Slow pace of change stops firms keeping up with Web

E-research,
published by Ashridge Management College, highlights managers’ fears that many
companies are struggling to adapt to the Net age.

The
main barriers to Internet-driven success are the slow, bureaucratic structure
of conventional firms, according to E-research.

The
survey also suggests that a shortage of resources – human and financial – and
poor implementation are barriers to change.

In
the survey of 500 managers, 90 per cent of respondents said they expect
successful Internet organisations to be innovative and adaptable.

But
respondents believe that less than half of organisations have these attributes,
with many being too bureaucratic and hierarchical. Less than a quarter think
these traits would make firms successful in e-business.

Ed
Smith, e-business partner at PricewaterhouseCoopers, said, "Middle
managers are struggling with what their technology managers are telling them.
They are unable to see this as an investment because short-term gains seem to
be very much in vogue."

Three-quarters
of those questioned said Internet start-up companies are more of a threat than traditional
organisations. But the on-line branch of large non-traditional competitors does
not worry two-thirds of those questioned.

Internet-driven
change has already had a significant impact on information gathering and
communication. Basic Internet tools are now commonplace, with 80 per cent
believing they are expected to use more information.

Ashridge
questioned 500 managers in September 2000, three-quarters of whom were senior
managers, partners, directors, chief executives or chairs of their organisations.
About two-thirds had been involved with their organisation’s Internet
initiatives.

Companies
must speed up their response times

E-research
claims that many companies need to undergo culture changes to fully realise the
capabilities of the Internet.

Less
than a third of respondents said their organisation responds quickly to change –
but nine out of 10 think this is crucial to Internet-based companies.

Many
respondents expect the Internet to have the greatest impact on customer
relationship management.

PricewaterhouseCooper’s
Ed Smith said, "What we will see is that a lot of the structures will
disintegrate in favour of more informal networks. Organisations will move
towards teams which are focused on the customer ñ it will not be up to
individuals to do it all.

"They
will possibly work via the Internet with somebody they don’t necessarily work
with every day."

Report
author Helen Wildsmith said, "Organisations will have to get used to
outsourcing. This will mean companies will be influenced by sources from
outside, making their culture more dynamic."

E-generation
calls for a new breed of leader

Internet-driven
companies will have to change their approach to leadership, claims the author
of E-research, Helen Wildsmith.

Of
those questioned, 31 per cent describe their organisations as
"laggards", lacking the necessary leadership skills for the Internet
economy.

Nearly
two-thirds of respondents think their employer is ill-prepared for the
e-revolution.

Wildsmith
said, "A lot of the skills managers will need is in reassuring their
staff. There is a lot of risk involved with Internet organisations and managers
will have to be able to deal with the tension that will inevitably build within
teams because of this.

"Leaders
should be prepared to allow people to make mistakes and learn from them ñ the
prevailing culture is to try and brush mistakes under the carpet."

PwC’s
Ed Smith said, "While traditional organisations have older people who are
seen as leaders ñ it might be the younger leaders, who are prepared to take
risks who will be successful.

"The
Internet therefore presents the greatest challenge to the older generations in
the business."

By
Richard Staines

www.ashridge.org.uk

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