Evolve!: Succeeding in the Digital Culture of Tomorrow

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People and organizations at every stage of Internet sophistication face the same burning question: How should they change in order to succeed in a digital world?

Renowned thinker and business trailblazer Rosabeth Moss Kanter says answers will be found not in cyberspace but on the ground, where real people connect, collaborate, and form thriving human communities. In this eye-opening book, Kanter explores what she calls "e-culture"-a new way of ...

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Overview

People and organizations at every stage of Internet sophistication face the same burning question: How should they change in order to succeed in a digital world?

Renowned thinker and business trailblazer Rosabeth Moss Kanter says answers will be found not in cyberspace but on the ground, where real people connect, collaborate, and form thriving human communities. In this eye-opening book, Kanter explores what she calls "e-culture"-a new way of living and working that will transform every aspect of today's organizations.

Kanter argues that networks of relationships, not just new technologies, permit speed and seamlessness, encourage creativity and collaboration, and release energy and brainpower-the "soul" of e-business. And every organization-from dotcoms to dotcom-enablers (technology and service providers) to wannadots (traditional companies struggling to embrace the Web)- must learn to build and foster them.

Based on a landmark project with rare on-site access, over 300 interviews, and a 785-company global survey, Evolve! provides a hands-on blueprint for adopting the core principles of e-culture: treat strategy as improvisational theater; nurture networks of partners; reconstruct organizations as online and offline "communities"; and attract and retain top talent.

With colorful and memorable stories, Kanter illuminates vast differences between older, more conservative companies and aggressive, born-digital dotcoms. She takes us deep inside evolving organizations-including IBM, eBay, Reuters, Sun Microsystems, Razorfish, Abuzz, Barnesandnoble.com, Williams-Sonoma, and pioneering public schools-to provide best practices frome-culture pacesetters and cautionary lessons from Internet laggards. Defining the skills leaders need to master change, she reveals how dotcoms and dotcom-enablers can grow fast while crafting a great culture, and how wannadots can benefit by becoming Web-enabled.

For anyone who wants to realize the potential and avoid the pitfalls of the Internet age, this pathbreaking book identifies and analyzes the emergence of e-culture-and provides a lively, roll-up-your-sleeves guide to profiting from tomorrow.

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Editorial Reviews

Booklist
... [Evolve!] ... will provide solid hints about what approaches work and don't work in an increasingly wired world.
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Product Details

  • ISBN-13: 9781565114739
  • Publisher: HighBridge Company
  • Publication date: 3/28/2001
  • Format: CD
  • Edition description: Abridged, 4 CDs
  • Pages: 300
  • Product dimensions: 5.60 (w) x 1.00 (h) x 4.90 (d)

Meet the Author

Rosabeth Moss Kanter is an award-winning author, a pioneer in the field of change management, a respected visionary about economic and social trends, and an internationally-recognized business leader with a lifetime dedicated to making corporations more humane, inclusive, and innovative.

Kanter's latest book is Evolve!: Succeeding in the Digital Culture of Tomorrow (Harvard Business School Press, March 1, 2001), which explores the countless ways in which the Internet is shaping our lives, both personally and professionally. Notably, Evolve! looks at the role of community and community service in an age where more and more often human communications take place in cyberspace. Kanter argues that the key to understanding our digital world lies not online, but on the ground-where real people connect, collaborate, and form thriving human communities, and gives us our first look at an emerging phenomenon she calls e-culture: a new way of living and working that combines the best of the New Economy and the Old, that marries the power of technology with the essential human relationships that make technology meaningful, companies profitable, and life better for all of us.

Kanter is the Ernest L. Arbuckle Professor of Business Administration (an endowed chair) at Harvard Business School. She also advises major corporations and government entities worldwide, and is the author or co-author of 15 books, including bestsellers such as Men and Women of the Corporation, The Change Masters, When Giants Learn to Dance, and World Class. Named one of the 100 most powerful women in America by Ladies Home Journal and one of the 50 most powerful women in the world by the Times of London, Kanter has received 19 honorary doctoral degrees and over a dozen leadership awards.

Kanter is a well-known advocate for community service initiatives, on the local and national levels. Her work as a national trustee for City Year-the inner-city youth service corps active in 13 major cities that was the model for AmeriCorps-has been widely heralded. Kanter was invited by the former First Lady, Senator Hillary Rodham Clinton, to work on several White House millennium projects, including speaking at the White House Conference on Philanthropy and at the Forum on Sustaining Democracy in a Global Economy. She was active in the Presidential Summit which launched General Colin Powell's America's Promise and chaired its advisory board on youth service with Timothy Shriver, President of the Special Olympics. She has translated her knowledge of change management from business to public education in collaboration with IBM's Reinventing Education projects in 21 states and 8 countries. She is a Fellow of the World Economic Forum, has served on the Massachusetts Governor's Economic Council, and was named a vice president of the NOW Legal Defense and Education Fund board in recognition of her advocacy for women.

Kanter serves on the faculty board of HBSi, the group creating e-learning tools and interactive strategies. In 1997-1998, she conceived and led the Business Leadership in the Social Sector project for Harvard Business School, involving over a hundred national leaders (including U.S. Senators, Governors, corporate CEOs, national association heads, and the First Lady) in dialogue about business-government partnerships for welfare and education reform. From 1989-1992, she served as Editor of Harvard Business Review, which was a finalist for a National Magazine Award for General Excellence in 1991. She also co-founded Goodmeasure Inc., a consulting firm that develops leadership and consulting tools based on her work.

She lives in Cambridge, Massachusetts, and Edgartown (Martha's Vineyard), Massachusetts, with her husband, son, and a very friendly cocker spaniel

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Read an Excerpt

Introduction
The New Economy Lobotomy
We want to learn from the past. But we want our dreams to wipe away our memories.
-Christopher Galvin, CEO of Motorola
Life is now defined by where we stand with respect to the Internet. Real mail (the kind that comes in envelopes and doesn't require downloading) is called "snail mail" because e-mail has become the standard. At meetings, people cut off discussion by saying "Let's continue that conversation offline," even though they are meeting face to face, not online; "offline" is a new synonym for "in private," as though everything public were now on the Internet. We have switched from understanding screen-life by using real-life analogies-desktops, trash barrels, real estate, stores, and malls-to defining all of life in terms of the World Wide Web. A New Yorker cartoon shows St. Peter requesting user name and password before admitting a man to heaven. Another one features "The Off-Line Store"-"All items are actual size! Take it home as soon as you pay for it! Merchandise may be handled prior to purchase!"1

You don't have to be in business to see the cultural changes wrought by the Internet, but business is a good starting point. Soon there could be only three main types of companies in the world: dotcoms, dotcom-enablers, and wannadots.

Dotcoms are the pure Internet companies, operating online businesses. Their activities tend to exist primarily in cyberspace. Many were formed in the heady last half of the 1990s, and most died fast. But successful pioneers such as eBay, Amazon.com, and Yahoo! have already transformed industry dynamics, opened new career aspirations, and become emblematic of a new workplace style. Others threaten to revolutionize industries, from Napster's attack on the recorded music business to the rapidly multiplying e-learning companies challenging colleges and universities. Already the purely digital are swallowing real-world companies, from AOL acquiring TimeWarner to Amazon acquiring warehouses.

Dotcom-enablers are the technology and service providers who spread the Internet gospel. Sun Microsystems's mission, its leaders say, is to "dotcom" the world, to be the "lumberyard for the Internet." IBM is now an e-evangelist for e-business and the world's largest e-business itself. Cisco Systems uses its own lean e-business model to convince others to buy its routers and communications products. Lucent Technologies, once the research and manufacturing arm of Ma Bell, aspires to be a venture capitalist, business incubator, and fast-moving provider of Internet infrastructure. For a time, the growth companies among consulting firms and advertising agencies were a raft of new Web strategy firms, such as Razorfish, iXL, Digitas, Mainspring, and Brand Farm. Operating in Internet time themselves, the Web technology and service companies are change agents that can succeed only if they turn everyone else into Net-based companies. Their rhetoric makes it sound like we are witnessing the Second Dot-Coming.

Wannadots are everyone else-existing businesses, schools, hospitals, and other established organizations. Corporate giants that were once the industry standard are now defined as "not-Internet"-referred to as offline, land based, or bricks and mortar (BAMs). Or they are known by how much they have embraced the Web-for example, multichannel "clicks and mortar" or "bricks and clicks" companies. They follow a variety of paths to cyberspace (and we will trace their journeys, later in this book). Cookware catalog and retailer Williams-Sonoma took several years to become convinced of the importance of e-commerce despite its direct marketing know-how. After a modest experiment during the 1998 holiday season, it launched a wedding gift registry in the spring of 1999 and a full e-commerce department six months later-but still has to work out the relationship between stores, catalogs, and e-commerce. NBC had several early starts before relaunching CNBC.com as a financial services website and now talks about how closely the website should be aligned with the television channel-where they should be tightly coupled and where they should diverge. Arrow Electronics, a leading semiconductor distributor, knew it could be driven out of business by online procurement. So Arrow approached its own online marketplace; if its business was going to be cannibalized, at least Arrow stockholders would be the ones enjoying the meal. General Electric CEO Jack Welch points to "a number of our units you could call DestroyYourBusiness.Com aimed at attacking our existing businesses."

The three types aren't pure types, of course. Dotcoms are developing land links, wannadots are morphing into multichannel hybrids, and a range of dot-orgs and dot-nets are increasingly hard to classify. The largest e-commerce companies in the world are not dotcoms, they are IBM and Cisco. In Taiwan, hardware manufacturer Acer founded more than forty software or dotcom subsidiaries between 1997 and early 2000, investing in Internet-related businesses in Greater China and Asia Pacific and forming alliances with-who else?-IBM and Cisco. In the United Kingdom, two of the largest portals through which users get their e-mail and news are Tesco.net and FreeServe, both of which are offshoots of traditional retail chains.

Still, dotcoms and wannadots, with dotcom-enablers egging them on, represent contrasting styles and face contrasting challenges, both of which I examine in this book. Ask big companies about their goals for the Web, and they are likely to reply, "Cautious experimentation." Ask dotcoms the same question, and they declare, "Total world domination."

That difference in rhetoric and attitude sums up the contrast between those reluctant to let go of the past and those hurtling into the future at warp speed. For companies that were not born digital, the big problem is change-when to change, how to change, and how to prepare people to live with the consequences of change.

Wait a minute! Before we rush off the cliff into the future, let's catch our collective breath and pause for perspective. Many discussions of the New Economy take place in a historical vacuum. Mention the Internet, and intelligent people sometimes act as if they have had a portion of their brain removed-the memory. (That's why I called this introduction "The New Economy Lobotomy.") As we search for the new and different things that occur in the wake of revolutionary communications technology, it is also important to recall what can be learned from previous waves of innovation. In earlier decades, television was going to replace radio, teaching machines were going to replace teachers, and Sunrise Semester, a set of televised lectures, was the first sign that mass media were going to replace college classrooms. The broad reach and interactivity of the Internet are much greater than that of television or other media, and so is the potential for displacement. But history demonstrates that new channels tend to coexist with old ones and sometimes even join them.

New Economy rhetoric is often extreme, at both ends of the spectrum of love-the-Web or hate it. Not since the Marxists roamed the earth has the word revolution been used so freely. Evangelists urge companies to "blow up your business model," while critics decry the "toxic excesses of capitalism" in the Internet boom. In both cases, people feel free to fling around provocative slogans without thinking about what they really mean or examining what is really happening. Media critics have faulted journalists for reporting financial news with little perspective on its meaning and little analysis of the business models of the glamorous companies they lionize. In 1999 and 2000, the press swung from being overly bullish, featuring young millionaires on magazine covers who never made a dime, a critic said, to being overly bearish after the spring 2000 market downturn.2

Because the United States was the launch site for the world's journey into cyberspace, I suppose this lack of interest in history is understandable. To tell someone they are about to be "history" (as in "You're history!") is an Americanism for impending elimination. Legacy has become a negative term in the information technology community, referring to traditional systems that now impede progress. It has long been a hallmark of American popular culture to look for the fresh face, and it has long been a tenet of American entrepreneurship to value the fresh start. The late great anthropologist Margaret Mead once claimed that America was the first culture in which the young taught the old instead of the other way around. She was referring to the children of immigrants' children who learned the language first, and then taught their parents. Today, that observation could be made about the Internet.

The Internet economy exaggerates antihistorical tendencies, offering a premium for new ventures and new ideas deliberately detached from tradition-witness the higher market valuations placed on dotcoms that separate from their parent companies. How many years a company has been in business and what its track record has been counts for less in some marketplaces than whether it has the newest, latest offering. History not only seems to matter little, but also may be seen as an encumbrance, or a sign that the company is stuck in the past. Even recent experience-"What have you done for me lately?"-is less important than "What do you promise to do next?"

As I was beginning the work for this book in 1999, popular exhortations to leaders to "forget everything you know because the Web overturns every accepted business principle" filled the air. So I tried to approach the e-world by assuming that I knew nothing. Before designing my massive research venture, I sat at the feet of twenty-year-olds and asked them to teach me. (My Harvard Business School MBA students were already influenced by their work experience; I was looking for the truly fresh new thoughts.) One weekend a set of four college students, aged nineteen to twenty-two, brought laptops and flip charts and industry statistics to my country retreat and talked through new business models. (They were then vetting business plans for a venture capital firm, while trying to find time for their college courses; one had started a Net business he sold eighteen months later.) When I suggested to a young magazine founder, who was tempted to leave the print magazine in the dust in rushing to the Web, that the print magazine was an asset that the Web wouldn't eliminate so fast, I was stung by his retort that "you're not twenty-five," so I redoubled efforts to shed preconceived notions. (P.S. I was right, as the founder has since acknowledged; the print magazine is the biggest single driver of traffic to the website and the vital lure for advertisers.)

My virtual lobotomy was illuminating, but a little went a long way, and my memory started returning to normal. I started to see that cyberspace is full of reinvented wheels. Yes, the technology is revolutionary, network economics are different, and all the wheels must turn a lot faster, but the problems of leadership, organization, and change are similar to those we have experienced for decades. So even though this book breaks new ground in examining a set of big new challenges, it also rests on a foundation of enduring truths about people and organizations-a foundation that serves as a springboard for an evolutionary leap into a new, networked age.

The research that led to Evolve! is both broad and deep, involving not only the United States but also on-the-ground investigations in Canada, Europe, and Asia carried out by my research team at Harvard Business School and augmented by conversations in Israel and Latin America. (See the Credits for the names of my terrific team, led by Daniel Galvin and Michelle Heskett.) Three pillars were used to develop and test hypotheses:


* A global print and online survey included responses from 785 organizations of all sizes and types, primarily from North America and Europe but including Latin America and Africa. Survey respondents included Global 2000 companies that belong to the World Economic Forum and emerging fast-growth companies in the Inc. 500 and Young Entrepreneurs Organization.


* My Harvard Business School team conducted over 300 interviews in nearly eighty companies and other organizations in North America, Europe, and Asia, using both a structured guide to identify the dimensions of e-culture and an open-ended search for best practices and object lessons. We included prominent and newborn businesses of all types, as well as a sprinkle of professional firms (law and consulting), schools, and trade associations. Interviews were augmented by e-mail dialogues and a discussion forum on theglobe.com.


* Over two dozen companies from three continents were examined in depth through multiple interviews and richly detailed case studies. These included Abuzz, AlliedSignal, Amazon.com (and partners), Arrow Electronics, barnesandnoble.com, Blackboard.com, Cisco Systems, CNBC.com/NBC, Digitas and clients (Bausch & Lomb), EarthWeb, eBay, Hewlett-Packard, Honeywell, IBM, iSteelAsia, iXL, Lucent Technologies, Mainspring, Razorfish, renren.com, Reuters, Sun Microsystems, Tesco, and Williams-Sonoma. IBM's Reinventing Education initiative and Bell Atlantic's partnership with a New Jersey school system were included to extend the research beyond business to public education. For several of the United States-based companies, we interviewed at international as well as American locations. (See Appendix A for company descriptions.)

The result of all this work is reflected in the lessons of this book. I show that the Internet and its associated network technologies play two primary roles. The World Wide Web is both the stimulus for a new organizational culture (making it necessary) and a facilitator of that same culture (making it possible). I call that new way of working e-culture. E-culture defines the human side of the global information era, the heart and soul of the New Economy. People and organizations everywhere must evolve to embrace this business culture of tomorrow-no matter where they are on the continuum of Internet use.

Taking full advantage of the potential of the Internet Age requires leaders to lead differently and people to work together in new configurations. Consider these truths of e-culture as the new truths for success in general:


* E-culture is about creative destruction. It means getting serious about continuous dramatic change, even if it destroys your own already-profitable business.


* E-culture is like living in a glass house under a huge spotlight that's always on, 24/7. Mistakes are immediately visible and magnified. And no one wants to hear excuses. They only want to hear about what's new, what's next.


* E-culture is superficial-in good ways. Communication is the core of e-culture. Internet time requires fast, cryptic communication among strangers who cannot take the time to interpret subtleties or build a deep relationship based on intimate knowledge.


* Done right, e-culture protects against armed combat. It fosters a spirit of cooperation because the network requires it, despite battles over screen space or brand image or merchandizing decisions. There is no time to fight it out, no time for thorough debate. People need to get on with it. They have to learn to collaborate.


* E-culture is made up as you go along. It involves emergent strategies, improvisation in response to opportunities.


* E-culture is full of paradoxes. The e-world is highly decentralized and hard to control, but it forces organizations to become more integrated-even centralized. New media rely on old media that they claim to displace to promote use of the new media. The value of unproven companies can increase with the rate at which they lose money.


* E-culture can be a lot of fun. Companies compete for talent by staging the goofiest games, sponsoring the most exotic trips, and stocking the most lavish snack bars.

The messages of this book derive from the deeper implications of those simple statements. Evolve! consists of insider stories and lessons about effectiveness drawn from organizations at all stages of Net change. It describes role models and best practices: how life is lived and work gets done in companies that lead the pack. It tells cautionary tales: why change is fumbled or resisted in those that lag behind. And it includes practical conclusions that readers can use to ensure personal and business success in their own ventures and workplaces. Evolve! explores the readiness of companies to embrace e-culture, the capability of leaders to lead within it, and the willingness of people to commit themselves to it.

The Way to Evolve! It is common in the business world, and increasingly wherever busy people are found, to provide an executive summary at the beginning of documents. In this book, I am providing two. One of them is conventional-the verbal tour through the contents of the book that comes next. The other one is the result of the hours I spent in dotcom offices that had music on all the time-it's the song whose lyrics are found just before the table of contents.3 Take your pick.

Part One. Searching, Searching: The Challenge of Change
The three chapters in the first part of the book set forth a variety of challenges. First are the ways that the Internet affects all of us, like it or not. In chapter 1, I argue that e-culture derives from basic principles of community: shared identity, sharing of knowledge, and mutual contributions. Online, community is a metaphor. Offline, the spirit of community is required to implement the changes that the Internet makes possible-to give customers more choices, citizens more voice, educators more capacity to improve children's learning, and businesses greater market reach and internal efficiency. Understanding the dynamics of community is also required to respond to the changes the Internet forces on us-whether they work in your favor or represent communities of opposition and protest. The Web represents opportunity for some, an enormous threat for others.

To some people, it seems that only the young can master this new, bewildering environment. It is no accident that young people of the Net generation are disproportionately represented in dotcom companies. Are those youth and those companies pointing the way to the future? Dotcom culture is described in chapter 2, along with the reversal of generational roles when the younger mentor the older. There is a distinctive dotcom workplace style that my team found everywhere in the world. But that style by itself is not enough to create a viable business. In chapter 2 I introduce some young companies with the substance to succeed-that begin to reflect elements of a new culture. But it's not youth that leads the way, it is new ideas executed with discipline and traditional values.

New companies do have one advantage: the fresh start. Wannadots, in contrast, can be inhibited by their size and organizational legacy from incorporating the Internet successfully, as chapter 3 shows. They face numerous barriers to change, and they are tempted to let those barriers stop them. Some wannadots are laggards, moving slowly through predictable stages en route to the Web-denial, blame, and insignificant cosmetic change. Others, however, are pacesetters that exhibit organizational curiosity and the desire to innovate. These pacesetters share many e-culture characteristics; along with the best dotcoms, they serve as models for the future.

Part Two. In the Green: The Essence of E-Effectiveness

"In the green" means "all systems go," and it also suggests financial viability. The four chapters in the second part of the book analyze the implications for business of the advent of the Internet and identify best practices in implementing e-culture principles. Each chapter covers one of the four big things companies-and organizations of all kinds-must do to achieve excellence:


* Treat strategy development as improvisational theater (chapter 4). When outcomes cannot be known in advance, the action itself creates the goal. Instead of following a script, e-savvy companies run an improvisational theater. A general theme is identified to get the actors started. Then the actors try out different scenarios, develop the story as they interact with each other, and create a different experience with each round. Because it is impossible to know which model, which standard, which concept will prevail, it is unwise to follow a script written in advance of the action; it is better to launch many small experiments and learn from the results of each-a hallmark of improvisation.


* Nurture networks of partners (chapter 5). In the Old Economy, partners were an afterthought or a relabeling of existing transactional relationships with a vow to treat each other better. The New Economy builds networks through multiple partners-important not only for online links among dotcoms but also for offline links among dotcom-enablers who need complex multilateral partnerships to build the technology for cyberspace.


* Reconstruct the organization as a community (chapter 6). The outlines of the "new organization model" are familiar: flatter hierarchies, more fluid boundaries, more team oriented, an emphasis on processes over structure. But often that model led to decentralization, one of the fashions of the late 1980s and 1990s, as the pendulum swung toward divisional and departmental autonomy. The Internet is a recentralizing force in that it makes more urgent the need to present one face to the customer, link separate systems for seamless integration, and meet the demand outside and inside the organization for full connectivity. But because of a legacy of decentralization, many of the battles inside wannadots ("dotcombat") involve turf and territory. This chapter deals with two overlapping issues: (1) how to get best business proposition on the Web-the face to the outside; and (2) how to work together differently because of networks in order to get the benefits of the technology and implement e-culture inside.


* Win the battle to attract and retain the best talent (chapter 7). Is commitment an outmoded concept in a world of mobility, or are there new ways to build bonds between people and organizations? In chapter 7 I describe culture-building at the workplace level-how to treat people as volunteers who renew their commitment periodically through the three Ms of mastery, membership, and meaning.

Part Three. Morphing: Leading Fundamental Change at Internet Speed

The final three chapters offer a practical guide to change-how to move fast to transform a whole organization, how to lead change, and how to cultivate the human skills required for an Internet-enabled world.

Let's say you like the idea of a new organizational culture but don't know how to get there-or that you're on the road and want to make sure you're headed in the right direction. Chapter 8 is a working chapter for people responsible for big changes, especially a major overhaul and comprehensive shift to e-business and e-culture. It focuses on overcoming the common barriers we have encountered throughout the book and successfully implementing systemic change. It shows how to ensure that the organization has been transformed to a new way of working that will permit continuing successful change. It addresses comprehensive change activities-not single projects, but building the entire organizational platform. A step-by-step practical roadmap is included.

Change is not a decision; it is a campaign. So chapter 9 is for leaders-appointed, elected, or self-appointed. The stars of this chapter are entrepreneurs and innovators of all stripes-in independent ventures or within already-established organizations-who have appeared earlier in this book as the forces behind successful e-ventures and change efforts. Change in the e-world involves mass mobilization, resembling a political campaign or community organizing. Change involves shaking up thinking (like shaking a kaleidoscope), communicating with internal and external audiences, staging pep rallies and other events, and building support within and outside the organization. This chapter pulls together leadership lessons about the skills required at every stage of a change process.

In chapter 10, I encourage all of us to stand back to put e-culture in perspective. What does all this mean for individuals and society? Are we on the verge of the next stage of social evolution-a great leap forward to shared consciousness? The advent of the Internet, if guided by leaders who understand its full potential and deeper implications, can help connect people in powerful ways that build human community. But there is also the danger that unless offline communities nurture social interaction, the Internet could become an isolating force, and children could grow up without the very skills that the Internet requires to run. The best online businesses have a community element; the best e-culture companies operate like communities internally and serve the external communities in which they live. Those individuals who will be most successful in the Internet Age will exemplify this possible evolutionary leap toward shared consciousness: They will be more collaborative systems thinkers, excellent communicators, and great members of improvisational theater troupes able to make quick adjustments as they interact with their multiple audiences of users and partners.

Overall, then, this book is about change-what to change and how to change. It is about a new culture, e-culture, that involves better ways of leading, organizing, working, and thinking. Through Evolve!, I hope to help readers prepare to evolve-to be leaders who can make the right decisions in an uncertain world and execute them quickly and effectively. This involves deep systemic change, not cosmetic change, and a deeper emphasis on human skills that build meaningful community out of mere connections.

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Table of Contents

Rosabeth Moss Kanter is the Ernest L. Arbuckle Professor of Business Administration at Harvard Business School. She has been named one of the "50 Most Powerful Women in the World" by The Times of London, and is the author of several bestselling books.
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Interviews & Essays

A Conversation with Rosabeth Moss Kanter

Q: What is e-culture?

A: So many people have talked and written solely about the business side of the Internet era -- new business models and organizational structures. But I was also interested in the human side of the global information era -- what I call the "heart and soul" of the New Economy. That's what e-culture is -- it's a new way of working that is both stimulated (made necessary) and facilitated (made possible) by the World Wide Web. It's founded on human relationships, networks, and communities -- not solely on technology -- and it requires people and organizations at all stages of Internet sophistication to work, live, and play together in new configurations. What's more, just as "e-business" will soon evolve from a special subset of business to the standard method of doing business, so too will we eventually drop the "e" from e-culture. Before long, it will simply be recognized as the culture of tomorrow -- the culture of the companies that lead the pack.

Q: "Community" is often still thought of as a "soft" term in business. Yet you argue that it is through community that today's organizations will derive the most value.

A: As an integrating force, the Internet makes it urgent to present one face to the customer, link separate systems for seamless connection, and meet the demand outside and inside the organization for full connectivity. Companies can't accomplish this just with technology -- they can only do it with people -- what I call "individuals-in-community." But it's important to distinguish community as a label from the underlying principles that make community integral to e-culture: sharing of knowledge, mutual contributions, smooth coordination, easy border crossing, and responsibility for a shared fate. Superficial "community-building" bells and whistles, from parties to dress styles, can deflect attention from the serious substance of a venture. And of course, a bad business proposition trumps all aspects of internal culture. The kind of community I'm talking about involves community as an organizing principle -- as an emotional and operational reality.

Q: While many pundits have argued that the Web is fundamentally new and different, you say that cyberspace is "full of reinvented wheels." Can you explain?

A: There's no question that the technology is revolutionary, network economics are different, and all the wheels must turn a lot faster. But what many hype-driven proclamations overlook is that fact that the problems of leadership, organization, and change today's leaders face are similar to those we've experienced for decades. So even though this book breaks new ground in examining a set of big new challenges, it also rests on a foundation of enduring truths about people and organizations -- a foundation that serves as a springboard for an evolutionary leap into a new, networked age.

Q: Why is Evolve! so upbeat when the dot-coms are so down?

A: In the book I talk a lot about the fact that many youthful dot-coms were doomed to fail from the start. Most of them were all "style" and no substance. But while the dot-com frenzy has died, the Internet is here to stay. And it is transforming life in all organizations, even those that do not have a dot in their name. Evolve! is not about having a web site, it is about leading, learning, and living with a new tool that can help organizations become more productive -- if they embrace the culture of tomorrow. The Web can potentially give customers more choices, citizens more voice, educators more capacity to improve children's learning, and businesses greater market reach and internal efficiency -- but only if we evolve. There are no guarantees. First, people and organizations must change.

Q: Your research for Evolve! was extensive. Can you talk about what it entailed?

A: I was interested in examining the impact of the Internet -- and the emergence of e-culture -- across all fronts and in all kinds of companies in the global marketplace. I sat at the feet of 20-year-olds and asked them to teach me -- and I sat across from CEOs of Fortune 500 companies and asked them to share with me their major challenges, their biggest successes and failures. In addition to on-the-ground investigations in the U.S., Canada, Europe, and Asia, we conducted over 300 interviews in nearly eighty companies and organizations, as well as over two dozen in-depth case studies of prominent companies in three continents. Finally, we supplemented all this with a global print and online survey of 785 organizations of all sizes and types, from technology companies to trucking companies, from consumer products to public schools.

Q: Let's talk about some of the findings from your research. What was the biggest problem with the way most "wannadots" have tried to conduct business through the Web?

A: Many traditional firms think that superficial add-ons, with no change in how the company operates, can produce Internet success. But a company is not transformed simply because it creates a web site. That might be only a cosmetic change -- what's been referred to as "putting lipstick on a bulldog." Success requires a more complete makeover, namely, rethinking the model for how to organize the work of the whole organization. It requires challenging traditional assumptions about relationships with customers, internal and external communication, decision making, operating style, managerial behavior, employee motivation and retention -- and then defining a new way.

Q: So interestingly, the biggest challenges to success in the digital age are human ones, not technological ones.

A: That's what e-culture is all about -- the human relationships that make organizations work. And whereas dot-coms are born to an Internet style that naturally values networks and community, wannadots have to morph into it. That's why leadership offline does not predict innovation in cyberspace. The transition is tough, even for the best of companies. Success requires a systemic change, a shift in the organizational way of life. That's the chore that's hardest for wannadots. And that's also why, in the early days of the Web, the pure dot-coms' "fresh start" looked like a permanent head start.

Q: You said before that you've always doubted the staying power of youthful start-ups. What can we take away from their quick rise and even faster fall?

A: The dot-com death rate proved that superficial aspects such as dress style or office-as-playground don't constitute a model for success. The right age profile is not the essence of e-culture. The real grain of truth to be learned from companies that are born on the Internet involves improvisation, quick learning, community feeling, and passion for the mission -- to change the world, if you will. The fresh start that dot-coms represent illuminates the barriers that established companies face. Large bureaucracies have the substance but neglect the style, creating tense and grim work environments.

Q: In your view then, e-culture is really about combining the best of both worlds -- the Old Economy and the New?

A: The so-called New Economy is certainly built on Old Economy roots. The young may be disproportionately represented in the dot-com universe, they may have a distinctive style, and they may even have fresh new knowledge to teach their elders. But reverse mentoring doesn't wipe out the traditional kind. Success in the New Economy stems from some of the same values and management lessons as success in the Old Economy. There is something to be learned in both directions. For example, style without the substance is all glitz and hype and game playing. But technology without a culture of play and rituals and communal kitchens can be boring and unmotivating. Substance comes first, then style can support it.

Q: What should investors look for when trying to determine which start-ups to bet on?

A: My e-culture project compared new companies such as EarthWeb, eBay, and Abuzz -- dot-coms that have all the signs of endurance and success -- with a group of others that suffer from high turnover rates and loss of investor and employee confidence. The dot-coms most likely to succeed want to be long-term businesses, not just stock sellers; they create professionally run organizations that function as integrated communities. Problem-ridden dot-coms, in contrast, have all the glitz and flash and fun without the underlying business fundamentals. That's why I am so skeptical about start-ups like therumour.com. Its founders know little about their user base; they have no unique use of technology; they lack a network of experienced partners; and they reject adult supervision. How could that kind of business possibly work?

Q: Your study also compared offline, traditional companies that have succeeded at e-business with others that have fallen behind -- you call them pace-setters and laggards. What separates the pace-setters from the rest?

A: While most traditional companies are moving slowly through predictable stages to the Web -- denial, blame, and insignificant cosmetic change -- pace-setters exhibit organizational curiosity and the desire to innovate. More importantly, they link these characteristics to culture change -- to how the business and organizational model will now be different. E-culture pace-setter companies also behave more like communities both offline and online. This community action and spirit permits speed and seamlessness, encourages creativity and collaboration, and releases human energy and brainpower -- the essence of e-culture. Along with the best dot-coms, pace-setter companies like Cisco Systems, Sun Microsystems, Williams-Sonoma, Reuters, or Tesco, the large British supermarket chain that is also a large Internet portal, serve as role models for the future.

Q: You identify four things all companies must do to implement the principles of e-culture. What are they?

A: Treat strategy as improvisational theater -- foregoing rigid "scripts" in favor of rapid experimentation and learning; nurture networks of partners -- from making deals to building relationships to forging new connections; reconstruct the organization as a community -- both online and off; and win the battle to attract and retain the best talent -- by making it possible for people to view themselves not as workers but as committed volunteers.

Q: The idea of employees as volunteers is an interesting one. Can you explain what you mean by "renewable commitment"?

A: While today's workers certainly care about making money, they care more about feeling connected to a community in multiple ways beyond economic transactions: as member, citizen, helper, and recipient of help, as well as buyer, seller, and worker. That's what renewable commitment is about. It requires offering people mastery -- things like challenging work, training, and a stake in the future; membership -- both a feeling of belonging and the feeling that one is free to express their individuality; and meaning -- a belief in a larger purpose.

Q: It's easier to see how this spirit of community can pervade start-ups. But isn't bureaucracy inevitable in large corporations?

A: In the Internet age, size does not have to limit communication, and a division of labor doesn't have to create permanent class distinctions. Cisco Systems -- which at one point called itself the world's largest e-commerce company -- is a prime example. Cisco builds an internal electronic community by using its own networks to encourage very large numbers of people to head in the same direction. Rather than dividing into too many rigid territories, or creating separate brands with their own pride of place, Cisco instead emphasizes rapid information dissemination and abundant communication. It has dazzling figures for sales per employee and remarkable feats of speed.

Q: What about the question of change -- isn't it much harder for established firms to transform -- and do it at Internet speed?

A: Many people believe that large-scale change is possible only by starting independent ventures -- whether e-commerce spin-offs, "greenfield" sites where everything is new, or charter schools. But it's premature and foolish to abandon large organizations because they are slow to change. Too much value is created in those organizations, and too much of the economy depends on them. Traditional organizations need to program a culture for change -- the platform for e-culture -- into their method of operating. Without fundamental systemic change, organizations will always revert to their basic pattern, like the default position on a computer program. The challenge will be learning how to reset this default position to one of ongoing change.

Q: But we've been hearing about the need for change since before the age of the Internet. How is this mandate different in the world of e-culture?

A: The pace, depth, and scope of change -- and how many people must get involved in coping with it. Change moves faster, and so do the reactions to change, as viral marketing spreads the good news but e-organizers and Web protesters create bad news almost as quickly. The reach of change is also broader and deeper: to bigger audiences in more places at greater distances, and into the inner workings of long-taken-for-granted institutions and daily routines. There's also a human tendency to sink into comfort and fight change -- so leaders must be more skillful at handling the human side of change than ever before.

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  • Anonymous

    Posted April 17, 2001

    Improvise and Evolve!

    Are you looking for success in the new e-commerce marketplace? Then you must read one of the greatest new books on the block, Evolve by Rosabeth Moss Kanter. In this highly evolving world of Internet, people often wonder what mechanics are necessary to create a successful e-commerce company. Combining her expertise in business management with an extensive research on some of the recent examples, Kanter has struck at the heart of how speed and e-culture have changed business paradigms. Pointing out how the relationships between people and not with the technology is the real challenge. You can no longer develop, institute and manage long-term business paradigms. Things are just changing too fast. The ability to really improvise allows you to work with different groups to be on top of each change and use the speed to create momentum. As Kanter outlines perfectly, you need a culture of improvisation. I think this book is an excellent source of reference for beginners as well as high executive officers and compliment well with the MBA/MSE e-commerce course that I am currently enrolled.

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  • Anonymous

    Posted April 17, 2001

    A Road Map To E-Culture

    This book appears on the reading list for the E-commerce course of my MBA/MSE Program at San Jose State University in California. The book ¿e.Volve¿ by Rosabeth Moss Kanter, a world renowned expert on change, is a treat not to be missed by those who aspire to play a part in the digital culture of tomorrow. It should not only be read by leaders but also by employees who would actually be the ones laying the e-bricks for the e-Culture of tomorrow. All the chapters are generously sprinkled with real-life examples, which gives it a story-book/novel-like feel. The ¿Evolve Song¿ at the beginning of the book is also a neat-little item to be liked. The book itself has three sections to it ¿ first one describing the challenge of change. Given the repertoire and expertise of the author¿s other works in this arena, it is not surprising to find this section the most intriguing. The second section is oriented more towards being effective in an e-Culture. It stresses the importance of the need for continuous success. The last section deals on implementing the ideas put forth in the earlier section. When talking about stimulating breakthrough ideas the author has compared creativity to looking at he world through a kaleidoscope. This is a very interesting comparison. This book is mostly complete in the sense of describing e-Culture, emphasizing key ingredients of a successful venture, strategies of execution and, social implications. It is not meant to be an instruction manual on how to build successful ventures. It does however teach us the key concepts through examples. Overall it is an excellent read and is highly recommended.

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  • Anonymous

    Posted April 14, 2001

    Will the Internet Completely Transform Every Aspect of Business in the Foreseeable Future?

    To answer such a question Rosabeth Moss Kanter created the Global 2000 E-Culture Survey and compiled and analyzed the responses from almost 800 business professionals. The book was a selected reading for my Electronic Commerce Class at San Jose State University, CA. Evolve! is recommended to business readers because of its in-depth and complete company case studies. The book is a must for anyone trying to understand his or her company's evolution in the global information era. Many books in the electronic commerce genre either explore pure content (information systems and information technologies) or pure context (social capital.) Evolve! is a superior book because it balances both context and content. Kanter accomplishes the difficult task by reinventing some well-known metaphors (Alice in Tomorrowland) and creating some new, imaginative metaphors (collabronauts exploring the evolving partner universe.) One of my favorite metaphors was comparing Barnes and Noble's successful transition from a bricks and mortar company to a new internet company as putting 'Lipstick on a Bulldog.'

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  • Anonymous

    Posted March 27, 2001

    Evolve!: The challenging most beneficial research

    In today¿s fast paced e-commerce, how the internet is changing our lives, the way we do business and where today`s expectation is different than tomorrow¿s, this book came as the long waited answer for How?and Why? To survive. The book is a serious resourceful research looking at the big picture first and then down through different kinds of examples and then down deep even to some of the finest details on how organizations and companies succeeded or failed to survive in the e-market. This book is a must read for executives of big companies, leaders at all levels as well as for entrepreneurs and anyone who has or expected to have a role in running businesses. Although it is not a step by step guide to success (yet very close) it is a rich answer book of How to? And why to? it can broaden the way people think, fills lots of gaps, touch on other aspects or relationships and let you not only look at the big picture but also participate in it as well as getting very useful hints on what to do and what NOT to do. The suspense in insider stories, how people at different levels resist change and how pieces interact together to form synergies and lead to unexpected success to the degree that some organizations were not prepared for success. Some other sad stories about the results of silos and individualism and how this hurt the whole organization and in some case was too late to recover. How wannadot companies can mix between types to become ¿Bricks and clicks¿, Barnes & Noble as an example of synergy between online and store marketing . Legacy companies and how they resist change and the challenge of how to change for those companies that were not born digital? How/why successful companies are the hardest to sell on the need for a change? The book takes you in an interesting insider tour between two extremes :Viewing the internet business as cautious experimentation versus total world domination, Below your old business model versus dealing with same problems of people and org while changing. In my opinion, the Author did an excellent job on stating new terminologies sometimes using numeric scheme e.g.: Defining the 7 elements of community, the 4 big things companies must do to reach excellence. Internet communities imposes 3 challenges, the 3 Cs community, content and commerce and the 10 rules if you want (NOT) to succeed in e-business . The 6 elements contribute to building organizational community:¿etc which makes it easy to remember and even post on you desktop. In environment where partners in certain areas are competitors in other areas, the book shed lights on the importance of partner relationship, Online versus offline links among partners and knowing together to working together. Challenges of How to get people who doesn¿t know each other to share knowledge? As the Internet rewrites the rules of competition, offer limitless opportunities and change conventional wisdom in how to run an organization. The need to work on relationships, not just a deal. Real network power comes from strong ties among every partner in the system. Usually Customer demand that you work together. In conclusion, The way I understand the book¿s message: In a complex interactive systems, leaders can not wait to get everything aligned before they permit action to begin for two reasons: they are unlikely to control all the relevant people and because delays are costly. So any action is better than no action as long as there are rapid adjustments and speedy response is more important than early perfection. Act on promising theme even without a script, Sense and respond, Get going and keep moving before you know everything and tolerate a few false turns and recover from them quickly. Embrace goals for tomorrow , letting go of yesterday¿s attachment to commitments . Involve the audience (customer , main stream core business). Experiment with new ways of doing things. Surface disagreement quickly and them commit to action. Stay on co

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