USINGWEB 2.0

The latest technology is increasingly utilized as a means of reinventing management. Srinivas Koushik, CIO of the Nationwide Property and Casualty Company, is one of

those leading the way. Julian Birkinshaw and Stuart Crainer report his approach.

TO CREATEMANAGEMENT 2.0

Does this sound familiar? You are anexperienced manager who has been involvedin a functional speciality for the last

decade. You realize that what you did in your firsttwo or three jobs has been largely replicated in thejobs that followed. The basic levers and controls aremuch the same. The levers are comfortable andfamiliar and you have learned when to push themand how hard.

And then you move on to a new job. There aremore people to manage, a few thousand rather thana few hundred, and they are dispersed. Suddenlythe reassuring levers that previously brought resultsare less reliable and responsive. What now?

Srinivas Koushik, CIO of the Nationwide Propertyand Casualty Company, was in a similar situation.With 2,400 dispersed people (out of Nationwide’s

23,000 headcount), his team offered a newchallenge – even for an experienced CIO. Koushik’steam supports Nationwide’s systems and technologyinfrastructure. Early results were good, but Koushikwas perplexed by a feeling that only 20 to 30 percent of the team were really engaged. The leverswere working, but only so far, because the resultswere not sustainable.

“I’m a closet geek and have spent a lot of time onthe Web, being one of the earlier adopters of Web2.0 technologies and social networks,” recallsKoushik. “The connection I started making was thata lot of what is on the Web can translate into andtransform daily management practices if we figureout the right way to do it.”

Once he began thinking about the link betweentechnology and day-to-day management, Koushikwent back to his early work in databases andnetworked databases. “Networked databases are a lot more efficient but very different fromhierarchical databases,” he explains. “I startedlooking at them and saying, well, our traditional

management model relies on hierarchy, on top-downcontrol and so on. Yet, in Web space you’releveraging the power of the network. Think ofMetcalfe’s law: the value of a telecommunicationsnetwork is proportional to the square of the numberof connected users of the system. Having 2,400people across the globe is the equivalent of anetwork, so what if I want to tap into the power ofevery node, every individual in that network?”These initial thoughts have ignited a series ofexperiments and initiatives in Koushik’s team thatbegan in 2006 and are ongoing.

Beginning to communicateThe starting point was to open up lines ofcommunication. Koushik wanted to make it clearthat he was personally involved and wanted to

change things. In late 2006, he started an internalmanagement blog. This wasn’t a decision-makingforum, but an opportunity for people to have opentwo-way communications with Koushik.

Updated every two weeks, Koushik’s blog talkedabout different topics, such as changemanagement, from a personal standpoint. He talkedabout the changes he was going through in his lifeand career – his daughter going to high school, hisnew job and new boss. The message was thatleaders are also going through constant change andhave to learn how to deal with it. “The personaltouch is important,” reflects Koushik, whileadmitting it wasn’t part of a conscious strategy. “Itstarts removing the mystique around executives bymaking them look more human rather than facelesspeople sitting in their offices. It allowed people tojust sign in and start adding their own thoughts tothe dialogue.”

Koushik’s blog now receives around 2,000 uniquevisitors every time he uploads a post. He estimatesthat only about 1,200 of the unique visitors are

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A lot of what is on the Web can translate into andtransform daily management practices if we figure out the right way to do it.”

“

from his own team; the others are fromelsewhere in the organization. Each of his blogposts receives anything from 10 to 40 comments.Now, Koushik’s team is piloting a new socialnetworking tool that allows people to have their ownblogs. About 50 employees now contribute –including one offering a biker’s perspective onthings going on at the company.

Building a community – with a viewThe next experiment (“It is not an experiment; it ishere to stay,” quickly counters Koushik) was tobring 40 front-line employees together on a

quarterly basis – an employee board of managersmodelled on Nationwide’s board of directors. Thisboard, originated in 2007, has a core team of fivepeople who stay on the board for three years. Theother members serve on the board for a year.

Says Koushik: “We bring them together to talkabout what we’re thinking about. We put a problemin front of them that the management team isfacing and say, ‘How would you guys solve it?’That’s actually worked extremely well. We’ve beenvery open with them saying, ‘Okay, this is an ideasforum; there may be some ideas that we won’t acton, but we’ll tell you why we’re not taking the ideaand here are the reasons’. You find out what’s reallyon their minds. It also exposes them to howmanagers make decisions on day-to-day issues.”

One of the thorny problems put in front of theemployee board concerned customer satisfaction.Nationwide has a sophisticated customerenthusiasm metric, which is directly tied to thesalaries of front-line associates all the way up to the CEO. But what can an IT employee do to helpcustomer enthusiasm? What is the directconnection? Even raising this issue is powerful, says Koushik. “These are good discussions in which we make the connections between what an individual does and how that work helps ussupport a customer. When we can’t make thoseconnections, we need to ask why and look atchanging them. This line of thinking also led to the idea of having employees set their ownobjectives and stating how they can contribute tothe company’s success. That’s been one of thereally good insights.”

Wiki wisdomThe Nationwide team is also championing the use ofwikis to help it build community ties. The employeeboard has a wiki, as do the 300 or so employeeswho work on agile development methods. “It’s theopen source concept of evolving knowledge, and it’ssomething that we’ve really found a lot of benefitin,” says Koushik.

With instant messaging, blogs and wikis extensivelyused, Nationwide is currently implementing an IBM technology called Connections – most easilyunderstood as an internal version of Facebook. Thisnow has 200 participants who have set up their own

profiles. They can tag themselves as experts incertain areas, such as architecture or changemanagement, and the search capability allowspeople to search by name or by expertise. Profilesquickly spawn informal communities.

“We’re just like any other company whosetraditional model for driving best practices andthought leadership is to set up a centre ofexcellence,” Koushik explains. “But, the wholeconcept of centres of excellence goes againsteverything that the Web is about, because on theWeb, there’s no centre. In this environment, peopledetermine whether you’re an expert based on whatyou know and what you contribute, and not by yourtitle or where you belong or any of that. Thetraditional model is based on command and control.We’ve just got to start realizing that control is anillusion in this networked world. You can join it, youcan influence it, but you can’t control it.”

So what is the future for Web 2.0? What will bethe Killer App that brings these tools intomainstream business use? “I am not sure if there is going to be one Killer App,” replies Koushik.“Web 2.0 is going to be like that BASF commercial:‘We don’t make the things you use – we make thethings you use better’. Today we are already usingthese technologies to improve communications andbuild virtual communities across the company. As these applications gain traction, we will seethem integrated into our mainstream managementprocesses. There are also emerging opportunityareas for Web 2.0 in collaborative productdevelopment and in the evolution of ‘folksonomies’(taxonomies created by normal folks) that replace

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The traditional model is based on command and control.We’ve just got to start realizing that control is an illusion inthis networked world. You can join it, you can influence it,but you can’t control it.”

“

the current taxonomy of knowledge that existswithin the organization. This could produce severalnew innovative ideas that will allow us to win in thishyper-competitive marketplace.”

Lessons from NationwideAdapt your style to the new world Koushik’s mostimportant insight was that, in order to make thissuccessful, he had to change his management model.“Do not try to make these tools fit your traditionalmanagement model; the worst thing that canhappen is that you put these technologies in andyou try to do the same old management practices,”he says. “You need to adapt your management styleto take advantage of these tools. It starts withadmitting that you don’t have all the answers andthat the only way you can get the right answers is totap into the collective wisdom of your team.”

Challenge the way you communicate Every managerknows that communication lies at the heart of whathe or she does. Without communication, nothinghappens. But modes of communication arechanging – and fast. Audiences are more dispersed,fragmented and demanding. In this world, messagesneed to be targeted, personalized and deliveredthrough preferred communication channels. “Mostmanagers consider themselves great communicators,but if you look at the venues and how wecommunicate, it’s predominantly one-way andwritten by some communications staffer,” observesKoushik. “Even face-to-face communication modelssuch as Town Hall meetings are good but can still beintimidating for people who are worried about askinga tough question in front of a large crowd. Web 2.0technologies allow people to ask questions that theymight not think of or might not be comfortable askingin other forums. In the new model, leaders have toput their personal touch in their communications,use a more informal tone and be ready for feedbackand opinions from the whole team.”

Work on your modesty All of this takes managerialhumility and a thick skin. Transparency can bedifficult to get used to. Technology allows people tochallenge what previously could not be discussed.Defensive reactions, as when someone mentionsyour pet project, are difficult to shake off. Instead ofmanagers being regarded (by themselves, at least)as the fount of all wisdom, they are admitting thatthey are open to ideas and that the levers theytraditionally pulled may no longer work. Modestyhas also to be worked at, Koushik admits. “You’vebeen trained to manage a certain way for 15 years,so unlearning some of those habits is not easy. Istill find myself saying, ‘I know the solution to theproblem; here’s the answer.’ Asking, ‘What do youguys think?’ elicits a very different reaction and amuch better solution.”

Be an early adopter of technology: your people will follow Koushik has witnessed the average age in his company fall from 48 to 42. This exacerbatesthe communication issue. He believes that, if senior executives are seen to be embracing thelatest technology, it can make a great deal ofdifference to how they are perceived by – as well as how they communicate with – a youngerworkforce. It’s no coincidence that Nationwide’spresident of insurance operations is one of the earlyadopters of technology, including the latestBlackBerry Storm.

Start small and grow fast It’s best to start with anaudience that is more comfortable with thesetechnologies. Koushik says that since technologywas second nature to his IT team, utilizing it tochange things was automatically more persuasive.The team realized that they could act as a changeagent for the broader Nationwide community bychampioning the use of technology in management.“Technology can be an enabler, and it certainly is inthis case,” he says. ■

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Julian Birkinshaw (jbirkinshaw@london.edu) is Research Director of the Management Innovation Lab.Stuart Crainer (scrainer@london.edu) is editor of Business Strategy Review.

London Business School Regent’s ParkLondon NW1 4SAUnited KingdomTel +44 (0)20 7000 7000Fax +44 (0)20 7000 7001www.london.eduA Graduate School of the University of London