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THE NAKED CORPORATION

How the Age of Transparency

Will Revolutionize Business

By Don Tapscott and David Ticoll

Free Press -- 348pp -- $28

Over the past decade, the forces favoring corporate openness have been gaining ground. Greater public access to information, aided by new communications technologies, is beginning to change companies' relationships with employees, partners, shareholders, and customers. To many executives, the prospect of ever greater candor is terrifying. But not to worry, say authors Don Tapscott and David Ticoll: For those who embrace it, transparency can be a source of competitive advantage.

In The Naked Corporation: How the Age of Transparency Will Revolutionize Business, Tapscott and Ticoll suggest that stakeholders' demands for information give companies a new way to differentiate themselves -- as honest, responsive, and sensitive to specific issues, such as the environment or work conditions. This is a fresh and compelling thesis, backed up by some persuasive evidence. But the authors tend to exaggerate just how much things have changed. Moreover, their book is marred by jargon and phrases that seem exceedingly ill-timed, such as "the new business integrity."

Tapscott and Ticoll, whose previous book was Digital Capital, provide numerous examples of the rewards candor can bring. At insurer Progressive Corp., callers asking for price quotes are given several -- one from Progressive and others from rivals. The authors report that they sometimes take the Progressive deal even when the price is higher. Outdoor clothing retailer Patagonia Inc. prospered after explaining why it was forsaking cheap cotton grown with pesticides for the organic variety.

However, Tapscott and Ticoll turn a blind eye to some recent developments that contradict their thesis. These include the opposition within Silicon Valley to expensing stock options, a move aimed at increasing clarity about these perks' impact on earnings. And the authors downplay such basics as the fact that openness in pricing would prevent a supplier from negotiating different deals with different customers.

Properly deployed, candor can give companies a leg up. But if the past three years of restatements and accounting scandals have taught us anything, it's that secrecy has its own seductive charms. No one should expect the tight-lipped titans of Corporate America to bare all anytime soon. By Louis Lavelle


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