The value of transparency

We've spent a great deal of time talking about transparency and its role in building trust. The most recent AIG debacle is yet another example of how to put a value on transparency, as my friend  Shel Holtz so clearly points out.
Now in the interest of my own transparency, I know Nick Ashooh, and sit on a board with his brother Richard, and I have the greatest respect for both of them. And I can't imagine what Nick's life must have been like for the past few months. My heart goes out to him and his family, because he probably has one of the worst jobs in America these days. I know, because I also know what it's like in corporate America. I'm intimately familiar with the antiquated logic that tends to prevail in board rooms.

Because he's my friend, and I have a dim view of many old-fashioned corproate executives, I'm assuming Nick gave them his best advice, and they ignored it.
But the point here is that PR's role is increasingly one of getting people to stop doing stupid sh_t. Every day we read thousands of blog postings, articles, and comments to learn how people react to stupid things  that organizations are doing. (We also get to read the positive stuff, when people applaud organizations, and thank them, so its not all that depressing a job.)  This isn't rocket science, we literally sit around and read this stuff.
When the ire reaches a high enough level of intensity, we send off an alert to our clients saying they should pay attention to it. Sometimes we even suggest what they can do to solve the problem. In reality, they probably can't do much. Senior management is still stuck in the dark ages when people thought you could spin your way out of anything, that they just can't bear to open their eyes to the bright sunshine of this new era in which customers, clients, and in this case legislators, can get behind your "firewall" in a nanosecond.
The role of PR is to build relationships, and nothing damages a relationship faster than lies and obfuscations. And in today's world it happens even faster and has far greater financial consequences.
In reality, companies ultimately have no choice but to be more transparent if they have a prayer of restoring the public's trust in their institutions. It's not just that AIG was idiotic in trying to cover up its role in the conference, its that in doing so, AIG further compromised whatever trust the public, and its elected officials, may have had in the organization.
I haven't done a formal measurement of their trust level, but I'm guessing from the comments I'm reading that its dropped even faster than AIG's stock price.So my question is: When will the C-suite wake up and realize that people will only regain trust in these institutions if they are utterly open and transparent. (I know, only when they fire all the lawyers) But seriously, do the math. The cost in reputation, failed relationships, lower trust, and now, government support, far outweighs whatever perceived cost that transparency may entail.

Comments

[Rebecca Rose]

Katie,

I swear I just had this exact conversation with a few C-Suite types last Friday. They are starting to come around, but still are unaware of exactly how valuable transparency is. After giving a long-winded talk about the value of this and what it does for your customer relationships I had them ask me "well, what if we just want to get our name out there but not say it's us - just go around commenting how great our product is everywhere". ARE YOU KIDDING!!! I wanted to slam my head into the table.

The only response I had that really resonated with them was when I asked them what they would do if someone came up to them on the street and asked what they thought of the product. I asked if they tell them how great it is and all the great features and not tell them they work for the company? If they asked how you knew so much or why you liked it, would you lie? If so, how do you think they'd feel later that day when they saw your face in a magazine and realized you worked for the company. My guess? Not great. In my opinion, they'd have just wasted the opportunity to build trust and a great relationship. This seemed to resonate some, but the lawyer was still questioning the legal ramifications of what's said. UGHHH!!!!

Anyway, thank you for your great post. I'm definitely not giving up the fight and I'll be forwarding it to a few C-Suite types today. They love me...really, they do. ;)

[Mark Story]

Katie,

I should be horse-whipped for not commenting on your blog or contacting you before this. In talk-radio-terms, long-time admirer, first-time commenter.

In addition to my day job as Director of New Media at the SEC (the AIG mention seems familiar..) I am adjunct faculty at Georgetown -- where I use your amazing "Measuring Public Relationships" as one my of textbooks. I am also part of the Shel Holtz six degrees of separation universe.

I cannot use enough superlatives to describe how you have helped me and other "make the case" for truly measuring the effectiveness of public relations efforts through your text and blogs.

I often comment on your ideas, and in fact, did so just this morning in a blog post: http://tinyurl.com/5gv26v

If you find yourself in the Nation's Capitol at any point in the coming months, my students would swoon to have you as a guest speaker.

And Barbara Coons is one of my colleagues at Georgetown. Small world!

Best regards,

Mark Story

[Derek Forrest]

Growing up you hear how trust is the foundation of any relationship – well at least I did. The more experiences you have in life, the more that notion becomes clearer and clearer. AIG is a great example of trust thrown out the window – good luck with the rebuilding process.

Transparency is definitely a road to trust. As our lives continue to be ported online through our engagement with social media, everything is becoming much more transparent. In 20 years the President-Elect will have all of her/his Tweets, Blogs, Facebook account, MySpace account, etc, dissected as a way of judging their trustability. Greater transparency is upon us and it would be wise to hold ourselves accordingly – your brand depends upon it.

On a side note, it was a little difficult finding your subscribe link but that may just be me. Looking forward to reading more of your posts in the future.

[Amber Naslund]

Katie,

I adore your straight talk.

The hardest part is the difference between OUR definition of stupid sh!t, and theirs. When you've looked at your world myopically for years, it can take a sledgehammer between the eyes to alert you to the fact that you, indeed, have been the one doing stupid sh!t.

So the question I've been mulling: we know it's stupid. They don't. How to keep bridging the divide?

Thanks for the thought provoking stuff.

[Marshall Sponder]

Hey Katie,

Do you have a post or paper on how you measure the trust level of a corporation, including non-profits?

Just curious. I mentioned your post today in one I just wrote http://www.webmetricsguru.com/archives/2008/11/transparancy-is-the-new-it-for-social-media-but-hard-for-corporations/

Thanks again,
Marshall