Systems Create Integrity
More than a decade ago, I sat in an open plan office one row behind two women in their mid-twenties. One of the women went to an Ivy League school. When she joined, she was confident and negotiated well for her salary. The other woman went to a state school; she had joined earlier and hadn’t negotiated as hard. Both women were at the manager level in the marketing department.
At that time, the company didn’t have a comp system. We had two managers on the same team, both talented, and one was paid $50,000 more than the other.
As they worked together over the years, they talked. And they found out how differently they were compensated. Not long after the truth got out, they both left.
“Act with Integrity” was one of the five values at that company. It was a fine value, even if the wording was flat. “Act as if your actions will always be known” would have been more concrete.1 But the writing wasn’t the main problem. The company wasn’t living up to it.
In a startup, systems, not individuals, scale integrity.
Compensation bands don’t force you to pay the exact same amount to people, but they do create a container of integrity, because there’s a maximum differential in top to bottom pay. The range flexes (for experience, performance, specifics of the role, etc) but it doesn’t break, which means that when people talk, the gap is explainable.
No matter where they come from or what role they play, people should be paid fairly. Fairly against the market, and fairly against each other.
One way to think about a system is that you do work upfront so your employees don’t have to. The system makes it easier and faster for your team to operate. And that’s how it works: integrity, if built into the path of least resistance, no longer depends on any individual’s behavior.
When we had about 10 employees at Modern Treasury, I told the founders the story of these two women. I said we needed to start thinking about comp bands. They looked at me sideways. I told them I didn’t believe in making comp transparent, but I wanted to operate as if comp was transparent. So we made a simple, consistent comp system. Building on that, when we had 65 employees, we purchased Radford. The Radford sales guy told us that we were too early-stage to buy. “It’s too expensive for startups.” But I wanted the data because I wanted to create a system. So we bought.
Systems create fairness through structure. It doesn’t have to be comp bands.2 Some other examples of systems in a startup3 that create integrity:
Onboarding programs
Consistent interview questions per role
Transparent decision logs
On-call rotation schedules
Each of these uses a system to programmatically equalize access, experience, or knowledge across employees.
Individually, integrity is acting as if everything will be known. In a startup, it’s designing a fair system.
Once over dinner at home, we were talking about a tough situation my dad was in at work. My mom said, “the truth always gets out, so act as if it will always be known.” So she gets credit.
The AI market is changing comp ranges and bands. OpenAI and Anthropic moved to a single-title model for all their technical teams, “Member of the Technical Staff.” But that didn’t change the need for a system. It just evolved into a different kind of system: less variation in base salary for levels, and a new bonus system to reward performance.
Outside of startups, one of my favorite examples is seating charts. Good seating charts, even for a 12-person dinner, take effort to get right. But they create a more enjoyable and equitable experience for guests.