At Chorus One, all information is available to all team members by default. This includes:
- Cap table and compensation
- Financial information (revenues, assets, etc)
- Interview notes
I have been interested in transparency, at least since reading Ray Dalio's book Principles around the time we started Chorus One. Over time I have come to appreciate the benefits of transparency even more.
The primary ones are:
People do their best work when they have a sense of ownership. In a startup this means that they need to have equity. And if they are an owner, they deserve to know what is going on.
Transparency reinforces a deep sense of ownership.
- Decision Making.
To move fast, you have to make decisions fast. This requires people to be able to decide autonomously as much as possible. If they have incomplete information, how can they make decisions? They'll either make worse decision or defer to someone with more information. This increases the burden on managers, introduces hierarchy, disempowers people and slows everything down.
Transparency supports efficient and autonomous decision making.
- Organizational Complexity.
If not all information is transparent, then someone has to worry about who should have access to what. In a dynamic environment, this is a complex problem. When things change, you have to change your system. It will tend to lag and people will lack access to important information (that they may not even know exists).
If everything is transparent, you don't have to build or maintain any systems around information access. You reduce complexity. Instead, the problem is around organizing information. But since everyone has access, everyone can contribute to doing this well.
Transparency removes the need to manage information access and allows everyone to help organize knowledge.
To create an organization where people feel ownership and move fast, you should embrace transparency to the maximum extent possible.