Digital transparency: inevitable paradigm

The amount of available information and its velocity are two undeniable factors of digital economy. Powered by those and by new generation of digital natives, transparent management models are consolidated. 

Technological changes are undeniably changing every aspect of our lives. Business world is not an exception. More so, it is a place where all these transformations interlock. Consider how digital life has radically modified our work routines and our ways of consuming (and deciding what and how to consume). 

Companies, as we have seen in the previous articles, suddenly face multiple challenges: how to be effectively visible online (which is different from having a web page), establish effective relations with a new type of consumer and, meanwhile, “take note” of technological innovations to benefit from. 

However, these new challenges taken separately fail to explain a true paradigm shift brought about by digital reality. Don Tapscott, author of acclaimed “Wikinomics” and “The Naked Corporation” puts it bluntly: “The industrial age with all its institutions has run out of steam”. 

The age of see-through companies 

Tapscott’s confirmation opens the door to a series of structural changes, which we would not detail here. However most importantly, companies of the 21 century should consider the value of transparency.

First, it may be appropriate to define this concept: it is not so much about a compulsive display of corporate performance, but about showing authenticity so it reflects positively on a company’s reputation. A few years ago, a business analyst Clive Thompson was asking ironically in the Wired magazine article: “Does it make sense for companies to try and hide anything in the era when Enron’s emails and Paris Hilton’s phonecam images are instantly accessible from any place in the world?”

The answer is simple: no. In the world where Google is not only a search engine, but also an implicit organizer and online “reputation manager” (personal and corporate), companies can – and should – establish more real and fruitful links with their customers and competition. 

And this relations start with a central premise of the transparency: making corporate information accessible and capitalizing on this accessibility. If the question “how?” arises immediately, the following four points will clarify it. 

1. Consumer ally: the customer service of, a firm that sells footwear and apparel online, redirects its clients to other companies if they do not have a desired item in stock. For traditional CEOs, this seems ridiculous, but this action, supplemented by others, has positive impact in the medium term. “Once people are interested in you, they will be interested in helping you also”, adds Thompson.

2. Co-workers, welcome innovation: once that see-through and genuine relationship is established (hence the above example), companies can expect many advantages from the 21st century consumer. Companies with open doors policy that talk on blogs and social networks about their future products or services get more than effective feedback. Therefore, Tapscott reminds us that a giant Procter & Gamble has used its online followers’ contributions to carry out about 50% of its innovations.

3. “Net” generation: those called “digital natives” are already among us. They begin to take up jobs and make up increasingly sought after consumer segment. This has huge implications for the 21st century businesses, which cannot be conceived without regard to a group that demands a lot of information before deciding and values those companies that consider their opinions. These consumers are always connected, and they have much greater influence on their peers than previous generations. Consider an average number of contacts that a 20-years-old person has in his or her social network profiles and the volume of informational exchange about products and services circulated there. 

4. Unconcealed criticism: the reputation of any brand is made – or ruined – on the web. The public relations officer Leslie Gaines Ross says that executives are more aware of a basic fact of our times: one simple Google search can tell much more about a company than the most expensive institutional campaign. Due to this, rather than trying to hide or minimize criticisms – no matter how negative or radical – it makes sense to get feedback from them and join a “greater global conversation” taking place on blogs and social networks. 

New limits

Assimilating a transparency concept and carrying it out seems to be a steep task. However, its acceptance does not require an effort greater than that of fully adapting to a world where we live. Digital economy teaches us that technological breakthroughs and massification are resetting the limits (in public/private lives) and concepts (consumers/sellers), which we believed to be static. Incorporating and putting them into practice will be the first step in the right direction of management as see-through as effective.