Good Fences Make For Lousy Intranets

It is a powerful new information technology than can unlock huge productivity gains. No, not the Internet. It's the intranet--and it's coming your way. Just as the Internet connects people around the world, the intranet links folks within a single corporation. In fact, intranets use much the same software as the Internet to connect computers and people.

The promise of intranets is one of corporate collaboration and synergy. If executed properly, an intranet ties together islands of data within the vast interstices of corporate bureaucracy, sparking new products and productivity. Intranets have worked wonders for companies as diverse as 3M and Federal Express Corp..

But a warning to the wise: Intranets work only if operating units within companies allow their data to be shared. Of course, there are minor benefits by simply putting company directories, newsletters, and cafeteria menus on an internal Web site. But the larger impact is lost when units refuse to divulge what they consider proprietary information to colleagues. Sadly, operating units often build higher walls between themselves and competing units within the same company than against outside rivals. When they do "share" information, they often make it difficult to retrieve. To use the power of intranets, these barriers to the free flow of information across corporate boundaries must be broken down--and that is as much a political decision as a technological one.

Ditto for top managers hogging intranets. The ease of intranets is tempting some executives to use them to communicate down rather than across. Endless streams of announcements about issues peripheral to today's work and tomorrow's product innovation clog the systems. Worse, they signal that the intranet is not a technology to be used collaboratively and horizontally, but hierarchically. If corporations are not careful, intranets can make for excellent command-and-control systems rather than liberating communication channels.

When intranets are designed the right way, they can speed work and promote creativity. The DreamWorks SKG triumvirate of Steven Spielberg, Jeffrey Katzenberg, and David Geffen is using an internal Web setup and Netscape browsers to manage the creation of a company. It may be that intranets work best for new companies that have few bureaucratic walls. But we think they can be mighty effective for established companies as well.

Before it's here, it's on the Bloomberg Terminal.