Dear Tech CEOs, Prepare to be Public

The World is Watching (Kata #2):

We now live in an era where truth and transparency win over growth and secrecy. Tech companies should embrace being more of an open book.

It is estimated that 4.2 billion people have internet access. More than 2.2B of those use Facebook, 2B+ use Android, 1.8B+ use YouTube, 1B+ Instagram — and the list goes on. That’s about 50% of the connected world! Fair to say that tech companies today have reach and influence akin to countries. Yet, we know so little about how most companies operate, what they stand for and who their leaders are.

Now, Tech CEOs are public figures from day one. And while for public institutions there are checks & balances and mechanisms for information transparency under the Freedom of Information Act, the same is not true for tech startups. We only find things out after they break; or get exposed.

In the past few months we have learned that our personal information is getting either stolen (eg Equifax) or exploited (eg Facebook — Cambridge Analytica), that we can’t rely on the information we receive (fake news taking over social media), that the algorithms behind some of the largest companies in the world are biased, that patient lives were put at risks by bogus blood tests (Theranos). Last week we saw a painful story about how a series of harassment allegations were grossly mishandled by Google over the years. And, unfortunately, the list goes on.

While severe mistakes are being made, I see an opportunity for tech companies to rebuild goodwill and own up to their responsibility. Perfection is not the standard; when growth happens so quickly, things are bound to break. But it’s not how you fall, it’s how you get up that will define you. The truly irreparable misstep is breaking user trust.

As Marc Benioff said at the World Economic Forum: “what is the most important thing in your company — is it trust or is it growth? If anything trumps trust, we are in trouble… You have to choose what is really important to you. We are in a new world… and trust better be number one.”

Here are some steps companies can take to ensure trust comes first:

1. Be honest (especially to yourself) — in many cases tech companies are pushing the limit of what is possible. Stay sober in the process of convincing people to buy into your vision, what you have and will accomplish. Lean on your board of directors, advisors and your own team to keep you honest and be transparent about what is and is not happening yet.
2. Let the world know who you are and what you stand for: it is one thing to be private and another to be absent. When you run companies that impact the lives of millions orbillions of people, you want the public to trust not only your company but also you. Satya Nadella has changed Microsoft for the better. He opened up a new chapter where cloud and mobile would be kings and he also reformed the company’s culture by instituting empathy as a value. He also published a book, Hit Refresh, addressing his plans for the company and giving us an insight into what matters to him and key principles by which he’ll run the company.

3. Create a culture that rewards transparency:

• Be open internally — this is not just a matter of improving efficiency, but also creating internal trust. The lack of transparency and reward of secrecy may have cost Snap Inc. a ‘once in a lifetime’ opportunity to out-execute the competition and become a platform of choice, as Facebook and Twitter struggle with user privacy. One positive strategy is that of Shopify, who went above and beyond: “only clos[ing] off anything that we’re legally not allowed to share — everything else is up for grabs.”
• Incentivize people inside the company to tell the truth and report if something is not working or just wrong. Don’t have a “go along to get along” culture. Have a system in place that allows all voices to be expressed — and listen to them. For example, Kim Scott (author of Radical Candor) mentions the strategy of a “manager at eBay who would leave a locked orange box near the office bathrooms where people could leave critical questions. He would later read them aloud in meetings — with someone else unlocking the box to prove he hadn’t edited its contents — hostile questions and all.”
• Promote a safe work environment. More companies should follow Microsoft’s stance and end arbitration agreements with employees who make harassment and gender discrimination claims.

4. Hire and Fire for values — Beyond skills and mission alignment, ensure your hires have good judgment and will not misbehave — even when no one is watching. Every person on your team represents your company and whatever they do will reflect back on you (even if are activities outside the office). If you notice bad behavior, step in immediately and do not tolerate it. Netflix fired its top communications executive for using disrespectful language and was transparent about the reasons.

5: Share what you know, even if you:

• Still have homework to do: it took the public 5 full days to hear from Facebook’s leadership after stories exposed that 50 million user accounts had been compromised by Cambridge Analytica. The company’s rationale for the delay was needing time to get all the facts. This silence was extremely damaging to the company’s goodwill.
• Fear the repercussions: Earlier this month a story broke on how Google opted not to disclose a software glitch with Google+ that gave outside developers potential access to personal data of 500,000 users. The company discovered the event in March of this year, conducted internal investigation and concluded the incident didn’t meet internal thresholds for when to notify users. Additionally, the company was advised by internal lawyers that it “wasn’t legally required to disclose the incident to the public”. Although process appears sound, Google’s decision didn’t sound good to the public and gave the company a black eye on privacy.
• Already messed up (or made the mistake): Mistakes will happen. When they do, own up to them, share what you learned and how you will fix it. A few months ago Patreon rolled out a new pricing structure that alienated the needs of a big portion of its users. The company didn’t just gloss over it; instead, it apologized and showed deep understanding of who was affected and why. It also promised to involve the community in coming up with a revised structure.

6. Lastly, rinse and repeat — Proactively look for areas where your company could be doing better and look for holes. Fix it before it gets worse.

I’m a big believer in the impact technology and tech companies. But we must to do differently, and better. The biggest obstacle in front of us is ourselves.

This post outlines Step #2 of a 7-part Startup Kata meant to help startups and founders build a better future without damaging themselves, their companies or humanity. Read Startup Kata #1 here. If the startup kata speaks to you and you want to practice together, I hope you’ll reach out: @rquintini. I’m interested to hear ways in which you are building a better future without hurting humanity. Please also share your stories on Twitter with the hashtag #StartupKata.