Dave Balter is the founder and CEO of BzzAgent

Bill Taylor ends his recent post about BzzAgent’s transparent mindset with an intriguing question: “Are you ready to share your challenges and setbacks with the outside world?”

In this era of post-Enron skepticism, consumer distrust is at an all time high. Corporate missteps have created a “guilty until proven innocent” customer mentality. Someone receives a higher-than-expected phone bill and immediately thinks, “The carrier is trying to rip me off!” Toys are coated in lead paint, and parents assume the manufacturer was trying to cut costs. Companies are beginning to recognize that transparency is the counterweight to public skepticism.

There’s a perception of risk that comes along with radical transparency. It’s the “what if” dilemma. Just before tearing open the corporate veil, most companies blush. Then blink. They think: What if we screw up? What if profits shrink? What if we have layoffs?

But what they should be asking is, “What if we never regain the public’s trust?”

The blogosphere was harshly critical of AT&T’s Dish Network when it held a San Diego couple financially responsible for their $300 satellite receiver after the unit was destroyed [along with their entire home] in the recent southern California wildfires. This unthinkable [and short-lived] customer “service” decision not only made AT&T Dish Network look heartless, it made all companies a little less human, a little less trustworthy. While the company later backed off its demands, the damage had been done, and a PR-penned apology issued several days later satisfied no one.

Now imagine if AT&T had publicly articulated their automated billing process, accepted responsibility for the awkward situation, and explained that they were working to resolve it [not to mention canceling the bill for the customer in question, as well as any others in the same situation]. If a company recognizes their mistakes and is up front about them, most consumers are willing to show a more lenient sense of understanding.

While the case for transparency is pretty clear, the real question is: How open is open enough? Where the line gets drawn is a critical consideration. Committing to transparency shouldn’t be confused with sharing confidential information. Rather, it means providing some insight into your thinking and considerations, so that those around you can feel involved and empowered.

Recently, BzzAgent began reworking a major aspect of our business model – our rewards platform – and the outcome is likely to impact many of our 350,000 community members. Last night, we publicly shed some light on what we consider flaws in our process, by posting to our blog a hard-hitting complaint … along with our response. While we were very clear about where we believe we’ve failed [how we’ve treated the program over the last few years] and how we’re thinking about solving [starting with discussions with those impacted], we didn’t point fingers, name clients or cite vendors. Being transparent is about opening up the dialog, not airing dirty laundry. Additionally, it’s not about asking others to run your business, but letting them understand the decisions you’re making to help the business work for them.

Every business has setbacks and challenges. Managers make tough decisions and companies make mistakes. Being open about the realities of your business is rarely attacked. In that light, your greatest setback may be trying to hide from them.