The new media consultant explains why companies should not be afraid of total transparency.

Question: Can companies learn to promote total transparency?

Clay Shirky: We already know right that, that the highest value way company that sells a product, essentially the highest value from social media that company can get, is to allow costumer views directly on the site, right. It is a huge culture shift to do that, but the difference between a site where I can go in and just look at list of products, and the site where I can see, this one has three and half stars and that one has four and half stars. That’s often the difference between the research strip and a sale strip.

And don’t have a coordinated vision for this because a lot of it is going to either fail or produce surprises that you could never anticipated in advance. Have instead an ability to both fun and then kill things in 6 months cycles. You want to try this, go try it? There are more thing back off the page whether 2 lines of CSS Code. And companies that say no, no we only have a site redesign about every 18 months so we can’t touch this page--fix that first, right.

Because if you can’t make small relatively isolated, relatively independent, and relatively granular attempts to take advantage of what the internet is currently offering, you always lag your competitors.

Question: How can companies mitigate negative publicity?

Clay Shirky: One of the things I say to CEOs, whether for profit or non-profit business, is the lost of control you fear is already in the past, right. If you are afraid of losing control of the future that just mean you’re not using Google well enough because somewhere someone is having your nightmare conversation about your business right this second and there’s nothing you can do about it if your goal is to stop that conversation from happening. What you can do about it is you can either be so clear about what your business stands for or so clear about the kinds of products and services you shipped. But if there some incredibly rumor out there no one will believe you, right.

When you saw this in Obama. There’s been no, no rumor mill more empathic than the one directed at Obama from roughly June to November of last year [i.e. 2008]. Nothing stuck because people knew what the guy stood for them. Stuck in certain communities but nothing; that rumor mill did not have the effect of moving the electorate because he just, he was so incredibly clear about what he stood for.

And the other is if you can’t prevent people from talking about your products and offering comments about what they think is both good and bad and somebody else is generating their profit margin on the ability to talk about your products. Why don’t you get that margin?

And if the answer is you fear loss of control, you’re just not paying attention.

Question: What is the future of the employee-employer relationship?

Clay Shirky :The great story is Route 128 versus Silicon Valley. Route 128 was the home of the computer industry. It was where with the exception of IBM it was where all of the kind of innovative new steps coming. Digital Equipment Corporation specially right the avatar of the certain class of success in the computer industry.

But what Massachusetts does, and California does not, is Massachusetts enforces none compete agreements which is to say I can essentially take a computer scientist and put them to the state that’s very much like endangered servitude because they can’t change jobs and continue to think about computer science. So what I meant was anybody who went to work in California could change jobs in Silicon Valley by pulling into different driveway on Monday morning and anybody quit in Massachusetts have to move to California to get any other work.

So the shift from tightly controlled, tightly edge-bounded corporate hierarchies, to what the guy working for me today could be working for somebody else tomorrow and the woman of that company that I want to recruit could come over here, means that businesses have to compete on something other than contractual lock up.

That condition that started up in computer industry, has now spread incredibly broadly. And one of the things that I learned, I was the chief technology officer of a web shop called Site Specific in the 90s and one of the things that I learned at the time when people could change job by getting out of the different subway stop in the morning, was if our employees felt like while working at Site Specific they were learning. Not just working but learning. That meant that any moment they decided to leave their value would be higher because they’d stayed with us another three months, because we’re trying new things and talking with the staff about it not just making decision in the executive suite.

And the bargain is right, if you’re good people go then you suddenly find yourself with competitors you have trained. But over the long haul and I mean it was such a long haul because it such a crazy, crazy time in those days; everthing was so compressed. But our ability to retain people, the people we really want to keep on our staff, was really high--because if my value was increasing while I’m staying with the company that’s the bargain I’m going to keep doubling it down.

Recorded on: May 7, 2009