When employees launch their own Web sites

Giant Financial Services Firm (GFSF) encounters a digital dilemma: some of its best brokers have posted their own Web sites to alert, advise, attract and support clients.

That mushrooming of internetworked money management media rivals GFSF's own branded site. What to do?

Kill them all! Citing legal uncertainties and US Securities and Exchange Commission compliance concerns, GFSF outlaws unauthorised sites and orders them extirpated.

Unenlightened digital despotism? Or a very smart move for both branding and regulatory reasons? We'll see soon enough. But the Web as a medium to disintermediate the enterprise has rapidly become one of the most provocative management challenges around for organisations that purportedly care about their customers.

The typical top management concern, of course, has been figuring out how best to block unauthorised intranet access. Yawn. Round up the usual suspects: firewalls, passwords, encryption and so on. In practice, the more serious issue may well be the rise of extracurricular pages and sites that spring up unbidden - but for darn good reasons - to serve key customers or suppliers.

A few years ago, I was writing about unauthorised intranets helping divisions and departments run themselves. Today, it's clear that the challenge of unauthorised extranets will matter far, far more.

Extranets represent the most serious business threat to clean, manageable distinctions between internal and external. Them and Us.

In truth, the real importance of firewalls may be to keep entrepreneurial employees in rather than to keep malevolent intruders out.

What happens when purchasing agents post special advisories for their most favored suppliers? Or when a derivatives design shop at a major investment bank decides to set up a special simulations extranet for its best institutional clients? Or when a top saleswoman creates a site that lets customers participate in a special Web auction for a backlogged product? Who in the organisation tracks that? Who's responsible? Legal? IS? Are employees expected to rat on colleagues who are using extranets to extend their market reach?

You could comfortably make a case that an organisation might want to encourage that sort of initiative. Of course, there's a very thin line between dynamism and chaos. After all, economist Joseph Schumpeter did describe entrepreneurship as "creative destruction".

There should be little doubt that if, say, the top 50 or 60 salespeople at IBM or Morgan Stanley or Xerox each had their own unique site - distinct from but complementary to their employer's corporate site - that would unsubtly shift the balance of power and influence in those firms. Would it really be in an organisation's best interest to force everyone to manage their key customer/client/supplier relationships through the official Web site (however that evolves)? That's a tough case to make, too.

As the true tale of GFSF affirms, those business concerns exist in the here and now. I wager that Jack Welch and his lieutenants haven't a clue how many extranets are being used to manage customer relationships at GE. How about GM? Microsoft? Oracle?

In the same way that power users of Lotus 1-2-3 and Excel spreadsheets accumulated organisational power from their fluency in financial modelling, it's inevitable that entrepreneurial extranets will confer advantages to those who want to create proprietary relationships with external constituencies.

In other words, the real business competition the Web can create will come from within. That's going to make Fortune 1,000 Web business management a lot of fun to watch.

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Michael Schrage

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