I’m often asked about the biggest differences between the corporate and startup worlds. I made the switch myself from corporate law to start Hugo in San Francisco. But the biggest shock wasn’t trading my suit for a hoodie or my latte for a RedBull. For me, the largest adjustment was getting used to the transparent culture in new age companies.
But learning how to leverage this quality can pay off in spades for your business.
‘Need-to-know’ is impeding how you grow
The status quo of ‘need to know’ is part and parcel of the corporate world, referring to sharing information only when it’s critical to complete your job. A junior employee doesn’t ‘need to know’ what we’re charging our client. Mid-level managers don’t ‘need to know’ hiring plans for the next quarter. And the engineering team doesn’t ‘need to know’ about a key partnership in the pipeline.
However, the concept of ‘need to know’ could be costing traditional companies in unforeseen ways. For instance, how do you handle information that you could technically complete your job without, but it could potentially improve your performance? Similarly, what about the information that’s not really necessary for your role, but would make you a far more engaged, motivated employee?
This is a key difference between the fast-growing, high-ROI startup world and conventional business. Knowledge is power, and information sharing is in the DNA of agile, rapidly-growing startups — and not just when teams ‘need-to-know’! Walk into any young tech company. You’ll encounter ‘Ask-Me-Anything’ meetings as the standard, an absence of offices and doors, open-access instant chat and file storage, and in some businesses, even publicly accessible remuneration data!
‘Nice-to-know’ is now ‘need-to-know’
According to a McKinsey study, nearly 80% of senior executives said communication is crucial for growth. Yet only 25% of them felt their companies were good at sharing knowledge across the company. We strongly believe that what was previously ‘nice-to-know’ is now ‘need-to-know’. While knowledge sharing was previously dictated by different perspectives, the ever-evolving business landscape now rewards it objectively. Here are three reasons why it’s the best practice:
1. Customer empathy
Only a small proportion of your team is probably customer-facing. This means the majority of your business never talks to your customer — the same majority who keeps your business running as well as directly or indirectly provides goods and services to your customers. Sharing a more holistic perspective of customers means the whole team can truly understand your customers and their pain points.
Having access to customer needs, feedback, and insights arms your entire team with true empathy for the customer they are helping. In turn, this leads to higher quality and better customer-centric decision-making. Customer insights are therefore no longer nice-to-know. You need a way for your entire business to listen to your customer. This allows them to do their best work every day and make decisions that truly represent the customer’s best interests.
2. Employee engagement
Simon Sinek discusses how leadership can inspire action with ‘Why’ and the measurable impact that sharing information can have on team productivity, morale, and motivation. The data also supports a key relationship between information sharing and employee engagement. A 2015 report found that:
- Over 80% of employees want leadership to share more info and data about the business.
- One in four employees has or know someone who has left a business due to a lack of transparency on business direction and performance.
- Over 50% of employees say that more company info and data being shared had a significant positive impact on their productivity and performance.
Leaders who speak openly about the state of the company gain trust through transparency. The onus is therefore on you to create business-wide practices of knowledge sharing. This includes but is not limited to the state of business, what you’re hearing in meetings, and how key projects are progressing. Doing this will quickly create an even more trusting, loyal motivated workforce.
3. Two brains are better than one
Regardless of your industry, the largest investment your organization makes will always be in your people. You’ve spent substantial time and money to find the smartest team you can to solve your business’s greatest challenges. However, tunnel vision and perception cause us to rely on our people for input only in their area of specialization or focus.
At Hugo, one of our most valuable strategies is to have many more brains working on our greatest challenges, based on information sharing across the business. Every day, an idea or opportunity comes from someone on our team not directly responsible for a solution to that problem — simply because we exposed everyone to the insights at hand. Having a culture of knowledge sharing across the business unlocks the potential for solutions, feedback, and opportunities for your business that would otherwise be lost behind closed doors.
Taking steps towards transparency
While transparency takes time to implement, there are a few steps you can take right now to accelerate your organization’s progress:
1. Emphasize what’s important to you
The first step to transparency is to simply be loud and proud about your company’s core values. Believe it or not, businesses skimp on this all the time, and they pay for doing so indefinitely. Your values let your employees know what your business is about and what’s expected from them. This quickly cascades down to your customers and can make the difference between success and failure.
2. Keep an open dialogue
Be an open book about your business — it’s the only way to keep your employees, investors, and customers on the same page. Strive to be personally and internally transparent. People can detect disingenuous personalities from a mile away. Similarly, they can also sense true transparency. Keeping it real is the simplest way to build trust and respect among all of the key players involved with your organization.
3. Always make room for growth
When problems arise, it’s not enough to turn to your employees and say “fix it”. If there’s an area your business is underperforming in, take some time to really tackle it with your team. Talk with them about potential solutions, the current roadblocks you’re facing, and the benefits of fixing the situation. You’ll be surprised how happy your employees will be to take the initiative on solving the current challenges your business is facing. In fact, establishing a regular meeting for this is highly encouraged.
Taking these steps and others to make your company more transparent will yield positive results almost right away. Holding onto the status quo of ‘need to know’ wasn’t doing traditional businesses any favors. It’s a big reason why so many of them are susceptible to disruption from startups. Get on the right side of the equation. By being more transparent, you’ll ensure your organization a spot as a disruptor, not the disrupted. You can learn more about how Hugo enables transparency here.