By Vincent Utere
We live in a world where anyone with a Smartphone connected to the Internet can get whatever information he or she needs at any given point in time.
With this new power gained at a time when public trust in established institutions is declining steeply, stakeholders are boldly demanding for information from their organizations about their business practices. They want to ensure their interests and those of the larger society are protected. Organizations can no longer hide from public scrutiny.
Wikileaks, CorpWatch, Greenpeace and other social enterprises are making it their missions to monitor businesses and government actions and expose what they think are not in society’s best interests. The public demand for institutions to show accountability and transparency in all their dealings has never been so great. And their power to remove whatever veil an organization uses to cover its secrets knows no bounds. We are in the age of the naked corporation, a term coined by Don Tapscott and David Ticoll. In this age any attempt by an organization to be secretive backfires with untold consequences.
Smart organizations are embracing radical transparency as a way to build strong relationships with their stakeholders, gain their trust and win their understanding and support. Unfortunately, some PR professionals still think that the best way to protect the reputations of their organizations is to create a buffer zone against the public. Stuck in the illusion of information control, which might have served them well in the heydays of traditional media, they believe they can create or determine the publics of their organizations and disseminate only information of their choosing in a bid to change their attitudes, opinions or behaviours in favour of their organization. Interestingly, in this age, any approach designed to promote the interest of an organization with little or no regard for the needs and expectations of their stakeholders does not work anymore. And creating or determining the publics of organization is failure waiting to happen. Publics form themselves around an issue or a problem of common interest and take actions to force an organization to address them, not otherwise. And in this age of social media they form very quickly and could become a massive force in no time. It is in the best interest of a PR professionals to identify the publics of an organization (not determine who they are) and work to understand their needs, expectations, tastes and preferences in order to communicate effectively with them to win their trust.
Simplified, the ability of the Public Relations professional to shape the perception of an organization through dissymmetrical communication has become a museum piece. The only way left in the fray is to encourage an organization to do good, become radically transparent and honest in its dealings with its stakeholders. The time to reinvent Public Relations practices in order to flow with the times and remain relevant is now.
This article takes a look at the concept of radical transparency as practised in modern management. It identifies its principles and practices, traces its origin, suggests how to integrate it into Public Relation practice and proposes the best Public Relations paradigm that flows with it.
What is Radical Transparency?
The meaning of radical transparency can best be summed up in Ray Dalio’s words during an interview as reported by Francisca Dino in her article for Havard Business Review, Radical Transparency Can Reduce Bias – But only if it’s Done Right: “When I say I believe in radical transparency, all I mean is we take things that ordinary people would hide and put them on the table particularly mistakes, problems and weaknesses. We put them on the table and we look at them together. We don’t hide them”.
Radical transparency is much more than mere corporate disclosures. It is disclosures far beyond the requirements of the law. In addition to providing information to stakeholders on behind the scene business practices, organizations that embrace it go a step further to welcome the thoughts, ideas and opinions of stakeholders into their decision-making process. So, when an organization proactively anticipates the information needs of its stakeholders and willingly provides them, it is embracing radical transparency. But when it also lays its cards on the table before its stakeholders, especially in the advent of a problem or an issue, admitting mistakes and seeking to work together with them to find mutually beneficial solutions, it is practising radical transparency at full throttle.
Being radically transparent does not mean that a company should disclose its trade secrets or information that violates privacy regulations or other ethical values. Rather, it is about breaking down barriers and granting access to information that are relevant to the needs of each stakeholders’ group while keeping an open mind for their own views and expectations.
When it All Began
The concept of radical transparency was made popular by Ray Dalio of BridgeWater Associates, the biggest hedge fund in the world. He introduced it as a policy in the early 1990s.
At the company, employees can share their thoughts and ideas on issues freely, no matter how ugly they may sound. This is meant to encourage debate and open discussion so that the ones that stand out for their merits are adopted and applied to grow the business. Employees are also encouraged to hold their peers to account openly because they are not expected to talk behind their backs.
Their actions are guided by a set of rules put together by Ray Dalio himself. The rules are designed to entrench a culture of openness in the company and promote what he refers to as idea meritocracy, where ideas are evaluated on their merits irrespective of the person who brought it to the table.
Cambridge Dictionary defines a principle as a basic idea or rule that explains or controls how something happens or works. In their book, Radical Openness, Don Tapscott and Anthony William offer the following principles or criteria as the gold standard of transparency:
- Authentic: The intentions behind disclosure are honest and genuine
- Systematic: Disclosure is a routine practice, not an adhoc, periodic occurrence.
- Proactive: Information needs are anticipated and acted on by the supplier of information.
- Timely: Information is delivered to the right place at the right time.
- Understandable: Information and data are in plain language and easy to comprehend.
- Judicious: Companies do not release more information than people can make sense of.
- Credible: Information delivered in context and conveys the true state of affairs, telling the whole story.
- Comparable: Institutions can be evaluated by some accepted or common standard of behaviour (such as performance benchmark).
- Interactive: Transparency includes two-way communication and exchanges of information and feedback.
DALIO’S GUIDELINES FOR RADICAL TRANSPARENCY
Interestingly, Ray Dalio has made the rules guiding the implementation of radical transparency in Bridgewater Associates public in a book titled, Principles: Life and Work. In the book, he stipulates how to practise radical transparency as follows:
- Use radical transparency to help enforce justice
- Share the things that are harder to share.
- Keep exceptions to radical transparency very rare
- Make sure those who are given radical transparency recognize the responsibilities to handle it well and to weigh things intelligently.
- Provide transparency to people who handle it well and either deny it to people who don’t handle it well or remove those people from the organization.
- Don’t share sensitive information with the organization’s enemies.
These rules may look like internal guidelines for Bridgewater Associates but when taken together with the principle espoused by Don Tapscott and Anthony William, there is a lot that PR professionals can draw from to develop a culture of radical transparency in an organization.
Radical Transparency and Trust
Institute for Public Relations states: “If the purpose of Public Relations is to establish and maintain relationships with key stakeholders through communication and other efforts, then Public Relations is essentially in the trust-making business.” The big question is: Can radical transparency deliver trust?
A research report by the Brand and Reputation Collective (The BRC) in collaboration with the European Association of Communication Directors (EACD) reveals that when asked the importance of several activities to building trust with consumers and other stakeholders, 80% of communicators rooted for transparency.
Another study by the Consumer Goods Forum, Futerra and the Chartered Institute of Marketing, UK reports that 91% of business leaders believe that transparency builds trust and 70% of consumers are most interested in transparency about products rather than the companies that made them. It also reports that 92% agreed that consumers are interested in transparency on social, health, environment and safety issues.
The long and short of this is that trust can be gained when an organization demonstrates transparency in a way that meets the expectations and needs of each of their stakeholders’ groups. It remains one great way of solving the current crisis of trust between organizations and their stakeholders. Radical transparency deserves the attention and commitment of every Public Relations professional.
Bringing Radical Transparency into Public Relations
How do you integrate radical transparency into Public Relations practice? What should Public Relations professionals do to promote and demonstrate it in their work?
Here are four key steps to take:
- Begin with listening
If you do not put your ears to the ground, you cannot hear the drumbeats of the ants, so says an African Proverb. Listening in order to identify and understand an organization’s stakeholders’ issues and needs is the first step to radical transparency. It helps you to track their perception of your organization on matters of transparency, reveals their expectations and needs and puts you in a better position to develop and implement strategies that will satisfy them.
To be effective in listening, you have to create what Jim Macnamara refers to as an “Architecture of listening”. In his work on the subject titled, Creating an Architecture of Listening for Organizations, he identified eight key elements necessary for success, namely:
- A culture of listening – openness and willingness to listen
- Policies for listening such as policies for social media use.
- Politics of listening – addressing issues around decision on who to listen to.
- Structure and processes of listening – creating positions and assigning responsibilities for listening, and developing criteria on the extent to which attention is given to certain voices.
- Technologies for listening such as media / social media monitoring applications and systems.
- Resources for listening – tools, human resources, time and budgets.
- Skills for listening – Knowledge and know-how of organizational listening.
- Articulation of listening to decision-making – acting upon what is heard.
In Public Relations listening covers social media monitoring and analysis, trends monitoring, trends spotting and interpretations, issues monitoring, tracking and analysis. Listening is the ultimate key to discovering the true position of your organization in the minds of its stakeholders.
2. Develop a Comprehensive Public Relations Plan
Ensure you capture both the old (traditional) and the new (social and digital) channels of communication in your plan. Today, your organization’s stakeholders are no longer localized. They are scattered all over the world. Reputation attacks on social and digital platforms could come from anywhere. The Internet has opened the door for everyone around the world to monitor an organization’s activities and vent their anger publicly whenever they are not satisfied with such activities. It has also made it easy for publics to form very quickly and take actions against an organization once they feel their interests are threatened.
It is important to make sure your Public Relations plan contains messages that meet the information needs of all stakeholders. The origin of raw materials, how they are sourced and processed, the ingredients of a product and how the entire production process runs are the kinds of information consumers want today. Your Public Relations messages should capture them. Remember that investors are looking beyond financial information in this age of transparency. They need information on environment, social and governance (ESG) issues. Capture it in your messages as well.
3. Communicate! Communicate! Communicate!
Constant and timely communication is what matters in this age. And a key tenet of radical transparency is authenticity. To be authentic, your PR messages must align with the behaviour of your organization. If you say that your organization has embraced sustainability practices, its actions should reflect such.
It is also crucial to tell the whole story about how your organization does what it does. Social media is promoting a visual culture. Public Relations professionals who know their onions employ it to show stakeholders everything they need to know about an organization and its work processes. In an article on foodnavigator.com, Niamh Michail reports a beautiful example of how a Mexican tequila brand, Patron created a virtual reality video that shows the company’s entire process of artisan tequila-making.
Practise open communication. It demonstrates radical transparency. Organizations should be willing to disclose information no matter how unpalatable they might be. It is also vital to embrace criticisms, admit mistakes and respond to stakeholders’ feedbacks as they come. Truth and accurate presentation of information and creation of opportunities for dialogue with stakeholders is the way to go.
4. Measure and Evaluate Your Effort
Measurement and evaluation have been a sore point in Public Relations for many years. Fortunately, the Barcelona Principles has provided a new standard of measurement. AMEC’s Valid Metrics Framework is another model which you can be apply to different types of Public Relations Campaigns. You may also use Jim Macnamara’s Measurement Analysis, Insight and Evaluate (MAIE) model to measure your efforts.
The Time For A Paradigm Shift Is Now
Radical transparency does not sit well with a buffer mentality, where you do everything to hoard information, create a barrier between stakeholders and your organization and promote its immediate interests at the expense of those of its stakeholders. A Public Relations professional should be a bridge-builder, an intermediary between an organization and its stakeholders, facilitating consultations and dialogues towards mutually beneficial solutions to any issue or problem.
Today, Public Relations practice must be guided by James Grunig’s Behavioural Strategic Management paradigm, which insists that Public Relations professionals participate in the decision-making process of an organization. It views Public Relations as a research-based discipline that uses organizational listening to continuously learn about stakeholders’ needs and expectations as well as changes in their networks and their expectations.
At a time when every organization is more like a glass box, it is only reasonable and pragmatic to embrace radical transparency in Public Relations practice. There may be new attitudes to cultivate and new skills to learn, but such will position Public Relations where it should be in any organization: the strategic decision-making roundtable.