
Ridiculously Transparent - InfinityX0
http://bhorowitz.com/2011/09/02/ridiculously-transparent/
======
sgentle
It seems like in most communication decisions, being secretive loses you a lot
more through misunderstandings and missed opportunities than you gain from
control. At least, I've seen a lot of articles written asserting this, and my
own experience backs it up.

I wonder if it's always true, or if not what the boundary conditions are.
Apple, for example, seem to play on their secrecy quite well as a marketing
technique, and it seems the Unity developers on that Reddit AMA had been
cautioned against revealing planned features to avoid disappointing people.

The cynic in me thinks it makes you feel powerful and in control to have
secrets, and that's the main reason why transparency is rare. I'd be
interested to hear counter-examples, though - does anyone know cases where
being secretive worked out to be a great business decision?

~~~
meric
You listed Apple as an example of secretive as a marketing technique being a
"great business decision". I can list HP as an example of transparency as a
marketing technique being a "not so great business decision".

Why is that? bhorowitz's transparency was certainly not a marketing technique.
From this we infer that there must be at least two types of transparency.

Being transparent with people who are with you, and being secretive with
people who are not. ...I guess its not a coincidence that people share more
with their closest ones than with house guests.

On another note, this article reminded me of
<http://en.wikipedia.org/wiki/Ricardo_Semler>

~~~
sgentle
I suppose so, and there are examples of massive fallout from the public
finding out about internal decisions; Elop's Nokia memo springs to mind. Is it
as simple as transparency to your friends, opacity elsewhere though?

My first thought is that some of those situations reflect genuinely bad
business decisions, and maybe it's better to take the public hit immediately
rather than struggle on in secret doing something whose dumbness is only
visible to people outside your reality distortion field.

The other thing is, how do you distinguish between people who are with you and
not? As the article noted, once you tell employees the information often ends
up outside the company anyway. And not all employees are necessarily with you
- they might agree with the broad mission of your company but disagree with
how you're executing it, like the Nokia Plan B thing (although that turned out
to be a hoax). Should you try to exclude people like that?

I should clarify that I'm not sure if Apple's secretiveness is a "great
business decision", merely that it seems to work for them in terms of
marketing. Would a company like Apple work better or worse if they operated
more in the open? Unfortunately, there's only one Apple so it's hard to know.

That Semler article was interesting. Have you read Maverick? Would you
recommend it?

~~~
meric
Good points.

>> That Semler article was interesting. Have you read Maverick? Would you
recommend it?

Yeah, it's a great read, I do recommend it.

------
nicholasjbs
I'm not familiar with this stuff. Would someone please explain what types of
information public companies can't share with their employees, and the
thinking behind these regulations?

~~~
Xlythe
If information (cash flow, cash in the bank, bad debts) is released to the
staff before the public, there's problems with insider trading of stocks, etc.
And I'm sure it has to do with stock stability as well. If there's a bad day
in the company and everyone knows about it, stocks will likely fall. You don't
have time to fix the problem before the public hears of the news.

------
jacques_chester
This approach is sometimes referred to elsewhere as Open-Book Management[1].

One key addition in full OBM is that staff are given basic training in
management accounting -- ie, in reading financial statements and inferring
performance from them.

This should fit the current enthusiasm for metrics perfectly. The three core
financial statements (Income, Balance, Cashflow) are internationally-
recognised metrics dashboards for business financial performance.

You can even build derived metrics (accounting ratios) to better understand
particular parts of your business. And nothing stops you marrying those
derived money metrics to your other metrics.

Basic accounting is really quite simple and illuminates a lot of business
logic. I'd recommend it to anyone.

[1] <http://en.wikipedia.org/wiki/Open-book_management>

------
ehsanu1
A post was killed for no good reason. Reproduced here:

shorbaji 23 minutes ago | link | parent [dead] | on: Ridiculously Transparent

The debate of more vs. less transparency is not trivial. Regulatory and
competitive considerations make this difficult. Sometimes it is simply human
nature to be secretive - particularly when it comes to bad news.

The article focuses on transparency between management and employees.
Transparency with customers and with the public is at least equally
interesting.

A company can benefit from transparency. Heroku, for example, are transparent
with their downtime (e.g. status.heroku.com). Another example is the case of
AirBnB and the EJ debacle. Once AirBnB openly acknowledged that
safety/security is a concern for landlords it adapted by rolling out an
improved product (guarantees, safety features, etc).

Both of these are great examples of transparency at the core impacting the
product and how it is marketed. These products are more valuable and more
competitive because of transparency. Certainly this adds to revenues and
likely the bottom line as well.

AirBnB could have adopted this approach earlier. So, the lack of transparency
can be missed opportunity.

~~~
mgkimsal
AirBnB's entire business depends on non-transparency - you can't get the other
person's phone number ahead of the transaction. And they've put in more
workarounds to get around the problems that forced secrecy creates.

~~~
shorbaji
True. As a broker of sorts, it is essential that AirBnB withhold details of
the two parties. But the company need not hide that they do so. The certainly
would not be ashamed if news broke out that they do so.

The transparency I speak about is slightly different. AirBnB where (I think)
caught out when news broke of a landlord's home was vandalized. The company
was heavily criticized for an arguably insufficiently transparent initial
response.

Eventually, AirBnB were transparent in the sense that they acknowledged
mistakes and acknowledged inherent risks to landlords. They used that
transparency to improve the offering and promote the product accordingly.
Kudos to Chesky and team!

At the risk of repeating myself, I see a parallel with Heroku's status
dashboard. In a sense they are saying: "We won't mislead you. Hosting with us
carries risk of downtime. Here is a dashboard so you see how well (or bad) we
are doing." That too is an example of transparency leading to an improved
service offering.

Heroku seem to have done it proactively. AirBnB did so reactively. Better
late, of course, than never.

------
mathattack
It's actually to keep people from trading on info before it's public. Every
investor legally is entitled to get material info at the same time.

Being this brutally honest as a firm isn't easy. Sometimes you withhold for
what seems to be good reasons - not scaring people, not distracting people,
etc. Not everyone reacts well to such transparency. All this said, it did
build a remarkably strong culture for them.

------
gabaix
I might try to do a startup at some point where people email each other
through tweets. I think it would open new possibilities for companies.

~~~
WiseWeasel
Why do I picture Dilbert's boss when I read that statement?

~~~
threepointone
maybe you remembered this strip?
[http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/...](http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/70000/4000/100/74149/74149.strip.gif)

------
shorbaji
The debate of more vs. less transparency is not trivial. Regulatory and
competitive considerations make this difficult. Sometimes it is simply human
nature to be secretive - particularly when it comes to bad news.

The article focuses on transparency between management and employees.
Transparency with customers and with the public is at least equally
interesting.

A company can benefit from transparency. Heroku, for example, are transparent
with their downtime (e.g. status.heroku.com). Another example is the case of
AirBnB and the EJ debacle. Once AirBnB openly acknowledged that
safety/security is a concern for landlords it adapted by rolling out an
improved product (guarantees, safety features, etc).

Both of these are great examples of transparency at the core impacting the
product and how it is marketed. These products are more valuable and more
competitive because of transparency. Certainly this adds to revenues and
likely the bottom line as well.

AirBnB could have adopted this approach earlier. So, the lack of transparency
can be missed opportunity.

