InformationWeek

March 12, 2001

The Dot.com In All Of Us

By Lou Bertin (Lou.Bertin@gte.net)

t turns out that Newsweek columnist Anna Quindlen, whom I've long admired, and I have at least one thing in common: a shared passion for the television program Law and Order. It was in the context of remarking on that program that she recently offered a typically salient comment, one that applies to where we find ourselves in this late winter of our stock market discontent.

An attorney friend of Quindlen, commenting on the aforementioned cops-and-robbers-and-lawyers drama series, remarked that "a televised trial is as much like the real thing as a wedding is to a marriage. All the boring bits are excised, leaving only the high drama."

We as an investor community have collectively become an economy that thrives on exceedingly high drama. When the market valuation of well-run, well-performing companies can drop by a third based on companies' failing to meet Wall Street's "whisper price" by one penny per share per quarter, things have left the realm of the rational and have entered a twilight world where little must be as it seems.

I say "must be as it seems" because the views can be, by all "right-thinking" measures that apply the old standard used for judging libel, positively rosy, except where the investment community (read: all of us and the friendly institutions through which many of us invest) is concerned.

In this new economy, it "must be" that sustained and sustainable profitability doesn't much matter; that experienced, astute management "must be" just one decision away from leading a company to ruination, that marketplace vision "must be" severely discounted to the point where it's worthless.

In Federal Reserve Board chairman Alan Greenspan's words, the market was "irrationally exuberant" in valuing the dot.com sector, but that doesn't come close to explaining away the bloodbath we're seeing among the stock prices of companies of any and all stripes.

It's a shame that this "slowdown" (still more perceived than real, it says here) comes when the North American economy is at the cusp of a phase where technology once again is proving to be the critical driver of growth for organizations astute enough to apply it strategically.

We saw the economy take off five years ago precisely when organizations began to see technology as a competitive tool for all aspects of an organization's operations and not merely a "cost center." I am convinced that the unmistakable, technology-fueled push toward customer-driven, customer-focused corporate behavior promises to bring growth rates comparable with those we saw until the middle of last year for organizations with sufficient astuteness and intestinal fortitude to carry through with their plans.

The peril is that a slavish devotion to quarterly earnings reports and their concomitant "long range" planning that extends about 60 days down the line will kill momentum. And that 60-day (or 90-day or 180-day) vision just isn't enough for the next step in the technology-as-evolutionary-tool process to take hold.

It's unmistakable that technology is making companies more customer-centric. InformationWeek's "Redefining Business" research project will bear that out when it's released next month and anecdotal supporting evidence abounds among the dozens I talk with on a regular basis.

There's a strong passion afoot about the changes technology can bring. With so many of the intramural battles between those who used to be seen as "the techies" and "the bean counters" having been settled, and with the value of the strategic application of technology as one of the key elements that differentiates any company from its competitors having been cemented, today could be a magnificent time for organizations to go full speed ahead in taking care of those who take care of them.

Instead, to paraphrase Quindlen's attorney friend, what we're left with is "all drama, all the time" and that's a shame. Watching this economy is like watching a tipsy person walking across a white rug while carrying a bowl of tomato soup . . . you know in advance what the outcome is going to be and the show is highly amusing unless the white rug belongs to you.

It's inevitable, perhaps, with the copycat, ill-managed and/or just plain odd dot.coms having bit the dust to the disgust of their backers, that there be some backlash against any outfit that purports to be involved in dot.com anything. Turns out that the dirty little secret is that every outfit has a bit of the dot.com about it and all organizations are being painted with the same big, broad, sloppy brush. Need proof? Check into your favorite online investment service and try to see how many stocks have ALL of the analysts who follow them issuing "buy" ratings. I got to 12.

Will cooler, saner heads prevail? Will the drama ever cease? Eventually, yes. Take heart, though. Conventional wisdom had it that life around The New York Yankees would be an ongoing soap opera of the basest sort so long as George Steinbrenner owned the team. Then along came this "retread" fella named Torre who achieved what the smart money said was unachievable, and calm descended upon King Geoge's realm.

Do the names of any comparable "retreads" who might be able to provide the same calming, guiding hand in this economy come to mind?


Rusty Weston: Matter Of Fact Rusty explores the facts and figures behind business technology.	Charles Pelton: Eye On IT Charles explores IT management issues and strategies that business and technology managers face.	Jason Levitt: Internet Zone Jason focuses on the strange, egregious, and the standard technologies of the intranet/Internet.	Stuart Johnston: Redmond Watch As our eyes and ears in Redmond, Stuart gives his perspective on the latest events at Microsoft.