REDMOND, Wash., Jan. 14, 2008 – One of the more heated debates in business today concerns the impact information technology (IT) has on business performance. Some regard IT as a powerful enabler of people, providing tools and systems that increase productivity, and an essential growth engine that ignites opportunity and success. Others see IT as the narrow domain of technology specialists and chiefly view it as a cost of doing business, with minimal strategic business value.
New light was recently shed on this debate through research conducted by the Economist Intelligence Unit, a research and analysis firm and the business-to-business arm of The Economist Group, publisher of The Economist magazine. Sponsored by Microsoft, the study polled 1,351 senior executives worldwide, and found evidence of a positive correlation between business success and the use of various policies and tools, including technology, to enable employees to optimize decision-making and act dynamically.
Betsy Frost, general manager, Microsoft Information Worker Product Marketing Group
PressPass spoke with Betsy Frost, general manager of Microsoft’s Information Worker Product Marketing Group, to discuss the findings and what they mean for businesses.
PressPass: What are the chief findings of this research that business decision-makers should take into consideration?
Frost: The findings underscore that an organization’s greatest asset is its people. Some of the most worthwhile investments a company can make are the technology tools and performance incentives that empower or “enable” their people to exercise their initiative and unlock their collective potential.
The research demonstrates a clear link between enabling people and business performance, be it in profitability, revenue growth, tangible assets or strategic success. The message is clear: Enable your employees as it can very well improve the performance of your organization.
But, despite this encouraging finding, the research also reveals a disconcerting enablement gap. While many employees are given the license to be enterprising, they lack the technology to actually deliver on the value proposition of enablement. For example, just 53 percent of respondents reported having the IT tools they needed, and only 52 percent said they had the “necessary information to feel truly enabled.”
It’s an important reality check. It is easy for companies to get carried away with the latest management fad or coolest marketing strategy., Behind any innovation or exemplary example of execution, it’s the people and the rich insights, passion and commitment they bring to bear, armed with the right tools, that make a difference and drive value.
PressPass: Why is enabling employees so important for businesses? Is there a cost associated in not enabling employees?
Frost: Enablement determines the degree to which employees are empowered to behave proactively and entrepreneurially by taking smart risks – within parameters – that push the envelope, making new connections, forging relationships and nimbly responding to customer needs.
Creating such an environment depends on investing in IT tools that drive empowered behavior, such as powerful software that fires peoples’ imaginations, expands their horizons and helps them make informed decisions, quickly. Also important are personnel policies, like decentralized decision-making and performance incentives. Employees respond positively to that kind of trust and inspiration, and businesses often see improved individual performances and overall business growth based on these individual efforts.
If you look at profitability, revenue growth and other financial performance yardsticks, companies that report a high degree of enablement across employees consistently outperform their peers, while those that are the most risk-averse and grant their employees the least latitude correspondingly lag behind. For example, 52 percent of individuals who responded that enablement was very important to their business function worked for companies with revenue growth outpacing that of their closest competitors.
Unfortunately, while companies may profess their belief in enablement, they may not be doing enough to make it a reality. The research shows that almost half of companies are without the IT tools and information that they consider necessary. Without IT to facilitate informed, timely and effective decision-making, businesses are simply squandering their biggest asset. That’s why we regard IT as an inalienable part of making a business “people-ready.”
PressPass: How can companies close the enablement gap?Frost: The key to ensuring that a culture of enablement translates into business results is equipping employees with the IT tools they need to find information and use it to make an impact and connect with co-workers, customers and partners to magnify their efforts.
Despite the unprecedented advances in productivity that computing has ushered in over the past thirty years, this study brings home the value that IT still has to offer businesses. The study estimated just 15 to 30 percent of employees use technology tools beyond e-mail, and less than 15 percent of the executives surveyed reported using distributed meeting systems – software that combines e-mail, instant messaging and telephony to allow employees to collaborate and convene ad-hoc meetings.
We’ve barely scratched the surface. At Microsoft, we see IT as a pre-requisite of a people-ready business and the catalyst for employee enablement, opening up previously unimagined possibilities and lighting a fire under productivity.
PressPass: Why is IT so important to enable employees?Frost: Information is the currency of business today. But the data explosion threatens to overwhelm businesses’ capacity to capitalize on that information. The right software, on the other hand, enables people to convert raw data into the intelligence and action that drive business results. And in today’s world, the ability to share information and collaborate across geographically-distributed teams that software confers is paramount.
The study found that companies that provide employees with the IT tools that enable them to go the extra mile outperform their rivals. For example, 58 percent of respondents who use collaboration software worked for companies with revenue growth stronger than that of their competitors. Companies that use technology like instant messaging, portals, data warehousing enjoy a similar competitive edge.
These investments give employees the capacity to navigate and glean insights from raw data, collaborate and communicate on the fly, coordinate projects across geographically-scattered teams, and efficiently zero in on resources and expertise.
PressPass: What is Microsoft doing to help companies better enable their employees?
Frost: Microsoft recognizes that it is people who ultimately make companies tick. That’s why we describe our vision of a software-enabled company, the “people-ready” business.
We’ve invested heavily in user studies to understand the practical scenarios and overall context in which people actually use technology to ensure our products are intuitive to use, configured around real-world needs and can be folded into business processes.
The 2007 Office System is the result of thousands of hours studying the way they people work in order to infuse applications like Word and Excel with an even finer-grained understanding of customer need. As a result, we really tried to break new ground with the user interface of Office 2007, and feel that it has provided dramatic strides in the way people can work with information to achieve results.
We placed particular emphasis on more tightly integrating Microsoft Dynamics CRM with Outlook, so people can make better business decisions, more easily troubleshoot problems and gain a strategic overview of their business from within the software environment they already use daily.
Our business intelligence effort is another great example. Although business intelligence remains a top priority for CIOs, only 10 to 20 percent of information workers use the BI technologies available to them. We wanted to bring business intelligence to the masses and democratize access to critical business information. So we added new features into Microsoft Office applications such as Excel and SharePoint Server to make it easier for people to access data from key business systems directly from these familiar business applications. And once they have the data, these same tools allow employees to mine the information to learn more about their customers, their products and their industry.. We expect these new features and solutions will help to bring business intelligence capabilities to 10 times the workers, because we deliver BI exactly where people live, work and collaborate every day.
Touches like these demonstrate Microsoft’s commitment to enabling people to concentrate on what’s important to them and what they want to accomplish, rather than getting bogged down in how to get there.
Also, our software is designed based on open-standards so it’s interoperable and highly-adaptable, working flexibly across business functions so employees can switch seamlessly between applications as the situation dictates. At the same time, we’re committed to developing easily-manageable, cost-effective solutions with wide cross-industry support to ensure that companies can leverage their existing technology investments and collaborate easily with partners beyond the corporate firewall.
It’s an effort that’s driven by our fervent conviction that software has the unique power to magnify the impact of employees and enable businesses to be even greater than the sum of the people who make them up.