I’ve just experienced 2 extremes of company culture – ridiculously open and communicative vs. insanely tight lipped and need-to-know.

The first company, ridiculously open and communicative, was very fun to work with.  Everyone trusted eachother, everyone knew eachother’s salary, we knew how long the runway was before we couldn’t make payroll, we knew if we landed or lost a big client, we knew when the CEO screwed up, we knew everything.  Everyone knew everything.  It was exhausting, but very fun because there wasn’t anything you could hide so everyone helped eachother.

The second company’s founders came from the fortune 100 world.  Everything was need-to-know.  There was a general sense of distrust there, and there was LOTS of talking behind backs and closed doors.  This company went through an acquisition that was almost derailed simply because the staff didn’t trust what they were being told, and very nearly walked away which would have completely sunk the deal and the company.  Even though no-one was ever lied to, no-one was ever sure they were being told the truth, or the whole truth.

I bring this up because I just read Fred Wilson’s “Do Loose Lips Sink Ships” – who alludes to a similar conclusion.  While it’s empirical, the evidence suggests that the more open entrepreneurs have an increased likelihood of success.  And while Fred came at it from the angle of entrepreneur-investor communication, I think the same is true of a company’s culture.

Be radically open.  Bring your whole team into the loop and don’t hid anything, especially your weaknesses.  You might lose a person or two with this method, however that eliminates those without the stomach for a startup, thereby strengthening your whole team.  And you’ll have everyone’s buy in, or at very least hear some ideas and opinions you haven’t yet considered.  It’s more fun anyway.