Part 2 : Challenges, sleepy web sites and opportunities

As corporations tackle these challenges and opportunities, are they making any key mistakes? And is anything preventing them from doing better?
The biggest error by far is the seeming attempt by many senior managers and boards to confine the Internet to the periphery of the corporate core identity and purpose.

The old "keep the barbarians outside the gates" strategy?
Kind of. First, deny that the Internet will have any lasting significance. That seemed to be the inner-sanctum theme until about two years ago. Then deny that it would mean much to United General Consolidated Widget, S. A. Then throw up a safe, sleepy corporate web site, just to demonstrate that the company is keeping up. And then, about last February, when dealing with the Net seemed to become unavoidable, push all that hard-to-understand stuff out to a subsidiary, make it a tracking stock, perhaps...anything but let it inside the parlor.

You sound as if you don't think they are completely converted, yet.
Right. I'd even bet that the collapse in web and related tech equities this year was met at least in some corporate quarters not by dismay, but quiet satisfaction - if not actual glee. "See? I told you this stuff wouldn't last!"

And some of it won't work, of course. We shouldn't expect it all to work. But a lot will, and sooner rather than later. So the worst mistake that established companies can make in 2001 is to assume that they need do nothing to prepare for adapting to the Internet. If the short history of the Net (and the much longer history of business in periods of similar upheaval) teaches us anything, it's that movement, experimentation, active expansion, inward re-thinking, are all-important for survival. To do nothing is to cease to be a prospective participant in the new economy, and instead risk becoming a target.

Are there any large corporations that are doing things right?
That's an easy question to answer, since the answer has to be yes. But it's a hard one to answer in a manner that can actually help others figure out what to do, or where to get started.

The problem is that unless you want to focus mainly on e-commerce per se, not a whole lot of other information about what larger companies are doing on the Web is available. There's some anecdotal material, of course, and information related to the worrisome problems of intranet security and firewall breaches. The latter are important, and also newsworthy, like when some cracker manages to invade a back-end application or otherwise embarrass a big company. But they are not really that significant.

Why not? They get a lot of press!
Yes, but, when all the furor is over, it's the constant, pervasive, often unnoticed changes in corporate practice that are actually the main story, because all those changes will redefine the underlying costs and performance that determine whether or not we have a healthy economy and an intelligent technology.

People tend to forget that the basic ideas of computing were around a long time before they were actually widely applied. And, at first, this application was primarily to the problems of bigger organizations, because it took big company or government money to pay for the development, and big budget savings to realize the early benefits. The Net is no different. It was invented for big government by, and for, big companies.

You mean as the Arpanet?
Yes. That project was the real motivation to develop packet switching, where large messages and files can be busted into smaller, more easily managed and routed segments at the source, and re-assembled at the destination. Without that and related work - most of it funded by the US government in one form or another - the present Internet would not have evolved so quickly.

All major historical techno-economic revolutions have basically been the same; a partnership between major money and government.

But you're not saying smaller companies and bold individuals have no place in the big picture?
No. Just that the Internet changes from a trend to an inevitability faster if (and as) bigger companies learn how to benefit from it, and how to move those benefits down to the bottom line. In fact, far from excluding the little guy or the smaller scale operator, this process of adoption and adaptation by bigger organizations creates huge and numerous opportunities for the smaller folk. This is because the process places even more of a premium on innovation, fast responses, and attentive service, none of which the big companies are famous for.

TV business analysts and the like commonly express the notion that large and small companies are somehow completely different, or that they are engaged in some cosmic struggle, or that the formation of a zillion small companies is the sole key to economic vigor. These notions are simplistic. In fact, the process whereby larger companies try to adapt to rapid processing and cost change drives the formation of new businesses to help cope with all that change. The Internet would be a textbook case of this interaction, if it would only slow down long enough for the business academics to describe it!

Continued...