VIEWPOINTS : Short-Circuiting New Technology : Old-Fashioned Management Styles Hinder Effective Use of Computers
It’s no secret that advanced computer technologies often fail to achieve the dreams and visions of their designers and backers. Even though information technology is cutting costs and boosting productivity, many top executives fret that it isn’t doing anything more--that it isn’t leading to long-term competitive advantages and improved products and services.
Why have things turned out like this?
After more than eight years of research into organizations ranging from manufacturing plants to international banks, I have found that most top managers are applying complex and fertile new technologies as though they simply are new versions of Henry Ford’s assembly line.
They have failed to recognize that their organizations need to be fundamentally changed to fully exploit the potential of information technologies. In fact, the kinds of innovations needed to foster better use of technology are being hindered--sometimes intentionally--by managers who resist re-examining their roles and who hew to notions of managerial status inherited from an earlier age.
Throughout human history, technology has been used to substitute for, and amplify, the efforts of the human body. Since the Industrial Revolution, managers have assumed that if you have more technology, you need less in the way of human talent--that is, fewer and less skilled workers. Or, in other words, you have automation.
Computer-based technologies work this way. When used to automate work procedures, they usually result in greater speed, precision and control than any earlier technology, along with lower costs and higher productivity. But restricting computer technology to these uses prevents it from creating more far-reaching competitive advantages. Why?
The answer begins with a better understanding of how computer-based technologies transform the nature of work and alter the role of management.
Computer-based technologies differ from earlier technologies in that they generate new information about the very processes of production and administration that they are designed to automate. This capacity of computer technologies to translate events, processes, objects and behaviors into data and then display that data is what I call “informating.”
For example, a robot on an assembly line can substitute for a worker and automate, say, welding or spray painting. But it also produces information about its own activities. This new information shows up on a video screen or a printout and is used to monitor and control an aspect of production.
In addition, there are back-office transaction systems that can speed up clerical work and reduce the amount of skill required of workers. At the same time, the data gathered by such systems sheds new light on the internal dynamics of the business and client behavior. In both cases, the technology has both automated tasks and informated the environment in which those tasks are performed.
Because of this informating capacity, computer-based technologies can increase, rather than decrease, the intellectual content of work. When people have their work reorganized by these technologies, they find that they spend less time doing things (for example, handling materials and equipment or dealing directly with other people). They spend proportionally more time dealing with abstract information presented to them by their computer systems.
Technology, consequently, helps management find out more about how the business operates and where it can be improved. It also sets the stage for identifying new patterns, putting things together in new ways and adding value to both products and services.
The catch is this: If informating creates opportunities for learning and adding value, then management must provide the setting in which this potential can be exploited. New types of organizations are needed.
To begin with, managements should help employees learn to take advantage of the information produced by technology. Immersed in abstract information, employees increasingly need to understand, analyze, explain and respond to data.
This is true for bankers who find themselves spending less time with clients and more time analyzing data about their clients and the dynamics of their lending portfolio. It also is true for pulp mill workers in newly computerized mills, where most of their time is spent in NASA-style control rooms monitoring a production process. With new skills, those who work at the front lines of an organization and who monitor its pulse can use the data to improve products and services.
But giving the “front lines” the skills, information and opportunity to act on what they are learning would require new roles and relationships, particularly for management. And too often managers have viewed sharing information and skills as if it were a zero-sum game in which more knowledge for others means less status for themselves. As a result, they frequently fight to retain their role as exclusive guardians of the organization’s key knowledge.
At one pharmaceuticals company, for example, top management killed a computer conferencing system that allowed professionals to establish new relationships and develop new ways to get information. By fostering a dynamic, collegial culture, it threatened the traditional channels of communication in the chain of command.
In another company, middle managers subtly took credit for new ideas developed by their workers. Loan officers at one bank refused to participate in a crucial new effort to integrate the business strategy and new technology, as it would have opened up to public view credit records they felt they “owned” and changed the way in which lending decisions were made.
‘Zero-Sum’ Games
The managers in an informated organization must operate in a fashion that I call “post-hierarchical,” if they want to fully exploit technology. They must see their role as educators who can help others learn. They must be able to foster collegiality and joint problem solving, as new groupings of people combine to forge innovations and new business insights, supported by information. In other words, they will have to alter their own behavior, embracing rather than fearing change.
But it is unfair to blame managers when they find it difficult to break away from the zero-sum games of the traditional organizational pyramid. They are actors in a tightly woven logic of reward systems, status symbols, career policies and cultural norms. The criteria by which they are evaluated continue to reflect their traditional roles, and this makes it hard to change individual behavior.
We know a great deal about how to design and administer organizations that use technology to automate, but we still know relatively little about how to create and manage organizations that exploit technology’s informating potential.
The new computer-based technologies will not do the job by themselves. At best, they can provide only short-term advantages. At worst, they can turn managers into police officers and companies into police states.
It rests with the visionary chief executive to create an organization that celebrates learning, risk taking and creative thinking. Without these innovations, more top managers will join the ranks of the CEOs who lament the false promises and broken dreams so often associated with new information technologies.
