Transparency vs. Efficiency

You can’t have one without the other if you want the best possible results.

Most of the companies I’ve worked for in the past focused entirely on efficiency. There were clients to please, deadlines to make, and revenue targets to hit. Involving others with additional expertise, proposing and testing solutions, or striving for consensus were never options. The ask was clear: Produce. Now. And for as cheaply as possible.

The result? We always met the deadline, and we always delivered exactly what was requested. But the team responsible for delivering the right stuff at the right time were often miserable. Our bosses got fat bonuses and big promotions while the rest of us only occasionally received a shout out after donating countless nights and weekends to meet their demands.

The thing that bothered me most wasn’t the long hours or lack of recognition. It was the total lack of transparency. In order to make our deadlines and deliver what the client asked for, people at the top made all the important decisions, agreed on numbers and timelines, and then told everyone else what to do. Those who were impacted the most by those decisions were rarely, if ever, included in the process. This of course meant a lot of frustration and hurt feelings. But I could never argue with the final results.

Fast forward to the last 2 years. Now I work at an open sourced product company. We have no clients (just partners). The only deadlines we typically have to deal with are those we set for ourselves. Instead of revenue targets, we have company goals. More importantly, the company culture values inclusion, discussion, and consensus. We’re expected to take our time defining problems and exploring the best possible solutions. The ask is still clear, but completely different than anything I was used to in the past: Aim for perfection. However long it takes.

The result? We never make the deadlines we do set, and we never deliver exactly what was requested. That’s because the teams responsible for delivering things are motivated by perfection, not revenue. We take our time finding out exactly what the problem is we’re trying to solve, exploring potential solutions, and reviewing source code to make sure everything is just right. When we do deliver something, it’s only because dozens of people agreed on it first. It’s rewarding to work at such a transparent, inclusive company because individual involvement is highly valued. But it’s also super frustrating when we can’t seem to do anything without 1,000 hours of discussion.

There has to be a happy medium. Yet to find a “middle way”, it’s critical to first consider the pros and cons of transparency and efficiency, respectively.

The benefits of transparency

There are both philosophical and pragmatic reasons the open source development community, and companies such as the one I work for, value transparency:

  • Involving different people with different areas of expertise leads to a better understanding of the problem you’re trying to solve, and ensures a diversity of quality solutions
  • Encouraging involvement from others naturally builds trust and buy-in
  • Decisions are decentralized, and so individual contributors have more responsibility and feel a deeper sense of ownership
  • No one person is ever the hero; everybody succeeds or fails together
  • Credibility is easier to demonstrate when everything you do is “out there” for the world to see

In and of themselves, all these reasons for transparency seem like things everybody should want — all the time, and without limit. So why don’t more organizations operate completely transparently? Quite simply: Because transparency is expensive.

The costs of transparency

It’s only by working at a company like this one that I’ve come to realize the steep costs associated with a transparent culture. So far I’ve noticed that the more transparent you are:

  • The more complex every decisions becomes
  • The more sensitive people are when any decisions are made without their prior involvement or agreement
  • Thus, the longer everything takes in order to involve all the right people at the right time
  • And therefore the less you can react to outside change

If we didn’t have to worry about making enough money to keep the lights on, or winning over users in a fiercely competitive/hostile market, the costs wouldn’t matter so much. But when a company can’t deliver a better product than its competition — continuously and consistently — it will quickly loose users, credibility, and relevance. These are huge concerns that can’t be ignored.

Bottom line: Total transparency without any regard for efficiency can paralyze a company, and lead to its eventual demise.

The benefits of efficiency

Any organization that depends on ever-increasing revenue understands that by being more efficient:

  • Less resources are consumed
  • Less time is needed to produce/deliver things
  • Costs are minimized
  • Revenue is maximized
  • Results are easy to measure

All these things are extremely attractive to any company wanting to increase its value or strengthen its position in the market, which is why many companies worship efficiency like a religion. Focusing on sheer growth as quickly as possible is why Google, Amazon, Facebook, and Apple dominate industries and rake in billions in annual profit. The human toll of brutal efficiency means very little when there’s so much money at stake.

The costs of efficiency

The supposed key to efficiency is basic: centralized decision-making and limited organic contribution. This is why decisions at the vast majority of companies are made by a few people at the “top”, and everyone else at the “bottom” are expected to comply without opposition (thereby making robots even more attractive). By doing so, the time and effort required to go from Point A to Point B is a clear, measurable, straight line. Nevertheless, efficiency does comes at a steep price, and the ones who pay it are mostly the regular folks doing all of the actual work.

By focusing only on efficiency, the costs will be:

  • Limited understanding of the problem and potential solutions
  • Distrust, rejection, or confusion among those who are responsible for implementing the solution
  • Exclusion of meaningful input from stakeholders, which in turn undermines any sense of person ownership
  • The person “in charge” gets all the credit, while everyone else gets all the blame
  • Lack of overall credibility

If efficiency is not balanced by transparency, an organization is likely to burn through its top talent and loose its competitive edge in the long run.

The solution is not a formula

So what’s the answer then? Should companies instead focus more on transparency and less on efficiency? Is there a decision-tree that determines when one should err on one side or the other?

In my opinion, no. Just like choosing between hard or soft power, the context should always determine the appropriate response:

  • If a decision will affect a lot of people at the company, then more transparency is required. Those affected should be invited to the decision-making process, have plenty of opportunities to provide input, and a safe, constructive format to challenge ideas. Once there’s sufficient buy-in, then the focus should be on efficiency. The faster and smoother a decision everyone makes together is implemented, the more satisfied and committed everyone will feel.
  • If a decision will affect the direction or priorities of a product, transparency means two different things. Thing one: Those who work directly on the product should be involved in the decision. Thing two: Those who do NOT work directly on the product should be informed about the decisions, including the problem, proposed solution, and intended goals. Involving everyone will only lead to paralysis. When it comes to execution, the priority should then shift to efficiency. The team has defined the problem and explored potential solutions. Now get out of their way and test those ideas in the actual market at soon as possible.
  • If a decision will affect only a limited number of people, there’s little need for transparency beyond making others aware of a decision and the intended impact.
  • When exploring new ideas, features, or audiences, the relationship between transparency and efficiency becomes a little fuzzy. Sometimes a broad range of input from very different roles will lead to better outcomes. Other times a limited number of experts is more suitable. It all depends on the scope of the problem one is trying to solve.  The important thing to remember is that discussion/exploration should translate into meaningful action as soon as possible, because the faster you deliver a solution, the faster you can learn and iterate.
  • When there is external pressure or a finite window of opportunity, transparency will ensure that everyone understands what’s at stake. Once everyone is committed, those directly responsible for delivering a solution should not be overly burdened by communicating their decisions in real time. Instead, they should have the freedom to work as they see fit in order to deliver something in time,

While there is no perfect, universal approach to balancing the two, total transparency limits immediate impact, while total efficiency limits long term potential.

Conclusion

Most people naturally gravitate towards one of these two mindsets. Those who believe that everything should always be as transparent as possible don’t care about speed or velocity. They care about perfection. Those who value efficiency above all don’t have much patience for debate or lengthy discussions. They just want results. The former camp lacks urgency. The latter camp stifles potential. One extreme hurts the business. The other extreme hurts people.

So, it’s worthwhile for any company to decentralize decision-making through transparency, while enabling people to get shit done efficiently. When companies keep transparency and efficiency in balance, they can react to change faster, deliver better solutions, and unleash the full potential of their people.