This new, rapidly changing environment poses a tremendous challenge not only for leaders of venture-backed start-ups, but also for Fortune 500 companies now needing to create, refine and manage rapidly evolving, technology-enabled multichannel organizations. This convergent economy demands a new breed of leader, one who possesses the wherewithal and skill set to combine traditional business judgment with an understanding of next-generation technologies.
Successful companies in the Convergent Economy will leverage the Internet and related technologies to add new channels of distribution, improve relationships with customers, work more collaboratively with suppliers, and successfully transform their internal corporate structures. Unlike the first wave of dot-coms, corporate spinoffs, business-to-business exchanges, and various other new business experiments, large corporations are weaving the Web into the fabric of their organizations.
As we look across the industry sectors that we serve, we see Fortune 500 organizations spearheading this transformation including innovators such as AOL Time Warner creating a global, multichannel media powerhouse; Microsoft, Web-enabling its entire consumer and business product offerings; General Motors reducing costs through online purchasing; E*Trade integrating online and offline delivery; and Eli Lilly speeding time to market through Web-enabled clinical trials.
A common theme among these convergent companies is their use of the Internet and related technologies in an integrated way to maximize the value of their existing assets, increase revenues, and reduce costs. The impact of these initiatives can be surprising. For example, over the last three years, General Electric has "woken up" to the Web, tasked each business unit manager to create an Internet plan for their businesses, and realized costs savings measured in billions of dollars.
Web DNA meets experience
What type of skill set will most accurately translate to effective leadership for a convergent company in the Convergent Economy? While over the last three years, the strongest demand has been for executives who "got the Web," it's now clear that to build a profitable and sustainable organization, Web DNA is not enough.
Web-enabling a large corporation in the Convergent Economy requires what might be termed a "Bionic Executive," a person who possesses both traditional business judgment and the unique ability to understand and apply next-generation technologies in a large corporate environment. Simply stated, the Bionic Executive has business sense turbocharged by technological savvy.
Where do you find a Bionic Executive? They may already work within the organization; or, it is equally possible, they reside somewhere among the pool of 3 million Internet executives who already have experience in working to build next-generation companies.
The recruiting market for these executives has changed significantly over the past several months. While top executives had been fleeing major corporations in pursuit of stock options in early stage start-up ventures, they are now looking for more stable platforms with real assets and a willingness to embrace change.
In the ongoing theme of convergence, proven executives, such as Bob Pittman who came from MTV and eventually landed at AOL, now find themselves applying their Old Economy and New Economy skills in integrated businesses like AOL Time Warner. What are the necessary steps to build a successful organization in this Convergent Economy? The first is to recognize that there is now a unique opportunity for major corporations to drive the second phase of the New Economy. The next step is to recognize that Web-enabling a large corporation is difficult and that success will be dependent on having the right executives integrated throughout the organization.
We see demand for Bionic Executives to fill numerous positions within convergent companies. At the top of the organization, companies are seeking board members who understand how technological change can transform a company and an industry. They desire CEOs who are not only technologically sophisticated, but who are "proven"--with the credibility to establish a competitive advantage and drive change throughout the organization.
Technology executives must be both business-savvy and capable of Web-enabling large, complex organizations. Those who fulfill traditional sales and marketing positions must be capable of building integrated online and offline marketing strategies. Companies are also looking for operations and supply chain executives able to improve quality and reduce costs through the use of new technologies.
In the Convergent Economy, business is becoming more, not less, complex. Success will be based, in large part, on an organization's ability to employ the right executives in the appropriate positions working closely together to build a successful and enduring business.