A Business Used to be a Black Box. Now it’s a Glass Box.
By: David Mattin
Tags: Politics, Society, Business, Technology, Future

In a connected world, the relationship between powerful organizations and the societies in which they operate is being redrawn. We all understand that. But we’re still catching up to the full implications.

Here is one such implication. A transparent world means a radical change in the nature of brands. That’s a huge shift, because brands — business, political, individual — do much to shape the world we live in.

This week we learned that Microsoft employees have been sharing stories of sexual harassment and discrimination in a long internal email chain. Many of those employees say they originally complained to HR, but got nowhere.

Reports say the chain started when one female staff member emailed others to ask for advice on how to break through the glass ceiling at Microsoft. Stories of harassment, abuse and prejudice began to pour in, including one by a woman who says she was asked to perform sex acts by a senior employee of a partner company, and was ignored when she complained. As news of the email chain spread through Microsoft, HR announced an investigation.

Stories of gender discrimination at big corporations are, sadly, nothing new. But the way this story surfaced — as an email chain first shared between staff and then leaked to the media — is a reminder of a powerful truth. A connected world is a more transparent world. And a transparent world is transformative.

That’s because transparency reconfigures power relationships. Just look at what transparency has done to some of the most powerful organizations of our time across the last couple of years. Transparency ended Travis Kalanick’s reign as CEO of the unicorn he grew from birth. It brought us the truth about Facebook, and forced Mark Zuckerberg to do the previously unthinkable: call for regulation of social media.

Credit: Shutterstock

A connected world allows citizens to see deeper inside the powerful organizations that shape their lives. It also empowers them to challenge power in new ways. Not only are those who are the victims of wrongdoing now able to corroborate each other’s stories and speak out in unison, but millions around the world can insist that they be heard and that action is taken. That’s what is happening with #MeToo, a movement that signals a historic redrawing of the power relationship between men and women.

We’re just at the beginning of the reconfiguration that transparency will impose on our societies. But one powerful implication is becoming clear. And its best understood as the difference between a black box and a glass box.

Organizations — businesses, institutions, and so on — used to be black boxes. For the most part, no one could see inside. The brand was whatever those inside the box painted on the outward-facing walls.

Now, organizations are glass boxes. People can see right inside. They can see the people, the processes, the values at work. In other words, they can see the organization’s internal culture. And once people can see that culture, they will feel something about it. That is to say, it will become part of the set of cognitive and emotional associations that they tie to the organization. It will become part of — perhaps the most important part of — the organization’s brand.

In a transparent world, internal culture is brand. Increasingly, an organization can no longer paint a brand on its outward-facing walls and expect people to believe in it. Instead, because of transparency, brand will be an organic outgrowth of internal culture. That’s a massive shift. Indeed, by blurring the boundaries between inside and outside, this shift changes the very nature of what it is to be an organization at all. It also explodes the communications disciplines that shaped so much of traditional 20th-century mass media, consumer democracies: public relations, branding and advertising.

Once, Microsoft could have sought to PR their way out of a story such as this. Today, they will be judged primarily not on what they say, but on the meaningful changes they make to their internal culture, which will be reported to the world via their employees. If they make no such changes, the brand will rightly suffer. But if they do, they have a chance to powerfully enhance the way that customers and clients feel about engaging with Microsoft.

In 2019, there can be no brand as distinct from the organization as it authentically exists; there can be no marketing department as distinct from the rest of the organization. The entire culture is the brand; every department is the marketing department.

The implications — for businesses, institutions of state, political parties, powerful individuals — are huge. And so is the opportunity for organizations and individuals who understand those implications.

One further glimpse of this shift? A spate of 2020 presidential candidates are about to start spending millions of dollars on their campaigns. Meanwhile, Alexandria Ocasio-Cortez could be found last week broadcasting from her living room on Instagram Live, assembling the furniture she has just bought for her new apartment, drinking wine and answering questions from viewers.

Ask yourself: in 2019, who is building the more powerful brand?