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InfoQ Homepage Articles Radical Transparency: How a Strong Startup Culture can Deliver Success

Radical Transparency: How a Strong Startup Culture can Deliver Success

Key Takeaways

  • Align the company culture externally and internally: The best way to express your values is to live them with clients as well as employees.
  • Measure everything and share the results: Customer and employee surveys, quarterly OKRs, real-time performance check-ins of employees and leadership.
  • Open doors, always: Make sure employees have access to everyone, and feel empowered to use it. Employees can’t grow unless they speak up, and they won’t speak up unless they feel comfortable with the people they’re speaking to.
  • Take professional development seriously: Employees that can make the most of expanding the breadth and depth of their skills on the job will be more engaged, more productive and less prone to burnout.
  • Feedback loops go both ways: One-way feedback creates a culture of fear and approval seeking. Employees should guide the company’s growth and development as much as the other way around, and formal and informal touchpoints are essential to gather that direction.

In a startup’s world, the economy is driven by employee skills and talents, and people are an organization's primary source of competitive advantage. Successful startups tend to have strong cultures where they are literal communities with shared goals, values, objectives and rules. These businesses have proven much more likely to survive and thrive in both good and bad economies, largely due to their sustaining cultural strength rooted in core values, transparency and pragmatism.

The following looks at the current reality of people management in startups, how to build a culture, and most importantly, how to make it last with "radical transparency."

The talent tightrope

Startups must be adept at walking a tightrope that requires balancing workforce demands and culture, regardless of shifting economic winds and scale. This begins by candidly looking at the landscape of your organization’s hiring needs and putting a plan together that will support where the business is going to be 18 months out at all times. If not, short-sighted decisions can occur that will need to be corrected or evolved before you know it - and at a much greater cost.

With fewer employees, it’s crucial for startups to attract resilient talent capable of scaling their own skill sets as the company rapidly changes, while also taking care to align employee development plans to anticipate and support future business needs wherever possible.

If a startup is in a hot industry segment or a product suddenly takes off, it could experience hypergrowth and need to acquire more talent, fast. Some organizations, ours included, are experiencing just that in spite of the current economy.

Navigating these periods of high demand with a methodical approach to healthy growth is an essential part of ensuring longer term sustainability, efficiency and financial health. It can be tempting to skip these sometimes challenging discussions in the face of business urgency, but the consequences of poor planning and execution can be disastrous to a company's culture, reputation and overarching business momentum.    

Sustainable organizational development

Our organization follows both top-down and bottom-up organizational development models, encompassing the vision of leaders, employee feedback and facets of business practices. On the technical side we use detailed models to determine the coverage ratios needed in order to scale effectively and serve our customer base. This helps us understand such things as the number of cloud architects and consultants that would be needed to support expansion plans, and then we review actual performance against our models and iterate along the way.

The sales department takes a top-down approach to model out how many new team members we might need based on the addressable market, established quotas and the number of customers we need to bring on over the span of the next 12 months to hit proposed revenue targets based on average deal sizes. Simultaneously, the bottom-up component looks at historical sales attainment by rep, ramp speed, pipeline creation and conversion rates, all to reverse engineer how best to build up to the top line revenue goal across the broader team.   

With this data-driven approach, we’ve reached an appropriate middle ground and established a trigger-based hiring plan to ensure we’re at the right capacity at all times. Equally important is the ability to protect and foster a hard-built culture that has enabled us – as a company and as employees – to handle peaks, valleys and future plans, comfortably and with continuity.

A radical approach to sharing information

Culture is a reflection of a company's core values in action. If you know what you want your company to be, the people you want to attract and the type of service you want to be known for, you can define a base set of principles to act as a guiding light. This can keep a company on track and create a body of highly motivated overachievers that are not only incredibly driven, they’re personally invested and incentivized to bring the company and their teams along with them for the ride as they build the business together.

Key to this for us has been embracing radical transparency, internally and externally. This enables us to show, not just tell, their true values across every aspect of a company and team. While not easy, it’s an investment that employees and customers appreciate, reward and reciprocate.

For example, we allow employees to fully access just about all company data no matter if it relates to customer support, finances or any other area. This is the foundation of a business model that has existed from our outset. The reason for doing so? We realize there is no way to know how the information might be used beneficially unless it’s put into the hands of the people who give it value – employees.   

It’s easy for a business to fall into the trap of simply safeguarding data, releasing just enough so employees can perform their specific functions and nothing more. By doing so, however, employees work with virtual blinders on, never knowing how their role fits into a company’s broader vision or even if they’re having a positive or negative impact. It can also create knowledge silos, and in a startup, shared information is what builds content and perspective needed to iterate and innovate.

The more that startups share with their people, the more aligned they’ll be with company vision, resulting in greater productivity and innovation. An entire organization’s focus is sharper when both individual and collective business objectives are at the forefront and all are moving in the same direction. By being transparent, teams share candid details on what is and isn’t working, and their ability to collaborate openly and comfortably can unearth opportunities that otherwise would be missed. Also, employees will better understand the skills needed for a given project, and with full transparency, they’ll know where in the organization they can find them. (They will also have a clearer understanding of why some projects are deprioritized in favor of other initiatives when there are difficult decisions to make.)

Tips for transparency

Keep in mind, the goal of transparency is not simply about metrics like achieving the highest operational cost efficiency possible or forcing information overload. Radical transparency is about cultivating trust among your workforce, making them aware of company expectations and supporting their ability to carry them out with as much impact as possible. This ultimately benefits your staff, customers and the company.

The following tips can help you ensure your startup is as transparent as possible:

  • Align culture internally: The best way to express your values is to live them. The work you ask your employees to do should be reflective of the culture that they signed onto. For example, don’t profess to be a progressive organization and then expect employees to do regressive work. If a core value of your team is autonomous achievement, give them the independence to work undisturbed. And if one of your values is collaboration, invest in tools and technologies that inspire and enhance it.

  • Align culture externally: Customers seek business partners who are trustworthy and true to themselves. Being an open book about your data and metrics is a surefire way to build it. For us, that means publishing service stats in real time, giving customers (and employees) a live, down-to-the-second look at performance metrics. Emphasizing transparency to customers doesn’t just build trust, it attracts like-minded ones whose values align well with your own. Also, with full visibility, there’s a pressure and motivation to continue evolving and provide a better, more client-friendly solution.

  • Measure and share: Customer and employee surveys, objectives and key results (OKRs), real-time performance check-ins of employees and leadership – all should be measured and shared. We survey our employees on a quarterly basis, alternating between two formats. For example, we use the Q12 format from Gallup, as well as a "start, stop, continue" feedback format. Each one of those also includes an employee Net Promoter Score question. Not only does this yield great insight, it’ll keep your startup honest.

  • Open door policy: Make sure employees have access to everyone and feel empowered to reach out. Employees won’t grow unless they speak up and they need to feel comfortable doing so, regardless of title. We create a number of touchpoints for employees to connect with leadership, from introductions the moment they walk in the door all the way through feedback, discussions and more. But as much as these are vehicles for discussion, they’re especially effective in building comfort for employees with the radical idea that leadership’s doors are truly always open. In making leadership accessible, be sure employees trust they can be candid, even when reaching out to the CEO with a quick question or idea. This can be particularly critical for building trust in fully remote startups.

  • Take professional development seriously: Employees that can make the most of expanding the breadth and depth of their skills on the job will be more engaged, productive and less prone to burnout. The important part is to make sure you understand what every single person on your team is looking to get out of their employment opportunity and that they're continuing to grow in that direction. If you're being authentic with the people that you manage - and understand what their wishes, hopes and dreams are within your company and beyond - you can facilitate their growth and satisfaction.

  • Keep everyone in the loop: Feedback loops should go both ways. Employees should guide the company’s growth and development as much as the other way around, and formal and informal touchpoints are essential to gather that direction. Additionally, forget those lengthy annual, archaic, exhausting performance reviews and focus on continuous management with regular performance feedback and goal alignment discussions. We use a quarterly OKR system that evolves with our priorities and can be adjusted along the way. You want people to get feedback, good or bad or constructive, in real time. That way they can make real-time adjustments and eliminate performance review surprises down the road.

Honesty as a policy

Radical transparency isn’t a business model for every company. However, with technology startups, you’re typically dealing with highly skilled experts that require a lot of independence to do their job. And when collaboration is necessary - and it always will be - employees understand the skills needed for a given project. With full transparency, they’ll know where in the organization to quickly and easily find them, and that’s just another in a list of competitive advantages that can be gained.

Always remember, though, you have to deliberately maintain and cultivate that kind of honest, open connection or it’s a futile exercise. You need to be accessible, honest, consistent and transparent. You must be willing to engage in thoughtful, open dialogue. The moment you deviate, you undermine your progress.

Honesty, as a policy, is much easier to handle from an HR perspective, too. Not only does it simplify and clarify objectives and expectations, it creates more personally satisfied, cohesive and highly motivated teams that can produce results regardless of economic shifts. And a win for everyone always makes for a better story.

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