Here, Alastair Campbell, founder of Company Check, explores what Sugar’s advice means for businesses.
Running a business is challenging. So when a well-known, successful business person shares their advice, people tend to listen.
Lord Sugar is a respected business leader, as well as being the star of The Apprentice, and this week he shared his tips for business success.
One of the most important lessons a business person should learn, Sugar argues, is the importance of transparency in business. As he puts it:
“I’ve never pretended to be anything other than who I am. And that’s important in business.
“I’ve invested in a lot of businesses over the years and one of the things I expect from them is that they are transparent about what’s happening, and what’s going to happen in the future.
“Whether you’re investing in a business, or working day to day with colleagues and suppliers, it’s important that you expect transparency from them in the same way. If they’re not going to be able to deliver for any reason, you should expect to know about it now. In return, you should be open with them about the strategy for the business and the role they play in it.”
A two-sided relationship
Business relationships are built, at least in part, on trust. We gravitate toward those we feel we can rely upon and we sustain partnerships with those who prove themselves worthy of our trust.
Sugar’s point is an important one, because it raises the two-sided nature of this relationship. While we expect transparency from others, we should also endeavour to be transparent ourselves.
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Obviously, this doesn’t mean being a completely open book in all things business related, but it does mean giving clarity to the facets of your business that affect those with whom you work, and vice versa.
“Be transparent about what’s happening”
As Sugar says, being transparent about what’s happening now is important, and doing this throughout working relationships will stand you in good stead.
The most tangible example of this for me comes at the beginning of a working relationship. Whether you’re starting to work with a new client or with a new supplier, the process of due diligence shouldn’t be foreign to you.
It should be commonplace within your company that all new business endeavours are underpinned by due diligence, where you review the financial situation of the company you’re about to work with in order to make better informed decisions about how, and if, you’ll work together.
Credit ratings are one key element of this; is the company you’re about to work with in a position to fulfil their commitments to you financially? If so, great. If it appears not, why? Having this one piece of information puts you in a much stronger position to open discussions that will negate risk in the future.
For example, if a company’s credit rating is low but you are keen to work with them, you may put in place a payment structure which meets both parties’ needs.
Due diligence is also about understanding the structure of the company; who are the directors, is there a holding company, how many employees are there, where are they based, how long have they been operational and what can their previously filed accounts reveal about them?
There are services, like Company Check and others, which enable you to check this information quickly and easily. Combine this with conversations with the other party to give them the chance to be transparent themselves too.
“Be transparent about what’s going to happen in the future”
Another facet to your transparency is being clear about what’s going to happen. When people know where they’re going, they can be better prepared for the journey.
Practically speaking, that means having in place clear processes, dates and terms for your interactions – with clients, suppliers and also with colleagues.
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This might be in the form of clear payment plans, where you lay out when payments are expected, how you want to be paid, how long they have to pay and what the process is if they don’t pay in time.
It might be in your terms and conditions; while many of us will be familiar with phrases like ‘terms and conditions apply’ or ‘see terms and conditions’, how many of us actually take the time to read through them (although we should)?
Communication of your terms and conditions is important and if you’re not communicating them in a way people can easily understand and digest, you’re not helping yourself to be transparent about the things that are important to both parties.
Consider how you communicate the things that are important in your business and how well you understand your relationship with the other party, to ensure everyone’s clear from the start and throughout the relationship.
What transparency in business really means
Whilst it’s one thing to suggest we ‘be transparent’ in business, it’s another to actually implement changes that achieve this. Transparency is akin to honesty – but within business reason.
Sugar’s advice is not likely intended to suggest that you share everything from your business with everyone. After all, that simply wouldn’t be sensible.
But by maintaining transparency in your relationships about the things that affect all parties, you stand a much better chance of nurturing successful relationships now and into the future.
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