How do you create a b-web culture?

A
solid consensus of new management thinking insists that the long term impact of
the internet on business is likely to extend far beyond its ability to create
an alternative means to market.

In
fact they claim the net is already having a profound effect on the way
commercial organisations are actually structured – issuing in a new period of
collaborative working which will ultimately spell the demise of the
vertically-integrated, "industrial age" corporation.

Pundits
such as Don Tapscott, chairman of the Canadian-based think-tank Digital4Sight
and co-author of Digital Capital – Harnessing the Power of Business Webs,
claim that the success of such collaborative models – called business webs or b-webs
– is already making itself felt in many different sectors.

Practitioners
include Cisco, Schwab, eBay and MP3. What marks them out from traditional
organisations is their reliance on a network of partners – producers, service
providers, infrastructure companies, and even customers – which come together
as one over the net to determine not only what kind of products are offered,
but also how they are priced and delivered.

The
emergence of b-webs throws up some interesting conundrums for the HR profession.
Because the prosperity of individual companies in the new environment is likely
to be determined by their ability to strike up lasting, yet flexible,
relationships with partner organisations, a new kind of discipline is required.

Tapscott
calls this "inter-enterprise human resource management" (IHRM). In a
nut-shell, HR managers must start to view the employees of their partners as
extensions of their own human capital. The b-web’s total performance, not just
the performance of one’s own firm determines success. Managers must motivate
individuals across the entire b-web.

It
is all very well talking about the importance of managing individuals across
the b-web, but what does it actually entail in practice? Clearly the fiduciary
and legal obligations that firms owe to their own employees do not apply in the
full sense here. But several new factors come into play – particularly in terms
of recruitment, motivation and conflict resolution.

Above
all, the need to assess the quality of a partner, or potential partner’s people
is paramount.

"Rather
than recruiting, HR managers should think about amassing internetworked human
capital," Tapscott says.

Gaining
this knowledge with a minimum of political disruption is clearly a delicate
proposition – and might help explain the growing incidence (and prosperity) of
undercover due diligence and risk advisory consultancies.

A
second key consideration in any business model based on fluid partnerships is
how the whole shebang is underpinned legally. For example, who is ultimately
accountable for the end-customer? You need look no further than the current
situation on the railways to see the inherent problems if fragmentation is
allowed to set in.

The
crux of the matter, then, is that although the b-web must be integrated as
tightly as possible to work effectively, it must also be structured in such a
way as to allow for its speedy dismantling and reassembling in the face of
market change.

"This
isn’t about creating rigid structures – the collaboration is not necessarily going
to last forever," says Mark Barratt director of e-supply chain research at
Cranfield Management School.

"So
it’s important when you’re setting up the relationship, and devising the Ts and
Cs, to plan for what will happen when it comes to an end – it’s similar to a
prenuptial arrangement."

But
most commentators maintain that contractual law as it stands at present is too
blunt an instrument to deal with these new necessarily amorphous relationships:
indeed, Tapscott insists that nothing less than a "tectonic plate
shift" is required to bring commercial law up to date with the new
“internetworked” model.

In
the meantime, you can at least start thinking about how to get the culture
right. The best b-webs, it is agreed, have somehow managed to perpetrate a robust
set of common characteristics and values that imbue the b-web with a
recognisable personality and brand of its own.

Eight
steps to setting up a B-Web culture
Source: Digital Capital

1.      Define
and shape b-web strategy and values
.

Several
steps are important here. First, wherever possible align interests within the
b-web: if everyone feels they are benefiting from its growth and success you
minimise the risk of self interest taking over.

Secondly,
you need to decide the shape of your b-web – and the extent to which you will
involve partners in business planning and overall strategy. Finally, it goes
without saying that setting up effective communication mechanisms, and a single
information system, between separate partners is critical.

2.      Foster
open relationships

Think
about how the boundaries between firms can be removed. Your aim is to reach a
situation on which "everyone’s business is everyone’s business".  Undue secrecy between partners, win-lose
negotiating, and an insistence on exclusive relationships characterise outmoded
industrial economy thinking.

3.      Focus
all participants on the end-customer

Avoid
the old definition of  ‘customer’ as
just the next buyer in the chain. Effective b-webs need to keep everyone
focused on the end-customer: "everyone must be accountable for
contributing to end-customer value."

4.      Treat
employees and contractors as investors of digital capital
.

People
bring capital to the firm and invest it: they bring their brains, know-how,
energy and capacity for innovation. Effective b-webs compensate them in kind
with stock-option, share purchase and profit-sharing options.

5.      Define
governance and rules of engagement

It’s
critical to decide at the outset who makes and enforces the rules, and how.
This will clearly depend on the type of b-web in question. In some, a leading
firm or ‘context provider’ will be responsible for devising terms, in others it
may well be a more consensual process. But whichever route you take, establish
the rules and make sure you stick to them.

6.      Manage
performance across the b-web.

Mirroring
the architecture of the internet itself, b-webs are highly interdependent and
to work effectively need to be monitored as overall entities. Companies like
Cisco regularly assess the performance of partners to make sure they can keep
up with growth plans. Even if such a command and control approach isn’t your
style, it’s important to establish transparency of performance across the b-web.

7.      Manage
knowledge across the b-web

It’s
a common experience that knowledge management, while a good idea, is often slow
to get off the ground. If this is the case in single organisations, it is
doubly so in b-webs. The chief impediment is that many people see knowledge as
the basis of power. The only way to overcome this is to create a culture in
which the common self-interest of all participants is clear to everyone. If you
have long term plans for your b-web, consider a knowledge management programme.
Decide to what extent your company should expand its staff development,
training and educational programmes to the b-web as a whole.

8.      Codify
culture in business objects

Business
processes contain implicit, norms, values and business practices that are
increasingly standardised and reusable in different situations – as such they
can be compared to Lego-like “objects”.

In
the move towards a b-web, it’s important to think about how core processes can
be extended or modified across the inter-enterprise. The emergence of
standardised business processes – in which firms will soon be able to draw from
a repository of business process ‘chunks’  
and slot them together at will – is an important development that will
help.

By
Jane Lewis

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