Businesses need to be both transparent and open to create opportunities for themselves and their entire network.
Yet even though we know that qualities like “open” and “transparent” are preconditions for innovation, we often aren’t clear about what these terms actually mean. Sometimes people even use the terms interchangeably, as though what’s transparent and what’s open are the same thing. They are not.
‘Open’ is a quality of participation. ‘Transparent’ is a quality of information.
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We need to make distinctions between these qualities, so that we have the specific combination of participation and information that makes it possible to be generative.
What it means to be Open
Open is a quality of participation. Something is open when other people besides the owner or initiator can participate in it. People can participate by watching (yes, lurkers participate), by taking it off for their own use (aka ‘forking it’), by interacting about it with others, or by contributing to it themselves.
The opposite of open is closed. A dance rehearsal is closed, while a dance party is open.
What it means to be Transparent
Transparent is a quality of information. Something is transparent when it is easy to understand.
When a process, situation or action is transparent, you can identify:
- What is being done,
- To what degree,
- By whom and to whom,
- When it will transpire, and
- Why it works the ways it does.
Transparency is ‘the ease with which a practice can be identified and understood’.
Because transparency is streamlined causal reasoning, understanding why something is being done becomes especially critical. Transparent is the opposite of opaque. When a process is opaque, you can’t figure out why what’s happening is happening.
Last weekend I saw my godson in a musical performance of Gertrude Stein poems, that pretty much defined the experience of opacity. I could see what was going on, who was doing what, that the performers were talented, that the dances were fluid, but I didn’t know why one thing followed after another. The activity onstage was easy to enjoy, but difficult to understand.
Transparency and Openness are two different dimensions of a situation.
We can imagine information and participation in a 2×2, creating four different combinations. Only one of these quadrants creates the conditions of possibility (generativity) for an organization and its stakeholders.
Q2 is Transparent and Closed. Sadly, this is a state that many great organizations shoot for. They might make sure that everyone inside the organization understands what’s happening and why, yet they don’t want stakeholders outside the organization to be able to participate.
A dance rehearsal can be transparent and closed. To the dancers involved, the activity is completely understood. The dancers can create a better dance, which delivers a better performance to an audience. We the audience don’t get to participate in closed rehearsal though. We miss out on the chance to help create the better dance, to lear to dance ourselves, or even to get exercise.
Q4 is Opaque and Open. Sure, anyone can participate, but what are we actually doing?
Imaging finding yourself in the middle of a flash mob. It’s technically possible for you to participate in it. You could just run into the crowd and start dancing too. But, without knowing what the steps were, what time it was happening, and why it was happening ( A marriage proposal? A social protest?), you’d find it difficult to join in effectively. The process would not be transparent enough that you could understand how to contribute.
Q3 is Opaque and Closed. No one inside or outside the organization actually understands what’s going on, and no one can take any sensible action.
This is the natural state of an overbred bureaucracy. This is also how most people experience the insides of an iPhone.
Q1 is Open And Transparent. Here’s where the opportunity lies for your organization and your network.
Generative Practices need to be Open and Transparent
To create more than what we can do on our own and to set the stage for opportunities to emerge, generative businesses have to open up their processes so that others can participate with them.
When stakeholders are “free to use or copy” they can create value for themselves. When they are free to join in, they can contribute and interact with us to co-create shared value.
To create things that are better and to build capacity for repeating these activities elsewhere (in the future, or with other partners), generative businesses have to make their processes transparent.
We’d never just invite people to a hackathon without also helping them form teams, set goals, learn to test ideas, or understand what it will take to create an effective tool. People have to have some idea of what’s going on, what they can do, and why it matters, before they can shape their energy to participate and contribute meaningfully.
It’s not enough to be open if stakeholders can’t understand what could be done.
It’s not enough to be transparent if stakeholders can’t contribute.
To extend an honest invitation to a stakeholder and to really offer them an opportunity, your practices need to be both open and transparent.
When we know how and are able to participate, we’ve taken the first step towards boosting each other.
Images: Windows7 
by viking_79, and my whiteboard.
I am an organizational consultant, change advocate, and organizational identity/reputation scholar with a PhD in leadership & organizations. I research, write about, and consult with organizations on the relationships between organizational identity, actions, and purpose. I teach Technology Management, part-time, at Stevens Institute of Technology.
My current research focuses on how social technologies in the workplace can drive organizational change, generate meaning, and catalyze purpose. See the 
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