Here's My Radical Candor About Radical Transparency

Transparency. It’s now expected from any modern company. It’s easy to talk about, but I can say from experience that it’s difficult to truly deliver. This post is about the tug-of-war I’ve been having with transparency at BetterCloud for the last five years. It’s my hope that it can serve as a reference for anyone who wants to promise transparency at their company.

Throughout my entire career, “transparency” has become an increasingly common term. I hear it in almost every interview I do now; it’s a top item that candidates are looking for. It makes sense. Who wants to go to work every day and be kept in the dark about what’s happening in the market, at the company as a whole, or worse, just within their department? Nobody. Almost every single event that occurs in the world is documented through technology and social media and is available for consumption. It’s absurd to think that we wouldn’t want or expect that from the place where we spend the majority of our time and make our living.

For a long time, employees probably didn’t feel empowered enough to demand transparency from the top brass, but today things are very different. It’s top of mind for the youngest generation of workers who expect to have immediate access to current information. Companies wanting to attract this generation of talent are adding transparency to their list of values and can now check the box. For many newer companies, started by the youngest generation of talent, they’re genuinely trying to be transparent. For others, it’s somewhere in between--maybe they’ve added quarterly all-hands meetings to discuss the company’s results. It’s happening across the board in one way or another.

Here is the experience we’ve had at BetterCloud creating radical transparency from day one. I didn’t anticipate what I was in for. It’s eye-opening to see what it takes to be transparent, as well as the incredible benefits and unforeseen challenges that come with it. I now understand why very few companies truly do this.

3 Must-Haves to Create Transparency

• Trust. This is the number one requirement. If you’re going to be transparent, you need to trust your team. You’re probably sharing raw, confidential information about activities, strategies, and events that are months (maybe years) away. You can remind people it’s confidential 1,000 times, and you can implement complex systems to prevent information from being copied, but ultimately that’s not going to help. You need to trust that this information won’t be shared more broadly, or else you’ll always be filtering what you say. Trusting people is a breeze when your team is small and you’ve hired and trained everyone yourself. Everyone feels like family; everyone’s “in it.” As you scale, though, you have to trust that the team you’ve put in place is hiring the right people who share the same values. This becomes pretty difficult and, truthfully, at some point it becomes blind trust. But you still have to trust.
• Time. The amount of time it takes to be truly transparent ends up being a tremendous investment. One of the biggest mistakes I made early on was communicating stream-of-consciousness style. Even though my emails were transparent technically, it was probably dizzying to follow. It takes time to collect and present information intelligently. We do most of it via presentations at our monthly company meetings and it takes at least four hours a month to pull together. The other time that is invested is the time of the whole team. If you’re going to be transparent, it’s important to provide exactly the same information to everyone. It takes time to consume that information and when you look across hundreds of people, that time adds up.
• Buy-in. Everyone in the organization should practice transparency, but it’s most important for the executives and leaders to do so. If there is one weak link, then the whole value proposition breaks down. It’s important to look for leaders who buy into the transparency goal, have a track record of transparency elsewhere, and agree in advance to the time commitment. At the beginning of each year, we ask every department to share--in front of the entire company--how they succeeded in the previous year and how they failed. If a leader or exec hasn’t done that before, it can be a hard habit to start.

If you have those three elements--trust, time, and buy-in--then you can make transparency happen. To ensure that information truly gets to people, sharing it through multiple channels is also essential. Everyone has different learning styles. They digest information differently. In fact, we often deliver this kind of information through company meetings, email, and Slack. No matter what, it all gets harder over time as an organization grows and gets more complex.

The Top 3 Benefits of Transparency

• It gives everyone a sense of purpose. One of the reasons I’ve been so passionate about transparency from day one is that it gets teams motivated about their individual projects. When people understand the big picture, they understand how they play into it. Large social enterprises have transformed recently because my generation (and the next) want to understand how their work plays into the broader world. At a startup, the same concept applies, albeit on a much smaller scale. If you know what the organization is working toward and how other teams’ projects are related to yours, then you’re likelier to invest more energy into your work. It’s great to ask people to work hard, but if you give them purpose, you probably don’t even have to make this ask. Transparency also benefits people’s careers and helps them grow rapidly. Since they have context beyond their job description, they’ll have a much broader understanding of the challenges of running and scaling a company.
• It lets leaders share the burden with the organization. Admittedly, this benefit is the most selfish of all of them. Any executive knows that leadership can be stressful: There’s a lot on the line, P&Ls to own, etc. Radical transparency gives me an avenue to share what’s going on in my head--especially the most daunting and negative concerns--each step of the way. Early on I discovered that many people were surprised by items I was stressed about. Either they already knew what the solution was--which was the best feeling ever--or the problem hadn’t even occurred to them.
• It encourages employees to reciprocate the transparency. Seeing our team feel comfortable enough to be radically transparent with me was the most surprising and delightful part of this initiative. I knew then that we reached a tipping point, that transparency had become fully embedded in our culture. Most organizations won’t be completely transparent with their employees for fear of retribution in one way or another. Because of that, some of the most valuable observations and ideas remain unspoken, or are never surfaced to the right people who can implement them. To facilitate transparency, I started holding office hours six months ago, allowing anyone in the company to book one-on-one time with me. The ideas and initiatives that have come out of office hours are incredible. We never could have had those conversations if transparency wasn’t so embedded in our DNA.

The 3 Most Surprising Challenges of Transparency (and How to Overcome Them)

• It’s hard to set expectations and remain consistent. Once you promise radical transparency, people start assuming that the same information will be shared every time, in the same format, with the same cadence. This shouldn’t have come as a surprise, but it did. When we shared updates about a particular team’s successful project, people assumed an update would accompany every successful project completion thereafter. When we sent weekly emails with updates and then paused for a while, people asked why the updates stopped. On one hand, it was refreshing when we started getting feedback like this because it meant people cared and were consuming the information. But on the other hand, it became a burden of sorts to remain consistent while also covering the right information. Anyone reading this will understand: You could probably write a novel about what’s happening across your company every week or month, so how do you decide what to focus on, how often to share it, etc.? We’ve invested a lot to automate certain items that were being shared (e.g., customer wins, stellar customer reviews, etc.) and we’ve established a consistent monthly cadence, but this will always be difficult.
• People start making their own assumptions. Radical transparency is about sharing all the information. If anything less than all the information is shared, people tend to fill in those gaps with the worst assumptions. This is another challenge I didn’t predict at all. I figured people would love getting information and details on different areas of the business that they otherwise wouldn’t get. I didn’t expect that it’s the information that isn’t shared each time that would become a focus. To combat this, we’ve implemented anonymous questions at our company meetings every month. If people have questions that haven’t been answered through another channel, they can ask them anonymously and I’ll answer it directly. This part is always interesting because I would never guess the questions that pop up, so I probably wouldn’t think to include that information in my updates.
• It can create an emotional rollercoaster. This was another surprise for me. Being transparent about a future initiative or strategy means that most people won’t receive updates again until it’s done or the strategy has changed. Unfortunately, this can create a jarring experience. “Hey, you told me we were going to do this, but here we are a year later and we still haven’t done it.” “You said this initiative would get us X customers, but we only got Y customers.” The reactions to this range, and the peaks and dips of the rollercoaster vary depending on the kind of organization you are, what industry you’re in, how old the company is, how much work experience your team has, etc. To address this challenge, we’ve been candid with employees about why our strategies change over time and why that’s beneficial for the company.

Building a truly and consistently transparent organization is difficult. It’s an extra layer of work that has to be thought about and done every single day. Once it’s part of the organization’s DNA, it’s nearly impossible to turn back. But it is immensely powerful. When employees know everything that’s going on around them, as well as the impact they’re making, it gives them amazing energy. It flattens the organization and removes politics by democratizing information.

If I had to do it all over again, I’d only make one change to make things go more smoothly. I’d outline these (and other) benefits and challenges as disclaimers to transparency, which would allow for a little more patience and understanding from employees. Other than that, I would absolutely make the same decision and invest in being a radically transparent organization again.