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Distributing information within your team – Finding the right balance between transparency and confidentiality

Anonymous asks

In the beginning when your company is small it is easy to distribute core company information to everyone relating to finances, recruitment decisions, trade secrets. When you grow you face challenges. You want everyone to feel committed and empowered but simultaneously sharing too much information will create friction and harm the team spirit. How do you balance between transparency and confidentiality?

Marten Mickos

This is a great question. The answer starts from the company culture. Some companies are secretive and reach huge success. Other companies share information broadly and reach huge success.
Whichever model you choose, you will pay a price for it. If you choose the secretive model, you may not be able to build maximum commitment and teamwork in your organization. If you choose the open model, you will at some point be let down by someone who betrays your trust.

A model I have used myself is one of as much openness as possible, but not full openness. I keep communicating to the organization that we will try to be as open as possible, but that there are facts, numbers and events that I will not be able to share. Most people will accept and respect that.
The big question is often: “Should we share revenue numbers and individual deal sizes?” Personally I believe in sharing the overall revenue number with everyone, because in a startup that’s one of the main metrics that people work on improving. Individual deal sizes is trickier. You may want to share it for big deals in order to enthuse the team. But generally you may want to keep them confidential, because if they leak out, customers may get upset and competitors may gain a benefit they don’t deserve.

As for other numbers, as CEO of the company you are the one who will face the moments where you choose to share or not share. Sometimes you will say “All, I can’t share the exact number, but let me state that our growth over the last period was excellent! Thank you!” Or you can say “We don’t share Profit and Loss accounts with everyone, but I want you to know that we have used more cash than what we budgeted. For this reason, I will ask each one to look for ways to be more frugal now. We will cut somewhat back on travel and on marketing.”

If you are in a 1-on1 discussion with a key executive, then you may choose to share numbers that you don’t generally share. At that point, you should tell the person that you are sharing the info only with them, and that you expect the information to remain confidential. In these situations, it’s good to be specific, saying something like: “Don’t mention this number at home, to your assistant, or to your own team.”
Oftentimes, employees are eager to know certain numbers only in order to verify that they or their team is being fairly treated and assessed. When that happens, you can tell them that the numbers are confidential, but that you as CEO pay great attention to equitability and you know that the numbers are fair for everyone. If they trust you, which by definition they should be doing if they work in your organization, they will be fine with this answer.

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