The entrepreneur can be very creative and imaginative and doesn't have to be tied to the past. He or she can ask, what organization and what kind of people make sense to tackle this problem in the most successful way? It's a clean slate for people who are just beginning to build organizations -- provided they recognize that the technology gives them that freedom.
INC.: Companies don't want to be different. They want to be better. How is my company a better competitor for having and using this technology?
ZUBOFF: A lot of people make the mistake of saying that competitiveness is about having a new product or a new service and getting it to the market first. My view is that no matter how unique the product or the service, your competitors are rather quickly going to figure out how to launch that same product or provide that same service. I worked with one bank that was very excited about being the first to bring certificates of deposit to market in the country in which it was operating. Six weeks later every other bank in that country was also offering CDs.
The real source of competitive advantage is having the organization that can exploit information to learn and to innovate more quickly and more regularly than the competitors. Sure, other people will catch up with the product or the service, but you've got the process that makes sure you're already working on the next one.
INC.: In the example you used of the London company, the organization turned out much flatter -- from 13 to 3 or 4 layers. Is that what companies operating in the informating paradigm are going to look like?
ZUBOFF: They are flatter. But that's not where I think it's useful to start. I think it's about creating organizations that are geared to learning, and you have as many people in the organization as you need to make that happen.
Even when you've got people at the front line with the information and skills to drive the business, you have to give them the authority, accountability, and motivation that they need to use their minds to exploit that information. So that means that your career systems -- the conception of promotions, reward, and development -- all of these policies have to be geared to creating and sustaining a learning environment.
INC.: Those policies all have to be rethought?
ZUBOFF: That's right. They all have to be consistent with supporting a front line that's empowered to drive a business by exploiting information. When you begin to get your mind around that, you see very different implications for what's important organizationally from what you would have seen otherwise.
It's not about creating a chain of command and getting the work more and more routinized. It's about getting the people closest to the marketplace into a position to do work that will make a difference. The organization has to support them. That means educating them, developing their skills, and creating an enabling environment.
INC.: Simply installing new technology doesn't mean that a company has entered the posthierarchical promised land?
ZUBOFF: Far from it. What you end up getting is this new technology with potentially revolutionary business benefits being installed in organizations that are still structured to pass all the data up the chain of command. They still have the idea that some people at the top will figure out what to do with the information, then they'll send the results back down, and the people at the bottom will implement their decisions. They still operate according to a class system that assumes that some people are going to have information and points of view worth communicating and others are not.
It is important to keep in mind that I'm not talking about a fad or this month's organizational gimmick. I'm talking about a fundamental organizational change that occurs as a response to basic shifts in the structure of markets, the nature of competition, and the nature of the technological infrastructure that hold our organizations together.
What will drive these changes is competition. One of the realities of global business is that communications systems have already transformed our notion of what it means to communicate -- we do it in nanoseconds now instead of months, weeks, or days. We can have data about our business and about customer reactions to our business almost as it is occurring. The strongest competitors will be those businesses that are the first to learn how to use those data faster and in a smart way.
INC.: You talk about empowering people at the front line -- what we now call the lower levels of the organization. That begs the question of where companies are supposed to find trained or trainable people.
ZUBOFF: They're not as rare as you think. More people can make this transition than we think. We have created organizations that essentially tell people in the front line that you don't have to think, you just have to do. People are socialized into those expectations.
We need to shift our managers' roles. In our new organizations, they won't be the guardians of information. Instead, we have to show managers that we really need them to be the educators -- to create, manage, sustain, and nurture the environment in which learning and value creation can occur. When we give that kind of role to managers, it lowers the threatening quality of this change.
INC.: Are you also suggesting that there won't be a great number of of middle-management layoffs?
ZUBOFF: I am not suggesting that there won't be streamlining. People talk about eliminating middle management because they're still operating in the automate paradigm. They think that because technology can move around the information that managers once moved around, we should eliminate managers. But I'm working off the informating paradigm, and what I see is that technology is not just about substituting machines for managers, it's about creating learning opportunities. If you are going to create learning opportunities, then there is more, not less, to do.
