Transparency isn't a buzzword at Zingerman's, a deli, coffee shop, and food mail order company based in Ann Arbor, Michigan. According to Ari Weinzweig, Zingerman's CEO and partner, transparency is key to their open book finances philosophy: Employees have access to the company's financial performance and key business metrics.

Salary transparency is a key element to Buffer's culture. Transparency is listed as the app company's second value in its culture deck. Operationalized into how they do business, transparency has guided Buffer to make progress reports available to all employees. What's more, they also are open about their revenues and user numbers. They post them on their blog for employees and users of their app to view.

What's the Business Value of Transparency?

Highly visible companies like Zingerman's and Buffer raise a question about the effectiveness of transparent business philosophies and practices. Is transparency good for business?

I interviewed Weinzweig. In it he shared with me that transparent business practices at his company have a single degree of importance: Transparency helps employees better understand the business. Zingerman's CEO finds that when employees know the financials and business metrics, they make more informed choices about how to spend and allocate company funds. They invest time in activities that generate value and delight customers. In short, they act like business owners;even the company's partner meetings are open to employees.

In a 2013 blog post by Buffer's CEO, Joel Gascoigne, he cites greater team cohesion as a business reason for transparency: "Transparency breeds trust, and trust is the foundation of great teamwork." Buffer makes all salaries public, from employees up through the CEO. The company goes as far as offering a salary calculator for current and potential employees.

The Call for Greater Transparency

Certainly the internet has played a role in pushing organizations to be more transparent. Sites like PayScale and Glassdoor have helped job seekers learn what a position is worth to a company, pulling the covers back on a once taboo topic.

In a TEDx talk professor and author of Under New Management, David Burkus explains that salary transparency reduces the concern about pay equity and discrimination.

Also, society demands greater corporate transparency due to the ubiquity of corporate scandals. Social media gives customers a voice to share their dissatisfaction or satisfaction with a company's service for the world to see.

While the call for greater transparency is, in part, an outcome of social and technological trends, companies are learning there is business value to it, too.

The Bottom Line

Transparency is a buzz worthy word. It's tossed around in management and leadership circles regularly. Unfortunately dropping the term in meetings is sure to elicit a few eye rolls. Yet, with any element of organizational culture, like transparent business practices, its value is realized when it improves the company's standing with its many stakeholders.

When transparency moves beyond mere words and shapes business practices like pay, communication, or customer service, it ceases being a buzzword. It becomes a critical design element in how a business generates value for its customers. Additionally, it positively shapes the employee experience, influencing engagement, morale, satisfaction, and how the workplace climate feels.

Transparency may be an overused word. But when companies like Zingerman's and Buffer can make it work for them, it may very well be part of the secret to achieving desirable business outcomes.