Even in today’s technological age, multinational corporations with thousands of employees still fail to grasp the basics of technology, the internet and how that impacts their business. How can a company, with resources coming out of their ears still not manage to get even the basics right? In today’s article I hope to identify some key factors…

Senior Management don’t get the internet

This is probably the key factor to most companies downfall with regards to technology. Senior management really struggle with what’s happening in Technology, what it means for them, and how they can exploit it. Example, the music industry. Not one, two but pretty much all record companies big and small just did not get the internet. Due to their ignorance, or just plain stupidity they wrote it off as a fad, and worse – a threat to the business they know and love.

This was probably the greatest example of how the mighty can fall in the last 10 years. Record execs, mostly old school fossils still clinging onto their vinyl records could not understand why people would want to listen to music without owning a physical product. They were right – for 20-30% of people that used the internet. For the rest (kids upto mid 30s), they couldn’t care less. They just wanted to listen to good music – they weren’t interested in owning a shiny bit of plastic, they were happy with putting their music on a heavier white piece of plastic called an iPod.

EMI and others soon started to feel the brunt of internet music piracy, due to the fact there was no real online outlet to buy music digitally. Specifically, when I started at EMI in 2005 their Digital business was pretty minimal, their content protection team however were in full swing. Launching a website on how and why you shouldn’t copy your music off of your CDs, why you shouldn’t share music and why it hurts the artists more than them… They then went onto publishing the URL to this site everywhere, on their CDs mostly. No one listened obviously. This “problem” was bigger than the record companies could handle, and it has been ever since.

Anyway, I digress – but what I am getting at here is the problem at EMI and all the other labels was that no one got it. Alot of the old school execs got information from websites printed off for them by their assistants because they “couldn’t deal with it”. It being a browser and a URL. Happily, most of them have now moved on…

A Good Excuse for Bad Recruitment

As I said, because a lot of the old school execs can’t grasp current technologies, they obviously hire people that are thinking on the same lines as them, and so it flows down to the very bottom. What you end up with, unless they accidentally hire a heretic, is an entire workforce that are completely blinkered. They all concentrate on what they know best, or what they knew best from 10 years ago more accurately, and continue to push the company “strategy” along a path of doom.

The reason why Apple are a successful company for example, or Google, is because they hire super smart people that are “with it”. Luckily this is flowing from the top down, other companies aren’t so lucky. Granted, Apple and Google are technology companies, yet each corporation effectively has their own Technology company internally. What they do differently though is they usually look outwardly for guidance in core competency areas, which 9/10 is expensive and you end up receiving a sub-standard product in return. I seriously think I am in the wrong business – there are plenty of companies out there desperate for basic internet knowledge.

Last week for example, I was at a conference by a consultancy for online research strategy… The key line they were playing everyone in the room, prepare yourself – it’s good – is that you need to embrace with your community of customers… Scarily most of the people in the room were actually perplexed by this and genuinely scared of the risk of talking to their customers via an online forum. This company had these people eating out of their hands… “We can guide you, we can help you setup a forum, and help your business grow”(and charge obscene amounts of money for the privilege btw – you lose).

Surely the people within these companies should be able to grasp these basic fundamentals of the internet by now? I guarantee all of those execs in the room and their companies will be gone in 3 years…

The company leads from the top down

This is so backwards nowdays I am surprised any half decent company still does this… It just doesn’t work in todays technological environment. As I’ve discussed, senior management are pretty much incapable of being cutting edge in most cases, and having a culture of top down management just doesn’t help anyone for the aforementioned reasons.

Seth Godin talks about heretics in his book Tribes, a clear signal to all companies on how they should be managing their leadership internally and externally. This is the only way things will changes within a top down management culture… low level heretics kicking up a storm – or, wait 10-15 years until the true old school folk have finally moved on. Who know’s if the next generation (that are the current generation “with it” bunch) will be capable of being cutting edge. I like to think that I will always be interested in current technology, I won’t get to a point and just stop paying attention. I assume my peers will be the same? Who knows…

The company bans or restricts internet access

This isn’t really a pointer of companies failing, however it definitely shows the company mentality of not understanding the internet, and seeing it as an evil distraction that will reduce throughput of their workforce. It’s such a backwards concept from the start. It demonstrates lack of trust, lack of understanding, and lack of forward thinking.

When starting a new role I always check out the company’s “Internet Usage Policy” as a key indicator of whether this company is half with it. Both my current role and EMI have a good one, basically down to trusting the end user to be sensible – do what you need to do, don’t look at porn and play online gambling using our network etc. Very sensible.

On the other side of the coin, I previously (and very temporarily) worked at a company whereby you absolutely could not have any internet access during your work time at all. Lunchtimes you could goto the “internet cafe” they had setup which was 3 computers for a building of 500 where you could use your lunchtime to browse the net on IE 4 (This was in late 2004, I think IE 6 was out by then?).

Anyway – you get the point – if the company cannot even trust their staff to use the internet sensibly, then they aren’t worth working for – they are going nowhere. There will always be people that abuse this trust, but 9/10 people will embrace it as part of their day job.

Risk Aversion to Open Source or Cheaper Alternatives

This was always a good one… “It’s free/cheap… it must be unsecure, not for the enterprise, and feature limited… It won’t meet our requirements”. Never understood this way of thinking, most execs would rather pay through the nose for something because it’s presumed the safer option. Is it better to run a product in house that is DOA, 3 years+ old, close to being out of support and costing you a bomb? Or to go for the cheaper option – possibly not quite meeting your requirements – yet is a constantly evolving product?

It’s a tough argument with many pros and cons, yet I guarantee that most execs won’t touch open-source / cheaper options with a barge pole. If it’s expensive to buy and expensive to develop on, it must be a good quality product right? Tell that to all the people that bought Sharepoint 2003, or Remedy… they suck, yet you have to live with them because they’re deemed expensive, therefore equalling good quality.

To Conclude…

So what can we do about all this then? Not a lot to be honest. You could become a bottom feeder heretic, start to spread your devilish words about the “new age” etc and hopefully get a small tribe going and turn some old school heads, but it’s going to be tough work. I think all we need is time, time for a generation to retire, and a switched on generation to take charge. Embrace or die is still relevant, companies still aren’t listening though, but who cares? Let them carry on and dissolve into dust, the rest of us will take over…

Tools to help you learn…

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This entry was posted on Thursday, March 5th, 2009 and is filed under Leadership, Social-Web, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.