Dec 9 2005

Counter Cliche: How Much Paranoia is Too Much Paranoia?, Part II

Counter Cliche:  How Much Paranoia is Too Much Paranoia?, Part II

After the original posting, one of my readers wrote in with the following question:

I was one of the first employees at a pre-funding enterprise social networking company, after having consulted on doing their business plan for them (not coming up with it; mainly turning the CEO and CTO’s engineer-speak into English). 

After being asked to participate more fully in the marketing and biz dev aspects of the company, I quickly found myself stymied by the level of secrecy the CEO maintained.  Now, I understand that you wouldn’t want important information getting out to competitors, but that can be handled by making that clear to team members.  I found it frustrating and that it encumbered the kind of “team spirit” that a good startup should have; it prevented the sharing of how someone moved the ball forward, and having others weigh in on how incremental moves based on this new information could make non-linear gains.

So with all that background, when you say “open book” to your employees, can you break that out some more?  I have an idea of what I think that means, and what it doesn’t, but I’d love to hear your thoughts on it too.

My thoughts on this are quite simple.  We are willing to share everything internally other than compensation.  We publish detailed monthly financials and reporting to the team, and we ask that they treat the information as extremely confidential.  We have had only good things come from this level of openness with our team.  Good ideas, good esprit de corps, and a radical reduction in fear of the unknown (the old "Looks like we had a bad quarter, does that mean I need to look for a job now?  Are we running out of money?"). 

In fact, I know one other CEO who goes so far as to publish an only-slightly modified version of his Board books to the entire company.

Transparency is a good thing.