Culture Of Transparency...Are We Ready?

The best businesses are built on a culture of transparency. Period. Yet so few companies, organizations or nations for that matter practice a true culture of transparency. As the recent WikiLeaks saga unfolds itself many intellectuals, critics and spectators are debating whether we, as a global community, are better off knowing the contents of some 250,000 classified government documents that were stolen and sold earlier this year. Its a complex question that is worth pontificating, even if there is no clear cut answer. Personally I am more interested in the question whether we, collectively, are ready for the kind of transparency philosophers and progressives preach, or business professors idolize.

Culture is an incredibly important thing in an organization of any kind, be it for-profit, non-profit or public sector. Yet culture sprouts from the organization’s leaders, and too many leaders do not comprehend the impact and value of their organization's culture. I have worked in companies that had incredible corporate culture, where everyone felt a part of something bigger. And I have worked in a company where the culture was pure garbage, a reflection of the CEO and Founder who had a talent for squashing anything positive sprouting from individual initiative. It was a great learning experience but one I would rather never repeat. Perhaps the most unfortunate thing about an organization’s culture is that it is often formed by pure accident, not because leadership actually works at it.

But there are exceptions. And sooner or later those exceptions run into the question of how much transparency should our culture tolerate? Companies like Google and Facebook tend to be more culturally open than the General Motors or Unilevers. Part of it is the type of innovation they harness, with dozens of talented people solving problems together in order to "better the world". And part of it is just the physical spaces they create for their employees - big open spaces, cubicles where even the founders and CEO sit in the middle of the floor with the staff. It helps too when your CEO is two generations removed from rule-setters. Regardless, there is a wide spectrum covering corporate America when it comes to culture.

When I worked for one of the fastest growing start-ups in the dot.com era, our leadership paid careful attention to empowering its employees with as much knowledge, information and know-how to ensure we always focused on achieving our goals. Pre-IPO the place was as close to 100% transparent as you could get - company meetings made sure that each individual knew where we were heading and what their role was. While things completely changed when we went public, I will always remember an incident that almost crushed our European organization in a matter of minutes.

We were approximately 400 employees worldwide just before our IPO, about 60 of them in Europe. We had grown from less than 100 employees in the past 10 months and one of the side effects of filling so many roles so fast was a discrepancy in salaries. As a start-up we had to fight hard for each individual talent, so it wasn't unusual to find a Manager who had a lower salary than one of his or her Associates in those days. Leadership had a plan for 'righting' the ship shortly after the IPO, but the discrepancy existed nevertheless. A VP accidentally sent out a spreadsheet containing each individual's annual salary, bonus and stock information. In a matter of minutes we had an uprising that halted all project work being carried out for our customers.

People were visibly upset. I was one of the leaders scrambling on the ground to contain the situation so I spent a lot of time listening and trying to understand why people were upset. The first issue was they felt a breach of trust - salaries are personal data and a senior leader had just spammed the company with their personal information (he was subsequently let go). But the second bigger issue was seeing the pay structure of the entire team and what differences existed between those doing the same job and sometimes more junior folks making more than their managers. The system had a meltdown; people could not handle the truth. And the truth, while not necessarily right, was very defendable in the eyes of our leadership. We were building a long-term business and needed to secure the best talent we could get. If some Associate-level recruit from Insead was a better negotiator than a Manager with 10 years more experience that was not going to stop us from getting our man. This is how dynamic teams are built during periods of fast growth.

As much as I believe a culture of transparency is the most powerful way to run an enterprise, the majority of people simply cannot handle full transparency. There is just too much room for misinterpretation or assumption. Looking at the WikiLeaks saga over the past several weeks I think we, the people, are faced with a major dilemma over whether we can handle the truth about how things work. I don’t believe the issue with WikiLeaks is whether they should have released this information or not, that is a simple question of law in my view. The issue is truly one of can people learn the truth and handle it?

I would further argue that we are not prepared to deal with the full knowledge of how things are done across a wide spectrum of society, be it Wall Street, Main Street, State and City Governments, or even the US Government. And just to be clear, things are at least 100 times worse in other countries and regions of the world. As I mentioned before, it became extremely difficult to maintain a culture of transparency when our company became public. This is all the more ironic because the whole notion of a public company is that you have to disclose all material information to the public, especially the investor community. Great idea, but this ‘transparency’ results in management being all the more secretive about how and what the company is doing in order to fend of speculation. Its what I call the fallacy of transparency.

As for the WikiLeaks saga I believe the rule of law should preside. In any country the theft and publication of 250,000 secret government documents would be punished. If the leak costs lives, let alone the careers and trust that have already perished amid the WikiLeaks disclosures, the case for action is even stronger. And I also don’t believe a government should fear to act because its adversaries are popular and fight back. WikiLeaks may have a cult following, but that should not save them from condemnation or prosecution, its no different than rightly chasing child pornography, bomb-making techniques and copyright breaches. Discouraging WikiLeaks and those who give it financial and technical support is justified in a world governed by law.

From the government’s position, prosecution, not persecution, is the best chance of limiting the damage and deterring future thefts. The extreme calls for the assassination of Julian Assange, the WikiLeaks founder awaiting extradition to Sweden on mysterious charges of sexual assault, look both weak and repellent. If Mr. Assange has broken American law, it is here that he should stand trial, just like Bradley Manning, the alleged source of the stolen documents. Calling Mr. Assange a terrorist, for example, is deeply counterproductive. His cyber-troops do not fly planes into buildings or murder innocent people in the name of God. Let the law deal with them.

Also telling is to see how business has responded to the WikiLeaks situation. PayPal, Visa and MasterCard, which handled donations to WikiLeaks, and Amazon, which provided web-hosting services, have dumped it as a customer in response to American outrage. More may follow. They risk attacks from its fans, just as those that refuse face hostility from their customers in America. In my view that’s just business, full of hard choices that will never please everyone.

Which brings us back to the culture of transparency. Do you believe we can handle it? Some have said we can handle some of it, but not all of it. Well, that’s not transparency, that’s mass manipulation of data and people. Ironically it was Mr. Assange and his WikiLeaks team that uncovered the falsification of environmental data earlier this year that even Al Gore has admitted does not support his original theory of global warming. Oh oh, I have stepped in it now…maybe we are not ready for transparency.