Companies and people need to embrace change in order to succeed in the future, according to HBS professor Rosabeth Moss Kanter. In this, the second of a two-part interview for HBS Working Knowledge, she explains the leadership skills of successful companies, as described in her latest book, Evolve!: Succeeding in the Digital Culture of Tomorrow (HBS Press).
Q: Many people rushing to use the Internet in their businesses have made some real mistakes that you warn your readers about. What are some of them?
A: Tongue in cheek, I write that there may be only three kinds of companies in the Internet age: dot-coms, dot-com enablers, and wanna-dots. That's kind of a joke, because many of the pure dot-coms are dead.
The dot-com enablers, which are the technology and service firms themselves, are the biggest e-commerce companies in the world. Wanna-dots refers to everyone else, whether that means hospitals or schools or businesses that are trying to figure out how to incorporate this technology to get advantage out of it. And for them, this often entails a change problem.
In Evolve, I explain some of the classic ways to defeat change. You can defeat any change, for instance, if you turn over a project to a small group of people who are amateurs, who do the project part-time and act as a committee. It doesn't demand management time and resources, and you haven't brought in new skills.
This holds for hospitals, government agencies, public schools, and universities as much as it does for businesses. Every time you try to do something new, you need to dedicate a group to just do that new venture, understand it, be accountable for it.
Then there are forces of resistance. Some come from the way companies and organizations have been organized, if they've been organized into separate territories where people control their own turf, their own profit-and-loss responsibility, and their own division.
New ideas, whether that includes the Internet or anything else, don't descend upon a company in the boxes that have already been established on the organization chart. They cut across. They require unprecedented cooperation.
Arrow Electronics, for example, which is one of the world's largest electronics distributors, started Arrow.com to sell its own equipment over the Web. Arrow.com decided it was very different from the rest of Arrow, and cut itself off from the rest of the company.
While they needed some independence and autonomy to get started, the problem is that an Arrow customer is just as likely to use the Web one day and a sales rep the next, yet wants to know that he or she is in the same system with the same company. So it's a real trap to become too separate.
Of course, if you're not separate at all, you can't effect change, either. People in the Internet age have to be collabronauts within their own company. That is, they have to be good collaborators who know how to focus on the new venture while, at the same time, build relationships with people in the mainstream business.
Q: There had to be some good things you learned by looking at dot-coms, even those that went out of business, and their cultures.
A: Many people are skeptical. In fact, a lot of people are putting their business suits back on and saying, "Thank goodness we don't have to worry about all those youthful excesses anymore, like fun and games in the office, and extra food, and casual dress."
But that was not what we should learn from the dot-coms. The youthful, fun overlay was just superficial. That wasn't the real stuff.
What we learned, and what we can still learn from survivors such as eBay, has to do with a work style that allows you to be enormously productive, professional, able to turn on a dime, and be open to change—because that's what many of those companies had to do.
What we learn is flexibility and change, and the importance of testing ideas by doing them—not back in the laboratory, but rolling them out, getting audience reactions, and making changes immediately. We learn about the speed of change, and about a work style that makes people feel motivated to work closely with each other to create change.
Q: One of the great challenges for companies now, clearly, is finding and retaining the best people. How can they meet this challenge, at a time when traditional loyalty seems to be declining?
A: People become even more critical assets in an age of technology. It's kind of ironic, isn't it? But it's true. And I think that we have to fall back on some old lessons about what builds loyalty and commitment in the workplace, but do it in a new way.
In Evolve, I write about the "Three Ms" that build commitment in the Internet age, because people aren't loyal for life anymore.
The three Ms begin with mastery. Give people cutting-edge work to do, the best tools, and a feeling that they'll be successful. Help them learn, and they will want to work in your company.
Secondly, membership. Make people feel like members of the community, not cogs in the wheel. Respect their individuality, pay attention to their needs—including their needs for flexibility if they have families—and help them bond with each other.
The third is meaning. People want to do work that's meaningful, that they feel has a purpose. The company should be meaningful, and the company's contributions to the world around it should be meaningful.
Q: What are some of the enduring lessons about leadership that are required for change?
A: This new age of networked information makes it imperative that we constantly challenge our assumptions as we're taking in new information.
Leaders have to be outstanding communicators, not just over the Web but also face to face. One of the things that impresses me about John Chambers at Cisco is that he gets up in front of groups and speaks without notes. He expects all of his executives to do that, too. Cisco is a company that uses the Internet probably more extensively than any other company, yet they emphasize face-to-face leadership and communication skills.
In Evolve, I also write about the importance of building coalitions and of leadership as community organizing, finding your supporters, bringing your supporters on board, and then gradually using them to help educate other people about the importance of change.
Q: Much has been written about the influence of the Internet on young people: whether it isolates them from the world rather than bringing the world closer to them. What did you learn in your research about the potential of this medium for real communication?
A: I hear these worries, as well, in small, nonprofit organizations that say, "What we do is human service. This technology has no relevance for us." They are afraid that if people can make charitable contributions over the Web, they won't pay attention to the little local groups in their own community.
I also hear a worry in education when people say they don't want computers in the classroom because kids won't learn about the real world.
My research made me conclude that in order to make the technology work for us, we need strong communities on the ground.
If that small neighborhood nonprofit is concerned that its donors will give money over the Web and won't show up at its fundraisers, it has to create its own network, and has to make human connections so appealing and enriching that people won't abandon them easily.
I'm not worried. We have a lot of choices we can make as people, and the Internet can be a tremendous facilitator when there are already strong connections and ties. It can speed up work when people can e-mail each other rather than have meetings all the time.
On the other hand, if we don't have that base of strong human connections, it can push us apart.
But much of that stems from human values. I don't think hermits with Internet access are going to take over the world. I believe leadership will always take place in a context where people have strong, face-to-face, human relationships.
As I write in Evolve, we have to emphasize what makes us most human if we're going to make the technology work for us.