Entrepreneurs: a Culture of Openness
by Miki Saxon
Many founders talk about the desire to build truly open cultures.
Then they start adding exceptions and caveats, especially when it comes to compensation—whether dollars or stock.
Sharing compensation information is usually discouraged and discussing stock options or salary may even be considered a firing offense.
While there are startups opting for openness, what happens over time?
Based on Whole Foods nearly 30-year trial salary openness can work.
Whole Foods co-CEO John Mackey introduced the policy in 1986, just six years after he co-founded the company. In the book, he explains that his initial goal was to help employees understand why some people were paid more than others. If workers understood what types of performance and achievement earned certain people more money, he figured, perhaps they would be more motivated and successful, too.
It takes solid planning and a culture with a real commitment to transparency and developing people over time to make it work.
By making it’s financials, including profitability, available to all it employees, so they could see not just what everyone was paid, but where else the money went, Whole Foods created a true feeling of ownership along with the knowledge that promotion was available and the support to make it happen.
The company’s openness even drew recognition from the Federal Government.
In fact, in the late 1990s the widespread availability of so much detailed financial data led the SEC to classify all of the company’s 6,500 employees as “insiders,”
Building openness into your culture requires support and full buy-in from your senior staff.
And that means being willing to pass on people who have the right skills, but not the right attitude.
Flickr image credit: Paul Downey
