Keeping Secrets at Work: When Transparency Isn't Valued

We often hear discussion of the value of transparency in organizations.  Nevertheless, many employees become frustrated about the lack of openness in their organizations.  They wish that more information was shared about key initiatives so that they could understand future plans, as well as the rationale for pursuing certain courses of action.

In a new study, Michael Slepian, Eric Anicich, and Nir Halevy examine the issue of organizational secrecy.  They find that people who keep information from others in organizations experience personal benefits as well as costs.  On the negative side, the scholars report that individuals who maintain secrets tend to express more stress and social isolation.   However, withholding vital information from others also comes with certain benefits.   It boosts perceptions of status and privilege for those holding the secrets. They feel more valued in the organization and perceive their work to be more meaningful.   These findings should not surprise us.   Just think for a moment about how people with privileged access to information tend to behave in your own organization.  

While this study highlights certain key benefits and costs associated with secrecy, it leaves open the question of just how much withholding of information is necessary in organizations.  My sense is that, in many organizations, people are more secretive than they need to be.  They withhold information because these personal benefits (status, meaning) outweigh the personal costs.  That does not mean the lack of transparency is good for the organization as a whole.  People come up with all sorts of justifications for that secrecy, but often, these arguments don't hold water.  They are flimsy rationales for not being transparent.  Leaders should test these arguments and probe the rationale being used to justify secrecy.  The costs of disclosure need to be weighed against the substantial value that derives from being transparent.   

Founder Mode: Should Entrepreneurs Reject the Conventional Wisdom about How to Manage Their Companies?

Source: Y Combinator

Y Combinator co-founder Paul Graham sparked a vibrant and wide-ranging discussion after posting a short essay titled, "Founder Mode," on his website.  He drafted his blog post as a reaction to a recent talk given by Airbnb founder Brian Chesky.   Graham and Chesky propose that entrepreneurs ought to reject the conventional wisdom about how to scale a business.   Graham writes:

The theme of Brian's talk was that the conventional wisdom about how to run larger companies is mistaken. As Airbnb grew, well-meaning people advised him that he had to run the company in a certain way for it to scale. Their advice could be optimistically summarized as "hire good people and give them room to do their jobs." He followed this advice and the results were disastrous. So he had to figure out a better way on his own, which he did partly by studying how Steve Jobs ran Apple. So far it seems to be working. Airbnb's free cash flow margin is now among the best in Silicon Valley.

Graham argues that the usual advice to avoid micromanagement might be wildly off-base when it comes to founders leading their companies as they scale.   In short, he suggests that we are advising founders to delegate far more than they should.  He argues that the most effective founders might very well dive deep into the details more often than conventional wisdom recommends.  They can and should talk directly to technical experts at lower levels of the organization and frequently conduct skip-level meetings.  They should employ "founder mode" rather than delegating as much as many leadership consultants suggest.  

Graham acknowledges that you have to adjust your management style as you scale a business.  You cannot run a large organization in the same way you operate a startup.   In short, managing in founder mode is complicated... 

To me, the key argument here is not about whether founders should delegate more or less often.  "Founder mode" sounds interesting, but what exactly does that mean?  The key issue is WHEN one should delegate and when it is appropriate and effective to take a deep dive on critical issues.  I would love to hear Chesky, Graham, and others explain how they think about THAT important leadership choice.  It's all well and good to reference successful founders such as Steve Jobs, but plenty of entrepreneurs meddle too much, alienate people by not trusting them to make decisions, and burn out their subordinates.   Advising entrepreneurs to embrace "founder mode" might do more harm than good unless we help them understand how and when to engage in those deep dives.