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Beyond Enterprise 2.0

April 1, 2007 | Erik Brynjolfsson, Andrew McAfee | Managing Technology
Over the last decade, the Internet has transformed many aspects of the way business is conducted -- from how goods are bought and sold to where work is done. To explore what might constitute the next generation of Web technologies and what effect they will have on the nature, purpose and management of organizations, MIT Sloan Management Review contributing editor Martha E. Mangelsdorf talked with two leading experts: Erik Brynjolfsson, director of the MIT Center for Digital Business and the George and Sandra Schussel Professor of Management at the MIT Sloan School of Management, and Andrew P. McAfee, associate professor of business administration in the Technology and Operations Management Unit at Harvard Business School.

Brynjolffsson and McAfee are confident that the future emphasis of some businesses will be on the use of Web 2.0 technologies to support innovation, creativity and information sharing rather than just to achieve cost cutting. They discussed the complementary relationship between traditional managerial tools, such as ERP and CRM, and the evolving modes of collaboration and communication, such as wikis. McAfee pointed out that one set of tools allows good ideas to percolate upward, after which the very structured process-management technologies can be used to replicate the innovation -- with brutal efficiency in some cases.

Companies in very turbulent, information-intensive industries tend to be the ones that have gone the furthest with deploying the new Enterprise 2.0 infrastructure and the mindset that goes along with it, said McAfee. There are "softer cultural things" that companies can do to promote creativity among employees, Brynjolfsson said, which gives them the freedom to work laterally or diagonally within their organizations. The cultural shift away from the classic notions of productivity and output, such as billable hours, is more difficult for some companies to manage, and neither Brynjolfsson nor McAfee sees any technology that by itself will resolve this dilemma.

According to Brynjolfsson and McAfee, technology innovation is engendering a whole set of complementary innovations in organizations that actually heighten the role of managers and executives. In fact, they said, it will be managers who will have to increase the ambient level of participation in and contribution to these Enterprise 2.0 environments.

Companies cited in the discussion that are integrating the new technologies and cultivating the complementary cultural changes include Google, retail pharmacy chain CVS, Spanish fashion retailer Zara and Canadian software developer Cambrian House.
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