The purpose of these thought leadership articles is to provide insights into effective business management and ways to reinvent your businesses to become relevant in disrupted environments.
While having this advice is essential, it is equally important to know how to implement these insights and see examples of how they are effectively used in practice.
I recently read an article which provides insights into how companies have used transparency to their advantage.
BodyBuffer — open salaries
The article points out that Buffer created a deck describing its culture’s values. 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 by revealing employee salaries throughout the organisation. Buffer reveals each employee’s pay rate by name through a publicly available spreadsheet, 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 and 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.
Whole Foods — GMO transparency
The article points out that, 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 patronise 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.
Whole Foods is working on becoming the first national grocery chain to offer full GMO transparency with its projects. With a goal of full deployment in 2018, 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 their products through a verification process, as well. Whole Foods hopes that this commitment to GMO transparency will encourage industry-wide transparency, with manufacturers and distributors asking the questions that need to be asked.
Image By: The Brand Hopper
Zappos — tours and vendor access
The article points out that 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 organisation 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 to 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 they needed to guard their secrets closely. As a result of his idea, Zappos created an extranet that gives vendors complete visibility into their business.
SumAll — salary transparency
The article points out that, 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 organisation. As a result, the company says it has a reduced turnover rate because employees feel free to speak up about their dissatisfaction when they are unhappy with their salaries. For SumAll, transparency means ensuring every employee knows what’s going on throughout the organisation 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 teams. A company Wiki holds all of SumAll’s policy information, including the company’s core values and information about the corporate culture.
Image By: Budrul Chukrut/SOPA Images/LightRocket via Getty Images
Patagonia — supply chain transparency
The article points out that, for outwear company Patagonia, providing transparency throughout its supply chain means reducing any negative social and environmental impacts the company might have. Many companies have been caught off guard by information about environmentally unfriendly habits of their manufacturers or distributors. To avoid this, Patagonia takes a proactive approach, taking responsibility to ensure no harm is being caused in making 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 supply chain step, including all textile mills and sewing factories used in creating the item. Customers can click over to the main Footprint Chronicles page from that page to view the company’s general supply chain. If a part of the manufacturing process needs improvement, Patagonia admits it directly in the video and invites customer feedback on how it can be improved.
Local relevance
South Africa has a recent history of companies misleading consumers; think of the Sharemax, Steinhoff, and VBS sagas.
This has led to a significant erosion of trust among the public. However, if companies adopt transparency as effectively as the ones in this article, it could be a game-changer in rebuilding trust.
