Bill Gates didn't become the world's richest guy by being shy about selling. So it's hardly a shock that Business @ the Speed of Thought, Gates' new management-advice book, is a 400-plus-page sales brochure for the wizardry that personal computer technology can work in your corporation.
A "digital nervous system," according to Gates, can motivate and empower managers, increase manufacturing efficiency, hone sales-force performance, enhance strategic planning, speed the flow of information and boost the bottom line. A "Web lifestyle" and "Web workstyle" will allow managers, employees and customers to conduct ever more of their professional and private business across the Net, profoundly transforming the home and the workplace. "Going digital," Gates writes, "will put you on the leading edge of a shock wave of change that will shatter the old way of doing business."
If you plow through Business @ the Speed of Thought you will quickly realize three things: Nearly everything Gates writes is obvious. Nearly everything Gates writes is right. Yet somehow he has missed the real story.
He's right that digital technology allows companies to react faster. He's right that e-mail allows important news to bypass hierarchical bottlenecks and get to the people who need to know it. He's right that abandoning paper and "going digital" can not only cut costs but create new business opportunities.
To such revelations, at this point in history, one can only respond: duh!
But your eyes may glaze over as Gates delivers example after example of mega-corporations like McDonald's, Nabisco, Boeing and Coca-Cola achieving digital nirvana. And as the book progresses, a subtle blurring of a key distinction takes place: Going digital is gradually equated with replacing all your old systems with Windows-based PCs. A handy appendix at the book's end provides a technical roadmap; all that's missing is a 1-800 telephone sales line for Windows 2000.
Business @ the Speed of Thought is packed with examples of how Microsoft has, in industry parlance, "eaten its own dog food" -- used its own technology to build the kind of "digital nervous system" Gates preaches about, routing critical information to the people who can act upon it. Gates himself says he has "a natural instinct for hunting down grim news ... An essential quality of a good manager is a determination to deal with any kind of bad news head on, to seek it out rather than deny it."
OK, Bill, here's the bad news: A lot of people who agree with you about the promise of digital technology are deeply unhappy with the particular incarnation of it that you peddle. And the Internet makes it possible for them to do something about it.
Gates-trackers will recall that the Microsoft founder's previous book, The Road Ahead, offered a vision of the digital future that essentially dismissed the Internet as a mere stop along the way to the "information highway" that would change our lives: "CD-ROMs are one clear precursor to the highway," Gates wrote. "The Internet's World Wide Web is another." Today, CD-ROMs offer a good way to distribute software but are in no danger of transforming the world; the "information highway" is a phrase even Al Gore can't utter with a straight face; and it's the Internet's uniquely open standards that have become the foundation for an unprecedented boom in online media, communications and commerce.
The Road Ahead appeared in December 1995, just as Gates was unveiling Microsoft's master plan to "embrace and extend" the Internet. Yet the book's first edition, with its clunky accompanying CD-ROM, mentioned the Web a mere seven times in nearly 300 pages. Though later editions tried to correct this gaffe, The Road Ahead remains a landmark of bad techno-punditry -- and a time-capsule illustration of just how easily captains of industry can miss a tidal wave that's about to engulf them.
Gates and Microsoft have, of course, so far managed to ride the Net's wave to further success. And Business @ the Speed of Thought makes clear that Gates has totally got the Net religion: "If we go out of business," he writes, "It won't be because we're not focused on the Internet. It'll be because we're too focused on the Internet."
But the Internet that Gates depicts is barely recognizable as the Net on which more and more of us work and play. For better and worse, today's Internet is a vast, teeming commons on which buggy technological innovations, experimental business plans, fringe political movements and evanescent pop-culture trends are all emerging, converging and mutating. The Net has become such a crucible for human energy because its technical standards remain wide open -- it's the proverbial "level playing field." Gates does wield considerable influence, largely because he sits upon an enormous mountain of cash that enables Microsoft to acquire promising small companies whenever it chooses. But he does not call the shots.
This must be galling to him.
One thing The Road Ahead made clear and Business @ the Speed of Thought reinforces is that Microsoft's corporate culture is built on an ideology of mastery and control. In the one moment of epiphany in The Road Ahead, Gates explained why he became infatuated with computers as a kid: "We could give this big machine orders and it would always obey."
In his new book, Gates re-creates this adolescent domination fantasy in the executive boardroom -- where, thanks to the digitally enabled just-in-time flow of perfect information to their desktops, the corporate managers Gates profiles can now exercise precise control of their operations. The "digital nervous system" becomes a feedback-and-control loop that lets managers slice their bean-counts ever more finely and tune their organizations to a peak of responsiveness. Gates still loves big machines that follow orders -- only now the machines are organizations made up of human beings.
And so something weird happens when Gates writes about the Internet: Though he pays lip service to the notion that the Net is a new, volatile business environment that keeps you on your toes, it's clear that what really attracts him about it is its promise of "information at your fingertips." To Gates, the Internet's value lies not in its capacity to surprise us but in its ability to organize us. At one point, Gates explains that Microsoft has a "culture of numbers" that prizes "straight math" over all else. Sure enough, the impulses coursing through Gates' "digital nervous system" are corporate numbers rather than human thoughts and feelings.
The Internet can serve as a great big number crunching-and-moving tool, to be sure, but that is only one of its many faces and roles. Gates repeatedly mouths the cliche that the Internet and personal computers "empower the individual," but all the individuals he pictures are working safely ehind a corporate firewall, exercising that individuality within the larger group-think of a business organization.
Gates acknowledges that a "digital nervous system" needs to "extend outward to partners and customers," but he doesn't consider how the Net itself changes who those partners and customers are, what they might want and how they think of themselves and the company that's "extending outward" to them. What's missing from Business @ the Speed of Thought is any sense that the Net might be transforming more than just the speed at which information moves from point-of-sale to a vice president's desk -- that it might accelerate social and economic experiments lying far outside the org charts of the Fortune 500.
One such experiment happened to bubble up from the Net to challenge Microsoft itself during the time Gates was writing his new book. And if Gates fully understood what's going on out there, he might well have a digital nervous breakdown.
That the free Linux operating system and its open-source methodology represent a genuine threat to Microsoft is now widely acknowledged in the technology industry, even by some of Microsoft's own front-line engineers, who touted Linux's strengths in the widely leaked "Halloween memo." Many users are frustrated by the inefficiencies, rigidities and flaws Microsoft products are increasingly riddled with; many are attracted to Linux and other open-source products that provide ready access for software developers to fix and enhance them without waiting for Microsoft to call back with a patch or deliver a long-delayed upgrade. Tested in real-world conditions by guerrilla groups of coders working collaboratively across the Net, open-source software, proponents argue, offers faster and smarter development than Microsoft. It is, you might say, software "@ the speed of thought."
The one person at Microsoft who doesn't seem to have received the bad news is Gates himself. Last week, he dismissed Linux with these words: "There has certainly been a lot of free software out there for the last 20 years. The main thing that has held that back is that because it's free software there's no central point of control. So what you see with Linux, and other things, is you get proliferations of different versions and everybody can go into the source code, and everybody does."
To Gates, openness and lack of control is a bug; to free-software programmers, it's a feature. Only time will tell whether Gates' prediction of a confusing, splintered Babel in Linux's future proves accurate -- it's certainly a possibility. But that Linux's loose-reined approach can offer a valuable alternative to businesses today is beyond dispute.
Microsoft's public responses to Linux have been
all over the map. Sometimes it plays up Linux to
bolster its position in its antitrust trial
("Competitors? Sure we've got competitors!"), and
sometimes it plays down Linux to reassure Wall
Street that Microsoft will continue to be a profit
machine. There's just one thing Microsoft's top
brass can't seem to do: carefully and openly
evaluate the appeal of Linux's fundamentally
different approach to developing and distributing
software. The company's digital nervous system is
failing to properly identify the threat -- perhaps
because it comes in the unrecognizable guise of an
idea rather than a corporation.
To anyone with a reasonably long memory, Gates'
pooh-poohing of Linux offers an overpowering
whiff of deja vu: The last time Microsoft
dismissed a popular new technology as being good
only for "the student and hobbyist market," as
Gates is now describing Linux, it was the early
'90s, and the technology in question was the
Internet itself -- which, like Linux today, was "too
hard to use," "didn't have a good graphic
interface" and just didn't fit into Microsoft's
vision. Just as The Road Ahead required drastic
re-routing, don't be surprised if Business @ the
Speed of Thought -- which today barely
mentions Linux -- issues a second edition replete
with revisions about the free software/open-source
If you must read Business @ the Speed of
Thought today, be warned that its contents are
even more stupefyingly bland than those of The
Road Ahead. Though the new book advocates a
strategy of opening up inner corporate councils to
the flow of information from the street, its
language never strays from boardroom gray. Gates
is widely regarded as someone who's passionate
about new ideas in management, but that passion
never cracks the plastic surface of his prose (the
book is credited to Gates "with" Microsoft
marketing exec Collins Hemingway). The closest
Business @ the Speed of Thought comes to
breaking a sweat is when Gates describes
Microsoft's Herculean effort to turn its business in
the direction of the Internet.
By coincidence, the week that Gates' book hit the
stores also saw the arrival on the Net of a funny,
insightful manifesto against just the kind of
impersonal corporate language in which Business
@ the Speed of Thought speaks. The Cluetrain
Manifesto is the work of a quartet of Internet
provocateurs who argue that the Internet is rapidly
transforming not just the speed but the tenor and
content of business communications. (The
"Cluetrain" name derives from a quote attributed
to a "veteran of a firm now free-falling out of the
Fortune 500": "The clue train stopped there four
times a day for 10 years and they never took
The Net, the manifesto declares, makes new
"conversations" possible among and between
corporate employees and the general public -- and
these conversations, conducted in "language that is
natural, open, honest, direct, funny and often
shocking" are inoculating us against the "hollow,
flat, literally inhuman" language corporations use.
"In just a few more years," the authors maintain,
"the current homogenized 'voice' of business -- the
sound of mission statements and brochures -- will
seem as contrived and artificial as the language of
the 18th century French court. Already,
companies that speak in the language of the pitch,
the dog-and-pony show, are no longer speaking to
anyone. Companies that assume online markets
are the same markets that used to watch their ads
on television are kidding themselves."
What the authors are saying is that the very voice
Bill Gates uses in Business @ the Speed of
Thought is being rendered obsolete by the
technology he espouses. Though predictions of the
demise of marketing-speak often prove to be
wishful thinking, there's plenty of evidence out
there to back the Cluetrain argument. For a crude
but telling example, all you have to do is look at
the reader comments about Gates' book on
Amazon.com -- the kind of "Web lifestyle"
company Business @ the Speed of Thought
The reviews are a mixed bag, from "excellent
book" to "You'll find more original ideas on the
wall of a barroom commode." They're full of
misspellings, grammatical errors and non
sequiturs. But there's a liveliness to the exchange
among enthusiastic and pissed-off Net users.
Business @ the Speed of Thought drones on for
hundreds of pages without ever achieving that
sense of engagement.
On the info-glutted Net, attention is the scarcest
commodity. That makes boredom the ultimate
...[A] thoughtful contribution to the issue of how technology will shape the way we do business in the next century....Gates is at his most engaging when he talks about changes made at Microsoft that reflect this belief in the idea of a digital nervous system....Gates' latest effort is well worth reading...even if you have to cut through some datasmog to get to the read nuggets of information.
The Christian Science Monitor
Read an Excerpt
Business is going to change more in the next ten years than it has in the last fifty.
As I was preparing my speech for our first CEO summit in the spring of 1997, I was pondering how the digital age will fundamentally alter business. I wanted to go beyond a speech on dazzling technology advances and address questions that business leaders wrestle with all the time. How can technology help you run your business better? How will technology transform business? How can technology help make you a winner five or ten years from now?
If the 1980s were about quality and the 1990s were about reengineering, then the 2000s will be about velocity. About how quickly the nature of business will change. About how quickly business itself will be transacted. About how information access will alter the lifestyle of consumers and their expectations of business. Quality improvements and business process improvements will occur far faster. When the increase in velocity of business is great enough, the very nature of business changes. A manufacturer or retailer that responds to changes in sales in hours instead of weeks is no longer at heart a product company, but a service company that has a product offering.
These changes will occur because of a disarmingly simple idea: the flow of digital information. We've been in the Information Age for about thirty years, but because most of the information moving among businesses has remained in paper form, the process of buyers finding sellers remains unchanged. Most companies are using digital tools to monitor their basic operations: to run their production systems; to generate customer invoices; to handle their accounting; to do their tax work. But these uses just automate old processes.
Very few companies are using digital technology for new processes that radically improve how they function, that give them the full benefit of all their employees' capabilities, and that give them the speed of response they will need to compete in the emerging high-speed business world. Most companies don't realize that the tools to accomplish these changes are now available to everyone. Though at heart most business problems are information problems, almost no one is using information well.
Too many senior managers seem to take the absence of timely information as a given. People have lived for so long without information at their fingertips that they don't realize what they're missing. One of the goals in my speech to the CEOs was to raise their expectations. I wanted them to be appalled by how little they got in the way of actionable information from their current IT investments. I wanted CEOs to demand a flow of information that would give them quick, tangible knowledge about what was really happening with their customers.
Even companies that have made significant investments in information technology are not getting the results they could be. What's interesting is that the gap is not the result of a lack of technology spending. In fact, most companies have invested in the basic building blocks: PCs for productivity applications; networks and electronic mail (e-mail) for communications; basic business applications. The typical company has made 80 percent of the investment in the technology that can give it a healthy flow of information yet is typically getting only 20 percent of the benefits that are now possible. The gap between what companies are spending and what they're getting stems from the combination of not understanding what is possible and not seeing the potential when you use technology to move the right information quickly to everyone in the company.
CHANGING TECHNOLOGY AND EXPECTATIONS
The job that most companies are doing with information today would have been fine several years ago. Getting rich information was prohibitively expensive, and the tools for analyzing and disseminating it weren't available in the 1980s and even the early 1990s. But here on the edge of the twenty-first century, the tools and connectivity of the digital age now give us a way to easily obtain, share, and act on information in new and remarkable ways.
For the first time, all kinds of information - numbers, text, sound, video - can be put into a digital form that any computer can store, process, and forward. For the first time, standard hardware combined with a standard software platform has created economies of scale that make powerful computing solutions available inexpensively to companies of all sizes. And the "personal" in personal computer means that individual knowledge workers have a powerful tool for analyzing and using the information delivered by these solutions. The microprocessor revolution not only is giving PCs an exponential rise in power, but is on the verge of creating a whole new generation of personal digital companions - handhelds, Auto PCs, smart cards, and others on the way - that will make the use of digital information pervasive. A key to this pervasiveness is the improvement in Internet technologies that are giving us worldwide connectivity.
In the digital age, "connectivity" takes on a broader meaning than simply putting two or more people in touch. The Internet creates a new universal space for information sharing, collaboration, and commerce. It provides a new medium that takes the immediacy and spontaneity of technologies such as the TV and the phone and combines them with the depth and breadth inherent in paper communications. In addition, the ability to find information and match people with common interests is completely new.
These emerging hardware, software, and communications standards will reshape business and consumer behavior. Within a decade most people will regularly use PCs at work and at home, they'll use e-mail routinely, they'll be connected to the Internet, they'll carry digital devices containing their personal and business information. New consumer devices will emerge that handle almost every kind of data - text, numbers, voice, photos, videos - in digital form. I use the phrases "Web workstyle" and "Web lifestyle" to emphasize the impact of employees and consumers taking advantage of these digital connections. Today, we're usually linked to information only when we are at our desks, connected to the Internet by a physical wire. In the future, portable digital devices will keep us constantly in touch with other systems and other people. And everyday devices such as water and electrical meters, security systems, and automobiles will be connected as well, reporting on their usage and status. Each of these applications of digital information is approaching an inflection point - the moment at which change in consumer use becomes sudden and massive. Together they will radically transform our lifestyles and the world of business.
Already, the Web workstyle is changing business processes at Microsoft and other companies. Replacing paper processes with collaborative digital processes has cut weeks out of our budgeting and other operational processes. Groups of people are using electronic tools to act together almost as fast as a single person could act, but with the insights of the entire team. Highly motivated teams are getting the benefit of everyone's thinking. With faster access to information about our sales, our partner activities, and, most important, our customers, we are able to react faster to problems and opportunities. Other pioneering companies going digital are achieving similar breakthroughs.
We have infused our organization with a new level of electronic-based intelligence. I'm not talking about anything metaphysical or about some weird cyborg episode out of Star Trek. But it is something new and important. To function in the digital age, we have developed a new digital infrastructure. It's like the human nervous system. The biological nervous system triggers your reflexes so that you can react quickly to danger or need. It gives you the information you need as you ponder issues and make choices. You're alert to the most important things, and your nervous system blocks out the information that isn't important to you. Companies need to have that same kind of nervous system - the ability to run smoothly and efficiently, to respond quickly to emergencies and opportunities, to quickly get valuable information to the people in the company who need it, the ability to quickly make decisions and interact with customers.
As I was considering these issues and putting the final touches on my speech for the CEO summit, a new concept popped into my head: "the digital nervous system." A digital nervous system is the corporate, digital equivalent of the human nervous system, providing a well-integrated flow of information to the right part of the organization at the right time. A digital nervous system consists of the digital processes that enable a company to perceive and react to its environment, to sense competitor challenges and customer needs, and to organize timely responses. A digital nervous system requires a combination of hardware and software; it's distinguished from a mere network of computers by the accuracy, immediacy, and richness of the information it brings to knowledge workers and the insight and collaboration made possible by the information.
I made the digital nervous system the theme of my talk. My goal was to excite the CEOs about the potential of technology to drive the flow of information and help them run their businesses better. To let them see that if they did a good job on information flow, individual business solutions would come more easily. And because a digital nervous system benefits every department and individual in the company, I wanted to make them see that only they, the CEOs, could step up to the change in mind-set and culture necessary to reorient a company's behavior around digital information flow and the Web workstyle. Stepping up to such a decision meant that they had to become comfortable enough with digital technology to understand how it could fundamentally change their business processes.
Afterward a lot of the CEOs asked me for more information on the digital nervous system. As I've continued to flesh out my ideas and to speak on the topic, many other CEOs, business managers, and information technology professionals have approached me for details. Thousands of customers come to our campus every year to see our internal business solutions, and they've asked for more information about why and how we've built our digital nervous system and about how they could do the same. This book is my response to those requests.
I've written this book for CEOs, other organizational leaders, and managers at all levels. I describe how a digital nervous system can transform businesses and make public entities more responsive by energizing the three major elements of any business: customer/partner relationships, employees, and process. I've organized the book around the three corporate functions that embody these three elements: commerce, knowledge management, and business operations. I begin with commerce because the Web lifestyle is changing everything about commerce, and these changes will drive companies to restructure their knowledge management and business operations in order to keep up. Other sections cover the importance of information flow and special enterprises that offer general lessons to other organizations. Since the goal of a digital nervous system is to stimulate a concerted response by employees to develop and implement a business strategy, you will see repeatedly that a tight digital feedback loop enables a company to adapt quickly and constantly to change. This is a fundamental benefit to a company embracing the Web workstyle.
Business at the Speed of Thought is not a technical book. It explains the business reasons for and practical uses of digital processes that solve real business problems. One CEO who read a late draft of the manuscript said the examples served as a template for helping him understand how to use a digital nervous system at his company. He was kind enough to say, "I was making one list of comments to give to you, and another list of things to take back to implement in my company." I hope other business readers discover the same "how to" value. For the more technically inclined, a companion Web site at www.Speed-of-Thought.com provides more background information on some of the examples, techniques for evaluating the capabilities of existing information systems, and an architectural approach and development methodologies for building a digital nervous system. The book site also has links to other Web sites I reference along the way.
To make digital information flow an intrinsic part of your company, here are twelve key steps:
For knowledge work:
1. Insist that communication flow through the organization over e-mail so that you can act on news with reflexlike speed.
2. Study sales data online to find patterns and share insights easily. Understand overall trends and personalize service for individual customers.
3. Use PCs for business analysis, and shift knowledge workers into high-level thinking work about products, services, and profitability.
4. Use digital tools to create cross-departmental virtual teams that can share knowledge and build on each other's ideas in real time, worldwide. Use digital systems to capture corporate history for use by anyone.
5. Convert every paper process to a digital process, eliminating administrative bottlenecks and freeing knowledge workers for more important tasks.
For business operations:
6. Use digital tools to eliminate single-task jobs or change them into value-added jobs that use the skills of a knowledge worker.
7. Create a digital feedback loop to improve the efficiency of physical processes and improve the quality of the products and services created. Every employee should be able to easily track all the key metrics.
8. Use digital systems to route customer complaints immediately to the people who can improve a product or service.
9. Use digital communications to redefine the nature of your business and the boundaries around your business. Become larger and more substantial or smaller and more intimate as the customer situation warrants.
10. Trade information for time. Decrease cycle time by using digital transactions with all suppliers and partners, and transform every business process into just-in-time delivery.
11. Use digital delivery of sales and service to eliminate the middleman from customer transactions. If you're a middleman, use digital tools to add value to transactions.
12. Use digital tools to help customers solve problems for themselves, and reserve personal contact to respond to complex, high-value customer needs.
Each chapter will cover one or more points - good information flow enables you to do several of these things at once. A key element of a digital nervous system, in fact, is linking these different systems -knowledge management, business operations, and commerce - together.
Several examples, particularly in the area of business operations: focus on Microsoft. There are two reasons. First, customers want to know how Microsoft, a proponent of information technology, is using technology to run our business. Do we practice what we preach? Second, I can talk in depth about the rationale for applying digital systems to operational problems that my company actually faces. At the same time, I've gone to dozens of pioneering companies to find the best practices across all industries. I want to show the broad applicability of a digital nervous system. And, in some areas, other companies have gone beyond us in digital collaboration.
The successful companies of the next decade will be the ones that use digital tools to reinvent the way they work. These companies will make decisions quickly, act efficiently, and directly touch their customers in positive ways. I hope you'll come away excited by the possibilities of positive change in the next ten years. Going digital will put you on the leading edge of a shock wave of change that will shatter the old way of doing business. A digital nervous system will let you do business at the speed of thought - the key to success in the twenty-first century.
(c)1999 by William H. Gates, III