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The dark side of the connected enterprise

The dark side of the connected enterprise

Connectivity can boost performance or get in the way.

  • min read


The dark side of the connected enterprise

This article originally appeared on Forbes.com

Web technology was supposed to break down cubicle walls and make multinational companies seem as intimate as startups. Email would eliminate tedious meetings, and video conferencing would make offices obsolete.

At many companies, the opposite has happened. We recently studied 2,300 managers at an industrial company with 14,000 employees around the globe. As a group, these individuals sent and received more than 260,000 emails a month, just with one other.

On top of that, the typical manager devoted eight hours each week to meetings—for senior managers the figure was more like 20 hours—and the volume was growing. During the average meeting, about a quarter of attendees sent at least two emails every 30 minutes.

This is today’s connected enterprise: always on, everyone linked to everyone else, a flood of information coursing through its electronic arteries. It’s partly a creature of collaborative technologies, such as email, instant messages, Web-based conferencing, internal social networks and so on. It’s also a result of globalization, capability sourcing and partnerships that extend beyond a company’s walls.

All this information and collaboration should make companies more agile, but technology often undermines organizations that don’t know how to harness its strengths. When that happens, critical decisions slow to a crawl, trapped in an endless cycle of data collection and debate.

Fortunately, things don’t have to be that way. Here are four principles that can help a company use technology effectively.

1. Keep the organization simple. High-performing companies design their processes so that key decisions are made quickly by a relative handful of people. They never have large decision-making meetings.

A global technology company found that its spending on marketing was increasing at 1.5 times the rate of revenue growth, while market share was declining. Its headcount had also increased, programs had proliferated and decision making had slowed down. To attack the problem, the company consolidated its marketing functions, reduced the number of managerial layers and centralized key decisions. The moves contributed to 10% faster revenue growth and a 30% reduction in marketing expense.

2. Align management forums. Companies that make good decisions usually foster cross-boundary collaboration whenever it creates high value, such as in R&D or sales. But even in this context, they keep decision-making authority simple.

A $2 billion Internet services company had grown by acquisition, but synergies were scarce and margins, flat. Thanks to technology, the company could replace its 10-person senior management forum with a core team of just three, including the CEO, head of products and head of sales. Decision making and execution improved radically, and margins widened by more than 30%.

3. Target technology and information. Technology can help guide decisions about innovation, but only to a point.

A $3 billion software and financial services company used collaboration technology to capture new business and product ideas from individuals throughout the organization. Participants generated more than 700 new ideas in one area alone, providing decision makers with a host of good possibilities. Still, the company used the collaboration tool to augment the normal product development and decision-making process, not to supplant it.

4. Keep connectivity in perspective. Virtual is fine for many purposes, but nothing can replace direct human interaction, especially for exchanging ideas.

When a new CEO took over a struggling software company, he learned that people in the organization complained about unfocused and frustrating meetings, despite vast numbers of PowerPoint presentations. The new CEO instituted a no-presentation, working-session-only rule, with printed documents distributed and no laptops allowed. The leadership team almost immediately noticed a change in energy level, focus and meeting effectiveness.

Connectivity can boost performance or get in the way. If you expect social technologies to cut through complexity all by themselves, you’re in for a disappointment. To accelerate your company’s performance, focus on decisions first and then—only then—figure out how new social technology tools can best support them.

Chris Brahm is a partner with Bain & Company and leads the firm’s Technology practice for the Americas in San Francisco. Eric Garton is a partner in Bain’s Chicago office and is the leader of Bain’s Industrial practice in the Americas.

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