“Departments are separate, segregated entities. But in a highly networked, highly complex corporate environment, departmental thinking is the last thing you need.“
Dr. Ralf Schneider, CIO of Allianz Deutschland AG
Dr. Ralf Schneider: A mathematician with a master’s degree in information technology. After completing his studies, he joined a mid-sized management consulting company. In 1995, he joined Allianz as an assistant to the executive board. Unusually for an IT professional, he also spent two years working in sales at Allianz. He was named CIO of Allianz Deutschland AG after occupying a variety of IT-related positions.
“IT is providing the impetus” – Part 2
Transparency is a way of building trust, and that lead us to social media networks.
They are really only two ways of building trust. Either in an immaterial way through a strong brand or through direct person-to-person interaction. But today, interaction does not begin in the physical world with a meeting or telephone call between an HR manager and an applicant, or between a sales rep and a customer, but often days or even weeks earlier on the Net.
They are really only two ways of building trust. Either in an immaterial way through a strong brand or through direct person-to-person interaction. But today, interaction does not begin in the physical world with a meeting or telephone call between an HR manager and an applicant, or between a sales rep and a customer, but often days or even weeks earlier on the Net.
The consumer world is setting the pace …
… for the new Web 2.0 world in business. And IT professionals bear a huge responsibility, because they are very much in touch with the topics and issues that will change the world. IT is definitely providing the impetus. Take innovation, for example: in the future, new ideas will not make their way through conventional organizational structures along functional lines. They will be the product of collective intelligence. Someone provides the initial spark, follows it up, and then has to find partners in other areas. When we launch something new, the product originator needs to synchronize his activities with Sales, Marketing, IT and the other corporate functions. And that means creating ad-hoc communications networks.
… for the new Web 2.0 world in business. And IT professionals bear a huge responsibility, because they are very much in touch with the topics and issues that will change the world. IT is definitely providing the impetus. Take innovation, for example: in the future, new ideas will not make their way through conventional organizational structures along functional lines. They will be the product of collective intelligence. Someone provides the initial spark, follows it up, and then has to find partners in other areas. When we launch something new, the product originator needs to synchronize his activities with Sales, Marketing, IT and the other corporate functions. And that means creating ad-hoc communications networks.
Isn’t it the case that many innovations never really get off the ground?
You’re right, unfortunately. In companies managed by their original founders, such as Grundig and AEG, innovations could flourish unhindered because the head honcho could simply ask “What does the market need?” Today, our customers have such diverse value systems, there is no patriarch at the top who can simply go with his gut feeling. Today’s businesses no longer revolve around a single autocratic leader. The instinct of a single person has been replaced by the intuition of the many, and the direct involvement of customers. We need technologies that can quickly get our customers onboard, for example to secure their input on product design; we need technologies that leverage the collective intelligent of the enterprise.
You’re right, unfortunately. In companies managed by their original founders, such as Grundig and AEG, innovations could flourish unhindered because the head honcho could simply ask “What does the market need?” Today, our customers have such diverse value systems, there is no patriarch at the top who can simply go with his gut feeling. Today’s businesses no longer revolve around a single autocratic leader. The instinct of a single person has been replaced by the intuition of the many, and the direct involvement of customers. We need technologies that can quickly get our customers onboard, for example to secure their input on product design; we need technologies that leverage the collective intelligent of the enterprise.
And how do you manage your resources to achieve that aim?
To keep to the nautical analogy, companies today no longer sail close to the coast; they frequently crisscross the oceans. That calls for an extremely skilled crew, excellent navigators and capable captains. Economic theorist Ross Ashby stated that a control system has to be more complex than the system it controls. In other words, in the highly complex economic systems currently evolving, we can no longer simply rely on passive monitoring. We need outstanding proactive control, with highly skilled people and corresponding tools that allow us to gain visibility into highly complex situations – in real time.
To keep to the nautical analogy, companies today no longer sail close to the coast; they frequently crisscross the oceans. That calls for an extremely skilled crew, excellent navigators and capable captains. Economic theorist Ross Ashby stated that a control system has to be more complex than the system it controls. In other words, in the highly complex economic systems currently evolving, we can no longer simply rely on passive monitoring. We need outstanding proactive control, with highly skilled people and corresponding tools that allow us to gain visibility into highly complex situations – in real time.
What impact do accelerated business processes have on the hierarchical organizational structures within today’s enterprises?
It’s a question of mindset. Many companies are still clinging to cohort systems that can be traced back to Ancient Rome. That is a problem because in highly complex organizations, knowledge cannot always be gleaned from the supposedly proven sources of expertise in the usual way. To channel new knowledge via established hierarchies and to gather the required facts and figures takes far too long. Today, we need different decision-making processes – ones that do not require everyone to wait for the man at the top to give the thumbs-up or thumbs-down in the traditional way.
It’s a question of mindset. Many companies are still clinging to cohort systems that can be traced back to Ancient Rome. That is a problem because in highly complex organizations, knowledge cannot always be gleaned from the supposedly proven sources of expertise in the usual way. To channel new knowledge via established hierarchies and to gather the required facts and figures takes far too long. Today, we need different decision-making processes – ones that do not require everyone to wait for the man at the top to give the thumbs-up or thumbs-down in the traditional way.
How are you going to establish this kind of mindset throughout your company’s IT and user departments?
The language we use is itself very revealing: departments are separate, segregated entities. In a highly networked, highly complex corporate environment, departmental thinking is the last thing you need. And hierarchies are not intrinsically conducive to rapid decision-making. In the future, these processes will take place in a very different way. The boss does not have to be the one to make the decision. Someone else can do that. But the boss remains ultimately responsible. That will not change.
The language we use is itself very revealing: departments are separate, segregated entities. In a highly networked, highly complex corporate environment, departmental thinking is the last thing you need. And hierarchies are not intrinsically conducive to rapid decision-making. In the future, these processes will take place in a very different way. The boss does not have to be the one to make the decision. Someone else can do that. But the boss remains ultimately responsible. That will not change.
Where has this kind of decision-making already been successfully implemented?
Take a Benedictine monastery. The abbot should never be the first to speak, but he always has the last word. And he should never make a decision until he has heard from the youngest, the most inexperienced monk. They are interesting rules, which were created and implemented centuries ago. Over the ages, we have forgotten certain things. Strategy-driven decisions need to be made via cascading organizational structures, with everyone providing their input, not just by a predefined group of people. Otherwise you will never be able to tap into your collective intelligence. The power of collective intuition has to be greater than the limited brainpower of a single individual.
Take a Benedictine monastery. The abbot should never be the first to speak, but he always has the last word. And he should never make a decision until he has heard from the youngest, the most inexperienced monk. They are interesting rules, which were created and implemented centuries ago. Over the ages, we have forgotten certain things. Strategy-driven decisions need to be made via cascading organizational structures, with everyone providing their input, not just by a predefined group of people. Otherwise you will never be able to tap into your collective intelligence. The power of collective intuition has to be greater than the limited brainpower of a single individual.
And what methods can you apply?
There are techniques available for addressing a problem via a network – comprising employees who have never previously solved a problem as a group. Irrespective of the defined hierarchies, dynamic process leaders emerge, and in the end the right solution filters through. In corporate Germany, there are far too many people who join in the chorus of approval when the silver-backed gorilla makes clear that he likes a particular idea. We do not need yes-men and yes-women. Top-down decisions applauded by stooges are dangerous for businesses. In many areas, we still have to combat a widespread corporate culture based on status, position and hubris.
There are techniques available for addressing a problem via a network – comprising employees who have never previously solved a problem as a group. Irrespective of the defined hierarchies, dynamic process leaders emerge, and in the end the right solution filters through. In corporate Germany, there are far too many people who join in the chorus of approval when the silver-backed gorilla makes clear that he likes a particular idea. We do not need yes-men and yes-women. Top-down decisions applauded by stooges are dangerous for businesses. In many areas, we still have to combat a widespread corporate culture based on status, position and hubris.
And what is the boss’s role in all of this?
His role is to nurture processes of this kind, and to find the right people. It is a very demanding task, and the key role of any top executive.
His role is to nurture processes of this kind, and to find the right people. It is a very demanding task, and the key role of any top executive.
