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Radical Transparency

This article is almost two years old, but it is perhaps even more current today than it was when it first appeared:

Pretend for a second that you’re a CEO. Would you reveal your deepest, darkest secrets online? Would you confess that you’re an indecisive weakling, that your colleagues are inept, that you’re not really sure if you can meet payroll? Sounds crazy, right? After all, Coke doesn’t tell Pepsi what’s in the formula. Nobody sane strips down naked in front of their peers. But that’s exactly what Glenn Kelman did. And he thinks it saved his business.

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The Internet has inverted the social physics of information. Companies used to assume that details about their internal workings were valuable precisely because they were secret. If you were cagey about your plans, you had the upper hand; if you kept your next big idea to yourself, people couldn’t steal it. Now, billion- dollar ideas come to CEOs who give them away; corporations that publicize their failings grow stronger. Power comes not from your Rolodex but from how many bloggers link to you – and everyone trembles before search engine rankings. Kelman rewired the system and thinks anyone else could, too. But are we really ready to do all our business in the buff?

“You can’t hide anything anymore,” Don Tapscott says. Coauthor of The Naked Corporation, a book about corporate transparency, and Wikinomics, Tapscott is explaining a core truth of the see-through age: If you engage in corporate flimflam, people will find out.

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Secrecy is dying. It’s probably already dead.2 In a world where Eli Lilly’s internal drug-development memos, Paris Hilton’s phonecam images, Enron’s emails, and even the governor of California’s private conversations can be instantly forwarded across the planet, trying to hide something illicit – trying to hide anything, really – is an unwise gamble. So many blogs rely on scoops to drive their traffic that muckraking has become a sort of mass global hobby. Radical transparency has even reached the ultrasecretive world of Washington politics…

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All of which explains why the cult of transparency has so many high tech converts these days. Transparency is a judo move. Your customers are going to poke around in your business anyway, and your workers are going to blab about internal info – so why not make it work for you by turning everyone into a partner in the process and inviting them to do so?

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Some of this isn’t even about business; it’s a cultural shift, a redrawing of the lines between what’s private and what’s public. A generation has grown up blogging, posting a daily phonecam picture on Flickr and listing its geographic position in real time on Dodgeball and Google Maps. For them, authenticity comes from online exposure. It’s hard to trust anyone who doesn’t list their dreams and fears on Facebook.

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The new breed of naked executives also discover that once people are interested in you, they’re interested in helping you out – by offering ideas, critiques, and extra brain cycles. Customers become working partners.3 Kelman used to spend valuable work time arguing why the real estate business had to change; now his customers do battle for him, wading into Redfin’s online forums to haggle with old-school agents.

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Nearly everyone I spoke to had a warning for would-be transparent CEOs: You can’t go halfway naked. It’s all or nothing. Executives who promise they’ll be open have to stay open. The minute they become evasive about troubling news, transparency’s implied social compact crumbles.

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Which illustrates an interesting aspect of the Inter net age: Google is not a search engine. Google is a reputation-management system. And that’s one of the most powerful reasons so many CEOs have become more transparent: Online, your rep is quantifiable, findable, and totally unavoidable. In other words, radical transparency is a double-edged sword, but once you know the new rules, you can use it to control your image in ways you never could before.

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“Online is where reputations are made now,” says Leslie Gaines Ross, chief reputation strategist – yes, that’s her actual title – with the PR firm Weber Shandwick. She regularly speaks to companies that realize a single Google search determines more about how they’re perceived than a multimillion-dollar ad campaign. “It used to be that you’d look only at your reputation in newspapers and broadcast media, positive and negative. But now the blogosphere is equally powerful, and it has different rules. Public relations used to be about having stuff taken down, and you can’t do that with the Internet.”

But here’s the interesting paradox: The reputation economy creates an incentive to be more open, not less. Since Internet commentary is inescapable, the only way to influence it is to be part of it. Being transparent, opening up, posting interesting material frequently and often is the only way to amass positive links to yourself and thus to directly influence your Googleable reputation. Putting out more evasion or PR puffery won’t work, because people will either ignore it and not link to it – or worse, pick the spin apart and enshrine those criticisms high on your Google list of life.

Read the whole thing – all those good examples that I snipped out. Is this how you operate, either as a person or as a company/organization?

Comments

  1. #1 Glendon Mellow
    December 31, 2008

    Terrific article. Thanks for that.

    How much information to reveal is certainly something I think most of us wrestle with. It reminds me of the culture in David Brin’s novel Earth, and how secrecy in culture collapsed in a war centered around Switzerland.

  2. #2 daedalus2u
    December 31, 2008

    I think this is great advice, and is how I live my life. IRL I am a very bad liar. I donít like to lie and I am not good at it, so I donít. I am careful not to do anything I would want to lie about. It is so much easier to just keep track of one version of things.