What is Transparency in Innovation?

Although ‘transparency’ has become a buzzword over the last decade or so, and is very commonly used in companies’ marketing materials, it is an important first step towards organisations being accountable for their actions.

In a 2019 report that looked at transparency in the fashion industry, McKinsey & Company (1) predicted that brands would be increasingly scrutinized on:

• Creative integrity
• Sustainable supply chains
• Value for money
• Treatment of workers
• Data protection
• Authenticity

This reflects consumers’ increasing desires to be able to trust companies, amidst rising levels of mistrust: “The more digitized consumers’ lives become, the more advertisements and messages they’re contacted with every day, and many have grown sceptical with the realization that they can’t trust everything they hear. As a result, they’ve placed a higher value on company ethics and openness than they have in the past.” (2)

As you heard in the previous step, transparency can be beneficial for developing effective products and services, as well as for supporting diversity and inclusion. It’s an integral part of many of the products and services we use too. Think about how many websites have user reviews and rating systems available, so that buyers and sellers can make more informed consumer choices (though we should question how well we can trust user reviews, some of which are not written by genuine users) (3). In the ‘Gender Inclusive Approaches in Tech’ course, we looked at reporting on the gender pay gap, which is an example of the kind of information businesses should disclose to ensure transparency. Transparency is also not only about disclosing information, but making it easily accessible to anyone without then having to dig through the pages of a website, for instance. Ethnicity pay gap reporting is less well established, but some companies are making progress. For example, in the UK PWC recently published a Diversity Pay Report, which shows that Black employees receive 14% less pay than white employees on average and that there is a 53% bonus gap (4).

Can there be any downsides to transparency, though? In a 2017 report for McKinsey, researchers suggested that there can be some unintended consequences (5). Too much transparency can, they suggest, impede creative work: “the close monitoring of the process of developing a creative product is detrimental because the creative person may self-censor some of his or her better ideas, for fear that they will be misunderstood or criticized.” Introducing clients to ideas too soon can be counterproductive, as they may shut ideas down before they have a chance to fully evolve. It can also disrupt perceptions of the value of creative work. Innovators know that some ideas come fast, and some take longer to mature, but Eulogy CEO Adrian Brady notes: “Logically, clients know they pay us for our expertise, experience, and creativity in the right idea…But emotionally, it can be hard for people to pay us if they know it took 15 minutes to generate.”

Thinking back to the list at the top of the step, what does ‘creative integrity’ mean to you? What kinds of transparency would it involve for your project or business? Share your thoughts in the comment section below, and see if anyone else’s thoughts spark your imagination.

References:

1. Amed, Anita Balchandani, Marco Beltrami, Achim Berg, Saskia Hedrich, and Felix Rölkens, 2019. What radical transparency could mean for the fashion industry, McKinsey & Company.
2. McCauley Marketing Services, 2015. Transparency: the marketing buzzword of 2015.
3. Jamie Pitman, 2019. Fake Reviews are a Real Problem: 8 Statistics That Show Why
4. Price Waterhouse Cooper 2020. Diversity Pay Report
5. Julian Birkinshaw and Dan Cable, 2017. The dark side of transparency, McKinsey & Company.

Further resources:

1. Fashion Revolution, 2020. Fashion transparency index 2020