Over the next few months, I (Immad Akhund, CEO of Mercury), will share my stories, learnings, and tips for other leaders based on what has worked for me. I started my entrepreneurial journey 16 years ago as a recently graduated engineer and have had to learn all the “CEO” lessons the hard way — often feeling like I was making it up as I go. How one leads as a CEO is extremely dependent on any number of factors, like your style, your company, your stage, or your industry. Rather than taking these ideas as ones to copy verbatim, take them as food for thought — one example to learn from amongst the many.
In the last column, I talked about taking advice as a leader. This week, I'm exploring the importance of building a culture rooted in transparency.
I think I shied away from being transparent with my team in my earlier days as a founder. My assumption was that revealing potentially distressing information when things weren’t necessarily going according to plan (which is basically all the time at a startup) might cause team members to panic or leave. It was a perspective probably based on fear and apprehension more than anything else.
But I remember one example from my time as CEO of my previous startup, Heyzap, where the company was on the verge of this tipping point where we were running out of money and only had about six months of runway left. The team may have had a general awareness of our financial position, even without us having said it. Even so, the thought of confronting the issue head-on felt uncomfortable. In any case, we decided to be straight with them and told them flat out our position and that our only option was to get profitable within the next six months. We anticipated that once we’d laid our cards on the table, we might see a good chunk of the team leave, so we were prepared for the worst.
To my surprise, only two people ended up leaving. Instead, almost everyone stayed and was excited about the challenge. Something that seemed like this quite existential, scary thing to me and my cofounder was actually received well and embraced as an opportunity by the team. It almost had this galvanizing quality to it.
And so, we laid out an action plan of how we would achieve profitability, and that was that — we got to work and turned the ship around.
There were a few things I took away from that moment. For starters, it’s a testament to the value of transparency. I think just being honest with your team not only builds trust but allows you to mobilize around problems faster. We probably wouldn’t have been able to course correct as effectively had we not been straight with the team. It was only by being transparent that we could take an all-hands-on-deck approach with an unmistakable sense of clarity and urgency around the goal.
I also learned in this instance that there’s a “how” element to transparency that matters. It’s not simply about providing information — it’s about how information is delivered and treating information as context for a bigger conversation. In this case, I think it made a huge difference that, despite talking to the team about a relatively dire financial reality for the company, I remained pretty calm and optimistic in how I delivered that information. And rather than dwell on the situation, I offered transparency and a path to a solution at once. Coming to the team with an action plan and thoughts on how we could figure things out gave us a chance to frame things less scarily because it wasn’t just a matter of us being transparent and sending a wave of uncertainty through the company, but instead being transparent and starting to answer the question of, “where do we go from here?” That was the important conversation for us to be having, and transparency about our situation got us to a place where we could have it.
There’s another important distinction there as far as transparency around facts versus transparency around emotions. As leaders, I think it’s important to focus on the former but be wary of the latter. In a situation like this, where I was maybe feeling a lot of stress or fear, being candid about those emotions could easily have instigated a general sense of insecurity across the company by transferring my personal feelings to the team. So, finding that balance, where I could be transparent with information but less so with my emotions — being mindful not to compromise my sincerity or authenticity as a leader — has been an important lesson for me.
In general, you should aim to be extremely transparent around the facts and default to transparency. The reality is the more context the team has on your startup problems, the better they can work to resolve them. There are some exceptions, but those are relatively rare. When unsure, I think the appropriate level of transparency in any given situation essentially comes down to a few key questions:
- Does my team have the background knowledge or context to fully understand the implications of the information if I were to share it? An example of this might be in the case of fundraising, where things are fairly complex, and offering transparency could be more confusing than clarifying if someone doesn’t quite understand everything at play. So, if you talk to one VC and they pass on you, it’s easy for the team to take that as a negative signal, but, in reality, that happens all the time in a fundraise. In this case, your transparency would likely create more questions than answers — so it’s not all that productive.
- Am I ready to provide my team with a clear takeaway or path forward with the information? Going back to the Heyzap example, transparency around something that feels scary or unsettling feels a lot less so when you present it alongside an action plan. It helps to remember that one of the core benefits of transparency is building trust, and demonstrating your thinking and planning as a leader helps bolster that. This doesn’t necessarily mean that you have to have every detail worked out before you share updates with your team. Having a clear idea of the path forward — or at least approaching the conversation with a plan for how a path forward would be put together — can be sufficient and might even allow for more collaborative problem-solving. Either way, the key is to present information at a point where you can do so without compromising your team’s peace of mind.
Again, think of transparency as a tool — a way to build trust and ensure that the team has the right context at the right time to do their jobs well and feel good about their work. Anchoring transparency in those core areas of value has always been a helpful way for me to determine which information to be transparent about and when.
Immad Akhund is the co-founder and CEO of Mercury.