The Translucent Company 8

The plastic curtain protecting corporate secrecy has melted.

In the olden days, corporations and governments could depend on a completely compliant media staffed by professional journalists and editors.

These professionals were inculcated into a priesthood designed to distribute information in an orderly fashion. The corporation issues press releases – many of them mandated by the Securities and Exchange Commission (SEC) – and the press machine dutifully weaves the press release into something resembling a coherent narrative to engage the readers.

This process is enshrined in journalism schools and through official style manuals dictating grammar, sentence structure, and political orientation. Certain sources are privileged over others. Sources from governments, corporations, and academia receive privilege over ordinary people.

On occasion, the “man on the street” – most often a taxi cab driver or some other person of little consequence – will be solicited for an opinion. Just to give color to the story. Often, journalists just make those quotes up, because they’re so meaningless and clichéd.

The primary goal of the journalist is to avoid upsetting any advertisers or sources and to keep eyeballs engaged in the constructed narrative long enough for a proximate advertising message to be delivered.

Stories are artificially extended beyond a single page to force the reader to turn pages and garner further exposure to advertising messages.

Traditional Press Relations Gives Way to Psyops

I dislike watching sports, but I went out to a Mexican bar this year during the Super Bowl.

By chance, I met with a PR agent representing a major technology firm.  One amusing anecdote he shared was how this company budgeted $3 million so that his firm could “influence” three female bloggers whom he described as “pajama-wearing.” He might have been lying to me about everything, but I doubt it.

I suggested that he either bribe them or hire gigolos, only half in jest. He told me that he had no idea how he could possibly affect their opinions by traditional means or justify his massive budget. I told him that bloggers generally ignore press releases because it alienates readers and clogs their inboxes.

Journalists are simple animals. It’s usually easy to feed a story to a journalist and to engender a positive response. You just throw a party or take them out to a meal. If it’s something related to consumer goods, you send them “samples” of the product and give them and lavish them with special attention.

Another method is to feed them privileged information that will give them an advantage over their competitors.

All of these things can work with bloggers – but due to higher competition, a lack of censorship, and the rapid spread of information online, overt corruption becomes a riskier strategy than ever before.

The Honest Alternative

Many companies are ill-equipped for the integrity the hyper-connected world expects from organizations. In the past, it was sufficient to merely project the image of integrity. What happened within an organization could be kept relatively quiet thanks to the bonds of Non-Disclosure Agreements, a compliant press, and weak communications technology.

Now, the loose lips of a single employee can generate a powerful rumor or narrative that can gain traction in the media landscape far faster than ever before.

In 2004, a woman created an anonymous LiveJournal post about working conditions at Electronic Arts that ultimately lead to a successful lawsuit for unpaid overtime. I worked for a blog at the time that covered the story. That blog post altered the way that the public perceived EA – and gave the company a shocking introduction to the power of social media before the buzzword even existed.

As a result, EA changed the way it structures development studios and how it relates to the press. The controversy also spurred dialog about labor practices in the wider gaming industry and how companies can prevent similar blow-ups from occurring.

A similar controversy erupted recently at Rockstar Games – so the issue is obviously continues to resonate.

Check that comment thread. You can see more insiders leaking rumors about managers and executive s wasting hundreds of thousands of dollars – and competitors (brazenly salivating at the poaching opportunities) telling employees to quit.

Widespread labor unrest in China in the headlines can be partly attributed to the organizational power of social media.

This is partly why I stress the importance of engendering a positive corporate culture of respect for both employees, customers, shareholders, and the public at large. When companies allow corporate culture to deteriorate, morale declines, and the company’s fortunes usually follow closely.

If the CEO of the company cheats on his wife, you can expect every other wife in the entire company to become upset about it. You can expect them to complain about the brazen affair every night at dinner. They’ll blog about it and leak embarrassing secrets to the press. Both the jilted CEO spouse and the “other woman” will also probably blog about it, which will wind up in the court case.

The entire fracas will be collected and used as a basis for shareholder lawsuits.

As you can imagine, the web undermines any attempts to control information.

Loyal, satisfied employees tend to remain mum to the jackals of the press. Angry ones yap and organize – or leak inside information to hedge funds or investment banking analysts.

Integrity and Authenticity

If your company lies to the press, you can expect someone to pick up on it eventually. If you try to gag someone, you can expect someone to find out about it somewhere. If you abuse employees, someone will out you on it. If you defraud shareholders, someone will discover the truth, and it will be spread around the web and translated into a dozen languages ten minutes after it gets out.

Even Goldman Sachs – once the most trusted institutional brand in the world – can’t release an analyst report anymore without Zero Hedge eviscerating it. Blogs used to be relatively unimportant, but now mainstream news editors and television producers rely on blogs to drive coverage.

What might’ve died as a fringe conspiracy theory in the past can be validated, fact-checked, and spread around the web immediately.

The web has matured into a social mechanism for burning away secrecy, fraud, and deception. And most companies are unprepared for the implications.

About JC Hewitt

JC Hewitt is an independent copywriter and marketing consultant based in New York City. He loves innovative companies of all sizes.