Transparency has become a new management buzzword. Ten years ago, an employee might not protest (or even question) a management decision that their executive team made in secrecy. But today, employees expect companies and its leaders to be transparent. It’s no longer enough to give orders and announce decisions–employees want to know why and how.
Of course, companies still have the choice not to disclose that information. But the risk of public blowback is greater. With social media and sites like Glassdoor, unhappy employees can air their grievances publicly, and companies risk external backlash. Arguably, the stakes are higher than they were 10 years ago.
For three tech executives, transparency–particularly when it comes to goal setting–has been a cornerstone of their business practice. Leaders at Box, Front, and Buffer tell Fast Company why they believe practicing transparency is crucial for businesses. It’s not just because it’s good for their workplace culture–it’s vital to their financial success.
Making your goals (and progress) transparent leads to better decisions and less resentment
When a company is in the early stages, transparency comes easily. Aaron Levie, CEO and cofounder of Box, tells Fast Company that in Box’s early days, “The only way [we could] operate [was] by being completely transparent.” But as the company grew to a certain size, Levie recognized that they needed to build in a set of systems and be explicit about practicing transparency.
Box uses a system of OKRs (objectives and key results), a method pioneered by KCBP’s John Doerr that Google popularized. Every single employee can upload their OKRs for the rest of the company to see. Although it’s not compulsory, Levie says that about 80% of employees end up participating because they need that information to set team goals. (Levie himself makes his goals public to the company.) Using this information, Levie organizes weekly calls with Box’s 150 directors to go through areas of the business that are and are not performing well. “This has created an open forum for people to constantly learn how different areas of the business are performing.”
Levie tells Fast Company that being transparent has allowed teams to make better decisions. While it might be uncomfortable for the not-so-great performing groups, they end up getting the help and extra resources they need, and they don’t face resentment from the other teams because they know exactly why the underperforming department is getting more of the leaders’ time and attention.
Transparency allows you to execute with speed
For Mathilde Collin, CEO and cofounder of email collaboration software provider Front, being transparent with her goals have helped her and her team to be more efficient. Front has a similar process to Box–everyone makes their OKRs public, and Collin holds a weekly meeting with the leaders to go over the metrics. “At the beginning of every week, I also send an email to direct reports, I share what my goals of the week are. What I’m working on is also what they’re working on. The way that our goal-setting works is that once the company OKRs are done, then every executive will work on the company’s OKRs and those are shared [with their teams].”
While Collin acknowledges that transparency is good for instilling trust, she was motivated to instill a transparent culture because she believes that it’s more efficient. As she previously told Fast Company, she’d worked in a place that wasn’t transparent, and she found it time consuming to make decisions and execute tasks when she didn’t have all of the information available. You end up having a lot of unnecessary meetings, Collin says. At Front, she noticed that this problem didn’t exist. At 106 employees, “we have far less meetings than a [typical] company our size.”
Carolyn Kopprasch, chief customer officer at social media management platform Buffer, acknowledged that the process of being transparent can be time consuming, particularly for a remote company like Buffer. “We’re very disciplined about taking notes, we’re very organized about sharing things in Slack in a certain way . . . all that takes time for sure.” But she insists that it’s worth the effort. “As a team, we feel like you should be able to say, I wonder what our leads are talking about, I wonder how product is doing on their goals. We’re a small enough company that every team’s successes influences every other team.”
It is an effective way to prevent disengagement
Michael Papay and Alexandre Santille previously wrote for Fast Company, “Employees want to be heard. We want to be owners with a voice contributing to the strategy of the organizations we support. From top to bottom, each of us brings a unique set of experiences and organizational wisdom that is yearning to be tapped. Give us an opportunity to share what we know and debate the important issues. Involve us in planning, decision making, innovation, and strategy.”
When it comes to company culture and attitude, Collin says that she noticed a striking difference with employee engagement between her previous company and Front. Her previous employer would only share the good news and positive progress, and withhold negative information. “Instead of me being engaged with the good news, I was disengaged with the lack of trust,” she says. Employees are most engaged “when they know exactly why they’re working on what they’re working on.”
Levie echoes this sentiment. By giving employees context on what’s happening and what the company is working toward, employees don’t feel like there is a sense of mystery in the company. When they’re clear about where the company is at, and where they still need to go, they’re less likely to be disillusioned and disengaged. Say you decide to consolidate two teams into one team, Levie says. If everyone knows exactly why this happened, you don’t have employee speculation.
When not to be transparent
All three tech leaders recognize there are instances where too much transparency can slow down a business. Buffer, for example, doesn’t make individual goals public to the extent that it doesn’t relate to team goals–such as goals that relate to personal/career development. Collin doesn’t share information and goals that are personal, sensitive, and/or “would raise more questions,” rather than arm employees with information.
But ultimately, Levie, Kopprasch, and Collin believe that it’s crucial for businesses to make their goals (and progress) transparent to employees for a company to be innovative and nimble. Businesses today need to “diffuse innovation from across the company,” according to Levie. To be able to deliver, you need everyone in your business to understand (and align to) the company goal. It really comes down to how quickly the markets are changing, and as a result, employees need to be able to make better and faster decisions, Levie says.
Collin tells Fast Company, “The way I think about transparency is: Good transparency will help solve problems, and bad transparency will create more questions and problems.”