This is about financial transparency.

I’ve noticed a strange paradox. In a number of places I’ve worked, and other startups I’m familiar with, the revenue numbers, sales figures, and user growth are all very visible and shouted (often publicly) from the rooftops. In contrast, the spend numbers such as monthly burn, cost to acquire customers, and total cost of creating a product from development to shipping are treated as classified information.

Sometimes even the CEO doesn’t know the burn rate, the cost of goods, or the total non-recurring engineering costs for manufacturing a new product.

If the CEO does have visibility into all these numbers, that data is often locked away, compartmentalized by those who “need-to-know.” I have seen a great many instances where this failure to be transparent about expenses makes it impossible for team members to propose solutions that make economic sense for the business.

At the end of the day, running a business is all about numbers. Your team can’t account for what they can’t see. It is very hard for employees to make smart spending choices when they aren’t allowed to see at least a partial picture. Even if there are parts of the picture you find sensitive or want to keep confidential (for example, employee compensation), you can still find ways to make most expenses visible to your team.

Everyone spending money should be able to see where it goes.

You should not only enable but require the leaders in your company to understand the costs of acquiring a new customer, retaining an existing customer, developing a new product feature, recruiting a new employee, or launching a new internal system.

Financially literate teams are extremely powerful.

This is an opportunity for you to teach those around you to use the numbers. Let employees look at historical spending data and say “this is what we paid for X,” so this is why we should spend more on Y or reduce expenses on Z. Data gives employees context for making decisions and gives company leadership the reference points they need to do more with less.

Create a culture where people work to do more with less, and are empowered to make pragmatic spending decisions of their own accord.

When you withhold this financial information from the business process you go to a place where spending decisions become emotional. I don’t understand why so many leaders prefer a culture of secrecy. Teams do better when they go by the numbers.