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Don Tapscott's blog

Don Tapscott's picture
Don is one of the world’s leading authorities on innovation, media, and the economic and social impact of technology and advises business and government leaders around the world. He has authored or co-authored 14 widely read books including the 1992 best seller Paradigm Shift. His work continues as a the Chairman of Moxie Insight, a member of World Economic Forum and as an Adjunct Professor of Management for the Rotman School of Management at the University of Toronto.

WikiLeaks is just the beginning of hyper-transparency

| April 24, 2012

We should know within a matter of weeks if WikiLeaks founder Julian Assange is extradited from England to Sweden, where he faces sexual assault charges. But even if Assange ends up behind bars and has his website taken down, others will be happy to take his place. Think of the whack-a-mole game at the arcade. Hit one on the head and another will pop up.

WikiLeaks is just one example of why I say we are entering an era of hyper-transparency. Courtesy of the Internet, people everywhere have at their fingertips the most powerful tool ever for finding out what's really going and informing others. They are gaining unprecedented access to all sorts of information about governments, corporations and other organizations in society.

WikiLeaks itself has expanded to go after private sector corporations.  Just two weeks ago, WikiLeaks began publishing The Global Intelligence Files, over five million emails, dated between July 2004 and late December 2011, from the Texas-headquartered "global intelligence" company Stratfor. The e-mails reveal the inner workings of a company that fronts as an intelligence publisher, but provides confidential intelligence services to large corporations, such as the Dow Chemical Co., Lockheed Martin, Northrop Grumman, Raytheon and government agencies, including the U.S. Department of Homeland Security, the U.S. Marines and the U.S. Defence Intelligence Agency. WikiLeaks claims the emails show Stratfor's web of informers, pay-off structure, payment laundering techniques and psychological methods.

This will undoubtedly unleash a new round of whistleblowers keen to reveal what they see as evidence of duplicity and moral turpitude by their corporate masters.

But forced transparency goes beyond revenge by disgruntled employees. Customers can evaluate the worth of products and services at levels not possible before. Employees share formerly secret information about corporate strategy, management and challenges. To collaborate effectively, companies and their business partners have no choice but to share intimate knowledge. Powerful institutional investors today own or manage most wealth, and they are developing x-ray vision. Finally, in a world of instant communications, whistleblowers, inquisitive media, and Googling, citizens and communities routinely put firms under the microscope.

Overall this is a positive development. When you're increasingly naked, fitness is no longer optional. Survival will force you to get buff.

To be sure, all organizations have a right to secrecy. Companies have legitimate trade secrets. Transparency should refer to the release or exposure of pertinent information -- information that can help stakeholders if they have it or harm them if they do not. Employees should not violate confidentially agreements or the law.

But rather than defaulting to opacity as was done in the past, increasingly it makes sense to default to openness.

North America's biggest electronics retailer, Best Buy, has adopted the principle that "our customers should know everything that we know" including data about the defect levels of the products they are selling. CEO Brian Dunn says this is not just a matter of building trust but rather "customers have a right to this information." A few weeks ago, Dunn called on mobile phone companies to simplify their pricing plans so consumers can compare them more easily.

Nike has decided to reveal information about its patents that could help the environment by launching the GreenXchange, and encourages other companies to do the same. Fedex has built transparency into its supply chain as the company has found that free and open flow of information reduces transaction costs.

Bill Green, Chairman of Accenture’s Board of Directors and former CEO, has a track record of shocking candor with employees about everything from their financial performance to his personal struggle and tough decision to terminate the company's contract with Tiger Woods. "Transparency with employees builds trust; it speeds up the metabolism of collaboration and increases loyalty," he says. "Being open makes us better, and it's just the right thing to do."

Rather than something to be feared, transparency is becoming central to business success. Every company needs a transparency strategy. It has to rethink what new information should be made available to employees, customers, business partners and shareholders. Corporations that are open perform better. Transparency is a new form of power, which pays off when harnessed.

Companies should embrace transparency as a force for good. It will result in high-performance business operations. Create good value because value is evidenced like never before. Companies should embrace the principles of integrity, honesty, consideration and accountability as part of the organization's DNA. In doing so a company can build trust -- the sine qua non of the networked world.

Don't confuse transparency with the lack of privacy. Transparency is an opportunity and increasingly an obligation for institutions. But transparency applies to institutions, not to individuals. Individuals have no such opportunity or obligation; they have a right to privacy. So while a company should strive to be as open as possible, it should also be scrupulous in protecting the private information of customers, employees and other people who are stakeholders.

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Comments

Hi Don, first just want to say how much I enjoyed your book, Macrowikinomics. Well done.

As to this article I agree with you but think a follow-on article might be in order.

The issue you haven't touched on is where transparency and privacy intersect and specifically the financial arena. I agree that people should expect very high degree of privacy but when those people are heads-of-state and have 'private' bank accounts in Swiss banks holding billion$ they have stolen from their country there is a need for transparency.

Stories about Putin's wealth (40-80 B$), the Chinese Communist Party leaders wealth, the wealth of monarch's, oligarchs, banksters, military leaders and contractors, politicians from Presidents to Mayors, etc. etc. circulate regularly, and likely have some basis, in many cases, in fact.

This can only happen because of Banking secrecy protecting 'personal privacy'. And yet this single issue (wealth-by-stealth) is at the heart of most of the World's issues; how many powerful world leaders would actually be corrupt if they had no opportunity for hidden personal gain$?

So, the follow-on article I'd like to see you write is how this issue can be address; actually it probably justifies a book but I don't want to wait that long. Smile

Looking forward to hearing your thoughts, and proposed solutions to this vexing problem; Wealth-by-stealth, where transparency and privacy intersect.


All the best,

@GregLBean

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