Corporate Openess

Seth Godin has a good piece in Fast Company about how revealing more information may actually be better for a company.

EBay allows every bidder to see the reputation history of every seller. Amazon ranks every single product on a top-sellers list. Ambient Devices is building digital pinwheels that spin faster when the pace of sales picks up for a client. Nordstrom's CEO still answers his own phone.

Compare those transparent companies with British Airways. Its Web site is designed to automate as much as possible, but it's actually a barrier between the customer and the company. You'll find few names to contact about a problem, and even if you do, chances are your call won't be returned. Four months ago, I sent the airline a ticket to be refunded, yet no one there would even talk to me about it — by mail, by phone, or by email. Desperate, I went to the airport, where two agents and a supervisor spent 20 minutes trying to get through to their own switchboard. Clearly, British Airways views transparency as an expensive intrusion, not a cost-saving asset.

A few decades ago, we discovered that quality was free. It is actually cheaper to build stuff right the first time than it is to fix it later. Guess what? Transparency isn't just free, it can be profitable, too, by sharpening your competitive edge. In an ever-competitive environment, it is also a requirement.

Many business ideas are, like this one, paradoxical. New ideas frighten people, who rather stick with conventional wisdom. I think it was Warren Buffett who once cautioned that "conventional wisdom is often long on convention, and short on wisdom."

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