Monday, May 18, 2009

Transparency is good for business

In economic theory, the more transparent a market is, the healthier it will be. When sellers hold information that buyers can't gain access to, "information asymmetry" occurs, which is a toxic asset, according to Daniel Goleman author of Ecological Intelligence: How Knowing the Hidden Impacts of What we Buy can Change Everything.

Information that used to be considered proprietary is now published for all to see; withholding information fosters mistrust.

On Leading Green, a blog at http://www.harvardbusiness.org, Goleman writes, "Radical transparency has arrived. Radical transparency converts the chains that link every product and its multiple impacts — carbon footprints, chemicals of concern, treatment of workers and the like — into a force that counts in sales. Radical transparency leverages new software capabilities that render massive collections of data into a simple read-out. An eco-mom can take GoodGuide.Com (in the form of a free iPhone app) with her while she shops.

"But is this still a niche market? How many people really care? One of the first product transparency websites, SkinDeep, ranks personal care products like mascara and hair dye by matching each ingredient to findings of concern in medical databases. How many people have checked to see if their baby wash contains a suspected carcinogen or if their shampoo might harbor an endocrine disruptor? The site has had more than 100 million searches since launching in 2004."

Read the article here and then return and leave a comment: What does "radical transparency" mean to your association?


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