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Practice 2: Invest in Information Technologies and Experiment With New Formats

6 October, 2015 - 11:38

The number one capital investment for most organizations is in information technologies; the primary new means of communicating within organizations. By some accounts, information technologies account for 35% to 50% of all business capital investment in the United States. 1 There are several obvious reasons for this high level of investment—the clear benefits of productivity gains due to improved information, the transition from an industrial to an information-based economy, and the declining cost of information technologies coupled with increasing capabilities.

However, information sharing is the essence of communication, and so effective information technologies are an essential ingredient to making an organization change capable. Information is being shared more extensively with not only senior executives but also with the entire organization. Examining trends in information sharing in trying to understand organizations that were “built to change,” Ed Lawler and Chris Worley reported that of the five common types of information within an organization, all were being shared with a wider range of employees. The five typical types of information being shared were (a) corporate operating results, (b) unit operating results, (c) new technologies, (d) business plans and goals, and (e) competitor’s performance. Interestingly, more than half of all employees in all organizations received regular information in these five areas in 2005; whereas in 1987, only corporate and unit operating results were reported to half of the employee base.  2

Effective information systems do the following six things for an organization to make it more change capable. First, they provide comprehensive data on key processes. Second, these systems integrate data across departmental boundaries. Third, they monitor organizational capabilities as well as performance. Fourth, they are linked to goal setting and reward systems, which are central to organizational change. Fifth, they include information on customer and competitors. And finally, effective information systems make measurements visible throughout the organization. 3 Clearly, good communication is not likely to occur without good information, and effective information technologies are a necessary ingredient to make that happen.