Is General Management Being Transformed by IT?

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.