Last month, we made a huge mistake.

We’d built a new feature in Know Your Company a while back. During that process, we’d accidentally written a bit of code that caused private responses to be revealed to new employees in a company.

This means that for the past six months, when new employees were added to Know Your Company, they were able to view responses that only their CEO was supposed to have access to.

Ugh.

It was a horrible mistake… and we were just finding out about it now. It affected about 80 companies, and hundreds of employees. My stomach still feels sick when I think about it.

One of our customers noticed the error, and was kind enough to tell us. Aside from that, our other customers hadn’t noticed the problem (or, at least hadn’t told us).

Now I was faced with a big decision… Should I tell our other customers about it?

One could argue that, if customers hadn’t noticed, why say anything? Why rustle feathers, especially when the damage had already been done. There wasn’t anything that our customers could do about it.

Saying something could cause our business harm. Customers might be angry. Some of them might even leave.

Or, we could come clean. I could be upfront about what happened, own up to our mistake, and say how terribly sorry we were. Sure, we risk losing business. But what about the risk of losing the trust of our customers?

Trust, after all, is everything. If you don’t have the trust of your customers, what do you have? If your customers don’t trust you, they won’t be your customers for much longer.

I also thought: If I were a customer, wouldn’t I want to know? As a CEO myself, I would want to know that those private responses had been accessible to my new employees. Even if I couldn’t do anything about those private responses going out, I would want to know that it happened in the first place.

To gut-check myself, I called up Jason Fried, the CEO of Basecamp. I wanted to get his two cents, and make sure I was thinking about this right. (Basecamp originally built Know Your Company, and is a co-owner and advisor to our business).

Here’s what Jason said to me: “I like moments like this. Moments like this are an opportunity to show what kind of company you are. You get to show your customers what you stand for.”

Those words were all I needed to hear.

I knew what kind of company we were. I knew what we stood for.

I decided to personally email the eighty-some CEOs affected by our mistake. In a short note, I explained what we messed up, and how sorry we were.

I offered a small credit as a token of how bad we felt, knowing of course that it wouldn’t make up for it. I gave folks my personal cell phone number and told them to call me anytime if they had questions, concerns, etc.

Then I braced myself for the reaction.

I got a flood of replies from customers. Not a single one was negative. A few folks were concerned (as they ought to be!)

But no one was angry. No one left.

In fact, the response from customers was overwhelmingly positive. People said, “Thank you for letting me know” and, “No biggie, these things happen.”

One of our Dutch customers emailed me saying, “We have a saying in Dutch: waar gewerkt wordt, worden fouten gemaakt that translates to ‘mistakes are made if you’re doing work’.”

Another person replied to me, “We all screw up from time to time. Go have a cocktail ;)”

I even had one customer who said he was so impressed with the email I’d sent, he’d forwarded it to his entire company as an example for how to handle a mistake.

Our mistake became a positive moment for our company. It solidified who we were, what we stood for, and showed our customers that too.

We proved that “putting our customers’ best interest first” isn’t just something we say – it’s something we do. We gained our customers’ trust and confidence as a result.

Mistakes are bound to happen. You’ll never entirely avoid them. So your customers aren’t going to judge you on whether or not you’ve made a mistake – they’ll judge you on how you handle it.

Do you come clean immediately? Do you say how sorry you are? Are you genuine about it?

It’s a hard thing to remember when you’re in the middle of a fire. You’re faced with the prospect that admitting a mistake could cost you customers, your reputation, and a lot of money.

When you’re in that moment, simply ask yourself: “What kind of company are you?”

You’ll know what to do.

A few weeks ago, a friend told me he was thinking about quitting his job.

He said it was because of communication breakdowns between him and his boss. Small moments of poor communication had snowballed into a deeper, gnawing frustration for my friend.

I asked if he’d mentioned these moments to his boss. Maybe his boss had no idea these were problems in the first place.

My friend acknowledged that this was most-likely true. But then he said this:

“Even if I did speak up, I don’t think anything would change.”

His words struck me. I had almost forgotten – I had felt the exact same way a few years ago.

Before I was CEO of Know Your Company, I was an employee at another company. Just like my friend, I was unhappy at work. But just like my friend, I didn’t tell my boss about it.

Why? Part of it was due to personality. I’m an introvert. I didn’t want to come across as a “know-it-all” to my boss. Another part of it was fear. I was worried that my boss would interpret my feedback as a personal attack.

But those weren’t the biggest reasons holding me back.

The biggest reason I didn’t give my boss feedback is I believed that even if I did speak up, nothing would change. I believed my boss wouldn’t do anything with my feedback. No action would be taken. And if nothing was going to change, what was the point of me saying anything?

My friend had felt the exact same way. This sense of futility is why we both didn’t speak up. We’re not the only ones to have felt like this.

Futility has been found to be 1.8 times more common than fear as a reason for employees not speaking up to their managers. According to a 2009 Cornell National Social Survey, more employees reported withholding their ideas due to a sense of futility (26%) than a fear of personal consequences (20%).

In other words, it’s not that we’re merely scared of giving feedback. It’s that we don’t think anything will come of the feedback when we voice it. Futility, more than fear, is why employees choose not to speak up to their bosses.

So how do you help your employees overcome this sense of futility?

If you’re a manager, business owner, or CEO, the most important thing you can do is act on the feedback your employees give you. After all, that’s why an employee is giving you feedback in the first place – they simply want action to be taken.

Now I’m not saying that you should blindly appease every request that an employee makes. But you have to start somewhere. If you want an open, transparent work environment, you can’t just talk about being open and transparent. You have to act in an open and transparent way.

Here are three small ways you can encourage your employees to speak up…

(1) Recognize the messenger. How do treat the people in your company who do choose to speak up? Amanda Lannert, the CEO of Jellyvision and a Know Your Company customer, told me that during an all-hands meeting, she publicly thanked an employee who spoke up and gave feedback. Even though she didn’t agree with the employee’s feedback, she wanted him to know his voice was heard and his feedback was not in vain.

(2) Explain why you’re not doing something. If you receive a piece of feedback that isn’t practical or doesn’t align with the company’s direction, tell your employees that. Expose your decision-making process. If you don’t, employees will wonder, “What ever happened to that idea I suggested?” They’ll assume that you’re not open to receiving new ideas, and they’ll hesitate to bring up feedback the next time around.

(3) Act on something small. Acting on feedback – no matter how small – is the most powerful way to encourage employees to speak up and to create a more positive company culture. For example, Dave Bellous, the co-CEO of Yellow Pencil, learned through Know Your Company that his company needed a new phone service. So he promptly changed their phone service, and saw an immediate shift in his team’s morale. This one unassuming change yielded huge results. All because he acted on something small quickly.

At the end of the day, acting on feedback is how we encourage our employees to give feedback more openly. If we focus on what we do more than what we say, more employees will see that speaking up is not futile.

When I think back to a few years ago when I was an unhappy employee, this action was all I needed to feel comfortable speaking up. And for my friend thinking about quitting his job, that’s all he needs too.

“All that work, and that’s it?”

I remember thinking this to myself a few weeks ago. I’d been building a new homepage for Know Your Company. But I didn’t feel I’d made much progress.

I’d rewritten copy, collected stories from current customers, designed several new pages, made the site more mobile-friendly…

Yet despite these changes, the site didn’t look much different than before. I began to question if I’d accomplished much at all.

Luckily, as I started to feel this way, I happened to be chatting with Jonas, a designer at Basecamp. He’s also the original designer of Know Your Company, and has helped me transition the product into its own company.

Jonas said this to me:

“Claire, go read what the homepage had before.”

I went and did that.

“Okay. Go read it now with your changes.”

I went and looked at my new site.

“See? Before, people looking at your site didn’t know what customers thought about your product. Before, they couldn’t request a product demo as easily. Now, your revised design helps people do those things. So don’t get discouraged because your design doesn’t look different. If you read it, you’ll see it’s much better than it was before.”

What a great reminder.

I’d forgotten my progress simply because it didn’t look different. When you just look at the difference, you might not see much. Text looks like text, regardless of what it’s saying. But if you read the difference, you see how big your changes actually are.

Progress isn’t measured by how different something looks. It’s measured by how useful something has become. Is it making this person’s life easier? Is it doing the job you want it to do? Reading the difference, not just looking at it, reveals your progress.

So the next time you doubt how much progress you’ve made, don’t look at the difference. Read the difference.

You’ve probably accomplished more than you give yourself credit for.