Blogs and Martyrs
This may sound odd, of course, given current thinking about corporations, which are still weathering a crisis of trust on a scale unseen since the Wall Street crash of 1929. But to build trusting relationships and success in a transparent economy, growing numbers of firms in all parts of the globe will have to behave more responsibility and more openly than ever. Firms that exhibit ethical values, openness and candor have discovered that they can better compete and profit. Some figured this out recently, while others have understood it for generations.
Now, when I talk about the Internet, I mean more than the World Wide Web. The Internet extends from Weblogs and e-mail to mobile phones and handheld computers and, just now out of the gate, cameras in mobile phones, wireless communications for specialties like healthcare, education, security and gaming, and communicating chips embedded in everything from running shoes to soup cans to door handles, production lines, diaper boxes and prosthetics. Call it whatever you likethe Hypernet, pervasive computing or ambient intelligence. The point is, the physical world is watching, providing information back to corporate stakeholders. Organizations that wish to sustain high performance in this evolving knowledge economy will have no choice but to create new images of trust, founded in transparency. Today's winners, increasingly, undress for success.
Transparency is not an abstract conceptit has a physical embodiment, the stakeholder web. The Internet has created a web of stakeholders that every company participates in, and these stakeholders are scrutinizing the company 24/7. Most of the time, these stakeholder webs are fairly dormant, until something happens, some kind of important event or activity or information disclosure that triggers an increase in the activity or the size of the stakeholder web.
Some companies don't even realize they have a stakeholder web until they get charged with doing something inappropriate. Home Depot, for example, had a fairly dormant one until one day, the Rainforest Action Network became part of the web and got very active, deciding that Home Depot's suppliers were logging old-growth forests. These activists didn't go to some global government to complain, because there isn't one, nor will there be in our lifetime. Instead, they went to the Internet, and they organized a powerful campaign. As a result, a couple of years later, Home Depot has become a leader in defending old-growth forests. The firm had to get buffto have values and behavior consistent with those of its stakeholder web. This is just one, small example of the force of transparency on an organization.
New strategies, mostly aimed at building trust, must be put in place. But don't fake it, spin or fib. In the transparent society, you've really got to be as good as you say you are, because it's getting harder and harder to control the fallout when conflicts with your story arise. Martha Stewart's downfall is emblematic. Martha was the icon of the pastel-tinged family lifestyle, and her message was trust at the highest level. Her fantasy was how to articulate an aesthetic of caring into daily life. If not Martha, then who? Because of the forces of transparency, and Martha's inability to control the message once the company's stakeholder webs began buzzing, the appearance of hypocrisy hurt the company more than whatever it was that Martha was accused of doing. The Internet makes everything appear much larger. Trust took a double beating. And partly what kept Martha's troubles alive were special sites on the Web and the information machine that churned out "Martha Watch" blogs and parody Web sites throughout her ordeal. She had little control over any of it.
This article was originally published on 10-01-2003