Transparency builds trust - especially when it comes to crisis management; with crisis comes opportunity. This is precisely what happened in 1994 with Intel.
The company noticed a small issue that would result in incorrect calculations for a very small percent of computer users running on Intel's latest Pentium processor. Once the late, great CEO of Intel Andy Grove found out about the incident he informed the general public about a recall which cost the company over $400mn.
What Andy Grove didn't realize would happen is that he accidentally created the most important marketing campaign in the history of the semiconductor industry.
Many people watching the news that day didn't know what Intel was. By the end of the relatively benign crisis management event, the first impression many consumers had of the Intel brand was that of trust.
Many other technology companies are also incredibly transparent and this creates outstanding brand loyalty and significantly enhances shareholder value. More importantly, it's the ethical and right thing to do.
Salesforce.com discloses all outages and security issues in real time on this web site: https://trust.salesforce.com/
Google is also incredibly transparent, even disclosing all Google self-driving car incidents online: https://www.google.com/selfdrivingcar/reports/.
When companies are transparent, customers and investors are more comfortable doing business with or investing in the underlying company. This often leads to stellar long term revenue growth and in many cases, stock price appreciation.
What's the lesson here? Always be 100 percent transparent in business, especially with the risks of the product or service you are selling. All you have in business is your reputation, which you take with you from one employer or start up to another.
I always feel that it is important to disclose risks within the first 30 minutes of a meeting with a potential or existing client. It's the right and ethical thing to do.
It also leads to trust which is of paramount importance in business. It's crucial to disclose all risks to your clients or prospective clients before doing business with them.
The only reason you might not offer 100 percent disclosure is in the rare situation when you can't divulge an issue due to confidentiality reasons. If this is the case and if the investment or product/service has significant risks that outweigh the potential returns, consider not selling the product/service. Life is too short to destroy your or your company's reputation and compromise your values.
Companies like Google, Salesforce and Intel have developed an incredibly loyal following over the years given their intense focus on ethics and transparency. It's not a coincidence that Google, Salesforce and Intel are all the market leaders in their respective sectors, as transparency builds trust.