The Problem

You've read about our mission. Yet I know many of you may be thinking "who cares?" Companies have long kept their books secret - so why the push now for greater transparency?

One of the reasons is that although for the past century (post Depression) public companies have operated in a certain way - in the past decade we've seen a massive group of companies go dark.

This is not well known. (Enjoy the gift article!) As Rogé Karma writes,

That may not have been such a big deal when private equity was a niche industry. Today, however, it’s anything but. In 2000, private-equity firms managed about 4 percent of total U.S. corporate equity. By 2021, that number was closer to 20 percent. In other words, private equity has been growing nearly five times faster than the U.S. economy as a whole.

Certainly having more companies operate in the dark is not good for business. And yet, even publicly traded companies aren't terribly transparent about the internals of their business. And because of the current archaic accounting rules there is even a perverse incentive for organizations to hire contractors instead of full time employees, to appear as if their current expenditures don't last indefinitely into the future. Such an accounting ruse (because it really is a trick - it is not done in good faith) wouldn't be possible if an organization adopted conspicuous accounting, because it would be easy to see at a glance that the total number of employees hadn't changed.

The argument of course, has been made for decades that revealing a company's proprietary costs would allow competitors to scoop in and win. Many product based companies work for months on pricing new SKUs, and it even bubbles up in the marketplace (think Sony vs Microsoft for game consoles, or Samsung and Apple when it comes to new cellphones) news and impacts the price of stock.

Yet for many companies, this fear of price knowledge obscures a broader problem with pricing ignorance: if you don't know how much a seasoned developer costs to hire, how can you ensure you are attracting the best and brightest? If you are making 40% margin on the products you are selling, will customers automatically head for a competitor who is only making 30% margin? Or does the quality of your work demand a price premium?

Even worse - if your internal teams don't know the cost to produce your service - how can you ask them to cut back when times are tougher? Would employees leave an organization if it was about to run out of cash? Of course they would - which might encourage policies to build up a healthier reserve in the first place. Hiding bad news from the bulk of your staff doesn't lead to a better business - and if the c-suite is making big bets on highly risky investments - shouldn't the business know?

Finally, the perfect should not be the enemy of the good here. Organizations won't become fully transparent overnight - and every step forward helps the organization and its employees. This is akin to providing your doctor regular updates on your weight, blood pressure and exercise habits - the more data you can surface, the easier it will be for your healthcare team to keep you in excellent shape. That's something every business should aspire to.