Here’s what a company that values vulnerability, trust, and transparency can accomplish (Part 2)

In Brene Brown’s book, Daring Greatly, she shares a story told in a Harvard Business Review article about the “snowball effect” of vulnerability in leadership. To summarize a great example, the CEO of a large corporation decided to “get real” with his team about some missteps he had taken. Rather than work in private, he stood in front of his sixty-plus managers and told them the truth - and, ultimately - that he didn’t have all the answers and he needed their help leading the company. 

What happened? Did the team lose? No, the Harvard Business researchers studied the aftermath closely and reported that the CEO’s “effectiveness surged, his team flourished, there were increases in initiative and innovation, and his organization went on to outperform much larger competitors.” 

Brene Brown uses this remarkable story to illustrate the power of vulnerability - and it certainly does, but when I read it I thought first of the power of transparency. In making the incredible decision to be upfront, direct, and humble in front of his organization, this CEO led his team to see that anything is possible, but admitted he didn’t know the way and needed their help. To many of us, we might feel terror leading a company while concurrently admitting mistakes and not having answers to the most important questions. We might feel exposed and insecure. This CEO’s admission that he made mistakes and didn’t have the answers ultimately demonstrated his humanity. And it was this vulnerability that led to transparency and transparency leads to trust. 

In environments of trust, people are willing to be open and take what might be perceived as bigger risks.  With personal vulnerability and perceived risk might come feelings of insecurity and inadequacy, but at the same time, they invite better ideas, greater cooperation, and more valuable collaboration. That's how businesses grow. The lesson here is counter-intuitive -- that we may need to be more vulnerable, open, and exposed to establish greater trust and a more positive work environment.

Would you want to work for a CEO that puts it all out there and believes that people are capable, creative, and collaborative? More and more of us are eager to devote our time and our dollars to companies with individuals like this at the helm. Everywhere I look I’m seeing more organizations that are seem to be saying, “We’re going to do this differently than our predecessors. We’re going to take care of our people first because when we take care of our people, they do what’s best for our shareholders and other stakeholders.” Refreshingly, these organizations are creating both a dedicated workforce and a loyal customer base.

Here are just a few examples of some remarkable companies in a changing marketplace:

1. Patagonia
Amongst other innovative ideas, like matching volunteers and promoting used clothing, the adventure-loving apparel company has been a leader in transparency. Their words exactly? “Everything we make has an impact.” Just a click on their webpage and shoppers will easily find a summary of their environmental footprint. Learn where and how their clothes are made, the materials that are used, and the impact on human labor. Some of the statistics on wages and fair trade are eye-opening. 

Did Patagonia take a risk in putting all this information out there? They sure did. It wasn’t long ago they even ran a marketing campaign called “Don’t Buy This” encouraging consumers to think twice about what they’re purchasing from Patagonia. It sounds crazy for a company to spend money on a marketing campaign that encourages customers not to buy their stuff. What this has done, however, is create and accomplish their own idea of success... a one billion dollar company that cares about their workers and their customers. Patagonia enjoys a loyal following willing to pay a premium for jackets and hats that favor transparent practices. 

Patagonia has set an example and other clothing companies have followed suit. Warby Parker, Pact, and Everlane all directly share information about what each item costs to make and how the production process unfolds. As a Michigan native myself, I can share first-hand that Zingerman’s Deli in Ann Arbor, nonchalantly posts their financial statements on the wall of the restaurant. After all, employees have an opportunity to become partial owners.

2. Buffer
Buffer Social Media Management is a relatively small company doing things a little bit differently. They made an uncommon choice to make all of their salaries public. Whether you work at the company or not, you can easily see what each individual makes.  Not only do they give team members access to what each role is earning, but like Zingerman’s, they also share monthly revenue and user numbers, emails, and progress reports. 

Joel Gascoigne, CEO, and founder, says it well: “Sticking to radical transparency was probably both one of the most frightening and exciting things to do over the past months. It has meant to open up and make ourselves extremely vulnerable for ideas, since they were easily accessible to everyone on the team.”

Joel believes in building an “open company” and concludes by saying, “One key reason transparency is such a powerful value for a company’s culture is trust: Transparency breeds trust and trust is the foundation of great teamwork.”

Other powerful examples of organizations breaking the rules of the past and opting for radical transparency are Netflix, Zappos, and Lyft. 

3. RXBAR
Similar to Patagonia, a lot of food producers are redefining transparency and trust as they build their brands. Chicago-based RXBAR founder Peter Rahal started out with a $10K investment. By year two, the company hit $6.5 million in revenue. By year four, $161 million. Rahal eventually sold the brand to Kellogg for $600 million. What set RXBAR apart? Full transparency. Each ingredient is proudly listed on the very package. Along with each whole food ingredient, buyers will see the following in bold letters: NO B.S. Exactly. NO B.S. stands for “No Bad Stuff” but take from it what you will. 

The founders were committed to the idea that the marketing be super simple and super direct.  Industry experts told them it was a big mistake. But, it worked. “Customer’s love it, talk about it, and share it,” Rahal says. Rahal still runs his company under Kellogg and the NO B.S. packaging seems to have massive staying power. 

Despite the small-company culture that made RXBAR so successful, under the ownership of a larger legacy corporation, RXBAR has had to adopt some elements of culture of its parent organization. As a Chicago resident, living just a couple miles northwest of its headquarters and being acquainted with several current and former employees, the company has had to make some difficult non-transparent operational decisions relating to hiring and retention. Even though it was simply the nature of corporate growth and profitability, some people felt blindsided by decisions. When transparency runs in the blood of people and they’re suddenly confronted by a different way of doing business, the impact to culture can be enormously consequential. These alumni still talk about their disappointment.

Other food brands putting transparency first? Blue Bottle Coffee and KIND Bars to name a few. I think we’ll see more and more follow suit. Despite the ongoing pressure from investors to grow sales and profitability, these same investors will increasingly understand that trust is a key element of those financial metrics.

Buffer’s CEO, Joel Gascoigne, says: “Transparency breeds trust, and trust is the foundation of great teamwork.” Can it be as simple as that? Scary, sure. It’s never easy to do things differently than the organizations and leadership that came before us, but the risk pays off in loyalty, creativity, and innovation.