WHERE A TRANSFORMATION STARTS

If you want to move your organization successfully into the Dual Age of Information and Connections, you must first transform your culture. This kind of transformation is not easy. To change your culture, you must begin to think consciously about and plan for the type of culture you want for your organization. An organization's business model is based on its underlying culture, a culture that is no more— and no less—than the collective values, ethics, and norms of its people. You must start with a review of the organization's strategic framework as developed from the Holistic Organization Model (see Chapter 3). Leaders have the primary responsibility for creating the kind of culture that enables individual, and thus corporate, transformation. The employees then must transform their view of the organization and their role within it.

Unfortunately, business leaders are often part of the problem. They cling to old styles of management while giving only lip service to cultural transformation. This mixed message causes confusion and mistrust within an organization.

Understanding What's New

How do you know when you have truly embraced the new business model? First, you must clearly understand the basic differences between the old industrial model and the new one, as shown in Table 9.

Table 9: The Industrial Age vs. the Dual Age of Information and Connections

INDUSTRIAL AGE (OLD)		DUAL AGE(NEW)
Controlled Production		Open Production
Scarcity Mentality		Abundance Mentality
Hierarchical Structure		Network Structure
Command and Control		Collaboration
Linear/Sequential		Organic/Neural
Win-Lose		Win-Win
Material		Information

Controlled Production vs. Open Production

Under the old industrial model, companies try to control the material resources they need for production. When Henry Ford needed glass for automobile windscreens, for example, he bought a glass manufacturer. When he needed rubber for tires, he bought rubber plantations. He developed a huge business empire. In the Dual Age of Information and Connections, the successful companies focus on their core competencies. To get the materials they need for production, they partner with other companies rather than seek to own them directly. After all, information is the key material in the twenty-first century, and information is so abundant that no company alone can control it.

Scarcity Mentality vs. Abundance Mentality

A scarcity mentality says, "The pie is only so big; so how can I secure my piece of that pie and keep other people from getting it—or even from getting their own piece?" An abundance mentality takes the opposite tack. It says, "The pie is only so big, so how do we make it bigger?" or better, "How can we bake more pies?" Businesses with an abundance mentality look for ways to combine talents and products to create something new and different. An example is the partnership between General Motors and Verizon Wireless to equip certain GM cars with the OnStar™ in-vehicle communications system. GM and Verizon took two products and combined them in a way that expanded the market for both. They made the pie bigger.

Hierarchical Structure vs. Network Structure

In hierarchical organizations, decision making and communication must trudge up and down the bureaucratic towers. That's a slow, inefficient, and often frustrating way to do business. Businesses structured as a network look more like an octopus, disbursing and collecting information to and from a host of sources in many directions at the same time. As a result, these businesses are able to react to the changing marketplace much more quickly and efficiently.

Command and Control vs. Collaboration

Managers in industrial model organizations tell employees what to do and how to do it. Period. It's a management style based on the military chain of command. My way or the highway. In the Dual Age of Information and Connections, forward-looking managers realize that they must collaborate with employees if they want their business to thrive. These leaders open a dialogue with employees and invite input and ideas.

Linear/Sequential vs. Organic/Neural

Industrial Age companies run their business in incremental segments that follow a linear thought pattern. This linearity can lead to dead ends—in ideas and in business growth. Wasted time. Wasted money. Wasted technology. Wasted talent. Another problem with linear thought patterns is that they prevent people from making the kinds of breakthroughs needed to reach new plateaus. Because they are trained in and work in a sequential culture, breaking this mind-set is difficult. As organizations become increasingly information and knowledge based, however, they begin to act more like living organisms. These businesses grow organically or in random spurts, rather than sequentially. Some parts of the business may die, but other parts continue to grow and thrive. Instead of remaining static, the business evolves and adapts to the changing marketplace.

Win-Lose vs. Win-Win

In the traditional competitive business model, there cannot be two winners. For a business to succeed, it must beat its competition. One winner, one loser. Smart businesses, however, are now adopting the win-win approach to competitors. They recognize that there's enough opportunity out there for everybody. As a result of this abundance mentality, they work not to crush their competitors, but to expand the marketplace to everybody's benefit.

Material vs. Information

Under the old industrial model, business wealth was built on commodities—tangible material assets and products. In the Dual Age of Information and Connections, information is the raw material that organizations use to devise new ways of satisfying customer needs—and to grow their business. This shift in perspective represents an important difference from the industrial economy. Although car manufacturers and energy companies, for instance, still produce material products, how those products are engineered, built, marketed, and sold—and the profits they reap—are all based on new and different ways of using information. This change is really what the Dual Age of Information and Connections is about.

Developing the Skills to Make the Transformation

Once you understand where your business needs to go—into the Dual Age of Information and Connections—you need to develop the relationship skills to help move it there. Knowing whether your business culture has a past or future orientation is critical. The new information and connection culture, after all, is a partnering culture— living in the past will not enable you to create a culture capable of moving you into the future. Roberta and Jamie's story below illustrates how a past orientation can undermine needed transformation, and how a future orientation can accelerate necessary adaptations to changes in the marketplace.

ROBERTA AND JAMIE AND MOVING TO THE FUTURE

Last week we were having lunch with our friend Roberta, a well-respected banker. Roberta told us about an issue she was having with Jamie, the bank's customer care center manager. It seems that Jamie wanted to reduce the center's call volume by establishing an Internet banking service that would enable people to review account balances, make payments, and transfer money online. We thought it sounded like a great idea, but Roberta was not at all enthusiastic. Her bank, which had a growth strategy based on personalized service, was a phenomenal success, and Roberta didn't want to lose the personal touch that had made the company so successful. Jamie, on the other hand, felt that the bank had to change to meet customer demand. Something had to give! Finally, this slow-burn conflict flared into a full-blown firefight at their most recent staff meeting.

So who was right? Who was wrong? In some ways, the answer to that question is irrelevant. As with many partnering issues, the process is as important, if not more important, than the outcome. The more critical issue here is how the company is handling change.

When things are going well, as they are at Roberta's bank, embracing change can be especially hard to do. But it's also one of the most crucial skills to have. People tend to get complacent when things are going well and take a "don't-rock-the-boat" approach to business strategy. The problem with that strategy is that while you've been drifting along on smooth waters, you've moved downstream and the environment has probably changed. You may have failed to continue scanning the external environment and adapting to new conditions.

Businesses today are facing a colossal transformation in the environment. Everything from the information explosion to globalization is changing the face of the business world. We'll examine how to manage those changes in terms of past and future orientation and then discuss the importance of being comfortable with change.