Transparency is about building trust. The more your people trust each other and the organization, the more engaged and secure they feel – even in bad times. It simply leads to better work. Erring on the side of transparency is a good general approach.
That said, you can take transparency too far. Having an open book approach to the company’s finances can help build trust, but at some level it can also lead to unnecessary stress. It’s common for early stage companies to have one or several near-death moments as cash gets tight. Briefing your team on the intimate details of your lack of cash and limited runway can leave team members wondering if they are going to have a job soon. Productivity is likely to drop just when you need it to peak. In these situations, the CEO needs to bear some of the burden of uncertainty. Let the team stay focused, not feeling like they are bumping up against existential threats on a regular basis.
Instead, be transparent about your goals and where you stand relative to them. Be transparent about what each team in the company is working on so that other teams can coordinate and help drive the overall impact. Create an expectation of transparency in all directions: what’s going well, what’s not going well, what have you learned?
Making transparency stick:
When it comes to conflict, there is a sweet spot. The goal is to set the conditions just right to hit that sweet spot. Once again, it starts with institutional transparency and interpersonal trust. Patrick Lencioni describes a highly functional team in The Four Obsessions of an Extraordinary Executive:
“These people argue like brothers and sisters, but then they seem to forget about the arguments ten minutes later, just like my cousins. One of them would have a bloody nose, and the next thing you know they’re laughing.”
This is one rendition of the conflict sweet spot, albeit a more forceful one. Just remember: all valued team members need to feel comfortable bringing a contrarian idea forward. This can be particularly daunting for certain personalities. Their ideas may be rock solid, so you want them to surface. Create channels for these people to ‘speak up’ (e.g. anonymized contrarian meetups described above).
Perhaps most importantly, leaders should develop an internal “thermometer” as decisions are being made and – as appropriate – nudge the discourse left or right on the spectrum below. “Hurtful words” are a simple way of knowing you’ve crossed the line into destructive. The best team formats reside at the intersection of direct but caring exchanges (also see the simple grid from Radical Candor in the Foster Leadership Cohesion section).
Source: The Advantage, Patrick Lencioni