Transparency is creating a new world, triggering organizational change on par with the transformative evolutionary effect more than 500 million years ago of light penetrating the oceans. That is what Daniel Dennet and Deb Roy of Tufts and MIT respectively conclude as they view today’s digital revolution through the Cambrian lens of In the Blink of an Eye author Andrew Parker of Oxford.
Writing in the March edition of Scientific American, Dennet and Roy suggest that when organizations, like Cambrian animal life, “find themselves exposed to daylight, they quickly discover that they can no longer rely on old methods; they must respond to the new transparency or go extinct.”
Surviving Cambrian creatures developed camera style retinas, nervous systems, claws, jaws and shells, as well as predatory and defensive strategies. Successful 21st century organizations will adapt their “organs” for delivering goods and services, as well as modify externally facing functions such as public relations, marketing and legal, according to Dennet and Roy.
Change is Changing
Earlier this month, Panera Bread became the first national restaurant company to publish a No No list of artificial colors, flavors, sweeteners and preservatives it has eliminated or intends to remove from its menus by the end of 2016. “The No No List is the latest step on our journey to clean food and a transparent menu,” said the company’s founder and CEO Ron Shaich.
A regulatory bureaucracy did not order the change. Nor did it compel Chipotle to eliminate GMO ingredients, Pepsi to stop using aspartame, Kraft and Nestle to drop some artificial dyes and McDonald’s to use antibiotic-free chicken. Like Cambrian creatures, they responded with new policies, procedures and practices to transparency’s light and the altered competitive environment it creates.
They and other organizations are adapting to what I call the new transparocracy, i.e. government, rule, power, control (-ocracy) by light (-par-) shining through (trans-).
Within this new transparocracy, the “nature of change is changing,” as explained by Accenture’s Mark P. McDonald. Now inherently social, the change process begins with dissatisfaction, followed by a demand for information and ensuing transparency, choice based on the new information, and change “in the face of clear information that drives active choice.” This is, according to McDonald, instead of the traditional process by which change occurs: problem, solution and adoption.
Some companies began taking adaptive steps more than 20 years ago amidst the right-to-know environmental movement, a harbinger of transparocracy. In 1988, Monsanto’s CEO, Dick Mahoney, issued the Monsanto Pledge, an environmental manifesto that included a commitment to reduce legally permitted air emissions by 90 percent in five years. With progress publicly reported each year, Monsanto achieved the goal by its self-imposed deadline. The company also made its product material safety data sheets (MSDS) – 1,200 in all – publicly available. In 1996, Mahoney provided a retrospective and “lessons learned” in Anatomy of a Public Policy Crisis.
For an evolved adaptation to the new transparocracy, we need only look to Nike. Facing intense scrutiny of supply-chain labor practices, the company embarked on major changes beginning in the 1990s. Nike found that simply pressuring suppliers did not achieve enduring change. Instead, it needed to base change on real business solutions driven by strong market signals, according to CEO Mark Palmer. In other words, organizational structures at the local level had to adapt.
Parker says Nike “suspected that a new model was being born – one that would tap into the wisdom of diverse contributors, where collaboration was more important than proprietary secrets. We learned to view transparency as an asset, not a risk.” The company has now moved beyond having a responsive corporate responsibility team to an adaptation-supporting sustainable business and innovation team.
Further pushing the adaptive envelope has been Tesla’s Elon Musk. He announced via a blog post last year that Tesla “would not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.” Musk explained that he created Tesla to accelerate the advent of sustainable transport, and that making its technology open source, rather than defending patents, would advance that goal. He added that technology leadership depends on the company’s ability to attract and motivate the world’s most talented engineers.
Health Care Transformed
Meanwhile, throughout the 17% of the US economy represented by health care, reformers are intentionally deploying transparency to drive change. Several weeks ago, AARP, Aetna, the National Consumers League, the Pacific Business Group on Health and other organizations launched the Clear Choices Campaign. Their aim is to put more health cost and quality information in the hands of consumers and the developers of transparency tools for consumers. They also support competitive health markets.
Once consumers become patients, having chosen where to get care, transparency comes into play again fundamentally to change the physician-patient relationship model. Transparency makes it possible to involve patients as full partners in decision-making, explained New England Journal of Medicine executive editor Gregory Curfman, M.D., at an October 2014, seminar sponsored by the journal and the Harvard Business Review.
Hospitals increasingly are engaging patients and their families in helping with the redesign of care – as detailed in my last article. At Children’s Mercy Hospital in Kansas City, a 2012 policy change “placed patients and families at the center of decision making.” Now, Children’s Mercy has more than 300 advisors embedded on committees, task forces and teams throughout the hospital. In North Carolina, Vidant Health integrates more than 150 advisors on teams and committees.
Across the economy, every organization will need an adaptive strategy for the new transparocracy. As Dennett and Roy observe, the old protective interfaces between organizations’ internal affairs and the public world are losing their effectiveness. “We can now see further, faster, and more cheaply and easily than ever before—and we can be seen,” they explain, adding, “The players who cannot adjust will not last long.”
Steps to Transparency
In developing their strategies, organizations should consider these ten steps to transparency:
1. Make mission “true north:” This is the “why” of your organization, establishing your reason and right to operate, not a slogan or tagline. Align all your practices and behaviors with it. Some organizations also use their business model as a public reference point for their performance.
2. Prioritize your focus: Considering your mission and business model, identify those areas, e.g. supply chain, menu ingredients, health cost and quality, where greater transparency will have the most positive impact. Proceed area by area in order of importance.
3. Redefine privacy boundaries: Certain information must remain confidential, such as personal health and market-moving information, as well as critical privacy needs. Narrow what this information is and who gets it internally. Then, identify transparency zones within the organization for both employee and public.
4. Provide understanding: Add perspective and explanation to the information you release, both internally and externally. Anticipate how the public and employees will receive and question it. Provide answers up front.
5. Deliver accessibility: Make your information easy to find and use, for example through a central point on your website. Ensure it is timely and current, and the public can count on it. Provide vehicles for feedback and questions.
6. Monitor and respond: Track how your information flows through digital space. Monitor your website metrics and social media. In real time, identify issues that can be resolved with more information, more comprehensible portrayal or more easily understood explanations. Fully engage in the social media conversation.
7. Recruit and Include: Embed consumers, customers and other stakeholders on work teams, task forces and committees. Engage volunteers; hire some to serve as the external voice, internally; and recruit others for short-term intern-like roles.
8. Modify practices and behaviors: Capitalize on the feedback, conversation, reaction and dialogue your information triggers. Improve products, policies, practices and procedures accordingly.
9. Restructure the organization: Adapt your organization, setting priorities, instituting process and allocating resources. Reduce hierarchies and foster the collaboration among employees and with the public that accompanies greater transparency.
10. Manage the transition: Prepare a detailed roadmap for your transition to greater transparency. Carefully consider and communicate the reasons for more transparency. Link to your mission, relevant past history or new external circumstances, especially if you are contradicting prior disclosure resistance.