internet management

The gross security breakdown at Barclays' internet bank, plus the stumbling start of "cahoot", Abbey National's venture into e-semantics, are grim reminders of what can happen when old-line businesses set sail for Brave New Worlds. They founder - and, distresssingly often, they sink.

Today, moreover, failures come full frontal, on a much larger scale - and, still worse, much faster. This follows inexorably from the acceleration of change, which carries weighty consequences for managers. However powerful their empires, they have lost the luxury of long pauses between what is and what's to come.

The strains and stresses are especially agonizing for corporations that stick to old ways in new times - which means nearly all established enterprises. Their unenterprising reactions are still determined and stultified by obsolete practices, old-fashioned hierarchies, and obsessional command-and-control. Always ludicrous, these habits have become positively lethal.

An entirely new dynamic dominates the rampant high-tech contestants. If hot product launches, like personal computers, face a puny life-cycle of only six months, their successor, and the successor's successor, must already be in the works - complete for the first replacement, half-way there for the second. These companies don't plan three years ahead, but 18 months, tops: one website whiz, Akamai, manages on a mere three months.

The new imperatives also impose dazzling development cycles on innovation. In the world's Silicon Valleys, futuristic design and engineering methods are today's routine. The full powers of IT are essential tools of the technology - including that of management. Thus, synchronous working by multi-disciplinary, semi-autonmous teams becomes indispensable. Old-fangled sequential working, from design, to engineering, to production, to marketing, just takes too long and delivers too little.

High-speed efficiency is incompatible with the hierarchy, bureaucracy, due process, turf wars and top-down decision-making beloved by the corpocrats. High-tech high-fliers know none of these earthly non-delights. Yet Silicon Management is new only in practice, not in theory. For at least two decades, not one management thinker has advocated the paraphernalia and practices of order-and-obey cultures.

Silicon Management fits, not only changing technology, but changing social patterns. Companies of all kinds can only recruit from new generations of humans who have been reared as free-minded individuals in a climate of questioning, dissent and expectations of greater, better, faster delivery. You cannot manage these people like the long-dead Organisation Man.

But herein lies corporate paradox. Most companies largely operate in the old unsuitable ways. The grotesque disparity between remuneration at the very top and the rewards of even second-tier managers is richly (le mot juste) symbolic. In the corpocracies, money is power, and power is money. In Silicon Management, money is reward for achievement, not for rising to highest grimace on the totem pole.

This monetary contrast symbolises a massive disconnect. The new generation, full of ideas and eager to act, is too often held down by superiors who use top-heavy powers of organisation, appointment, budgetary control and authority to block initiatives from below. Most of these superiors would fervently deny that they and their cohorts squash the talent within. Those few who admit to the truth do nothing at all to cure the disease - another disconnect.

The Internet dramatically exposes these flaws. The Web allows companies to achieve, with ease, speed and certainty, a new, high and highly potent degree of communication and information, internally and externally. It makes global presence automatic. It opens new channels of distribution, procurement and customer service to all, not just established giants. It creates all the necessary conditions for Silicon Management - save one.

That is top management's decision to join the future, boldly and entirely. Paradoxically, if the top-downers take this decision, they weaken their own monopoly of power. Look no further to explain another fundamental disconnect - between awareness of change and responsive action. The gulf runs from great corporations to proprietorships. Owner-managers, too, have been flooded by the torrent of Net publicity; yet few have grabbed the opportunities (which are real) - or thwarted the threats (which are grave).

Self-fulfilling, dumb prophecies abound. Try an easy question on the Internet banking boobs. Why has web banking penetrated so little of the British market (0.2% at recent count, though presumably now rising fast)? Is it because (a) customers like their present crass service and, anyway, are too conservative to change; or (b) because banks joined the Web reluctantly and late, and mostly bungled their sites? The answer is a little of (a) and a lot of (b).

Gaps between awareness and action are yet another disconnect. There's a missing link: analysis. A website is not enough. The most basic management need applies: to have a clear ambition and a full understanding of the means required to achieve lofty aims. The visionary thinkers, moreover, must be umbilically linked with the doers. Otherwise, Xerox's famous and fateful disconnect awaits: your thinkers invent the PC, but your senior doers completely waste the most wondrous invention on earth.

Seniors can also get disconnected from reality. When Intel made its historic, wrenching decision to drop memory chips and switch to microprocessors, top management discovered - to its grateful relief - that seven out of eight plants had already quit memory work: middle managers had acted to cut their losses. The higher they are, the harder managers fall into chasms of ignorance about their businesses and marketplaces.

Electronic connections help marvellously to replace useless ignorance with effective information. In all companies, rich veins of knowledge, know-how, initiative and willingness run from top to bottom. Unless the blood flows both ways, companies will lose the future that could have been. They won't be rescued by reorganisations and restructurings - or new web ventures - that fall far short of Silicon Management and its revolutionary practices. Every process and every relationship probably has to be changed to exploit the strengths within and the opportunities without. The winning strategy for the future present is two words long: Get Connected.