If corporations have learned anything in the era of social media, it’s that they can’t stop workers from tweeting, Facebooking, and Instagramming about their jobs. The web has even carved out special places for employees to trade office gossip without -repercussions. At Glassdoor, a repository of anonymous com-pany reviews and salary data, more than 27 million people have contributed information about their employers. Meanwhile, anonymous apps like Whisper and Secret, which surged in popularity last year, circulate juicy rumors about various startups, deals, and executives.
Naturally, that can be perilous for a corporation. Federal labor law protects employees’ rights to talk about things like wages, hours, and terms and conditions of employment, making it illegal for companies to interfere. When a damaging rant ricochets around the web, they can only react and respond.
A new service aims to capture the thrill of anonymous office gossip and harness it into something productive. Memo, which launched in January, has already accumulated 10,000 sign-ups from employees of about 1,000 companies, including Amazon (AMZN), Deloitte, and Delta (DAL). On Memo users post about work-from-home policies and doomed projects. A recent post from a PepsiCo employee called out the company’s planning (poor), work ethic (skewed), and management (oppressive). Another poster bemoaned an acquisition: “I loved my company until it was bought out by Honeywell. The only thing I like about Honeywell is my cubicle and a paycheck.”
Memo’s goal, according to CEO Ryan Janssen, is to surface all manner of vital information about a company, be it rumors, compensation trends, or problems with a strategy. It’s the sort of information everyone except management knows, because everyone is afraid of confronting his superiors. “The problem with companies isn’t that they don’t think the truth can help them,” Janssen says. “It’s that they don’t know the truth and aren’t acting on it.”
In the second quarter, Memo will begin selling advanced tools that allow companies to collect data on employee sentiment, moderate comments, and engage with workers on the app. It’s a big ask—employers surely aren’t amused by what they’re reading. But Janssen insists that this sort of radical transparency is inevitable and that smart companies will get ahead of it. “You can either become a transparent company peaceably, or your employees can open it up for you,” he says.
It wasn’t always this way. When Glassdoor launched in 2008, employers reacted with uncertainty and discomfort, according to CEO Robert Hohman. That has changed. “We live in a much more transparent world. Most employers recognize that public review of their company’s culture is the new normal,” he says. “You can’t put the genie back in the bottle.” The company, which is expected to IPO this year, minimizes wanton aggression by verifying the identities of users and asking them to leave pros along with their cons. The result? Most reviews are favorable. The average CEO approval rating is 67%; the average company rating is 3.2 out of 5.
Several forward-thinking companies already use internal tools for feedback. Squarespace, a New York web-development startup with more than 400 employees, collects anonymous feedback using Google’s survey tool. Kris Passet, Squarespace’s people relations lead, worries that the negativity on an app like Memo may not be productive. “There aren’t many proposed solutions, so it’s just a vacuum for venting basically,” she says. “That’s not very helpful.”
Ryan Smith, CEO of business survey provider Qualtrics, says his company’s internal feedback tool, which is not anonymous, surfaces problems just fine. “Anything that’s said [on Memo] is not going to be a shocker because we’re open with ourselves,” he says. That’s less likely at the large corporations where Memo has gained the most traction. Says Smith: “The old-school companies who have never addressed the feelings in their relationship—they’re going to struggle with that.”
How to complain: A primer
Chill
Too emotional to think clearly? Don’t try to. Take a breath, a walk, or a break until you’re grounded.
Confront
The best person to complain to is usually the offending party. Awkward? Yes. But it’s the fast track to a fix.
Change
Raise red flags only when you have solutions. Instead of losing rapport, you’ll gain respect.
—Scott Olster
This story is from the April 1, 2015 issue of Fortune.
