Something we’ve talked a lot about on this blog, in articles elsewhere and directly to our customers is the importance in being transparent. Often overlooked but never to be taken for granted, I believe that transparency is a crucial concept in this age of information. Technology is quickly increasing the need to be transparent in the way we work and simply being honest is moving from virtue to a prerequisite in modern business.
In this month’s cover story for Wired author Clive Thompson, discusses the concepts of “Radical Transparency” and how some businesses have turned away from the long-standing traditions of corporate secrecy and opened up their inner workings for all to see. I applaud Clive and the editors of Wired for bringing to light what I think is such an important topic in modern business.
In the past I’ve shared how we price projects, how we think transparency will effect the revolutionize the agency business and most recently about our project process. It is no surprise to me that these are some of our most read articles.
But sharing information about how the inner workings of your organization isn’t easy to do. Knowing what to share—where the line is between public and private—can difficult to identify.
The following are the principles that I use to be a transparent company. I don’t think they are that radical, they are really just the principles my parents raised me by. But I’ve found that these principles are rare in the business world, that many do not know how to apply what they learned as a child to the business world.
1. Never Tell a Lie
Your parents most likely told you to “never tell a lie.” But somewhere along the line we come to realize that lies are just a part of life, especially in business. It can sometimes feel like the ones that lie, cheat and steal are the only ones that attain success. But I believe those days are coming to a end.
A good reason to be motivated to lie is knowing that you can get away with it. Lying is simply deceiving people based on their lack of information. What happens when that information becomes readily available?
Let’s look at an entirely different kind of deceit, robberies. In Japan, 75% of all robbery cases are solved, versus 26% in the US. Robberies occur over 200 times less per capita in Japan as they do in the States. Why? Would-be Japanese criminals simply do not the commit crime. The likelihood of them being caught is just too high, you would have to be insane to try to beat those odds.
When you look at the Information Age, the ease of publishing, availability of information and the simplicity of finding the truth makes lying increasingly more difficult to do. The likelihood that you get caught is very high and bound to get higher.
In this new world of information trust is quickly becoming a highly rewarded and valuable asset.
2. Share Your Ethics
It is one thing avoid lying reactively, but the next step is proactively sharing ethics. This isn’t always clear as we aren’t dealing with just one person, but an entire organization. Make sure either someone at the top is specifying the expectation on how the organization is to behave ethically, or you have consensus.
Either way it is important to actively communicate your ethics. Doing so sets an internal guideline for employees to model themselves and externally a measure for people to judge and ultimately rally around your company. This is the new brand loyalty, based on shared values. Though it is important to note that these values aren’t sold in :30 second spots, but rather through continually demonstrating your support of them.
3. Expose the Truth
As people I feel we are naturally compelled and have a responsibility to expose the truth about hypocrisy and injustice. But as consumers we’ve become jaded and distrusting in the power of large or prominent organizations. Why don’t businesses have to abide by the same rules we use to govern ourselves? I believe they do.
A transparent company needs to feel comfortable exposing the truth from within as well as call out flaws within their industry. If you believe that something in your industry is based on consumer ignorance or deception, call it out, correct it. If one thing is certain in the Information Age, consumers are destined to find out sooner or later anyway. When they do, what is preventing an enterprising online start-up from putting you out of business? Sound ridiculous? It happened to the travel agent industry in less than five years.
Why not lead the charge in your industry? While everyone certainly won’t agree, that is okay. As long as your reasoning is sound and true you can stand behind your beliefs with pride that you did the right thing why not?
4. Do No Harm
Being transparent means having personal dialogs, talking somewhat unfiltered to your constituents (collectively meaning anyone with a vested interest in your business, e.g. users, consumers, employees, stakeholders, etc). It can be easy to call out a personal grudge with another person or organization, to air your dirty laundry for all to see to gain sympathy or support for your belief. This can be a very slippery slope.
While I believe you should expose the truth, it should be done carefully and judiciously without intentionally causing harm to another party. I believe this can be one of the greatest abuses to the trust you create with your constituents. It is important to remember that it is possible to be too transparent and too honest.
Harm can also be caused unintentionally. One of the best ways to communicate out is through your website. But a challenge with the web is making sure you define context. Language is easily misinterpreted. it can be fairly easy to make some sort of offhand remark that is misconstrued. Be careful about what you say, review before you publish and do no harm.
5. Listen
Listening to others is not something we naturally do. We always listen to ourself, but we have to force ourselves to actively listen to others. Transparency works two ways. It is important to communicate out, but is is equally important that you take the time to listen to the opinions and views of others.
Put the mechanisms in place for people to easily contact you with thoughts, ideas, opinions or support. It surprises me how many organizations are scared of this idea, fearing it will be abused or it will take too much time to manage. It is not surprising to me that these are usually the same organizations that are out of touch with their constituents. The reality is that this is a problem that can easily be solved with technology. It is the internal processes that usually need to the work.
6. Be Iterative
Iterative process is all the rage these days in development circles. But focusing on smaller releases is a tad bit easier in application development than it is in a product launch or a marketing campaign, but it can be done. The benefits to an iterative approach is the ability to reduce the cost of production while simultaneously listening to the needs of constituents. But an iterative process demands embracing transparency in order to work.
Transparent companies naturally follow a Say-Listen-Do-Learn approach. By embracing transparency middle layers, overhead and redundancies are inherently exposed. When done right transparency can both improve efficiency while at the same time building consensus. Transparent companies organically evolve into more agile organizations.
7. Accept Responsibility
My final principle and hardest to adapt to the business world is accepting responsibility. In an overly litigious society publicly accepting responsibility in business can be a very risky proposition to accept, certainly one your lawyer would advise you not to take. But I think it is one that we must embrace.
Behind closed doors a temporary lack of judgement, unchecked by others, can quickly evolve into a full blown quagmire, difficult to recover from without eating crow. Sometimes a simple difference of opinion or recollection of events can become a nasty my word against yours scenario, one where no one wins… except lawyers.
Historically in business proactively accepting responsibility for mistakes has always faired better to the future of the organization than reactively acting to the demands of others. Standing by your ethics, being open, honest and acting iteratively almost forces the transparent company to take responsibility for small mistakes, correcting course and moving on.
The Bottom Line
I know what some of you are probably thinking:
“These are great, but pretty idealistic. The real world doesn’t work like that. I have a responsibility to make my company money and sometimes I have to bend the rules to do it.”
I would counter: Sure you can play the margin and make money in the short run, but it is not the long term play. Any company that insists on being opaque, preying on the ignorance of their constituents will become an endangered species. They will lose to those who embrace transparency and open up previously closed doors. They will be rivaled by competition doing more at the fraction of the cost. They will lose employees to competition that share the same ideals, ethics and values.
I believe that in the new new new economy (I forget which one we are on), money will be made from sharing information and knowledge, building communities around big ideas and shared values.
I believe profit can be made while still being able to sleep at night.
That was very well spoken. It is one of the aspects that I appreciate about my present employer. I feel in-the-loop and not out in the cold when it comes to company policy, etc.
It’s good to hear someone espousing some good principles of business. I feel that the best kind of business relationships are just that - relationships. When you work with a client it is hopefully for the long term so getting to know each other and being real, open and honest just makes good business sense!
The principles that you live your everyday life with apply at work too. But sometimes it seems as though a different standard exists because it’s a ‘business’ relationship.
Good food for thought!
Honesty increases its value! Imagine the marketing trend? Corporate gibberish, everyone pretending being big, international and powerful… Not cool.
Turns out that loving an small startup company is easier on a transparent background rather than a Big noise: take a look at the guys from innocentdrinks.co.uk and how they approach their customers! Isn’t it an example for all of us?