Monday, August 14, 2017
"Radical transparency"/ "How to prevent the institution from killing inspiration"
May 31, 2017 "The upside of corporate 'radical transparency'": Today I found this article by Brenda Bouw in the Globe and Mail:
Transparency is of the latest business buzzwords, but few companies take it as far as Buffer, a San Francisco-based social media software company that makes its salaries public.
All of its 70-plus employees – from the CEO to the so-called “happiness hero” customer service representatives – have their annual incomes published online. The company also publishes revenue in real time, and last year it openly discussed the reasons behind its decision to lay off 10 employees.
“People were quite shocked about how we shared our financial details for that one,” says Buffer spokesperson Hailley Griffis, who is based in Toronto.
The so-called “radical transparency” approach helps attract and retain employees that fit with its open culture and also helps to improve the business. For example, when the company started sharing its monthly recurring revenue numbers online, a reader pointed out they were calculating it wrong. It was quickly fixed.
“When you put something out into the open, there’s a lot of feedback that comes in,” Ms. Griffis says. “It has opened up a really great dialogue.”
While few organizations go as far as releasing employee salaries (with the exception of requirements for some government workers and leaders of publicly listed companies), more are taking bold steps to publicize key financial metrics such as sales, profit and customer retention rates. By being open, companies are hoping to get employees more involved in the business and build customer loyalty and trust.
While there are risks, such as revealing data that can be used by competitors and potential impacts on employee morale (especially if the business isn’t doing well), experts believe the pros outweigh the cons.
“I think it’s a positive trend,” says Ann Frost, an associate professor for organizational behaviour at Western University’s Ivey School of Business.
She says increased transparency forces companies to be more accountable and can empower employees to pitch in and make their company more profitable.
“People like to see that what they do on a daily basis makes a difference,” Ms. Frost says.
More transparency also helps companies build a stronger corporate culture and attract top talent.
“You are indicating this is an open transparent [company] and you don’t play games,” Ms. Frost says. “But you need to have that culture for transparency to work.”
Toronto-based Fiix, which makes maintenance software for equipment and asset management, doesn’t share salary information but is open with its 50 employees about a number of key metrics including financial results, targets and how much money it has in the bank. Employees are also allowed to sit in on executive meetings.
Fiix CEO Marc Castel says being more open gives employees confidence about the state of the business. When times are tough, they can also help it do better.
“When you don’t know how the business is doing, you get nervous about the future. You end up spending a lot of time talking and worrying about things that you shouldn’t,” Mr. Castel says. “Transparency turns every employee into a mini CEO who can take personal ownership and responsibility for the health of the company.”
Fiix also publishes its quarterly revenues on its website for customers and stakeholders to view if they want, as well as corporate social responsibility goals and programs and product updates, both good and bad.
Mr. Castel doesn’t see any downside to sharing the information and is open to feedback.
“You have to be big enough as an employee and as an executive to take the good and the bad,” he says. “Not everything you do is going to be terrific. There is nowhere to hide when you’re transparent. If you get called out, you have to deal with it. It makes people more accountable and more responsible and ultimately builds character and better judgment.”
Waterloo-based Axonify doesn’t share much information outside of the company but is open with employees about its finances, targets, expenses and any hiring challenges it may have.
“Employees need to understand how the judgment calls and decisions they’re making add up financially to what we’re all trying to achieve as a company,” says Axonify CEO Carol Leaman. “From an overall financial-results perspective, I think it’s essential that people know, otherwise they guess – and when they guess, usually it’s in a negative way.”
She says some potential hires also want to know about the company’s finances before they accept a job.
“They want to know there’s enough cash to feel safe,” Ms. Leaman says. “It has almost become necessary that, to attract people, if they’re going to jump ship from somewhere else [they want to know] that you’re going to survive.”
Ms. Leaman says transparency builds trust with potential and current employees.
“If people trust you and they understand how their contribution adds to the overall results, they will go to the end of the Earth for you,” she says. “From a cultural and loyalty perspective, it is highly effective to be open and honest with people.”
5 hours ago
No one has the right to know what my company makes but my wife and I.
We risked the capital. It is our business.
We deploy our capital, not someone else's, so it is our concern.
This millennial hugfest shows a complete lack of balls.
He's gonna find out that employees have their own interests in mind more than his.
Also, if he's receiving venture capital I'd be questioning my investment as an investor.
The deployment of capital is not employees concern.
Its their job to do their job.
1 hour ago
Can we get the Illuminati to embrace this transparency maybe start with Fidelity, Vanguard and Slate Street?
"How to prevent the institution from killing inspiration": Today I found this article by Roy Osing in the Globe and Mail:
Roy Osing, former executive vice-president of Telus, is a blogger, educator, coach, adviser and the author of the book series Be Different or Be Dead.
First of all, institutions don’t kill anything; people do.
That said, every leader wants to grow their company; it is the imperative of their strategic game plan.
The founder of a startup has a vision that they can only realize when a larger and larger market consumes their product or service.
The organization to support the increasing demand grows; infrastructure increases along with the employee base.
What started out as a two-person crew with a pledge to solve a problem and make a difference suddenly becomes a large machine with all the attendant challenges of complexity and bureaucracy.
Under such conditions, how does a leader preserve the inspiration that created the organization in the first place?
How do you prevent the machine from suffocating the small entrepreneurial engine?
1. Take a look at yourself. You may have been successful launching your startup and creating the momentum needed to gain traction in the market, but you may not have what it takes to lead the business through the stresses and strains of growth.
Let go of your ego and make the right call for the future of what you started. Find someone who can turn your brave idea into a real deal.
2. Create a “rules and policy system” that minimizes rigidity and restrictions and maximizes degrees of freedom for employees.
Don’t look to best practices for direction; this will only propagate what large organizations do. You don’t want to act large. You want to maintain the nimbleness of small.
3. Recruit as many folks as you can from small business. You want practical thinkers and people who have a proven track record of getting stuff done.
4. Develop execution as the competitive advantage of the business.
It’s not your intellectual capacity that will set you apart from the competition; it’s what and how much relevant stuff you deliver to customers.
An organization that executes brilliantly can only do so if it is lean and mean, with simplicity as a core value. This will hold off the pressures to add unnecessary complexity to the business.
5. Stay close to the front line. The fuel to think big but act small comes from the people who take care of customers day in and day out.
Keeping the inspiration alive requires keeping it real in terms of how customers feel about the business through every touch point and every transaction.
Set up a front-line guidance panel to provide insight and direction to keep the customer in the driver’s seat of your business, informing your growth activities.
6. Adopt a “servant leadership” style. People are inspired when they are connected to what the organization is trying to achieve and there is a support system in place to help them do their job and deliver what is expected of them.
Servant leaders ask “How can I help?” often and everywhere and use the answers they get as the critical instrument to keep the organization fresh and vibrant rather than stale and rigid.
Inspiration can dominate institution as the lifeblood of an organization, but it requires a specific culture to keep it alive.
If words like inspire, feel, execute, small, fast, “do it”, front-line, simple, less and customers define the conversation in the organization, inspiration is winning the war.
If not, you might be doomed.
2 days ago
Having an ex-VP from Telus (or any CDN Communications Company) writing about innovation is like asking a house plant who they plan to vote for.