Building Trust with Transparency

Fast Interview: The co-author of "Tactical Transparency" on how companies can use authenticity and social media tools to reinforce their brands and create relationships with customers.

What do you have to hide? So asks John C. Havens, co-author (with Shel Holtz) of the new book Tactical Transparency: How Leaders Can Leverage Social Media to Maximize Value and Build their Brand. He argues that the market and customers will increasingly demand that companies become more transparent--and punish those who fail to do so. Havens previously worked as a film and TV actor and appeared in The Thomas Crown Affair, Law & Order, and Spin City and now finds himself in the role of vice president of business development for BlogTalkRadio.com. Here he explains why transparency should be approached as a strategy.

What do you mean by tactical transparency?

Tactical transparency means the use of social media tools to let brands talk authentically about their products and services to their community. It's a behavior as well as a philosophy. You do not have to have full disclosure around your brand or organization to have authenticity or breed trust, but you do have to show your audience that you are listening and that you are in the places online, at Facebook, MySpace, et cetera, where they already spend their time. It's a fact: your brand is being discussed off of your main portal. If you do not have a voice in those places where your audience already is, people will wonder why you are silent and they also will wonder what you may be hiding.

Or they will not know about you, period. If you're not active in social media, are you in danger of becoming invisible?

Oh yes. If you don't have a website, you don't exist. Would you go to a conference 20 years ago without some kind of brochure? Would you go to a networking event without a business card?

Is benefit mostly PR? Or is there also a business case to be made for transparency?

There's a huge business case in terms of trust. One example of a very clear businesses advantage, sort of an R&D use of transparency, is the Southwest Airlines blog. On the blog people were saying, would you please start your summer airline rates sooner because there wasn't a long enough window for customers to buy the tickets they wanted because Southwest had some internal reason. When they opened up that window, they ended up selling a lot more tickets, making a lot more money, because they responded to a consumer request.

The good organizations are going to realize the advantage of having employee thoughts for R&D, having feedback forums for customers like Southwest Airlines. It's not just about being nice and kumbaya, let's be transparent. The massive time savings, trust, return on investment and business acumen--to me it's a no brainer.

Even MacDonald's has a vice president of Corporate Social Responsibility. Who blogs!

Remember the tactical part of our title. Bob Langert (MacDonald's VP of Corporate Social Responsibility) is very savvy. When you already have an established platform and you are actively letting people know you are speaking for your company, it allows you to fight on your own turf. If your blog becomes a place where people know they can discuss things and you keep their comments posted, you'll garner trust from them whether or not you agree.

You should give someone like Bob credit. He took flak. He went to a conference and someone really harangued him and he wrote about it and linked to the woman who harangued him. You have to give him props for his willingness to deal with that.

Is admitting fault part of being genuine?

In the book, we talk about David Neeleman from JetBlue. They had a two-day ice storm when the majority of their planes were held on the ground and thousands of customers were inconvenienced. They got in a room and brainstormed and Neeleman said, "I want to do a YouTube video." I think he's the first CEO to do one of this magnitude. He's utterly real and apologized. Right after that they came out with their customer bill of rights. It's great to talk about community and using the tools, but follow up is key.

What's an example of a company that came out of a PR nightmare stronger as a result of transparency?

A good example is with Steve Jobs after the first iPhone discount. A lot of people bought the iPhone when it was $599 and three months later it came by $200 and there was so much first buyer's remorse and ire. Steve Jobs didn't really apologize but gave his logic for why he did it. And what he did from a business standpoint was extremely smart: he said if you were one of those first buyers I will send you a $100 gift certificate at any Apple store. He's helping his brand ambassadors not feel so burned--but he's doing it by getting them back to the store! Of course he has a margin on that 100 bucks. From a business standpoint, the transparency was very smart--and made money for him.

What's an example of company that caught out in fake transparency?

There's a term called astroturfing--that's a formal public relations campaign designed to look like a grassroots or spontaneous outpouring of support. That's Wal-Marting Across America.

What happened there?

Edelman, the world's largest independent PR agency, created Walmartingacrossamerica.com. It followed the adventures of a couple going cross country in a recreational vehicle, stopping at various Wal-Mart parking lots. The trip was funded by Working Families for Wal-Mart, without full disclosure of the fact that the trip was funded by Wal-Mart. Richard Edelman, the CEO for Edelman, eventually apologized for the campaign.

We've talked mostly about transparency in relation to the outside world. What's an example of a company reaped benefits from internal transparency?

There's a guy named Paolo Tosolini, who works in Microsoft and heads up their Academy Mobile program, which I talk about in the book. Internally, they gave employees audio and video podcasting tools to easily create content where they could talk about what they're working on. From a return on investment standpoint, an empowerment standpoint, a time management standpoint, a product supply chain standpoint, it was brilliant. That's what led to SharePoint, going from B2B to B2C, because they proved this could bring such value.

What hangups do companies typically have about being more transparent?

Certainly, legal is a big one. It's not like the social media landscape has changed legal or HR restrictions within a company. Now you have to expand them to the digital world. You need a pretty extensive digital version of your HR protocols, or you'll get burned because you won't have thought of it before something happens.

In the book we put a link to IBM's social computing guidelines, which is one of the richest and most in-depth. At one point, they were doing a lot of international training in Second Life. They have a pretty expansive thing about your behavior representing IBM when you're in the body of an avatar online, which is really funny and surreal--if you're an IBM representative and come in contact with a Gorgon... I'm being silly, but the point is they are very extensive. No IBM person, in my opinion, would read that and say, "I guess I can go to a sex island and do whatever."

You were an actor in your previous life. What lessons are transferable to business?

The one thing you learn as an actor that is directly relevant to business is what is your niche? What is your role? It's not how I perceive myself, it's how they perceive me and how I fit in. When you find that niche as an actor, you're gold. As an actor in New York, I was a cop, I was doorman, I could made a pretty good living off the types of roles where I knew I'm not going to Tom Hanks, I'm going to be his funny friend.

So the lesson is to know your niche and establish an identity, and obviously social media helps you do those things?

Your niche is not just "we're a supply chain company that does this and we sell bolt A"--I don't care, it's boring. That's your sales sheet. Part of your niche is being memorable. Your niche is "we deliver to your house, we're customer-centric." If you have a personality, that's why you're memorable.

Finish this sentence: if you take away nothing else from this book, it should be that...

Authenticity leads to value. Working to be more open is not just desirable but is an inevitable business need today.

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  • Jeffrey Krasney

    When one talks about transparency and accountability, I recall the cartoon Charlie Brown and Lucy. Good ol’ Charlie Brown was absorbed target shooting, one lonely afternoon. Charlie was practicing his target shooting with his bow and a few arrows. As Charlie Brown would pull the string on his bow as far as he could, the arrows would fly into the fence. Once the arrows stuck into the fence; then, Charlie Brown would run over to the fence and with a piece of chalk, draw a target around where the arrows had stuck into the fence.
    Naturally, after a few of these sessions when Snoopy was not around; Lucy found out and saw what good ol’ Charlie Brown was doing. Immediately, Lucy started screaming at Charlie Brown. Seemingly, Lucy shrieked at the top of her lungs toward Charlie Brown, “That’s not the way you are supposed to do it.” As Lucy yelled further, “You’re supposed to draw the target first; and then shoot the arrows at the target.”
    However, good ol’ Charlie Brown rejected Lucy’s advice; instead calmly telling Lucy, “I know that, but, if you do it my way, you never miss.”
    In today’s business culture, business leaders operate in an environment that increasingly demands greater transparency and far more levels of accountability. As a result, many leaders are often chagrined at the increased degree of transparency; since it represents far less freedom to maneuver; and as such many businesses might choose to engage in fewer risks (documented failure can be viewed as an unkind and an inappropriate gambit; especially when such an exercise is available for all to see).
    I submit the potential costs of inaction, omission or fudging the balance sheets (or targets); similar to Charlie Brown’s rebuttal to Lucy is misplaced. Although the business literature has often neglected to portray, describe and summarize the potential costs of acting honestly and respecting the message to do the right thing; the transparency issue does demand a harsh recipe of reality. Such reality may be painstakingly difficult; nonetheless, taking advantage of carefully hidden struggles; often leads to reticent embarrassment, which similarly to Charlie Brown’s target shooting creates an increasingly; and paradoxical-like intense downfall. Gee, I would ask rhetorically -- should such conduct been presciently clear -- who would have predicted -- might Lucy?