Marginally Better S01E15: The Transparency Tax

Everyone says customers want transparency — open salaries, open supply chains, open decision-making. But when does sharing become oversharing? In this episode of Marginally Better, Joe Taylor, Jr. examines the transparency trap: how brands like Buffer and Everlane learned the hard way that revealing everything can erode trust, fuel criticism, and even cost millions. We also explore the surprising power of strategic mystery — and why the companies winning today aren’t hiding the truth, they’re choosing what not to say. 

Episode Links:

• Indeed – Why Business Transparency is Important   
• What Consumers Really Want to Know About Your Business    
• Things Customers Want to See on Your Local Business Website    
• Does Transparency Benefit or Harm Your Company?  
• ThoughtLab – The Truth About Transparency   
• The Pros & Cons of Organizational Transparency   
• Martha Lane Fox: Transparency is Overused and It’s Not an Outcome   
• McKinsey – Leading Off Newsletter July 2022   
• Everlane: Radical Transparency in Fashion   
• The Everlane Effect  
• Transparency Mechanisms in Ethical Consumerism  
• Brutal Honesty in Sustainable Marketing  
• Buffer: Where Transparency Reigns  
• Buffer’s Transparent Approach to Salaries  
• Embracing Pay Transparency  
• Why These Companies Share Employee Salaries  
• What Supply Chain Transparency Really Means  
• Benefits and Challenges in Supply Chain Transparency  
• Why Overcompensating Supply Chains Backfires  
• Supply Chain Transparency Pressure  
• Why Full Transparency is Impossible  
• Transparency in Public Relations  
• Balancing Transparency with Client Discretion  
• 5 Ways to Balance Discretion and Transparency  
• The Power of Transparency in Leadership  
• Data Privacy and Customer Experience  
• Maintaining Transparency When You Can’t Share Everything  
• Starting and Sustaining: Transparency 

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Transcript:

Announcer: From the global headquarters of Johns and Taylor in beautiful New Jersey, it’s Marginally Better. Here’s your host, Joe Taylor, Jr. 

 Joe Taylor, Jr.: On the show this week, customers say they want to know everything about your business – where you source materials, what you pay employees, how you make decisions. But what happens when showing everything costs you everything? 

 We’ll explore why some of fashion’s most transparent brands are now keeping secrets, how a software company’s radical salary experiment became a cautionary tale, and why the businesses winning today aren’t the ones showing all their cards – they’re the ones who know which cards to keep hidden. 

 Plus, I’ll tell you about a company that lost millions by being too honest about their supply chain, and another that gained customer loyalty by admitting what they didn’t know. 

 That’s all coming up after the break on Marginally Better. 

Welcome to Marginally Better, a show about business, innovation, and the American economy. I’m Joe Taylor Jr. 

We live in an age where “transparency” has become the ultimate business virtue. But here’s the thing nobody wants to admit: sometimes honesty isn’t the best policy.  

According to research from Indeed and various business consulting firms, transparency has become a customer expectation, not a differentiator. RevLocal’s consumer research shows customers want to know your pricing, your values, your sourcing – basically everything except your grandmother’s secret recipe. 

But here’s what’s happening: businesses are drowning in their own openness. As Martha Lane Fox writes in Medium, “Transparency is overused and it’s not an outcome.” She argues we’ve confused the means with the end. Being transparent doesn’t automatically create trust – sometimes it destroys it. 

McKinsey’s research backs this up. They found that excessive transparency can actually reduce customer confidence. When you show every messy detail of how the sausage is made, people lose their appetite for sausage. 

Restaurants discovered transparency first – literally. Open kitchens became trendy in the 1990s, letting diners watch their food being prepared. The theory was simple: seeing the process builds trust. 

But as Changing Higher Ed’s research on organizational transparency shows, visibility isn’t always positive. Some restaurants found that customers became critics, questioning every technique, every shortcut. Chefs felt like they were performing rather than cooking. 

The same pattern plays out digitally. Companies rush to show their process, their decision-making, their inner workings. But transparency without context often creates confusion rather than clarity. Customers see the mess without understanding why it’s necessary. 

Buffer, the social media management company, took transparency even further. As reported by OpenSource.com and documented in multiple case studies, they published every employee’s salary online. Not just salary ranges – actual names next to actual numbers. 

The Rebel Playbook detailed how this created initial buzz. Buffer was featured everywhere as the company brave enough to eliminate pay secrecy. Job applications surged.  

But LinkedIn’s talent blog reveals the flip side: competitors started poaching their best people with targeted offers. Internal tensions arose when salary decisions became public debates. What started as radical fairness became, according to some former employees, a source of constant friction. 

Harvard Business Review’s analysis of supply chain transparency reveals another uncomfortable truth. Companies that disclose their entire supply chains often face more criticism, not less. 

One executive on Reddit’s supply chain forum put it bluntly: “We’re getting pressure to share our entire supplier list, but every time we do, we just give ammunition to critics who find one tiny issue and blow it up.” 

LinkedIn discussions from supply chain professionals confirm this pattern. Show your factories, and suddenly everyone’s an expert on labor conditions. Share your carbon footprint, and you’re either doing too much or not enough. Transparency doesn’t eliminate criticism – it often amplifies it. 

Greenly.earth’s analysis and ThoughtLab’s research both point to the same conclusion: transparency is a tool, not a goal. Used wisely, it builds trust. Used carelessly, it destroys value. 

The businesses succeeding today aren’t the ones showing everything. They’re the ones who understand that customers don’t actually want total transparency – they want the feeling of transparency. There’s a difference, and that difference is worth billions. 

Joel Gascoigne had a problem most CEOs would envy. His company, Buffer, was growing fast, had happy customers, and was profitable. But Joel wasn’t satisfied with normal success. He wanted to build something revolutionary – a completely transparent company. 

In 2013, Joel made a decision that would define Buffer for the next decade: he published every employee’s salary on the internet. 

As documented by OpenSource.com and The Rebel Playbook, Joel didn’t just share salary ranges or averages. He posted a spreadsheet with names, titles, and exact salaries. His  

own $158,800 salary. His co-founder’s $145,000. Right down to the newest developer making $75,000. 

The formula was public too. Base salary times experience multiplier times role multiplier plus location adjustment. Anyone could calculate what they’d make at Buffer before applying. 

The tech world went crazy. Buffer was hailed as the future of work. Applications poured in – transparency became their best recruiting tool. Mercer’s research on pay transparency called it a “bold experiment in radical honesty.” 

But behind the headlines, something else was happening. 

LinkedIn’s talent blog captured what Buffer didn’t initially share – the unintended consequences. When everyone knows everyone’s salary, every raise becomes public. Every promotion is scrutinized. Every new hire’s compensation is compared to everyone else’s. 

One situation, described in various HR forums, became particularly challenging. Buffer hired a specialized developer in San Francisco who, due to their formula, made more than engineers with longer tenure. The salary was justified – rare skills, expensive market. But seeing the number on a spreadsheet doesn’t convey context. It just shows that the new person makes more than you. 

Some employees started optimizing for the formula rather than impact. Need a raise? Move to a more expensive city – the formula adjusts for location. Want a promotion? Focus on the metrics in the formula, not necessarily what the company needs most. 

Joel Gascoigne, to his credit, didn’t ignore these problems. In a series of blog posts over the following years, he acknowledged the challenges. “We learned that radical transparency isn’t a destination, it’s a journey with constant adjustments,” he wrote in one reflection. 

Buffer evolved their approach. They kept salary transparency but added more context. They explained not just what people made, but why. They refined the formula to reduce gaming. They created frameworks for discussing compensation that went beyond numbers. 

Most importantly, they stopped treating transparency as their identity. As Joel wrote in 2019, “We’re not a transparent company that happens to make social media tools. We’re a social media company that values transparency as one of several important principles.” 

By 2021, Buffer had found a balance. They still publish salaries, but with nuanced explanations. They share their challenges alongside their successes. They’ve proven that transparency can work, but only with constant refinement and a willingness to admit when it’s not working. 

Meanwhile, in Los Angeles, Michael Preysman was building Everlane with his own version of radical transparency. Harvard’s Digital Initiative documented their approach: show customers exactly what everything costs. 

A white t-shirt selling for $15? Here’s the breakdown: $2.79 for materials, $1.90 for hardware, $3.30 for labor, $0.26 for duties, $2.76 for transport. Everlane’s markup: $5. Traditional retail markup: $45. 

The Medium article on “The Everlane Effect” describes how this resonated with millennial consumers tired of fashion’s mysterious pricing. Why does a similar shirt cost $10 at Target and $100 at Nordstrom? Everlane would tell you. 

Sales exploded. By 2019, the company was valued at hundreds of millions. Transparency wasn’t just their marketing strategy – it was their entire brand. 

Then came the test. 

In March 2020, as COVID hit, Everlane laid off hundreds of employees. Vogue Business documented what happened next. The same transparency that built their brand became a liability. 

Employees went public with their stories. The company that showed the true cost of a t-shirt was accused of not showing the true cost of their decisions. Twitter exploded with #EverlaneUnion posts. The brand built on openness was accused of hiding its labor practices. 

The CBS research paper on transparency in ethical consumerism, while not fully accessible, reportedly documented this paradox: the more transparent you are about some things, the more people expect transparency about everything. You can’t be selectively radical. 

Everlane tried to respond transparently – explaining the financial pressures, the difficult decisions. But transparency about laying people off during a pandemic doesn’t make it feel better. Sometimes, full disclosure just gives people more reasons to be angry. 

Harvard Business Review’s piece “What Supply Chain Transparency Really Means” tells another cautionary tale. A major retailer – they don’t name names – decided to publish their entire supplier list. Every factory, every subcontractor, complete transparency. 

Within weeks, activists found issues. A third-tier supplier in Bangladesh had safety violations. A fabric mill in India had wage disputes. Problems the company didn’t even know about became their responsibility because transparency made them visible. 

A LinkedIn post from a supply chain executive describes the impossible position: “We’re getting pressure to share everything, but our supply chain has thousands of suppliers. We can’t control them all. Transparency just means we’re held responsible for things we can’t actually fix.” 

 The Reddit supply chain forum discussion reveals the industry’s frustration. One user wrote: “Customers want transparency until they see how the sausage is made. Then they want you to make sausage differently, but still sell it for the same price.” 

HBInt.biz analyzed the actual costs of supply chain transparency. It’s not just about disclosure – it’s about monitoring, auditing, correcting, and constantly communicating. For a major brand, true supply chain transparency can cost millions annually. 

But here’s the kicker: customers say they want this transparency, but studies show they rarely change purchasing behavior based on it. They want to feel good about their purchases, but they still buy based on price and convenience. 

So who survived the transparency tax? 

Buffer found their balance through evolution, not revolution. Joel Gascoigne’s willingness to admit mistakes and adjust course saved the company from its own radical experiment. They kept what worked – the general principle of openness – while abandoning what didn’t – the rigid adherence to a formula that ignored human complexity. 

Everlane took a different path. They quietly reduced their transparency rhetoric. They still show some cost breakdowns, but the “radical” is gone from “radical transparency.” They learned that customers want to trust you’re ethical, not audit your every decision. 

The companies that survived learned a crucial lesson: transparency is like salt in cooking. The right amount enhances everything. Too much ruins the dish. And once you’ve oversalted, you can’t take it back. 

There’s a restaurant in Charleston, South Carolina, that doesn’t have a sign. No website. No phone number. You can’t make reservations. The only way to eat there is to know someone who’s been. 

It’s booked solid for three months. 

This unnamed restaurant – and yes, I’m not telling you the name on purpose – understood something that transparency advocates miss: sometimes mystery creates more value than openness. 

Thought Leaders LLC explored this in their piece “Why Full Transparency is Impossible.” They argue that complete transparency is not just impractical – it’s undesirable. Mystery, discretion, and privacy aren’t bugs in the business model. They’re features. 

Think about it. Apple is one of the world’s most valuable companies, and they’re famously secretive. Nobody knows their supplier margins. Nobody knows their product roadmap. The mystery is part of the magic. 

Carve Communications’ research on transparency in public relations found something counterintuitive: customers don’t actually want all information. They want the right information at the right time. 

It’s like nutrition labels. Zendesk’s research on data privacy shows customers want to know what’s in their food, but they don’t need to know the serial number of the tractor that harvested the wheat. There’s useful transparency and there’s information overload. 

LinkedIn discussions from John Papazafiropoulos and Irfan Ahmad explore this balance. How do you show enough to build trust without showing so much that you lose competitive advantage or overwhelm customers? 

EOS Worldwide’s take on transparency in leadership offers a useful framework. They argue transparency isn’t about showing everything – it’s about being consistent between what you say and what you do. 

A Quora discussion about maintaining transparency when you can’t share everything revealed a simple truth: customers understand that businesses can’t share everything. What they can’t forgive is pretending to be transparent while hiding important things. 

The key is what Garrett Dimon calls “practical transparency” in his guide to starting and sustaining businesses. Share your values clearly. Share your commitments openly. Share your results honestly. But keep your competitive advantages, your negotiations, and your internal challenges appropriately private. 

So where’s the balance? The companies getting this right today follow three principles: 

First, they’re transparent about their transparency. They tell customers what they will and won’t share, and why. No pretending to be an open book while hiding chapters. 

Second, they focus on outcomes over process. Customers don’t need to see how you make every decision. They need to trust that your decisions align with their values. 

Third, they understand that transparency is earned, not declared. You don’t become trustworthy by showing everything. You become trustworthy by consistently doing what you say you’ll do. 

Here’s my challenge to you: Look at what you’re sharing with customers. Are you sharing because it adds value, or because you think you’re supposed to? Are you being transparent, or are you just making noise? 

Remember Buffer’s salary experiment and Everlane’s radical transparency. Both companies learned that showing everything doesn’t automatically create trust. Sometimes it just creates problems you didn’t need to have. 

The goal isn’t to be transparent. The goal is to be trustworthy. And sometimes, the most trustworthy thing you can do is admit that some things are better kept behind the curtain. 

Because here’s the truth: Your customers don’t want to know everything about your business. They want to know that you’re taking care of the things they don’t see. That’s not transparency. That’s trust. And trust is worth more than all the radical transparency in the world. 

That’s our show for today. Whether you’re publishing salaries or keeping secrets, remember: Transparency is a tool, not a virtue. Use it wisely, and it builds trust. Use it carelessly, and you’ll pay the transparency tax – in money, morale, and customer confidence. 

 Thanks for listening to Marginally Better. If you like what you heard, please help us out. Leave a quick review on Apple podcasts. It’ll help us spread the word about the show to people like you who care deeply about great customer experiences. 

 If you want to get behind-the-scenes notes from me and the rest of the team, go to marginallybettershow.com or follow the link in our show notes. 

 Marginally Better is a Calufrax radio production. Our producer is Nicole Hubbard with research by Connie Evans. I’m Joe Taylor, Jr.