Trends for 2009: Radical Transparency

Now that Barack Obama has appointed YouTube as his “Secretary of Video,” as CNET comments, it raises the question what does Generation O’s new transparency mean for businesses?

At first sight, well, it means danger. The airlines British Airways (BA) and Virgin Atlantic recently experienced that first hand. The Economist reports that several crew members were fired after making derogatory comments on the airlines’ Facebook forums about safety standards and passengers. The staff gushed about cockroaches on board the planes and shared other juicy details that -- if true -- were less than flattering for their employers. Public relations experts such as Aedhmar Hynes from Text 100 were quick to point out (in the Economist article) that online transparency can only be as radical as its regulation is regimented and that employee empowerment needs to go hand in hand with employee education.

Yet Hymes’ recommendation sounds like radical transparency that is not quite so radical, and may run counter to the very notion of transparency. Moderated radical transparency, so to speak, is as oxymoronic as, say, risk-averse hedge funds. So does this episode mark the beginning of the end of radical transparency? Not so fast. It’s all a matter of managing expectations. For starters, it is worth acknowledging that radical transparency can have radical implications. In fact, collateral damage should almost always be assumed; it is part of the game. If you’re not willing to take that risk, don’t take it! But note that in most cases (unless you’re a military defense contractor, the CIA, or another organization that needs to respect strict legal requirements), your customers may then assume you have something to hide. And, if you’re perfectly honest, that’s probably the case, no?

Airlines and other travel industry companies are especially vulnerable when it comes to bad PR because the perception of their service is so critical. Customer expectations are high, and every little interaction -- and there are hundreds of thousands every day -- is closely scrutinized. See Untied, the customer forum for rants about United. Airlines are also impacted by variables that are often beyond their control, at least partly. Remember JetBlue’s winter storm fiasco in 2007? The brouhaha around BA’s and Virgin Atlantic’s Facebook woes does not make for a case against radical transparency; rather it highlights an inconvenient truth: airlines – as well as the majority of service brands – are radically transparent by the very nature of their business.

If flight attendants complain about unpleasant passengers, then it reveals a bigger issue at stake that transcends the sole PR dimension: Radical transparency may bring out the skeletons in your closet. If the bond between your customers and your brand is just a bit flawed, you’re not only facing a PR issue, you’re facing a fundamental issue at the very foundation of your brand promise that can severely threaten your business. Staff members who think not so highly about their customers are the problem, not the fact that they are sharing their opinions on Facebook. BA and Virgin Atlantic did the right thing, and it was not a “fiasco,” as the Economist labeled it, but rather a cleaning of the system. Exposing black sheep among your personnel may hurt in the short term but can serve as a real benefit to your brand in the long term. When your business is in the service industry, those ticking reputation bombs need to be dealt with anyway. Promoting transparency is a valuable concept to preempt them and, well, promote the truth. It will come out anyway, sooner or later. And then radical transparency is not a strategy but the only real option left.

All that being said, reputation protection is only one side of the equation, and it is the defensive one. As much as radical transparency can underscore that you have nothing to hide, it can also highlight that you have a lot to show. In this respect, it presents a huge opportunity for marketers. Dave Balter, founder and CEO of the word-of-mouth marketing firm Bzz Agent, made a compelling case for corporate transparency in a recent interview with the Harvard Business Review: “(…) Companies put rules into place to hide their ideas. They think the rules give them control over people and markets. But that’s totally untrue today. There are so many communication routes that you can’t possibly control the information flowing through them. Furthermore, attempts at secrecy prevent the company from making use of those information flows. You can’t always foresee the benefits of letting ideas out into the world, but they often far outweigh any harm that may result.”

Indeed, in the brave new world of always-on social media, companies may need to share everything about their business, including complaints, profit margins on particular products, and specific corporate strategies. And they may increasingly turn to proprietary channels to do so, bypassing traditional media and becoming media companies themselves. Add to that the fact that customers “own” and manage brands and not companies, and it is time for a fundamentally new concept of “brand presence.” Proactive radical transparency can not only become the mandatory platform for authentic, trust-building interactions with all stakeholders (or “brandholders”) but also open a new avenue for marketers who understand that effective marketing needs to be conversational and open-sourced.

So, here’s an audacious future vision of what radical transparency in corporate communications could look like. Taking social instant messaging one step further than existing formats (such as the micro-blogging service Yammer that applies the Twitter model to the enterprise -- “what are you working on”?), companies could make their live email correspondence public. Let’s call it Reality Email. An open and interactive email feed may propel knowledge-sharing and collaboration but also an ongoing conversation that customers, partners, and media worldwide can join. Remember the “Cluetrain Manifesto”? “Markets are conversations” -- and so are organizations and brands. Reality Email would take this literally literal. Companies “going public” with live-email might create a powerful new marketing broadcasting channel for brand-building in the new age of radical transparency. Does this sound radical? Perhaps. Will it happen? You bet.

Comments

[StratumDave]

Harvard Business review wrote a great article on this subject way back in 2003 titled: A Blogger in Their Midst about the blogger called Glove Girl. I have recommended it to many colleagues as a must read. I find it so interesting to see the conundrum being discussed just as vigorously a full five years later. Or as we early internet folks used to call it 20 internet years later.

[Anders Vesterberg]

Radical transparency and authenticity in business is very challenging and interesting ideas. These thoughts ought to be explored further. Great discussion!
/Anders