Leadership

X-ray visionaries: Six key areas where I believe companies should be transparent

Written by Brian Scudamore

Being the owner of a private company, I’m under no obligation to share the “secrets” of 1-800-GOT-JUNK? with anyone. Not our goals, not the state of our finances, not our operating results — nothing. Yet my business is one member of a growing class of companies that have benefited from sharing such sensitive information with their non-executive teams, and even with other companies. In fact, 1-800-GOT-JUNK? is an extreme example of this trend. I share almost everything. But some business leaders think we’ve taken the concept of transparency too far.

A good friend and mentor of mine is Verne Harnish, one of the founders of the Entrepreneurs’ Organization. About four years ago, Verne told me, “Remember, you always get more than you give.” After reflecting on Verne’s advice, keeping secrets and protecting information as most companies do just didn’t feel right. I started acting in my business the way I do in my personal life, by being open and vulnerable. Another mentor of mine, Pat Lencioni, teaches in his book The 5 Dysfunctions of a Team that the best way to build trust is by being vulnerable. Companies can’t sustain their growth and development without a widespread level of trust.

So, I started making changes to how we communicate with our people. I consciously decided that we’d be more open and that we’d share the weaknesses and vulnerabilities of both the company and its leaders. How else can our people continually improve the company if they don’t know our mistakes and the areas in which we need help?

There are six key areas in which I believe companies should be transparent:

1. Vision: It’s the most important leadership tool, because employees can’t be left to guess where they’re supposed to be going. But many entrepreneurs keep their vision in their head to prevent someone from stealing their great idea, or because they don’t have enough faith in their vision to share it. (Some don’t have a vision at all.) At 1-800-GOT-JUNK?, we share our Painted Picture, which is our vision articulated in great detail. (Admittedly, it’s written, not painted!)

2. People: If you don’t have the right people, then any information you share won’t matter. Being transparent during the interview process is the best way we know to attract and hire the right people. We share our Painted Picture with them, and if a candidate doesn’t get excited about it, then they’re not the right fit for our company.

3. Finances: I’ve found that most people don’t understand their employer’s financial model — that is, how the company makes money. We share everything except salaries at 1-800-GOT-JUNK?, because employees must know where financial improvements need to be made or what effects their actions have on financial results if they are to contribute to better performance. I hear so many entrepreneurs say they don’t want employees to know their profits, but my research indicates that when employees do find out what the company makes, they’re surprised it wasn’t making way more!

4. Planning: Having clear, realistic and relevant goals is key. But you must also confront the obstacles between your company and its goals. Employees will have a general idea of these “brutal facts,” but unless you reveal them and how you are dealing with them, employees can’t help you address them. At 1-800-GOT-JUNK?, our open discussions of the brutal facts at all levels of the company help ensure that our people are aligned to overcome these challenges, and that our planning process is effective.

For instance, when we were in danger of missing our annual profit-sharing target last year, most people knew about the problem, but no one was confronting it. We had to talk about it, so we highlighted the issue at a company-wide meeting. Everyone came out of that meeting and went into battle. We had just three months to turn the ship around, but with clear focus and a lot of effort, we did it!

5. Space: The right physical environment can support the open flow of information. How we’ve laid out our space has been key in maintaining an open and trusting atmosphere. We have no private offices, and when someone needs some “private” space, they book one of our meeting rooms, which have walls incorporating a large amount of glass.

6. The outside world: This is where many think 1-800-GOT-JUNK? takes transparency too far. We share information with prospective employees, the media and other companies — even direct competitors — because they ask questions, offer criticisms and make suggestions that can improve our company. To encourage this feedback, we conduct public tours of 1-800-GOT-JUNK?, during which we share our vision, our meeting formats, our profit-sharing structures, our interview questions and even the secrets to how we get free press. You wouldn’t believe the quantity and quality of the ideas that have come from outside the 1-800-GOT-JUNK? box.

Like Verne says, you get more than you give.

Originally appeared on PROFITguide.com
FILED UNDER: