Over the last twenty years, information technology – especially the internet – has dramatically increased the amount, accessibility and velocity of digital information. This is causing huge changes in how almost every company is organized and run. In a new LEF position paper, David Moschella and I examine one particularly important change: the growing pressure on companies to share more information and data about their business.  We show how some companies are harnessing the power of transparency to become more productive and successful, to innovate more quickly, and to build trust among their customers, partners and investors.

It is becoming increasingly clear that companies will have to become more transparent whether they want to or not.  Our position paper argues that while there will always be trade-offs between secrecy and openness, the tide is clearly moving toward the latter, and that now is the time for market-leading firms to get serious about developing a transparency strategy that meshes with their security strategy and their privacy policies.  Today, the trend toward transparency is still in its early stages, but we expect that the implications for companies, individuals and society at large will become steadily more profound, as modern technologies demand ever more openness, sharing and connectivity.

Our paper examines how different firms will respond differently to the trend towards transparency.  Clearly, a defence contractor or a large hospital shares much less information about its customers and its operations than a social media site designed to share user-created information.  But even companies in the same business will adopt different sharing strategies: Apple is famously close-lipped about products in development, while some internet start-ups operate more like an open-source software project and share a great deal about new projects.

The two main reasons for sharing more are to create business value and to improve accountability.   In the paper, we describe how this can be achieved by moving towards greater transparency in eight different areas:

• The thoughts and opinions of the CEO and employees
• Research and product plans (even source code and other IP)
• Employee data (bios, contact information, job focus and even salaries)
• Sales and market figures
• Customer data (anonymized)
• Customer complaints/satisfaction
• Pricing and purchasing data
• Crisis response

Highlights of the paper include:

• An assessment of the benefits of transparency in each of the eight areas listed above – and the potential downsides.
• Case studies on the impact of transparency (including Google, WikiLeaks, Comcast, CustomInk.com, the Sunlight Foundation and others).
• A list of the factors that affect whether a company tends to be more transparent or not. I n interview after interview that we conducted for our research, the leadership of the CEO (and sometimes the board) was mentioned as the most important driver of transparency
• Models to help you determine which transparency strategy makes the most sense for your organization – and leverage information sharing inside your  firm, with customers, with partners, and with the general public.
• The challenges that CIOs face in developing and implementing a coherent transparency strategy (for example multi-tier classification schemes,  employee training, coordination.)
• Recommended first steps in developing your transparency strategy and suggested reading on transparency and openness.

This paper presents a snapshot of how transparency is starting to 'change the game' today. Clearly, technologies, business practices and corporate cultures will continue to change as transparency gains momentum.  We look forward to working with our clients and partners to explore how this trend will develop.  To continue the discussion, please share your thoughts on this blog, or contact me or David Moschella.