I believe in transparency as a philosophical basis from which to run a company. The resulting trust, loyalty, buy-in and contributions of your employees more than make up for the downsides. But there are indeed some downsides. The two I’ve been most aware of are inefficiency and unnecessary anxiety. One’s a simple tradeoff; the other I believe can be addressed with education, more transparency and increased employee responsibility.
In the early stages of the company it was possible for everyone to be involved in making decisions. My philosphy of transparency worked easily with a group of 10 or so closely-knit employees. But Atomic now stands at 31 people (plus summer interns). Thirty people could in theory contribute to each decision that needs to be made and evaluate every opportunity we face. I have no doubt all 31 atoms would have something valuable and interesting to say on most issues. But there would be a lot of overlap in those contributions, lots of discussion, and lots of software not being created as a result. Full participation just doesn’t scale well. (I suppose representative democracy was invented for similar reasons.) While Atomic is no democracy, the tradeoff of efficiency and participation seems similar. Since last year we’ve been experimenting with a governance structure of a board and executive committee. I like how it’s going so far — efficient and effective. Having a board of eight helps to disseminate the issues we are discussing and multiplies the channels for employee input.
While we now have a semi-formal governance structure, one thing hasn’t changed: we still hire people for culture-fit, and part of the culture is to give a shit, or “care deeply” as one modest candidate so aptly countered. Part of giving a shit is caring about and feeling responsible for the direction of the company. After all, we expect this sort of concern and accountability when thinking about our software practices and client projects. It’s only natural that such caring individuals will take seriously and think critically about decisions made within the company.
A consequence of our transparent culture is that some ideas are exposed without context or at an early stage. Hearing about problems or initiatives early, without having full information, can easily cause caring employees a degree of stress: they don’t agree with or fully understand the decision or direction. I’ve found it’s critical to put responsibility on every atom to engage the full complexity of decisions that, through our practice of transparency, they are exposed to. Irresponsible and unacceptable behavior includes unproductive bitching in the local bar, pessimistic extrapolations on insufficient data, questioning the motives of company leadership, continuing to debate decisions which have already been made, subverting existing policies, willful oversimplification, and lack of full consideration of all aspects of a difficult issue.
But even if everyone is exposed to the full gamut of the decision, and have had ample opportunity for clarification, there still can be some deeply-rooted differences of opinion about what’s best. Some of this can be chalked up to experience. Given the gray in my beard and the ten years I’ve spent thinking about and solving business problems for Atomic, my perspective is very different than it once was, and very different from most of our employees. I find it helpful to remind myself that I started Atomic knowing very little about business, an ignorance not uncommon among technical people whose degree programs are full enough as it is. To help address this knowledge gap, I periodically offer an “Economics of AO” class. I think it helps eliminate some of the anxiety by giving everyone a shared understanding of the business foundation of the company.
Learning more about business helps, but it isn’t enough to eliminate some of the anxiety and concomitant negative behavior of being exposed to evolving issues and initiatives. For transparency to provide its maximum benefit and avoid its significant possible downsides, everyone in the company needs to take on the responsibility of engaging complex issues fully and resisting the temptation of merely criticizing from a safe distance.
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Daniel EstradaJune 16, 2011
Carl: I’ve enjoyed keeping up with your blog! Just read this story in Inc earlier this week about a democratically-run company and some of the challenges they’ve dealt with:
Carl EricksonJune 16, 2011
Thanks, Daniel. I caught the description of Namaste Solar in Inc as well. It’s quite an amazing governance structure they have.
I liked the CEO’s point about efficiency: Yes, they take a long time making decisions, but once they’ve concluded, everyone understands and is behind it so they execute quickly.
Steve FrazeeJune 16, 2011
stevepolingJune 17, 2011
I believe love is the necessary condition for making this work. Transparency evokes trust, but trust only goes so far. Love means giving the other the benefit of the doubt–like in those anxiety-creating situations. Love is “caring deeply;” it is “giving a shit.” According to Eric Raymond, “The best people, in every field, are motivated by passion.”
We generally don’t consider love in business relationships, or think a company culture should be “loving.” This is certainly antithetical to every union shop I’ve seen that encourages hostility between labor and management, or companies that encourage rivalries between managers to create competition in the hopes of greater performance. I hope Atomic never falls into this trap.
Carl EricksonJune 21, 2011
It’s interesting how far out on the fringe using that word puts you, Steve. But I agree.
In fact I see the emotional connections inherent in companies like Atomic as one of the limitations to their ultimate size.
Joy PryorJune 21, 2011
Love in this culture/society is thought of as mostly a romantic emotion. I’ve given a lot of thought, study and practice to the kind of love I assume Steve is referring to. Giving the benefit of the doubt is an interesting way to present it – probably easier to bring people to understanding with that than anything I’ve come up with. Giving the benefit of the doubt is something I’ve looked at, and suggested a lot to facilitate good relationship and community, but hadn’t thought about it as a manifestation of love. BTW – getting the benefit of the doubt is something that comes with privilege. The higher you are on a society’s privilege ladder, the more you get the benefit of the doubt. If you are attempting to have a workplace where everyone is valued and has an opportunity to give their best/most, striving to level the “playing field” – making channels open to all – as equally as possible – might be a goal. It requires constant vigilance (or at least periodic review), since you are going against the tide of the culture.
Joy PryorJune 17, 2011
I’m thinking about this with a permaculture principle in mind: the problem is the solution. Is anxiety and perceived inefficiency a problem? I don’t have answers, but that’s how I approach/examine things. My initial reaction/response about the anxiety part is that it is a reaction/emotion – only “bad” because we believe it to be bad – like any discomfort – rather than as a part of the whole of life, and/or a “highlighter” to bring attention to something that needs to be brought to greater awareness.
I appreciate Daniel Estrada posting the link to the article about Namaste – also an interesting case study.
Carl EricksonJune 21, 2011
I think anxiety can be channeled into the positive action of engagement. It’s an interesting way to look at it, Joy.
Clueless Leadership | Atomic SpinMay 4, 2012
[…] has written about the good, the bad and the ugly of transparency, but he has always stood by his conviction that a culture of openness is essential to sustainable […]