the value of being open and honest

Yesterday I posted about Jeff Jarvis saying companies should let their users do everything, and "kumbiyah crap" under the banner of "being transparent". Let's tackle the being transparent meme today.

I have heard the phrases "companies have to be honest", "companies have to be transparent", and "companies have to be open" mantras so often that I'm just numb to them. The catch phrases mean nothing. I've come to the conclusion that half of the people who utter these phrases do so because it's become habit or because other people they know and respect have gotten into the habit of rambling on about this stuff.

The other half of the "companies have to be honest" et. al. crowd are those who really just want companies to say that they (companies) are sometimes wrong, misbehave, and are not always right. Perhaps they are just tired of corporate spin machines always giving the positive take on the worst news, or perhaps they are just the same people that boycott Starbucks and don't watch television.

Of course companies should be honest, but that's a corporate value and not a strategy. I wouldn't want to work for a company that didn't value honesty, I wouldn't invest in one, and fundamentally I believe that companies that don't value honesty do not perform well either. Advertising is not always honest, but it's not inherently dishonest either, it's a biased perspective on a question/topic/idea/product/whatever and everyone knows it. General Motors doesn't run advertising that says their trucks get 14mpg, they run ads focusing on their cars that get good mileage; GM is not being dishonest by ignoring the fact that their trucks get low mileage while talking about their cars that do.

Transparency is overrated, exhibit number one is Apple and Microsoft. Microsoft is still one of the most villified companies in the tech industry despite being widely recognized as being one of the most transparent and open. Apple is one of the most loved despite being one of the most closed and secretive, and for extra points they are one of the most hostile to those that try to pry the curtains open. Enthusiasts in every market love secrecy, why else would new product launches get so much attention, and stealth companies create buzz. Flock is one of the most talked about companies of the moment, but as David Cowan points out, who needs to see the product when you can just talk about the hype. I think stealth mode companies are stupid, but I also recognize that stealth is a good way to create buzz... being secretive works.

Yesterday I wrote that good companies essentially know what they want to design/build and they should ignore their customers. While provocative, that isn't exactly what I meant, I believe the best strategy is to know what you want to build based on a data driven model for product management combined with a qualified intuition (subjective, I know... it's like porn, can't define it but I know when I see it.) The most innovative companies I've seen (big and small) combine selective transparency with strong ideology about the nature of their business, in other words knowing what they want to build and validating that with a well defined group of customers/users.

Comments

[Ben Casnocha]

excellent post - this is what i was talking about a month or two ago with some "straight from Jeff" posts!

[Andy Nardone]

I hate these #&*%ing "mantras." At times, blogging really fosters the idea that if enough people say something it must be true.

A lot these mantras seem to be contained in an echo chamber. They have no real application outside of those who perpetuate them, seemingly to demonstrate to the others thay they, too, are clever and visionary - they "get it." I'll pass.

[Frank Ruscica]

Re: a company's need to be selectively transparent, see Wikipedia's entry on Ackerlof's Lemons Model, at http://en.wikipedia.org/wiki/Lemons_model

Re: a company's need to maintain control of its brand, see Wikipedia's entry on Arrow's Impossibility Theorem, the foundational result of Social Choice Theory, at http://en.wikipedia.org/wiki/Arrow%27s_Impossibility_Theorem

Best,