Blog of JT McCormick

Why Transparency Works

No disrespect, but most business leaders I know wouldn’t even share their company’s salary and financial information with their dog, let alone everyone in their company.

They’d never admit it, but those business leaders hoard information for one reason: they’re afraid.

CEOs wrap themselves in secrecy because they think if nobody sees the company’s spending habits, let alone their salary, then they’ll be free from criticism.

But secrecy doesn’t protect anyone—it just leaves people guessing. It leads to Water Cooler Talk. People fill in the information gaps with their own made-up story, and it’s usually not a beneficial one.

That’s why Scribe is open about everything in our company. Everything from company finances to salary information is available at any time to every member of our Tribe.

If someone wants to know how much we spend on big expenses like rent, they can see that. If they want to know my salary, they can see that. If they want to know what we spend on bottled water for the office, they can see that too.

That’s how granular we get with our transparency.

It’s not just finances we’re open about, either. We can all see each other’s Whole Self plans for personal, professional, and relationship goals, some of which include INCREDIBLY intimate details about our Tribe members lives.

What do we have to gain from this level of transparency?

It creates a sense of ownership and trust among everyone in our company.

If people can see our expenses, they’re less likely to spend money excessively. They can see what we spend on rent and salary with the same transparency of their own personal finances, and they can understand how their decisions fit into the whole.

Transparency also gives people a sense of accomplishment. Because our company is transparent with every Tribe member, we can see how we’re all doing on a month-to-month basis. Together we can see where we’re coming up short over time, and where we’ve improved.

If someone in the manuscript department has insight into every detail of the sales department, it creates a collective sense that “We’re In This Together.”

Transparency also creates a check on management—i.e., me.

If our whole company is transparent, I can’t fool anybody. I can’t favor one person or one department without the entire Tribe knowing (and trust me, they’d call me out on it in a second).

Back to the salary example: if anyone in Scribe suspects that we compensate certain people differently because of their race or gender, all they have to do is look at the salaries and see that people actually get compensated for the Results they drive, not the color of their skin.

Favoritism is IMPOSSIBLE with full transparency, because there is nowhere to hide it.

With everything laid out in the open for our entire Tribe, they don’t have to question anything. They can know.

Even if most of our Tribe doesn’t look at salary information on a regular basis, the fact that they have access to almost everything if they want it is a massive trust builder.

HOWEVER…

You’ll notice that I said “almost everything.”

There is one piece of information that we don’t make available to everyone in the Tribe: poor performance.

We don’t have a leaderboard in our company.

Now, don’t get me wrong—we celebrate people when they drive exceptional results.

But there’s no point in shaming people for poor results.

First of all, if someone is struggling in their role, we don’t always know the reasons why. They might simply be a poor fit. Or they might have problems in their relationships outside of work.

In that case, we make sure to support that Tribe member’s Whole Self while they get their relationship worked out.

Sometimes, though, people just need to be coached up or coached out of their position.

That’s why every quarter I run an exercise: I ask myself, “Would I ENTHUSIASTICALLY hire this person again?”

There’s no point in blaming someone for their poor performance. If they are truly not skilled enough and can’t be coached up enough to drive Results, then shaming them accomplishes NOTHING.

In fact, it only creates a spiral they can’t pull out of, which not only affects their work, but it also affects their relationships outside of work, too. And it can often spill out onto the whole company. After all, who wants to follow a leader who shames their followers?

That’s why we aren’t transparent about poor performance to the entire Tribe. That stays with the people who need to improve.

But if they want to see anything else, they have that ability.

Transparency can be scary—your flaws are out in the open for everyone to see. But full transparency is the best way I know to create ownership and trust throughout a company.

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