Here's the bottom line about transparency for companies: it helps your bottom line. In the US, about 70 percent of employees feel disengaged in the workplace, and fifty percent of those blame a lack of transparency. Studies show 91 percent of employees will work toward the overall success of the company if they understand their role. In fact, each employee that becomes engaged from being disengaged can add $13,000 to that bottom line each year.
But maintaining transparency isn't easy, especially when your company is facing a major challenge or change. Jesse Miller, VP of Product at Yesware, shared last month how maintaining transparency during an acquisition can hurt, rather than help, company morale. Daniel Krafts, CEO of Sitrion, and Jeevan Kalanithi, VP of Product at 3D Robotics, talked finding the right level of transparency during company layoffs.
But what about when things are going well at your company?
Now, in our third and final piece on transparency, I want to explore what it's like to maintain transparency during fast growth--a scenario which, one might assume, is easy. Revenue is climbing, new hires walk in the door pretty regularly, and overall morale is high. Seems like a good time to turn that transparency dial to "maximum".
Scaling a company requires taking a second look at transparency. For a small, young company, transparency is the default. Everyone must know what's going on to get the company off the ground. But as the company grows, the level of employee involvement comes into question.
So how should companies adjust their policies to keep employees informed and included? CEO of StudyBlue Chris Klundt, AppDirect CEO Daniel Saks, and Distil Networks CEO Rami Essaid share the four important steps for maintaining effective transparency during high growth.
Step 1: Create New Communication Channels
"When we were 20 people in one room, the vehicle [for transparency] was being in that room together," says Daniel. But as you add more employees, you have to add more rooms, a new building, an overseas location--and dissemination of information becomes increasingly difficult.
That means making sure information and key messages are not only distributed to the company but also that they remain consistent. Some approaches that worked for Daniel: town halls, newsletters, email aliases, culture surveys to gauge feedback, and lunch and learn sessions.
Step 2: Determine the Information That's Essential to Employees
The bigger your company gets, the less essential it becomes to share every detail with every employee. But Rami, Daniel, and Chris agree that sharing internal information strategically is key.
For example, if your engineering team is overworked and wants to know why no one has been hired, they deserve to know the internal reasons why. If you're looking to fill those jobs, but your sales team is a priority because they're struggling even more, communicate the situation clearly and honestly. Even if your employee isn't part of the hiring process, says Rami, giving them greater visibility is important. They'll understand why they haven't gotten the help they've asked for, and --they'll know you're on their side and working towards a solution.
Most important of all: communicating company priorities. Everyone in the company works towards the goals you set--unless you don't tell them what those goals are.
Step 3: Determine What You Don't Need to Share
There are some things in a company that not everyone needs to know. By nature, says Daniel, individuals are very curious about what goes on behind closed doors. But just because people are in a room, it doesn't mean they're deciding the fate of the company.
Take salary information, for example: it's a tough metric to share with all of your employees. Some people, like Rami, feel it's overstepping to discuss other people's salary with other employes. Not to mention, says Chris, "To know why someone makes more or less than you do, you'd need to have all the backstory about when this person came on board, what's their background, etc." Sharing all that information, he says, is not a good use of anyone's time.
Step 4: Repeat.
With each new stage of your company, it's important to revisit these steps and readjust policies accordingly.
Let's return to the salary example: when your company is just a few people, it's tough to keep information like salaries a secret. As the company grows, managers must know when it's appropriate to turn that transparency dial to "low." But that doesn't necessarily mean sacrificing transparency completely. At AppDirect, Daniel says, "we're transparent about the way we derive the compensation, the mechanics. We wouldn't point to specific people." This way, employees can not only feel comfortable that they deserve what they earn, but they also know their co-workers do also--regardless of whether the actual figure is greater or less.
Adjustments like these are important because, at the end of the day, the goal of transparency is to benefit both employees and the leadership. It's a sense of mutual trust that everyone has the company's goals in mind, that no one is trying to lead anyone else down the wrong path. There's a type of transparency that's productive, and a type that's obstructive. It's the responsibility of the leadership team to know the difference.
This article is the third of a three part series exploring the benefits and potential drawbacks of transparency during periods of unusual company activity. Is transparency always necessary? Is there a "right" way to be transparent? Is there a time for not sharing information that impacts employees? Check out the first two, covering transparency during an acquisition and transparency during layoffs.