Open business concept

Notes

I submitted this idea to the SinceSlicedBread contest on 2005-11-23; the following is expanded from that original text (reposted here in case the web site goes away after the contest is over). I'm not really done expanding the idea, but feel free to edit and clarify. I'll edit further when I have time. --Woozle 12:01, 24 Nov 2005 (CST)

The Idea

Today's economy is increasingly dominated by extremely large corporations. These corporations are in turn largely dominated by a business mentality that focusses on the near-term bottom line, usually at the expense of the communities and individuals which allow the corporation to exist (e.g. Wal-Mart), and often even at the expense of the corporation's own long-term health. Sometimes terrible mistakes can be made, which might have been avoided if there had been more oversight of the decision-making process; worse, an individual or small group which has made an innocent mistake will often try to hide the fact that a mistake was made, in order to avoid disproportionately large punishment, which often results in a small problem becoming a large one (e.g. Enron).

What is needed is a new business model which combines the idea of transparency with the more traditional business goal of making money.

In much the same way that Open Source software makes it easier to find and eliminate coding errors in computer programs ("many eyes make all bugs shallow"), an Open Business model would allow the benefit of "many eyes" monitoring the corporation's activities, planning, and health, towards the twin goals of avoiding bad decisions and maximum benefit.

Using modern data-processing tools, businesses can now expose every recorded detail of what they do. Summaries and analyses can be done internally or by third parties. Wiki-style web sites and online forums allow anyone to post suggestions, criticisms, or praise. Meetings can be held online, either with open participation or simply to create (instantly!) a record of what is said.

Allowing data access to all employees, investors, customers (perhaps with preference for frequent customers, or perhaps not), and even those in the community at large with no other connection to the business would certainly reduce the chances of either destructive corporate behavior or unintended errors.

Issues

One minor issue would be where to draw the line between private data (e.g. customer credit card numbers are clearly private) and shareable data. Similarly, some analysis is needed of the costs and benefits (to the company and to the community) of sharing all shareable data equally versus restricting some possibly sensitive data (e.g. plans which might benefit a competitor, if the competitor discovered them).

Another issue is how to allocate ultimate responsibility for decisions.

Implementation

Obviously we can't force anyone to adopt such a model, but by encouraging it today we can help it take root and become common practice tomorrow.

(Suggested topics for further writing on "implementation": what businessses are ripe to have this model tried? How about the real-estate development industry, which -- at least here in NC -- is notorious for abusing the process and basically converting forest into greytown for their own gain? How can Wal-Mart be pressured into adopting parts of the model?)

Links

Reference

• Wikipedia: Open Business - Concept: stub article with a basic definition and some links

Discussion

• OpenBusiness: "a platform to share and develop .. entrepreneurial ideas .. built around openness, free services and free access"
• Discussion page by "David G.V." at MySpace. Minimal content so far, but we'll see what happens...

Weblog Entries

• 2006-10-04 Transparent Business

Issues

• 1998 really bad attitude is the story of a confidential flames-only mailing list whose contents were subject to subpoena.
  • Would Open Business further threaten the ability of such lists to exist and thrive? Or would it render such subpoenas obsolete, by having all the flaming and complaining out in the open where nobody would really take it seriously or need to be offended by it?
  • How is this not a slippery slope? Is it presumed that only new forms of communication must be archived, or are we moving towards keeping audio recordings of all verbal business discussions? ...requiring all business-related conversations to be held in a sufficiently loud tone of voice so that they may be successfully recorded? ...requiring employees to record any business-related verbal discussions they may have off-premises? If it is only new forms of communication, why should they not be subject to the same implicit availability of confidentiality as older forms?

News

• 2007-03 The See-Through CEO: how one company was able to use transparency to break with tradition despite being blacklisted, and how similar practices are spreading throughout corporate America
• 2006-03-26 Here's an Idea: Let Everyone Have Ideas (slashdot): not Open Business, but shows how some OB-ish ideas are being used successfully
• 2006-02-28 Eugenics doesn't work...: how "survival of the fittest" is mis-applied in business
• 2006-01-09 Profit-driven corporations can make management blind to ethics
• 2005-12-22 Flattening Hierarchies in Business