Different Leadership for Different Kinds of E-Commerce
Spencer Stuart is a
global executive search firm. They took a look at 55 well-known
companies at what they describe as "different stages of leverage
in the Internet." From their in-person and telephone interviews,
they developed the idea that there are two kinds of companies using
electronic commerce and that these companies required different
kinds of leadership.
They described the two
types of companies as web-enhanced and web-centric.
The web-centric companies
are those whose primary business is on the web. They include companies
such as Amazon.com, Ebay, etc. According to Spencer Stuart, leaders
in web-centric companies, foster cultures that encourage risk taking
and rapid decision making.
By contrast, leaders
in the web-enhanced companies see the web as a way to do things
they're already doing. Consequently, they focus on the brand's name
and value, product mix, cost reduction, etc.
WALLY'S COMMENT . .
.This is an interesting take on the management of Internet companies
issue, but I think it's descriptive, and should not be taken as
prescriptive. Further, I think it's a snapshot of a river, which
will look very different in just a little bit.
One reason that the
web-centric companies are flatter and more likely to encourage "risk
taking" is that they are younger and smaller and than the companies
cited as web-enhanced.
The bigger, older companies
developed their culture over time, in part to meet the challenges
of size. That will probably happen to many of the web-centric companies
as they grow.
Other management issues
derive directly from the amount of time that the companies have
been in business. Companies such as Kodak or W. W. Grainger already
have things which they need to conserve. They have established distribution
channels, relationships, and brand identities. Newer companies,
like Amazon, are developing these as they go. This is unrelated
to whether they are net-based or physical-based companies.
I don't think there
is a lesson to be drawn in terms of leadership models here, but
I do believe there are lessons to be learned from this study.
A key strategic choice
when a company looks at moving to electronic business is whether
or not they see the addition as an organizational equivalent of
facilities which exist or whether they see the addition as something
that enhances operations going on in the physical world. Here's
When we worked on developing
the strategy for Samuel Music, we decided that the web store (note
not website) would be effectively a new branch store. Once we had
decided that, it determined the answers to a number of issues about
budgeting, stocking, etc.
The danger in studies
like this one is that they were taken to be prescriptive. The challenge
for CEOs and other Senior Executives in business today is to look
at ways in which the digital and Net/Web technologies are transforming
the very basis of the ways we do business. Then, they can make decisions
about what their company needs to do to meet the challenges, seize
the opportunities, and neutralize the threats.
Date Published: 1 November
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