Why This Founder and Investor Says 'I Don't Know, Let Me Get Back to You' Is Often the Best Response You Can Give
Free Book Preview: Coach ’Em Way Up
I grew up, and spent my early adult years, playing two extreme sports: football and freestyle skiing. In the NFL, I played for two very different organizations, and between them I learned many lessons that I have merged into my current life as a founder and CEO of Integrate, a large marketing SaaS company. The bad experiences taught me as much as the good ones.
As a Philadelphia Eagle, I never felt the organization was fully transparent with the players. This led to a lack of trust in the locker room and made for a "watch your own back" culture. By contrast, as a member of the Pittsburgh Steelers, my experience was the opposite. If you look up extreme transparency on Google, the first image that should appear is the Steelers head football coach, Mike Tomlin. Coach Tomlin was never afraid to be real with us and tell us how it was -- good or bad. This transparency and realness by our leader reduced internal politics and created a connected team culture where players could more easily "lock arms" and focus on the whole squad, rather than themselves. That year, in 2008, the Steelers were Super Bowl Champs.
As I moved away from athletics and into the workforce, it came as a surprise to me how secretive some founders and management layers were with their teams. From a macro perspective, I understand the urge to do so. As the CEO of Integrate, I want my team excited about the company's future and not feeling deterred by weaknesses and obstacles. This mentality is called the optimism delusion. The truth is, great leaders understand the only way to strengthen a team, product and company, is to consistently bring the necessary focus to the areas that need the most improvement.
Using Coach Tomlin-like transparency leads to improvements that go way beyond teamwork; the effects on profitability are striking. As examples, here are just four statistics, from four separate sources, showing how lack of transparency can impact a business.
- B2B companies' inability to align sales and marketing teams has cost them upwards of 10 percent or more of revenue per year, according to IDC.
- Organizations with tightly aligned sales and marketing functions enjoyed 36 percent higher customer retention rates, according to MarketingProfs.
- Lost sales productivity coupled with a wasted marketing budget costs companies at least $1 trillion per year, according to the B2B Lead.
- B2B organizations with tightly aligned sales and marketing operations achieved 24 percent faster three-year revenue growth, and 27 percent faster three-year profit growth, according to a study by SiriusDecisions.
The common theme is, isolation is not conducive to good business -- and, remember, I only looked at the marketing and sales side. Expanded across a whole business, these effects are multiplied many times.
The consequences of hiding information, or being secretive about poor results, can be catastrophic for an organization and promote the construction of a weak and timid culture.
In its simplest form, extreme transparency eliminates these layers of secrecy and bureaucracy to bring all team members to the same level playing field. The idea is to give everybody involved, at whatever pay grade, or job title, the complete picture of the company. No secrets -- no cover-ups -- everything up front.
Transparency is also very important if you want to raise capital to take your idea to market. I'm one of three investors on Adventure Capitalists on CNBC and I want to see entrepreneurs say things like, "I don't know, let me get back to you." One of the biggest red flags for investors is when a founder pretends to have all the answers when you know that he or she does not.
Some new management fads pass quickly. In an age where every aspect of your business is out there on the internet for customers to comment on and rate you, extreme transparency is something you (and your team) should take a serious look at.
Adventure Capitalists debuts tonight on CNBC at 10 p.m. ET/PT. Watch a sneak peek of what to expect below.