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The big switch: Electrifying change in the Internet
This post is the first of a series exploring the role of technology, in particular the Internet, in organizational change. New technology is often the reason for change initiatives and there is much written on how to incorporate new systems and ideas into existing practices. However, the potential of the Internet seems qualitatively different - even in its early stages it has shown to facilitate massive shifts in the way services can be delivered. Who would have thought, for example, that Skype, a telephone company starting from scratch, could gain 53 million online customers in 3 years with only 200 employees (compared to 90,000 for a company like British Telecom in the UK) and the service be provided for free!
But stories of Skype and the success of sites like YouTube might lead us to think that the Internet is merely a place for special products and ideas to flourish - useful (and often entertaining) but not essential. A far cry from the day-to-day challenges of most change agents where discussions about IT are often concerned with creating tailored software and hardware systems to support a new strategic direction. According to Nicholas Carr in his latest book, “The big switch: Rewiring the world from Edison to Google”, this is all going to change. The Internet is starting to “stream” into our homes and workplaces in such a way that it is likely very soon to have profound implications on how we view organizations and manage change.
Switching On the Computer in the Cloud
Carr believes we are at a point of significant transformation. Using the arrival and adoption of electricity in the US during the last century as his example, he tracks how early adopters of electricity initially created their own systems to generate power but how the development of a national grid changed everything. Local systems were no longer needed and were replaced by sharing resources more efficiently over a network. The emphasis became on making appliances that could plug into the network and electricity came to be seen as a simple utility that comes “safely and predictably through sockets in our wall”. For Carr, the same revolution is occurring now in terms of the Internet -
“What the fibre-optic Internet does for computing is exactly what the alternating current network did for electricity: it makes the location of the equipment unimportant to the user. But it does more than that…..it allows disparate and formerly incompatible machines to operate together as a single system”.
The network allows individual users to no longer be reliant on the power of the box sitting on their desk - they can tap into the resources held in the network, gaining access to data, software and computing power previously unimaginable. At home and at work we now have the power of a Supercomputer at our finger tips. Just think about it - a typical Google search isn’t being processed in milliseconds by your PC but thousands on the network. The network is becoming our computer. Carr quotes Eric Schmidt who describes this as the “Computer in the Cloud” - to describe how our data and software are not fixed peripherals attached to our desks but “out there” - no longer fixed but shifting, moving.
The old model of concentrating on building IT resources in-house starts to seem increasingly unnecessary and inefficient. According to Carr, organizations are realizing that software and hardware rarely now differentiate them from their competitors and the building of independent data centres consumes wasteful amounts of electricity and space. Instead, computing power is becoming seen in utility terms and this is reflected in a growing number of centralized computer plants, “Server Farms”, such as Google’s recent purchase of a vast data-processing plant along the banks of the Columbia River. These data centres support millions of clients’ computing needs by utilizing the computing power within the network. Carr calls these systems “multi-tenant” - where each organization does “whatever it likes inside the walls of its own apartment but all of them sharing the building’s infrastructure and the resulting savings”.
Unlike electricity, however, the range of possibilities is in a different league. The network not only enables services, data and applications to be stored and shared simultaneously, but network users are finding it more and more economical to transform physical objects into purely digital goods. From e-books to virtual life the network, in replacing our computer, is starting to change our world of work. Carr explores the implications and his assessment raises significant concerns across a range of topics. These arguments have critical implications for those interested in changing organizations and communities.
Disrupting notions of scale
One dramatic effect of these changes is on the nature of organizational scale. The Internet simultaneously diminishes and drastically increases the importance of scale. Some of the most successful Internet ventures have radically altered our understanding of the size of organization necessary to effect radical social change. Carr provides the examples of Flickr, the online photograph service, which has a value of $35 million and only 10 people on the payroll, but with millions of users generating content and organizing it on a daily basis and PlentyofFish, a dating service, which in late 2006 had over 300,000 people a day log into the site, run only by 1 person! These organizations significantly complicate the question of what constitutes a “big” organization. Clearly, Flickr and PlentyofFish are big – powerful, influential, vastly connected – and yet they stay small, focused and lean, with respect to their internal operations.
Smashing boundaries
Carr points out that in 1964, 81% of American adults read a daily paper, but by 2006 only 50% did – and only 36% of those between 18 and 24. The move by publishers to online publications, however, had 2 important principle effects that go well beyond convenience or cost.
- Online publications “unbundle” core content. Whereas each traditional newspaper had to contain all of the content, regardless of its value to any individual reader, today’s online publications can be easily and cheaply packaged and repackaged to fit the user’s interests in sports, news or entertainment.
- Online publications “democratize” the newsworthiness of any item. Driven by user clicks, rather than professional editors, the editorial process can short-circuit traditional gatekeepers.
Both of these changes radically affect how organizations and change agents can interact with their stakeholders. Following the lead of the online publishers, those interested in effecting change can generate inspirational and informational content in a myriad of user-controlled combinations, allowing people to interact with issues and information in much more personal and idiosyncratic ways. Moreover, the impact of different kinds of information, whether on a workforce or a community, can be easily captured and deeply analyzed, so that the change agent’s message can be constantly refined.
Connecting widely and intimately
Whereas traditional change agents relied heavily on connecting to groups with well understood identities, based on class, race, religion, and profession, the sophisticated profiling of internet users today has allowed a shift to an understanding of individuals that is far more than the traditional belief that individuals were somehow anonymous on the network, as in the famous New Yorker cartoon “On the Internet nobody knows you’re a dog”. Carr argues, in contrast, that “In reality, not only is it known that you’re a dog, but it’s probably known what breed you are, your age, where you live, and the kind of treat you prefer.”
The implications of this shift for change agents is both positive and negative. On the upside, change agents can rely on web-based vehicles to deliver their message in ways that are tailored not just to the communities they are targeting, but to the heterogeneous collections of individuals within those communities. On the downside, Carr argues that this will tend to narrow the information seen by any individual, reducing the diversity of information and perspectives that each of us are exposed to, potentially reinforcing our own biases in the bid to win our support on particular issues or for particular products or services.
Unlike some books, “The Big Switch” offers no 10 point plan for changes agents, and can’t even be boiled down to a simple set of homilies. But, Carr has pointed out some critically important trends - some you may have already experienced and some that are highly dependent on a continuous, uninterrupted connection.
The big switch: rewiring the world, from Edison to Google by Nicholas Carr (2008) W.W. Norton & Company
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From Dr. Blaize Reich:
“When I was reading this, I thought of a few interrelated themes, which use some of what Carr mentioned but also other perspectives
1) Utility Sourcing – getting your kicks from the net, not from a local provider – in Big Switch. May make some parts of internal IT departments irrelevant
2) Crowdsourcing – the reason Flikr can be small and yet have tremendous content. Get your customers to deliver the content, you deliver only the framework. Interesting commons ideas.
3) OpenSourcing – of course starting with software like Linux, but now a much bigger concept. This idea is explored further in Wikonomics (called peer production), by Don Tapscott (an unapologetic homage to technology). There are some very cool examples in this book (eg Goldcorp). May make the boundaries of the company irrelevant re innovation. Is qualitatively different than crowdsourcing? I am not sure. May also make the corporate model of software development uncompetitive.
4) Global Sourcing – ideas from the World is Flat. May make geography irrelevant, but has limitations.
It seems to me that any and certainly all of these themes have the potential to be disruptive of our present organizational forms and certainly might be useful for adoption within organizations to drive innovation.”
Check out Dr. Reich’s internet based resource: http://www.PMPerspectives.org - Project Management Research for Practice - seeking to connect practicing project managers and sponsors with project management researchers.