5 Examples of Companies Succeeding Through Transparency
Transparency is a new goal for many businesses, winning over shareholders, employees, and the general public. When a business is open about its operations, it can earn a level of trust that it wouldn’t have established otherwise. With each year, it seems businesses are expected to disclose more information, from tax records to executive salaries.
For smaller businesses, transparency can be a choice. Generally, no one is demanding information from most of these businesses, so it’s completely up to the business’s leaders to make information publicly available. By being proactive in opening up its information, smaller businesses can establish relationships and avoid the mistrust that can happen when information is revealed after the fact. Here are five well-known instances where businesses successfully achieved transparency.
1. Buffer -- open salaries.
Buffer created a deck that describes the values that make up its culture. The second on the list is “Default to transparency,” which the social media scheduling company applies to each area of its business. One way the company has demonstrated its commitment to transparency is through revealing salaries of employees throughout the organization. Through a publicly-available spreadsheet, Buffer reveals the pay rate of each employee by name, from co-founder and CEO Joel Gascoigne to engineers, content crafters, and “happiness heroes.”
In addition to posting its salaries, Buffer also reveals the formula it uses to come up with employee salaries. Each employee goes through a 45-day boot camp, then qualifies for a salary under the business’s formula, “Salary = job type X seniority X experience + location (+ $10,000 if salary choice).” This type of transparency shows a level of fairness that reduces employee frustration. When employees know the role that factors like seniority and experience play in determining pay, those employees are more likely to understand when another employee makes a higher salary than they do.
2. Whole Foods -- GMO transparency.
As a business known for offering natural foods for higher prices than average grocery stores, Whole Foods has faced deep scrutiny in the past. Whole Foods customers choose to patronize the chain because they’re concerned about their health, so learning that products might somehow compromise that can be very disconcerting to those consumers. By the time Whole Foods was slapped with a class action lawsuit accusing the chain of mislabeling products as not being products of genetic engineering, known as non-GMO, transparency became a priority for the company.
Currently, Whole Foods is working on becoming the first national grocery chain to offer full GMO transparency with its projects. With a goal of 2018 for full deployment, the project will require every product sold as non-GMO to go through a verification process. The company has always encouraged its suppliers to put its products through a verification process, as well. Whole Foods hopes that by making this commitment to GMO transparency, it will encourage industry-wide transparency, with manufacturers and distributors asking the questions that need to be asked.
3. Zappos -- tours and vendor access
Transparency is written directly into the Zappos Family Core Values, in the statement, “Build Open and Honest Relationships With Communication.” This is exemplified by an entire department in the organization called Zappos Insights, which facilitates tours of the Zappos headquarters and live training events. Attendees can even schedule Q&A sessions with specific departments within Zappos, including customer service, user experience, and marketing.
Perhaps the most insightful statement about Zappos’ commitment transparency came from CEO Tony Hsieh in his book Delivering Happiness: A Path to Profits, Passion, and Purpose. In the book, Hsieh explains his decision to open up access to information to the company’s vendors. Previously, businesses had always kept vendors in the dark, feeling that they needed to closely guard their secrets. As a result of his idea, Zappos created an extranet that gives vendors complete visibility into their business.
4. SumAll -- salary transparency.
Like Buffer, SumAll decided to open up information about its salaries but it did so from its very first days in business. The company offers salary information in a Google Doc that is open to every employee in the organization. As a result, the company says it has a reduced turnover rate because when employees are unhappy with their salaries, they feel free to speak up about their dissatisfaction. For SumAll, transparency means making sure every employee knows what’s going on throughout the organization at all times.
On its website, SumAll detailed the tools it uses to achieve desired transparency levels. Employees use work management software, instant messaging, Google Drive, and face-to-face communication to make sure everyone knows what’s going on outside of their own teams. A company Wiki holds all of SumAll’s policy information, including the company’s core values and information about the corporate culture.
5. Patagonia -- supply chain transparency.
For outwear company Patagonia, providing transparency throughout its supply chain means reducing any negative social and environmental impacts the company might have. While many companies have been caught off guard by information about environmentally-unfriendly habits of its manufacturers or distributors. To avoid this, Patagonia takes a proactive approach, taking the responsibility on itself to make sure no harm is being caused in the making of its products. The project is called “Footprint Chronicles” and is displayed to the general public through videos on the company’s website.
When a customer clicks on an item on the Patagonia website, that customer has access to a series of Footprint Chronicles videos directly related to that product. These videos show each step of the supply chain, including all textile mills and sewing factories used in creating the item. From that page, customers can click over to the main Footprint Chronicles page to view the company’s general supply chain. If a part of the manufacturing process needs to be improved, Patagonia admits it directly in the video and invites feedback from customers in how it can improve.
When companies are open with employees, shareholders, and the general public, those businesses are able to build trust while also holding themselves accountable. Businesses of all sizes can use these same principles to improve their own internal processes, which will improve both employee morale and customer satisfaction.