We live in a golden age. We can travel around the world freely, we can meet new people online, watch movies, TV shows or play computer or video games alone or with friends at home. Most importantly you can even earn money by working on your laptop from your favorite coffee shop. Globalization and the development of technology has led us to these times of many possibilities.
These possibilities are changing not only the way we live our lives, but also the way businesses around the world interact with their customers. Now they can deliver higher quality products or services, create extra value and create a brand that’s closer to their clients. That’s why the radical transparency approach is gaining momentum among modern businesses as the new business model. This model not only helps to create a stronger bond between businesses and their customers but in some cases also brings a higher meaning to buying products and services.
The term radical transparency is used to describe actions and approaches that increase the openness of organizational processes and data across different fields of governance and business. In short, this means the business lays all its cards on the table and is honest about what they do, and how and why they do it. The use of the phrase was already hinted at when David Brin wrote The Transparent Society, a non-fiction book re-imagining Orwell’s 1984, showing the social consequences of the radical transparency approach.
Later, political arguments would be made that technology, including communication technology, drives economic growth. By 2008 the term radical transparency was used to describe Julian Assange’s WikiLeaks project. The project became an international non-profit organization that publishes secret news, leaks, and other information, founded on the belief that important things shouldn’t be kept secret from people.
Benefits of Radical Transparency
David Rock, the executive director of the NeuroLeadership Institute and CEO of the global consulting firm NeuroLeadership Group, published an article about radical transparency in 2012. In his article, David presents the strengths of a business that implements a radical transparency approach. He talks about the improved focus and engagement and the growth of talent in the private research software firm Qualtrics, which has made all employees’ performance data available to everyone in the company.
For each quarter of the year, the employees set measurable and visible objectives and key results, which makes everyone’s progress and priorities clear. This has been shown to result in a reduction of the clutter on people’s prefrontal cortex. An overload of such clutter brings a sense of being overwhelmed about what your goals are. Radical transparency also increased Qualtrics employees’ commitment and motivation, by bringing fairness. The feeling of fairness is rewarding to the brain and this feeling of reward then leads to strong autonomy and a sense of control. The final effect of the approach seen at Qualtrics was that less successful employees would see their more successful colleagues and start to mirror their behavior, thus encouraging themselves and improving their skills.
Radical Transparency in Action
Another story of radical transparency in use is Ray Dalio, who built a billion-dollar company using this approach. In his book Principles: Life and Work Dalio shares how important this approach was and still is for his success. On his TEDx talk, Dalio explained that all he wants are meaningful work and meaningful relationships, which are possible through radical truth and transparency. When you put out all your honest thoughts, he continues, the best ideas rise to the top. Moreover, embracing a culture based on transparency means you must be willing to have thoughtful disagreements – of the kind that others are not courageous enough to have – and that leads to success.
Once again, there’s the story of Bloobloom, an eyewear company that takes a radical transparency approach to business. Not only they are transparent about the cost of their glasses and their business model in general, but at the same time, they offer great customer service and high-quality products. Moreover, they are using the transparency model to make an impact on the world through their “Pair by Pair” program. Through this program, they donate one pair of glasses to someone who needs it for every pair of glasses they sell. This makes Bloobloom customers feel proud about the brand they are using and lets them experience a deeper meaning from buying their products.
The radical transparency approach is not for every business. It takes courage and responsibility to be able to take on possible confrontations and do the right thing, by making thoughtful decisions and building meaningful relationships between partners and customers.
This business model is beneficial to the company as it increases employees’ focus, engagement, and skills. For consumers, it creates a bond between them and the company and when it supports specific values it brings a deeper meaning, rather than a simple transaction of products or services for money.