Transparency can be a difficult thing in business. Many leaders worry about employees leaving to pursue their own endeavors with company ideas, horde information to prevent corporate espionage, or resist easy access to information due to IT concerns. Some simply don't trust their employees. Transparency, however, can be a powerful tool businesses can use to achieve revenue growth and strong company culture. And in the beauty industry, the latest disruptor isn't technology or potent ingredients - it's transparency.
YPO member Amy Risley believes in the beauty of radical transparency. Her company, Skinfix, is the first clean and clinically active skincare line that is recommended and tested by unbiased dermatologists. It's why Skinfix has received 37 major beauty awards for its formulas, with clinical results published in peer-reviewed dermatological journals, and mentions on the podiums of top dermatology conferences. But it's not just the products that make Skinfix transparent. Risley has made transparency a core value in her company, establishing complete openness with employees on everything from financials to facial exfoliation.
Here is Risley on the transformational power of radical transparency to connect with customers and employees and to drive revenue growth:
1. Engender Loyalty and Trust
Product: Skinfix has made a point of listing the percentage and number of natural active ingredients in their products. And it's not enough just to say an ingredient is natural. "Our natural ingredients are verified by a third party regulatory expert. We also use a non-paraben, synthetic preservative system that's been approved by Whole Foods," she says. And the customers have noticed. "Our proactive transparency has underscored our trustworthiness as a brand," Risley asserts.
Business Practice: Transparency has played a key role in Skinfix's company culture. "We respect our customers enough to be transparent with our formulations. We also respect our employees enough to be open about our P&L, including what other companies might consider highly sensitive information, like costs of goods and profit margin," shares Risley. "We share triumphs and trials with our team, and also with our shareholders," Risley emphasizes. She hopes that their openness "will put pressure on ingredient manufacturers to come up with more and better natural alternatives to some synthetic ingredients, like preservatives," she adds. Skinfix is practicing what they preach, internally and externally.
2. Don't Operate from Fear
Product: Risley is clear on her company's focus: healing skin, naturally. They have made the conscious decision to share with their clients exactly what is in their products, despite the risks. Risley explains, "We announce the percentages of ingredients on our packaging so that our consumers know we are using an active, effective level. In some cases, it is a large percentage of our formula. It's important to tell the consumer that we have formulated a product with a high level of amazing active ingredients. In fact, we've decided it's more important than worrying about a competitor reverse engineering our formulas." This is bold for a company competing against powerful consumer product goods companies, but Risley is confident about the choice. "We choose transparency over fear. We want to establish who we are and what we stand for. If someone tries to copy our formula, can they really copy our DNA? We don't think so," Risley asserts.
Business Practice: Risley knows her opinions on sharing information are contrary to many others in the industry, but she is undeterred. "We don't make a habit of sharing detailed strategies with anyone and everyone, but we do share information when it's relevant and productive," she explains. And it turns out there are lots of mutually beneficial opportunities. "What may surprise people is that when we share within the industry, they share back! We learn so much from our industry friends, mentors, and contacts. It often helps us avoid pitfalls and mistakes that they have made along the way - some of which we were headed right for! It also helps us to better understand aspects of the business that may be new to us, like hidden costs to watch out for in a new channel of distribution, or how much leeway we have in a negotiation," Risley describes. It may not work for everyone, but it's become a hugely positive strategy for Skinfix. "While we understand competitive advantage and don't undermine our own, we don't operate from fear. We operate from a reasonable level of openness, which has allowed us to have rich two-way dialogues with colleagues and industry experts," Risley concludes.
3. Don't Over-Promise
Product: Risley is proud of her line of products, saying, "As a brand, our products undergo rigorous clinical testing with dermatologists. The protocols that we follow are much stricter than those that skincare brands traditionally follow." But she's also careful not to make unsubstantiated claims about what her products can do. "We want to ensure that our products do what we say they do. We often say, 'If it doesn't fix skin, it doesn't wear the Skinfix logo.' We don't want to over-promise and under-deliver," she explains. That's because these days, bad news travels fast. "In the era of social media, consumers will respond immediately if they feel they have been let down. At Skinfix, we pride ourselves on our 5 star reviews and customer loyalty metrics. We put our products through the ultimate transparency challenge - and only launch those that succeed," Risley says. Customers notice and respond to this kind of honesty.
Business Practice: It's important to Risley that that her company culture is upbeat and enthusiastic, without being over the top. "While our company culture encourages optimism, we also ground ourselves in reality. We don't hide the bad news from one another or our stakeholders. We don't over-promise a result. We do our best to deliver, but are quick to point out where we may fall short," Risley shares. This insistence on openness pays dividends all over the company. "It's a healthy balance between optimism and realism that requires a constant dialogue and the safety of knowing that bad news is inevitable. We shoot for the moon, but give lots of progress reports along the journey there," Risley says. It also ensures that mistakes are caught early and fixed immediately, and therefore without causing any long-term damage.
4. Information Is Power(ful)
Product: Risley celebrates that amazing ideas can come from anywhere. She says, "Our team devours lots of different information from the beauty and fashion industries, as well as unrelated industries and sources. We have a habit of constantly sharing information. When we see something that sparks an idea, an insight, a nugget - we share it around. We collaborate. We keep our minds open and curious, constantly connecting dots." It has encouraged good company-wide communication, and resulted in better products. "We don't silo the product development process. We try to expose different team members to ingredient conferences, product conception, and formula evaluation. We also dig deep into understanding skin conditions, from their symptoms and available cures to external triggers, emotional correlations, and other seemingly tangential factors," she divulges. This explains that this correlates to Skinfix's practice of sharing information within the industry: "We believe the way to innovate and deliver the best products is to dig deep, compare notes, and collaborate. One person's idea seed can be watered by another person's contribution, fertilized by yet another perspective, and on it goes until a fully formed flower of an idea blooms. A fantastic product is not the work of one - it's a collaborative effort of many along the way." Skinfix's success is a direct result of these collaborations and partnerships, inside and outside the company.
Business Practice: The same principal of collaboration permeates Skinfix's culture, and it's instantly recognizable. "When we recently hired an amazing new CMO, her first comment to me was that she was struck by the culture of teamwork and collaboration. When she asked for information, it was willingly and eagerly provided to her. She noted how well colleagues work together," Risley enthuses. It's a requirement of working in the small business world, she says: "We don't silo teams. We work across functions because we all wear many hats in a small company. Collaboration is a necessity, and one that enriches the work environment." Transparency allows it all to happen.
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