Culture is a powerful instrument; sharing your culture publicly not only grants you visibility but also reveals your vulnerabilities. Celebrated companies within our innovation ecosystem are often great sources of cultural inspiration. Their profound openness detailing why and how they do things serves as a springboard for collaboration and creating new solutions. When speaking about culture, transparency has become our badge of honor. Despite fierce competition, many founders and CEOs have realized the long-term benefits of transparency as a way to strengthen internal engagement and become a trusted resource within the community.
Your culture is a component of your competitive advantage. Arriving at the decision to actually be transparent about your work as opposed to merely stating you value transparency may come from experiencing a lack of it. This may translate to acting in a transparent way internally with your team or externally with others. Jason Henrichs of PerkStreet Financial, Rand Fishkin of Moz, and Joel Gascoigne of Buffer are fans of transparency and aren’t shy about sharing their stories.
At PerkStreet, transparency provides momentum to the team. Jason Henrichs, COO of PerkStreet looks back at his experience running a previous company and says, “whenever my partner and I were out, the rumor mill kicked into high gear and we spent a disproportionate amount of time regaining positive inertia. Later, as an investor, I saw how much organizational energy went into maintaining order and a veritable lack of transparency would often keep people from being able to act because they couldn’t see the full picture.” Henrichs is happy to lead his team in a way that maximizes sharing information and does so through three different channels. “We systematize the exchange of information according to: the uncertain long range future, a monday kick-off meeting to define objectives, and then a virtual scrum using Yammer which allows for fluid and transparent peer to peer management.” In and of itself, not radically different from other companies striving to maintain openness. But when I asked more about the weekly meetings, Henrichs told me that everyone not only shares the status of their work but also the state of their personal finances – whether it be repaying loans, saving for a big-ticket purchase, or disciplined daily spending habits. He related team members’ personal finance talks to the practice of transparency:
We are a mission driven company and everyone on the team is passionate about helping Americans live better financial lives. We live this out in our company culture by regularly talking about our individual financial goals and habits. While that might seem strange since most Americans don’t talk about their financial situations even with friends and spouses, it is important to us as a company to engage in those tough conversations. It helps highlight the challenges we all face as well as uncovering ways we can serve our customers better.
This level of engagement is something I hope to hear more about in my future conversations on transparency!
In an Xconomy article on transparency, Rand Fishkin of Moz points to a time in Moz company history when he was not leading with transparency and it led to the possibility of bankruptcy, not to mention a lot of personal turmoil. SEOmoz, now known as Moz, evolved from his mother’s traditional marketing company which was founded in 1981. After amassing nearly half a million in credit card debt and not telling his father, Fishkin realized it was time to change and lead with transparency for the sake of the business and his family. As he related the incident to Xconomy, he said the experience of keeping debt a secret, was the kind of experience that “…inspires you to have values. That’s the kind of thing where you say ‘never again.’ From now on, I don’t care how dirty the laundry is, we’re going to be transparent about it.” Operating with this newfound sense of purpose has been rewarding for Fishkin. Moz operates transparently to the extent of specializing and sharing with others in the industry who also specialize and share; in return this practice increases their business knowledge and expands their network.
Another article on transparency, this one from 99U, details how Joel Gascoigne of Buffer takes transparency to the extreme and discloses his salary as well as the formula for calculating salaries for everyone on his team. Gascoigne uses transparency as a tool to normalize the culture and communicate expectations. Everyone is privy to company information: everything from the company financials to openly discussing the reason for letting someone go. The trick to making it work at Buffer has been their ability to take it one step at a time, gradually increasing their tolerance for transparent practices rather than plunging into full transparency all at once.
Of course there are disadvantages to being so transparent, but most folks agree that having a longer term goal of transparency is more of a priority because it has become a value that employees in our startup environment expect, offering trust and accountability. Companies driven by cultures keen on transparency have a better chance at attracting and retaining employees seeking the same values. Who knows, there might even be a place for salary transparency in startup cultures looking to eliminate the gender pay gap.