Power to the people managing technology democracy in the workplace

Just under one-half—48%—of respondents to an Economist Intelligence Unit survey of European executives conducted for this study say that management of their firms is supportive of expand

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the workplace

A report from the Economist Intelligence Unit

Sponsored by

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Power to the people? Managing technology democracy in the workplace is an Economist Intelligence

Unit white paper, sponsored by Trend Micro The Economist Intelligence Unit bears sole responsibility for the content of the report The Economist Intelligence Unit’s editorial team executed the survey, conducted the analysis and wrote the report The findings and views expressed here do not necessarily reflect the views of the sponsor

Our research drew on two main initiatives:

l We conducted an online survey in March and April 2009 In all, 390 executives from seven European countries took part

l To supplement the survey results, we also conducted in-depth interviews with senior executives and independent experts on technology use in the workplace

The author of this report was Svetlana Grant and the editor was Denis McCauley

Our sincere thanks go to the survey participants and interviewees for sharing their time and insights

on this topic

September 2009

Preface

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Technology changes are often accompanied by fanfare, but in recent years at least one quiet

technology revolution has been developing in the workplace Individuals are adopting for work use the applications and devices they have learned to use in their personal lives Applications previously accessed only on home computers, such as wikis and social networking sites, now appear on business PCs Nearly every employee is now equipped with a personal mobile device and can become an online publisher with the help of blogs As a result, employees are challenging the technology status quo

in their organisation Many are demanding “technology democracy”—greater freedom to use the information technology (IT) applications and devices of their choice in order to conduct their work more effectively

Companies are not entirely ready for this development In Europe, many firms resist the notion of according greater technology choice to employees and business units Just under one-half—48%—of respondents to an Economist Intelligence Unit survey of European executives conducted for this study say that management of their firms is supportive of expanding technology freedom at the grassroots level, but virtually the same number, 47%, say the opposite On a hopeful note, executives tend to see more opportunity than risk to their business from this development Nonetheless, the use of new IT tools goes on at many firms without clear IT guidelines and proper training In their absence, business risks are likely to increase for these firms

This pressure from below on company management and the IT function will to continue to mount Generation Y, also known as the “millennials”, is populating the workforce in increasing numbers, and

it will not be long before they begin advancing to middle management positions Increasingly reliant

on social media, messaging and other personal networking technologies to conduct their work, this generation will challenge the established modes of IT management in organisations

Other key findings from the research are highlighted below

l Innovation and morale stand most to benefit from technology freedom Over 40% of European

executives are prepared to deal with the risks of technology democracy in order to reap its business benefits The chief gains, they believe, will come in the form of better grassroots innovation, as well as higher morale on the part of employees who are trusted to make at least some technology decisions for themselves

Executive summary

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l The risks are real but can be managed The fears of executives who resist according greater

technology freedom in their firms are not misplaced No few employees have wasted valuable work time using Web 2.0 applications for personal purposes, and companies have been damaged by sensitive information appearing on blogs, for example Survey respondents agree that the biggest risks from technology democracy are lower productivity, the loss of confidential information and an increased vulnerability to viruses

l Keeping technology chaos in check requires clear rules Where any degree of democracy exists,

technology freedom must be supported by clear rules and regulations to prevent a descent into chaos The most important means of minimising productivity loss and security risks include conducting regular and mandatory training courses for employees, developing formal guidelines and continuing the work of upgrading network defences

l Firms must provide better training on using new technologies Most executives in the survey

claim that their firms have drafted IT policies to govern employees’ use of devices, applications and websites in the workplace But few have begun to instil these guidelines in the minds of employees: no more than 21% of surveyed firms provide training on the use of personal communications devices, and only 17% do this in regard to social networking applications More worryingly, no more than one-fifth have plans to do so in the future

l Some IT decentralisation may be needed to manage the security risks When asked their view

on the implications of greater technology freedom for the IT function, survey respondents’ reply that

Six steps to keep technology democracy from

descending into chaos

Whether or not management is supportive of expanding technology

freedom, grassroots pressure to use new technologies will not go

away The research suggests a few measures that all organisations

can implement to ensure that this pressure remains creative and not

destructive

l Publish clear guidelines for technology use and update them

regularly Clarifying the rules of technology engagement for

employees is imperative in order to minimise the threat of security

breaches (and productivity loss) They must also be updated

frequently, as technologies change at breathtaking speed

l Make the guidelines specific Some firms which encourage the

workplace use of blogs and social networks, for example, require

employees, among other things, to identify themselves clearly and

to use disclaimers when discussing the firm, and to avoid citing

clients, partners or suppliers without their approval

l Educate and train It is not enough to develop guidelines; they

must be communicated to employees Courses on the use of social

media and personal communication devices should also become part

of regular employee training

l Be ready to devolve some security oversight Securing the

ever-expanding universe of applications and devices that employees use could overwhelm the centralised IT function Trained IT specialists

in the business units may be better placed to manage this aspect of information security

l Develop in-house social networking tools Large companies

should consider building internal social networking applications, which can deliver the benefits of information sharing—especially improved innovation—without the security risks Such tools may not be right for all firms, however, as they can require significant resources to build and maintain

l Make the business units a partner of IT Current mantra holds

that the IT function must become a “true partner” of the business units This should also work the other way round Employees often have a keener sense than IT of the business utility of a new application, and line managers may have a better knowledge of employees’ technology needs and practices Involving business units in technology decision-making will ensure that this knowledge

is tapped, and will also expand awareness of new risks

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the delegation of responsibility for information security to individual business units is the most likely outcome This would allow the IT function to focus on other tasks, such as the management of firewalls and other aspects of physical network security and tracking new external threats

The technology democracy survey

The analysis in this study is based in part on

an online survey, conducted by the Economist Intelligence Unit in March and April 2009, of 390 executives based in the UK, Germany, France, Italy, the Netherlands, Sweden and Russia The sample was senior: 49% of all respondents were C-level executives, with CEOs and board members

alone accounting for 30% of the group A range

of functions was represented in the survey, with general management, strategy and business development, sales and marketing, finance and IT the most prominent Respondents hailed from 8 different industries, as well as a range of company sizes, with one-half of respondents coming from large firms—those with over US$500m in annual revenue More details on the survey sample and results can be found in the appendix

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The traditional model of information technology (IT) management in organisations may be likened

to a benevolent dictatorship The IT function, led by the chief information officer (CIO), chief technology officer (CTO) or IT director—having the best interests of the business at heart—makes all decisions about which technology tools should be used by staff, procures them centrally, and sets the rules by which these tools are used for daily tasks This model, which has predominated for half

a century around the world, in public- and private-sector organisations alike, allows some limited freedom for experimentation to individual business units, but almost none to individual employees

“Technology democracy”—which we define as freedom to choose the IT applications and devices with which to conduct one’s work—spells chaos and risk for IT’s “benevolent dictators”

As the Internet and advanced (particularly mobile) telecommunications have become a thorn in the side of political dictatorships, however, so the use of these technologies in organisations threatens to erode the traditional model of IT management By increasingly bringing the technologies they use in their personal lives into the workplace and using them for work purposes, employees are, consciously

or not, making a case to be involved in the IT decision-making process The change is gradual: some use blogs to solicit product or marketing ideas from peers; others use personal mobile devices to read work e-mail or make business calls In many organisations, the result is a quiet workplace revolution as employees assume the power to choose their own applications and devices

Driving the change is the rising use of Web 2.0 applications and personal communications devices

by individuals The workplace use of these technologies may not yet be as widespread as is popularly assumed, according to Alexandra Jones, associate director of the Work Foundation, a UK not-for-profit institute which conducts research on work practices Ms Jones points to the results of a recent study by her organisation which suggests that less than one-fifth of UK employees at large companies use blogs

or social networks while at work.

There is little doubt, however, that the workplace use of these technologies is on the rise More than two-thirds of European executives in our survey believe that the use of personal mobile phones and notebook computers by their employees for work (as opposed to personal) purposes is increasing; nearly one-half think the same about social networking and similar applications

Several changes in the working environment will ensure that this trend continues One is the arrival

Introduction: Challenging the established order

The Work Foundation,

Changing Relationships at

Work, 2008.

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of a young generation of employees to the low and middle ranks of the workforce This Generation Y, or

“millennials”, born between the early 980s and the mid-990s, grew up using mobile phones and the Internet; most of them are IT-savvy and accustomed to using social media online During the next five years, they will progress to middle management positions, and some will even start bringing the use of new technologies into executive suites and boardrooms

Another change is the rise of teleworking The UK’s Institute for Employment Studies predicts that telecommuters in the original 15 EU member countries will top 27m by 2010, or 14% of all employees,

up from approximately 4m in 2000 In the US, already as many as 22% of the entire workforce work remotely at least one day a week, according to WorldatWork, a professional association focusing

on human resources management Geographically dispersed employees need new technologies to communicate and manage teams

Michael Nelson, visiting professor of Internet studies at Georgetown University in the US, describes the resulting change as “the blurring of boundaries between personal and professional, between the use of technology for personal and business purposes” He believes that its consequences are significant: “The biggest problem corporations face is a cultural issue CEOs and CIOs need to get used

to the idea that their companies are now more open and accept it when employees give away more information They also need to rethink their information and technology management.”

Far from all the executives in our survey appear ready for this Just under one-half of respondents say that senior management is supportive of according employees greater freedom to use applications and devices of their choice, or “technology democracy” Employees in 40% of Russian firms and 38% of Dutch firms in the survey are likely to face disciplinary actions for using social networking applications (German and French firms are considerably less likely to impose sanctions than the European average.) Technology use in these companies continues to follow the traditional rules, but for how much longer?

“CEOs and CIOs

need to get used

to the idea that

their companies

are now more open

and accept it when

Michael Nelson, visiting

professor of Internet studies,

Georgetown University

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European companies are divided in their views on technology democracy, and for good reason

Expanding employees’ freedom of choice introduces many unknowns into the established system

of IT functions and responsibilities It opens new and exciting business opportunities, but it also exposes organisations to risks which they have spent many years trying to manage and minimise The arrival of many new technologies to the workplace, moreover, is so recent that executives have not had time to give them much consideration

The above are likely to be reasons why nearly one-third of survey respondents (and over 40% of IT executives) believe there is more risk than opportunity in according employees greater freedom to use technologies of their choice at work, and that 23% see as much risk as opportunity A larger share

of European executives see a brighter side, however: 42% are prepared to deal with the risks in order

to capitalise on its business benefits UK executives are the survey’s most optimistic national group

Democracy in action

12 8

13

30 27

30 23

18

25 18

19 18 13

24 11

4 5 4

Significantly more opportunity than risk

Somewhat more opportunity than risk

Equal balance of opportunity and risk

Somewhat more risk than opportunity

Significantly more risk than opportunity

Don't know/Not applicable

How would you say that senior management of your company views the balance of opportunity versus risk in allowing employees greater freedom to use the technologies of their choice in the workplace?

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on this count, with half seeing more opportunity than risk (Russian executives, by contrast, emerge

as the most wary, with 4% seeing a greater amount of risk.) John Linwood, CTO of the BBC, the UK’s public broadcasting company, sums up this sentiment: “There are clearly risks involved, but we think those are far outweighed by the opportunities.”

Mr Nelson articulates the benefit for businesses: “Every time a new technology appears, it gives people more power Organisations that find the way to build on this power and take advantage of the new tools are the ones that will come out ahead.” The chief rewards for accepting the risks, according to the survey group, include better innovation, improved employee morale and enhanced collaboration with external partners

Freedom to innovate

A growing number of companies across different industries are leveraging interactive Web 2.0 technologies to enhance their innovation practices One of them is IBM, an IT services firm Says Ed Bevan, IBM’s vice-president for innovation and market insight: “We think that innovation today is a much more complex process than in a lone-inventor era Successful innovation requires a combination

of many technologies, business processes and even business models For that you need more expertise, and using social media and online tools are very useful.”

IBM uses online collaboration to develop ideas for new business investment The company has been organising an online brainstorming session called Innovation Jam™ since 200, using a combination of technology platforms it built for the purpose; these have led the company to create ten new businesses with seed financing totalling US$100m, according to Mr Bevan The 2008 session brought together 90,000 participants from ,000 companies in 20 industries

Mr Bevan explains the philosophy behind IBM’s approach: “Technology is obviously very important [to innovation], but it is much more important to have alignment between business approach, strategy and the culture created within a company or a group of companies, which includes partners We have

31 27 25

35 32 27

38

46 23

37 27

20

29 13

(Top responses from selected countries; % responses)

Enhanced innovation (eg, from employees' involvement in online forums, etc) Enhanced employee morale More effective collaboration with external partners

Source: Economist Intelligence Unit survey, April 2009.

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a very similar approach to Innovation Jams, blogs, social media or any other new technologies It

is all about democratisation and listening to many voices and ideas, allowing people to collaborate

in business ventures, and creating a flat playing field with non-hierarchical approach.” Such brainstorming, however, requires clear thinking beforehand about what to do with the resulting flow

of ideas, warns Mr Bevan, otherwise “you have a big party where everybody constantly contributes and then nothing happens.”

Many organisations are also proactively utilising social media to leverage what Mr Nelson calls the

“power and wisdom of crowds” Such organisations as the BBC, for example, use social networking sites

to solicit feedback from their viewers Lego, a Danish toymaker, consults an online panel of young toy users called “Kid’s Inner Circle” on specific innovations they would like to see in new products.2

Happier employees, more effective teams

Freedom to use new technologies and innovate can also become an important morale booster for employees Ms Jones from the Work Foundation believes that improved loyalty and higher employee retention are important benefits of a more open working environment: “We found that new technologies are associated with a more flexible culture and could play a role in supporting closer working

relationships Where the choice and use of new technologies is allowed, employees are more likely to describe their organisation as having a culture based on loyalty and mutual trust, and this is what people like in the workplace.” The survey results support this assertion, at least in some European countries: as many as 4% of German respondents and 3% of those from the UK believe enhanced workplace morale

is among the main benefits they expect to gain from greater employee freedom to use technology

In addition to talent retention, new technologies are also seen as an effective tool for collaborating with external partners and creating greater team cohesion Longer and more complicated supply

2 The Lego and Procter

& Gamble examples are

described in The digital

company 2013: How

technology will empower

the customer, a 2008 white

paper from the Economist

Intelligence Unit.

For the BBC, social media opportunities outweigh

the risks

BBC, the British public service broadcaster, has adopted a

liberal view on the use of new technologies Its journalists and

reporters use social media sites, such as Twitter, on a daily basis

as one of many sources of information and public opinion, and

leverage Facebook in their research of news stories and people

BBC employees also use Facebook for internal networking and

communication with colleagues The IT department is also mulling

over the policies that would permit the use of personal laptops

John Linwood, the BBC’s CTO, who joined the corporation in early

2009 from Yahoo, an online media portal, is receptive to many other

uses of social media in the workplace “We are the largest media

company in the UK, with 28,000 employees, and interaction with our

audiences is very important to us Social networking is an additional

tool we can use to achieve greater interactivity Whenever we release

a new version of iPlayer [an online play-back portal for the earlier broadcast programmes], for example, we use the Twitter community

to get feedback on different features.”

Mr Linwood admits that using social media has increased the risks for the company: “Social networks are another vehicle that malicious people can use; we are aware of that and are making sure that our IT policies and procedures can deal with it.” The corporation has rules for the use of social media and blogging, and it sends its employees

on mandatory training courses to make sure they have sufficient knowledge and skills to use information effectively and wisely.Information security is a shared responsibility at the BBC, according to Mr Linwood “Responsibility for developing information policy and understanding the IT threats lies with the CIO But in terms of implementation, it is up to each individual employee Once they receive the training, they need to step up and take responsibility for their own actions and for data security within their area Our role

is to equip and educate staff across the organisation and then have them take responsibility for the areas in which they are involved.”

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0

chains increase companies’ reliance on their partners and suppliers, and require more extensive channels for communication Social networking by no means replaces more traditional forms of communication such as phone, e-mail and face-to-face meetings, but rather complements and augments them Even in companies that are wary of the idea of “technology freedom”, the use of new tools is on the rise: Achmea, an insurance provider based in the Netherlands, for example, uses instant messaging to link its 13,500 employees spread across 12 locations

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New technologies, familiar risks

35 32 24

30 29 27

36

41 23

47 33

20

42 36

31

38 31

(Top responses from selected countries; % responses)

Loss of productivity Leakage of confidential company information Increased network vulnerability to viruses

Source: Economist Intelligence Unit survey, April 2009.

For every organisation like the BBC which is comfortable with according employees freedom

to use technologies of their choice, there is at least one, if not more, which is not Kellogg Company, a food producer, is one of the latter Says Mike Nagle, Kellogg’s director of regional IT in Europe and Asia-Pacific: “We currently do not allow employees to choose and use their own devices

or applications in the workplace We also disallow the use of social networking sites selectively and personal e-mail completely We apply these rules on the basis of threats to security and productivity.”

The aforementioned Achmea is another firm wary of allowing technology choice Bob Jutte, Achmea’s CIO, explains his management’s view: “We do not think it is appropriate for our employees to choose and use their own devices There is too much risk of losing confidential company information and customer data.” This is not, however, an immutable position “We are reviewing our policy on social

Key points

n In the world of social networking, firms have very little control over the outward stream of information, increasing the risk of losing IP and customer data

n File-sharing sites and applications top European executives’ list of the most risky technologies

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Efficiency drain

Social networking sites, blogs and wikis (websites that allows visitors to contribute or modify content) were created for the purpose of socialising with friends, family and peers These sites are all too often used in the office for just this purpose, wasting hours of productive time Facebook is the best-known distraction, but there is a site just like it in all markets, be it Bebo in the UK or Odnoklassniki

ru (translated as “classmates”) in Russia In many cases, employers draw the line between personal social sites and those that aid professional and business networking Achmea in the Netherlands, for example, allows its employees to use LinkedIn, but prohibits the use of Facebook The line between the two is often very thin: reading pages of news and information from such sites as Twitter can distract employees from more important work, even if they read it for professional purposes

The easiest way to minimise this source of productivity loss is to ban the use of certain social networking sites In the survey, 24% of European executives state that access to Facebook should be disallowed in their organisations, and 22% would ban blogging sites and services This is the practice

at some of the firms whose executives were interviewed for this study

Mr Linwood of the BBC takes a different view, namely that the abuse of social networking sites is more of a managerial or human resources issue than a technology one “Social networking is just one

of many things people do to waste their time,” he says “If employees are not doing their job, the management should deal with it through other processes.” Such an approach may be better suited to the BBC and other companies that measure their employees’ performance against specific deliverable targets and deadlines For those where the number of productive hours is of greater importance, shifting the emphasis to the quality of work could be a better way to fight against procrastination

A restrictive approach of banning sites may also have negative productivity implications for the

IT function itself Prohibition requires the tracking of sites and policing of employees’ computer use When it comes to the Internet, tracking and policing is becoming more complex by the day, and IT departments must often task staff to do this on a regular basis

Freedom to lose information?

Accidental or deliberate leakage of sensitive information is a significant threat to a company’s security Firms have ploughed enormous investments over the past decade into beefing up network defences against security breaches, and in training employees to use information, networks and the devices attached to them with care The executives in our survey appear sanguine about the level of information security threats they face today, even in these extraordinary times: most say the risk of breaches from

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3

22 20

19 13

22 4

Loss of intellectual property Reputation or brand damage Loss of customer data Financial loss (eg, through fraud) All of the above equally Other, please specify

Which type of potential loss or damage from information security breaches should your organisation be most concerned about over the next two years?

(% respondents)

Source: Economist Intelligence Unit survey, April 2009.external or internal sources is unchanged (or even smaller) since the onset of the economic crisis However, as mentioned above, leakage of information and increased vulnerability to viruses and hackers are among the primary fears that European executives harbour when it comes to extending greater technology freedom to employees Intellectual property—the company’s competitive secrets—and customer data are the types of information that firms will most fear losing over the next two years, and they are also concerned about reputation or brand damage resulting from such breaches

Companies discover—sometimes too late—that in the world of social networking and blogging they have very little control over the outward stream of information: postings from hundreds of employees can reveal too much about the firm’s operations or intellectual property, even if the information itself is not confidential Mary Sheppard, financial controller at 4X Currency Corporation, a financial services firm, portrays the risk: “Business perception is very important to us Many of our clients blog and we need to be aware what information is being released The main risk here is the damage to the company’s reputation You don’t have a business if a client doesn’t feel secure about what you do.”Some large organisations such as KPMG, a professional services firm, address the problem of information security by developing internal social networking applications According to Bryan Clarke, KPMG’s head of ICT, these deliver the benefits of information sharing without the security risks

“Facebook is clearly very popular,” Mr Clarke explains, “but it is not an appropriate place to discuss work; it is simply not secure We are working to provide a similar capability internally, so that the information could be securely exchanged in a similar fashion.” He warns, however, that “it is not easy

to get it right”

High-risk technologies

When it comes to specific technologies, social media are only one of many potential sources of threat For survey respondents, file-sharing sites and applications top the list of the most risky technologies; nearly one-half of respondents believe that these should be banned in the workplace altogether Potential breaches of security and viruses are not the only problems with peer-to-peer technologies; file sharing can lead to copyright violations—and thus exposure to legal risks—and it also affects the performance of companies’ networks According to the OECD, in 2007 as many as 7% of west European Internet users regularly accessed peer-to-peer file sharing sites, but even a small number of people downloading music and videos can slow a company’s Internet traffic to a trickle In markets where

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