What Happens If ‘Radical Transparency’ Backfires?

What Happens If ‘Radical Transparency’ Backfires?

In the New York Times, Alexandra Stevenson and Matthew Goldstein report on allegations by an employee against Bridgewater, the world’s largest hedge fund, which, if true, show how the firm’s culture of “radical transparency” might have, in at least one instance, had a chilling effect instead:

The employee’s complaint with the Connecticut Commission on Human Rights and Opportunities, which has not been previously reported, describes an atmosphere of constant surveillance by video and recordings of all meetings — and the presence of patrolling security guards — that silence employees who do not fit the Bridgewater mold. … In his complaint, Christopher Tarui, a 34-year-old adviser to large institutional investors in Bridgewater, contends that his male supervisor sexually harassed him for about a year by propositioning him for sex and talking about sex during work trips.

After he complained last fall, Mr. Tarui said, several Bridgewater top managers confronted him and sought to pressure him to rescind his claims. One manager, he said, accused him of lying and said that he was “blowing this whole thing out of proportion.” These and other allegations in the complaint could not be independently verified.

Mr. Tarui said he remained silent for many months about the harassment out of fear the incident would not remain private and would impede his chances for promotion at the firm, which is based in Westport, Conn. “The company’s culture ensures that I had no one I could trust to keep my experience confidential,” he said in the complaint, which was filed in January. …

Mr. Tarui said in the complaint that he did not report the conduct out of fear it would become public because of the firm’s policy of videotaping confrontations between employees. Eventually, Mr. Tarui did complain after his supervisor gave him a bad job performance rating even though he had been promoted and given a pay raise just a few months earlier. He said in the complaint that during a meeting in November 2015, he told a Bridgewater human resources representative and another top manager about the repeated sexual harassment by the supervisor.

While Bridgewater’s culture is by all accounts unique, it’s not the only organization to adopt a philosophy of “radical transparency,” nor is it the only place where that philosophy may be running into challenges. The social media management startup Buffer, which makes all internal data including salaries and revenue publicly available, discovered the limits of transparency last month when the company announced that it was laying off 11 percent of its 94-person staff, and “the news seemed to come out of nowhere,” Aimee Groth writes at Quartz:

[CEO Joel] Gascoigne noted that in the last few weeks he and the rest of the executive team debated whether to go through with the layoffs over several 5-hour meetings. They were closed-door conversations that led to “feelings of guilt, sadness and fear” all throughout the company.

Transparency is fundamentally a good thing. Keeping people in the loop can make them feel more connected to the company. It can also give recruiting a boost (after Buffer released its salaries, it was inundated with resumes), and attract useful feedback that can improve the business. But for all of its aspirations, radical transparency is nearly impossible—there are legal reasons to keep some information closed, and knowing when to share sensitive data is a grey area. Buffer co-founder Leo Widrich shared with Quartz that the company has improved its financial model to predict the company’s health, which all team members have access to. They also didn’t ask their departing employees to sign blanket non-disclosure agreements concerning the cash-flow crisis.