Will Web 2.0 technologies spell the end for corporates?

Executives in big business face a real issue in the coming months; they need to generate more business in these difficult times, yet the very tools they can use to do this will make their life much more difficult than ever before.

Corporate business is a top-down, patriarchal system. Bosses tell underlings what to do; and if as an underling you don’t like it, well your only option is to resign and move to another job. It has been this way for decades. There is plenty of occupational psychology research which shows us that such models of business are poor for motivating staff, retaining staff and engendering any kind of enthusiasm for the company. The bosses of course simply show us their share price and say “Look – it works.!”

Emotionally, though, they know the top-down approach to business is difficult. You have to spend hours and tons of cash on getting staff to do what’s necessary. Then when you have done that, you have to spend hours and tons of cash recruiting new staff to replace the ones who left. And then when you have done that you have to spend hours and tons of cash training the new staff who then go and leave. Efficient? Hardly. But that’s a picture of many corporate organisations who are seemingly otherwise successful.

Now though, the world is changing around these businesses and they are finding it difficult to cope. Young people, technically savvy people and those who are not turned on by the patriarchal world are all demanding that companies use Web 2.0 technologies, such as blogging, social networking and Twitter.

Luckily, Web 2.0 technologies are the very thing which could come to the rescue of cash-strapped businesses in these difficult economic times. That’s because Web 2.0 can quickly gather you an audience and can help you find new customers with very low costs. For big business that’s very attractive.

But here’s the problem with Web 2.0 – it’s not top-down; it is distinctly “bottom up”. It puts power in the hand of the creators of blogs, of Twitterers and in those who engage in social networking. A boss cannot stand in the way and say what you should and shouldn’t do when Web 2.0 is such a rapid system of communications. Web 2.0 technologies may be able to come to the rescue of big business in these recessionary times – but only if there is a wholesale change in the way such corporates are run.

A new report from the business consultants McKinsey shows some of the problems that corporates are going to face. The company has studied 50 organisations and how they have coped with the introduction of Web 2.0 technologies. It shows that it’s not an easy ride. In order for companies to benefit from Web 2.0 they are going to have to accept disruption to standard working practises, says McKinsey. They also point out that corporates are going to have to re-consider the way they currently are in control of staff – in the future Web 2.0 driven world, that is going to be far from easy.

Attitude change within big business frequently takes time. And at the moment that’s precisely what corporates do not have – thanks to the credit crunch and the associated recession. Has the combination of the current economic turmoil and the growing acceptance of Web 2.0 combined to kill off old-fashioned, patriarchal business? It looks like it.

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