By Eddie Geller, co-founder/CEO of Tinybeans
“You can talk to us anytime. We’re an open book.” A lot of management teams say this, but do they live up to it? If the answer is no, most employees recognize that, and it plays out in a range of reactions. At best, the words simply become white noise, and employees don’t pay heed to them either way. At worst, employees react with literal and figurative eye rolls, sowing seeds of distrust and resentment.
Being an open book doesn’t mean showing the company’s numbers after they’re final. That’s called reporting. Most businesses share their historical performance, but how many share the “actuals” and, more importantly, the forecasts so that employees can understand them and move them in the right direction?
On the flip side, being a proverbial open book goes a long, long way toward strengthening the management-employee relationship. It can create a level of loyalty that inspires the team -- at the very least, transparency is appreciated by employees.
So, how transparent is transparent?
At my company, we use the method described, appropriately enough, as open-book management based on Jack Stack’s book, The Great Game of Business. Every week, the entire company comes together for a 15-minute huddle to review how we’re doing and, more importantly, where we’re going. Everything is fair game. Is revenue meeting expectations? Are costs being managed? What’s helping us achieve our goals? What are the obstacles? Everyone in the entire company has complete visibility into the budget, how we’re spending and what our results are, and they each have a voice on how we can improve.
The benefits of this are tangible. I see it every day, particularly in the following areas:
Vision and strategy: To fulfill our vision as company leaders, we need everyone on board. That’s why I truly believe that the more you share about your company -- its visions and ambitions, its processes and outlook -- the more employees can rally around it. Not only does this keep them informed, but it also invites them to contribute. Every one of us has hidden skills that don’t show up on a resume or job description, and open discussions about the path forward may prompt people to volunteer these skills for projects.
Financials and operations: The more you share about the specifics, the more employees know. Positive news is, of course, welcomed, but you may be surprised at the power of sharing negative news. The honesty required to disclose negative news builds a bond, and this often engenders buy-in from everyone on the team. On an individual level, the more employees know about financials and operations, the more they can make the best decisions for the company and for themselves.
Leadership: The best leaders are not just the smartest or most strategic; communication and charisma are often cited as important qualities, too. Strong communication skills help inspire engagement and build trust -- and this is formed over time. The more honest you are as a leader, the more engaged your employees will become.
As leaders, it’s critical to embrace all elements of the open-book strategy. My colleagues and I execute these in a number of ways -- all of them are simply pieces of a goal, none greater than the other. It takes a lot to build this level of two-way trust, and every single stone in the foundation counts. Some examples of how to build this foundation include:
- Use employee pulse surveys to regularly provide a way for the team to give feedback. This creates a regular mechanism for expressing how staff is feeling about any particular issues.
- Maintain an open-door policy with leadership. It should not just be a saying. Of course, there are scheduling logistics that need to be worked around (a literal open door can sometimes be hard to coordinate). But employees should feel safe in speaking their minds to management. That safe space does wonders for building trust.
- Have an all-hands meeting every month where you accept anonymous questions and answer them, no matter the topic.
The consistent message through all these items is this: We value transparency, and we do our best to live those values. This includes “telling it like it is,” even when it’s not the most positive news. But receiving frustrating or negative news from leadership is still a positive step, as it allows people to feel confident in your honesty. That inherent trust builds a strong management-employee relationship, and that is a foundation for long-term success in any business.
Eddie Geller has been a tech/online entrepreneur since 1994. He is the co-founder/CEO of Tinybeans, a private social network for families.