Radical Transparency: A Vital Ingredient In Self-Management
We recently wrote a blog post about the betting exchange, Smarkets. London based, with 120 employees, they made self-management work in their fast-growing company.
We followed up with three employees to learn how they practice radical transparency.
This time we talked with Alex Tsoflias (company chef), Vihang Gosavi (software engineer), and founder/CEO Jason Trost.
A quick refresher about Smarkets: Smarkets is a betting exchange founded in 2008 by Jason Trost. It has offices in London, Los Angeles and Malta. Most of its 120 employees are in London. They don’t offer casino games, poker or bingo. They offer event betting through a peer-to-peer exchange in which people can bet for or against an event. In 2017, Smarkets rated second in the Sunday Times Tech Track 100. Their employees regularly blog about the company’s unique way of working on their company blog.
It's an unusual workplace
Many of the 100+ progressive workplaces we’ve visited show the importance of radical transparency. They manage to eliminate secrecy by opening up all kinds of information. The goal is to boost employee engagement and business success.
Smarkets isn’t any different. Before we dive into the details, here’s an overview of their practices.
- Self-managing teams of 5-8 people, no more, no less, plus a leadership team.
- Each team forms around a function (e.g. development, finance, HR).
- And has full autonomy on how they work.
- Leadership comes naturally. Some select a leader democratically. Others rotate the role. Others don’t have a specific leader and are therefore ‘leaderless’.
- Employees set their own salary, whether you’re the CEO, chef, or an engineer.
(For more details, read our earlier post.)
From secrecy to radical transparency
This overview begs an important question: How do they avoid chaos when the environment is ‘uncontrolled’?
Some people assume such radical workplaces must be a one-way ticket to a hell of mayhem, disorder and uproar. And some companies do indeed create chaos instead of engagement. Often that’s because they overlook radical transparency.
Here a some examples:
- Giving people freedom to work whenever and wherever, without transparency on individual and team performance, leaves no way to gauge progress.
- Eliminating managers (who often take care of coordination) without transparent communication, creates an information vacuum.
- Throwing out the travel expense policy (see Netflix) and replacing it with a guideline (“Act in Netflix’s best interest”) is not powerful without transparency so teams can know how budgets are being spent.
- Giving staff the freedom to spend without teaching them basic financials means they may not realise the implications of their decisions.
Without vital information, all these good intentions easily go astray. Radical transparency is a vital ingredient in progressive organizations.
Keep no secrets
How does Smarkets put radical transparency front and center?
1. Town hall meetings + Q&A
At regular town hall meetings, all kinds of information—from financial updates to failures and successes—is shared. It’s all there for people to see. CEO Jason Trost: “These meetings create lots of transparency, especially since we’ve added a Q&A session. That ensures everyone can ask the question they want to ask.”
How do they ensure that at these sessions people actually dare to ask tough questions? And how do you avoid fake transparency? He said: “We struggled with that for a bit. Now, we do two things to ensure that. People can ask their questions upfront, so they don’t have to in public. Also, people can send in their questions anonymously. I estimate that about 10-20% of questions are asked anonymously.”
2. Real-time data
Performance data is available in real-time. It provides people information at the right time to help make better, faster decisions.
3. Weekly coordination meetings
Once a week there is a ‘coordination meeting’. Each team sends one representative. In this 30-45 minute stand-up, they review the status of work in progress. They also say where they need help with blockages.
4. Transparent communication
Communication is transparent. Meeting notes are shared openly. Slack is used as an internal communication tool. In fact, even the code the engineers create is held transparently in a global repository.
5. Financials
Chef Alex Tsoflias: “Just like everyone else at Smarkets, I have access to all financial data. It gives me a feeling of what’s going on and I therefore feel truly part of the company.”
6. Salaries
Céline Crawford (Head of Communications): “In our previous careers we spent much time trying to guess what colleagues earn, and how big their bonuses are, etc.”
“At Smarkets we were like: wouldn’t it be better to spend our time on work? So that’s how we got to talk about just exposing everyone’s salary.”
Now, every employee in the company can look up the salary of each member of staff.
Sunlight is the best disinfectant
Radical transparency helps companies create truly progressive workplaces. Indeed, it’s one of our 8 trends of progressive workplaces. It has the power to boost engagement and commitment while weeding out unfairness and nasty politics.
American lawyer Louis Brandeis put it well: “Sunlight is the best of disinfectants”.
