What is the purpose of an intranet? How can it contribute to an organisation’s bottom line? What does it take to ‘sell’ the idea of an intranet?
These are questions that many intranet professionals have grappled with over the last few years.
Some answers given so far include: to manage organisational knowledge, to publish content, to be a communication tool, to enable collaboration, to build culture, to improve knowledge sharing, to support decision making, to better manage content…
While these are all valid and useful functions that an intranet can provide, they are more ‘steak’ than ‘sizzle’.
Saying the purpose of an intranet is for publishing content and collaboration is like saying the purpose of a car is for steering and driving. While it’s certainly true, a car is also for exploring unknown and remote territories, for bringing families & friends together, for going on holidays, for impressing a date (a shallow one at least), for saving time and for safely transporting valuable cargo.
So what is the ‘sizzle’ that an intranet can bring to an organisation? What is the ultimate purpose of all this content development, collaboration, communication and knowledge sharing? How can these activities help an organisation survive and thrive in these globally competitive times?
Analysing the feedback from the 160 organisations that have participated in the Worldwide Intranet Challenge (WIC) online benchmark service, it seems there are essentially three critical and equally important business drivers relevant to all organisations that can be supported by an intranet. These are:
Innovation: Improving and developing products, services and business processes
Operations: Producing and delivering current services and products
Engagement: Enabling team members to perform at their best
This article looks at why these three business drivers are critical to an organisation’s survival and how intranets can play an integral role in supporting them.
Just 10 years ago, with 8,000 stores and $3 billion in annual revenue, Blockbuster was easily the planet's biggest video chain. Today, after bankruptcy and massive closures, it's limping along with 500 stores. And their days seem numbered.
What happened? Netflix happened. Redbox happened. Streaming video happened. The world and the technology surrounding how people like to watch stuff changed. Blockbuster didn’t. And there are many other examples of big brands who faced the same fate.
These days, if organisations are not continually innovating and improving, they risk being quickly overtaken by their competitors.
In fact, continuous innovation and improvement may be the most important factors to a modern company’s ongoing survival. In Baruch Lev’s book about the impact and value of intangibles - “Intangibles Management, Measurement, and Reporting” - he says that the way companies generate value has changed dramatically changed since the early 1980’s.
“Because of the intensified competition brought on by globalization of trade, deregulation in key economic sectors and technological change, companies had to fundamentally change to survive. Companies now place a premium on rapid innovation, and intensive use of information technology.”
Half of the biggest American companies of 1980 have now disappeared by takeover or bankruptcy. And half of today’s biggest companies did not even exist in 1980 (Micklethwait, J. and Wooldridge, A. 2003. The Company. Weidenfeld). Innovation, or lack of innovation, are major contributors to these surprising statistics.
As Ryan Holmes, CEO of Hootsuite points out “When some companies stop innovating, it can literally kill them.”
How can intranets support innovation?
The article, From innovation to operation: the role of the intranet, lists a number of ways an intranet can help organisations move more quickly through the lifecycle of identifying an innovation, through to implementation. This includes the ability of intranets to facilitate collaboration and build informal networks within organisations. These networks are key to an innovative organisation.
In his book, The science of serendipity: how to unlock the promise of innovation, Matt Kingdon observes that “The best innovation environments are not created through traditional management channels but are self-organised”. An effective, up-to-date intranet can help facilitate self-organised environments through updated employee profiles, micro-blogging and community sites that connect people with common interests.
Tim Cook, the CEO of Apple, said in a recent interview “it is my deep belief that collaboration is essential for innovation—and I didn’t just start believing that. I’ve always believed that. It’s always been a core belief at Apple. Steve very deeply believed this.”
But perhaps the biggest contribution an intranet can make to innovation is through change management. That is, an intranet has the unique ability to ensure organisational changes and improvements are implemented more quickly and that the roles & responsibilities impacted by the changes are clearly defined. This allows organisations to be more responsive and adaptable to the inevitable change.
To make a profit, an organisation needs to be able to create a product or deliver a service at less cost than a customer is willing to pay for it. It also needs to do this more effectively and at the same or better quality than its competition.
Wal-Mart in the 1990s is the classic example of an organisation gaining a significant competitive advantage by operating more effectively than its competitors. Through efficient ordering, ruthless negotiating, hyper-punctual time keeping, merciless cost control and ingenious responses to customers’ preferences, Wal-Mart was able to gain a 40% efficiency advantage over its competitors in the early 1990s.
In fact, according to a McKinsey Report, the burst of productivity that the US and the UK unexpectedly experienced in the 1990s was largely due to logistical changes in business. That is businesses, particularly in the retail sector, were able to improve the way they operated. This accounted for around a quarter of all productivity growth in the US.
How can intranets support better operations?
Intranets can contribute to operational efficiencies through:
Communicating consistent business processes throughout the organisation: the McDonald’s template approach to business
Clarifying roles & responsibilities: the right tasks performed at the right time by the right people.
Consolidated lists: single, organisational wide lists of customers, products, staff, services, suppliers, contractors, forms, processes, applications, etc.
Automated processes, online forms and workflows: Common tasks are automated. Eg. Submit an invoice, claim travel expenses, suggest a new idea, obtain customer feedback
Employee engagement is "a heightened emotional connection that an employee feels for his or her organization, that influences him or her to exert greater discretionary effort to his or her work".
There is clear evidence that high levels of employee engagement correlates to individual, group and corporate performance in areas such as retention, turnover, productivity, customer service and loyalty. While differences varied from study to study, highly engaged employees outperform their disengaged counterparts by a huge 20 – 28 percentage points.
More than 100 studies have confirmed the connection between employee engagement and performance. But the Towers Watson 2012 Global Workforce Study — 32,000 employees across 30 countries — makes the most powerful, bottom line case yet for the connection between how we feel at work and how we perform.
The research concludes that "organizations must create policies and practices that make it possible for employees to better manage their workload, live more balanced lives and exercise greater autonomy around how, when, and where they get their work done. Policies focused on flexibility and working remotely contribute to a more energized workplace".
And Alex Edmans, MIT Sloan School of Management, agrees with these findings. He analyzed the financial performance of a portfolio of stocks selected by Fortune magazine as the “Best Companies to Work for in America” from 1998 -2005. By the end of 2005, these stocks “earned average annual returns of 14 percent by the end of 2005, over double market return”.
How can intranets support employee engagement?
Employee engagement is influenced by many different factors, such as employees’ relationship with their direct manager, the perceived meaning and importance of their work, career growth opportunities and performance of the company.
While the intranet cannot claim to be the only answer to a highly engaged workforce, it can certainly make a significant contribution by:
Enabling employees more flexibility and control over their working lives by providing them with remote access to the information and tools they need to do their jobs
Providing on-going company and job performance feedback through dashboards and other measures
Providing online training and career opportunities
Enabling employees to build relationships with colleagues based on common interests and skills
Sharing stories about the organisation’s successes, values and culture
Summary of how an intranet can support these 3 critical business drivers
While intranets can’t do it alone in ensuring an organisation’s staff are highly engaged, improvements are being continuously implemented and operations are as efficient as possible, they can make a real and significant contribution to a business if implemented with the clear goal of supporting one or more of these imperatives.
The following diagram summarises the ways intranets can assist. Note that there is often overlap between the three business drivers as well as the functions provided by an intranet. For example online training provided by an intranet may well mean better operations and innovation as well as more engaged employees.
If you are interested in discussing how your intranet can support your organisation more effectively, feel free to contact the Worldwide Intranet Challenge.