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Business online: A working evolution

Harvard Business School professor Rosabeth Moss Kanter talks about the evolution of business in the era of the Internet and how enterprise can better harness its power.

A whole new way of working, leading and living is in store for every human being, thanks to the Internet, according to Harvard Business School professor Rosabeth Moss Kanter. But how best can people and businesses make their mark?

In her new book, "Evolve!: Succeeding in the Digital Culture of Tomorrow," Kanter, an authority on organizational change who advises major corporations and governments on these very issues, lays out a blueprint to help readers get a handle on work, and life, in an increasingly connected world.

In a recent interview, Kanter discussed the evolution that's afoot, as well as important ways that successful companies can seize emerging opportunities.

Why did you decide to call your new book "Evolve"?
I chose the title "Evolve" because I wanted to focus on change--but change that's a natural outgrowth of several decades of experience with information technology.

We've just moved from private networks to public networks, and I think that has a huge impact. The technology is revolutionary; yet in terms of how organizations and businesses change, it's much more important to concentrate on evolving to the next logical stage of development in terms of how we manage, how we lead. It also means evolving ourselves so that we are better suited for a world of networked communications.

What inspired you to begin exploring this kind of evolution?
When I started to pay attention to the impact of the Internet, which of course is a relatively new phenomenon as technologies and as human history go, I started out assuming that I understood it, that I knew all about it. As the New Economy, so-called, started growing, people were saying, "You must throw out every preconceived notion. There has never been anything like this ever before in human history."

I was very skeptical about that. At a certain point, though, there was so much action and momentum that I said to myself, "Maybe I should try to learn from new people who are entering it--who've grown up with the technology, who are starting companies. Maybe I should try to forget that I have an investment in several decades of a business career, and see if I can learn fresh, new things."

I asked young people who were starting companies to tell me what they were doing and how they were thinking about it. However, I soon discovered that the Internet was full of reinvented wheels, and that we needed that historical memory.

Those youthful companies needed the wisdom of the established business world. And established companies that had the brand, management skill, and distribution network that should have won on the Internet--and I think will win on the Internet--had a massive change problem, and were often stuck in old thinking. So the issue was change.

Now, I think, we can understand, for the first time really, the difference the Internet makes. We have no idea what the Internet means; but I think the significance of the Internet does not lie in e-commerce. Where it lies is in transforming the way every company, every business, every organization in the world does its own work, and communicates to its customers.

Many people talk about the rise of e-business and e-commerce, but you've chosen to emphasize a new idea: "e-culture." Why?
In "Evolve," I write about the changes that businesses, other organizations, and even individuals are going to go through as a new way of working, leading and living. I call it e-culture because I'm interested in the culture, people and organizations, and not just in the technology.

E-commerce was one tiny manifestation on the Web; it's another mail-order business that happens to go through the Internet. That's not a transforming phenomenon at all. What is transforming, however, is the way people communicate with each other in organizations and the global networks that weave us together. The transparency of the Web is also key--the fact that information can be spread everywhere so rapidly.

This is an interactive medium. Many people in many businesses forget that. The fact that we can send messages, and can put products on the Web, means that many other people can also send us their reactions, feedback and requests.

There's direct access everywhere, and that is transforming even for businesses and nonprofit organizations that are never going to sell a single thing on the Web. They have to operate as though they are playing to vast, unseen audiences anywhere in the world.

We have to work faster and more collaboratively. We have to be able to work seamlessly across all those turfs and tiny territories that used to characterize big bureaucracies. And that's a new culture, a new way of working. There's money to be made in that new way of working, to be sure; but it's profound whether or not it's a moneymaking proposition.

What was the scope of your research, and what insights arose for you out of that work?
I embarked on a classic research project of enormous scope after I realized that somebody like myself, who has spent several decades consulting to major businesses and governments all over the world, had something to say about this. I surveyed 785 companies, start-ups as well as the global giants, on many continents of the world, in collaboration with Inc. Magazine and the World Economic Forum. And, by the way, the Internet was a huge asset because it meant that I could work with global teams on the ground in many parts of the world.

Then my team conducted over 300 interviews in about 80 companies, primarily in North America, Europe and Asia. I wanted to see how universal this phenomenon was.

I also did classic, in-depth Harvard Business School case studies of almost two dozen companies in order to chronicle their activities and their changes over time. I wanted that scope of research because I wanted to be confident that I really understood this phenomenon from the inside.

Since you worked with companies of many different sizes and types, what similarities did you find in the new culture they established because of the Internet?
One of the striking things that was similar across successful companies--regardless of size or country--was that they incorporated technology into their business proposition and were creating value for customers. That's my definition of success.

They operated more like communities offline in order to help create communities online. The online communities were customer communities, such as eBay's community of users, or were employee communities, in which employees could share best practices worldwide--which is something that many companies want to do today.

Successful companies started erasing, insofar as is possible and realistic in the business world, the distinctions between divisions, departments, functions, countries--and tried to create a sense of membership in one enterprise. I found this in tiny companies as well as in big ones such as Cisco Systems, a darling of the technology world that operates as "one Cisco."

The second thing that successful companies had in common was they were much more network-oriented. They made their partners part of their community, and they did much more work collaboratively with networks of partners, not just single partners, and saw all of them together as a network that extended their reach.

There are a lot of brick-and-mortars that say, "We have partners. We have a network. So we're doing that already." But you find that there's a real difference, a mind shift in how to think about networks and partners.
Many brick-and-mortar companies, as well as many established companies, hear words such as "partnerships" or "strategic alliances" and say, "Oh, we're already doing that. In fact, weren't those the business buzzwords of the 1980s?" Well, yes, these phenomena have been emerging for a long time.

What the Internet does, though, is it makes it more essential to work seamlessly with partners, and to use the Web itself to create a seamless interchange. After all, your customer doesn't care where the idea comes from. All customers care about is that a product gets to them. The people who are responsible for partners and networks are also becoming much more important. These are jobs that didn't even exist 10 years ago in most companies.

It's such a new role, and it requires extraordinary diplomacy. I've given a name to people who serve as ambassadors for their company to the rest of the world: I call them "collabronauts." Like astronauts who explore outer space, they are explorers of cyberspace, explorers of new possibilities while creating links and connections, and explorers of the possibilities that can come through collaboration.

In order to deliver value to the customers, technology companies such as IBM, Cisco and Sun Microsystems have to create what I call space stations for the Internet age. These become the platform for everybody else to use the technology; but it's an elaborate and complex relationship, because these companies themselves also work much more closely together.

It is more than Wal-Mart working with Procter & Gamble as a supplier. It's joint planning. It's developing technology together. It's a daily interchange.

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