Modern Companies That Are Winning At Radical Transparency

October 4, 2018
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what is radical transparency?

The internet has made it easier than ever for consumers to discover sensitive information about large companies. As a result, businesses are constantly under scrutiny for aspects of their operations, products, services, and culture. Avoiding secrecy by practicing radically transparent is one of the best defenses against the negative repercussion of this easy access to information. Here’s what radical transparency really means—plus three companies that are doing it well.

What is radical transparency?

Radical transparency is the belief that all corporate entities should be honest, open, and straightforward. Rather than keeping certain details behind closed doors, radically transparent companies don’t hide anything. In addition to being open about everything that goes on behind the scenes, companies should also make employees feel welcome to share their thoughts and opinions.

The idea was originally founded by Ray Dalio of Bridgewater Associates. The company founder created this policy back in the early 1990’s after realizing that meaningful, thoughtful dialogue was essential to a successful organization. Dalio set his sights on creating a company where everyone could candidly share their thoughts and ideas without criticism from others, thereby fostering and encouraging blunt, honest discussion.

In addition to encouraging open conversation, radical transparency at Bridgewater also means allowing employees see the salaries and wages of all others at the company. The benefits of radical transparency are allowing employees to feel knowledgeable about the inner workings of the company as well as feeling respected and valued. They also know how much they’re earning compared to their peers, which is unusual for companies of all sizes. This can both encourages employees to work harder in order to achieve their next visible pay band and it also helps protect against wage discrimination (a female or minority employee will be able to point out if their salary is below a white male coworker’s).

Examples of radical transparency

Radical transparency is a great business strategy because it helps employees, customers, and partners feel authoritative. This helps build a sense of trust that promotes loyalty and dedication to the brand. If you’re wondering what radical transparency looks like today, consider these three examples below.

Buffer

This social media management tool began as an ordinary startup—until they started practicing radical transparency. Once the company began sharing information about their sales numbers, salaries and revenue use, the whole world began watching them. This move was a strategic one, as it reinforced Buffer’s brand as being honest, helpful, and straightforward.

FitBit

Another example of radical transparency is FitBit. This popular fitness technology company has access to something extremely valuable: customer data. This kind of mass customer behavior data collection is relatively new, and it has left many people feeling uncertain. FitBit quels these concerns by being completely open about which data points they collect, how they share it, and how the collection of adult data differs from the collection kids’ data. They regularly update their privacy policy as well, so customers know this information is always up-to-date.

Patagonia

Lastly, Patagonia is one of the strongest and most current examples of transparency. Patagonia is extremely open about where all of their products come from. They also detail how the products are made, where the materials are sourced, and the conditions for the workers who create these materials. This helps share insight into Patagonia’s prices, and most likely contributes to the reasons consumers are more willing to pay their higher prices. Customers know what exactly what they’re paying for when they buy something from patagonia, and this is a choice they feel good about.

Considerations of radical transparency

It probably goes without saying that this unusual tactic is not well-suited for all companies. While it can be wildly successful, it can be difficult to implement into a company that has not been operating with transparency since the beginning. While we support this practice in theory, there are a lot of considerations to make before attempting to implement this in your company. Keep in mind that not all employees might be interested in being exposed to these mass amounts of information. They might also be uninterested in allowing their coworkers to know their wages or performance ratings. As always, be sensitive of your workforce before making any of these decisions, and check out more pros and cons here.

About

As a professional copywriter, Dan produces strategic marketing content for startups, digital agencies, and established brands. He helps organizations tell stories, achieve online presence, and builds brands that communicate with their customers. Dan is also a regular contributor to Forbes. He started writing after his first professional role as a health promotions coordinator for a local family physicians office.

Category: HR Tips & Trends, Culture


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