I have always been convinced of the importance of transparency in all sorts of aspects of running a business - and last night's episode of Dragons' Den reinforced that belief. This is because transparency - or lack thereof - was a unifying theme of an unusually disorderly evening in the Den.
For me, in its context of a personal characteristic that can be applied to business, transparency means two things. Firstly, it means something similar to integrity, honesty, fairness. It's the willingness to be completely open and upfront about your proposition - whether you're pitching it to potential investors, potential customers or any other kind of stakeholder.
This is a quality we champion at Make It Cheaper through internal monthly awards to our saving experts. In fact, we regularly select the recipient of an award directly from the results from our customer feedback programme. This can either be in the shape of positive testimonials that refer to an individual's impeccable conduct or based on the Net Promoter Score that each front-line member of staff receives once a month.
In its other slightly different sense transparency means clarity, directness, a straight-talking approach. It's the willingness and ability to remove unnecessary complication and allow stakeholders to understand your proposition without doubt or ambiguity.
On last night's show, all four featured pitches faltered because - in different ways - their presenters were not completely transparent about the business offer on the table.
In the first pitch, Steven Charrot from Dayfame showed bags of enthusiasm for a company that offers customers celebrity treatment for a night out on the tiles, complete with stretch limos, red carpets, VIP tables and even fake paparazzi. The Dragons had no issues with the concept, but were frustrated by Charrot's lack of clarity - or even evasiveness - when quizzed about his extraordinarily low costs, exclusivity with partner nightclubs and his plans for spending a £100,000 investment.
Next, an industry specialist in reconditioned catering equipment pitched for investment in an untested franchise model of his existing business. Theo Paphitis expressed bemusement at Dominic Ricciardi's decision to not actively volunteer information about the full nature of his current business, and four Dragons had declared themselves out before Ricciardi revealed that he had yet another sister company yielding a multi-million pound annual turnover. The remaining Dragon Deborah Meaden was too perplexed by Ricciardi's strategy for this new information to change her mind about declining the investment opportunity.
In the third pitch, Peter Jones was unconvinced by Matthew Page and Louise Craven's unique selling point of a hand tool with interchangeable heads. The pitchers claimed their product eliminated the need for DIYers to buy a number of separate paintbrushes and other tools such as wall strippers - but Jones felt it would actually be inconvenient to keep changing tool heads during a real home improvement job. Theo Paphitis jumped in and suggested that customers could buy more than one - and that actually the USP was that only the head, rather then the whole tool, would need replacing when it wears out. Page and Craven agreed emphatically - but Jones felt that by changing their mind about the USP they had muddied, and therefore largely discredited, their own proposition.
On the other hand, Page and Craven did themselves great credit by openly explaining how their existing distribution company, Synagi, was prevented from selling the product by the terms of their current contract with a big European manufacturer. There was some twitchiness from Duncan Bannatyne and Hilary Devey over how the manufacturer would react when Synagi activate their release clause in a few months' time - but Page explained that the larger company had full knowledge of Synagi's plans for the product and were comfortable with the direction they were taking. There was even a deal on the table for the European company to manufacture the product themselves - but this wasn't quite enough to convince Theo Paphitis to take what he perceived to be a £90,000 punt.
There was also some contractual ambiguity in the evening's final pitch, in which Mark Richardson presented a "bionic" golf glove for which he has exclusive rights to distribute throughout Europe. Hilary Devey felt the licensing contract was not watertight enough to stop the owner of the intellectual property from pulling out in the future - but the straight-talking and congenial Richardson was unconcerned about this prospect because he was fully confident of hitting sales targets. Furthermore, he was convincing about the level of trust he had already established with the American licensor.
The product was met with Den-wide approval and - to pick up on a theme I explored in last week's blog - probably found its way to the top of many viewers' Christmas lists. Significantly, Richardson's proposal to the Dragons was very clear: this isn't an opportunity to help grow a new business - but put me in front of the right people and we'll sell lots of gloves at attractive margins. Theo Paphitis and Deborah Meaden felt they were just the people for the job and - thanks largely to his transparency and that of his proposition - Richardson walked away with the £100,000 investment he sought.