IT StrategyRaj Sheelvant’s blog on harnessing Information Technology to create and sustain competitive advantage for the businesses

Why Traditional Organizations fail to leverage Web 2.0 technologies

Great article by Herman Mehling in SearchCIO.com, titled IT/BUSINESS STRATEGIES: Wikis in the enterprise face security, compliance challenges. He writes how Wikis have failed to win widespread acceptance in the corporate world. Web 2.0 technologies like Wikis are so radically different that traditional organizations are not structured to take advantage of these emerging technologies. In my view there are 3 main reasons why Web 2.0 will have difficulty penetrating traditional corporate world.

Flow of Ideas

In a traditional organizations, ideas flow in unidirectional fashion. It’s the management that decides on a business strategy and motivates their employees to implement or work towards that strategy. Information flow is also controlled by the management. Conventional corporate wisdom says that employees do not need to understand all the complexities behind running the business. It’s revealed on a ‘need to know’ basis.

In Web 2.0 world, ideas do not follow any rigid preset direction. The information freely flows and that in turn generates relevant and big ideas. Any individual with a great idea can galvanize and create an ecosystem as well as momentum around that idea.

Power Structure

In the traditional organization, the power structure is vertical and top down. The manager can influence how and what the employees can work on. Hierarchy is mainly predisposed. Top executives are supposed to be smarter than middle management. Middle management is supposed to be smarter than individual contributors. This hierarchal power structure gives management a sense of direction as to where to take their organization.

In Web 2.0 world the power structure is horizontal. The person with the greatest idea can influence how and what to work on. Community of resources agreeing with that person, will come together to organize themselves to execute the idea. Also, there is no concept of hierarchy in the Web 2.0 world. In fact, this lack of hierarchy makes it all that powerful.

Employee Incentives

In the traditional organization, the employee who is smarter or better gets promoted. That generates an environment of competition between the employees. This pyramid structure in the organization leads to vicious politics. Power and Control are the only ways the employer can reward an employee.

Web 2.0 technology triggers people to collaborate rather than compete. The best ideas come as multiple people come together to co-operate and add value. Instant international recognition is what motivates individuals in Web 2.0 culture.

These three diametrically opposite forces between traditional organizations and Web 2.0 technology is the main reason, why a traditional organizations will struggle to use it successfully. Today’s organizations have to radically restructure to fully leverage Web 2.0 technologies.

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Saturday, September 8th, 2007 at 7:52 pm and is filed under Globalization, Web 2.0, Business Strategy, IT Strategy, IT Management, Collaboration. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.