The industrial revolution made goods more generally available but also separated buyers from manufacturers. Before the revolution, a cobbler made shoes to fit a particular wearer and fixed a shoe if it did not fit well. That cobbler/customer relationship was a transparent one: a dialogue between people who knew one another.

The industrial-age company/customer relationship is opaque. Buyers rarely meet manufacturers, and they must go through channels to complain or seek restitution. Organizations disclose financials in their annual reports, and their websites tell customers "About Us" and describe "Our Mission," but many organizations reveal only what they wish to reveal and reveal it in one-way communications-monologues-and do not generally invite comment.

After Enron, WorldCom, Tyco, Halliburton, and Adelphia, transparent relationships are back, and companies like Dell, Microsoft, Boeing, and McDonald's are embracing transparency. Not all opaque organizations are crooked; opacity has been the way of doing business for centuries, but it is now obsolete.

Someone May Be Looking: Transparency Done Right and Wrong  

"Remove the BS from PR," challenges Brian Solis, principal of the high-tech PR agency FutureWorks. "We tend to forget about the 'relations' in public relations," and speak at customers and prospects with buzzwords and jargon, which they do not buy anymore.

It is no accident that the public lost confidence in companies and their leaders after Enron, WorldCom and Tyco, but the past decade has seen a surprising uptick in confidence in companies and their leaders.

Some of that new confidence is owed to regulatory oversight, but tactical transparency is likely just as strong a contributor. Companies like McDonald's, Beth Israel Deaconess Hospital, Apple, and Microsoft engage their customers and discuss their strategies. They go out of their way to foster trust equity. With an informed, Internet-savvy customer base, these companies cannot get away with any less than 100 percent trust. In a transparent age, companies cannot hide insincerity, nor conceal business relationships with renaming, rebranding, and arms-length investment.

Unilever won tremendous trust equity with its "Dove Real Beauty" campaign, which used ordinary women instead of models. Dove estimated that an accompanying online video garnered $150 million in sales, versus $100 million from a Super Bowl ad a year before. However, in ads for its Axe brand cologne, oversexed, rail-thin models hurled themselves at young men wearing Axe. Unilever countered that Dove and Axe were distinct business units, but customers in the blogosphere simply saw hypocrisy. Perhaps the Real Beauty campaign simply ran its course, but it disappeared quickly.

JetBlue Airways successfully regained trust after a misstep in February 2007. The airline canceled outbound flights from New York just before Valentine's Day due to ice storms in the Northeast, but did so poorly. JetBlue allowed customers on the planes, but then delayed flights for 11 hours before canceling them, leaving customers on the planes without food or drink.

With the uproar still fresh, CEO David Neeleman worked with his communications team and quickly issued a statement on YouTube. "We are deeply sorry and embarrassed," said Neeleman. No denials, no obfuscation, a CEO was sorry. The team similarly wrote emails to every disappointed passenger, offering credits for future flights. Surprisingly, the responses to those emails was about 85 percent positive, and the company saw little drop-off in sales.

Do You Have What It Takes? Characteristics of Transparent Organizations  

The transparent organization is inherently more approachable. Customers (and the curious) can engage directly with support representatives, product designers, and even the CEO. The organization reveals its objectives and its plans to achieve them; admits its fault and takes questions regarding reparations; and discloses its policies and the rationale behind them.

The transparent organization does away with opaque practices, such as:

• obfuscating a company's inner motives and inner workings


• isolating its leaders


• one-way messaging, with the customer on the receiving end


• top-down messaging, with the employee on the receiving end


• sheltering rank-and-file employees from customers and media


• baffling the customers (and the curious) with "corporate speak"

Transparent organizations also do away with opaque practices in ways that are accessible to the customer, employing social media, blogs, FaceBook, and podcasts. Savvy organizations use these tools to give their customers candid and direct answers, often straight from the CEO.

Transparency may seem informal, but tactical transparency is a disciplined and well-thought strategy. A transparent organization shares information with its stakeholders concerning leaders, employees, values, culture, results of its business practices (both good and bad), and strategy.

The organization does not throw open its windows and doors and invite the world in; a defense contractor or hospital can only be transparent to a certain point. These companies implement tactical transparency with forethought and control.

From Prospects to People: Why Opaque Selling Does Not Deliver Long-Term Return on Investment  

Christopher Carfi, cofounder of Cerado, wrote a "Social Customer Manifesto" in which the customer declares among other demands:

• "I want to do business with companies that act in a transparent and ethical manner."


• "I want to tell you when you're screwing up."


• "I want to know when something is wrong, and what you're doing to fix it."


• "I don't want to be called by another salesperson. Ever."


• "I want a say."

Many of today's customers dislike monologue-style sales pitches, brochures, and keynote speeches; they desire dialogue.

What social media does is enable permission marketing: customers search for what interests them and, by clicking through or downloading something, effectively give a company permission to sell to them. This type of relationship-oriented marketing fosters trust and builds problem-solving relationships with a customers.

In a transparent organization everyone pitches the product and everyone represents the organization. The receptionist and CEO both are empowered to satisfy the customer. If a receptionist receives a complaint about a bad night's stay in a hotel, the receptionist may offer restitution. A customer with a complaint may also reach the CEO on the CEO's blog and receive an answer. This is not a passive way to sell. The first sale is one of many to the customer, because the relationships become sales.

When Things Go Bad: Transparency During a Crisis  

While many companies' instinct is to lock down in the face of crisis, tactical transparency takes the opposite approach. Crises come in three flavors. First is a meteor crisis, something that strikes suddenly and without warning. The Tylenol poisonings in 1982 is an example. Second is a predator crisis, sparked by someone who means the company harm. The company may or may not deserve it and predators can come from inside or outside the company. The whistle blower at Dow Chemical who leaked information regarding the company's defective breast implants was a predator. Last is the breakdown crisis, some slip in the company's operations, decision making, or ethics. Enron suffered a breakdown crisis of ethics when its executives willingly cooked the books.

Transparent organizations approach all crises with a four-part methodology called OPEN, an acronym for:

• Objectivity. The company admits error willingly.


• Purpose. It plans to rectify the error and prevent it from recurring.


• Esteem. The good will the company has built with honesty, innovation, and trust.


• Navigation. How the company manages a particular crisis.

Apple CEO Steve Jobs openly apologized to early adopters of the iPod who were infuriated by a sudden drop in price before Christmas of 2007. Jobs demonstrated objectivity by apologizing and explaining his reasoning. He demonstrated purpose by offering rebates to those early adopters, which both mollified them and kept them buying Apple products. Apple had enough esteem based on its innovative product to weather the crisis; and navigated out of the crisis quickly.

Meet the Press: Traditional Public Relations and Media Relations  

The nature of journalism is changing, with information coming together in a mashup. People are increasingly getting their news online and forming opinions using social media outlets like blogs and FaceBook. Traditional news sources such as newspapers, magazines, and televised newscasts are losing customers. This form of media is not dead, but it is losing dominance; CNN is losing TV viewers even as it gains readers on its website.

CNN.com enables its readers to digest the news at will, and news stories can include hyperlinks to sources and other stories on the same topic. The result is that readers gain greater insight from a story on CNN.com than they do from the same story when it is televised on CNN.

This trend in media consumption has led to social media release, which replaces old-style press releases. Companies like Ford Motor Company, Coca-Cola, Intel, and Cisco Systems now rely on audio, video, animation, images, and social media sites to reach consumers.

The View from the Top: The Role of Leadership  

Some messages, such as admitting fault, are best handled by the CEO, and CEOs are increasingly using blogs to get these messages out. CEO blogging is no fad; MacMillan Publishing, Boeing, Lenovo, NBC, and McDonald's are just a few of the big-ticket companies with CEO bloggers.

Blogging is not "media lite," it is serious media. PR giant Brodeur & Company found in a survey of journalists that more than 75 percent admit to getting story ideas from blogs.

Blogs are a new method of communication, but communication is not new for CEOs; they routinely communicate through press releases, statements, interviews, and speeches. These have their place, but blogs invite greater dialogue. Michael Hyatt, president and CEO of trade publisher Thomas Nelson, estimates that a third of his job is spent in communication, much of it through blogs.

A blog enables CEOs to speak to the public or their employees in their own voices about what concerns them. It enables customers and employees to know the individual whose decisions affect their well-being. An interactive blog enables customers and employees to engage directly with the CEO and gives the CEO a unique look into the "edge" of the organization.

Not all CEOs must blog; it is a tactical decision. Criteria to follow include:

• Will the blog produce better communication with key shareholders than traditional methods?


• Is the CEO in the best position to handle those conversations?


• Will the CEO commit to keeping the blog current?


• Will the CEO commit to writing the blog personally?


• Is the CEO genuinely interested in conversation?

The CEO may not be the best choice for blogging. At McDonald's, the company's vice president of corporate social responsibility hosts a blog, as does the division leader at BP's U.S. operations. Southwest Airlines CEO Gary Kelly does not keep a blog, but used the company's blog to join in a conversation with customers about revising the airline's famous seating policies. He received 648 responses to his first post.

En-Gauge the Conversation: How Issues Blogs Show People You Are Listening  

In the transparent age, people prefer to form their opinions less by reading newspapers and watching TV news and more through social media-the modern word of mouth. In classic word of mouth, someone gushed or griped to ten friends, and each spread the word to ten more. Now, one person can reach thousands on a blog or on YouTube.

A company cannot control the word-of-mouth blogosphere, but it has more control if it starts the conversation, hosts the conversation, and engages in it actively. Companies like McDonald's, Ben & Jerry's and Boston's Beth Israel Deaconess Hospital have all weathered (or headed off) bad press with issues blogs. The conversation becomes part of the company's brand and stays under its control.

For McDonald's the issue was its corporate social responsibility (CSR). The company receives good grades for its environmental policies, but its CSR officer blogged candidly that he grades the company poorly and sees considerable room for improvement. McDonald's took an unexpected hit to its environmental commitment when it put toy Hummer trucks in its Happy Meals. The majority of that discussion took place on the McDonald's blog, where the CSR officer answers questions directly, admits to an error, and describes the company's environmental plans for the next year.

Beth Israel Deaconess Hospital's CEO Paul Levy on his "Running a Hospital" blog aimed a preemptive strike at what he believed would be an issue: his salary. Rather than wait for a Boston Globe story or consumer advocacy group to start a fire, Levy wrote the candidly-titled blog entry "Do I get paid too much?" He divulged his salary, outlined the hospital's salary policies, and invited commentary. Levy believed that the blog helped him center the conversation and frame the issue before anyone questioned the hospital's motives or intent. The result: no firestorm.

From the Inside Looking Out: Employee Involvement  

The employee looms large in a transparent organization. These organizations treat employees well, engage them directly, and trust employees to engage the customer. The employee is the organization when a customer calls or when someone reads the employee's blog. If an intern treats a customer well (or poorly), that is the customer's experience of the organization, so a company cannot have a hive of angry workers; it must have engaged representatives.

How a company treats employees is not "its own business." Word gets out, and prospective customers and employees care. A study of CSR by the PR firm Fleishman Hillard revealed that people esteem a company by such factors as environmental practices, community involvement, philanthropy, and employee practices. Employee practices are among the highest factors of company esteem at 26 percent, versus three percent for philanthropy. New workers care less about high pay than fair play; they esteem a company that makes its compensation policies transparent, understandable, and fair, and organizations in which they can feel engaged.

A transparent organization fosters engagement by creating dialogue three ways: between management and employees; employees and employees; and employees and customers.

The first two are in-house and take place both in person and over social media. Internal blogs become the new water cooler. A few companies, including Macaw in Europe and Siemens USA, actively invite their employees to create original blogs and share them on the company intranet. At Siemens this sometimes degenerated into discussions about soccer, but, "Management doesn't care as long as their work gets done," said a spokesperson. If a Siemens US employee can engage with one in Germany to accomplish something on the company's behalf, management is all for it. Siemens observes that employees are fairly self-policing and write chiefly about their work.

A blog may also be an effective tool in project management; it can inform management about the progress, traditionally done in a memo or meeting, and seek knowledge from other employees. Meetings and debriefings happen in isolation. Few are privy to the information, so the successes never become part of the institutional memory. A searchable blog creates a learning organization, a management ideal. It is important that these blogs include both success and failure for the institution to truly learn.

Social media acts as an important tool in a strategy, but is not the strategy itself. Ludovic Fourrage, a group program manager at Microsoft, observed that using blogs and podcasts democratizes the enterprise. He referred to this new approach as a liberal enterprise. The answers to the challenges that field employees face are in the field, so let the field share their expertise among one another rather than wait for some prescription from above. Microsoft calls this initiative "Academy Mobile."

Companies like Microsoft and Ford actively encourage employee blogging to generate excitement about products, but engaged employees can also be the company's strongest defenders. Religious publishing company Thomas Nelson was criticized for shipping 100,000 bibles to Louisiana after Hurricane Katrina. That seemed absurd to people who thought that hurricane victims needed groceries and clothing, and the comments on CEO Michael Hyatt's blog was vitriolic. Hyatt did not police the posts; opinion was part of transparency. Thomas Nelson employees replied that hurricane victims lamented the loss of heirloom bibles. The employees effectively silenced the criticism by the public.

The Toothpaste Is Out of the YouTube: Addressing Loss of Control with Transparent Tactics  

Tactical transparency invites some common but out-of-date objections:

1. Transparency exposes a company to liability. A transparent company owns up to its failings, but "to apologize is to admit guilt," so the belief goes.


2. The CEO's primary role is to "raise money for the company," as Dave Taylor phrased it on his online strategy blog "Intuitive Systems." Blogging is thus a waste of a CEO's energy.


3. Transparency exposes a company to regulatory liability. Regulations like the Health Insurance Portability and Accountability Act (HIPAA) and Securities and Exchange Commission (SEC) regulations mandate that a company remain secretive.


4. The workforce at large is not trained to deal with customers or the press. Give them rope and they will hang the company.

These objections apply only to opaque organizations; tactical transparency overcomes them all. First, companies foster good will by apologizing. Neither JetBlue nor Apple suffered liability or lost sales by apologizing; they retained sales. Second, regarding a CEO's task, opinion is sharply divided. Many CEOs see their objective as developing and implementing strategy and communicating that strategy. Profitable companies like MacMillan Publishing, Boeing, Lenovo, NBC, and McDonald's are just a few with CEO bloggers.

Regarding liability, regulations and shareholder protection are part of the equation. Hospitals are mandated by HIPAA to maintain patient privacy, and the CEO blogger at Boston's Beth Israel Deaconess Hospital never names a patient in his blog. He relates true stories with names changed, but obtains permission of the patients first. Also, a transparent company does not have to reveal its secrets. Product developers at Microsoft blog openly about Windows 7, while pharmaceutical product developers at Pfizer do not blog at all. Any well-run company has well-established and well-communicated policies regarding privacy. Everyone in human resources knows better than to reveal employee names and addresses. A newly-transparent organization must, however, articulate its privacy policies.

Your Road Map to Transparency: Creating a Plan  

The companies that successfully move from an opaque culture to a transparent one follow a template:

1. Assess the company on the opaque/transparent continuum.


2. Adjust the culture.


3. Establish a voice.


4. Create an action plan.

The assessment asks such practical questions as "What communications tools does management have in place to communicate to employees?" Tools like one-way email blasts or articles in the company newsletter are opaque, while interactive blogs by management and real-time meetings are transparent. A second important question is, "Do employees genuinely feel that their opinions matter?" If management is unsure why employee opinion matters, that is an opaque organization in need of change; a transparent organization can answer "Yes, they matter, and here is how we know what employees think and use their knowledge."

Adjusting the culture begins with management. It was the CEO of JetBlue who took the hit for the Valentine's Day 2007 crisis. It takes time for employees to trust that, yes, management is interested in their ideas for improvement, and is not going to use their honesty against them.

A company must actively establish a voice-just as it does in traditional marketing and PR. Blogging and social media appear informal, but an MTV blog and one from National Public Radio must be as different as those organizations are from one another.

The action plan itself has six key elements, which focus on:

1. crises


2. major change initiatives


3. financial matters


4. dealing with the media


5. employee interaction with the outside world


6. accessibility of management to strategic publics

The plan is as proactive and detailed as a natural disaster plan. It identifies the key players for different crises (e.g., legal, media related); establishes a method of contacting those people; and includes theoretical crises with plans of action for each. CEO Cindi Bigelow of Bigelow Tea created what she calls a SWAT team to respond to crises. Bigelow and her team successfully navigated a crisis in April 2007 when shock jock Don Imus, whose radio program Bigelow Tea sponsored, referred to the all-black Rutgers University women's basketball team as "nappy-headed hos." Cindi Bigelow herself fielded questions on her blog regarding the company's sponsorship. The blog became a community to discuss the issue and race relations in general. Imus was fired before the company reached a decision to continue or discontinue sponsorship, but the company owned the conversation about its sponsorship.

The rules for major change initiatives are no different than they were for TQM or company takeovers; only the tools differ. Some conversations must be face to face, for example, dealing with layoffs, which calls for a town-hall approach, but management may share good news quickly or invite feedback using blogs and social media.

So far, no company has suffered a disaster by allowing employee interaction with the outside world, but those that do so establish very clear guidelines. Cisco updated its blogging policy when an employee blogged anonymously about legal matters. The company now requires that employees clearly identify themselves as a Cisco employee and include a disclaimer on their blogs.

What Is Next? The Future of Transparency  

There are really only two approaches to transparency:

1. that which is required by law


2. that which a company actively chooses and manages

Boeing has discovered that active, tactical transparency is necessary to put together its 787 Dreamliner, with many of its subcomponents and parts manufactured elsewhere in the world. Boeing has been very transparent in explaining its financial need to outsource, which is controversial in a down economy, and equally transparent in sharing its internal objectives and schedules with those global partners.

Transparency is no longer a choice; it is a legal and moral requirement, but it may also be a competitive requirement.

Reading Time: 8 hours, 285 pages  

Lynne D. Johnson, director of social media at FastCompany, sums up the strength of this book in her introduction. Tactical Transparency "Goes a step farther than other books covering social media's impact…It outlines a course of action, providing a roadmap, not only with case studies but with guidelines as well." In the first two sections the authors examine real-world successes at such companies as McDonald's, JetBlue Airways, Apple, and Bigelow Tea. In the third section they provide a comprehensive methodology for success from those same companies.

Tactical Transparency is best read cover to cover; it rolls out logically as the authors revisit each case study several times throughout the book to illustrate fresh points. For example, in the chapter "Someone May Be Looking," JetBlue Airways successfully uses Twitter to observe customer satisfaction at the gates. In the chapter "When Things Go Bad," JetBlue overcomes a crisis with a transparent methodology. The book's three sections move easily from reasoning to methods to results. Finally, each page has an "Aha!" quote or paragraph powerful enough to make the reader rethink years of business practices.

Because tactical transparency is a top-to-bottom strategy which engages every employee, the book is relevant to managers at all levels, from project managers to CEOs. Project managers will understand how companies like Siemens AG gather collective intelligence (no matter how remote the employees); corporate counsel will read how transparency does not expose a company to litigation or intellectual property theft; and CEOs will see how tactical transparency using social media tools enables them to defuse crises hands-on and become their organizations' top salespeople.

Transparency is no longer a choice; it is a legal and moral requirement, but it may also be a competitive requirement. Some characteristics of transparent organizations include:

• A transparent organization is honest in its practices and inherently approachable.


• Social media renders the organization more vulnerable to scrutiny. It also represents the best way for a company to brand itself and speak to its customers.


• The organization promotes dialogue with customers versus one-way monologues.


• Transparent organizations host conversations in blogs and social media sites in order to answer criticism firsthand.


• The organization values corporate social responsibility, particularly its treatment of employees. It actively engages and empowers employees.


• Transparency and dialogue help the organization navigate a crisis and retain trust.

Shel Holtz is principal of Holtz Communication + Technology. Before forming his consultancy in 1996, he managed communication for two Fortune 500 companies and worked as a communications practice leader for a global human resource consulting firm. He has written several books and manuals and dozens of magazine and journal articles on communication. In 2005 he was named an IABC Fellow, the highest honor of the International Association of Business Communicators.

John C. Havens is vice president of business development at BlogTalkRadio. He is also lead organizer of PodCampNYC. He is a founding member of the Association for Downloadable Media, a member of the Online News Association, and the inaugural Guide to Podcasting at About.com. He is a frequent speaker on the topic of new media.

Part One: Strategy  

What is Transparency? A Working Definition

Someone May Be Looking: Transparency Done Right and Wrong

Do You Have What It Takes? Characteristics of Transparent Organizations

Part Two: Tactics  

From Prospects to People: Why Opaque Selling Doesn't Deliver Long-Term Return on Investment

Follow the Money: Financial Communications

When Things Go Bad: Transparency During a Crisis

Exposing the Company to the Employees Who Make It Work: Internal Transparency

Meet the Press: Traditional Public Relations and Media Relations

The View from the Top: The Role of Leadership

En-Gauge the Conversation: How Issues Blogs Show People You're Listening

From the Inside Looking Out: Employee Involvement

Transparency Beyond Text: How Audio, Video and Interactive Media Build Trust

Profile and Privacy: Transparency in Social Network

The Case for Face-to-Face: Transparency in Person

Part Three: Making It Real  

The Toothpaste Is Out of the YouTube: Addressing Loss of Control with Transparent Tactics

Yeah, But…: Overcoming Objections

Your Road Map to Transparency: Creating a Plan

What's Next? The Future of Transparency