Change and E-business

Bureaucratic companies are forced to change these days. A recentexample: The Board of a big conglomerate was aware they needed toadopt E-Business practices but they struggled with how to implementthem. All over the world their companies were taking initiatives,but there was no coordination. Each local management team made itsown judgments about E-Commerce, IT solutions and applications.Chaos followed, because the wheel was re-invented everywhere,inter-company connections were obstructed, and outsiders lostinterest in partnerships because the company was not utilizing itscritical mass. Not surprisingly, the results of these isolatedjudgments and practices are very disappointing for theconglomerate.

Attempts to avoid this strategic misfit led to things gettingeven worse for the conglomerate. The internal discussion quicklymoved to "who should be in charge, who should be involved, and whatshould be the connection with the users of the new technology". Andthe Board finally presented the new approach, which contained notone element of its own vision. The focus was on responsibilities ofthe steering committee, the user-group, the strategic task force,etc. The daily operational management was placed in the hands of atop executive who never exhibited an ability to achievetechnological innovation. And the outcome? The implementation isunlikely to lead anywhere and this type of coordination can beexpected to make matters worse.

The importance of vision

What was missing was the vision of the Board itself. The onlyconsensus among the Board members was that something should bedone, but there were no clear ideas about a plan or itsimplementation.

Events as described in this case are becoming common practice inmany classic companies because Boards in Europe rarely take theopportunity to get involved in innovation. They are too busy withroutine meetings, for example about budgets, and dailydecision-making. They are not eager to take a stand on newinnovative projects, because existing procedures only work for theold business cases. Soon these Boards may need to signal investorswith a profit warning.

Gary Hamel poses a crucial question in his bookStrategy as aRevolution: "What if your company is more…