PLANNING AND LEADERSHIP FOR A BETTER WORLD
PLANNING AND LEADERSHIP FOR A BETTER WORLD You’d want to know if your toothpaste contained high levels of triclosan, a powerful anti-fungal that stays in the human body for months. Or if your bank or insurance company was about to cough up a gargantuan toxic-asset hairball. (Oops, too late.) Or if your company’s customer service was being savaged publicly by angry customers.
Of course you would. And so would lots of other people. And that is the simple but possibly game-changing appeal of “radical transparency.” This emerging buzzword has lots of roots, notably The Naked Corporation, a 2003 book about corporate transparency co-authored by Don Tapscott. A popular Wired article in 2007 showed CEOs applying the principle. Since then, the concept has begun a steady viral spread into politics, finance, marketing, green and beyond. The Facebooking, Tweeting, blogging Barack Obama has been lauded as the first radically transparent president. Wall Street, Wired’s latest treatment notes, is especially ripe.
An Open-Source World
Essentially, radical transparency applies an open-source approach to the wider world. Information is published and freely shared by individuals and organizations. And as in software development, IT has a crucial role to play: discovering, cleansing, analyzing and presenting data, and, increasingly, making it mobility-ready; integrating public and private information streams; and creating and maintaining collaborative platforms, to name a few.
Making radical transparency work also requires a change—a big one for many of us—in leadership style. Information hoarding and despotic, secret, unilateral decision-making are, well, the opposite of what we’re talking about here.
I know, I know, it all sounds hopelessly naïve. People don’t want to share important info, you say. Neither do companies. Often, that’s true. But let’s face it—technology has/will let that genie out of the bottle. It’s already happening (see below). If the boss doesn’t want to be open, odds are growing someone will decide for him. In this new open world, if you don’t make information public, someone else eventually will. Wouldn’t you rather be in the driver’s seat? Not sharing everything all the time, but more than you’re doing now. Plenty of startups work this way.
Below are three interesting Websites embodying different aspects of radical transparency. Do they suggest a discussion point, action item or path for your organization? For you?
www.GoodGuide.com: Greenness as Market Advantage
In a recent Harvard Business review blog post, "Winning in an Age of Radical Transparency," emotional/eco intelligence guru Daniel Goleman neatly summarizes www.GoodGuide.com:
A website that draws on 200 or so databases to rate—and rank—consumer products on their environmental, health, and social impacts. For the first time this makes available to shoppers an independent evaluation that lets them compare what had been hidden ecological costs. GoodGuide.com signals a revolution: expanding the domain of value for an item beyond price and quality to include its harmful or beneficial consequences.
Among the databases GoodGuide draws on are some for product lifecycle assessment (or LCA), the method that tracks the environmental and health impacts of each of the hundreds of stages in industrial production. LCAs have heretofore been proprietary, not public, knowledge. Taking that data public to compare products converts once-hidden ecological impacts into a market force.
Sharp-eyed visitors will notice Goleman’s latest book prominently featured on GoodGuide. But blog rolling aside, he’s got a point. Expect more like this. And while you’re at it, check your shampoo.
http://getsatisfaction.com: Public Customer Service
Evolving beyond simple bitch-and-gripe Websites, Get Satisfaction unites customers and company employees to handle all manner of prickly problems—in public. It’s a win-win: Customers get real people and answers, both “official” and from other customers. Companies signing up for the service (they pay) get another customer satisfaction channel. Tech companies include giants like IBM, Oracle, Microsoft and smaller others. An added bonus: real-time feedback for product improvement and development.
http://freerisk.org: Crowdsourced Risk Analysis
This might be my favorite. A neat little Wired piece says it all: "Finance Geeks Use Open API to Crunch Market Numbers." The story goes like this:
When AAA-rated companies began crumbling like sand castles in an earthquake last year, Jesper Andersen and Toby Segaran had the same thought: There has to be a better way of measuring corporate credit risk. Bond rating is plagued by insularity, they argue. Agencies like Moody's and Standard & Poor's lack transparency, use narrow data sets, and rely on too few models (one of which was the notorious Gaussian copula formula featured on Wired's March cover). Worst of all, they're paid by the firms they evaluate—an obvious incentive for grade inflation. "No one can pay for this and keep it fair," Segaran says.
The partners' solution: a volunteer army of finance geeks. Their project, Freerisk.org, provides a platform for investors, academics, and armchair analysts to rate companies by crowdsourcing.
The site amasses data from SEC filings (in XBRL format) to which anyone may add unstructured info (like footnotes) often buried in financial documents. Users can then run those numbers through standard algorithms, such as the Altman Z-Score analysis and the Piotroski method, and publish the results on the site. But here's the really geeky part: The project's open API lets users design their own risk-crunching models. The founders hope that these new tools will not only assess the health of a company but also identify the market conditions that could mean trouble for it (like the housing crisis that doomed AIG).
"You can't hide anything anymore," Don Tapscott reminds us. That is truer than ever, and becoming more so each day.
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