Now you see me, now you don’t: Practicing good transparency (Part 1)

It’s not always easy to be an open book. However, history shows that dishonesty and secrecy usually ends up costing more when the public finds out later. Like an overripe piece of fruit, the longer a lie is kept the fouler it will taste when someone finally has to take a bite.

Volkswagen AG took a big bite of a rotten apple in 2015 due to its lack of transparency turning into a large-scale scandal of catastrophic proportions. Trying to cut corners, VW created what it call the “defeat device” which was designed to cheat emissions tests. When discovered in September 2015, VW understated the fuel consumption of 800,000 cars that it sold in Europe and 11 million worldwide. The U.S. Environmental Protection Agency caught VW in its dupe forcing it to face fines and lawsuits that will end up costing it billions of dollars not to mention a drastic drop in stock value. This could only be the tip of the iceberg as further investigations may reveal a wider range of problems regarding emissions and fuel efficiency that officials have not yet addressed. Becoming transparent may be VW’s last chance at redeeming itself.

Volkswagen stocks plummeted after the scandal was revealed. Constant transparency is the key to long-term success. (Photo courtesy of Thomson Reuters, the Economist)

Volkswagen stocks plummeted after the scandal was revealed. Constant transparency is the key to long-term success. (Photo courtesy of Thomson Reuters, the Economist)

Of course, people could argue that being transparent would have caused just as much harm. This may be true, but transparency looks a lot better in the long run. An important part of transparency is revealing information that affects key publics. Early transparency about issues that occur allows the organization to take the bull by the horns and show the public that they are taking action against misdeeds. James L. Horton, from Marston Strategic Communications, said that it provides a teaching moment for the company and anyone involved about the consequences of going against what is lawful and right. This is much better than being caught with your hand in the cookie jar, which completely destroys a relationship of trust. VW was caught red-handed with nothing to do but take the blow full on.

Communication is key to transparency. Letting publics know about a company’s activities keeps that organization honest and trustworthy. There are organizations that decide that a “no comment” policy is the best PR approach. In the eyes of the masses, “no comment” often means that there is something to hide. Keeping secrets from people about actions and information that they desire to know fosters an environment of suspicion. Suspicion leads to a lack of respect and ultimately trust. Consumers are going to look to the competition for what they want and need.

So why is transparency so important in an organization? It comes down to the fact that humans naturally lie. While an organization might be honorable in the public eye, fallible people make up that organization. Creating a culture of transparency, that is, regularly implementing transparency in communications helps to fix any kind of crisis before it happens. When an organization communicates well and often with their key publics, those publics will be prepared to be more forgiving. Transparency will show that even when the times get tough for an organization, that organization seeks to always do the right thing and fix its mistakes.

Transparency will be a protection from organizations digging a deeper hole to bury themselves in. The best protection in a crisis is not to hide the truth, but to call it out with a plan to right what had been wrong. A culture of transparency can also be used to improve service and customer loyalty. Society today pushes for transparency and is the reason that transparency leads to long-term success.

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