THEE-DlMEfJSlON 27
Table 4.1 Transitions to the world of e-business.
In industrial business In e-business
used for:
Strategy
Technology
Management
Knowledge
Assets
Prediction
Convergence
Compliance
Utilization
Tangibles
Organizations Structure
used for:
"Anticipation of surprise'
Divergence
Self-control
Creation and renewal
Intangibles
Edge of chaos

Source: Malhotra, Y. (2000) "Knowledge management for e-business performance: advancing information strategy to 'Internet time.'" Information Strategy, The Executive's Journal, 16(4), Summer, 6

Organizations need to think about coupling the e-business revolu­tion with the business model revolution. Those who can recreate themselves on the cutting edge of responsiveness will have a distinct advantage over their competitors. In a fundamental change, the vastly enhanced capacity to respond rapidly allows organizations to partner their network of customers and suppliers to become organizations of co-creators. This is a development that radically transforms the rules of business.

At its core, this shift is grounded in terms of an organization's capabilities to respond. This is the ability to draw on the past and act in the present while continually sensing and moving towards the future. Organizations need to view their world in terms of the emerging e-environment and revamp their resources in light of the ability to rapidly respond, continuously learn, and grow a set of network relationships.

Security will be not in terms of current assets, but in the ability to respond to ranges of new configurations of conditions. Change is moving at a continually accelerating pace and it is impossible to predict exactly what conditions organizations will be facing in the next week, let alone the next year. It is this anticipation of surprise that must be built into the organizational mindset. Being able to operate at Internet speed, versus bureaucratic speed, needs to become the norm.

For technology, organizations must transition from concentrating on having their intellectual capital embedded in a fixed technology base to an approach that facilitates bringing together diverse knowledge and information and making it broadly and dynamically available across networks.

Management must move to function as resources for, and facili­tators of, intellectual capital across their extended enterprises. The complexity of the new environment means theyprobably know less of the particulars of any situation than the people who report to them. The leaders of the organization need to guide the organization, bring the different parts into conversation, and build the capabilities and values for ongoing responsiveness

In keeping with that, knowledge is not something that is a fixed asset and something to be hoarded. Knowledge is a dynamic, ever-growing, ever-changing resource that must be sensed, cultivated, and brought appropriately into play in every new situation. Organizations need to shift from being activity-based into being knowledge-based, from doing repeatable things to drawing on and renewing a knowledge base that is a community resource.

Part of the new perspective is recognizing the value of intangible resources and developing the capacity to manage them. This is a new set of skills for everyone in any enterprise.

Some measure of structure is needed for any organism to survive and thrive. The question is, what is the right amount of structure for the conditions in which an organization operates? With the emergence of "communities of practice" and new relationships with both suppliers and customers, everything in the organization comes into question. Moving from an internally focused, rigid structure to an extended enterprise network, facilitated by incorporating the e-dimension, will provide significantly more flexibility and necessary responsiveness.

FROM "JUST-IN-CASE" TO "JUST-IN-TIME"

In the past, the range of choice was limited for organizations, employees, and customers. People lived and worked in the same location, and very often were employed by the same organizations for their entire careers. They usually had only a narrow set of life options open to them over the course of their lifetimes. Production and distribution systems were physically-based. Transportation and communications were scarce and expensive resources. Essential resources had to be readily available or stockpiled in case availability was in jeopardy. Inventories of physical resources, such as iron, coal, paper, or wheat were built up "just-in case."

The "just-incase" model also defined what happened with the workforce as well. Workers were seen as commodities that were brought in, used up, and replaced, just like physical resources. For the most part people were seen as extensions of the physical assets. The skill base for the workforce was not actively cultivated, since the real knowledge for production was seen only to be in the heads of the managers. The workforce was not seen as being able to be entrusted to do more than narrowly defined, specific tasks. During a time of gradual change and limited options, these practices were far more sensible.

In the volatile e-business era, the "command and control" model is an increasingly difficult model to continue to deploy. The level of customer expectations has risen enormously, requiring whole new levels of quality, diversity, and speed of response. The range of choices, both in type and in quality, grew significantly in the 1970s and 1980s, and the emergence of the Internet and World Wide Web in the 1990s ratcheted up the options beyond almost any expectations. Going into the twenty-first century, the range of choices is potentially limitless.

PEOPLE AS THE OWNERS OF INTELLECTUAL CAPITAL

The real revolution is that perhaps for the first time in history, people have control of their intellectual capital resources. They can get up and walk out the door, taking their intellectual capital -with them.

As Charles Handy, a leading thinker on business and organization change, put it:

"People now own the means of production in organizations that rely on intellectual capital, on knowledge and skills, because the people have them in their brains, and they can walk out of the organization at any time... It makes no sense to say that the people who own the capital own the people who have the means of production, because you can't own other people either morally or literally, and that is going to change the nature of capitalism.

Secondly, it is going to change the nature of management, because you can't boss people around the same way if they don't like what you are doing. They have a market price and can walk out."2

As critical as the e-dimension is, it is operated and leveraged by people. As people discover the power of the e-dimension they can use it to extend and market their talents and intellectual capital. They can either make it available inside the organization or they can use the e-dimension to take the intellectual capital and just as easily send it elsewhere. The Internet has hastened the demise of the old social contract and formed the basis for the necessary links that enable the new social contract.

The e-dimension then is not just a technology. It is the "medium" and the "message," as well. It avails enterprises a basis for a new set of relationships, new ways of doing their business, and a vehicle to reshape themselves, in conjunction with their intellectual capital.

XEROX'S EUREKA!

Xerox's 19,000 service engineers receive more than 25 million customer requests for support annually. Xerox was looking for a better way to train them. After initially going down the road of the traditional approach of a step-by-step logic-based training program, they experimented with a novel way to develop a social fabric that supported knowledge sharing and meaning.

Xerox sentan anthropologist to observe its service engineers in daily work to find out their tacit work practices. The anthropol­ogist followed the service engineers around for six months. He noticed that, as they walked atound the copying machines that had problems, the service engineers began to develop a socially constructed narrative. The narrative was not logically driven. In fact, the construction of a narrative was not finished until an under­standing of the problem was accomplished. It turned out that the most difficult troubleshooting creates the most interesting stories.

Individual service engineers' tacit knowledge, or know-how coming from their years of experience, was made explicit in their work situations as they shared it with their peers. Xerox developed a community of practice among the service engineers.