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Michael Wolff contribution to Peter Lloyd and Paula Boyle (1998): Web-Weaving – intranets, extranets and strategic alliances
Tapscott and the effective individual
Don Tapscott, author of the best selling Digital Economy, Promise and Peril in the Age of Networked Intelligence,1 has developed a model of business transformation in the Information Age. His main argument is that the new economy will become a ‘networked’ economy and that in business we are looking at the emergence of the ‘internetworked business’. By ‘networked’ Tapscott is referring to the interconnection of desktop end-users, whether connecting from home, office or elsewhere. In Tapscott’s hierarchy, he sees the ‘internetworked business’ as the highest form of organisational structure. Below this is the ‘extended enterprise’, followed by the ‘integrated enterprise’, the ‘high-performance team’, and at the lowest level, the ‘effective individual’. Tapscott sees the effective individual as the basis building block of the networked economy, and describes his effectiveness in terms of learning efficiency through the enabling of personal multimedia. By failing to appreciate both the need and the effect of the required psychological transition, Tapscott underestimates the full potential of individual empowerment and therefore quite understandably places the Effective Individual at the bottom of the networked hierarchy. He has perhaps unwittingly fallen into the same paradigm that prevails for conventional organisation without realising what is actually happening in practice. In conventional business, we rightly see the largest organisations as being the most successful and the examples of best commercial practice. They would not have grown so large if they were not doing the right thing. However, within the organisation the individual thrives only in so far as he aligns hissense of meaning and purpose with that of his organisation. At the point where this alignment fails, the individual becomes expendable. It may be true to say that the organisation stands on the shoulders of its employees, but the organisation serves its own purpose, not necessarily that of the individuals employed by it. In this sense, employees at all levels within an organisation allow themselves to be disempowered for the good of the organisation. In the hierarchical structure, each individual divests his power in favour of the next level of authority. In return, the individual derives income, social status, meaning and purpose and security. Especially with respect to security, this organisational contract is now under increasing stress. It is also arguable that this type of hierarchical structure is becoming both pathological and dysfunctional as it ceases to fulfil the needs and aspirations of its members. In the networked economy, this paradigm is stood firmly on its head. The empowered individual, free from the need to give away his power to
hierarchies that serve their own purpose and supported by the huge self-organising networked economy, is free to build his or her own hierarchies at will. With open access to all the resources of the network, the individual is spoilt for choice. The otential is almost infinite. He or she can choose when, where and how he or she works. At all times the individual is in charge of his or her own destiny. He or she creates his or her own meaning and purpose. The empowered individual, the first level of integration, is able to create one or more core business services in which the end-to-end value chain is fully integrated electronically. These processes involve the client, the suppliers of information and value enhancement services and the coordinating empowered individual. This is the second level of integration. At the next level, functional support services such as sales, marketing, IT support, accounting and many other functions can be integrated as endto-end value chains. ach of the individuals supplying services within these chains needs to be empowered in the same way, as will be shown below. We now begin to see a model of the networked economy in which the empowered individual is supported by a network of empowered individuals, each fully in control of his own destiny. While Tapscott does not play down the seismic upheaval that is presaged by the emergence of the networked economy, his thinking is still tainted by the old-paradigm notion that higher levels of organisation are more effective than lower levels. Teams are more effective than individuals, integrated enterprises more effective than teams, the extended enterprise more effective than the integrated enterprise and so on. Tapscott does not distinguish in any detail the difference between the employed and the self-employed effective individual. His underlying assumptions suggest that the Effective Individual is an employee. The employed knowledge professional becomes more effective with his or her understanding and practice of the technology, this will in itself act as a trigger for the psychological transition. As the awakened individual strives for further empowerment and discovers a new sense of purpose and meaning, there will be an inevitable divergence between the purpose of the individual and the organisation. Not only is there a tension of purpose, but the individual’s greatly improved commercial effectiveness combined with an increasing psychological robustness, pose a considerable threat to the organisation’s competitiveness. The structure created by the empowered individual will inevitably evolve to become the most competitive economic unit. Therefore it would appear that it is in the interests of both individuals and organisations to work together to support and facilitate this process. Individual empowerment is not in itself a modern concept. One historical example is the notion of the Japanese Samurai warrior. For the Samurai, his tool was his sword. For the empowered individual, it is his desktop. To master the use of his sword, the Samurai developed not only his technical skills, but also his mind. Of what use was a sharp, well-balanced sword, or an intricate and technically elaborate method of using it in combat, if the samurai who had to be prepared to face death every day had not also developed a stable, inner platform of mental control from which to act or react according to the circumstances of an encounter? The relationship
between this condition of mental stability – which made it possible for the martial skills expert to assess a situation quickly and coolly, simultaneously deciding upon the proper course of action – and a coherent and powerful execution of that decision had been perceived by almost every martial arts instructor in Japan.2 In the unstructured networked economy, the empowered individual needs to combine technical, commercial and entrepreneurial skills with an aspiration for personal development that takes him or her beyond the stage that has enabled him or her to be successful in the conventional economy. I intend to illustrate this point with a brief description from my own experience.
The transition to individual empowerment
In order for a knowledge worker within an organisation to transition to an “Empowered Individual” functioning within the networked economy five levels of technical and one level of transformational competence are required. It is assumed that the individual already has a well-developed set of commercial, managerial and entrepreneurial skills or that these can be acquired from other sources. The five technical skills include the ability to: • • • • • use all the common and latest desktop application software packages and to be able to manage the desktop environment navigate the Internet and the Web, using all its resources, with the ability to communicate and share information access sources of online business intelligence as appropriate build, manage and maintain one’s own Website, and to use this as a means for building relationships with clients, suppliers and associates who are potential work partners or information sharers build and manage a virtual office, which involves the management of the core business competency and all the other business functions that support it, such as marketing, sales, IT support, billing, collection and accounting
The empowered individual has the potential to operate as a self-contained micro business, integrating and co-ordinating the value chain between suppliers and customers, and the functions needed to support this process, all from his or her single desktop. The enabling technology, as with information, is easily accessible, universally available and useable by any intelligentperson. In a networked environment where information is universally accessible and infrastructure costs are the same for all participants, the potential to gather, organise, synthesise, evaluate - to generally add value and leverage intellectual material to produce a higher-value asset - still remains. However, this asset cannot be realised unless the individuals engaged in the process are prepared to share information. A very high degree of information sharing has been enabled by the technology, facilitating wholly distributed processes, that is, individuals being able to live and work anywhere. However, true information sharing requires a high degree
of mutual trust. Furthermore the development of mutual trust between individuals who may never meet each other face to face, requires an ability to build and maintain relationships that are quite different to those necessary for successful operation in a conventional organisation. In a conventional organisation, the successful manager needs to be able to exercise power and control. In the networked economy, the professional bases his success on personal empowerment and mutual relationships built on trust. The exercise of power and control just does not work. In fact the empowered individual can organise him or herself so that he or she is never in a position where another individual, whether an employer, customer or vendor, can exercise power or control over him or her. At the same time, the inividual has no need to use this mode on others. The culture of conventional organisations, however flat the structure, is still rooted in the concept of hierarchical power. Personal fulfilment and identity are determined by the complex reward structure, which tells a person who he or she is by how he or she performs in relation to the purpose of the organisation. Personal financial security and sense of fulfilment are totally geared to this process. Inevitably the individual’s level of psychological development must remain stuck at this level, because moving to another level threatens to undermine not only his or her financial security, but also social status, and most importantly, the sense of who he or she is. In any networked relationship, most of the functions that give us meaning in a conventional organisation are no longer valid. Status, role, authority, earnings level, social position, gender, age, physical appearance – none of these have any relevance. So how do we need to change in order to orient ourselves in this new and potentially bewildering environment? The psychological transition is just beginning to be understood and is further discussed below.
Employment status and motivation
The networked economy is global and with the universal availability of information, there is a high degree of transparency relating to the prices of products and services. For any product or service, a global price is emerging. For an individual to sell his or her services in the networked economy, he or she needs to be competitive within the global pricing structure. This means that he needs to take a hard look at the value of his services, his distribution channels, his income needs and his underlying cost structure. If the individual works for a large successful organisation he or she may have a high sense of security. He or she has the rights of an employee, derives a regular income from one source and the chances are still reasonably good that if he or she were to lose his or her job, another employer could be found. However, as the networked economy gathers momentum, the individual will become increasingly aware that his or her level of security is diminishing rapidly and that the window of opportunity to make the transition to self-empowerment is closing fast. With any luck he or she will not become a victim of the down-sizing in his or her industry and will manage to survive each successive merger and
subsequent rationalisation that takes place. According to Find/SVP, a US research group that tracks workplace developments, the number of workers telecommuting, at least part-time, has nearly tripled, jumping from 4 million in 1990 to 8 million in 1996 and 11.1 million in 1997. While most of these are still employees, an increasing number are becoming self employed. It is clear that as individuals develop and hone the skills outlined above, self-employment and home based working will become the norm for knowledge professionals. In a recent conversation with the head of an executive outplacement service, I was told: “Three years ago we were able to find full time employment for all our clients. Today we are placing 80 percent, but in three years we are forecasting that we will only find jobs for 50 percent. The remaining 50 percent will have to be considering alternative forms of employment”. Individuals with high-quality skills and operating from a low cost base with few fixed overheads will inevitably prove to be highly competitive in knowledge-based markets. This applies to a high percentage of white-collar professional jobs. The motivation for these people is that they can maintain their current standards of living and at the same time improve their overall quality of life and sense of well being. This may be achieved at the expense of very high earning levels, major capital accumulation and/or power in the conventional sense. Quality of life is achieved primarily through the individual’s ability to choose • • • where he lives and works what he does with whom he works
In this structure, the development of high-quality relationship and mutual interdependence (albeit virtual) is the basis for achieving his goals. Also in this structure, the whole notion of information takes on a different significance. Back in the early days of telegraph, information was used as a tool for achieving financial leverage and power through the process of differentiation. I have it, you don’t. I win, you lose. In the networked economy, information has become a universally available resource and the possibilities for leverage are limited. In this situation information becomes a means for harmonisation and integration. A tool for building relationship as well as adding value.
Understanding this point is critical to understanding the process of change from the conventional to the networked economic structure. This will become clearer when looking at the psychological transition that is required: • • An individual in life goes through various stages of development and these do not stop at adulthood At each stage of development the individual sees the world in a certain way and that this changes as one moves from one stage to the next
At a certain stage of development an individual can become conscious of his or her own consciousness, that is to say, he or she can achieve a certain level of self-knowledge that enables him or her to observe his or her own patterns of behaviour and motivations Having reached this stage of meta-consciousness an individual is able to progress to further stages of self-knowledge and psychological development.
In this respect we are only concerned with the level of psychological transformation required that enables the individual to achieve maximum adaptation in the emerging networked environment. Why he needs to change will become clearer as we proceed. There are many schools of psychology that interpret this process in slightly different ways. A concise exposition can be found in Robert Kegan’s book The Evolving Self, Problem and Process in Human Development.3 Kegan, a senior lecturer at Harvard Graduate School of Education has identified five major stages of personal development and has described in detail the process of transition from one stage to the next. What is relevant to our discussion is his description of the transition from the fourth level (the institutional) to his fifth level (the interindividual). The thrust of our argument is that the institutional level which corresponds in this case with the individual’s successful adaptation in the conventional power and control world of business must progress to the interindividual level, in order to become empowered and build trusting relationships in the networked economy. Kegan shows first that at each stage of development, there is a tension between the individual’s need for differentiation and his need for integration. At the first and last stages of development, integration becomes the dominant mode, whereas in the intermediate phases, including the fourth institutional phase, differentiation is the main requirement for the individual. Kegan describes the transition from one stage to the next in terms of three main phases. The first one, holding on, involves the confirmation of the stage that has been reached and a desire to hold on to this stage. However, having assimilated and started to grow out of this phase, the individual moves towards contradiction, which initiates the process of letting go. The final phase, which he calls staying put for reintegration, involves the need for continuity to provide a safe bridge from one major stage to the next. In the institutional stage, the individual’s identity is very much determined by his or her social and organisational status. Identity is determined by job titles, earning levels, power, property, financial wealth. It is less a question of who you are, but what you do, how much you earn and what you own. In order to be successful in this tage, the individual is willing to become the role that he or she has defined for him or herself and has allowed others to define for him or her. Role models are other successful individuals in the organisation or chosen social niche. In his holding on phase, the individual achieves his or her career goals, a certain level of authority. Through his or her career he or she gets a sense of personal enhancement, fulfils ambitions and achieves a number of goals. The individual is motivated by need, especially respect and acceptance within his or her social group. Personal goals are adjusted within the organisational and social structure. He or she engages in a high degree of socialisation.
To succeed in the networked economy, it is clear that the individual must move out of this phase, or fail. In the networked world, there are no job titles; there is no organisational status, no social position, fewer opportunities for face-to-face socialisation. There is no scope for authority, no opportunities for personal enhancement, no peers against whom to measure one’s performance. Without these identity props, the individual has to re-define his or her whole identity. In this stage, he or she must discover, know, define him or herself. The centre of his or her universe becomes him or herself, not the institution or social grouping to which he or she belongs. The individual needs to let go of the organisational and social trappings. He or she becomes motivated by choice, his or her personal goals are self-actualisation and social goals are liberation. He or she is searching for autonomy. His or her measure of success is authenticity, the ability to speak his or her truth, his or her overall sense of well-being. Kegan describes this phase as the acknowledgement and capacity for interdependence, for self-surrender and intimacy, for inter-dependent selfdefinition. This is also the stage at which, being centred in him or herself, the individual can build the ‘stable inner platform of mental control’ which is essential when the individual has no other means by which to define him or herself.
I have outlined a situation in which highly skilled, entrepreneurial and psychologically developed professionals can embrace the opportunities emerging through the networked economy and achieve a high degree of personal security, competitiveness, quality of life and sense of well-being. Underlying this proposition is the increasing awareness that the emergence of the networked economy will entail fundamental structural change at all levels of society, which in turn presents major threats and opportunities for all concerned. I sense that the changes will be very profound and that they will come very quickly. The following are some of the issues that need to be considered:
For individuals - employed knowledge professionals
Faced by the opportunities and threats that have been raised above, the individual wishing to succeed in the networked economy needs to be asking the following questions about him or herself and his or her situation: • • • How do the current changes affect the competitiveness of my employer and therefore how secure are my long term prospects? What is my level of desktop competence and how willing is my employer to support me in fully developing the technical skills required to maximise my productivity? Where do I stand in terms of psychological development?
Assuming that I am in Kegan’s institutional Stage, am I at the holding on, contradiction or staying put for reintegration stage? If I am at the holding on stage, to what extent is my employer encouraging me to stay there or to what extent is he encouraging me to let go and move on, especially in relation to the development of my knowledge-sharing skills? Do I want to become an independent knowledge professional as described above, and if so, what support and encouragement am I likely to get from my employer? What structural changes would I have to make in my life to make myself globally competitive? If I made a strategic decision to become self-employed, how could I make this transition in such a way that both I and my current employer get the maximum benefits?
For organisations employing knowledge professionals:
• • What is the level of desktop competency in our organisation? Do our desktop end-users have access to high quality business information, both from fee-based information providers and from the Web? Do they need more training to let them know what is possible and how to get the best advantage? Do we think that our internal information sources are better than information that can currently be obtained from public service providers? If so, have we recently conducted an audit to check whether this is the case? How good are our systems for knowledge sharing both within and outside the organisation? Are they better than knowledge sharing systems currently available to users over public networks? If so, how much better and for how long? Do we think of our knowledge resources in terms of ‘intellectual capital’, and if so, have we put into place steps to measure and monitor it? Have we considered our key knowledge professionals in terms of ‘psychological capital’? With respect to the pressures outlined above for individual empowerment in the emerging networked economy, what strategies are in our best interest? Should we support or discourage our employees in this respect?
1. Tapscott, D. (1995) The Digital Economy : Promise and Peril in the
Age of Networked Intelligence
2. Ratti and Westbrook (1973) The Secrets of the Samurai 3. Kegan, R. 1982. The Evolving Self: Problem and Process in Human
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