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Black Box vs. White Box Companies – What Are the Real Differences?

  I found two recent articles about two radically different corporate practices to be indicative of a fundamental divide in how brands conduct themselves in the public sphere.  Or more accurately, are seen to conduct themselves.

 

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I found two recent articles about two radically
different corporate practices to be indicative of a fundamental divide in how
brands conduct themselves in the public sphere. 
Or more accurately, are seen
to conduct themselves.

 

The first story was a New York Times feature
on the dating site O.K. Cupid, which in my taxonomy is a White Box company. The
reporter writes about their blog, where the company throws open the door
and exposes some of the statistical insights that power their dating
algorithm.  “These entertaining and
potentially useful results of {their} number-crunching” are exemplary of the kind
of transparency that is so au courant
in branding circles.

 

Check it out the blog and you’ll see some
charts and graphs that look like they were cut and pasted from statistics
textbooks, with explanatory copy like:

 

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“As you can see below, the number of online daters peaks at 24,
drops sharply at around 30, and then gradually tapers off, as the remaining
singletons either find mates or withdraw themselves from contention.”
 

 

It’s spun as an open-kimono approach that’s
fully in cultural synch with open-source movement and the whole notion that a
brand’s authenticity increases in a linear fashion with the level of its
willingness to expose.  A hip new kind of
Folies Bergère attitude
that’s in stark contrast to a more Victorian form of brand repression.

 

The other story, which showed up in the Wall
Street Journal
, was about the literal “black box” that sits inside millions
of Toyota vehicles, in the same way that airlines have their own so-called
“event data recorders.”

 

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This device is a gold-mine of diagnostic data,
with information about “
vehicle and engine speeds as well as
brake, accelerator and throttle positions and other data that can help
determine the causes of accidents.”

 

The trouble is, this hieroglyphic is
only decipherable by Toyota itself.    In
the past, way before the recall, attorneys litigating against Toyota “
have butted heads over access to its black-box data, or have
gotten data from the company that sheds little light on the causes of the
crashes at issue.”

Interestingly, and
perhaps surprisingly to some, GM, Ford and Chrysler – at least in this area –
are White Box companies. Their event data recorders are an open book, and can
be read with “commercially available tools.” 
This double black box – literal and metaphorical – will prove to b a big
problem for Toyota.

Unsurprisingly,
companies and the CEOs who lead them have been trained in a Black Box
mindset.  The paradigm of this approach
is the legend – whether apocryphal or not doesn’t matter – about the secret
Coca-Cola recipe
that’s locked in a vault in Atlanta.   Business schools spend hours teaching their
adepts about how to create and maintain proprietary competitive
advantages.  

This Black Box
orientation makes companies skittish about revealing any of their clockwork
mechanisms to the public.  It even makes
them reluctant to use Twitter in any kind of revealing way – as the way Zappos
does, for example – because any glimpse into the brand’s “real” feelings is a
violation of a conventional code of conduct. 
And Japanese companies – of which Toyota is the premier example – are
culturally inclined to be desperately insular.

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By comparison, White Box
companies seem so friendly, so accessible, so trusting.  They support the mists of hype created by an
army of “Transparecists” like Andy Beal, who is the co-author of “Radically
Transparent” and is quoted in the Times article.

But is this “Enter Here”
signed nailed on the company front door just a brand gesture, a marketing
ploy?  Sure, O.K. Cupid is putting some
statistics out on their blog that have been collected from user behavior – and
this ostensibly will allow their customers to become more successful at
mate-finding – but they’re not exactly letting competitors into their sanctum sanctorum.

The media frenzy around
transparency is overstating the difference between the Boxes.  Giving consumers a peek into one tiny room of
your corporate house, or letting them feel “empowered” by dreaming up Superbowl
commercials or the name for your next candy bar, is just
Folies Bergère transparency.  

I do think, though, that
there are fundamental differences between White Box and Black Box
organizations.  And I’d like to see more
of it.  For example, I’d like to see
Citibank show consumers how much money they’ve paid lobbyists to fight the
Obama administration’s effort to restrict aggressive credit card
practices.  Sure that’s going to be
painful.  But unless it really hurts, it
isn’t really White.

 

About the author

Adam is a brand strategist--he runs Hanft Projects, a NYC-based firm--and is a frequently-published marketing authority and cultural critic. He sits on the Board of Scotts Miracle-Gro, and has consulted for companies that include Microsoft, McKinsey, Fidelity and Match.com, as well as many early and mid-stage digital companies.

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