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The Impact of Information Technology (IT) on Businesses and their Leaders
Andrew McAfee
Associate Professor, Harvard Business School
HBS Faculty Blogs are a forum for presenting and encouraging discussion of ideas and activities related to research, course development, and teaching conducted under the auspices of Harvard Business School. All opinions expressed are those of the faculty owner of the blog and respondents, not of the School.
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January 27, 2008

Signs In the Times


Two recent articles in the New York Times caught my eye. The first, by Lisa Belkin in the January 24 ThursdayStyles section, was titled "Who’s Cuddly Now? Law Firms." This article builds on an earlier one by Alex Williams in the Times chronicling the declining prestige of law as a career. Belkin’s article describes a number of radical (by the profession’s historical standards, anyway) steps taken by many law firms in order to make them better places to work, especially for bright young people.

These steps include a move away from the traditional laserlike focus on billable hours as the desideratum for a lawyer who wants to rise within the firm. Some law firms, according to the article, have done away the concept of billable hours altogether. 

My ignorance of law as a culture and profession is almost complete, and I have no idea what the overall impact of these moves will be. They’re still very interesting to me from my perspective as a researcher on IT’s impact on work, though, because they might be able to address one of the challenges around Enterprise 2.0.

As I wrote in an earlier post titled "The Pursuit of Busyness," many organizations emphasize (in ways both formal and informal, overt and subtle) that their people should engage in activities that are directly, obviously, and immediately ‘productive.’ Within law and consulting firms, working billable hours is the clearest example of such an activity. 

So downplaying or doing away with billable hours provides leaders at these firms with an interesting and perhaps unique opportunity to communicate to the workforce what kinds of activities should take the place of billing the client upward of 2,000 hours per year. If these leaders are serious about improving collaboration, knowledge capture and sharing, innovation, and information flow, they can take advantage of both the novel tools of E2.0 and the novel work environment they’ve just created as they de-emphasized billability.

As I wrote earlier this month, building on a very sharp post by Michael Idinopulos, they could do this by putting the use of their company’s emergent social software platforms ‘in the flow’ of work for their people. A major change in corporate culture like the decline and fall of billable hours presents a major opportunity to reshape what the culture measures, values, and esteems. This will in turn, of course, affect what people do during a workweek.

Would a law firm or consulting company be better off if it went from having a standard of 40 hours of billable work each week to a standard of spending half a day (or a day, or whatever) each week helping colleagues and the enterprise as a whole via the modern social digital toolkit of blogs, wikis, mashups, prediction markets, comments, ratings, votes, RSS feeds, etc.? In some law firms at least, it sounds like there’s an opportunity now to answer that question.




The second article, in yesterday’s business section, was by Steve Lohr and titled "Belt-Tightening, but No Collapse, Is Forecast in Technology Spending." It relates how corporations are not slashing their IT spending at present despite fears of a recession and other unsettling economic news. Lohr relates that while US corporate tech spending fell 11% in the two years after the dot-com bubble burst, IDC forecasts that IT spending will continue to grow this year, but at 4% rather than last year’s 7%. 

Belief in the power of technology is nicely summed up in the article by a quote from Monte Ford, the CIO of American Airlines. He states his company’s three biggest costs are people, planes, and fuel and maintains that "Technology remains the best lever for getting more value from all those, making your employees more productive, making better use of your fleet, and increasing your fuel efficiency."

The article corresponds well with what I’ve been hearing at conferences, within companies, and in executive education classrooms. The deep skepticism about IT that was part and parcel of the dot-com hangover has largely passed, and has been replaced by a cautious optimism and sincere curiosity about IT’s power. My MBA course "Managing in the Information Age" has attracted almost 120 students this semester, a growth rate of over 50% from last year. I’d like to attribute this to my "To Sir, With Love"-level classroom abilities, but I think that like so many other things, this is not about me. It’s about an awareness on the part of some smart young people starting their business careers that they’d better add some tech to their managerial toolkits.






January 14, 2008

Why Not Widen the Flow?


My friend Michael Idinopulos, formerly of McKinsey and now with SocialText, recently launched the Transparent Office blog. I’ve always found Michael to be both thoughtful and pragmatic about social software in the enterprise, which I imagine comes from his combination of work experience and graduate work in philosophy. I plan to be a regular reader.

One of Michael’s first posts was about the distinction between using wikis and other social software ‘in the flow’ of work versus ‘above the flow.’ As he explains:



  • In-the-Flow wikis enable people do their day-to-day work in the wiki itself. These wikis are typically replacing email, virtual team rooms, and project management systems.


  • Above-the-Flow wikis invite users to step out of the daily flow of work and reflect, codify, and share something about what they do. These wikis are typically replacing knowledge management systems (or creating knowledge management systems for the first time).

Michael’s experience has shown him that in-the-flow wikis get heavily used (especially, I’d add, if they actually do replace previous collaboration technologies) while above-the-flow ones attract more sporadic contributions. He makes the great point that:


... the challenge of getting people to use above-the-flow wikis is an above-the-flow thing, not a wiki thing. Left to their own devices, people don’t collaborate very much in above-the-flow ways. That was one of the great (if depressing) learnings of the Knowledge Management movement.

One conclusion I take away from Michael’s insight is that business leaders, if they’re serious about Enterprise 2.0, should think of ways to put contributions in the flow, as opposed to above it. There are a couple ways to do this. The first, and most obvious, is simply to say something like "This project will be managed via a wiki, not email, project management software, etc." This doesn’t redefine anyone’s job; it just changes one of the tools used to do the job.

The other course of action is to change a job definition so that what was previously above the flow moves into the flow. A few of my fellow IT professors have launched wikis for their courses. Most of them report anemic activity, which is not surprising given how busy our students are. For them, wiki participation is clearly above the flow.

In Managing in the Information Age I address this problem head-on by putting wiki contributions squarely in the flow—they count for a major portion of students’ grades. This approach brings its own challenges, of course, but lackluster contribution is NOT one of them. And by the end of the semester the course wiki is a pretty impressive resource.

How outlandish would it be for a company to put participation in emergent social software platforms in the flow for at least some employees? In other words, why not put in job descriptions something like "being helpful at the enterprise level using digital tools such as blogs, wikis, folksonomies, Q&A forums, idea boards, comments, prediction markets, ratings, etc." 

There are certainly enough such tools that people wouldn’t have to feel pigeonholed into one kind of contribution. Not everyone is a natural blogger or prediction market trader, but the current E2.0 toolkit is big enough that it probably contains something for almost everyone. So what would happen if a company deployed a complete toolset and said to its employees "10% (or 25%, or whatever the ‘right’ number is) of your performance evaluation will now be based on your contributions in these environments." 

I get the impression that few companies these days think of their employees as assembly line workers who should be focused exclusively on the job that’s right in front of them. Instead, they’d truly like their people to spend some portion of the work week looking around, helping others, communicating and using their expertise, etc. In short, I believe that many if not most companies desire a good deal more lateralization and crosstalk. So why not put these IT-enabled activities squarely in the flow?

I imagine part of the reason companies haven’t done much of this yet is that to date it’s been hard for people to work above and beyond their ‘normal’ jobs. Doing so typically involved physical displacement—hopping on a plane, going to a meeting, etc.— and so was time consuming, inconvenient, and often costly. Part of the reason I’m excited about the potential of E2.0 technologies is that they greatly lower, if not eliminate, the barriers to working above and beyond one’s ‘normal’ job. So to ask the question again, why not put above and beyond squarely in the flow?

This is a sincere question, and I’d love to know what you think. Please share your thoughts by leaving a comment.

 






January 10, 2008

I've Got Class (Starting Next Week)

I head into the classroom next week to start teaching my HBS MBA course Managing in the Information Age (MIA). I thought I’d share the email I sent out to encourage students to consider taking the course. I sent it students whose educational or professional backgrounds seemed appropriate for course content, and have lightly edited its content to remove HBS-specific jargon.

MIA represents my attempt to teach non-technologist business leaders what they need to know about modern corporate information technology. I want to convey both what IT can do for them, and what they need to do for IT success. Is this a worthy goal? Is it a course you’d take, or wish you had? Leave a comment and let us know.

Graduate students elsewhere at Harvard, at MIT’s Sloan School of Management, and at the Fletcher School at Tufts can take HBS courses if there is room. So if you’re eligible and MIA looks interesting, please inquire about cross-registration. It’s great to have many different perspectives in the classroom.




To:  Selected HBS Second Year Students

From:  Prof. Andrew McAfee

I’m sorry for the impersonal nature of this email.  I’m sending it to second year students whose backgrounds look appropriate for the course I’m teaching this semester at HBS.

I’m writing to encourage you to consider taking the course, which is called Managing in the Information Age (MIA).  It’s a 30-session course devoted to understanding how information technology is changing the business world, and how insightful business leaders use IT to create value and win competitive battles.

The course is not intended to train CIOs, and requires no technical background. MIA is not about hardware, software, or networks.  It’s about IT-enabled business models and IT-based capabilities --  the things you simply can’t do without technology.  It’s also about the critical roles played by business leaders outside the IT department—the decisions they make and the roles they play in order to be successful with technology.

If you liked the Zara and ITC eChoupal cases in the first year technology and operations management course, you’ll find MIA‘s content compelling.  We’ll look at:


  • Ducati Racing’s use of computers to help build the world’s fastest motorcycles.

  • Construction of an ‘Intellipedia’ across the CIA and other agencies that make up the US intelligence community.

  • How MK Taxi was able to offer better service in the crowded Tokyo cab market with a good idea and a bit of technology.

  • Google’s internal prediction market.

  • What happened when a Boston hospital tried to get its doctors to order medications via a computer instead of via paper.

  • Why Los Grobo was able to build a true ‘network organization’ in one of the last places we’d think to look:  the Argentine soybean industry.

  • Recent controversies on Wikipedia.

  • Why Cisco got into trouble because its managers liked IT too much.

  • How some companies are bringing Web 2.0 inside and creating ‘Enterprise 2.0’

We’ll have several class guests and technology demos.  We’ll also practice what we preach by using wiki technology throughout the semester.  In fact, students’ contributions to the wiki will be an important part of their grades, along with class participation. Students will choose for themselves whether they want wiki contributions or class participation to count more heavily toward their final grade. There is no paper or final exam for MIA.

The course will be useful for line managers, consultants, technology entrepreneurs, venture capitalists, and active investors --  those who take a stake in existing companies with the goal of improving their performance and position.

If you’d like to get an idea of some of the course’s content, check out my blog and this Wall Street Journal article, or do some Googling around my name and/or ‘Enterprise 2.0’  If you have any questions, please feel free to email me.  And if you’re at all interested, please show up for our first class session, which will not be a case discussion.  We meet for the first time on January 15  at 10:05 and 11:40 in Hawes 202. Hope to see you there!

 




The To-and-Fro over 2.0: It's Rematch Time!


Tom Davenport and I debated Enterprise 2.0 last June as part of the 2007 Enterprise 2.0 conference. And we’re going to do it again this Friday at 11 am in a Webinar sponsored by the enterprise search company FAST (FAST maintains a great collection of E2.0 blogs, and I’ll be speaking at the company’s conference in Orlando in February). The debate will be moderated by Jim McGee, who’s been thinking about the topics under discussion for a long time. 

In debates and his other writing on the subject Tom’s been making three broad points: that Enterprise 2.0 is really not anything new, that it’s not going to be successfully taken up by most companies, and that even when it is in place it’s not going to make much of a difference in things that pragmatic business leaders care about. To which I reply…   well, tune in and see for yourself. 

The webinar is free to attend, but advance registration is required.

I’ve been obsessively watching the video of our previous encounter, and have noticed that Tom drops his left when he’s getting ready to throw a hook, and that he doesn’t move as well to his left. Come watch as I exploit these weaknesses.

 






January 08, 2008

We're Number 2!

Tom Davenport and I have debated about Enterprise 2.0 before, and are going to do so again in a webinar this Friday (register for it here). I’m starting to feel like Martina Navratilova to his Chris Evert; we love to slug it out, but have a huge amount of mutual respect and admiration and are each happy when good things happen to the other (as long as it’s not at our expense).

Tom just sent an email congratulating me for being part of 2007’s second most popular article in HBS Working Knowledge, the school’s online newspaper about faculty research. Sean Silverthorne wrote the article, which covers the online case Karim Lakhani and I wrote about Wikipedia’sEnterprise 2.0” article. The case itself is available here; I blogged about here and here.

When I look at the other articles, I’m amazed that we even made it onto the list, let alone that we were second only to Jim Heskett’s summary of different views of leadership as control, delegation, and theater. Leadership, of course, is a classic, enduring, and perennially popular topic in management research, as are innovation, negotiation, consumer behavior, organizational learning, etc.. Collaboratively produced free online encyclopedias, meanwhile, have not been.

So what, aside from Sean’s excellent writing, made the article so popular? Working Knowledge subscribers are busy, pragmatic businesspeople, and I’d imagine that the newsletter’s readership does not overlap much with that of Boing Boing, Slashdot, or even Wired. And whoever was reading the article was probably not looking primarily for money-making tips; Wikipedia generates no revenue and has announced no plans to do so.

I think the article was popular, first and foremost, because Wikipedia is inherently fascinating. It’s not immediately clear how it works at all, let alone why it works so well, so people read to educate themselves.

I also think, though, that at least some readers were interested in figuring out how to apply Wikipedia’s tools and approaches within their own organizations. They wondered if there was anything they could extract from Wikipedia and exploit for themselves. In short, they were interested in Enterprise 2.0. I consider this good news as we start 2008.

Happy New Year, all!






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