The Customer Peers BackCorporate integrity is a more valuable asset now that the world is more transparent. With abundant and free information, customers can now discern the true value of vendors and their goods and services. Business policies and processes — and the systems in which they manifest — should embrace this transparency rather than fight it.
by Don Tapscott & David Ticoll Continued from Page 2 Marketing to Customers Who Have BIThe implications of this new reality are profound. First, companies need to create true value more than even before. To compete, firms need truly differentiated products, better service, or lower prices, because deficiencies in value cannot be hidden as easily. Companies can't make garbage smell like roses anymore. It's getting harder and harder to "spin," advertise, or otherwise trick customers into doing what is not in their interests. Second, companies need to understand customers better than ever to build relationships with them. Relationship capital refers to a new class of assets that are based on the relationships a company develops with its customers, suppliers, and others. The wealth embedded in these relationships is becoming as important as the capital contained in land, plant, buildings, and even big bank accounts. Managers must know how to design the new relationships and exploit the wealth they contain. When you have knowledge about your customers, you can better balance the power dynamic between you and them. Business intelligence is an idea whose time has come. Third, notwithstanding the foregoing, businesses must protect customers' privacy. The corporate standard of transparency should not be applied to individuals. Customers will want to be clothed for the foreseeable future, and firms need to respect their privacy. Embrace appropriate privacy principals. Get permission before compiling individuals' information. Limit collection of such information to what you need. Make clear your purposes for collecting personal information. And unless the customer authorizes it, don't use information for purposes other than those for which it was collected. When it comes to customers, privacy is good business. Fourth, business integrity should be part of the corporate DNA. Historically, customers cared about price and value (product utility, quality, innovativeness, services, and safety). Nearly eight in 10 U.S. consumers now say they can help drive responsible corporate behavior. Three in four consumers also want to learn more about how companies seek to be more responsible. This combination of empowerment and desire to learn sets the stage for new kinds of consumer behavior. Customers care about corporate values. Customers also care about brands in a new way. Increasingly, customers want to buy from companies they consider to be "good," that give back to the community. The new architecture of the brand has business integrity at its base. Nothing goes better with Coke if Coke is accused of complicity in the murder of union organizers in its Columbian bottling plants. If the Coca-Cola Co. is blameless, it needs to engage its stakeholders to convince them. Customers can increasingly hold corporations accountable for everything from integrity to the value of its products and services. Open enterprises understand this power shift and embrace it. Fifth, embrace candor. Transparency is a new form of power, which pays off when harnessed. Rather than to be feared, transparency is becoming central to business success. Rather than be unwillingly stripped, smart firms are choosing to be open. Transparency of course is not always the right thing, nor may it always be practical. And it has its enemies. Transparency can be controversial, poorly executed, or placed at risk. Undeniably, though, transparency is an unstoppable force; a glasnost for business and capitalist society. The best firms have clear leadership practices that others can adopt. They understand that investments in good transparency deliver significant payoffs: engaged relationships, better quality and cost management, innovation, and overall business performance improvements. They build transparency and integrity into their business strategy, corporate character, technology strategy, brand and reputation, products, and services. They build an open technology architecture to enable candor on a minute-to-minute basis, while at the same time ensuring appropriate business intelligence for the firm. They do this because they know that open enterprises — firms that operate with candor, integrity, and engagement — are most likely to survive and thrive. Don Tapscott & David Ticoll are coauthors of the newly released book The Naked Corporation: How the Age of Transparency Will Revolutionize Business (Reed Business Information Inc., 2003). Tapscott [don@tapscott.com] is a consultant, business speaker, and a columnist for Intelligent Enterprise. Ticoll has conducted extensive research into the nature of the firm and the impact of technology on business and society. Information EverywhereCorporate transparency channels extend beyond weblogs and email, to include:
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