The Long View

Book Review: Ideas and Information in a High-Tech World (W.W. Norton Co., 1989)

A book that helps you think about the way technology is redefining your business

Throughout history, celebrated 'managers' fell victim to the temptation of letting numbers displace judgment. Napoleon Bonaparte's efforts to manage his navy is a good example. Frustrated by the apparent cowardice of his admirals, he decreed that his fleet attack the enemy whenever the French had more ships in an area than the British. This was a fatal edict. . . . By the evening of the 21st [of October 1805], Napoleon's hopes of sea power lay smashed forever on the shores of Cape Trafalgar.

-- from Ideas and Information by Arno Penzias

There are probably a few charmingly eccentric Luddites remaining in business today who continue to forswear the computer and its microelectronic ilk: the fax, electronic mail, and so forth. Soon they'll be put into living museums that kids of the next generation can visit on school-sponsored field trips. "Back then," guides will explain, "this is how people actually worked. Secretaries would record the missed phone calls on those attractive pink slips of paper. And this is the mail room. Mail used to come in big sacks. . . ."

By now, however, most entrepreneurs running or starting businesses suspect -- if they don't yet believe -- that information technology has become a crucial business tool, one they can ignore only at their serious risk. Some, in fact, argue that microchip-powered devices have become the tool for creating altogether new kinds of businesses and business organizations. Fred Smith, who founded Federal Express Corp., is one of those.

But even entrepreneurs who don't aim to make the huge innovative leap of a Smith face a prodigious challenge from the new technology. Its application is changing, among other things, the way companies buy and sell, the way they organize their production and administration, the way they design their products, and the scope of the markets they serve. The products of the microelectronic revolution are changing more than just the face of business, but it's not always clear how. Is it confusing? You bet. And just reading about the latest gizmo or software in the newspapers, the trade press, or the incredible number of books written on the subject only serves to confuse more. Most writers pitch a particular approach or technology -- the M-form organization, say, or local area networks -- that may be the solution to someone's problem, but not necessarily yours.

What you need is a book that clarifies and simplifies the new technologies, that helps you understand their broad effects and gives you a perspective from which to think about the changes in your own business. Let me recommend Ideas and Information: Managing in a High-Tech World (W. W. Norton & Co., 1989). The subtitle might be misleading. Perhaps the author, Arno Penzias, means "managing" in the sense of coping -- as in getting along in a high-tech world. Either that or it's a deliberate ruse Penzias put there to trick information-hungry business readers into picking up a book that they otherwise might pass over. If so, let yourself be tricked.

Penzias, currently vice-president of research at AT&T's Bell Labs, won a Nobel Prize for radio astronomy work that buttressed the so-called big bang theory. This theory reduces all that we know about the universe -- clearly a large and complicated place -- to a few, relatively simple core concepts. Understand the concepts, and you're on your way to understanding how things in the universe got to be the way they are today and how they're likely to continue developing in the future. Ideas and Information performs roughly the same service for information technology.

Computers are just the latest in a long series of information technologies that people have developed to help themselves think, work, and live. Penzias goes back to their roots. He traces the evolution of mathematics and written language from the first crude drawings made 10,000 years ago in the caves of southern France. Along the way, a reader begins to understand why even the plainest microcomputer can correct the spelling in a book-length manuscript, while all the supercomputers in the world cannot compose the line, "Now is the time for all good men to come to the aid of their party," unless some person programs them to do so.

Penzias also looks at previous breakthroughs in technological hardware -- the replacement of clay tablets with paper scrolls, for instance. He examines both the causes of such breakthroughs and their far-reaching effects, thereby providing a historical context for thinking about the changes remaking the modern world.

His point (or at least one of his points) is that the course of world events is not altered by technology per se, but by its application. The telephone, for instance, had been around for decades when J. P. Morgan brought Theodore Vail in to improve AT&T's slipping earnings in 1906. At the time there were 6 million phones installed in the United States, and AT&T was just one (although marginally the largest) of many competing companies. Impatient investors pressured Vail to focus on selling phones. They saw the company's product as a piece of hardware with a value based on the materials and the labor that went into it and the wires, poles, and switches that connected it to the outside world. The way to increase profits, they figured, was to get more people to buy the hardware.

Vail had a different concept of what AT&T was, or should be, selling. The concept was universal connectivity -- the ability to talk to anyone in the world through a telephone. Such a product, intangible though it was, had a value far beyond that of the hardware that made it possible, and people would gladly pay more to get it. Create the telephone network, and phone sales will follow. Universal connectivity, Vail recognized, was the true value of this technology.

That's the kind of thinking that businesspeople are going to have to apply today to realize maximum value from the stuff -- machines and software packages -- that the high-tech purveyors are pumping out. It's in developing this kind of thinking that Penzias's delightfully readable book is so helpful.

Last updated: Jun 1, 1989

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