#information transparency

Every company and organization, at some time or other, faces a crisis that includes rumors. How one deals with rumors, especially in the critical early phases of a crisis, can determine the outcome of the crisis.

Most crisis communications management is pattern recognition, and rumors follow predictable patterns. In fact, there's a formula that describes how rumors work and that provides a very useful tool for understanding how to kill false rumors and how to diminish the damage caused by true or partially true rumors.

Psychologists Gordon Allport and Leo Postman elaborate how the two factors of importance and ambiguity work together in their theory of psychology of rumors:

THE BASIC LAW OF RUMOR

The two essential conditions of importance and ambiguity seem to be related to rumor transmission in a roughly quantitative manner. A formula for the intensity of rumor might be written as follows:

R ~ i x a

In words this formula means that the amount of rumor in circulation will vary with the importance of the subject to the individuals concerned times the ambiguity of the evidence pertaining to the topic at issue. The relation between importance and ambiguity is not additive but multiplicative, for if either importance or ambiguity is zero, there is no rumor. Ambiguity alone does not sustain rumor. Nor does importance.

Here are some ways to think about the model quantitatively. Again, note the elements of the Allport and Postman Model of Rumor Dynamics:

R ~ i x a, where:

R is the reach, intensity, duration, and reliance on a rumor; i is the importance of the rumor to the hearer or reader, if true; and a is the level of ambiguity or uncertainty surrounding the rumor.

In other words, the reach, intensity, duration, and reliance on a rumor is roughly equivalent to the importance one attaches to the rumor if true, multiplied by ambiguity surrounding the rumor, especially surrounding its denial. Note that simply denying a rumor does not eliminate ambiguity; it may even increase it. Rather, eliminating ambiguity requires giving affirmative factual reasons for not relying on the rumor.

Corporate managements, however, have little appreciation for the seemingly arbitrary and somewhat confusing deadlines under which journalists work.

Fortunately, there is a formula that helps management overcome its natural reticence and to disclose quickly. It's a rough generalization, and in some ways an oversimplification. But it helps to clarify in corporate minds the necessity of acting quickly. It's the Rule of 45 Minutes, 6 Hours, 3 Days, and Two Weeks... Essentially, it's a reality-based observation of the news cycle and points at which one can influence the cycle.

45 Minutes: Within the first 45 minutes, give or take, of a news cycle you have maximum influence on the outcome of a story. If a rumor prompts a reporter to begin working on a story, the first 45 minutes are critical. During this time, only a small number of people, and possibly only one reporter, knows about the rumor and is working on a story.

6 Hours: Once a story crosses a wire service, is broadcast on television or radio, or appears on the internet, it is, at least for the moment, out of your control. It may still be possible eventually to control the rumor and even to kill the story. But now it will much more difficult. And it takes much longer. As a general rule, once a story is broadcast you can expect to have at least six hours of negative coverage.

3 Days: Once a story hits the daily newspapers, you can expect it to be alive for several days. During the day the story appears there is likely to be television and radio commentary about the story, as well as gossip among your customers, employees, and competitors.

2 Weeks: After the daily newspapers have had their run, there is still a further news cycle that includes weekly and semi-monthly magazines, industry trade publications, weekend newspaper wrap-up sections, and the Sunday morning talk shows. If a story has been alive for three days in the daily press it is unlikely to escape some notice from the weeklies and semi-monthlies. During this period you can still invoke the R ~ i x a formula to kill the rumor and prevent its further spread. But by then you will have suffered several weeks of negative coverage and reputation harm.

All of this suggests that it is a fundamental mistake for corporations to make decisions about crisis communications on their own routine timelines. They need to recognize that however arbitrary and at times irrational news media deadlines may seem, companies can control their own destinies better if they can kill rumors as early in a news cycle as possible.

Successfully employing both the R ~ i x a formula and the Rule of 45 Minutes, 6 Hours, 3 Days, and Two Weeks... can help prevent reputational damage and keep the company focused on its own agenda. Failure to recognize the power of these two formulas puts the company at the mercy of the rumor mill, gossip mongers, and the irrational-seeming dynamics of the news media.

Source: https://www.krisennavigator.de/Killing-Rumors-A-50-Year-Old-Mathematical-Formula-Is-Key-Tool-in-Managing.491.0.html

Effective dissemination of information builds on some key conditions:

1. Transparency of information flow. 

2. Freedom of press and public information-FREE OF CENSORSHIP of any kind-let the people and the informed be judges.

3. Neutrality of information, if not, at least neutrality of the channels, platforms and media. Is it too hard to find it nowadays?

4. No insider privileged access-this is especially important for investment and share trading. Market efficiency is also important. But do we really find a market that is efficient? No since we have share trading market. Do we able to eliminate insiders who have privilege access? Not since, we do at the best have disclosure system. But these disclosure mechanisms are on self-declaration basis. And that’s how scandalous news of failure to honor the disclosure obligations come in.

5. Market maturity-you do NEED to assume recipients of the information are matured AND rational in evaluation of information AS WELL AS making calm and informed decisions. Again, hard. The more immature the recipients or players or actors or actresses in the market, the more likely they believe in myths, rumors, gossips and anything that are inflammatory in nature to stir up any irrational actions. Well, that’s how a market crash; and that is how a society breaks into riots. That’s even how a place nourishes extremism of all sorts, prejudice, bias, hate, misunderstandings of all sorts.

6. Integrity of data-of course, you need to have something creditable as ‘data’ and ‘information’ from the beginning. If it is unable to validate or verify whether a piece of news is reliable as information, how can you tell whether it is just rumors?

 From a psychological perspective, human beings are NEVER rational, calm creatures. We are social animals. The good sides of this is we form bonds and intimacy and personal relations. The bad sides of it is we are NEVER neutral. We are tied to our bonds, our loyalty as group ‘accepted’ ‘norms’. Sometimes these bonds and loyalty make us survive better as a specie or as a group, in other times, these bonds drag us into hysterical behaviors, flamed responses, blind herds and hives group behaviors and even wars. For example, the two World Wars were all sorts of deeply entangled political alliances that could not sort out balance of powers.

A few days ago, I sent a request to the U.S. Government Accountability Office for a copy of FEMA’s internal control plan and standards for Hurricane Sandy.

I had seen these documents referenced in a GAO report summary from an inter-agency review (Hurrican…

Enterprise architecture develops, documents, and communicates the baseline, target, and transition plan for an organization. EA makes information transparent to enable better decision making. Transparency leads to self-correcting behavior.

Here’s one case where transparency may be better left under wraps.

The Wall Street Journal, 9 April 2008, reports: “Candid Camera: Trove of Videos Vexes Wal-Mart.”

“For nearly 30 years, Wal-Mart stores Inc. employed a video production company here to capture footage of its top executives, sometimes in unguarded moments. Two years ago, the retailing giant stopped using the tiny company. At first, the decision threw Flagler Productions Inc. into a panic. Now, it’s Wal-Mart that’s squirming.

“Flagler has opened its trove of 15,000 Wal-Mart tapes to the outside world, with an eye toward selling clips. The material is proving irresistible to everyone from business historians to documentary filmmakers to plaintiff’s lawyers and union organizers.”

So what’s the problem with exposing some tapes of Wal-Mart executives?

“Among the revealing moments: a former executive vice president and board member challenges store managers in 2004 to continue his work opposing unionization. Male managers in drag lead thousands of co-workers in the company’s corporate cheer. In another meeting, managers mock foolish or dangerous use of a product sold in stores.”

“Unlike the polished presentations delivered at business forums, the videos provide an unvarnished look at Wal-Mart leaders…the videos deal with ‘everything anyone would want on Wal-Mart…They’ve got 30 years of people winging it.’”

A labor historian says, “When they are talking to themselves, and there aren’t any shareholders present, you get a level of things being revealed.”

This is a treasure trove for lawyers on various cases, unions delving into personnel policies and practices, and critics of the company. The question from an EA perspective is whether information transparency is really a good thing or not?

On the positive side, only by getting the information out there or having the “threat” of the information getting out (like on the cover of the Washington Post or in Congressional hearings) are organizations and people forced to ensure they are doing the “right” thing, and therefore self-correct when they are off track.

On the other hand, when information is too transparent (like the unscripted videos of Wal-Mart executives), the enterprise can be put at competitive, security, economic, judicial, and political risk, thus jeopardizing any future plans for the organization.

There are a number of key business technology trends that enterprise architects need to be aware of─McKinsey Quarterly reports these on 26 December 2007. 1) Managing Relationships

Distributing co-creation—“The Internet and related technologies give companies radical new ways to harvest the talents of innovators working outside corporate boundaries. Today…companies routinely involve customers, suppliers, small specialist businesses, and independent contractors in the creation of new products. … By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.” Examples include Linux and Wikipedia

Using consumers as innovators—“As the Internet has evolved--an evolution prompted in part by new Web 2.0 technologies--it has become a more widespread platform for interaction, communication, and activism…Companies that involve customers in design, testing, marketing (such as viral marketing), and the after-sales process get better insights into customer needs and behavior and may be able to cut the cost of acquiring customers, engender greater loyalty, and speed up development cycles.”

Tapping into a world of talent—“Software and Internet technologies are making it easier and less costly for companies to integrate and manage the work of an expanding number of outsiders [globally], and this development opens up many contracting options for managers of corporate functions…This trend should gather steam in sectors such as software, health care delivery, professional services, and real estate, where companies can easily segment work into discrete tasks for independent contractors and then reaggregate it.”

Extracting more value from interactions—“Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations--smarter and faster ways for individuals and teams to create value through interactions.”

2) Managing capital and assets

Expanding the frontiers of automation—“Companies, governments, and other organizations have put in place systems to automate tasks and processes: forecasting and supply chain technologies; systems for enterprise resource planning, customer relationship management, and HR; product and customer databases; and Web sites. Now these systems are becoming interconnected through common standards for exchanging data and representing business processes in bits and bytes. What's more, this information can be combined in new ways to automate an increasing array of broader activities, from inventory management to customer service…The trick is to strike the right balance between raising margins and making customers happy.”

Unbundling production from delivery—“Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever smaller increments cost-effectively. Information and communications technologies handle the tracking and metering critical to the new models and make it possible to have effective allocation and capacity-planning systems.”

3) Leveraging information in new ways

Putting more science into management—“Just as the Internet and productivity tools extend the reach of and provide leverage to desk-based workers, technology is helping managers exploit ever-greater amounts of data to make smarter decisions and develop the insights that create competitive advantages and new business models. From "ideagoras" (eBay-like marketplaces for ideas) to predictive markets to performance-management approaches, ubiquitous standards-based technologies promote aggregation, processing, and decision making based on the use of growing pools of rich data.”

Making businesses from information—“Accumulated pools of data captured in a number of systems within large organizations or pulled together from many points of origin on the Web are the raw material for new information-based business opportunities…[For example,] A retailer using digital cameras to prevent shoplifting could also analyze the shopping patterns and traffic flows of customers through its stores, and could also use these insights to improve its layout or placement of promotional displays.

From a User-centric EA perspective, many of the business technology trends not only ring true, but are in fact essential to the practice of good User-centric EA.

First, managing relationships, whether through co-creation with partners, customer involvement, outsourcing, or making interactions more valuable, all point to the “User-centric” aspect of User-centric EA, in which we bring the users, stakeholders, and subject matter experts collaboratively into the EA process to provide them more value from EA information products and governance services, so that the EA is useful and usable to them.

Second, in terms of leveraging information “to make smarter decisions,” this is the value proposition of EA—information transparency to enhance decision-making. McKinsey underscores the growing importance of information, such as EA provides as follows: “Given the vast resources going into storing and processing information today, it's hard to believe that we are only at an early stage in this trend. Yet we are. The quality and quantity of information available to any business will continue to grow explosively as the costs of monitoring and managing processes fall. Leaders should get out ahead of this trend to ensure that information makes organizations more effective, rather than less. Information is often power; broadening access and increasing transparency will inevitably influence organizational politics and power structures.”

Third, in better managing capital assets through additional automation, interoperability of systems, and utilizing reusable components, these too are core elements and principles of EA, particularly in terms of applying and implementing technology (automation) to align with business requirements, and developing interoperable systems and using service oriented architecture to deliver reusable component services. This is all about more effective management of our technology base and the development of a farther reaching, stretch target to continue to get more value from technology.