Don Tapscott, a frequent TED conference speaker and author of the 2013 e-book Radical Openness, suggests (below) the world’s problems may not be too great for us to fix, but first we need a new model for working together that the networked age can supply. In MEDIA BANK, the innovation authority goes on to describe to TRUE the changes in the Internet that have created the potential for a much more collaborative society and how that may end up saving capitalism.
The following is an excerpt from Don Tapscott’s newest e-book, Radical Openness.
A Strategy for Thriving in the Age of Transparency
With increases in transparency taking place almost everywhere, there is a growing concern in many organizations that this comes at a great risk. Most organizations cling to a culture of secrecy because they fear making themselves vulnerable to competitors or hostile groups. But in today’s environment, maintaining secrets can be even more costly. Companies and governments that withhold information (or simply fail to communicate honestly and clearly) can end up alienating stakeholders and straining important relationships. Further, organizations with fewer secrets inevitably spend less money and use fewer resources trying to hide or justify them. Just ask Apple executives in the wake of the company’s recent supply chain troubles.
In this new transparent world, everyone inevitably discovered Apple’s problematic relationship with Foxconn, the Chinese contract manufacturer whose employees assemble millions of iPods and iPads in conditions that most Western consumers would consider atrocious. When consumers found out about this link, it caused an enormous problem for Apple. Not only did it sully the company’s reputation, but such working conditions cause real disruption in the supply chain. It’s clear that in today’s culture of radical openness, Apple should have been more transparent about the Foxconn factories. Only after an embarrassing exposé in the New York Times did Apple hire the Fair Labor Association to perform an audit on its supply chain practices. The audit found serious violations of workers’ rights, as well as salaries too low to cover living expenses. Foxconn has since promised to improve conditions, and Apple publicly declared, “We think empowering workers and helping them understand their rights is essential.” But the damage to Apple’s reputation had already been done.
Of course, organizations should not divulge all of their secrets. Employees should not violate confidentiality agreements, nor should companies reveal trade secrets or competitive information that would undermine their position in the market. In fact, secrecy sometimes generates good results and, somewhat ironically, Apple is a good example of that too. The company’s product development process is ultra-secretive, and few can doubt its track record since the iPod revitalized the company’s fortunes in 2001. Most employees don’t even know what’s in Apple’s pipeline unless they’re part of a specific product team. These strict confidentiality measures ensure that employees can’t blab to the media or leak competitive details to the Twittersphere. One reason Apple’s product release events are met with such predictable excitement is because nobody quite knows what’s about to be released. Weeks of pre-launch rumors and speculation feed an insatiable media appetite that few companies, if any, have succeeded in replicating.
What the Apple case demonstrates is that the decisions around when to be transparent are rarely clear-cut. The real value of transparency lies in the ability of organizations to apply it strategically to enhance trust with stakeholders and lower transaction costs in business activities. And in order to lower transaction costs and build trust-based relationships, it helps to have a well-defined and well-managed transparency strategy — a strategy that addresses key questions like: Where can transparency be used to increase business efficiency? Where will transparency help counter public criticism or misinformation? And where could transparency help deepen trust and relationship capital with customers, partners and other stakeholders? Ultimately, the most effective transparency strategies will be systematic and rigorous in their classifications of and communications with stakeholders; they will leverage new technologies to create enterprise systems for monitoring, measuring, reporting, and dialoguing on key aspects of organizational activity; and they will require capable managers who can change more than perceptions, who can drive real changes in governance, strategy, and operations. Effective transparency also means abandoning a rigid top-down broadcast approach to communications in favor of a more genuine and engaging conversational model that solicits the insights and opinions of a broader, more representative group of employees, partners, and community members.
Transparency strategy is more than just an elaborate public relations and communications method. It is a new form of engagement with a broad range of stakeholders in the economy and society that helps guide and inform organizational governance. The broader, systemic promise is that corporations will act with greater integrity because they are in constant dialogue with the societies in which they operate. Governments that share pertinent information will develop new capacities for engaging citizens and designing smarter services and policies. And citizens on the receiving end of this new openness will benefit from opportunities to play a deeper role in the issues and institutions that matter to them, using new tools that make their interactions with companies and governments as simple as posting to Twitter. Taken to its logical conclusion, transparency strategy is really about reshaping organizational cultures, structures, and processes — even products and services — to prepare companies and organizations to meet new expectations for values-based behavior in an increasingly transparent world.