This story started out to be quite simple. Ask high-level purchasing executives at two or three Fortune 500 companies how they’ve fared in implementing their e-procurement initiatives. The result? Add to our nation’s most-guarded secrets, excluding the instructions for making nuclear bombs, the e-procurement plans of some of America’s biggest brand-name companies. However, we weren’t entirely skunked. Another story emerged, one that illustrates the different personalities of old-and new-economy companies.
In their struggles to survive and earn some respect, Internet companies are building new types of organizations designed specifically to harness the Internet’s power to distribute information. Their tinkering may in time inspire changes in the way all organizations think and behave. This is the so-called “paradigm shift.” Net gurus have preached from the beginning; it’s not technology that actually powers the Internet, but the unfettered flow of information. Like the Biblical tree of knowledge, once you pluck off an apple, stuff happens, welcome or not.
The Internet is a state of mind, which conjures up a number of flaky images until the concept is seen in action. Dell Computer Corp., for one, is hardly flaky. In an e-mail message, spokesperson Venancio Figueroa III says, “One of the primary drivers of implementing the Internet in our direct business model is that we believe we can compress time and distance — we call this velocity — which gives us a competitive advantage over others. We’d rather be in the business of managing our intellectual assets (i.e., customer and supplier information) versus managing inventory.”
Dell is considered the prototypical Internet company, in that “Internet company” is losing relevance as a business category, just as having phones doesn’t make it a “phone company.” Rather, Dell demonstrates the adoption of the type of bedrock values that will make companies better able to cope with change, manage their knowledge resources, respond quickly to suppliers, customers, and partners, and operate more openly.
The Velocity of Change
Internet time is fast. The pace astonishes even people who work for and with Internet companies. Internet and tech companies are, for the most part, organized around the Internet because speed is of the essence in order to keep up with technological change. Their willingness to take risks makes them error prone, which is why we’re most familiar with their boo-boos. However, they also recover quickly and move on, and along this bumpy path a new company culture is being formed.
“The speed and urgency with which Internet companies work will creep into all companies,” says Amy Adair, a consultant and founder of The Table Group, an executive coaching and organization consulting firm that works with tech companies. But managing change at any speed can be difficult. Employees can suffer anxiety, as well as a sense of loss in a number of areas, which Adair’s firm identifies as control, turf, structure, personal attachments, meaning, identity and a vision of the future.
A buyer at one Fortune 500 company sees some of these issues surfacing at monthly meetings of a local chapter of the National Association of Purchasing Management. Automation can do that to a person. A wholesale slaughter of purchasing professionals is unlikely, as the strategic value of purchasing will always be important (and seen growing by some industry analysts), and no single technology is expected to take the place of experienced people to man the battlements.
The career threats may not be real, but the worries are, and they can be the cause of serious resistance to change, which in turn makes entertaining new ideas and implementing much-needed technologies difficult, if not impossible. Leadership is important in alleviating much of the stress change can cause.