Monday, December 24, 2007

Something Telstra has not yet learned

Telstra is a company that follows the old corporate "coverup" and secrecy policy -- as evidenced by their absurd prohibition of their own name on BigBlog sites -- so it is exactly the sort of company which should take heed of the excerpt below -- if Senor Trujillo (their boss) is capable of learning such things

Last year, Kelman was the newly hired CEO of Redfin, an online brokerage firm that was, as he puts it, "the ugly red-haired child" in the real estate world. Redfin was trying to turn the industry upside down by refunding people two-thirds of the commission that real estate agents normally charge. Customers loved the idea - why the heck did you need to hand over 6 percent of the price of your house, anyway? But agents hated it for destroying their fat margins, so they began blacklisting Redfin, refusing to sell houses to anyone who used the service. Kelman was struggling to close deals for his clients.

His first reaction was to keep the situation quiet and pretend everything was OK. "We were really ashamed that our customers were getting pushed around, so we tried to keep it this dirty little secret," he says. But when months went by without any improvement, he decided to take a different tack.

Kelman set up a Redfin blog and began posting witty screeds about the nasty underbelly of the real estate business. He denounced traditional brokers, accusing them of screwing customers with clubby, closed-door practices. ("If we don't reform ourselves, and take out all the sales baloney, too, people will come to hate real estate agents the way they hate tobacco companies or Big Oil," he wrote.) He publicized Redfin's internal debates, even arguments about the design of its Web site. He mocked himself: One post described how he had sat at a college job fair for hours, waiting in vain for a single student to approach him. ("This was particularly sobering because it meant we had outlosered our neighbor to the right, Ford Motor Company," he wrote.) Meanwhile, in the blog's comments, old-school agents were unleashing hissing attacks on Redfin. Kelman left the critiques ine and lashed right back, in full view of his customers.

His enemies got nervous. All this intestinal spew seemed maso chistic. Worse, it was probably bad for business. Everyone's business.

But customers loved it. More and more signed on to use Redfin, and by the beginning of this year, Kelman and his crew were closing several deals a day. "Instead of discouraging customers, being open about our problems radicalized them," Kelman says. "They rallied and started pulling for us."

Like some crazed convert, he trumpeted his epiphany: "I honestly believe that if Redfin were stripped absolutely bare for all the world to see, naked and humiliated in the sunlight, more people would do business with us." Follow me, he urged.

And many have. Radical forms of transparency are now the norm at startups - and even some Fortune 500 companies. It is a strange and abrupt reversal of corporate values. Not long ago, the only public statements a company ever made were professionally written press releases and the rare, stage-managed speech by the CEO. Now firms spill information in torrents, posting internal memos and strategy goals, letting everyone from the top dog to shop-floor workers blog publicly about what their firm is doing right - and wrong. Jonathan Schwartz, the CEO of Sun Microsystems, dishes company dirt and apologizes to startups he's accidentally screwed. Venture capitalists now demand that CEOs be fluent in blogspeak.

In February, after JetBlue trapped passengers for hours in its storm-grounded planes and canceled 1,100 flights, CEO David Neeleman tried to deflect the blast of bad publicity by using YouTube to air his own blunt mea culpa. Microsoft, once a paragon of buttoned-down control, now posts uncensored internal videos - and encourages its engineers to blog freely about their projects (see page 140). The very process of developing ideas, products, and messages is changing - from musing about it in a room with your top people to throwing it out on the Web and asking the global smartmob for a little help.

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