January 10, 2000 New Thinking:
The formal and the informal
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January 10, 2000
The formal and the informal
By Gerry McGovern
The Internet has created an interesting paradox in the world of business. Email, in particular, has created an informal communications environment where the emphasis is on speed of thought. However, at the other end of the spectrum, the ecommerce website is a very formal environment where the user wants precise information.
Both of these developments are having major impacts on business and are changing the very shape of the organization as we enter the new millennium.
I had an interesting discussion with a senior executive from a large corporation before Christmas. He was very enthusiastic about the Internet but admitted that many of his colleagues were being left behind. He talked about how more and more decisions and strategic development were now happening through rapid fire email where people would discuss and issue back and forth and then decide to do something.
He mentioned how a number of senior managers had not taken to email and how they were now being increasingly being left out of the loop, not through any deliberate policy but rather because they were not participating in the growing email debates.
Decisions in such corporations historically followed very formal processes and tended very much to come from the top down. Now, many more managers were contributing to what was a more informal ‘chatty’ process. Information was flowing at an incredible pace, the demand to decide quickly was increasing by the day, and the whole process was effectively undermining the traditional top-down controls.
Over in the ecommerce domain we see the opposite happening. Commerce is generally an informal environment. In business to business, much product is sold based on the relationship the sales rep has with the buyer. Even in business to consumer marketplace, the whole environment of the shop, how close it is to your home from a travel and convenience point of view, the friendliness and helpfulness of the sales people, all add to an informal experience.
When you go to a website, however, you enter a very minimalist environment where there is very little room for the informal and direct human-to-human contact. You are there on a mission. You are there to know something, and if you find out what you came to know, you might just decide to buy.
You want to know if the product is available, what price it is, are there any reviews of it, what the delivery charges are, when it can be delivered, what the returns policy is, etc. You may also want to know broader information relating to the privacy policy the website has, for example.
To correctly answer all these questions and more, require the organization to have very formal information structures. The stock management system needs to be able to feed very exact information to the website. The logistics system needs to promise precise delivery based on a number of factors.
If new information arises on the product it needs to be fed to the website as quickly as possible. Not an easy task by any means and this is one of the reasons why ecommerce developments are proving to be a lot more expensive than many expected.
The Internet challenges the organization to be both formal and informal, to be highly flexible and yet highly structured. Not easy.
Gerry McGovern
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The Internet challenges the organization to be both formal and informal, to be highly flexible and yet highly structured. Not easy.
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