Talking to Each Other

As companies become more fragmented and their workers more geographically dispersed, managers need a way to build a corporate culture. The Internet...
Economist StaffNovember 1, 2000

At its most basic, the Internet is a wonderful way to communicate. Hit that “send” button and off goes the e-mail, trailing attachments, to everybody in the firm and beyond. No wonder companies find it a perfect way to talk to their staff. No wonder it is so useful — but also so dangerous — when staff want to talk to each other.

Over and over again, the Internet’s uses turn out to dovetail beautifully with current trends. As companies become more fragmented and their workers more geographically dispersed, managers need a way to rally the troops. In particular, they need a way to build a corporate culture: that intangible something that binds employees together and teaches them to understand instinctively the defining qualities of the business and the appropriate way to respond to any issue that confronts them. The Internet provides the means to do this.

In a stable, slow-growing and well-established company, a common culture may be easy to maintain. You take each year’s new recruits off to boot camp for a fortnight and teach them the company history. But few companies today can afford to be stable or slow-growing. Instability and speed make culture-creation harder.

In Silicon Valley, people count as old stagers if they have been with the same employer for much over a year. But rapid turnover is not the only difficulty. In many companies, the salesforce or the maintenance folk rarely come into the office. A quarter of IBM’s workforce, for instance, is now mobile — they spend at least 80% of their time off-site, usually working from home or on the road. Key people may be based in key markets abroad, a day’s air travel away from the main office. Mobility goes right to the top: Douglas Daft, chief executive of Coca-Cola, travels 80% of the time. He boasts: “The headquarters office is where I am.”

Add in mergers and takeovers, which create a need to proselytise a new bunch of employees and coax them to abandon one corporate creed for another. As companies outsource more and more activities, too, they look for ways to teach their subcontractors to share their values. And the faster things change, the more important it becomes to explain to employees what is happening, and why.

How to do it? “In a rapidly changing and geographically distributed organisation,” observes Michael Morris, a social psychologist at Stanford’s Graduate School of Business, “you don’t have the option of the drink after work.” But you do have the Internet. More than any previous technology, it allows companies to ensure that every employee has access to the corporate news, views and vision.

Some companies use it to teach their employees (as well as suppliers and customers) their ethical code. Boeing, for instance, offers an online “ethics challenge” where employees can test their moral instincts on such delicate issues as “acceptance of business courtesies” and “the minister drops a hint”. Such applications are a way to spread a common approach throughout an organisation.

But the Internet is also a way for bosses to tell staff where they want the business to go. For example, at Ford, which claims to have the world’s largest intranet, 170,000 staff around the world are e-mailed a weekly “Let’s chat” note from Jac Nasser, the chief executive. A purpose-built newsroom maintains a website upgraded several times a day, and available to Ford’s employees around the world (in English only), as well as to those of its new acquisitions, such as Volvo.

Not only does the Internet allow managers to talk to their staff; it lets them track whether the staff are at least pretending to listen. William Nuti, president of Europe, the Middle East and Africa for Cisco Systems, a high-tech giant, produces a monthly video to send to his staff, explaining where the business is going. What happens if the staff don’t choose to watch? Well, the Internet allows you to track who opens an e-mail and when. “I know everyone who clicks on it, and those who throw it away, and I make phone calls to people, saying it’s important you watch this.” Unsurprisingly, Mr Nuti’s viewing figures are high.

But all this communication from on high can sometimes cause problems. SAP, a German business-software giant, is another company with an elaborate communications system. It allows material to be broadcast on the car radios of workers on the road, for example. The company found that middle managers objected to the chairman e-mailing all employees. Their authority had rested partly on their role as a source of information, and without it they felt exposed. As so often with Internet-driven changes, the implications of what appeared to be a simple, time-saving innovation turned out to be more complex and politically sensitive.

That sensitivity becomes more acute as communications become increasingly bottom-up as well as top-down. At Siemens, a large German company, Chittur Ramakrishnan, the chief information officer, has noticed a “very significant number of e-mails to top management. The idea of going through a secretary to get an appointment has changed. People can send e-mails to anyone and expect a response. It is very democratising.”

Listen to Us

Leaving aside pep talks, companies find all sorts of mundane tasks can be done online with greater efficiency and less expense. As a result, “B2E” — business-to-employee — applications are flourishing. Tim Mead, chief marketing officer for Cambridge Technology Partners, a consultancy, thinks they may be the biggest growth area for Internet applications over the next couple of years. They include many tasks involving staff matters; the creation of an internal job market; and training. These are discussed in detail in the next section. It is one of the strengths of the Internet over previous, proprietary systems that it can be used to provide services to everyone in a company.

Once material of direct interest to workers (say, their holiday entitlement) is available online, they grow used to logging on. Many companies reckon this is a quick way to help their people come to terms with changing business methods. That is why Ford and some other companies, such as American Airlines, are giving their employees computers to use at home. Two-thirds of Ford’s employees are hourly workers, who will not be able to use them to do company work from home. But that is not the point. Ford is hoping to get all its people used to thinking online, and to have a direct way to reach them all with a consistent global message.

Consistency becomes important as companies evolve their internal communications. Initially, every department tends to set up its own website, perhaps protected from the rest of the company by a password, and often designed to boost the department’s self-esteem. To end such anarchy, or simply to pull all internal information together, a growing number of companies now have a “corporate portal”: a centralised home page with links to various services, items of information and titbits to entice the staff to keep looking in. Click, and there is a map of each floor of the office; click again, and there are photographs and personal details about who sits where. Elsewhere on the page there may be links to the online services of the human-resources department, or the day’s news clippings, or a page allowing workers to fill in expenses claims, order office supplies or find telephone numbers.

To persuade employees to look at the home page as often as possible, companies think up various inducements. Cisco Systems, keen to attract the attention of its option-owning employees, plonks its share price centre-screen. Other companies post a list of employees with a birthday that week. Scient, an Internet consulting firm in San Francisco, has an area called “Do you want to scream at anyone?”, for employees to complain about colleagues who send excessive e-mails. The site shows the daily winner in categories such as “Take a chill pill.”

The good thing about such pages is that they are accessible not only to employees in head office, but also to people in distant subsidiaries, on the road or at home (though this can cause culture clashes: Scient’s British staff are bemused by its “stream of e-consciousness” site). Increasingly, employees can personalise their page, so that if they are working in the marketing department they do not receive a deluge of news clippings on camshaft design. Companies with lots of old “legacy” computer systems can use the home page as the entrance to a network designed to pull all the old systems together.

In time, these in-house portals may become important sources of revenue for many companies. Some already sell their own products to their employees online. Ford has a scheme to allow the friends or family of an employee to buy a company vehicle at a discount. The employee enters his social-security number, name and address on a website and receives a personal identification number which he can e-mail to his friend. That allows the friend to pick up the vehicle from a dealer. Rival car companies have similar schemes offline that involve lengthy form-filling.

Next, there is the prospect of turning the corporate workforce into a marketplace. It is an advertiser’s dream: a stable group of people with regular pay and a known employer. Why not, for instance, offer a link from the page that informs an employee of her holiday entitlements to a travel company with which the company already does corporate business, and which will offer discounts on leisure travel? Why not charge local restaurants for the occasional advertisement?

Indeed, this is already starting to happen. For instance, Exult, a consultancy to which BP subcontracts much of its human-resources work, is discussing just such a proposition with companies offering financial services. But how will businesses feel about encouraging their staff to hunt for a home loan when they should be finishing a presentation? Alan Little, Exult’s head of global client relationships, replies robustly that, if employees can work from home at the weekend on their company laptop, then surely they should be allowed to book their holidays from the office on a weekday. They should be judged by results.

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