The Strategist

Radical Transparency Is Linked With Radical Accountability

04/30/2015 - 10:00

The Infobahn has enabled to take the 'customer-brand' friendship to another level with the growing trend of “radical transparency” that leads to “radical accountability”. – 25 April 2015 – At present, an enterprise-behaviour can be monitored and tracked via social media and “data analytics”. The information, thus harvested, is becoming a base for many individuals whereby they take decisions relating to purchases. Juliette Powell writes that this is an upcoming trend, which has been termed as the “radical transparency”. The said term was coined by “World Resources” Institute’s chief information-officer, Allen Hammond, who as per Powell is “a sustainability oriented think tank”.
Hammond had published an article dealing with “Foreign Affairs” of “digitally powered development”, in the year of 2001, wherein it was suggested that “advocacy groups” along with environmentalists would be able to retain a high “ethical standard” between companies. However, the change seems to be coming from the customers of “millennial generation” instead of the expected activists groups. Interestingly, it turned out that a lot of people care to keep a track on behaviours of various companies and analyse “how it affects their lives”.
The Ogilvy One Worldwide’s ‘creative strategy’ director, Jeremy Wilson says:
“Consumers expect brands to be more transparent about their practices. Brands are using social media. You can now ‘friend’ a brand. So when you’re friends with a brand, you expect it to behave like a friend.”
This new trend of consumer-brand friendship, termed ‘radical transparency’, has proven to be healthy for businesses. However, the said trend requires a certain behavioural changes from the companies’ side which most of them aren’t ready to accept. Powell gives an example of “mainstream pet food companies” as they “earn high margins” for their usage of “filler” ‘ingredients’ at a lower cost; whereas earlier only high end customers visiting speciality stores would seek for “better ingredients”.
At the present age of Infobahn, the internet is flooded with articles instructing one about which brand of pet food to avoid and which to go for as they are better in certain aspects. Moreover, comparison tables of various brands for their ingredients, price and quality, are also easily available whereby the consumers can take an educated decision. Most of the young adults among other consumers are growing conscious about “avoiding pesticides, preservatives, and fillers in their pets’ food”; they go for “healthier alternative” guided by consumer forums.
In Powel’s words:
“To cope with this change, pet food manufacturers have two choices. Some will compete as commodities, selling on price or convenience, watching their market shrink and their margins erode. Others will change the way they do business, openly publishing their recipes and operations data to prove that they have nothing to hide.”
Furthermore, the ‘radical transparency’ is linked with ‘radical accountability’, especially for the companies looking for acquiring the customers trust. The said companies will not only have to be tolerant instead they should also be able to “embrace scrutiny”. As a result, the companies cannot stop at redesigning of their practices as the customers also should invited to see “what goes on inside your enterprise”. According to Powell, one good example of the ‘radical transparency’ practice can be seen in the business approach of “Everlane” wherein the company:
“...keeps itself honest and attractive to customers through an innovative and highly engaging form of radical accountability.”
Moreover, the company also “reveals its day-to-day practices” to the extent that the scheme behind “the costs and markups of its products” is also a click away from its customers.