You don’t need Technology but Organizational Infrastructure

Have you ever thought about who has the knowledge that makes your product or service successful? With that question began an article that I had the opportunity to read and retweet a few days ago.

I think it’s a good question to start an article, don’t you think so? And I am convinced that, despite its importance, many of us never have considered something similar. But now, more than ever, that in our head is blinking in neon the word “sales” and its flashes blind us and led us take wrong and expensive decisions – when it was quite the opposite of what we expected- it might be a good idea to address this issue.

So, let’s go back to the article that led me to write this post. In it, the authors argue that the knowledge associated with the success of a product or a service is distributed among many stakeholders, both internal and external. For example, in the marketing of a product, not just the talent of the designer is important but also the role of the distributor or the supplier. So far we all agree.

Moreover, the authors uphold the idea that now there’s a way to identify and access to this knowledge spread among many stakeholders: the Enterprise Social Networks (ESM). According to them, the ESM is able to rapidly exploit the tacit knowledge of an organization, taking advantage of the ability of its employees to make projects happen faster and more effectively than ever could be achieved through traditional methods such as team meetings. And from here, I think we can discuss it.

It is true that many companies are starting to implement social networks to promote collaboration among its employees and, consequently, and as in the case of “e-reputation” (which I call “e-visibility”), suppliers and consultants of this these technologies are popping up everywhere. These new technologies are being implemented to get employees to work together and share tips and ideas on how to improve the workplace, projects, etc. Some of these are homegrown, so they’re built in internal systems. In any case, and based on research conducted by Gartner*, the 50% of companies will use some type of network within the next two years. So suppliers can rub their hands.

Before start questioning the importance being given to technology in the fields of intangible assets (such as reputation, brand, Research, etc.) or stakeholders (internal and external) management, I’d like to say that, despite my recent articles, I’m not an anti-technology, I promise. I love to participate in forums, blogs or communities that fit to my goals and interests. I also like all kinds of technological gadgets, as long as they provide me some value.

From my point of view, technology is an enabler of tasks, functions and processes. In the network is a transparency and visibility enhancer. But in any case is a generator per se. In this sense, we could ask ourselves: how many times we use our company’s intranet? We use it to share our ideas? With how many people in our company we share ideas and opinions outside the network?

The truth is that, apart from the lack of familiarity, adoption, perception or privacy of the networks, with or without technology people interact, share and participate when, how and with who they want and, although technology is a facilitator for even the most shy to launch into the “networking world”, they won’t do it if they don’t feel comfortable or think that their interests may be affected. At the same time, to ensure the proper management of the ideas and knowledge shared an enabler is needed in order to guarantee that the discussions, opinions, etc. are aimed to solve a specific problem or improve a specific project.

In short, we need a cultural change, defined systems of participation, an understanding of the company’s mission, environment and the different stakeholders interests, as well as an explicit acceptance of transparency for considering ESM a good investment. Achieving it is certainly ambitious, but let’s be clear, complicated, at least in the short-term. Sometimes, I get the feeling that companies use technology as a patch: instead of working to improve what they’ve inside (and in their surroundings), they invest in technology because they believe that’s the answer to all their problems. By analogy is like breaking a leg and taking Algozone to relieve the pain: don’t be wrong, if we have a broken leg and we don’t go to the doctor, we might not walk again.

In fact, technology (SEM, SEO, CRM and many more) is an inert good, so it can’t create value and generate growth by itself. For example, a large customer database won’t generate value to Amazon without an effective and customer friendly distribution channel, as well as a highly qualified sales team.

In addition, technology is a currently economy asset, that is, most companies in the same sector have the same access to it. This doesn’t happen with other intangibles such as reputation. That’s why the concept of “e-reputation” (I insist, “e-visibility”) makes my hair stand on end: if potentially all firms in a sector can have the same technology to better position themselves in the network or boost the relationship between its stakeholders, why some of them have better reputation than others? Believe me, the answer it’s not that their technology providers are the leading ones. On the contrary, most reputable companies already had positive relationships before SEO, SEM, etc. where launched, and had learned to positively manage them, alone or with the help of reputation and stakeholder management advisors.

From my point of view, that so much technology has diverted the attention from what’s really important: the Organizational Infrastructure, that is, the management processes, organizational plans, the motivation, incentives and control (governance) systems, as well as the relationships management plans between the different stakeholders of the company, that if they’re successful, can generate surplus in relation to the invested resources. Therefore, the Organizational Infrastructure is the enabler of all other company resources (physical capital, employees, customers, brand-, Innovation-R & D, adaptability, and reputation) that perform their “duties” in the value chain.

In this context, technology mainly enables the Organizational Infrastructure to well-perform. But at last, it crucially depends on the leadership skills and execution. Consequently, it will be the deployment of these skills, what will develop systems to identify and promote knowledge among the different stakeholders of the company.

Assess the relationship between your technology spending and your Organizational Infrastructure growth and notice that you’ll probably need to devote part of your investment to other areas. I won’t tell you to which ones.

* Gartner is the leading research and consulting firm in the ICT field.


Comments
9 Responses to “You don’t need Technology but Organizational Infrastructure”
  1. Wonderful article. A question just popped into my mind: ¿It is better to have no reputation than bad reputation?

    • That’s a good question TMD 🙂 From my point of view is better to have no reputation and work towards a favorable one. This takes time and consistency (read the article “Reputation is not the Image” in this blog). The truth is that it’s actually easy to move from good to bad reputation if the company is not able to manage as best as possible its relations with its stakeholders.

  2. Francisco del Álamo says:

    Interesting article Marta. Some comments:

    * About where the knowledge resides, we must not take into account suppliers, distributors or employees. The customer role is crucial, we must listen to him. Unfortunately many companies forget about it when defining their marketing and sales strategy.

    * IT as a facilitator? It depends. Currently there are sectors, like banking, where technology is part of the core business itself, it brings competitive advantage and adds value. Without IT there is no business. In these cases IT is part of the business strategy. In other sectors IT is a facilitator for the implementation of business processes. Depending on the business characteristics, technology contribution to business is different. IT can play a role as facilitator, transformer or co-creator of value. What is important is that managers know what role IT should play. In any case the technology itself does not provide any value in any case, but properly managed itself.

    * About investment in technology, there are studies by both Gartner and other international IT analysts, which show the correlation between investment and the efficient management of ICT spending with increased productivity in companies, and even income generation. Investing in ICT itself, co-creating with the business, and understanding that technology must always be accompanied by a strategy and efficient management.

    • Dear Francisco, I’d like to thank you for your contribution, I’ve noticed you’re an ITC expert 🙂

      I agree with you that customers are a key stakeholder, but so are employees and, for many companies (depending on the sector), suppliers, investors and even the government. Companies should identify their key stakeholders in terms of interest and power to affect their business and interact with them accordingly.

      Likewise, I didn’t want to say that technology isn’t important. As you point out, technology is core in some sectors, but it will always be a facilitator of the Organizational Infrastructure: if there are no management processes, organizational plans, stakeholders relationship management plans, etc. technology will have no use to the company.

      As regards to your third point, I think we say the same but using different words :-). Choosing the right technology, based on the company strategy and goals, should help to improve its productivity and even its results (if those who take decisions and define the strategy get it right. You can see that leadership is a key issue). But how many companies measure the effects of the ICT investment over the Organizational Infraestructure?

      • Francisco del Álamo says:

        Not many, unfortunately. Majority of CIOs don’t really know how to do it, and CXOs are not interested in IT. It’s not the case of large firms, but SMBs are not mature about that.

  3. Francisco del Álamo says:

    Hi everybody! On my comment there is a little mistake. It’s about the first paragraph. The right sentence is ‘we must not ONLY take into account suppliers, distributors or employees’. Thanks!

  4. Francesc Rius Tous says:

    An excellent article, with many ideas that inspire me to think about the existing mismatch between technology and leathership skills and execution evolution that we usually find in the business’s world. As you well explain, the mismatch is currently going to technology favor. Moreover, I think that the great speed of change and the swift acceptance of the new technology’s possibilities does not make easy to improve the balance between them & management skills. This might suggest that managers should integrate more rapidly the tools that technology brings them, in order to improve their knowledge and performance and consequently reduce the margin of error in the decision taking process. What do you think about it?

    • Dear Francesc, I love your reflection! It’s absolutely realistic and it has provided me with ideas for new articles! As you point out, actually there is a mismatch between the speed at which technology evolves and the response that leaders give to management challenges both at short and long-term. From my point my of view, the problem is not the technology itself but how we use it to bring the maximum value to the organizational infrastructure. Perhaps it would be worthwhile to find ways to see the effects of leadership on the infrastructure by assessing the managers skills and success. What do you think? Maybe, too complicated?!

  5. Mika Citizen says:

    Completely agree with the statement that the organizational infrastructure is the enabler of all other company resources: technology is a catalyst. If a company team works properly, it’s possible to find (or create) tools that can help the firm’s processes. I also agree with your comment “the most reputable companies already had positive relationships before the SEO, SEM, etc . were launched”.

    Everyday I am more convinced of the following: imposing technological factors is (not always) a way to camouflage the lack of skills of some professionals (including those who manage the company).
    You (if you are the manager, and you are reading my comments) are wrong if you’re thinking that with implementing the latest technology your employees will do it better, or they will achieve the firm’s goals. It may be more positive to invest in talent, internal communications processes, team building, empowerment, don’t you think so?

    Perhaps we could say: promote and encourage relationships and personal skills (managers included) and only then implement the necessary technology to optimize productivity. Doing so, the company will boost its competence, confidence and effectiveness.

    Very good post Marta, congrats!.

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