Published

1

Nov

2011

Position Paper

Conceal or Reveal? Transparency Strategies for Business Advantage

Transparency: the story so far

Vinton Cerf, one of the creators of the internet and now the Chief Internet Evangelist for Google, is fond of saying: “In the past, information was power. Today, information sharing is power.” It’s sharing that allows information to be deployed, amplified and enhanced. In recent years, internet giants such as Facebook, Google and Twitter have clearly demonstrated the many forms of influence and soft power that come from increased sharing and access, and these forces will only strengthen over time.

Conceal or Reveal? Transparency Strategies for Business Advantage

Figure 1 - Key Position Paper messages

  • Businesses have always faced conflicting demands for information sharing versus information security/privacy.
  • But the trend toward more transparency is unstoppable as information becomes a dominant business driver, and as individuals, firms and governments are all expected to be more open.
  • While the risks of transparency are well understood, most firms have not thought through the potential benefits in areas such as R&D, product development, marketing, customer service and recruitment.
  • Thus, every firm has an implicit transparency strategy, but relatively few have an explicit one. Explicit discussions about potential benefits are needed to overcome legitimate risk concerns.
  • Developing an effective transparency strategy requires CXO commitment, as well as IT, legal, marketing and HR support.
  • Strategies will vary by company, industry and geography, but every firm faces basic questions of transparency inside and outside of the firm.
  • Although still in its very early stages, transparency will be an important long-term CIO issue and an ongoing area of LEF research.

But today’s high technology leaders are not the only firms that can benefit. Almost every company in every industry sector knows that it can enhance its market position by better leveraging its data and information, both internally and externally, as collaboration and co-creation become important competitive requirements. Towards these ends, forward-thinking Chief Information Officers, along with CEOs, boards of directors, marketing professionals, human resource specialists, corporate communications groups, research and development teams and other key business leaders, will increasingly need to ask themselves two basic questions:

  • How can sharing more information make our organization more productive and successful?
  • What information do we really need to protect?

While these two questions may seem simple, the answers will challenge many traditional business and IT assumptions and practices. The process of thinking through these challenges and determining what information to conceal and what to reveal is what we mean by developing transparency strategies for business advantage.

This paper provides an overview of the state of business transparency today – its drivers, dimensions, opportunities and risks. As summarized in the figure above, we will argue that while there will always be trade-offs between secrecy and openness, the tide is clearly moving toward the latter, and that now is the time for market-leading firms to get serious about planning for the many information management changes ahead. Today, business transparency is in its very early stages, but we expect that the implications for companies, individuals and society at large will become steadily more profound, as modern technologies demand ever more openness, exposure and connectivity.

Figure 2 - Increasing societal demands for transparency

2. Increasing societal demands for transparency

Let’s start with some basic definitions. Today, the words transparency and openness are often used synonymously, even though in our view the former is best viewed as a subset of the latter. For example, using the definition of transparency in the figure, a company or activity is transparent if its business practices are readily visible and accessible. But if traditional decision-making hierarchies still remain, the practices are not truly open. In contrast, it’s difficult – perhaps impossible – for a company or process to be entirely open without also being transparent.

The open source community provides an excellent real-world example. Here, everything about a given project – source code, future direction, day-to-day governance – is transparent to participants and decisions take place in open forums. Similarly, many standards bodies such as the Internet Engineering Task force find that high levels of information transparency and open decision-making are the best way to pursue their technically demanding and politically complex goals.

In recent years, the term transparency (but typically not true openness) has been widely used in government circles, as the public demands to know more about government operations, agendas, spending, research and policy deliberations. While, understandably, this public pressure is often resisted in areas where it might prove embarrassing, distracting or dangerous, the general trend toward more transparency is clear.

But the biggest recent transparency shifts have been personal. The astonishing success of Facebook, along with the enthusiasm for LinkedIn and Twitter, have greatly increased society’s expectations for personal transparency, knocking down many of the traditional walls between work, friends, community and family. Consider how easy it is for children to see their parents’ linkedIn profiles, and HR departments to view applicants’ facebook pages. What was once secret is now increasingly revealed.

These demands and opportunities for transparency (and sometimes openness) are now pressing upon a business environment accustomed to – and often still in need of – high levels of secrecy and control. But consider that today’s firms must increasingly cooperate with ecosystems (communities), comply with regulations (government) and motivate employees and customers (individuals). This will require an effective set of transparency norms and practices.

 


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