To say that we are in an era of profound and rapid technological change is, to borrow a phrase from a well-known former CEO, a "blinding glimpse of the obvious." However, despite a very high awareness of these trends among the population in general and managers in particular, many senior managers appear determined to ignore and to shy away from seizing these new tools.
I believe that they do so at extreme peril to their organizations, to their employees and to their own careers. The thrust of this article is to analyze some of the "myths" that are associated with this behavior, to attempt to explain why managers act in this fashion, and to draw conclusions that will, I hope, be helpful to senior and mid-level managers.
Three Myths of Management
Myth One: "What you don't know won't hurt you."
This old adage could not be more wrong in the context of modern communication and information technologies. In particular, new (and some not-so-new) applications have given informed managers powerful tools to use in improving the performance of their organizations.
A few examples include more rapidly accessed and better quality information, lower production costs and reduced inventories, and improved levels of service. In short, those organizations that can identify which applications can be adapted to their requirements (or how their requirements can be adapted to take advantage of new applications) will define a superior operating model, resulting in dramatically improved performance, be it increased market share and profits in the corporate sector, or reduced costs and higher levels of service in the governmental or nonprofit arena. This holds true for even the most mundane operations.
For instance, one industry veteran wryly described the snack food business as "identifying the most efficient ways to deliver unhealthy megadoses of salt and fat to consumers." In recent years, there have been a number of important new product introductions to assist in this mission, including snacks that are baked instead of fried and new flavor versions of potato and tortilla chips. But beyond tinkering with the flavor and fat content, some of the most important developments have taken place in the area of store delivery. Many drivers now use portable scanners to conduct rapid in-store inventories and then transmit this information back to their warehouses, while they are still on their routes. This information is then consolidated and retransmitted both to production facilities, where replenishment orders are automatically entered, and to sales and marketing executives who can quickly determine the results of different tactics, such as new product introductions, promotional activity or pricing changes.
Another illustration is the phenomenon of "yield management" in the airline industry. This practice enables airlines to fine-tune the pricing and availability of their seating inventories based upon both historical data and also current levels of demand. Yield management has had a significant positive impact on revenues during a period when airline profits are under extreme pressure. Currently, the most sophisticated practitioners are able to change the mix of their inventories on an almost minute-by-minute basis in order to capture as much in the way of incremental revenues as possible.
However, it is also interesting to observe that, to date, the hotel industry has not really adopted this technology, nor have various segments of the entertainment industry (e.g., theater, concerts and sporting events). One exception is an aggressive hotel proprietor in Orlando who reprices his rooms down to $29 as the day winds down, so that his facilities can operate at or near full occupancy. Other operators in the market, ignoring the lessons of the airline industry, decry this approach as self-defeating. But as a result, the entrepreneur has been able to operate at a significantly higher occupancy level than have his competitors and his cash flows also apparently have improved. Indeed, it appears that he has used these technologies to capture virtually all of the bus tour market, which had been largely shunned by other operators as not sufficiently profitable, and turn it into an important profit contributor.
And what about hospitals offering a similar pricing approach when it comes to scheduling elective surgery procedures? I have no experience in the area of hospital administration, but I offer the idea as an illustration of the need to go beyond the traditional boundaries in operating an organization to take advantage of potential opportunities. As one well-respected management conference facilitator used to put it: "Give me your best 'bad' ideas." Even if they are impractical, they may provide the foundation for an important organizational shift.
In summary, the "ostrich approach" is quite likely to result in a firm's suffering a serious competitive disadvantage when others in the industry actively incorporate these advances into their culture and business model. Similarly, in the nonprofit and governmental sectors, those organizations that aggressively adopt these new technologies will provide higher levels of service to their constituents and offer a more appealing place to work, which in turn will assist them in making their case for improved funding and for attracting top-caliber staff.
Myth Two: "Senior managers in traditional industries and organizations don't need to become involved in technology. That's the job of the middle level managers and supervisors."
As noted earlier, information technology has advanced from providing merely "useful tools" (e.g., the automatic processing of complicated payrolls) to offering dramatic strategic weapons. Some of the most important areas of responsibility for senior executives involve leadership and strategy.
However, if a senior manager is not fluent in the possibilities that new technologies offer, his strategy may be deficient and his leadership suspect, particularly among the "second lieutenants and staff sergeants" who are on the front lines and charged with fighting the war with limited weapons and without a technologically aware strategy. In all likelihood, these junior managers are younger and more knowledgeable concerning technological developments than is senior management. If they are denied access to new tools and ordered to follow dated and technologically deficient strategies, morale will suffer and the best and brightest likely will leave.
For example, one of the larger U.S. banks recently adopted a new information system to support its marketing and lending officers. To facilitate its rapid adoption, the bank's rank and file were required to be in the office over a three-day holiday weekend to attend related seminars and to familiarize themselves with the software. Unfortunately, this positive move rapidly backfired when the employees discovered that the system was seriously dated (by some 10 to 15 years), significantly inferior to the systems of competitors, and was adopted only because it had been used in that bank's operations in another, much smaller state and was, therefore, a "proven commodity", albeit obsolete, in the eyes of the bank's senior managers.
Had senior management been more than tangentially involved in the process they would have avoided not only sparking a major morale crisis in the bank (that was subsequently conveyed to the bank's customers), but also they could have saved the tens of millions of dollars spent on outmoded technology.
Myth Three: "I'm paid to manage people inside the organization and relationships on the outside. My job is about people, not about numbers and technology."
However, a broad range of applications from personal information managers (database/address books/contact logs), to groupware (enabling associates to share ideas), to project management (keeping track of the progress of both single and multiple projects) are devoted exclusively to relationship management.
They assist managers in leveraging their time and ensuring that vital tasks and communications are not overlooked. This increases both a manager's "span of control" (i.e., the number of people and/or projects that he/she can effectively manage) and the quality of the direction that he or she provides. It can also improve accessibility, where groupware or e-mail enable the rank and file to communicate quickly (and sometimes anonymously) with senior managers, alerting them to important issues both inside and outside of an organization.
Overcoming the Obstacles
Given all of the benefits to general managers in using technology, why the reluctance? First, inertia is a powerful force. Most of us resist change: we sleep on the same side of the bed each night, we follow the same routine in getting dressed and in reading the paper. We do not like to be disturbed. However, more than ever before, our lives, both personal and professional, are all about change. Success will come to those who adapt and who adopt quickly.
Second, I believe it also has a great deal to do with a reluctance to make mistakes, which are a natural and essential part of any learning process. Our first journeys on a bicycle were accompanied by a few scrapes, but that didn't stop us. Similarly, our first journeys on a computer will involve some fumbling, some lost files and maybe some system "crashes." But just as in learning to ride a bicycle, we will find that none of this is fatal, but rather the prerequisite to mastering a new skill.
Third, many managers do not believe that the goal of computer literacy is attainable for them, so why start at all? Or they may believe that the amount of time necessary to acquire these new skills will be too great. I can empathize with these feelings. About six years ago, I left the large corporate environment for the entrepreneurial world. There were no longer subordinates to develop computer models for me or to search databases. It was sink or swim. To my great surprise, I found how easy it was to float and then how much I enjoyed "swimming."
Since then, information technology has become significantly more "user friendly." Remember that to capture the mass market of workers and consumers, software designers and publishers have had to gear their releases to a population whose educational background is almost certainly not as advantaged as is yours. I would be happy to wager that I could in a few short sessions of an hour or less, teach virtually any manager how to comfortably use a word processor and a personal information manager, how to fax directly from a computer, how to use a relational database and a personal financial manager, and how to log on to and use both e-mail and the World Wide Web. Rather than constituting drudgery, these applications relieve the users of drudgery, enabling them to pursue other tasks that are either more interesting or involve a higher return for their time. A good example is one female manager I know who now looks forward to balancing her checkbook with Quicken, whereas she formerly dreaded the task and relegated it to her assistant.
Leading the Troops
How then can senior managers learn and encourage their colleagues to become literate in technology? First, lead by example. All too many senior managers have that latest high-speed machine sitting idly on their console, except for an occasional game of solitaire. Many don't even receive and answer their own e-mail, but have their assistants print it out and then send replies. This, unfortunately, eliminates many of that application's benefits: easy access, independence, quick response, informality, accessibility.
Next, jump on the technology bandwagon! Become an active user. Tell your chief information officer (CIO) that he/she has an interested, albeit anxious, student. As you use these applications, it will become clear to those in the organization that they need to incorporate them into their regimen if they are to keep pace. If you don't have a CIO (or an outside consultant who fills that role), get one. Otherwise, you will be left in the dust.
Supply your organization with the tools it needs to be competitive! Why learn an application, if using it only complicates the task and slows one down? For example, I recently observed a clerical employee in a state department of motor vehicles office who had to print out each vehicle registration form twice, since the first attempt generally jammed or snagged in the printer, which was an antique. Then, if and when it did print out, a third copy was typically mailed to the registrant, after being generated once again, several days later, by another clerk and printer, since the bar code on the second copy was not sufficiently legible to be read by a scanner.
Become an aggressive adapter of technology in your organization and encourage all of your associates to think of new approaches that employ technology to make their jobs easier and more interesting. This will result in improved service at reduced costs to your clients. Institute an "Einstein Award," to be given to the associate who originates the best idea for incorporating information technology into your organization. And make it a meaningful award, both in terms of status (e.g., lunch with the chairman or agency head) and reward (e.g., extra time off, a cash bonus, or a pair of airplane tickets-you probably have mileage that you never use, if you don't want to spend the money).
Looking Ahead
Finally, there is a new technology on the horizon that should make these applications much easier to use: voice recognition (VR). In fact, it is currently available in commercial format at relatively attractive prices from a variety of suppliers, including IBM.
One example is VR for the PC. This lets the user announce commands verbally and then dictate to the word processor or other application with a high degree of accuracy. Some familiarization time is required both for the user and the VR application, which requires that the user repeat some key phrases or read a short story so that it "learns" the user's pronunciation.
Another example, is a "personal assistant" equipped with VR that offers powerful voice mail and messaging services. Named "Wildfire," this technology interacts with both callers and the user. It responds to verbal commands, very unlike the lengthy, keypad-oriented menus for many voice mail systems that regularly make David Letterman's top ten list of things to hate.
It enables you to return calls from the car or the road without having the caller's number with you by simply telling the application to "Call." Or it can put through important calls from priority callers when you are speaking on the telephone to another party. Wildfire informs you who is on the line and lets you decide whether or not to take the call or have it take a message. Moreover, it accomplishes this without the party with whom you are speaking knowing the identity of the new caller.
In conclusion, successful managers are the ones who have the most accurate and timely information, who can process it the most quickly and accurately, and who can communicate it the most clearly and effectively to their organizations, vendors, customers, investors and constituents. Accomplishing this is not just the promise of technology, it is what can be delivered today.
In addition, there may be an added bonus: your increased literacy in technology will probably draw you closer to your kids, who are virtually certain to already be quite techno-literate and who would welcome the opportunity to teach mom or dad a few tricks and then share new discoveries with them.
Jeffrey Balash is chairman of Comstock Partners, LLC, a private merchant bank in Los Angeles. [email protected]