Why radical transparency is a survival strategy in today’s world
The virtues of transparency have been much talked about in the context of organizational behavior and leadership. But there is more to it. The world we are living today is more than the “flat” world envisioned by Tom Friedman some time back. Thanks to Internet and the myriad types of social media, the world has truly become a Black Swan world in the Talebian sense. The traditionally opaque organizations — governments, religious institutions, large corporations, political parties, etc. — are facing existential crises, one after another, due to their structural opacity.
There are numerous examples to “an unexpected event with a disproportionate impact” destroying the calculations of many who are familiar running opaque institutions. The latest example being a Middle East Crown Prince’s misadventure in an apparent “covert” operation. Then comes the all-powerful “#Me Too” which resulted in the fall from grace of many movie tycoons, politicians, and others.
The most influential corporations of our age have also come under threat. For example, the recent gender equality protests at Google, the Cambridge Analytica scandal at Facebook, and the culture troubles at Uber that led to the founder’s forced departure.
Then comes the continuing sex-scandal troubles of the Catholic Church — one of the most opaque of all global institutions along with the communist regimes — and many other faith-based organizations across the world.
Examples are numerous, and organizations connected with the events mentioned earlier all have one thing in common — they are extremely nontransparent in their dealings and structure and that makes them very “fragile” in the wake of an unexpected shock.
Even if these institutions survive some Black Swans, as long as they remain opaque at the organizational and operational level, their survival is in question.
More than another Silicon Valley start-up — which it can probably buy out using its cash hordes — another Cambridge Analytica of a bigger scale can dethrone Facebook, resulting in massive losses to investors.
The likes of Google and Facebook created “communication platforms with instant feedback” that act as the bedrock of the open and radically transparent world we are living in, but they are also opaque when it comes to the way they do business, manage consumer privacy, or in terms of organizational hierarchies. Simply put, they are not meeting the very high benchmarks of a more “open” world they themselves helped create!
The biggest problem is that almost all of the organizations and the powerful individuals who lead them are operating with the “old mindset” that they can continue with a lack of transparency as long as they wish. But they have got it completely wrong. The more they try to suppress and subvert the flaws in the systems they command, the more fragile they become and the more vulnerable they are to Black Swans, and the resulting destruction.
I am sure that, recently, the Crown Prince of a Middle East nation would have been stunned by the global reaction to the outcome of the covert operation allegedly ordered by him. Even though he may survive this crisis, post that the ruling dynasty to which he belongs to would be a greatly weakened and fragile one than it was before. The same holds true for Facebook. Even though Zuckerberg has survived the senate/congressional grilling, it is not going to shield his company from an impending privacy disaster in the future. Another Data Leak could open the Pandora’s Box of regulatory issues and customer reactions across the world.
There is one solution to this grave existential threat: make organizations structurally transparent even when it is not mandated by the law or traditionally accepted principles and norms. Those organizations that fail to do this — whether they are governments, corporations, or faith-based organizations — will continue to be fragile to unexpected shocks.
In sum, these institutions require a fundamental transformation from structural opacity to structural openness in order to survive in the ‘open new world.’
Note: This article is inspired by the ideas of Nassim Nicholas Taleb, one of the greatest thinkers of our time.