As Magic Giant sings, it’s a disaster party. But there is one incredibly important thing every CEO must do. Be transparent with everyone about your plans.
Transparency isn’t the quality most often cited by entrepreneurs who are asked the key traits they look for in senior leadership. Or even if they are asked what they think are their own most important qualities. But especially in times like these, it is absolutely critical for success.
Transparency is key for employees to feel fully informed, to feel trusted, and to be confident in their role in the company. It’s also key for investors and customers to know that the company has integrity, and that not only the products and services, but also the direction of the company can be trusted.
Reggie Aggarwal founded Cvent, a leading events software company, in 1999. It grew quickly, and by 2000 he had 125 employees. Then the dot-com bubble burst, and he couldn’t cover his costs or raise more money. He was completely honest with his employees. He told his whole team that he had to lay off 80 percent of them; that he personally would stop taking a salary for the next couple years and move back home with his parents to save money; and that those who stayed would have to wear multiple hats, work incredibly hard, and even double up in hotel rooms when they went on the road for business.
Reggie told his team that they would have to do whatever was necessary to keep their customers happy. His hard work and transparency paid off. Cvent turned the corner and kept growing. It went public in 2013 with a market cap of over one billion dollars. In 2023, Cvent was acquired for $4.6 billion. Today it has 5,000 employees and 24,000 customers. Being transparent in good times and bad has served Reggie well.
Lee Insinga told me that he had been closely involved in two different companies, before setting out on his own. One succeeded and one failed. A critical difference was transparency. One had it and one did not.
In the company that failed, the CEO had senior staff meetings where he went through a checklist of unimportant topics. Then he met separately with each member of the leadership team and discussed what the real plans were. Lee would talk to three different people about the company’s priorities and get three different answers.
The strategy backfired. The leadership had put words on paper and on their website about the company’s culture, but it didn’t reflect or influence how the company operated. Lee felt that this clear lack of transparency was one of the main reasons the company was never going to be successful.
The values they said they had – being transparent – weren’t the values that actually were demonstrated. It was clear to see how this lack of transparency wasted resources, caused confusion and decreased motivation. Ultimately, the company failed.
Lee told me, “Before I decided to join the second company, they sent me their pitch deck and budget. I made some changes and asked them, ‘What do you think?’ This led to a substantive conversation about several important topics. They didn’t mind the challenge and valued the thoughtful discussion. To me that was everything. They were open and honest and transparent.”
It was important to Lee that the founders of the next company had the same values he did. After explaining his experience at the last company, the founders of the next company agreed that transparency should be one of their company’s core values. Looking back years later, that decision served the company well, both with its employees and externally with its customers.
Transparency was one of the biggest differences between the two companies. Even if it’s occasionally uncomfortable, it’s always the right decision. I used to tell my employees the same thing I told my children when they were growing up: “If you’re not honest one percent of the time, I can’t trust you 100 percent of the time.” Especially in times like these, for your employees, your customers, and your investors, let everyone know they can count on you.
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