Radical Transparency: What It Means and Why It Is Important
By: Stuart B. Frankel
When you start a company, one of the early decisions that you will make is how much information you are going to share with your employees about the company’s progress, challenges, and results.
In the beginning, it is easy to share information because you can get everybody in one room frequently. As your company gets bigger – growing to 50 people, 100 people and then even bigger – it becomes exponentially more difficult to communicate to employees in a consistent way. When you hit this point, you must decide if and how you plan to share information with your employees.
Transparency Defines Culture
CEOs should not underestimate the importance of this decision. Some CEOs are very open, while others are very secretive and keep everything siloed within senior leadership. In some extreme cases, the CEO is the only one who knows all of the operating information about the company. There is a huge range in terms of the amount of information that can be shared, and what and how you decide to share with your company will define your culture.
Radical transparency has been defined in many different ways, but has recently been made famous by Ray Dalio and his book Principles. We have always been transparent at Narrative Science, but we haven’t been radically transparent until now.
Our Journey to Transparency
When we started Narrative Science, it was extremely important to me that we create a culture of trust. One way to do that is through transparency. At first, we didn’t have many operating statistics to share, so it was relatively easy to be transparent. We shared big milestones with the company (usually verbally) and on a daily or weekly basis. As the business matured, we started to collect more data and hire more employees. Verbal updates weren’t cutting it anymore and it was time to decide how to present our operating information to the growing company.
We started where most companies start: dashboards and Powerpoint presentations. We presented our operational metrics to the company weekly or monthly via a Powerpoint and an in-person meeting. As we got bigger, we presented that same information at our all-hands meetings on a quarterly basis. In fact, we still do this. We share all of the details about Narrative Science with our employees, including how we are doing, how that compares to our goals, and the challenges we face. Then, we give people opportunities to ask questions in person or anonymously.
We have tried many other methods to keep employees informed on a more frequent basis. We’ve provided wide access to dashboards, created KPI leaderboards that were displayed in our offices, and started a company-wide information portal.
Employees appreciated the transparency. However, the formal business updates were only happening once a quarter, and although we adopted lots of things to keep people informed in between these meetings, it wasn’t enough. We were still hearing through employee surveys that our team wanted more information and they wanted it faster. Fortunately, we have been working on a solution.
Our Journey to Radical Transparency
At Narrative Science, we’ve given our newest product, Lexio to the entire company. Lexio translates business data into plain-English stories. We recently launched our Lexio Sales Application in beta, which writes stories from Salesforce data. As a result, our entire company now has access to our stories about our sales performance.
Lexio has many benefits, but one of the biggest benefits is that it just works — right out of the box. We didn’t teach anyone how to use Lexio – our team just started getting weekly stories about our sales performance to their email inbox. Instead, we spent time teaching our employees about the information they were getting from Lexio. We taught the entire company what sales performance metrics (bookings, revenue, pipeline) mean and why this matters to every single employee.
By teaching our entire company about sales, we are providing education that will be useful well beyond the walls of Narrative Science. Most companies do a decent job teaching their employees how to do their day-to-day tasks, but are terrible at teaching people key skills outside of their everyday responsibilities. By giving daily, easy-to-understand access to stories about our company performance metrics, we are providing a way for all of our employees to learn more about our business and business in general.
Initial Results are Encouraging
Although this is the very beginning of our radical transparency journey, so far, the results have been positive. By making this information available in an easy, consumable way, we are finding that people actually take the time to read and understand what’s going on in our business. Our team is also talking about the business more which is really the goal of all of this. Instead of just giving our team dashboards and saying “best of luck,” we’ve given them access to real information that they can now use to inform their efforts every day.
As we expand Lexio’s capabilities, we will share more business and operating information with everyone in the company in the form of easy-to-consume stories. Whether it’s about marketing, customer success or even the results of our employee engagement survey, we will normalize the communication of real-time performance data in a way that anyone can understand across our entire organization In short, we are going to enable every single person in our company to think and act like a CEO.
Like I said earlier, this is just the beginning of our radical transparency journey. I am excited to see how we evolve, and will be sharing our progress along the way.