10 hours and 43 minutes. That’s the record set by a Zappos employee on June 11, 2016 for the longest customer service call in company history. Zappos sells shoes and clothing online. And they take customer service seriously. They also believe in open communication. So much so, that it’s enshrined as one of their ten core values: “Build open and honest relationships with communication.” Which is crucial given their unusual management structure.
Any business leader will tell you that their most valuable asset is their employees. (If they don’t, they don’t have their facts straight.) Employees who are empowered to speak up and offer feedback to their superiors are more likely to offer ideas on how to improve the business, as well as identify potential threats.
Especially now, as people look to their leaders for bold action—but it’s true at any time—businesses that are open to such feedback are better positioned to capitalize on the information to drive better cultural and business outcomes.
What Zappos gets right
Rather than having a traditional management hierarchy, Zappos has adopted a management philosophy called “holacracy,” where the company is self-managed by every employee. There is a hierarchy but it’s composed of a series of “circles,” or teams, each of which have leads. The lead can remove a person from their role but the members of each circle are the ones who have the power to change an individual’s responsibilities, not the lead.
The focus is on the work, not the role, as each employee may belong to more than one circle. Everyone is encouraged to offer their thoughts, insights and ideas on how to best do their work, which confers psychological safety and removes a key barrier to speaking up, which we call “social threat.”
Zappos CEO Tony Hsieh has acknowledged the approach isn’t right for everyone, but for those who commit, they go all in.
“There isn’t a day that goes by where there isn’t a mention of our Core Values in some way,” Zappos Chief of Staff, Jamie Naughton, said in a 2017 Forbes interview. “They allow everyone to easily prioritize what’s really most important.”
What Google gets right
Another company where employees are actively encouraged to speak their mind and share their ideas is Google. The company aims to have a flat organizational structure in order to encourage employees to actively challenge strategies they think can be improved.
Google even has teams dedicated to figuring out the ideal conditions that enable people to work more effectively together. They’ve discovered that creating an environment in which people feel psychologically safe to offer their ideas and criticisms is key to both employee satisfaction and high performance.
Google shares were priced at $85 at their IPO in 2004. At the end of 2019, the share price was $1,377, an increase of 1,620%. There are many reasons for Google’s success but its focus on creating a positive, open and transparent work environment is one of them.
What Bridgewater gets right
Taking the idea of an open culture even further is Bridgewater Associates. Ray Dalio, the founder, has inscribed the culture of the company in a book called “Principles: Life and Work.” One of the key tenets is “radical transparency” which demands that everyone at the firm be open to both receiving and offering blunt criticism and evaluation on a real-time basis. Almost all interactions are video-taped for later review and to serve as case studies.
The environment is not for everyone—supposedly, a third of new employees don’t last two years at the firm. But those that survive have been known to say they can’t imagine working anywhere else.
Bridgewater is an extreme example of an open culture but it appears to work—it’s the largest hedge fund in the world with over $160 billion in assets. Its flagship fund, Pure Alpha, has produced a remarkable 11.5% average annual return over its 28-year history. While Bridgewater may be too harsh for many, it’s an instructive example of what openness can achieve.
These are a few examples of what can happen when companies build a culture of openness, as well as what can happen when employees are discouraged from speaking up. Now look at your own organization: What are some of the obstacles in getting your employees to speak up? How can these obstacles be overcome?