Open Secrets

 

Takeaway

  • Technology has made it much easier to steal and widely distribute business secrets
  • Companies should rethink how many secrets they're trying to keep and proactively make as much information public as possible

Last November 30, shares of Bank of America tumbled 3 percent in one day. Nothing unusual there, but what raised eyebrows was the cause of the drop. It wasn’t a disappointing earnings report or a tussle with regulators. It was the whistle-blowing website WikiLeaks.

WikiLeaks is known more for exposing diplomatic secrets than business ones. But the day before, founder Julian Assange had threatened to release internal documents revealing corruption at a major American bank. He did not name his target, but many investors assumed it was Bank of America — partly because Assange had claimed earlier to have five gigabytes of the bank’s data. Executives scoured their computer systems for signs of theft, and consultants offered proposals for damage control.

To date, Assange has yet to spill the alleged goods on Bank of America, and WikiLeaks has recently run into problems it may not survive. But regardless, University of Texas faculty say businesses should prepare themselves for a new age of transparency — an age in which a digital Deep Throat can leak or hack any corporate secret onto the front pages.

WikiLeaks is “a wakeup call in terms of how transparency and secrecy will fit into this new world,” says Rosental Alves, Knight Chair in journalism at the Knight Center for Journalism in the Americas. “It’s important to understand that the technical facilitation that exists now makes leaks much easier.”

Back in 1971, he recalls, Pentagon Papers whistleblower Daniel Ellsberg spent weeks making Xerox copies of 7,000 pages. Today, millions of pages can be copied in minutes onto a flash drive.

“For some reason, we used to think things we put on our intranets [internal communication networks] were protected, but they never really have been,” says Paul Walker, a University of Texas alumnus and principal of the Austin firm PulsePoint, who consults with the university on social media. “You have to assume that whatever is published internally is going to go outside.”

But rather than doubling down on secrecy and building more firewalls, Walker suggests that companies should rethink how many secrets they’re trying to keep. “Maybe,” he says, “we should be allowing some of this information to go outside our firewalls.”

He cites the website The Ford Story. Ford Motor Co. packs it with technical information and research previews, along with articles by engineers, blogs by customers and the chance to submit ideas and questions.

Says Walker, “They looked at their intranet, and they said, ‘Half this stuff should be shareable. If we want all our employees to be evangelists, we need to give them information to share.’”

That kind of openness can also build customer loyalty, says Alves. “People want to know how and where a product is made. The more information you make available, the more we consumers have a sense of belonging to that product.”

Transparency becomes even more vital when something goes wrong, says Jeff Hunt, lecturer at the School of Communication and another principal at PulsePoint. Companies should resist the knee-jerk impulse to pull up the information drawbridge.

“In a crisis, we’re advocating more disclosure, and the lawyers are advocating less,” says Hunt. “But there’s a natural vacuum of information created in these situations. If we don’t jump in, outside sources will fill it with speculation.”

He recalls working with Dell Computer in 2006, when critics were spreading online videos of laptop batteries catching fire. Although Dell had not manufactured the batteries, it moved quickly to recall 4.1 million and set up a website devoted to the recall. On Hunt’s and Walker’s recommendations, the website included links to photos of burned laptops.

“Transparency is a hallmark of that medium,” says Hunt. “You have to link to bad news, if you’re going to have credibility.”

Ultimately, Dell’s candid response strengthened its reputation, he adds. Its recall campaign won a Silver Anvil award from the Public Relations Society of America.

Companies need to plan ahead for how they’ll release information during a crisis, says Walker. As a cautionary tale, he points to Domino’s Pizza. In 2009, when two employees showed themselves on YouTube doing unsightly and unsanitary things to food, the company took 48 hours to make a public response. By that time, the video had gone viral. One subsequent survey found 65 percent of viewers were less likely to order Domino’s.

 “A company needs to assume their next crisis is going to happen online,” says Walker. “They need to be prepared to manage it. You can’t wait for someone to call you. You have to be proactive about communicating what your company knows about the issue and what your company is going to do to make sure the issue is never going to happen again. That proactive transparency is the key to managing a crisis and keeping it from getting out of control." 

Faculty in this Article

Rosental Alves

Professor College of Communication

Rosental Alves is Knight Chair of International Journalism and founder of the Knight Center for Journalism in the Americas. He is an expert in...

About The Author

Steve Brooks

Writer,

In a quarter-century as a journalist, Steve Brooks has won two Neal awards for excellence in trade reporting and a Press Club of New Orleans award...

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