Why Transparency Is Good for Business

One of the most frequent questions I get asked in my job is “how has HubSpot’s culture changed since you became a public company in October?” I love that question because the short answer is “very little,” and it’s a direct result of our commitment to transparency. As organizations grow, the default playbook is to add more complexity, rules, and regulations to “standardize” everything you do. This temptation becomes even greater as you go through an initial public offering because you’re surrounded by lawyers, bankers and accountants, who are all too willing to share catastrophic scenarios to scare you into legislating good behavior instead of hiring great people and trusting them. At HubSpot, our founders were adamant: we would do everything required of us from a compliance perspective, but we would maintain our commitment to being as transparent as possible as an organization. We’ve stayed true to this commitment, even designating all of our employees as insiders so that we can continue our practice of sharing as much information as possible with team members at every level. But on a basic level, why does transparency matter to your company, to your brand, and your employees? Below I’ve outlined just a few of the reasons it matters to us: 1. Remarkable Employees Want Insight Into Your Business: The top employees in your business, whether they are programmers, recruiters, or sales people, have many competitive options for where to work, and one of the many things that can influence their decision is an ability to truly and deeply understand your business. At HubSpot, we solve decisions with transparency instead of titles, and the information we share organization-wide allows employees to roll up their sleeves and create innovative solutions to the most challenging elements of our business. That access is really appealing to up-and-coming interns and new employees, because they feel empowered to speak up about things we can do better as an organization or problems we should tackle with a different approach. Providing top-tier employees with transparency and autonomy to innovate across the business can be a powerful weapon in a highly competitive market for talent.

2. Sunlight is the Best Disinfectant: One central tenet of HubSpot widely-read Culture Code is Louis Brandeis’s quote that “sunlight is the best disinfectant.” No matter what business you’re in or what stage of growth you’re experiencing, people will make mistakes. Handled correctly, failure can be an extremely effective form of organizational learning. But when you create a culture devoid of transparency, employees often conceal failure, and doing so can be lethal to your company. Not only does this practice make it more likely that employees are hiding behavior that is less than admirable, it also makes failure a four letter word, and that’s the fastest way for your company to regress to the mean. Don’t hoard information; share it widely--doing so will give you better ideas, better insights, and ultimately better behavior from everyone in your organization. 3. It Puts You Ahead on an Inevitable Shift: Social media and Glassdoor have fundamentally transformed what candidates know about your company--you can no longer sit in an ivory tower and build your employment brand with brochures and trade fairs. The proliferation of information and data externally has made the recruiting and employment world inherently more transparent, and rewarded companies that have long valued openness and transparency as part of their brand, like Google and Expedia. So while it’s possible in 2015 to resist this trend internally, it’s an uphill battle that you’re inevitably going to lose. The internet is making any information more available, so embracing transparency represents a fundamental understanding of how the world is changing, which can only improve how you adapt, transform, market and sell to your customers. In a recent survey from INSEAD, North American Millennials cited “empowering employees” as the top trait they sought out in management. The single most effective way to empower employees at every level of your business is by giving them the data and autonomy to think big, solve interesting problems, and truly learn your business well beyond their division. Transparency done right will help you recruit top talent, retain exceptional employees, and foster innovation throughout your company, and every organization can benefit from that.