June 2008 | By Enrique Dans, Professor at IE Business School
The web is now 15 years old, and, just like any adolescent, it has revolutionized the previous generation. Business organizations need to find new approaches to keep growing in lockstep with the continuous changes the web brings.
The web celebrates its 15th birthday. Fifteen years have passed since Tim Berners-Lee and Robert Cailliau decided, at the CERN, to change the world by making their operating source codes freely available everyone, unleashing one of the most important technological diffusion processes of our time and giving rise to one of the development platforms with the greatest potential in the history of technology. Now, after 15 years of using the web, of seeing it grow and reach adolescence, it is a good moment to consider the future: that of the web, our future and that of our business.
If anything is patently obvious, it is that after 15 years of existence the web has become one of the greatest friction-reducers ever made available to humankind. Entering a search engine such as Google, keying in anything and pressing a button produces a page of results in a fraction of a second, when, before the advent of the web, it would have taken us hours, almost certainly after a number of trips and much detailed documentation and summarizing. And, as classic economics says, friction is a very important part of business.
On many occasions and for many products and services, friction is the genuine raison dâ??Ãªtre: in the best of theories, I could build my own car, but the friction inherent to the idea means that, except in very special cases, I prefer to pay someone who has developed a certain experience in building cars, who has a better grip on the process and has dealt with the problems and limitations I would almost definitely encounter during the process on many occasions. I could get together with other people to program, for example, an operating system, but in view of the size of the task, I would normally prefer to turn to a company that has the necessary team of programmers already up and running, which would make it more efficient in coordination tasks and obtain the result more quickly.
Before the web, this type of decision was what Americans call a no-brainer: nobody in their right mind would decide to manufacture a car or create the kind of operating system that enabled companies such as Ford or Microsoft to make a living carrying out those very tasks. However, as we have seen, the situation has changed: although the task of manufacturing a car still involves an amount of friction that makes only a few individuals consider doing it on their own, the operating system has actually now shown itself to be even more efficient when done this way.
An operating system created by contributions from hundreds of people, developed outside the realm of any specific enterprise, is today the most stable, the cheapest and the most pleasant to use, and has forced Microsoft to reconsider its business model, to fruitlessly try to improve its extraordinary long production times, in an effort to compete with a kind of “invisible enemy” that has almost endless sets of eyes and hands that incorporate improvements and correct errors far more quickly than Microsoft can. Ronald Coase and his The nature of the firm, revisited several decades later, observed that if the enterprise was a response to the friction inherent to communicating and coordinating beyond oneâ??s own scope, we need to reconsider the enterprise. A project such as Linux would have been completely unthinkable before the Internet.
Indeed, besides a lack of clear vision, it was no-brainers like this that led Microsoft to ignore the web for years and to arrive late for its development: the company was not at all convinced that the result of so much freedom and lack of friction would be good for it and preferred to settle for models such as the one AOL applied at the beginning and like the one MSN tried to be: closed, proprietary platforms where anyone wanting to do anything had to have the ownerâ??s permission. The unrivalled success of the web overshadowed this type of model and the progress humanity as a whole has obtained from it is clearly evident 15 years later.
However, Microsoft and software companies are not the only ones that need to rethink their activities in view of the web. We all have to do it. For academic institutions for example, the web also poses very important challenges. The work we previously required of our students, for example, focused more or less on teaching them to obtain and use information, on compiling and presenting information, something they can do today in a couple of clicks and a few copy-and-paste operations. Their work is not necessarily of poor quality, although some use the facilities in such a way that they donâ??t have to read what they hand in, but they are not the ones that do anything wrong by trying to get their work to us as efficiently as possible, but rather we are responsible for asking them to hand in work that can be done so easily in todayÂ´s world.
The classes we give can no longer assume that our students know more than us because any student with a laptop open and connected to the web can obtain information we didnÂ´t have at any time and put it in a discussion for which we had not prepared. And of course, the solution is not to prohibit students from using laptops in classrooms with weak excuses such as “they are distracting”, but rather to get involved ourselves and try to turn teaching into a higher medium, with more potential, capable of meeting the challenges it faces that used to be due to the existence of friction.
That work (assessing our business under the lights of the immense friction-reducer that is the web) corresponds to us as executives when the web reaches its 15th birthday. And if you donÂ´t like the result, just remember: “if you donÂ´t like it, youÂ´ll just have to lump it”, because it will still be there. It is impossible to ignore the web or live without being affected by it because sooner or later you will find that your customers or your competitors have picked up what you lumped. When you meet the 15-year-old parading before us more sources of knowledge than ever, you cannot look the other way. The web has everything, the best and the worst of humankind, because it is a reflection of it and it affects everything: in response to the way it works, the way it communicates, the way it sells, the way it investigates… you cannot afford, as one of the authors of the highly recommendable Funky business says, “to remain at your post thanks to the fact that you are an expert in what was important yesterday”. On the web, 15 years of friction-reduction lie in wait.