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Leadership
in E-Commerce:
What Does it Take to Lead an E-Commerce Venture?
By Mukul
Pandya, Editor, Knowledge@Wharton (http://knowledge.wharton.upenn.edu/)
 Rick
Berry, CEO of ICGCommerce.com, often feels he is driving a Ferrari with
a cinderblock on the accelerator. Ask him why, and he will explain that
his colleagues and he are slogging around the clock to build an
Internet-based procurement business which should take a decade and
trying to do it in six months. The reason Berry is racing like crazy is
simple. "E-procurement is a $10 trillion market worldwide, nearly 30%
to 40% of which is not bid and that is our untapped opportunity,"
he explains. To grab a chunk of that market before the competition moves
in, ICGCommerce.com has set a blistering pace since its launch last
October. It already has 350 employees and offices in London and Toronto.
Little wonder Berry feels he is speeding down a highway. "You go as
fast as you can," he says. "Just don't crash."
Berry
is hardly alone. As more and more companies try to seize opportunities in
today's volatile Internet environment, they are forced to move at great
speed down uncertain often
experimental paths.
This poses enormous leadership challenges for dot-com companies as well as
traditional bricks-and-mortar businesses trying to develop e-commerce
initiatives. What exactly does it take to lead an e-business effectively
in today's fast-changing, technology-driven world? Are traditional
leadership skills enough? Or do CEOs and other top executives need to
cultivate new capabilities in order to move as fast as possible without
crashing?
Answers
to these questions and more were discussed at a session on
"Transformational Leadership for eCommerce Initiatives" at a
meeting of the Wharton Forum on
Electronic Commerce on June 1. Moderated by Michael
Useem, director of the Wharton Center for Leadership
and Change Management, the session involved presentations by Berry, William
Kelvie, chief information officer of Fannie
Mae, and two MBA students, John Joseph and Kelly Jo Larson.
"Leadership is especially important when the future is
uncertain," says Useem, who conducted an informal straw poll before
the session. He asked: If you were a venture capitalist looking at
investing in an enterprise, how much weight would you place on the
business model, and how much on the talent of the management team? The
response: 50-50. "To succeed in e-commerce, the business model is
key, but talent is key as well," says Useem.
 Talent
must take specific forms to provide effective leadership in e-commerce
ventures. According to Berry, the most important quality such leaders must
possess is the ability to build a team. Paradoxically, the humility
some might call it egolessness
that is needed to manage a team
must go hand-in-hand with the drive and confidence that stems from a
strong ego. Leaders of e-commerce ventures must have the ability to
attract teams of talented risk-takers. "You have to find people who
are willing to put some skin in the game," Berry says. "At
ICGCommerce we attracted people who left millions of dollars on the table
to join us, and so all of us had a stake in the company."
Dot-coms
typically have a very direct communications style, Berry explains, and
leaders must equip themselves to deal with that. In traditional companies,
criticism of a colleague's or subordinate's actions often takes what Berry
calls an "Oreo cookie" approach you
first say something positive, then slip in your criticism coupled with a
suggested change, and end by saying something positive again. The
fast-paced e-commerce world, however, simply doesn't permit the luxury of
such a leisurely approach. "You communicate directly, and you must
build a team that can cope with that," he says.
The
speed at which everyone works in an e-commerce venture also means little
time is available to train anyone. "Your team members must come with
a set of skills and deliver," says Berry. "You need people with
lots of experience who know how things are done, and go out and do
them." A corollary, he adds, is that team members must have
confidence bordering on arrogance. In addition, they must have enormous
amounts of energy and stamina because
the environment often requires 18-hour days and weekends that blur into
the work week.
Leaders
of e-commerce ventures must strive to create a specific type of work
culture, Berry notes. This culture is high-energy and result-oriented. It
doesn't allow time for studies or leisurely thought-processes. It fosters
decision making based on incomplete information. "We have an
aggressive culture," Berry says. "We always ask ourselves, 'So
what?' And we have a culture that is highly solution-oriented. If you have
a problem, you've got to come up with at least three solutions."
While
the work culture must emphasize hard work, it must also be fun.
"People love to win," he adds. Among other things, the work
culture must be athletic and competitive. It must be driven by people who
hate to lose, who will fight every battle to the end, and who will be
prepared to die for the cause." They must also be driven by a sense
of urgency. "There's a time window within which we can do something,
and it is closing," says Berry.
Another
crucial capability of Internet leaders, Berry notes, is that they must be
constantly upbeat and uplifting. "It is like being on stage all day
long," he says. "Your work has to be a constant euphoric
event." ICGCommerce uses a method to sustain the euphoria. Everybody
in the company regularly gets an e-mail about "Five Great Things that
Happened Today."
Other
panelists agreed with Berry. Fannie Mae's Kelvie points out that leaders
of e-commerce ventures must be visionary in
addition to being as tenacious as Shetland sheepdogs. He adds that a vital
aspect of leadership in e-commerce ventures involves the ability to
attract and retain talented staff. "I used to draw upon talent in
other companies, and now I'm getting raided," he says. "I live
every day with the war for talent."
Joseph
and Larson, who have been working with Useem on a website
about leadership in the Internet age, based their presentations on
interview with leaders of e-commerce companies as well as those in
traditional companies. Quoting David Perry, founder of Chemdex, a B2B site
for the life sciences industry, Joseph says that leadership often entails
developing a virtuous circle of "raising money, so you can hire good
people, so you can make and sell good products, so you can raise more
money." He adds that other leaders of e-commerce ventures emphasized
the importance of nurturing a strong culture, which begins with hiring the
right kind of people who
are enthusiastic, passionate, and share the organization's values.
Larson
points out that the speed at which the Internet world moves has often made
it difficult for traditional companies to compete effectively with dot-com
companies. The reason is that leaders of dot-coms often do things
"that are probably correct or
correct directionally but
may also turn out to be wrong." This requires a mindset in which the
organization views failure as the tuition for success. Traditional
bricks-and-mortar companies, however, are not built to tolerate failure.
"You need leaders who are willing to be taught as they lead,"
she says.
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