Last updated on October 1st, 2015 at 03:56 pm
It used to be that when a company was privately owned, things were, well, mostly private.
A company may have disclosed the number of employees and maybe annual sales but all other information was kept behind closed doors.
These days, however, privacy seems to be less important. This is particularly the case for a growing number of startups that see information transparency as a competitive advantage and a way to attract customers, employees, partners and customers.
Buffer, for example, not only discloses its finances but information about salaries, pricing, fundraising and equity holders.
For startups that need some help in becoming transparent, Baremetrics makes it easy for them to disclose financial information such as sales and customers.
It seems that openness and transparency are becoming the way to do business. In his book Public Parts, Jeff Jarvis looks at how public sharing has, “disrupted economies, industries, laws, ethics, childhood, and many other facets of our daily lives.”
He argues that when we “open up, we gain new chances to learn, connect and collaborate.”
So what’s driving more companies to be transparent and why it is becoming more important today than ever before?
Kalvir Sandhu, chief executive with Vancouver-based Web dev agency Brewhouse.io, says corporate transparency is gaining momentum because people have access to more information through technology and movements such as citizen journalism.
Sandhu says he started to embrace the idea of corporate transparency in 2006 when he realized that it was easy to manage development teams if he was more open and honest.
“At the time, we felt that if we implemented transparency internally, we would reduce the amount of political perceptions or second thinking about a decision that was taken. Developers are smart and they think things through. They wanted to know why so it’s simpler to tell the truth and be honest. It builds trust and lets things get done in a quality way for the team.”
Sandhu says Brewhouse, which does custom design and development, began to publicly share its data through blog posts. “We were the first startup in Vancouver to say ‘here are some salaries’.”
He notes transparency is a big part of Brewhouse’s culture and how it keeps and attracts talent. It is a tool that drives the company’s values and open conversations. “We have values around transparency and testing everything. If you don’t have transparency, you don’t build trust, which doesn’t build collaboration, which doesn’t help you learn,” Sandhu says.
Not all of Brewhouse’s transparency is serious subject matter. Last December, for example, it published a blog post that included information such as the number of customers whose name was Mike or Michael (35).
Sandhu believes sharing information publicly is a good way to learn and get better at what you do and, as important, get feedback from different people. “I have been in so many conversations because of the opening of that data.”
Also, as this article notes, “if you’ve established a pattern of transparency, your team will better understand how its leadership works and have faith that the right decisions will be made.”
So what are the downsides of transparency when people know so much of who you are and what you are doing?
Sandhu says you need to be prepared to handle awkward conversations and accept the fact that people, including “trolls” could say negative things about your company.
At the same time, it forces you to be accountable and explain why, for example, issues around cash flow and revenue.
Flickr photo via user Louish Pixel