ways that allow the business to scale.

As a leader, you must embrace uncomfortable truths and know that the real risk of withholding key information is that it stifles growth — for both the employee and for the company.

If knowledge is power, then hesitating to share it is often done out of fear; but great leadership isn't about being in control — it's about equipping your people with the insights they need to succeed, because when they succeed, so does the business.

Take, for example, some common situations where transparency is withheld from employees out of fear:

  • Not disclosing a major decision like selling the company out of fear that employees will quit: Too often, leaders hold onto information, expecting blind faith and unquestioning loyalty from their teams. But employees aren't just followers; they are stakeholders in the company's success. When employees eventually discover that leadership had a different plan all along, resentment builds, trust fades and turnover increases.
  • Being secretive about salaries out of fear that employees will want more money if they're aware of what others make: As a leader, ask yourself — are your wages fair and competitive? If so, there's no need to stress when employees ask for more. If you're compensating your team appropriately, sharing in the wins and shouldering the losses (as any strong leader should), then you can approach these conversations with confidence. The key is to ensure that your pay structure is equitable from the start — when you know you're doing right by your people, you won't feel defensive when the topic of compensation comes up.

While some leaders prefer to keep major company plans, transitions or internal structures under wraps, this can often feel like being trapped by your employer, one that lacks respect and regard for a person's financial and professional future. I strongly encourage implementing a revolving open-door policy across all teams, because if an employee doesn't know where the business is headed, how can they align their efforts to support its future?

Related: Don't Be Coy With Your Employees — Here's What Healthy Transparency Looks Like

Transparency affords you the luxury of trust

Operating in a culture of "closed-door conversations" creates a lurking sense of uncertainty and unnecessary stress. Leaders constantly find themselves managing internal and external crises, carefully navigating what "can" and "can't" be said and determining who has been "brought into the tent." It's an exhausting cycle that depletes your personal resources — akin to maintaining a dishonest relationship where you're constantly cognizant of turning your phone face-down, always worried about what might be exposed.

True leadership is built on transparency. When you commit to honesty and direct communication, you free yourself from the burdens that so many leaders carry unnecessarily. More importantly, trust is built on doing the right thing. When integrity is at the core of your leadership, you gain the confidence — and the privilege — of being fully transparent, which is an expensive luxury to possess.

Mary Hagen

Entrepreneur Leadership Network® Contributor

CEO of Colossal

Mary Hagen is the proud CEO of Colossal, the leading nationally registered professional fundraiser. Growing the company by 675%, while raising a remarkable $175 million for nonprofits via its innovative digital campaigns, Hagen has successfully proven Colossal's approach to philanthropy effective.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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