It’s a commonplace by now to observe that many types of knowledge worker have had their jobs transformed by information technology. Most engineers, scientists, and financial analysts, for example, spend much of their time in front of a computer. The hardware and software they use let them investigate, analyze, simulate, and predict their worlds with ever-greater confidence. And the networks they belong to let them access seas of data, and share their work broadly and easily.
The list of professions being changed by IT keeps growing, and now includes some that are quite far away from white collar office work. Art and architecture, for example, are also being influenced by technology. Fabrication instructions for Frank Gehry’s fluid buildings and Richard Serra’s wondrous new sculptures now take digital form, and I’ve heard that it would be tremendously difficult, if not impossible, to translate their visions into physical reality without computers. I don’t yet know how far ‘upstream’ IT has penetrated the creative processes of these two men and their peers, but I wouldn’t be a bit surprised to learn that many creative artists at present use digital tools in the early stages of their work. As my HBS colleague Stefan Thomke has documented, BMW’s elite auto designers now use the computers along with paper, pencils, and clay when conceptualizing new car designs.
At the other end of some spectrum, I learned from James McManus’s book Positively Fifth Street that he got to the final table at the 2000 World Series of Poker in part by playing thousands upon thousands of hands using Wilson Software‘s products. I’ll vouch that these are brilliant tools for learning to play the game better (almost any version of the game: standard Hold ‘em, tournament Hold ‘em, Omaha, or Stud). I don’t have the talent or the dedication to play poker at a high level, but many hours of playing Turbo Texas Hold ‘em on planes have given me a good enough intuitive feel that I can avoid embarrassing myself against experienced players, even though I don’t spend nearly as many hours as they do playing for real money against real people. Wilson’s website states that players who use its software won over $47 million in tournaments in 2005 and 2006.
My point in citing these examples is to tee up a simple question: do ‘managers’ belong on the list of knowledge workers whose jobs are being transformed by information technology? Or, to ask the same question slightly differently, wouldn’t it be absolutely astonishing if this weren’t the case – if the ecosystem of technology developers, entrepreneurs, and funders had somehow overlooked the profession of management, or failed to deliver powerful tools to help with this profession? Is it at all plausible that poker players have received a bigger boost from computers than general managers have?
In my MBA course we concentrate on information technologies that improve multi-party interactions rather than single-party tasks. And we focus most deeply on how various digital tools impact workflows, interdependencies, and decision right allocations. I call these the organizational complements of IT (see this HBR article for a fuller explanation of IT’s complements). The course examines two broad classes of corporate application: those that let managers impose these complements, often across a very large organizational ‘footprint,’ and those that let these complements emerge organically over time.
I frame the course around these complements because they’re at the same time precise (each can be tightly defined) and highly flexible. In every situation we study, the concepts of workflows, interdependencies, and/or decision rights help students ‘crack the case,’ showing them where to focus their attention and how they can productively effect change. And the cases that I and others have written illustrate just how powerful current corporate technologies are for general managers who seek to change and improve their organizations, either by intervening to impose new complements or by getting out of the way in order to let them emerge. Of the cases I’ve written on this topic, my favorites include Zara, Los Grobo, MK Taxi, and Dubai Ports Authority. I also teach (and have learned a lot from) the ITC eChoupal case by Dave Upton and Ginny Fuller, and the cases on Otis Elevator by Warren McFarlan and his colleagues.
My goal with the course, as with virtually all of my work, is to reveal to general managers what IT can do for them, and what they in turn need to do so that their organizations succeed with technology. I want my students to start their careers with the belief that IT is one of the biggest and best tools available to help them lead, change, improve, and create value in their companies.
My experiences in both MBA and executive classrooms, however, have shown me that relatively few of today’s general managers are predisposed to believe that this is the case. Many (most?) of them believe instead that IT is some combination of the following:
- Low-level. IT decisions can and should be made at relatively low levels in the organization. After all, what do senior executives know about the best router, or the most appropriate computer-aided design software?
- Able to be delegated. Top managers are busy people, and would love to have one less thing to do. If there’s no real downside to outsourcing IT decisions, why not do so?
- Impenetrable. Many managers feel like they can’t get past the jargon, and can’t learn to ‘speak IT.’
- Overhyped. One of the most common complaints I hear is that IT proponents have an enduring tendency to overpromise and underdeliver. After managers feel like they’ve been sold a technology bill of goods a few times, they stop listening to the sales pitch.
A good bit of my writing, in this blog and elsewhere, tries to shift these perspectives and to convince senior managers that they can and should be involved in some IT efforts. But why do these perspectives exist in the first place? If IT is so great for general managers, why are so many of them so lukewarm on it? Why don’t more of them believe in the power of technology? Are they just missing the boat? Or are we?
I want to suggest a third possibility, which is that until fairly recently the profession of general management was actually not one of the ones deeply affected by technology. Prior to the mid 1990s the footprint of most corporate IT – the sphere of direct influence for a piece of technology – was the single function or task. This made for a happy marriage between technology and knowledge workers like engineers, scientists, and analysts because these workers stayed within a single function. But general managers, by definition, do not. They’re responsible for orchestrating the work of multiple groups. So from their perspective, IT was actually delegable and low level.
And it had also been overhyped. The historian of technology Thomas Haigh wrote a fascinating article in the spring 2001 issue of Business History Review titled "Inventing Information Systems: The Systems Men and the Computer, 1950-1968." Haigh resurfaces the extravagant claims made by the ‘Systems Men’ at the dawn of the era of corporate computing that they would soon be rolling out applications that would optimize, standardize, and monitor all of a company’s important inputs, processes, and outputs. The article documents how far ahead these claims ran of reality and available technology, and how the Systems Men were thoroughly discredited by the end of the 1960s.
It wouldn’t be until the middle of the 1990s that technologies appeared that could support at least some of these claims. The Internet and commercial enterprise systems such as ERP made the dream of cross-functional applications based around business processes a reality for many companies. These applications let general managers deploy redesigned workflows, specify interdependencies, and allocate decision rights across their organizations. They let managers, in other words, impose IT’s complements across arbitrarily large footprints.
More recently, Enterprise 2.0 technologies have come on line to offer almost precisely the opposite capability. These tools let the same complements emerge over time, instead of imposing them up front. Many questions remain about both classes of technology, but one thing is clear: both of them operate primarily at the level of the organization, not the level of the single task or process. Because of this, general managers are their most natural constituency – the group of knowledge workers who will be most influential, and most influenced.
So as a result of some relatively recent additions to the toolkit of corporate IT I’m comfortable adding ‘general managers’ to the list of knowledge workers who have very powerful digital tools at their disposal, and who need to learn how to use them well. Does this also seem right to you? Leave a comment and let us know what you think.
{ 30 comments… read them below or add one }
I can’t really comment till I understand what you mean by “complements” and “general managers.”
Professor Andrew, you’ve hit the nail on the head!
I completely agree that Web 2.0 is changing how IT was viewed by the business managers. Managers from the new/emerging product development groups are getting ideas for new products from IT blogs and wikis. Whatever bubbles up in a IT blog, forms the basis of the new products. And in turn Managers from these emerging product development groups are turning to IT to test-drive the new products, and help them position it in the market.
I think your emphasis on the emergence of standardized pervasive connectivity in the mid-1990′s as the turning point is exactly right. Prior to that point, it was difficult to create complex IT-based capabilities beyond relatively static system-oriented stovepipes.
Since then there’s been an increasing emphasis on deploying coarse-grained operationally-oriented IT capabilities that are designed to be easily strung together to create new business capabilities. The initial focus has been on technology (e.g., SOA) and processes. As these areas have matured, the need for organizational agility & adaptability in such areas as roles/responsibilities/rights and governance/policy has become more pressing.
Enabling agility and ensuring coherence across all layers of the business “stack” (technology, processes, organization, people) will involve a melding of technology expertise and business expertise that’s very different from traditional IT project/ops management processes & organizational structures.
I agree with your third possibility, that until recently, the technology really hasn’t been there for the management level. However, now that we do have manager/executive-level tools to assist with governing a large organization, there is still a challenge in having them gain acceptance. Working mostly in the area of business process management, I’ve seen the drive towards cross-functional processes that requires newer technologies to manage these processes, but there’s still some roadblocks.
First, many of the vendors still sell to IT, not to business management, which tends to propagate the idea that the technology is both low-level and impenetrable. There needs to be some repositioning of the technology by the vendors so that business management understands why this is important to them, rather than having to have internal IT departments sell them on it.
Second, a portion of the upper level management in large organizations is resistant to the idea of using technology to manage processes, since they see this as an erosion of their authority and may also believe that the technology actually decreases their visibility into operations when, in fact, it increases it. Fear of loss of control and loss of flexibility are the two largest barriers that I see with management acceptance of this type of technology.
This certainly seems right to me. However, I believe it is about more than general managers learning to use the tools well as I discuss here: http://www.mwdadvisors.com/blog/2007/11/not-all-processes-are-created-equal-at.html
Thank you very much for interesting and informative blog. This materials helped we yesterday write A+ research paper on Management.
Andrew
Yes, it is probably right to add general managers to your list. However, let’s remember the powerful impediments to widespread adoption in that group. One is the four beliefs about IT that you listed. Another is the empowerment issue: true adoption of Enterprise 2.0 means embracing empowerment, and I’m sorry to say that few general managers truly believe in it. They are more interested in control. Yet another is the whole interplay between corporate politics and the written word. Some (important) things just can’t be published in a corporate environment without committing career suicide. A general manager’s job is political in nature, and often his or her influencing methods will have to rely on the spoken word, or perhaps email to a small group, rather than, for example, an internal blog. So employees fear publishing certain opinions, and the general managers see writing (for example) blogs as an unimportant tool in their influencing kit. Of course, corporate culture varies, and some general managers might go a long way towards embracing Enterprise 2.0, but I’m afraid I don’t think the majority will, unless and until it becomes clear that they will lose business if they don’t.
I think the perspective that IT has “come of age” and today’s IT systems should be designed hand-in-hand, closely tied to business processes in a mutually overlapping way has to be accepted now. Most IT systems are built to support/model the business processes(often 5 years after the process has been put in place and with a very limited/abstract knowledge of the process) and as a result, the overpromise/underdeliver scenario or the rapid obsolescence comes into picture. Its my belief that as soon as general management embraces IT system designs as part of core business process design, the IT dollars would start showing a much increased profitability. Thanks to Mr. McAfee for pointing this out.
I think that IT has to be mastered by general managers pretty much in the same way as weapon systems in the armed forces. You can’t be a good general if you do not master intelligence, communication, computers, reconnaissance, surveillance and collaboration.
To me, CEOs overlooking IT are making the same mistake as the Germans in WW1 and the French in WW2, overlooking the dramatic impact of communications and tanks on modern warfare.
I personally think that the first and direct impact of technology is on businesses and then on the leaders. A good analysis, anyways!
Dear Andrew
I have a somewhat unique role as a non-geek reporting to the group CIO of a large corporation in the financial services sector. As “Catalyst for Magic”, my role is to be a thought leader on how technology can be used to more effectively unleash the magic in an organisation- magic we only get from human beings, not machines.
On behalf of IT, and for the whole company’s learning and benefit, I arrange regular in-house demos by thought leaders and practitioners, blog about great stuff I discover and e-mail articles and links to leaders, arrange weeklong Innovation & Thought Leadership Festivals and exhibitions of new ideas, run employee idea pitches, and in my own functional area of decision-making (the corporate intranet, communication, collaboration solutions and innovation), we experiment with and deploy many technology options that achieve what you call multi-party interactions and facilitate more effective general management.
..YET….the uptake by the business and senior leadership is just so terribly slow that one really questions the adequacy of this sort of bottom-up approach to achieving a competitive advantage.
In my short 8 year career in technology (I still can’t type, cant code a single thing, and am no more tech savvy than the average executive), I have realised that understanding the benefits of IT is a bit like learning to cook. There is no way you will ever learn to cook well if you don’t taste as you go and experiment lots- with technology, process, ingredients and genres.
I agree with the 4 reasons you have highlighted above for managers’ reluctance to engage technology, but i think there is a fifth….lack of curiosity and a willingness to play. So many folks at the general management table get there because of their focus (in Myers-Briggs terms the J element) that exploring options and possibilities that technology could provide are often discounted unless they are PROVEN.
Curiosity is a hard one to coach…but its possible to create movement over time – we are slowly beginning to shift the culture (its taken 4 years) to one of greater openness and engagement with ideas thanks to the relentless and consistent push of the above events, activities etc. That is a long time for anyone person/ team to persevere to get take-up, and often you find the technology has moved on by the time the organisational wheels have begun turning!
I look forward to reading more from you on this subject.
Professor McAfee, thanks for the great article.
General management will be transformed by IT as soon as an IT solution addresses the needs of general management.
It also seems that the needs of general management are best defined by your colleague at Harvard – Professor Michael E. Porter.
If the above is not true, then we’ve wasted six years.
General Managers’ goal is to reduce the cost of ‘running IT’ and instead make more funds available to develop revenue earning ‘new IT features’. They have always expected ( or they were told ) IT to do this. Paradoxical? But, in their view, this is the definition of ‘real value of IT’. Over the years, businesses have spent considerable money on technology and not seen this (expected) transformation happening. Unless they see a direct and transparent linkage between cost and value, it is unlikely they will come on-board. One important tenet essential in making this happen is ‘participatory’ development of IT systems/applications. Business and technology need to set goals ( in terms of business benefits ), agree on mutually understandable metrics ( of performance ) and drive forward to success.
I agree. It is due to the fact that present manager generation did not have “IT tooling” in their curiculums. I have always been strived to witness the difference or the gap of preception of managers about “ICT” when a “general manager” is coming from a scientific carrier or not.
Annalie Killian is also right. A bottom-up tech stream is usually going against the top-down verticality that still exists in most of the companies. A general manager cannot, does not want, is not perceiving, etc… that this actually a chance, but rather a thread. Curiosity is one thing missing, ability to “ask question” and to somehow reveal “a weakness in understanding what is known to be an important area” might be another one…
Hoping that most of the students on earth can go through the sort of MBA where you are acting…
Looking forward to read more on the subject too, especially the right approach that a company should undertake to change culture… in less than 4 years (re: Annalie Killian’s post)!
The bigger question for me is not “Is General Management Being Transformed by IT?” but “How?”
The comments to your post suggest that general managers have yet to be convinced that their role should be transformed by technology, specifically web technologies and social computing. The perceptions you raise are all true. I’d like to add another based on interviews we recently conducted.
Overwhelmingly, the folks we talked to expressed the opinion that blogs, wiki’s, online communities, SecondLife/virtual environments were for people who have time on their hands, not busy, important people (like them) doing real work. They are technologies they associate with their kids. Admittedly, they were old enough to have kids but you get the point.
So, one answer is to wait until the cadre of general managers gets populated with those who grew up with these technologies and are comfortable with them. But comfort using technology does not mean deep understanding of how to use it (or invest in it) to move a business forward.
I find it curious that general managers are not expected to have the same level of competency in technology as in other disciplines, like finance, marketing, HR, legal.
I believe that a core issue is that the mental models of general managers are very different from technologists, in many instances, diametrically opposed.
Currently the technologies being referred to in E2.0 ie wikis, blogs, second life are as Anne rightly says mostly used by the “younger” generation. But that was true of google when it launched too. And even today there are CEOs who get their emails printed out on paper. but in 5 years these tools will be ubiquitous and just as we don’t consider phones or fax as “technology” these will be just another way to stay in touch applied to business.
In a competitive world, the success of a business will be influenced by their level of technical/IT understanding. If there is a senior manager who does not believe that IT is part of their role or they do not give it the time to understand the opportunities that IT can provide them; they will eventually be replaced by those that do.
In recent years, the role of the CIO has increased in terms of importance. IT often used to sit under the finance person, now it is beginning to have its say in the board room. This is where we need to get to.
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It has transformed everything. not only general managers. And the process is in progress. Old managers see their positions threatened.
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