Business Technology: Exposing The Shell Game

We all know the roll call by now, and however close to or distant from these companies any of us happens to be, I'll bet the names evoke similar feelings of anger, disbelief, and even nervousness: Enron, Tyco, Global Crossing, Adelphia, WorldCom, Arthur Andersen, and others. What flaws torpedoed these companies that were not so long ago admired and highly valued? What can the rest of us learn or re-emphasize?

Part of the answer has to be that in an age where the utility of information is increasingly realized when it's made visible to more people, these companies chose the opposite path, one filled with shell games and mirrors and smoke. Or they thought that by destroying paper on which information was printed, they would destroy the information itself or perhaps even the reality it expressed. Have we really learned so little over so much time? About 400 years ago, using eye of newt and toe of frog and wool of bat and tongue of dog rather than FASB permutations and multimillion-dollar financial systems, Lady Macbeth and her witches knew that sooner or later, no matter how many oaths they chanted and cauldrons they stirred and bodies they buried, "the truth will out."

Let me offer an example with two key points: First, the power of information is in its visibility and thereby its ability to be leveraged, enhanced, and acted upon; and second, that business-technology managers today have to hold themselves accountable for getting the information out to the places where it can be most effective.

In this case, New York has about 20,000 restaurants, and the city's Department of Health has about 80 restaurant inspectors. The problem was how to reduce the number of people getting food-borne illnesses. Hire more inspectors? That only chased the problem, but it didn't solve it. Raise the fines for noncompliance? Been there, done that, didn't work. More-frequent inspections? That meant each one was less thorough, and that effort also failed to increase compliance.

So a couple of years ago, the department applied the lever of information visibility and jumped outside the inner circle of restaurants and inspectors and went directly to the dining public by launching a publicly accessible Web site listing all of the restaurants that had failed inspections. As you can imagine, this caused more than a little heartburn among NYC's hash-slinging institutions, which railed that such a public disclosure was unfair, unreasonable, un-American, and worse. But with the site getting an average of 20,000 queries per day, the restaurant owners had a decision to make: either work harder at complying with the Health Department's regulations or bank on the hope that people will knowingly go to a restaurant that's unsanitary, unsafe, unsavory, or some stew of all three.

Mike Corcoran, chief marketing officer at Information Builders, the NYC-based software company that helped the Health Department launch the site, summed it up: "Putting this information out in front of the public gives the restaurants the power to police themselves-they can choose to either change their behavior or face the possible consequences." The results are unmistakable: In the first year, the number of NYC restaurants failing inspection was reduced by 50%, which translates to a whole heckuva lot less food poisoning.

All those giant billion-dollar companies at the top of this column-as well as all of the rest of us-could learn a lesson from NYC Health Department CIO Ed Carubis: "Our philosophy is about better transparency of information in government, in being accountable to the people we serve, and in giving them the full disclosure of what we do," in part by making available to that public "useful and appropriate information they can use to make fully informed decisions." In this specific case, he said, the result was "the restaurant owners realized, 'We need to be smarter about what we do.'

"In the end," Carubis said, in what we can only hope rapidly becomes a more pervasive business outlook, "it's about accountability to the public."

Bob Evans
Editor-in-Chief
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