What you begin to get is a database that is a detailed kind of mirror, increasingly a reflection of the internal dynamics and external transactions of the business. If you have the skill to navigate your way through these systems and to interpret and use the rich information available there, then you have a window into the business that never existed before. The whole organization, not just one bit of the production process, has become transparent.
I call this "informating." It's a word I coined reluctantly, but I found no other word in our vocabulary that describes this unique capability of information technology to take three-dimensional objects, processes, and behavior and translate them into data to make them transparent and knowable in this new way.
The technology creates an opportunity to learn more about the functioning and the nature of the business than ever before. Informating, in fact, is the way the new technology can make its biggest contribution to the organization. The informating capacity of the technology can help companies identify opportunities -- new services or products, ways of operating, ways of getting closer to and understanding the marketplace.
INC.: Let's say that I'm running a business. I've got some computers. I'm not antitechnology. How do I find out about informating? How can I use it?
ZUBOFF: Remember, I said that information technology represents a radical discontinuity in industrial history? Well, if you want to harness the informating power of technology, you've got to reorient your thinking about technology. You've got to move from what I call the automating paradigm into the informating paradigm. It means changing your fundamental assumptions about what business organizations are supposed to look like.
INC.: Which assumptions?
ZUBOFF: For instance, you need to abandon the assumption that managers are different from the people they manage. One of the things that made them appear different in the past was that they had information that the people they managed didn't have. Managers, we said, were the people uniquely equipped to deal with information, and for that reason we granted them authority.
But the informating process upsets this logic. By making the organization and its processes transparent, technology allows almost anyone in the organization to see what's going on in the business. Workers can see more and know more than they were ever able to see or know before. If you used to think that what separated managers from workers was information, you have to abandon that assumption. Workers will have information, too.
INC.: Say I do drop that assumption. How does that benefit my company?
ZUBOFF: It means that you can now think of your workers -- and by workers, I mean the people who are at the front line of whatever business you are in -- as being capable of thinking and acting on the information they have. After all, they are the ones closest to the production process, to the customer, and to the actual operations of the business. If you also give them the skills to exploit that information, then you've created very powerful organizational resources. You've engaged those people closest to the work in the value-adding strategies of the organization.
INC.: Another example, please.
ZUBOFF: One company I've worked with is based in London, but it has thousands of shops all over the world that rent televisions and other electronic equipment. They used to run those shops from London. Shop managers were told what inventory to carry, how much to charge for items, what rental policies to follow, and so on.
New leadership developed a new business strategy based on quality service delivery. It became clear that the shops had an important role to play in providing service and developing new businesses. Corporate management's job would be to see that they had both the information and the authority they needed to do that. So, the company put in place the technology that gives the store employees all kinds of information about their customers, the market, their competitors, their inventory, and their service.
INC.: And what happened?
ZUBOFF: Now, those shop employees have the capacity to manage and grow their businesses -- to see new things they can do, new ways they can serve customers, new niches they can open up. They can operate in a way that they never could before.
What happened was that the nature of the shop employee's job changed. It went from being a low-skill, low-wage, high-turnover job to being a managerial job with different career implications and requiring a good deal of business knowledge, training, imagination, and the intellectual skills to deal with abstract, electronically based information.
INC.: And the company looks different now?
ZUBOFF: Six years ago there were 13 levels of management and probably a hundred people in corporate headquarters, lodged in a fancy London building. Now, there are 3 or 4 levels of management, and instead of the fancy building, corporate headquarters is in a rented space above a suburban grocery store.
INC.: What does this paradigm shift that you talk about mean for entrepreneurs who are in the process of building companies from scratch?
ZUBOFF: It should alert entrepreneurs to the fact that creating an organization will no longer imply certain preset rules about what an organization should look like. Instead, you can develop the people and the organization to fit the problem -- satisfying your market -- and then develop the technology that will support that organizational structure, whatever it is.
