Information Transparency: A Universal Optimization Driver

NYBPP Meetup (12/14)Highlights and Q&A

Agenda

I. Information Transparency: A Universal Optimization Driver ■ Information Transparency■ Changing Information has a Cost■ What is Truth? Objective and Subjective Elements■ Reducing Data Transfer Costs■ Goal Transparency and Open Collaboration■ Summary

II. Q&A■ Is there any benefit to withholding information until a more appropriate time? ■ How can you avoid overloading people with information they don’t want when

you communicate more openly and with full transparency?■ What about the other person’s receptivity to the information? How much

adaptation is needed to account for non-objective actors?■ Isn’t there a reputational risk in being transparent about your faults or lack of

knowledge?

Information Transparency: A Universal Optimization Driver

The logic that makes truth-telling profitable

What is ‘Information Transparency’?

Information Transparency refers to openly and immediately sharing any actionable data you own with anyone or anything that requests it.

● This could be personal data such as your history, preferences, or plans

● This could be business data such as last quarter’s financial performance, products you have in the pipeline, or your secret recipe

The Cost of Changing Information● Consider the cost involved (to the communicator) in these

four possible approaches to sharing data and information:○ Telling the Truth (No Cost)○ Telling the Truth with Misunderstanding (Low Cost)○ Omitting the Truth (Medium Cost)○ Changing the Truth (High Cost)

● These also result in different costs for the person receiving and parsing the communicated data or information:○ Receiving the Truth (No Cost)○ Receiving the Truth with Misunderstanding (Low Cost)○ Receiving with the Truth Omitted (High Cost)○ Receiving Lies (High Cost)

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But What is Truth? Objective and Subjective Elements

Every time we communicate we must determine what we know to be objectively true (in the present), versus where we are relying on assumptions or intuition to fill in the gaps.

Most communication has some part objective truth and some part subjective assumption, especially as the data you are communicating increases in complexity:

Complexity of Information

Objective Data

Subjective Data

Part of being transparent is knowing how much you actually know objectively and representing it accurately - otherwise you may be bending the truth unintentionally!

Transparency Reduces Data Transfer Costs

● Increasing transparency and reducing uncertainty ALWAYS reduces cost

If you spend less energy sending information and less energy receiving/parsing information, you will be fundamentally optimizing your data transfer process.

● What do people need to know?

Anything they want! Let employees and contacts pull any information they want. The more transparency, the more cost is saved.

Goal Transparency and Open Collaboration

Key areas of information transparency:

• Share business goals: The more people know the business objective at every stage during the process, the more likely they are to align to an efficient value-creating configuration.

• Share resources and work: The value of transparency is starting to manifest itself in open source coding, open collaboration, etc.

Goal Transparency and Open Collaboration

What about my intellectual property?

• There is no value in protecting intellectual property (IP) or hiding best practice in the new information economy.

Isn’t there value in protecting IP as a competitive edge?

• If you have no competitive differentiator, hiding information won’t save you. Instead, it will slow you--and society as a whole--down.

Summary

• Being transparent with information means sharing all data you have at all times freely and accurately

• The farther you are from the truth in communications, the higher the cost

• To tell the truth, one must be aware of the level of objective versus subjective elements being used at all moments in time and represent the mix accurately

• Being transparent always reduces cost, even if the benefits don’t seem immediately apparent

• Businesses are learning to share everything all the time and reaping the benefits

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Q&AAnswering questions from the Meetup

Is there any benefit to withholding information until a more appropriate time?

No!

● You may think that shielding people from information, or delaying the giving of bad news, is beneficial for people in some circumstances; however, it will always result in cost on both sides.

● People will always derive more value from information being given to them as soon as it is known. As long as the information is accurate, they may have a bad reaction, but will be better prepared to act on that information the more time they have to process it.

How can you avoid overloading people with information they don’t want or need, when you communicate more openly and with full transparency?

● Generally, do not “push” information onto people. Set up an environment where people know they have transparent access to information and they feel comfortable “pulling” from you what they need, when they need it.

● Our culture is conditioned to wait on information to be given to them to act on; however, it will always be more optimal to control the flow of information by letting the receiver request what information they need and be able to retrieve it without constraint.

What if the person receiving the communication expects waste as part of the exchange? How much adaptation is needed to account for non-objective actors?

● This depends greatly on the players and nature of the exchange. Ultimately, any departure from transparency will result in waste; however, if waste is expected, one must navigate the situation to create the most value.

● Communicating with a subjective actor could create net value loss if etiquette or other types of communication waste are not used in the exchange.

Isn’t there a reputational risk in being transparent about your faults or lack of knowledge?

It depends.The answer here depends heavily on two dimensions: The effectiveness in how you articulate uncertainty, as well as the subjective measures of competence by the receiving party.

● How you articulate uncertainty:We know the receiver will get more value if you relate data objectively and transparently, even if that means your assertions are not 100% confident. You can communicate this through your word choice, energy, and general confidence in the value you are trying to provide.

● Subjective measures of competence:When receiving parties value unsubstantiated confidence over objective knowledge, you can manage them how you see fit. Know, however, that creating extra cost and sub-optimal communication will cheapen you as an information provider, and does not result in optimized outcomes.

THANK YOU FOR COMING!

• Thank you so much for coming to our meetup – we hope to see you again in future sessions and please don’t hesitate to post additional questions on the group discussion board.NYBPP Meetup

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