I’ve been sitting here typing up my daily update for the #CEOUpdates slack channel, and it got me thinking about how far the culture of transparency has come in my company. Its week 5 of COVID. Everyone’s working remotely. We’re in media & advertising - one of the industries that’s easiest for a CFO to put a big fat red line through when times get tough. ‘Marketing?’ they say…’ Yeah turn that off’.
Back to my team update.
“Average booking value is down 22%. Talent sign ups are up 28% - more people seeking work, so this makes sense, but we have a supply exceeding demand problem. Number of jobs posted per day is down 7% and conversion rate is at a historic low…Now lets look at our burn rate, and the runway we have left…”
Not a pretty picture I was painting.
When I first started theright.fit I wanted to protect my team from the daily stress associated with being a part of a startup. I was worried that if they fully understood the risks or knew how little cash was available, or the time frame we had to prove this thing could work, they might panic. I was being a total martyr about it - “it’s my job to lose sleep, to carry the weight of the world on my shoulders, not theirs” I would tell myself.
In fact, it was complete bullshit. I wasn’t giving them all the info because I was scared - scared they wouldn’t trust my leadership. Scared they’d leave. Scared they’d lose faith in the idea. That if I just showed them the shiny, glossy, exciting positive parts, all the wins, all the positive feedback, it’d allllll be fine…
It was my mentor sitting me down and explaining that actually all I was doing was isolating myself from the very people who had the skills and expertise to help - in fact, I was paying them to do exactly that! So why wouldn’t I let them in? He gave me a book called ‘Principles’ by Ray Dalio. My current human being crush.
If you don’t know who Ray Dalio is, here’s a quick bio. He’s worth $17 billion dollars. He founded what is now the largest hedge fund in the world, Bridgewater and they have about $160 billion under management. But he’s entirely different from what you would expect a multi-billionaire, finance dude to be.
Here’s one of my favourite quotes from him:
"I want independent thinkers who are going to disagree. The most important things I want are meaningful work and meaningful relationships. And I believe that the way to get those is through radical truth and radical transparency. You have to put your honest thoughts on the table. Then, the best ideas rise to the top.”
Now what he’s done in his highly successful company is formularise how the entire company goes about assessing ideas. Everyone gets to share an opinion on every subject within the company, including their opinions on their fellow workers.
Then everyone gets to have an opinion on the opinions and all of these opinions are quantified. The results are analysed through a series of algorithms - in fact the process is very mathematical.
So while initially all this brutal truth sounds chaotic and disruptive, it’s quite the opposite. It actually maps people’s nature in assessing other people’s ideas, whether they’re prone to negativity or positivity, whether they’re literal or lateral thinkers and builds that data into the equation. It’s mathematically measuring the worth of ideas and cutting out the guesswork.
Ray describes it as the very pathway to creating a meritocracy of ideas.
“[I wanted to create] an idea meritocracy, not an autocracy where I lead and others follow, or a democracy where everyone’s opinion holds the same value, but a meritocracy where the best ideas would win out.”
So now, in my companies, all the team has access to everything - the targets we need to hit, how much everyone was getting paid, what marketing channels we’re spending on, what’s working, the ugly stuff that isnt… everything. It means they have the data, they have the FULL picture, and they can help generate ideas, identify trends, spot problems, and have a robust, healthy, informed conversation about them. Radical transparency in action.
And I think its really pertinent in this COVID world we’re currently all trying to navigate. Business owners, managers, all trying to figure out how the f*ck we get our companies through this, and out the other side.
But if you’re hiding things from your employees, how can they feel included in decision making and idea generation? They can’t and they won’t. If people can’t see the problems or know the KPIs or drivers or financials, how can they put forward ideas that might help? Being a martyr might make you feel special, but you know what feels even better? Solvency.
As Dalio says, Poor transparency = poor culture.
And with $17 billion in his bank account, I think thats definitely worth listening to.