Businesses nowadays are becoming more and more transparent — and we’re not referring to filling their offices with more windows than walls. While it may have started with smaller startups, larger companies are now choosing to become more transparent and, taking it one step further, establishing ethical purposes and causes that their business stands for.
Both of these qualities — transparency and ethics — share pros and cons. A transparent business, by definition, shares everything with the public; salaries, future plans, goals, and even failures. This means anyone has access to your company’s information, which can sound scary to some and ultimately why it turns people off this idea.
If your company chooses to stand for something you’ll typically draw the attention of those who also share the same values and ethics. A lot of what your business does will revolve around this, and your employees will use these ethics and values as a north star to help guide decision making within their jobs.
Some companies are afraid of these approaches and that they could pigeonhole a business into a niche market. However, that’s not necessarily true.
Let’s dig into the benefits of transparency and ethics in business and how it could impact your company.
The benefits of transparency in the workplace
If transparency is done in the right way, it can improve employee motivation and satisfaction, marketing, website traffic, and many other aspects of your business. It’s much easier to gain trust and loyalty when you’re transparent, which will help you convert visitors into customers.
But, how do you do that?
Thankfully, there’s an easy place to start. Many companies move towards transparency by first publishing some of their private information. This can include things like public revenues, wages, hiring policies, and diversity stats. The list goes on and on, but typically this information is published somewhere for the public to view. Sites like Baremetrics make this very easy, as they automatically pull data and post it publicly on their user-friendly website.
Some businesses decide to take it a step further and publish employee salaries and the differences between team members. Companies can also create an easily accessible financial dashboard that illustrates the current state of the business.
So, what does this do exactly? For one thing, you’re giving your customers and investors a direct line-of-sight to your business. They know precisely how you’re doing from a business perspective, which can provide some peace of mind knowing exactly what your spending on vs. what you’re earning.
Customers tend to feel more comfortable with transparent businesses because they know exactly what they are paying for and what kind of service to expect. Transparency motivates businesses to improve since they always want to show how they are being sustainable and trustworthy.
You can also help to make your business more transparent internally, involving the entire company and all its employees. Some companies choose to make all of their email conversations public and available to all employees, no matter their rank, salary, or function within the company.
This strategy improves the efficiency of the employees because everyone is informed about what’s happening in the company. This results in fewer misunderstandings and coordination issues. Plus, it can help employees to feel less like cogs in the machine and more like equals with their senior management.
The benefits of integrity in a business
Pretty much everyone is standing for something these days. Whether its equal rights or saving the Earth, people have causes and beliefs that they are passionate about — something that, if done right, can benefit any business.
When a company clearly and honestly defines its values and what they stand for as a business, then they’re able to make decisions for their team more clearly.
If a company’s passions and beliefs are the backbone of their decision making and goal setting, it becomes easier for their employees and customers to see what they are passionate about. In doing so, a business can set itself apart from any competition and attract others who also believe in what you stand for to join your team.
Companies with integrity as a core value
To better explain how this can benefit your business, let’s take a look at an example of a company that does this really well: Whole Foods.
Whole Foods, as an organization, lives by six core values. They are, according to their website:
- We Sell the Highest Quality Natural and Organic Foods
We appreciate and celebrate great food.
- We Satisfy and Delight Our Customers
Our customers are the lifeblood of our business and our most important stakeholder.
- We Promote Team Member Growth and Happiness
Our success is dependent upon the collective energy, intelligence, and contributions of all our Team Members.
- We Practice Win-Win Partnerships with Our Suppliers
We are part of an interdependent business ecosystem.
- We Create Profits and Prosperity
We earn profits every day through voluntary exchange with our customers.
- We Care About our Community and the Environment
We serve and support a local experience and practice and advance environmental stewardship.
As a business, Whole Foods chooses to let these six values be the basis of all their decision making. If they’re considering adding a new line of products to any of their national locations, these products need to adhere to the company’s values. If they are looking to hire someone to join one of their teams, that person also needs to believe in what the organization stands for.
Their values are their guiding light, the thing that helps them decide what’s best for the company. This is why giving your business values is, for lack of a better word, valuable. They can usher consistency in your decision making. They can provide you and your team something to stand for.
If your company currently doesn’t have values that it tries to adhere to, consider looking back at your original business proposal. What was it that caused you or the founder to start the business?
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Then, consider what you want to accomplish. Not from an objective standpoint, but what your lofty, even ethereal, goals are. If you’re in the traffic cone manufacturing business, do you want to make the world a better place, one traffic cone at a time? Alternatively, if you run a small woodworking shop, do you want to support your local community of artists by crafting high-quality handmade goods?
Find that thing that makes your business unique. For Whole Foods, they summarize their values as “Our purpose is to nourish people and the planet.” This is the perfect example of integrity in a business: a place that truly wants to help and is doing their best to do so.
Just ask yourself what that is for you and your business, and go from there.
Tactics for true transparency
As we briefly touched on before, there are several things you can do to become more transparent as a company. Here is a comprehensive list of topics your business could publish publicly to start your journey to transparency:
- Overall site visits
- Overall profit
- Number of total customers
- Number of new customers
- Net revenue
- Fees they’ve accrued
- Public revenues
- Hiring policies
- Diversity stats
There are also many actions you can take as a business that can lead to more transparency, such as:
- Engage customers on social media
- Invite response from your customers on your product or service
- Make sure to have a good response time when it comes to answering customer’s queries.
- Build experiences or services that benefit your customers more than yourself that still reflect your company’s values.
- Don’t wait to dispense information.
Another great way to promote transparency internally is to utilize a few tools that allow everyone on your team to be on the same page.
Using a time tracking software like Hubstaff promotes transparency between clients, employers, and employees. This provides insight into how your team works, where time is spent, which projects are taking too much time, and how productive everyone is week to week.
Managers can see screenshots of work being done while team members log billable time and even see automatic GPS locations for on-the-go teams. You can track everyone’s activity levels and see how engaged each team member is. Hubstaff will even monitor which apps and websites they spend the most time on. Also, all this information is compiled into reports so you can see exactly what services you and your clients are paying for.
Because managers and clients get a clearer picture of the work being done, employees don’t have to spend time sending weekly email reports or justifying their time. Transparency in business means additional accountability and less wasted time clarifying what work is getting done.
Are there risks to being a transparent business?
An argument can be made that there are risks on either side of being transparent or not. While there are plenty of success stories, there are a few “dark side” stories of companies that didn’t utilize transparency in the right way and experienced adverse results.
For one thing, it’s possible to share too much information. This can lead to an overflow of data, which makes it harder for executives to make decisions. Additionally, having an influx of information can create fear in team members — one wrong step, and it’s evident to any owners or manager who’s messing up the numbers. As you can imagine, this doesn’t yield much creativity and can even reduce performance since people might want to fly under the radar.
The Harvard Business Review cites an example where transparency didn’t work out.
“In a tragic example, at a Dutch energy supplier that used rigorous, transparent safety standards to deal with toxic waste, employees came to work one day to find the company’s safety officer dead of a workplace accident. It appeared he had violated the careful standards he himself had implemented. Rather than asking why or how this happened to a person with an almost perfect record of past behavior, the company focused on the facts instead of the reasons for those facts. This gave the impression that the safety officer was being blamed for what had happened. That in turn hurt morale and left employees feeling mistrustful.”
Of course, this is an extreme example, but it still makes a point to show that when there’s a lot of information to go from, and the data is what leads the narrative, people may not listen to anything else.
However, there are still many instances were being transparent has worked out quite wonderfully. One popular company who decided to establish transparency in business is Buffer. They significantly increased the number of visitors and customers after publishing their employees’ salaries and discussing them in public. This move attracted much positive attention and brought the company respect from the competition and potential clients alike.
Why we choose to be transparent
At Hubstaff, we’ve chosen to be a transparent company. We have made our numbers public, and we detail all of our failures and successes in our blog. We choose to do this for several reasons, the most important being that we want to be honest with our customers.
As a company, Hubstaff believes in these core values: freedom, challenge, creativity, transparency, accuracy, support, and revolution. These things define us as a company. We believe in being honest. We believe in challenging others and ourselves. We stand by creativity, transparency, and accuracy. We wish to support as many people as we can. And, we look towards a workplace revolution. We choose not to shy away from what we stand for and wish to work with people who see our vision and wish to contribute.
We’ve found that displaying our information on Baremetrics for everyone to see provides clarity and confidence for our customers and clients. We don’t want to hide anything, because we believe that honest, hard-working people do good work.
Other companies, like Insomnia or ConvertKit, also choose to use Baremetrics for a similar reason. One of ConvertKit’s core values is to “Teaching everything we know so you can earn a living online.” Part of following through on that mantra is being transparent about their revenue. This is why they publish revenue reports and what they’re learning about their own business on their blog.
Sharing your companies revenue gives customers and stakeholders more visibility in your company. If you’ve had a rough month, you can make changes and visibly show how you’re able to bounce back. If you’re doing better year to year, you’ll build a reputation as a company that can manage themselves, and everyone will be able to see that.
This post was originally published in October 2015, and was updated by the Hubstaff blog team in September 2019.
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