With increasing size and complexity of your business a clear view on the most important drivers for revenues, profitability and liquidity becomes crucial.
A high level of transparency enables you to clearly focus and direct your various resources to those business activities whose value contributions are consistently high.
Basic elements for achieving a high level of transparency are a clear and workable corporate strategy and an adequate quality of data and (ERP-)systems as well as planning-, controlling- and reporting-instruments which are specially tailored to your company-specific needs.
With a certain company size the careful design and the right implementation of these elements will become critical for your success. Transparency is then the neccessary precondition for quickly adapting to changing market conditions, for early risk recognition and for utilising growth opportunities and value potentials in a timely manner.
Focusing on the most relevant value drivers, figures and strategic initiatives ensures the most effective allocation of your company’s resources and management-attention. On the basis of clear and significant information, you and your top management will be able to discuss and decide on necessary market-related or internal actions and measures at any given time.
A high degree of transparency not only leads to a significantly improved basis for decision-making – furthermore, it offers your company new prospects in leadership and corporate governance. This is especially important when your company - e.g. due to significant growth in the past - is challenged to change and decentralise the existing management model and to distribute responsibilities across several shoulders in order to maintain organisational and market flexibility.
To be able to effectively delegate responsibility along with decision-making authority within your company, you not only need suitable managers but also suitable management instruments. Transparency is therefore a key prerequisite. It is the basis of a culture of trust, which eliminates the risks of blind faith and allows a fair and individual performance assessment of your management and employees.
A clearly defined and broadly communicated strategy, operationalised and measurable objectives, individually agreed targets, along with a consistent incentive system are the core elements that will enable you to effectively channel the energetic potential of your corporation, to keep your team motivated and to achieve sustainable success.
Trust is an essential ingredient in business life. This applies within organisations as much as it applies to external stakeholders like supervisory boards, financial institutes or investors. This trust is especially important in economically challenging times.
Trust is closely linked to transparency. Lack of transparency leads to delay in recognising negative developments in your business. The underlying causes for such developements remain unclear and starting points for targeted countermeasures are not available. Add insufficient or delayed communication towards financial partners, then trust within the company as well as the management may be permanently disrupted.
Transparency is therefore of vital importance in situations of crisis in order to maintain trust or regain lost confidence. It allows for a clear cause analysis along with a fact-based developed strategy for the future and a well-documented (bankable) business plan. It therewith enables all relevant parties to properly evaluate the current situation as well as the impact of the intended measures. Delivering such transparency, management can demonstrate that it acts within a clearly defined operational framework and is able to fully satisfy external information requirements at any given time.
Implementing a transparent management system therefore acts like an insurance for one of your most valuable assets: the level of trust you and your company built in the past.