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Portrait of Jean Brownhill, CEO of Sweeten
Courtesy Michael Wiltbank
Sweeten CEO Jean Brownhill thinks startups should share most numbers with staff.
QZ&A

What happened when a startup based on transparency got transparent with its own employees

By Lila MacLellan

Like many startups, Sweeten was born out of a bad experience that pointed to a broken system. The company, an online service that matches home and business owners with general contractors, and then monitors the client’s project, is Jean Brownhill’s answer to the frustrations she encountered when she renovated her first home, in Brooklyn, several years ago.

Her experience wasn’t terribly unusual. What she found was that instead of working together on what is precious to the customer, the two parties are pitted against each other in a subtle but crazy-making bartering game. Renovation survivors know how the subsequent budget problems and delays can test a person’s sanity.

“People often find it surprising, but general contractors think that if they give you the real price, and the real timeline, you won’t hire them,” says Brownhill. “It’s one of the reasons homeowners don’t trust general contractors, and general contractors don’t trust homeowners.”

The whole messy process is also an anachronism. These days, consumers expect to have the data they need upfront before they make a buying decision. We see the ability to comparison shop with ease as a right. So Brownhill, a trained architect, developed the concept for Sweeten while at Harvard University’s Graduate School of Design. Since launching in 2011, it already has $500 million in projects in the pipeline. (The service is free for property owners; Sweeten makes money by collecting fees from contractors who are hired.) Now the New York-based service is expanding into four cities.

As founder and CEO, Brownhill has had to quickly develop her own managerial style. Early on, she says, she learned Sweeten would have to be bolder than other businesses in the way it operated: If it wanted to have any effect in the wider industry, it would have to prize and model transparency, not just between contractors and homeowners (Sweeten allows clients to read customer reviews of their vetted contractors), but between Sweeten’s own managers and employees.

“Transparency is so important to solving the industry’s problems that it really has be imbued in every part of our business,” she tells Quartz At Work. Recently, we asked her to explain how that experiment has worked. The transcript has been lightly edited for length and clarity.

Quartz At Work: How are you more transparent than other companies?

Brownhill: Companies share booked revenue, but I’ve not seen a lot of companies be as transparent as we are about collected revenue, which is key for me. At Sweeten, every single person knows what we collected every single month. For us, it’s important that we constantly think of this metric and tie it to the idea of creating value for our general contractors. People do vote with their wallets, so we open that up for staff to see, and sharing this number has been a good way to get people focused and motivated.

How does your transparency affect people’s day-to-day behavior? Do you notice a difference?

It’s been really interesting. For example, we have an office manager and HR coordinator who orders stuff for the office, and she is much more mindful about ordering now that she has much more visibility into the business in a concrete way.

It’s also nice to distribute some of the stress. Obviously they don’t have the full stress, that’s still on my shoulders. But it is helpful to not have to re-articulate why something is important every single time—everybody is on the same page. Conversations about why we have to budget certain things or prioritize other things—it just makes them so much faster.

Everyone in the company has a very clear understanding of how our business works, of when we get paid for projects, if we got paid, and how those projects went. Being transparent made the staff ask for tools and technology to help them monitor work more closely, which then changed the process and the ways they were interacting with general contractors, and it improved our service for homeowners.

It’s like everyone is a mini-manager.

I’m always telling people you’re getting the Sweeten MBA. They really do understand how their actions, even the small ones, impact those numbers.

Besides collected revenues, what else do you share?

We talk broadly about expenses and how we need to mindful of them, and how we need to appreciate the benefits that are provided by the company.

In startup culture, I don’t think leaders do the company or employees a service by not giving people a full understanding of the cost of all these benefits. People can then start taking it for granted and folks don’t think, “Oh, yeah, we are a business, we need to be generating more than we’re spending.” They get off track and start thinking that the merit of the company is the ability to raise external capital. That’s not something that we want to keep the team focused on, though we do share the fundraising process.

So you might say, “We met with these venture capitalists and here’s what came out of it…” What would you leave out of that?

Well, maybe I wouldn’t share [a detail like] “And that amount would give us 24 months of runway,” because then folks are going to be counting down. “Okay, 24 months….” It’s not helpful to people.

I think shielding folks from the details of that information is partly why I’m the CEO. There are three things that a CEO has to do: Make sure there’s money in the bank; recruit and hire good people, giving them the tools they need to be successful; and set the vision of the company. Those are my responsibilities.

Can having too much information make people nervous or upset? Do you think employees ever feel like, “Don’t make this my problem”?

This is one of the questions that I think about a lot. Early on, I read this book by Ronald Heifetz called Adaptive Leadership. In it he talks about this idea of productive disequilibrium, the idea that there’s a good amount of stress on a system that pushes people to be their most creative, be their most engaged, be their most productive. And if you go outside of that level, it stresses people out. They become less productive and less engaged in the work.

One of the questions that we’ve tried to answer is “What information will stress people out in a good way?”

We did make one mistake. We did an early test, sharing salaries with a small sample of people, and it was a disaster. It absolutely caused the wrong type of stress and people were focused on the wrong thing—trying to prove why they were worth more than someone else. People would come to me and say, “I don’t understand why this person makes $2,000 more than me.” It wasn’t a good use of anyone’s time. It didn’t inspire teamwork. Now we try to share information that’s at a company level. At an employee level, we keep information confidential.

Have you noticed any generational differences in the way people reacted to your openness?

Those who are a little bit older and more experienced have been very surprised about how transparent we are. The younger people—maybe because they’ve grown up in a world where transparency is one of those values that’s pretty widespread—they’re like, “Yeah, of course!”

They don’t know how unusual it is?

Not until they’ve talked to their friends. They say, “What? Those numbers are buzzing around our office all the time!”

But they don’t share the actual numbers [outside the company]. At every single meeting we reinforce to the team that we are trusting them with very confidential information and that we are treating them like the adults that they are, and the trusted team members that they are, and they are not to share it.

Were you this trusting and transparent from the very beginning?

In the beginning, no. We were a team of six people in 300 square feet, and we very quickly doubled to 12. That was that first time we started implementing some of the key metrics, like how many new projects we had, or the number of general contractors we onboarded in a month. It wasn’t until we doubled again, until it reached 24, that I started sharing the expenses and revenue collected metrics. And that’s been a game changer. I saw a significant change in perspective and ownership of the company, in a way, in every single person.

It helped to reframe everything and make sure that we were adding value, and getting paid for the value we were creating. That’s why I tell other managers that I can’t recommend transparency enough.