Thinking Ahead, Moving Ahead: Leading by example, the CEO must actively communicate the e-business vision throughout the organization - Leadership

Chief Executive, The, Nov, 2001 by Haapaniemi Peter

In making the transition to e-business, there are many places to start and many approaches that can be taken. Indeed, it is hard to pinpoint a single implementation strategy that will work for everyone. The right way forward depends on the specific company and the specific initiative, on the competitive climate, the urgency of the effort, the resources available within the organization and a host of other factors.

What's more, the path is complicated by the fact that companies are often treading new ground. According to a survey by the research firm Cutter Consortium, "e-project" managers must find their way around a number of intrinsic e-business challenges, including "constantly changing environments," "excessive schedule compression" and a "lack of well-defined product development processes."

Those tactical considerations are important. But regardless of the implementation techniques, executives who are formulating strategies for moving forward should keep in mind that e-business means transformational change. And that, in turn, means that top management must devote time and energy to helping the organization progress -- to actively nurturing and driving transformation.

"If there is one critical success factor," says Hollis Bischoff, director of electronic business transformation at the META Group research firm, "it's not which project you pick. It's not how much money you spend. It's whether you have good change management and communications in place."

The Elements of Success

The first rule of managing e-business transformation is to consider all the elements of the organization that will be affected by change -- systems, human skills and abilities, and process design -- and address them simultaneously.

"Therein lies both the greatest fear on the part of senior management, and the greatest opportunity," says Leigh Alexander, vice president and chief marketing officer at Unisys. "The companies that see the entire picture and how all the pieces work together are the ones that are really going to benefit from a transformation effort. You have to consider all the touchpoints inside the company that are going to be affected and that need to be integrated."

That comprehensive approach is also critical in keeping the business running while the transformation effort is under way. That's a lesson learned by David Aker, Unisys' senior vice president of worldwide human resources. In the effort to remake the HR function at Unisys, he recalls, new processes and procedures briefly got out in front of the technology that was going to automate HR transactions. "We moved forward in some areas before we had all the solutions and programs integrated and tied together," he says, "so we had a short-term falloff in employee satisfaction with our services. We learned that if you go too far and too fast in just one piece of the organization, you can end up losing control of the fundamentals. You've got to do it all; you have to work on the strategic front to change and add value to the business, and at the same time maintain the day-to-day services that people expect from the function." (See story, left.)

The key ingredient in the formula for a smooth, successful transformation is clearly people. "You are changing what people do," says Bischoff. "You are asking them to step out of their normal jobs and go do something different." The goal of effective change management needs to be "to do this with people, not to people," she says.

In essence, goals that sound good at the executive level -- such as cost savings, increased competitiveness and so forth -- may have a distinctly different ring at other levels of the company. To frontline workers, the high-minded pronouncements of transformation often do little more than increase anxiety about individual skills becoming obsolete and individual jobs being eliminated.

"People in an organization become afraid when they sense change that's going to affect the way they do their job," says Lorrie Scardino, a research director at the Gartner research firm in Stamford, Conn. "When an enterprise is looking at transforming business processes, you really have to be sensitive to those issues ... especially with middle-line management. You have to work with those middle managers, so they understand what the company's philosophy will be and what the company's practice will be for retooling, retraining and reskilling employees."

Employees facing change tend to fall into a traditional bell curve, according to Alexander. About 15 percent will be on the leading edge, she says: "Those are the people who are zealous, evangelistic, excited about change." On the other end of the curve will be the 15 percent who are frightened and cynical. And the middle 70 percent will be 'Those who come to work every day and do their jobs, and who can be persuaded one way or the other." Alexander recommends supporting and empowering that 15 percent on the leading edge. By involving them in pilot programs, equipping them with new tools and generally keeping in close touch with them, the company can make those people into change agents that help the middle group move forward.