Filed under: 11 Conversations | Tags: 11 Conversations, Don Tapscott, transparency
We spoke to some really interesting people whilst putting together the 11 Conversations, including Don Tapscott, author of Macrowikinomics. It’s practically a decade since he wrote The Naked Corporation about transparency – a book slightly ahead of its time. Now that Communications is one of the world’s big conversations, I asked him how corporates are really dealing with transparency.
Here’s a Q&A from the conversation, published in the latest edition of the Brunswick Review:
The past few years have seen companies moving towards more open and transparent ways of doing business. What’s driving this?
There are several powerful forces behind this – it’s like a perfect storm. The first is the technology push coming from the web, which is comparable to, and probably more important than, the printing press when it was invented. The printing press gave us access to the written word; the internet enables each of us to be a publisher. The printing press gave us access to recorded knowledge. The internet gives us access to the knowledge contained in the minds of other people on a global basis. So many people get this wrong – they think this is an information age. It’s not: it’s the age of major network intelligence and collaboration.
The second driver is a demographic one: the first generation to grow up in the digital age. They’re the net generation and these kids are different. They have no fear of technology, because it is like the air tothem. They are digital natives. I’m a digital immigrant, I had to learn. They think differently, learn differently, and they are the smartest generation ever.
The third one is a sort of social tsunami. Social media is now becoming a new means of production. In the private sector, it is changing the way that we orchestrate the capability to innovate, to create goods and services. In the public sector, it is changing the way we create public value – and the nature of democracy itself. Just as the internet lowers the cost of transacting and collaborating, it also lowers the cost of dissent, which is why we have these revolutions happening.
So you put all of that together and it is creating a pull for a new kind of enterprise, a new kind of institution. It’s creating a burning platform for change – and that analogy means that the cost of staying where you are is all of a sudden greater than the cost of going somewhere else or doing something radically different. So the industrial age is finally running out of gas and, on the other hand, we can see the contours of new institutions that are emerging.
How should companies go about developing a transparency strategy?
We need to look at the stakeholders – customers, employees, business partners, shareholders and communities – and we need to decide what information is pertinent to these stakeholders. Then we need to look at what information we are currently not disclosing that we could disclose, and what would be the benefits to us of disclosing this information, and what would be some of the dangers or unintended consequences. Then, how do we go about disclosing this information – through what media, through what process? Finally, how do we evaluate the effect of what we’ve done?
Some companies still treat transparency instinctively as a threat. Why do you think that is? I always say if you are going to be naked, you had better be buff. If you’re not buff, then transparency is a threat. But I think companies are increasingly concluding that the transparency train has left the station, the cat isoutofthebag…
The toothpaste is out of the tube … ?
Right. There is no going back, so you might as well get used to it, you might as well figure out how we need to change our behavior and make integrity part of our DNA and everything
And so how is transparency a positive opportunity for business?
For each of the main classes of stakeholders, transparency creates value, so every one of them is a separate story. Take employees: we found that when you increase transparency with your employees you get better trust, you get lower internal transaction and collaboration costs, you get better loyalty, you get a decline in office politics and game- playing and you get a higher-performance organization. So it pays off. This is not about somehow being a good company for altruistic reasons. It’s about being an open company so you achieve higher performance and competitive advantage.
Some people think that transparency is changing the way that companies act in society – making them better citizens. What do you think?
There was the traditional notion of Corporate Social Responsibility – that you can do well by doing good. I don’t think it was true. Lots of companies did well by being really bad – by having terrible labor practices or exploiting the developing world, or by externalizing their costs on to society. But increasingly I think, because of transparency, that idea of social responsibility is becoming true. We know for sure that you can do badly by being bad – look at the banks on Wall Street. Increasingly, I think, companies are going to have to build integrity into their business models.
You use the word “integrity” a lot. What is integrity in business?
Integrity is about being honest, considerate of the interests of others, and accountable – abiding by your commitments. Together with transparency, integrity is the foundation of trust.
And what is trust, in business?
I’ll give it to you in a sentence. Trust in business is the expectation that the other party will have integrity and transparency. The expression, “What are they hiding?” shows the relationship between transparency and trust. It’s very important to have these clear definitions: what is trust, what is transparency, what is integrity?
So what exactly is transparency, anyway?
Well, it took us about two months to come up with this definition: transparency is the opportunity and obligation for institutions (not individuals) to communicate pertinent information to stakeholders – pertinent, meaning it can help them if they receive the information, or hurt them if they don’t.
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