Full disclosure is better!

Despite the attempts of regular startup bloggers (like myself) to demystify startups into best practices and easy to follow guidelines, the truth is they are never that simple. If they were, I’d just start one. Then another. And another. I’d have no time for blogging and if I’d figured out the secret, I’d probably not be sharing it .

Startups are like sausages. They might taste good, but you probably don’t want to know how they were made. This is true even for the successful ones. It’s never a straight line. Things never go as planned. And success is a combination of hustle, timing and luck.

Since most people don’t actually want to know how sausages are made, the natural reflex of management teams and their boards is not to share everything with staff. ‘It will scare them’, ‘They don’t need to know’, ‘They will take that info with them if they leave’ and other nonsense are often cited reasons for not sharing the good, the bad and the ugly.

I have been part of companies that practiced full disclosure and ones that did not. And while I don’t have a statistically relevant sample size I have to say that those companies that did share everything tended to vastly outperform those that do not.

Why? Simple…

Accountability: The most successful startups are data-driven. They measure everything. When you share this data and assign specific measures to specific team members they become accountable for performance.

Empowerment: Would you rather work for a company where orders come down from on high for you to implement or one where you were responsible for identifying issues and solving them and where management’s role was to enable you? Yep, me too. Sharing everything and making people accountable empowers them to make things happen.

Leverage: So many times I’ve seen founders/ CEOs struggle with under-performance as if it is their burden alone. When you share the issues amazing things happen. The whole team rallies to solve them. The ultimate test of this is when cash is tight. Time and again I have seen teams rally, find ways to bootstrap and take temporary pay cuts to stretch runway. Don’t be a hero and try to solve things yourself. Leverage your entire team.

Trust: Ultimately this all comes down to trust. If you hold back from your team, they will know it. And they will spend a lot of time trying to figure out what you are and are not telling them.

Full disclosure works not just with your staff but also with your investors. They definitely know when you’re holding back and once the trust is lost, it’s hard to recover.

For all these reasons, I recommend regularly sharing all your operating and financial metrics with your teams and investors. For team members, make sure to train everyone so they understand what you are sharing and make specific team members accountable to specific measures.

If these deep dark secrets are too much for some staff members, exit them. They’re not right for you. Full disclosure all the way!