With transparency in business on the rise, more and more businesses have been talking openly about their hiring, their diversity and inclusion efforts, and even their revenue.
Transparency is more than just a PR or marketing ploy for a business.
There are significant advantages to productivity, trust, culture, and morale when you embrace transparency. We are fortunate to have been learning about transparency for the past seven years at Buffer — lots of lessons, good and bad, that we’re excited to share with you.
If you’re interested in learning more about how transparency in business works or if you’re eager to find out how to make transparency happen for your business, we’ve put together this blog post as a resource for you. Let us know in the comments if you have any questions or if we can answer anything further. We’ll keep this post updated with the latest, so stay tuned!
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What is transparency in business?
Transparent businesses publicly share information about their company — information that has traditionally been kept private.
There’s a wide spectrum of transparency, and it often looks different from business to business. However, these are some common elements that companies consider when they’re looking to increase transparency:
- Diversity and inclusion data
- Growth and performance
- Pricing breakdowns
- Internal processes
- Hiring practices
At Buffer, we choose to be transparent about it all. We’re big fans of this description of transparency by Sparktoro founder Rand Fishkin:
Why be so transparent?
Four key benefits of transparency in business
We get asked this question a lot: Why would a business choose to be transparent?
It’s a question we asked ourselves when we started on the path to full transparency several years ago. There were a host of benefits we saw then, and we’ve been grateful to have seen more and more as we’ve proceeded down this path.
Buffer CEO Joel Gascoigne outlined four of the primary benefits we’ve seen by embracing transparency in our company:
1. Transparency breeds trust
Transparency breeds trust, and trust is the foundation of great teamwork.
This trust extends to customers, readers of our blog, and anyone who interacts with us on any level. We believe that being open helps us build trust and share our reasoning for the features we have, our pricing, what we blog about, and many other choices.
If all the information about everything that’s going on is freely available, that helps everyone to feel completely on board with decisions.
2. Transparency helps with innovation as a company grows
As you grow and rely on your team members to make great decisions, they need to have all the details that you have. Keith Rabois put this really well in an article on First Round Capital:
If you want people to make the same decisions that you would make, but in a more scalable way, you have to give them the same information you have. – Keith Rabois
3. Transparency leads to greater justice
Another key benefit we’ve seen, which wasn’t necessarily our reason for transparency, is eliminating unfairness and inequality.
We have a formula that determines the salaries of everyone in the team. It has a number of factors such as your role, experience and location. As an example, one factor the formula doesn’t have is gender. When you determine salaries in a more ad-hoc way or through negotiation, I think a lot of inequality could creep in.
John Mackey, co-founder and CEO at Whole Foods said that with transparency, “any kind of favoritism or nepotism is seen.”
4. You open yourself up to more feedback
By practicing transparency, we’ve found that we get much more feedback on our decisions. We try to take in all that feedback and make adjustments based on it. For example, when we shared our salary formula, a lot of people mentioned to us that we weren’t paying high enough salaries for people in the San Francisco Bay Area, so we made an adjustment to the formula. Now we’re in a much better position to attract new team members in the Bay Area.
To see even more, I’ve written more about each of these benefits of transparency in a full blog post on the topic.
The 4 Benefits of Transparency We’ve Seen at Our Startup
Previously, we’ve answered the question of “why be so transparent” in this way:
The reason why we put everything out there is actually very simple.
The reason we make things transparent is we think it’s the right thing to do. There’s no benefit, we don’t do it to get press. We don’t do it to get people to join our company, to sign up for Buffer. We don’t do it for anything. We just think the best possible way we can develop ourselves as people is by making the company as transparent as possible.
To hear more, you can check out this interview about Buffer’s remote-first and transparent workplace culture:
The risks of being transparent (and why they’re worth it)
Along with all the great benefits of transparency in business, there do come certain risks.
After all, you’re baring some things (everything, perhaps) to the world.
Vulnerability doesn’t come easy.
Having spent several years now as a transparent company and having learned from many others like us who embrace transparency, we’ve found there to be a few common risks that these companies undertake. Josh Pigford of Baremetrics, a company that values transparency as much as we do, put together a list of three key risks to consider:
1. Increase in competition.
Within a few months of making Baremetrics’ numbers public, Josh noticed similar products coming out of the woodwork. It’s a common tendency to want to repeat success stories instead of making one’s own.
In Josh’s view, copycats aren’t actually a problem. There have been dozens of Baremetrics knockoffs over the years, but none of them have had any sort of negative impact on Baremetrics’s growth. Customers generally gravitate towards companies that are genuine.
2. Extra scrutiny.
When everyone can see your numbers, there can be a tendency to make assumptions without understanding the full picture. You may have temporarily high churn at the moment that you’re well aware of and are OK with while you make changes to your business, but it could appear to others that your business is unhealthy.
3. Decrease in focus.
Especially in the early days, you might need to be laser-focused on building a solid product and business. It’s easy to get sidetracked publishing your metrics and touting your transparency when you might be better served making your product better.
If you’d like to learn more about the risks associated with full transparency, the full article by Josh goes into some great detail.
The Transparency Movement: What It Is, Why It’s Important And How to Get Involved
How to get started with transparency
As we mentioned above, choosing to be transparent with your business or company can happen across a pretty wide scale. You don’t have to make everything visible all at once. You can do it in stages and steps. Here’s a short blueprint for anyone looking to get started from scratch. (And here’s what the transparency timeline looked like for us.)
1. Share transparently at the individual level
At the core of employee advocacy is the idea that the individuals of a company carry a lot of power, especially when aligned and moving en masse. Advocacy is a marketing concept, but it translates easily into the transparency roadmap, too. Many teammates and employees will have their own social profiles or personal brands and audiences, not to mention the platform of the company’s CEO and executives.
This is the perfect place to test the waters with transparency.
If you are an executive or founder, you can use your personal platform to share news about the company. Here are a couple examples from CEOs and executives in the Buffer ecosystem:
If you’re an employee, you can get started by sharing about the work you’re doing, seeking advice or feedback, and just generally being open about your day-to-day. Here are some examples from Buffer teammates:
2. Be transparent internally
While working toward full, public transparency, there remains a lot of power behind companies who share more and more internally transparent materials. This can come in many different forms:
- Quarterly, monthly, or weekly all-hands meetings where you go over the numbers of the business
- Creating shared email lists or group emails that can be cc’ed on interesting, important, or relevant email conversations
- Team-accessible spreadsheets that show growth numbers or area goal-tracking
- Team wikis where you can share learnings, new ideas, or meeting notes
At Buffer, we have some rather extreme internal transparency practices, like making all email transparent and accessible to the full team.
2. Find something small to share publicly and transparently
This next step involves some buy-in at the company level. Ideally you’ll find something small and notable that you can share with the public. We have a full list of ideas below, which you’re welcome to use as inspiration.
3. Find something a bit bigger to share, and get the team on board
We’re big believers in being transparent, even when it’s uncomfortable.
You don’t immediately have to jump from sharing something small to sharing something uncomfortable. But in order to really get on the road to transparency, you’ll eventually need to share things that feel a bit scary.
- Transparent pricing (e.g., this is what Southwest Airlines shares)
- Transparent hiring numbers on diversity and inclusion
- Transparent revenue via a dashboard like Baremetrics
These topics represent a bit of a leap from sharing something smaller like progress toward a goal or some niche numbers for your teams. When it gets to these company-wide topics, it’s important that you have a conversation with your team.
- What does everyone think?
- What about this makes you uncomfortable?
- Are you comfortable with the type of discomfort this causes?
Answering these questions and having the conversation in the open will be a huge asset to further embracing of transparency as things go along. Think of it as laying a foundation that you can build upon later.
4. Make transparency part of your company values
If the previous tests have gone over well, you’ll want to have a larger conversation about whether transparency is a core part of your company (and what it means if you decide it is).
We’ve had the opportunity to re-work our company values over the years, and our most recent iteration on our values followed a process like this:
- Interview the team
- Write the first draft
- Test the first draft
- Edit and interview again
- Share with the full company for feedback
5. Default to transparency
If you do decide that transparency is a core part of who you are as a company, the next step is to live it.
We have a phrase at Buffer: “Default to transparency.”
This means that, in everything we do, our first instinct is to make it public and transparent.
For us, this has meant that we open up things like salaries, funding, layoffs, monthly numbers, and so much more. Rather than coming at a situation after the fact and wondering about its transparent potential, we begin with the mindset that we’re going to be sharing about this.
What it’s like to work at a company with so much transparency
Being fully transparent will have an effect on the people who work for you. The safe thing is to keep all things internal. The bolder move is to share it all, and it’s important to align with people who are fully on board with this philosophy.
Yes, transparency can be scary and vulnerable. It can also lead to some of the happiest and most engaged workplaces around.
From our Director of People, Courtney Seiter:
I was pretty amazed and delighted to see that the values that are written down are not just words on paper; they really are something that we talk about and think about and try to evolve and iterate on. They are something that is always on the minds of pretty much everybody that works at Buffer, and that makes it a pretty special place to work for me.
And there’s this bit of validation from our hiring data:
When we published all salaries online I think in that month we had 4,000 people who wanted to work for Buffer. People were saying I know more about your company than about the company I’m working for right now. What really happens when you are that transparent is that we build trust. Hey, I’m telling you all the things about me already! You know how much money I make, you know how much money the company makes, you know where your money goes when you spend money with us. So I’ve not told you anything about me, but I know everything about you already. This makes me feel like I can trust you. This guy doesn’t want to hide anything. This company doesn’t want to hide anything.
14 ways to be transparent in your business (starting today)
1. Share what you’re working on this week. Ask others for help and advice.
2. Open source some or all of your codebase. Check out our guide to Open Source.
3. Publish your pay numbers. We join other companies in doing this for Equal Pay Day every year.
4. Publish your team’s salaries. Here’s a company that did it after 17 years of not doing it.
5. Publish your revenue. SaaS companies can do this easily with Baremetrics.
6. Write about your learnings in marketing, product, support, or HR.
7. Publish a playbook: how you hire, how you do content marketing, how you build a product, etc.
8. Publish your diversity numbers. It can be as robust as Google’s annual report or as real-time as our diversity dashboard.
9. Break down your pricing and show where every dollar goes. Our inspiration: Everlane.
10. Make your product roadmap visible for everyone.
11. Make your marketing calendar or blog editorial calendar public.
12. Turn your internal spreadsheets into publicly-available templates that anyone can use and benefit from.
13. Embrace transparent email.
14. Tell real stories about you and your team on your company blog. See: Tettra.
Over to you
- What does transparency look like at your company?
- What do you find most challenging about being more transparent at work?
We’d love to be here to answer any questions you may have and to make transparency in business more of a reality for you. Let us know anything that comes to mind in the comments. We’ll be cheering for you!