Open for business: companies letting workers see it all
When employees walk through the lobby of Apptopia Inc., a mobile-app market analytics firm in Boston, they pass a bank of 55-inch monitors displaying the kind of data that many companies guard tightly: monthly revenues, client numbers, customer churn. When employees log in to their computers, they can see even more, down to the status of every deal in the works.
Chief executive Eliran Sapir sees this transparency as a “silent motivator” for employees to keep the company moving forward.
Investors love it, too, he said. “When you have nothing to hide, things are going really well.”
Apptopia is part of a wave of companies throwing open their finances, e-mails, performance data, even salaries, for all employees to see as technology makes it easier to share information — and younger workers who grew up sharing everything on social media increasingly demand it.
From Facebook chief executive Mark Zuckerberg’s revealing not-yet-released products at companywide meetings, to Whole Foods Market disclosing everyone’s pay, to Wayfair providing employees updates on how products are selling that day, hierarchical business models are giving way to more open workplace cultures.
In past eras, this sort of information used to be shared only with top executives. But the increased sharing of information empowers workers, analysts say, boosting engagement and productivity as the staff’s level of knowledge and communication increases.
“If a lot more people have a lot more information, they’re better able to make decisions themselves instead of waiting for instructions from someone above them in the hierarchy who supposedly knows more than they do,” said Thomas Malone, a management professor at the Massachusetts Institute of Technology. “When you are making decisions yourself, you are often more creative, more highly motivated, able to be more flexible, and often you just plain like it more.”
“Sometimes,” Malone noted, “the best way to gain power is to give it away.”
Many of the companies giving workers more power are technology startups — young companies in a young industry not bogged down by structures that have been in place for decades — though analysts see the practice spreading to more established organizations.
In many companies, the walls of corporate America have been coming down quite literally, with offices and cubicles replaced by open seating plans. Now, that openness is extending beyond the physical space to the business culture, and technology is a major driver of this freer flow of information. Employees can use a variety of tools to comment anonymously on their companies and their bosses, and the group messaging app Slack also gives workers access to a wide array of online conversations companywide.
More than half of private companies regularly inform at least some employees about the organization’s financial performance — part of the “open-book management” concept, in which employees are expected to use inside information to improve the company’s performance. That’s up from 24 percent four years ago, according to a nationwide survey of 2,100 companies by Robert Half Management Resources.
Executives at HubSpot, a Cambridge marketing software firm that is a pioneer in transparency, decided to make all employees “insiders” when the company went public in 2014. This status gives everyone access to numbers and financial information that are normally open only to directors, officers, and owners. It’s an attempt to provide workers with a better understanding of HubSpot so they feel more invested in its success, the company said.
There can be drawbacks to all this openness, however. Employees and managers alike can become overloaded with information, analysts say, and disgruntled workers could potentially leak proprietary information to competitors. And if all this information and transparency isn’t properly explained, there’s a danger it could be misinterpreted.
Bullhorn, a Boston company that creates staffing and recruiting software, developed a program that gives employees access to co-workers’ e-mails with clients and vendors. E-mails can be searched by contact, so an account manager can see all of Bullhorn’s interactions with a customer before he picks up the phone to make a call. Alerts can also be set up by a keyword, such as “frustrated,” “disappointed,” or “angry” — “a signal that this [client] is about to blow their top,” said Bullhorn chief executive Art Papas. That allows managers to intervene before an issue escalates.
The company has seen a strong demand for the product, Papas said, though he acknowledges open e-mail isn’t for everyone, especially those who deal with sensitive customer information. “When we tried to sell it to financial services firms, they’ve loved the concept at first, but then freaked out later,” he said.
And the open e-mail concept can be jarring if a worker isn’t aware of it. When Bullhorn salesman Tim Cavins was new, he was “a little miffed” when the company’s chief technical officer sent him a note referring to what Cavins thought was a private conversation with a client. So Cavins called him up: “I was trying to politely tactfully say, ‘How the hell did that happen?’ ”
Now Cavins gets it. He regularly takes advantage of others’ e-mail conversations to educate himself before contacting a client and strives to be even more professional in the e-mails he sends: “When someone’s being observed, they behave better.”
People also behave better when they know where they stand, said Jordan Bishop, the 25-year-old founder of the Boston-based travel website How I Travel. That’s why he decided four months ago to reveal all of his employee’s salaries. He gathered his handful of employees, all in their 20s, in a room and projected a Google document containing their annual pay on the wall. Bishop said it was an awkward moment, but because every salary was built on a carefully spelled-out formula — base pay is $40,000 to $60,000, depending on if the employee is an engineer, designer, or writer, multiplied by experience level and the amount of equity he or she opted for — the employees weren’t caught off guard.
“We’re strong believers that transparency breeds trust, and it’s extremely important for us to have a trusting family feel within our ranks,” Bishop said.
The Google salary document is updated every month, and, as in a close-knit family, the people who get raises are ribbed accordingly. When they go out for drinks, Bishop said, someone will inevitably say, “This round’s on you.”
Pandemic Labs, a Boston social media marketing agency, also has an all-millennial staff, and they demanded the kind of “radical transparency” that the company embraces, said cofounder Brennan White. Workers at Pandemic and its sister company, Cortex, are invited not just to make suggestions about the way the company is run but to take matters into their own hands.
When Dana Leever, the 32-year-old vice president of client services at Pandemic Labs, realized the Fourth of July would fall on a Tuesday this year, a “weird day” for a holiday, she suggested to White and his cofounder that they also give workers the Monday before off, to create a four-day weekend. And they agreed.
“Having a voice means you’re more bought-in,” she said. “That’s why I’ve stayed for five years.”
Pandemic workers were also behind a reorganization that moved people from working on multiple accounts to focusing on one at a time, a change that has eliminated overlapping deadlines and reduced the stress level at crunch time, White said.
The change has helped the workflow, he noted, but the fact that employees know they have the ability to make these changes is even more powerful: “They want to feel like they can influence their destiny.”