...continued from Manhole 2 & 3 - Enterprise 2.0
Manhole 3: Picking the wrong change approach.
Olrlikowski and Hofman in subsequent research go on to state, "There is a discrepancy between how people think about technological change and how they implement it. Moreover, we suggest that this discrepancy contributes to the difficulties and challenges that contemporary organizations face as they attempt to introduce and effectively implement technology-based change. 9
Traditional ways of thinking about technological change have their roots in Lewin's three-stage change model of "unfreezing," "change," and "refreezing." According to this model, the organization prepares for change, implements the change, and then strives to regain stability as soon as possible. Such a model, which treats change as an event to be managed during a specified period, may have been appropriate for organizations that were relatively stable and bounded and whose functionality was sufficiently fixed to allow for detailed specification.
Today, however, given more turbulent, flexible, and uncertain organizational and environment conditions, such a model is becoming less appropriate - hence, the discrepancy." 10
Manhole 4: Investing too little in organizational capital
In Enterprise 2.0, many changes have a major technological component - installing a piece of enterprise software or new corporate information architecture to support e-business. But the success rate of these large IT projects (in terms of percentage that achieve the anticipated benefits) is often low. Many blame the technology, but a large-scale study undertaken by MIT Professor Erik Brynjolfsson illustrates that investing in IT is insufficient.
This survey and analysis of 753 large firms shows that firms only gain the benefits of new technology when they make substantive investments in organizational capital (in the form of training, business process engineering, and new management practices). Indeed, the work suggests that each dollar invested in technology needs approximately $10 in investment in the organization. Firms that invested too little in either technology or the organization had lower market capitalization and did not see the same productivity gains as firms that invest in both IT and the organization. 11
An important influence on the effectiveness of any change process is the interdependent relationship among three dimensions: the technology, the organizational context (including culture, structure, roles, and responsibilities) and the change model used to manage change. Ideally, the interaction among these three dimensions is compatible, or at a minimum, not in opposition. 12
Manhole 5: Solving the wrong issue(s) first.
With any new initiative, especially those with technological interdependencies, organizations inevitably have a heightened skepticism surrounding its chances of success. This skepticism comes naturally as many in the enterprise will have first-hand experience with technology solutions failing to live up to their billing.
Gaining credibility with the first e-business initiatives then is of paramount importance. Choosing the wrong issue(s) to solve on the first foray seriously impacts the credibility of your efforts and hence the long-term chances of success.
Because success often depends on coordinating the right technology, the right product mix, and dozens of the right strategic and structural issues all at once, near misses can leave a firm worse off than if it had never attempted the change. While several studies have documented the importance of coordinated change, managers continue to have difficulty achieving it. 13
Often, the problem is not that the proposed system is unworkable but that the transition proves more difficult than people had anticipated. Too often, managers proceed in a hit-or-miss fashion, implementing the most visible bits and pieces of a complex new system, while missing the hidden but critical interconnections. between practices. 14
9. W.J. Orlikowski and J.D. Hofman, "An Improvisational Model for Change Management:
The Case of Groupware Technologies," Sloan Management Review, 38,2, Winter 1997: pp. 11-21
11. E. Brynjolfsson, "eBusiness Transformation" (MIT, Cambridge, Massachusetts:
Proceedings of the Center for eBusiness @MIT Research Workshop, June 14, 2001, p. 16)
13. E. Brynjolfsson, A. Austin Renshaw, M. Van Alstyne, "The Matrix of Change," Sloan
Management Review, Volume 38, Number 2, Winter 1997: pp. 37-53