Many organizations have harnessed the power of information technology (IT). There is a new class of managers who know what they want from technology and how to get it. I like to think of this small and elite group as the "new information masters". They are a breed apart from the rest of the world.
The new information masters want to predict the future with ever-increasing accuracy. They want to anticipate and meet changing market trends and organizational needs in advance. They want to control the present in realtime. They want power over knowledge, distance and time. They want to conquer traditional barriers to communication, access and control. These managers are using information technology to achieve these goals.
But some senior-level managers have not mastered their organization's information. They want to know why they have not found the competitive edge they are looking for.
Brief history
The issues and problems managers face today with technology have changed since the 1960s and 1970s. If you were there, you know what it was like to bring technological innovation to an organization when you could barely buy technology. Most of us would have given anything for a good PC server or workstation. Off-the-shelf software was almost unheard of.
We can now get technology far more easily and less expensively than we could 30 years ago. Computer literacy has dramatically increased and continues to rise. Engineers have created some fantastic hardware and software. Our ability to interconnect divergent systems has leaped light years ahead of just a decade ago. Desktops are as powerful as mainframes used to be. This is nirvana compared to where we started, but many companies do not take advantage of this technology to get ahead of the competition.
Frustrated managers read about competitiveness through IT in business magazines like Fortune and Business Week. They feel they are spending equal amounts of money and effort as successful companies, but they are not getting a competitive edge from their information systems.
The corporate managers want to know what is holding them back. When they can't find an answer, they often blame their internal technology managers. The CIO has been under fire for the last decade for not delivering on the promise of technology. CIOs also turn over at an alarming rate.
However, disappointing results are not always the IT managers' or external technology and services providers' fault. Many technologically-lagging organizations include an aging group of managers and workers that have deeply-rooted, conservative organization cultures that cause barriers to innovation. I call this the "life-cycle barrier". Also, some managers and workers, apart from organizational barriers, do not want change and therefore do not pursue new technology that could improve organization functioning and competitiveness. I refer to this problem as "barriers erected by individuals".
Technologically lagging organizations may need to face one or both issues to surpass present technology levels. Overcoming either of these barriers is a difficult task, especially when just a discussion of change may irritate managers and workers.
The life cycle barrier
The last thing most managers want to do is look at their organization from an external perspective. They are accustomed to looking outward and dealing with problems as they arise. They have been reasonably successful doing things the same way for the last several decades and see no reason to change their perspective.
This kind of management injured General Motors, Ford, Chrysler, IBM, Digital Equipment Corp. and countless other U.S.-based manufacturing companies.
Life-cycle processes are not usually noticed on a day-to-day basis. A generation of managers and workers are hired into an organization. They become entrenched in the organization and create a culture that protects them from the outside world. Years pass and the world outside changes as new competitors emerge, markets mature and economic conditions shift.
Those entrenched in their culture of denial cannot see what is really happening around them. They become comfortable viewing the world in business cycles. Recession and booms come and go, but the company has always managed to ride them out. They have survived the past and assume the future will be the same.
Unfortunately, reality often tips the Richter scale too late, and the organization has incurred financial losses and damage to its reputation. In the 1970s, this happened in the steel industry. In the 1980s, it happened in the auto industry. In the 1990s, it is happening in the computer industry.
Barriers erected by individuals
The individuals that make up the organization, both managers and workers, can also provide barriers to innovative technology application. Sometimes, only a few individuals erect barriers. Unfortunately, they may be in middle or upper management. In other situations, there may be people spread throughout the organization that erect barriers.
If many employees resist change, the organization has a cultural problem. If there are only a few people erecting barriers, even though they may be in key positions, they can be dealt with on an individual basis.
The evolution of solutions
Management gurus and their methods come and go. We have survived the ages of industrial engineering, organization development and person-centered human resources management. We have also spent billions of dollars on employee retraining programs. However, we have achieved little by adapting these faddish approaches to fixing our organizations.
In spite of past failures there is a new fad called business reengineering. As with past management fads, major business magazines have provided extensive coverage of the new reengineering concept.
The business magazines put forth selected, shining examples of successful reengineering. But, like other fads, reengineering has meet with limited success for a few and disappointment for others. Nevertheless, numerous organizations are blindly signing up for this new treatment, just as they did for the treatments available in previous decades.
Choices for the future
If a competitive advantage has not been gained from corporate information systems, there is a lack of knowledge and abilities within the company. Managers in these companies don't understand the potential of information systems. These firms will probably remain disadvantaged until new perspectives are brought into the company.
New perspectives are gained in three ways. Existing managers can be retrained to recognize and exploit the potential of information systems. As an alternative, new senior level managers with greater expertise in information applications can be recruited. Also, companies can hire entry-level managers from universities with strong information systems management curriculums.
However, training alone will not make existing managers information gurus, just as new blood brought into an organization will not succeed without working within the existing organization structure and culture. Entry-level managers just completing their MBAs are not likely to know enough about the business, management or information systems to effect organizational metamorphosis on their own.
The bearers of this new perspective may not succeed unless every level of management understands the power of harnessing dormant information resources. Retraining may create some converts, new upper-level managers may already be believers and new MBA graduates may be zealous. But all will face resistance unless the quest for a competitive advantage is a company-wide goal.
Focused retraining may be the best first step a company can take. Training, however, is expensive and often ineffectual if not properly selected. Sources of training should be evaluated on content and results. The most accessible and dependable sources of retraining are often local universities. They are relatively easy to evaluate by obtaining course catalogs, conferring with academic staff and asking professionals in the community about the quality and effectiveness of educational programs.
Universities that integrate information systems training into business and management programs have recognized the importance of such education. Those universities with pure computer science programs may offer excellent technical training, but most new business and management students benefit little from this type of training.
A rigid evaluation of education and training is equally important when hiring entry-level managers. The majority of new hires will be from the immediate geographical area of the employment site. Thus, being aware of the curriculum of local schools will pay off when assessing new hires.
Beware of false hopes
For three decades developers have released technology that is truly capable of making organizations more competitive. However, organization managers have failed to best use information systems to gain a competitive advantage. The major methods of creating change in organizations over the past 30 years have provided only nominal results.
Rebuilding organizations to be more competitive is a long and difficult task. Be prepared for slow progress, skepticism on the part of managers and employees, and lots of hot air from technology suppliers. The technology is available and is getting better everyday. The real challenge is dealing with the human side of the equation.
Michael Erbschloe is president of American Business Network in Encinitas, Calif. He can be reached by calling 619-632-4189.