Characteristics of open and closed company cultures
A closed culture is typically built around secrecy, strict hierarchies, career ladders, individual incentives, fixed roles, and tight control. In contrast, an open culture values transparency by default, flatter structures, personal development, team-based incentives, and a clear separation between roles and the individuals performing them. [Source]
But what does openness actually look like in practice?
The culture of full transparency
One of the defining traits of an open organizational culture is genuine transparency. Leadership must be fully committed to the idea — not just when sharing success stories or revenue numbers, but also when facing challenges and disclosing risk. Trust is difficult to build and easy to lose. Often, management withholds bad news in an attempt to protect others, but the moment leadership breaks transparency, others follow.
It’s not difficult to start being transparent — the challenge is maintaining it.
Levels of openness vary between companies. Some, like Buffer, operate with radical transparency by sharing nearly everything internally and externally. Others prefer to keep public communication limited but maintain full internal transparency.
Larger organizations face unique challenges. Public companies, in particular, must manage legal and reputational risks. Full transparency in such settings remains a difficult problem to solve.
Transparency also goes beyond financial reporting. It’s about how teams communicate, how feedback is given and received, and how sensitive data — including salary — is handled. Studies show that when employees know how much their colleagues earn, satisfaction can actually decrease unless the pay system is clearly communicated. When companies are open about salary structures and the logic behind them, this friction tends to disappear.
As companies scale, maintaining accessible and accurate documentation becomes harder. Many organizations respond by building internal handbooks that centralize important company information. Some even share these publicly. Here’s a shortlist of public examples worth exploring:
Team communication
Openness, constructive feedback, and a willingness to share ideas and concerns are all part of a healthy transparent culture. Building an organization around trust, continuous learning, and collaborative innovation is essential.
When employees feel safe sharing ideas and concerns with colleagues and leaders, it fosters mutual respect and psychological safety. This, in turn, enhances collaboration and drives innovation. Encouraging open communication also reduces misunderstandings and internal conflict — issues often rooted in a lack of clarity.
Open communication is critical for alignment. When employees understand the company’s vision and feel invited to contribute to it, they become better problem-solvers and decision-makers.
One of the most cited examples of open communication comes from Netflix, whose culture book places high value on honest, productive feedback as part of daily operations — not just an annual review.
Still, it’s not always easy to give or receive feedback. A trust-based, honest culture must be in place for open feedback to work. These elements are tightly linked — no trust means no real feedback. Without feedback, learning and improvement stall. And without a learning culture, innovation becomes nearly impossible.
To dive deeper into Netflix’s culture, check out No Rules Rules by Reed Hastings and Erin Meyer.
Team autonomy
Open company cultures are also built around autonomy — and not just in what people do, but in how, when, and with whom they work. [Source]
- Practice autonomy: Employees want to choose how they work — both individually and as teams.
- Schedule autonomy: People want to choose when and where they work, balancing synchronous collaboration with focused solo time.
- Allocation autonomy: Rather than being assigned to teams, people want to join or create teams that align with their interests and strengths.
- Role autonomy: Employees in open cultures expect the freedom to shape their own roles and career paths — not follow a rigid track.
This leads to greater accountability. When individuals are trusted to own their work and communicate openly, they take pride in the outcome. That results in higher quality output and a greater sense of personal satisfaction.
Open cultures make ownership the default. Employees are more likely to take responsibility for results, raise issues early, and suggest improvements — all of which lead to faster problem-solving and stronger outcomes.
Delegating leadership and flattening hierarchies
Millennials and younger generations are especially resistant to static hierarchies. They expect agile, lightweight systems where they can contribute meaningfully — and will walk away rather than tolerate rigid structures. [Source]
Open culture is often built and sustained through decentralized decision-making, moving away from traditional hierarchies and toward dynamic, self-managing teams.
Tearing down outdated structures enables more collaboration and initiative. Because teams operate autonomously, they no longer need top-down control. Teams form organically, assume responsibility for their areas, and are empowered to make decisions using the information they have. What matters is not status — but outcomes.
This shift can go further: some self-organizing teams are even trusted to hire and fire, set compensation, define priorities, and propose new company policies.
For legacy organizations, this can seem extreme. But change doesn’t have to be radical at first. Start small. Let teams form organically. Remove rigid role boundaries. Flatten the structure. Build a culture of open doors. Leadership must fully support the shift — otherwise, the initiative will be seen as performative and quickly lose credibility.
