Future Here Now: When non-transparency bites back
Signals
National and international problems that are caused at least in part by lack of tranparency are dominating our daily news right now, so focusing on business stories feels a little like burying the lede. But since we’re focused on Future Ready business this month, we’ll stick to stories about companies that tried — and failed — to hide things they didn’t want to admit.
A lot of our parents told us that “honesty is the best policy,” but that’s more true now than they could have ever imagined, for the reasons that we touched on yesterday. Hiding infomation has never been harder, and the public’s expectation of truth-telling has never been stronger. Their potential to distrust and reject has never been stronger, either.
Here’s a few cases where business’ failure to be transparent has blown up on them, followed by a couple articles about the general benefits of transparency.
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The Volkswagon scandal
https://www.bbc.com/news/business-34324772
https://sederlaw.com/volkswagen-faces-legal-and-public-backlash-in-wake-of-emissions-scandal/
https://changemanagementinsight.com/volkswagen-crisis-management-case-study/
https://www.forbes.com/sites/davidkiley5/2017/05/11/vw-shareholders-demand-transparency-that-is-not-coming/
This story broke 10 years ago, which explains why you might not remember it (especially if you live in the U.S.). In short, Volkswagon tried to game its efficiency results, and the blowback was massive — billions of dollars in fines, lost sales and lost stock value.
Obviously, this isn’t a case of an innocent mistake — Volkswagon intentionally modified its products to get around emissions standards. And when you’re caught doing that, you’ve got a pretty big problem — including with your stockholders. You don’t want that. But as the Change Management Insight article above indicates, Volkswagon leadership’s efforts to avoid transparency backfired pretty badly.
The Takata Airbag Debacle
https://corporatesocialresponsibilityblog.com/2019/12/12/takata/
This is another case of failure to be transparent making the fallout of earlier bad decisions much, much worse. In this case, it’s worth noting that the company’s cover was blown by three whistleblowers. Whistleblowers aren’t new, but it’s worth noting here that it’s much easier to get incriminating information to a law firm when you can email and upload it than if you had to print or copy everything and sneak it out of your office under your coat. That means that, from a strictly practical point of view, it’s easier to blow the whistle now than it was 50 years ago - and that may be why bad dealings come to the surface today within a couple of years, instead of the decades it took to uncover 19th century business’s unsavory behavior.
That seems obvious, but the point here is that we have too often not changed our behavior to reflect this new ability. Companies often use security technology and NDAs and other restrictions to try to make it harder to bring bad behavior to light, but those are patches on a profoundly different system. It’s trying to lace up the holes in the fence when the horses you’re trying to hold in can jump over it easier than ever.
Other benefits of transparency
My focus here has been on demonstrating that transparency has become necessary, for the simple reason that you probably have nowhere to hide for very long. But there are lots of other benefits of business transparency - internal and external to your company’s operations. Here are a few articles that lay out these benefits in very clear detail.
On tomorrow’s Future LIVE, we will talk about these benefits, and how to manage them in a legal context that often counsels us to keep the cards close to the chest.
https://www.shopify.com/blog/elavi-production-mishap-to-marketing-magic
How do you like this approach to Signals — more interesting links, less yammer?