The empowered individual

Michael Wolff, 30.11.1999

Michael Wolff contribution to Peter
Lloyd and Paula Boyle (1998):
Web-Weaving – intranets, extranets and
strategic alliances

Tapscott and the effective individual

Don Tapscott, author of the best selling Digital Economy, Promise and
Peril in the Age of Networked Intelligence,1 has developed a model of
business transformation in the Information Age. His main argument is that
the new economy will become a ‘networked’ economy and that in
business we are looking at the emergence of the ‘internetworked
business’. By ‘networked’ Tapscott is referring to the interconnection of
desktop end-users, whether connecting from home, office or elsewhere.
In Tapscott’s hierarchy, he sees the ‘internetworked business’ as the
highest form of organisational structure. Below this is the ‘extended
enterprise’, followed by the ‘integrated enterprise’, the ‘high-performance
team’, and at the lowest level, the ‘effective individual’.
Tapscott sees the effective individual as the basis building block of the
networked economy, and describes his effectiveness in terms of learning
efficiency through the enabling of personal multimedia. By failing to
appreciate both the need and the effect of the required psychological
transition, Tapscott underestimates the full potential of individual
empowerment and therefore quite understandably places the Effective
Individual at the bottom of the networked hierarchy. He has perhaps
unwittingly fallen into the same paradigm that prevails for conventional
organisation without realising what is actually happening in practice.
In conventional business, we rightly see the largest organisations as
being the most successful and the examples of best commercial practice.
They would not have grown so large if they were not doing the right thing.
However, within the organisation the individual thrives only in so far as he
aligns hissense of meaning and purpose with that of his organisation. At
the point where this alignment fails, the individual becomes expendable.
It may be true to say that the organisation stands on the shoulders of its
employees, but the organisation serves its own purpose, not necessarily
that of the individuals employed by it.
In this sense, employees at all levels within an organisation allow
themselves to be disempowered for the good of the organisation. In the
hierarchical structure, each individual divests his power in favour of the
next level of authority. In return, the individual derives income, social
status, meaning and purpose and security. Especially with respect to
security, this organisational contract is now under increasing stress.
It is also arguable that this type of hierarchical structure is becoming both
pathological and dysfunctional as it ceases to fulfil the needs and
aspirations of its members.
In the networked economy, this paradigm is stood firmly on its head. The
empowered individual, free from the need to give away his power to
 hierarchies that serve their own purpose and supported by
the huge self-organising networked economy, is free to build
his or her own hierarchies at will. With open access to all the
resources of the network, the individual is spoilt for choice.
The otential is almost infinite. He or she can choose when,
where and how he or she works. At all times the individual is
in charge of his or her own destiny. He or she creates his or her own
meaning and purpose.
The empowered individual, the first level of integration, is able to create
one or more core business services in which the end-to-end value chain is
fully integrated electronically. These processes involve the client, the
suppliers of information and value enhancement services and the co-
ordinating empowered individual. This is the second level of integration.
At the next level, functional support services such as sales, marketing, IT
support, accounting and many other functions can be integrated as end-
to-end value chains.
ach of the individuals supplying services within these chains needs to be
empowered in the same way, as will be shown below. We now begin to
see a model of the networked economy in which the empowered
individual is supported by a network of empowered individuals, each fully
in control of his own destiny.
While Tapscott does not play down the seismic upheaval that is presaged
by the emergence of the networked economy, his thinking is still tainted
by the old-paradigm notion that higher levels of organisation are more
effective than lower levels. Teams are more effective than individuals,
integrated enterprises more effective than teams, the extended
enterprise more effective than the integrated enterprise and so on.
Tapscott does not distinguish in any detail the difference between the
employed and the self-employed effective individual. His underlying
assumptions suggest that the Effective Individual is an employee. The
employed knowledge professional becomes more effective with his or her
understanding and practice of the technology, this will in itself act as a
trigger for the psychological transition. As the awakened individual strives
for further empowerment and discovers a new sense of purpose and
meaning, there will be an inevitable divergence between the purpose of
the individual and the organisation.
Not only is there a tension of purpose, but the individual’s greatly
improved commercial effectiveness combined with an increasing
psychological robustness, pose a considerable threat to the organisation’s
competitiveness.
The structure created by the empowered individual will inevitably evolve
to become the most competitive economic unit. Therefore it would appear
that it is in the interests of both individuals and organisations to work
together to support and facilitate this process.
Individual empowerment is not in itself a modern concept. One historical
example is the notion of the Japanese Samurai warrior. For the Samurai,
his tool was his sword. For the empowered individual, it is his desktop. To
master the use of his sword, the Samurai developed not only his technical
skills, but also his mind.
Of what use was a sharp, well-balanced sword, or an intricate and
technically elaborate method of using it in combat, if the samurai who
had to be prepared to face death every day had not also developed a
stable, inner platform of mental control from which to act or react
according to the circumstances of an encounter? The relationship
between this condition of mental stability – which made it possible for the
martial skills expert to assess a situation quickly and coolly,
simultaneously deciding upon the proper course of action – and a
coherent and powerful execution of that decision had been perceived by
almost every martial arts instructor in Japan.2
In the unstructured networked economy, the empowered individual needs
to combine technical, commercial and entrepreneurial skills with an
aspiration for personal development that takes him or her beyond the
stage that has enabled him or her to be successful in the conventional
economy.
I intend to illustrate this point with a brief description from my own
experience.

The transition to individual empowerment

In order for a knowledge worker within an organisation to transition to an
“Empowered Individual” functioning within the networked economy five
levels of technical and one level of transformational competence are
required. It is assumed that the individual already has a well-developed
set of commercial, managerial and entrepreneurial skills or that these can
be acquired from other sources.

The five technical skills include the ability to:

• use all the common and latest desktop application software

packages and to be able to manage the desktop environment
• navigate the Internet and the Web, using all its resources, with the
ability to communicate and share information
• access sources of online business intelligence as appropriate
• build, manage and maintain one’s own Website, and to use this as
a means for building relationships with clients, suppliers and
associates who are potential work partners or information sharers
• build and manage a virtual office, which involves the management
of the core business competency and all the other business
functions that support it, such as marketing, sales, IT support,
billing, collection and accounting

The empowered individual has the potential to operate as a self-contained

micro business, integrating and co-ordinating the value chain between
suppliers and customers, and the functions needed to support this
process, all from his or her single desktop. The enabling technology, as
with information, is easily accessible, universally available and useable by
any intelligentperson. In a networked environment where information is
universally accessible and infrastructure costs are the same for all
participants, the potential to gather, organise, synthesise, evaluate - to
generally add value and leverage intellectual material to produce a
higher-value asset - still remains.
However, this asset cannot be realised unless the individuals engaged in
the process are prepared to share information. A very high degree of
information sharing has been enabled by the technology, facilitating
wholly distributed processes, that is, individuals being able to live and
work anywhere. However, true information sharing requires a high degree
of mutual trust. Furthermore the development of mutual trust between
individuals who may never meet each other face to face, requires an
ability to build and maintain relationships that are quite different to those
necessary for successful operation in a conventional organisation.
In a conventional organisation, the successful manager needs to be able
to exercise power and control. In the networked economy, the
professional bases his success on personal empowerment and mutual
relationships built on trust. The exercise of power and control just does
not work. In fact the empowered individual can organise him or herself so
that he or she is never in a position where another individual, whether an
employer, customer or vendor, can exercise power or control over him or
her. At the same time, the inividual has no need to use this mode on
others.
The culture of conventional organisations, however flat the structure, is
still rooted in the concept of hierarchical power. Personal fulfilment and
identity are determined by the complex reward structure, which tells a
person who he or she is by how he or she performs in relation to the
purpose of the organisation. Personal financial security and sense of
fulfilment are totally geared to this process. Inevitably the individual’s
level of psychological development must remain stuck at this level,
because moving to another level threatens to undermine not only his or
her financial security, but also social status, and most importantly, the
sense of who he or she is.
In any networked relationship, most of the functions that give us meaning
in a conventional organisation are no longer valid. Status, role, authority,
earnings level, social position, gender, age, physical appearance – none
of these have any relevance. So how do we need to change in order to
orient ourselves in this new and potentially bewildering environment? The
psychological transition is just beginning to be understood and is further
discussed below.

Employment status and motivation

The networked economy is global and with the universal availability of
information, there is a high degree of transparency relating to the prices
of products and services. For any product or service, a global price is
emerging.
For an individual to sell his or her services in the networked economy, he
or she needs to be competitive within the global pricing structure.
This means that he needs to take a hard look at the value of his services,
his distribution channels, his income needs and his underlying cost
structure.
If the individual works for a large successful organisation he or she may
have a high sense of security. He or she has the rights of an employee,
derives a regular income from one source and the chances are still
reasonably good that if he or she were to lose his or her job, another
employer could be found.
However, as the networked economy gathers momentum, the individual
will become increasingly aware that his or her level of security is
diminishing rapidly and that the window of opportunity to make the
transition to self-empowerment is closing fast.
With any luck he or she will not become a victim of the down-sizing in his
or her industry and will manage to survive each successive merger and
subsequent rationalisation that takes place.
According to Find/SVP, a US research group that tracks workplace
developments, the number of workers telecommuting, at least part-time,
has nearly tripled, jumping from 4 million in 1990 to 8 million in 1996 and
11.1 million in 1997. While most of these are still employees, an
increasing number are becoming self employed. It is clear that as
individuals develop and hone the skills outlined above, self-employment
and home based working will become the norm for knowledge
professionals. In a recent conversation with the head of an executive
outplacement service, I was told: “Three years ago we were able to find
full time employment for all our clients. Today we are placing 80 percent,
but in three years we are forecasting that we will only find jobs for 50
percent. The remaining 50 percent will have to be considering alternative
forms of employment”. Individuals with high-quality skills and operating
from a low cost base with few fixed overheads will inevitably prove to be
highly competitive in knowledge-based markets. This applies to a high
percentage of white-collar professional jobs. The motivation for these
people is that they can maintain their current standards of living and at
the same time improve their overall quality of life and sense of well being.
This may be achieved at the expense of very high earning levels, major
capital accumulation and/or power in the conventional sense.
Quality of life is achieved primarily through the individual’s ability to
choose

• where he lives and works

• what he does
• with whom he works

In this structure, the development of high-quality relationship and mutual

interdependence (albeit virtual) is the basis for achieving his goals.
Also in this structure, the whole notion of information takes on a different
significance. Back in the early days of telegraph, information was used as
a tool for achieving financial leverage and power through the process of
differentiation. I have it, you don’t. I win, you lose. In the networked
economy, information has become a universally available resource and
the possibilities for
leverage are limited. In this situation information becomes a means for
harmonisation and integration. A tool for building relationship as well as
adding value.

Individual transformation
Understanding this point is critical to understanding the process of
change from the conventional to the networked economic structure. This
will become clearer when looking at the psychological transition that is
required:

• An individual in life goes through various stages of development

and these do not stop at adulthood
• At each stage of development the individual sees the world in a
certain way and that this changes as one moves from one stage to
the next
 • At a certain stage of development an individual can become
conscious of his or her own consciousness, that is to say, he or she
can achieve a certain level of self-knowledge that enables him or
her to observe his or her own patterns of behaviour and
motivations
• Having reached this stage of meta-consciousness an individual is
able to progress to further stages of self-knowledge and
psychological development.

In this respect we are only concerned with the level of psychological

transformation required that enables the individual to achieve maximum
adaptation in the emerging networked environment. Why he needs to
change will become clearer as we proceed. There are many schools of
psychology that interpret this process in slightly different ways. A concise
exposition can be found in Robert Kegan’s book The Evolving Self,
Problem and Process in Human Development.3 Kegan, a senior lecturer at
Harvard Graduate School of Education has identified five major stages of
personal development and has described in detail the process of
transition from one stage to the next.
What is relevant to our discussion is his description of the transition from
the fourth level (the institutional) to his fifth level (the interindividual).
The thrust of our argument is that the institutional level which
corresponds in this case with the individual’s successful adaptation in the
conventional power and control world of business must progress to the
interindividual level, in order to become empowered and build trusting
relationships in the networked economy.
Kegan shows first that at each stage of development, there is a tension
between the individual’s need for differentiation and his need for
integration. At the first and last stages of development, integration
becomes the dominant mode, whereas in the intermediate phases,
including the fourth institutional phase, differentiation is the main
requirement for the individual.
Kegan describes the transition from one stage to the next in terms of
three main phases. The first one, holding on, involves the confirmation of
the stage that has been reached and a desire to hold on to this stage.
However, having assimilated and started to grow out of this phase, the
individual moves towards contradiction, which initiates the process of
letting go. The final phase, which he calls staying put for reintegration,
involves the need for continuity to provide a safe bridge from one major
stage to the next.
In the institutional stage, the individual’s identity is very much
determined by his or her social and organisational status. Identity is
determined by job titles, earning levels, power, property, financial wealth.
It is less a question of who you are, but what you do, how much you earn
and what you own. In order to be successful in this tage, the individual is
willing to become the role that he or she has defined for him or herself
and has allowed others to define for him or her. Role models are other
successful individuals in the organisation or chosen social niche. In his
holding on phase, the individual achieves his or her career goals, a
certain level of authority. Through his or her career he or she gets a sense
of personal enhancement, fulfils ambitions and achieves a number of
goals. The individual is motivated by need, especially respect and
acceptance within his or her social group.
Personal goals are adjusted within the organisational and social structure.
He or she engages in a high degree of socialisation.
To succeed in the networked economy, it is clear that the individual must
move out of this phase, or fail. In the networked world, there are no job
titles; there is no organisational status, no social position, fewer
opportunities for face-to-face socialisation. There is no scope for
authority, no opportunities for personal enhancement, no peers against
whom to measure one’s
performance. Without these identity props, the individual has to re-define
his or her whole identity. In this stage, he or she must discover, know,
define him or herself. The centre of his or her universe becomes him or
herself, not the institution or social grouping to which he or she belongs.
The individual needs to let go of the organisational and social trappings.
He or she becomes motivated by choice, his or her personal goals are
self-actualisation and social goals are liberation. He or she is searching for
autonomy. His or her measure of success is authenticity, the ability to
speak his or her truth, his or her overall sense of well-being.
Kegan describes this phase as the acknowledgement and capacity for
interdependence, for self-surrender and intimacy, for inter-dependent self-
definition. This is also the stage at which, being centred in him or herself,
the individual can build the ‘stable inner platform of mental control’ which
is essential when the individual has no other means by which to define
him or herself.

Key issues
I have outlined a situation in which highly skilled, entrepreneurial and
psychologically developed professionals can embrace the opportunities
emerging through the networked economy and achieve a high degree of
personal security, competitiveness, quality of life and sense of well-being.

Underlying this proposition is the increasing awareness that the

emergence of the networked economy will entail fundamental structural
change at all levels of society, which in turn presents major threats and
opportunities for all concerned.
I sense that the changes will be very profound and that they will come
very quickly. The following are some of the issues that need to be
considered:

For individuals - employed knowledge

professionals
Faced by the opportunities and threats that have been raised above, the
individual wishing to succeed in the networked economy needs to be
asking the following questions about him or herself and his or her
situation:

• How do the current changes affect the competitiveness of my

employer and therefore how secure are my long term prospects?
• What is my level of desktop competence and how willing is my
employer to support me in fully developing the technical skills
required to maximise my productivity?
• Where do I stand in terms of psychological development?
 Assuming that I am in Kegan’s institutional Stage, am I at the
holding on, contradiction or staying put for reintegration stage?
• If I am at the holding on stage, to what extent is my employer
encouraging me to stay there or to what extent is he encouraging
me to let go and move on, especially in relation to the
development of my knowledge-sharing skills?
• Do I want to become an independent knowledge professional as
described above, and if so, what support and encouragement am I
likely to get from my employer? What structural changes would I
have to make in my life to make myself globally competitive?
• If I made a strategic decision to become self-employed, how could
I make this transition in such a way that both I and my current
employer get the maximum benefits?

For organisations employing knowledge

professionals:

• What is the level of desktop competency in our organisation?

• Do our desktop end-users have access to high quality business
information, both from fee-based information providers and from
the Web? Do they need more training to let them know what is
possible and how to get the best advantage?
• Do we think that our internal information sources are better than
information that can currently be obtained from public service
providers? If so, have we recently conducted an audit to check
whether this is the case?
• How good are our systems for knowledge sharing both within and
outside the organisation? Are they better than knowledge sharing
systems currently available to users over public networks? If so,
how much better and for how long?
• Do we think of our knowledge resources in terms of ‘intellectual
capital’, and if so, have we put into place steps to measure and
monitor it?
• Have we considered our key knowledge professionals in terms of
‘psychological capital’? With respect to the pressures outlined
above for individual empowerment in the emerging networked
economy, what strategies are in our best interest? Should we
support or discourage our employees in this respect?

Notes

1. Tapscott, D. (1995) The Digital Economy : Promise and Peril in the

Age of Networked Intelligence
2. Ratti and Westbrook (1973) The Secrets of the Samurai
3. Kegan, R. 1982. The Evolving Self: Problem and Process in Human
Development