By Jon Wuebben

Transparency.  What is that?  We’ve heard the word but some of us might be a little confused as to what is really meant by it.

Look, you are already totally exposed on the internet, so what’s the difference, right?  Privacy is a thing of the past and we all need to get used to it. It’s just the nature of the beast. I’m sure people in the 1800’s didn’t always like the fact that they had to carry a candle around at night to see things, but they dealt with it. Every age has its uncomfortable realities.

But, you see, you can really use this to your advantage.  Your customers want you to be open.  If they see this, it will motivate them to do business with you.  A good customer seeks to make you better.  And they will.  And you will thank them.

To illustrate the idea of transparency, I want to talk about Glenn Kelman of Redfin real estate.

A few years ago, Kelman was the newly hired CEO of Redfin and was as he puts it, “the ugly red-haired child” in the real estate world. Redfin was trying to turn the industry upside down by refunding people two-thirds of the commission that real estate agents normally charge.  Customers loved the idea – why the heck did you need to hand over 6 percent of the price of your house, anyway?  But agents hated it for destroying their fat margins, so they began blacklisting Redfin, refusing to sell houses to anyone who used the service. Kelman was struggling to close deals for his clients.

So finally, Kelman set up a Redfin blog and began posting witty screeds about the nasty underbelly of the real estate business.  He publicized Redfin’s internal debates, even arguments about the design of its Web site.  He mocked himself.  Old-school agents were unleashing hissing attacks on Redfin.  Kelman left the critiques in and lashed right back, in full view of his customers.  His enemies got nervous. And customers loved it.  More and more signed on to use Redfin and Kelman and his crew began closing several deals a day. “Instead of discouraging customers, being open about our problems radicalized them,” Kelman says. “They rallied and started pulling for us.”  Like some crazed convert, he trumpeted his epiphany: “I honestly believe that if Redfin were stripped absolutely bare for all the world to see, naked and humiliated in the sunlight, more people would do business with us.” Follow me, he urged.

And many have. Radical forms of transparency are now the norm at startups – and even some Fortune 500 companies. It is a strange and abrupt reversal of corporate values. Not long ago, the only public statements a company ever made were professionally written press releases and the rare, stage-managed speech by the CEO.

“You can’t hide anything anymore,” says Don Tapscott, coauthor of The Naked Corporation, a book about corporate transparency. Tapscott explains a core truth of the see-through age: If you engage in corporate flimflam, people will find out. He ticks off example after example of corporations that have recently been humiliated after being caught trying to conceal stupid blunders.  For example, there’s Sony, which put a rootkit – a piece of spyware – on music CDs as a secret copy-protection technique, only to wind up in court when bloggers revealed that the code left their computers vulnerable to hacker intrusions.  …Your customers are going to poke around in your business anyway, and your workers are going to blab about internal info – so why not make it work for you by turning everyone into a partner in the process and inviting them to do so?

Some of this isn’t even about business; it’s a cultural shift, a redrawing of the lines between what’s private and what’s public. A generation has grown up blogging, posting a daily phone cam picture on Flickr and listing its geographic position in real time on Dodgeball and Google Maps. For them, authenticity comes from online exposure. It’s hard to trust anyone who doesn’t list their dreams and fears on Facebook.

Here is the deal: It’s not secrets that are dying, but lies.  One bad blog post can kill you. But if you’ve got hundreds or thousands of sites linking to you and commenting on you, the law of averages takes over, and odds are the opinion will be accurate: The cranks will be outweighed by cooler heads.  Again, the net rewards the transparent.

Popularity: 3%