We know who's reading what Web page, driving through what tollbooth, typing what email. We know your costs, your prices, your turnover.
One fascinating side effect of our networked world is that many things are now transparent. As consumers, competitors, colleagues, and citizens, we can see the inner workings of organizations (it's not that hard to figure out who does what anymore). We can see the traffic patterns in Detroit. We can monitor hidden cameras in London. And most important, we can raise our voices and comment.
What are you going to do about this new transparency? FedEx has embraced it. The company has made it a thousand times easier to track shipments, by having shippers fill out airbills online. It's much easier to get proof of delivery. And yes, it's much easier to get a refund.
Why would FedEx do this? Why open itself to such scrutiny and ultimately pay more in refunds? There are two reasons. One, it forces the company to get better, faster, and cheaper, which further sharpens its competitive advantage. And two, it engages the customer in a deeper relationship that makes it harder to switch companies. Express Mail may be a few cents cheaper, but delivery is no longer all you're buying when you send a FedEx package. The company is now selling data access as well.
EBay allows every bidder to see the reputation history of every seller. Amazon ranks every single product on a top-sellers list. Ambient Devices is building digital pinwheels that spin faster when the pace of sales picks up for a client. Nordstrom's CEO still answers his own phone.
Compare those transparent companies with British Airways. Its Web site is designed to automate as much as possible, but it's actually a barrier between the customer and the company. You'll find few names to contact about a problem, and even if you do, chances are your call won't be returned. Four months ago, I sent the airline a ticket to be refunded, yet no one there would even talk to me about it — by mail, by phone, or by email. Desperate, I went to the airport, where two agents and a supervisor spent 20 minutes trying to get through to their own switchboard. Clearly, British Airways views transparency as an expensive intrusion, not a cost-saving asset.
A few decades ago, we discovered that quality was free. It is actually cheaper to build stuff right the first time than it is to fix it later. Guess what? Transparency isn't just free, it can be profitable, too, by sharpening your competitive edge. In an ever-competitive environment, it is also a requirement.
Who gets to have access to your company telephone directory? Are you so worried about competition and headhunters that it becomes a secret? In a transparent organization, the right vendor can reach the right person. The employee responsible for a product can hear directly from the user who has something to say.
Of course, every successful enterprise is looking for a profit haven to protect itself from competition. Confidentiality is a key factor there. Does enabling transparency mean we are supposed to give up all of our secrets?
You can still keep secrets in a transparent world. The challenge is to enlarge the circles, to bring outsiders in. Let your customers and your competitors have easier access to your people and your data. Let your employees have two-way access to more processes and feedback. Every part of the business works better when the circles are enlarged.
Google offers software to access its database. That makes it easy for sites like Googlism.com (check it out; it's fun) to exist without arranging a special deal with Google. Amazon publishes data that shows how well a book is selling — just visit JungleScan.com. Does this help or hurt the publishers that work with Amazon? Most would agree that it's astonishingly useful input to their planning.
Majestic Research is busy selling new information to stock analysts. Not hype and spin from companies, but data — an actual census — about the behavior of 1.5 million online surfers and shoppers. Within a day, Majestic knows what's hot and what's not, who's profiting and who isn't. Can your company hide from this information?
You can try to forestall the inevitable, the way British Airways is doing, or you can embrace it. Go ahead: Post your org chart, your price list, your best-sellers, and your incoming complaints. Make it easy for customers and suppliers to understand who you are and what you do. Then get back to work. People are watching.
Seth Godin (firstname.lastname@example.org) is an author based outside New York City. Purple Cow: Transform Your Business by Being Remarkable (Portfolio, 2003) is his latest book.
A version of this article appeared in the August 2003 issue of Fast Company magazine.