Momentum Podcast: 632

Transparency Clears Constraints

by Alex Charfen

Episode Description

Being transparent and asking for help is a position of vulnerability. It leaves us feeling vulnerable and exposed but the reality is that when your team doesn't understand what's happening in the business, when you can't be real and honest with them, it creates confusion, frustration, tension, it slows things down and prevents you from getting the help you need. In this episode of The Momentum Podcast, Alex is going to share with you how transparency will clear constraints in your business and how it's critical for building and growing an aligned productive team. I hope you enjoy.

Full Audio Transcript

This is The Momentum Podcast.

Being transparent and asking for help is a position of vulnerability. It leaves us feeling vulnerable and exposed but the reality is that when your team doesn't understand what's happening in the business, when you can't be real and honest with them, it creates confusion, frustration, tension, it slows things down and prevents you from getting the help you need. In this episode of The Momentum Podcast, Alex is going to share with you how transparency will clear constraints in your business and how it's critical for building and growing an aligned productive team. I hope you enjoy.

I'm Alex Charfen and this is The Momentum Podcast made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to, we challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution.

Sure, we pay attention to their rules but only so that we can bend them, break them then rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat because you only lose if you stop and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority, the few who are willing to hallucinate there could be a better future and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters. Clearly the most important people in the world because entrepreneurs are the only source of consistent positive human evolution and we always will be.

As entrepreneurs, one of the most important things for us in the entire world is momentum. That feeling of moving forward, that feeling of making things happen. Gosh, do you remember the last time you were a momentum? It's like you're achieving what you want to achieve. You're knocking things down, the world is falling in your wake. When I go out and speak and I talk to people about momentum, I say, what does it feel like? They share things like it feels like ecstasy, an amazing and off the charts and it feels euphoric and unreal. I'm just, I can do anything I want and momentum for entrepreneurs like you and I is how we feel alive.

See, that's why it's so crucial that we get into and stay in momentum. Well, one of the major factors... Hey Nancy. One of the major factors of being in momentum with a team is creating transparency. And by transparency here's what I mean, letting your team know what's really going on so they can help you. Now, there is some limitation to how much you should tell them but it's not as much as you would think. I'll get into that in just a second. But I want to share a story first. I want to share the story that actually prompted this.

So this morning we got an inquiry into our coaching help desk. And we get... We have a lot of inquiries. We coach a couple of 100 companies. We have somewhere around four to 500 members with some companies have one person, some companies have several... Hey Gideon, thanks for being here man. And here was the inquiry that we got this morning. It was an email from one of the owners of the company and she wanted to know how to handle a situation where a team member on her team had had a review.

This is a new member in our coaching. So they don't have... They didn't do the type of review that we do or they probably wouldn't have had this issue but they did a review. And the team member... The review was good. They were doing everything that they need to be doing. Hey, what's up Luke? It's so good to see your name men. The team member was doing everything that they should be doing. They were getting the outcomes that they were supposed to be getting and they got their review and at the end of the review, there wasn't a raise. And the team member was really disappointed and frustrated and upset and didn't understand why they didn't get a raise and we got this question as to how to handle it.

Well, the first thing my coaching team and I know is that there's a high likelihood that there's not a lot of transparency in this company because the email also said this team member was upset that they didn't get a raise, but as a company right now we're losing money, we haven't been profitable. There's not enough money there to give them a raise. So here's what we know is that in a condition where a team member is irritated like that after a review and there's no money in the company because it hasn't been profitable, the team member probably doesn't know.

And this happens a lot in businesses where as entrepreneurs we feel we shouldn't be transparent with our team. The majority of people who come into our program haven't told their team what the profitability numbers are, how much they're really making, how much money is coming into the company, what are all of the details. And when we talked to them, there's all different types of answers as to why but the answer would get more most often is, I didn't know I should. How much should I tell my team? How much should I share?

Well, here's my contention. You want to share as much as you possibly can with your team. Here's what I want you to know. If you want people to be responsible, you have to give them responsibility. If you want people to act on information to make your company profitable, they have to know whether it's profitable or not. So give them as much information as you possibly can.

In our coaching and in our company, we talk about absolute transparency. Everything is an open book. My team knows exactly what's going went on with our company. They know how much money we have coming in. They know how much money we're spending and what we're spending it on. They know what initiatives we have, they know our exact profitability and they know, since Cadey and I, my wife Cadey and I are the owners of the company, they know exactly how much the two of us are making.

Now, here's why we've done that. I want my team members to make incredible decisions for my business. I want them to make the decisions that move the business forward. I want them to make intelligent intellectual decisions that actually help our company and the only way I know for people how to do that is if they understand what's going on in the business.

Now we share everything. We share our profit and loss statement with our executive team. We share our profitability with our entire team. We share everything except for one thing. So when it comes to transparency people always ask me, Alex what shouldn't we share?

Well, the one place where we hold back is on pay transparency. We don't have each member of our team know what everybody else is making because in my experience what you pay someone is a very emotional subject. And rather than have everybody know each other's pay, that's the one place where we hold back on transparency but everywhere else we share it with our team.

And here's how transparency removes constraint. If you tell your team what's really going on, then they can help make better decisions. And as your business grows one of the keys is the duplication of decision making beget your team to make decisions like you do. If they don't have the same information you do, they will never make decisions like you do.

And here's what happens, if you hold back, if you don't share profitability, if you don't share what's going on, if you don't share all the numbers with your team, if they don't understand what's really happening, you have relegated yourself to always being the person who has to make all of the decisions. That's one of the biggest issues in business today. Is that entrepreneurs, CEOs, are building themselves into a corner. They're building themselves into a place where they have to make all the decisions, where they hold all the cards, where they have all the control and the reality is as you always have control you... We feel like we have more if we're not transparent but we have so much more strength to grow when we are.

And so the more you share with your team, the more tools they have to understand what's really going on. The more you show your team what's happening the more transparency they have, the more they can get constraint out of the way and your business will grow and get into momentum.

And if you haven't been transparent with your team yet, now's a great time to start. And here's something I want you to know. I know the biggest objection to this is if I share the numbers with my team, they're going to know how much I make and I make way more than any of them do and that's going to make them really upset. Well, I'll share a quick story with you.

Several years ago, probably 2009, 2010, similar financial economic situation in the world that back then till today, actually today is much worse. Back then, Cadey and I were running the company where we won the Inc 500 award, you can see all three of them up here. We were the 21st fastest growing company in the country and it was right in 2010 timeframe when this happened. And we had a month where we made over $1 million in a month. In fact, we had a month where we had a day where we made over $1 million in a day. The month was like 1,000,004.

And we were going into our monthly all hands to share that number and here's what that in reality meant is that Cadey and I made about $1 million that month. After taxes, it was much less. We didn't get to keep all of it. But we were sharing with our team that we made $1 million and most of them made a fraction of that. That's just how it is when you work on a team, Cadey and I made $1 million in a day and we had team members that made $35,000 a year up to six figures and above but they were in that entire range.

So we went into our monthly all hands meeting and everybody knew it had been a good month. So they were waiting something, they were expecting it. They knew that we had this explosive growth month. We were doing some work with Re/max. It was amazing. And I hit the button on the sides to switch from one side to the next to show everybody in the room that we had made 1,000,004 in the month and the room went crazy. They were cheering and they were excited and they were pumped and they were just over the top.

And then one of them was crying and I had to stop. Her name was Melissa. I said... I turned around, everybody was cheering and Melissa had tears coming down her face but she was clapping too. So it was kind of a contradiction. It was... There was an in congruency there. So I said, "Melissa, you seem you're having an emotional response. What's going on?" And she said, "This is just so amazing. I've worked in four companies since I moved to Austin, three of them closed down because they couldn't afford to keep them open. The fourth one just had a business model and they shut down anyway. To work in a company that's making this much money and doing so well in the economic condition the world finds itself in right now is amazing. I feel so safe and so protected and so excited to work with a company that's winning."

See, of course Cadey and I were making the money, but what did the team see? The team saw that they were on a winning team. The team saw that the numbers were going in the right direction. The team saw that we are winning. Now that cuts both ways. If numbers are going down and you share them with your team and they see them, they're not going to be disappointed when they don't get a raise in a review, they're going to understand that you're going to cut budgets and pull them back.

And if you're really worried about sharing something with your team, your numbers with your team especially profitability, let me let you in on a little secret. They think you make all of the money. When I had... When Cadey and I were running this business that had... That we got to number 21 on the Inc 500 list, that year we were at 10 million, the next year we were at 13 or 12 million then 13 million.

I remember the year we were at 13 million, a friend of mine from high school actually saw it in the Inc 500 and reached [inaudible 00:11:06]. Well, I just got a weird phone call. He said, "Dude, I can't believe you make 13 million dollars a year." I don't make $13 million a year, that company made 13 million. After expenses and everything else, Cadey and I still did extraordinarily well but the point I'm making is, if you tell people how much you're making at least they'll know. If you don't they're going to make up that it's a lot more than you think and probably a lot more than it is.

So the more you share with your team the more transparent you are, the more you are giving them the tools to make better decisions, clear constraint out of your way and create massive momentum. If you want to have a process and a structure through which you feel safe sharing with your team... See one of the big things that makes it feel safe to share with your team is when you have a process, a structure, a routine, so your team knows when they're going to hear from you, why they're going to hear from you, what they're going to hear from you and improves your decision making and theirs.

We can help you build that. If you're interested in being... Creating a strategic plan, communicating to your team and building the infrastructure of your business over time so that you get predictable results, reach out to us.

Go to,, answer a few questions from my team, jump on a call with one of us and let us show you how we can help you build your business predictably so that you can go out, make the income you've always known you should and make a massive impact. and remember transparency clears constraint and creates momentum.

Thank You For Listening!

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