Transparency and Truthfulness (in Advertising)

First, a quick disclaimer: As you might have guessed from the pretentious title of this post, I’m not going to write today about pre-employment testing, statistics, or anything relating to psycyhometric testing. But this rant,…does touch on principles that are crucial to how we try to operate our company and that seem increasingly imperiled in the age of Bernie Madoff, balance sheets hiding toxic debt and opaque finacial instruments that no one can seem to value, and so on. Being transparent and open with customers, employees, and investors has such obvious benefits that it still strikes me as weird when people don’t understand this. But first, let me tell you the story that got me thinking about transparency as a business imperative.

Several months ago Criteria moved into a new, larger office overlooking Santa Monica Boulevard, with a view of the Santa Monica mountains to the north. Things were going pretty well in the new space, until just after Christmas, when we returned to discover that over the holiday our landlord had covered the windows of the entire 3rd and 4th floor windows of our building with an enormous 150-foot vinyl “supergraphic” advertisement for a multinational bank that will remain nameless. Happy Holidays! Apparently the sign was part of a larger trend of “supersign” advertisements going up suddenly across Los Angeles over the holidays, a trend reported in the LA Times on Jan 1.

The sign had an awful effect on our office space: it allowed very little natural light into the office, and of course our view was ruined. On the fourth floor the sign was a really obnoxious shade of orange, so that in the late afternoon my office felt like being inside a lava lamp. We were all very angry.  Calls and emails to the building owner were ignored and often unacknowledged. Incredibly, when we did finally get a response, the building managers and owner at first seemed to imply they were not aware that the sign was up, and would have to consult with the “sign company.” It would be down in two months, we learned next. This response prompted more angry emails, this time more emphatic and sarcastic than the last. Some of our co-tenants wrote letters to the City Council, and eventually a fire marshall came in and pronounced the sign a violation of the fire code, because it hindered entrance and exit from the building.

Finally, this week the LA Times ran a story entitled ‘Supergraphics’  Anger Tenants in L.A. Office Buildings that featured an interior picture of the office of our neighbor Pat, a physical therapist who had been instrumental in rallying opposition to the sign. (Thanks Pat!) Sure enough, the next day workers appeared and took down the sign, just like that.

What most annoyed us about “signgate” was that the landlord put up the sign with no warning, the building manager denied any knowledge of it being up, and we were provided with no credible explanation for what was happening or when we could expect it to be reversed. I’m not saying we’d have been ok with it if we had been told in advance, but at every stage the increasingly angry tenants in our building could probably have been at least partially mollified by a little more credible, timely information about what the owner planned to do to respond to our concerns. A little more transparency would have gone a long way.

At Criteria we practice a kind of “radical transparency” that might be too much for some companies to handle. We try to dispense as much information to customers, employees and investors as possible. We allow prospective customers to access a comprehensive, fully functioning version of our pre-employment testing software for 30 days prior to purchasing it, with no obligation. We publish real-time sales figures on our company intranet, so that every employee can tell exactly how much money we’ve made in a given quarter, month, or day. And we provide detailed updates to investors not quarterly but monthly, so that they know exactly how we’re doing at all times.

This kind of transparency might not be practical for very large companies, and is not without risk. Occasionally a small company that has no intention of buying our software will use our tests very actively for a month during a hiring spree. (Our VP of sales calls such companies T&Rs, or “test-and-runs.”)  But in general allowing prospects to fully immerse themselves in our software through the free trial inspires confidence in the product and is a very cost-effective way to market our services. By making sure all employees can see the company’s sales data in real-time we encourage data-driven decision-making and help everyone understand how their roles directly impact the company’s success. And we give lots of information to investors because, well, we like our investors.

Obviously, there are some limits to how far you can take the transparency ethos. But in the digital age it just doesn’t seem to make much sense to try to restrict the amount of information given to customers, employees and investors–its going to come out eventually. In the coming months it is expected that President Obama’s administration will make a point of pressing for more transparency in Washington and on Wall Street. Here’s hoping landlords are listening too.