Why Startup Founders and Leaders Should Embrace Accountability and Transparency
In the world of startups, where founders and leaders prioritize rapid growth, it’s easy to lose sight of accountability and transparency as crucial to success. But you only need to look as far as Theranos, the notorious healthcare startup that promised to revolutionize blood testing, to see what happens when young companies ignore those core values.
The talented minds at First Round Review caution that without accountability and transparency, there can be no growth. And when companies hide challenges and setbacks, they risk creating a lack of trust that can drive them to ruin.
Keep reading to learn how embracing accountability and transparency could give your startup the edge it needs to succeed.
The Long Game of Accountability and Transparency
It all comes down to this: Accountability and transparency breed trust and collaboration: two qualities that business experts have identified as vital to long-term success.
While it can be tempting to hide failures, mistakes, or setbacks to “save face” with employees or investors, this deception inevitably backfires in the short- and long-term. All it takes is one errant email, conversation, or peek into company finances to shed light on those deceptions. The fallout might not be as public or dramatic as the Theranos scandal, but it will erode trust on an interpersonal and community level.
Transparency Breeds Engagement and Loyalty
Transparency indicates, “Whether it’s good news or bad news, I have nothing to hide.” When you are consistently honest about victories and setbacks, you create a culture where employees and stakeholders react wholeheartedly to information instead of with reluctance or suspicion. They trust that what you share is accurate and complete—not a manipulation or misrepresentation.
According to Stephen Covey’s research in The Speed of Trust, team members who trust their leaders to be transparent feel included in the decision-making process and are more likely to engage in their work.
Transparency also translates to higher levels of loyalty among customers and investors, who appreciate a company that takes ownership of its actions and impact on the world.
Four Practical Ways to Create a Startup Culture of Accountability and Transparency
Wondering where to start? The following ideas can help you infuse more trust and accountability into your startup:
- Prioritize Open, Honest Communication
Commit to being upfront about challenges, goals, progress, and setbacks. Identify the audiences you’re accountable to and decide how to communicate with each. For example, a monthly newsletter or town hall could suffice for employees and customers, whereas investors and leadership might require regular in-person or virtual meetings.
While it can be scary to reveal vulnerable information, the trust and confidence each group builds will yield engagement, productivity, and loyalty you can’t earn any other way.
- Solicit Regular Feedback and Input
Don’t just communicate—listen! Encourage your stakeholders and employees to share their ideas, concerns, and frustrations through surveys, focus groups, online forums, or email. Be active in soliciting feedback. Sometimes, people need a nudge or invitation to speak up or reach out.
Just as importantly, ensure you respond to this feedback with respect, kindness, and follow-up if necessary.
- Lead by Example
Practice personal accountability and transparency. When leaders embody these qualities, it creates a ripple effect and sets the tone for their team and company. Your team members will be more open about their mistakes, decisions, goals, and challenges when they see you do it first. And they’re more likely to meet revelations about setbacks with respect and generosity.
- Create Your Policies and Best Practices
Policies and best practices can feel too stodgy and corporate for a new startup, but there’s a lot of value in creating these guidelines early and thoroughly. Get everyone on the same page about sharing information, making decisions, and resolving conflicts within the company.
These guidelines give employees and stakeholders confidence that founders and leaders have thoughtfully considered problems that can and will arise during the startup's life.
Reflect and Apply
Are there areas of your startup culture where you can infuse more transparency and accountability?
Tell us which of the four suggestions above you’re committed to applying to your startup on Twitter!