Want to outdistance your competition? Then give your people the information technology tools, infrastructure, and support they need to do their jobs well.

That is the main message from a July 2007 study of more than 1,300 business executives, IT workers, and team leaders at small, midsize, and large companies in North America, Europe, and Asia-Pacific. The study—Ready, Willing, and Enabled: A Formula for Performance—sponsored by Microsoft Corporation and conducted by the Economist Intelligence Unit (EIU), a global provider of business and management analyses, examines the effects of "people enablement" from several angles.

Among the conclusions the study reaches are:

• The more a company empowers its employees to make decisions, the more likely it is to perform better financially and competitively.
• True enablers use technology to improve collaboration, encourage risk-taking, and optimize decision-making.
• Companies categorizing themselves as "true enablers" are three times more likely to be more profitable than their competitors.
• Compared with other types of firms, companies described as "true enablers" have a higher proportion that are more profitable than their competitors.

"The study clearly shows that there is a positive correlation between a higher degree of enablement and corporate performance," says Nigel Holloway, the EIU's director of research for the Americas. "Now we know that measures can be taken to give employees the wherewithal to do their jobs more effectively."

Enablement refers to the organizational structures, informational technologies, and other resources that make it possible for employees to make decisions.

Results of many people-enablement studies show that information technology may be a vital component of business success and an important driver of global economic expansion. The 2007 EIU study sponsored by Microsoft, however, also reveals that when it comes to IT, there is a significant "enablement gap" at many companies. Eighty-seven percent of the respondents cite enablement as important to people's pride and confidence in their work. Unfortunately, the study found, only one-half of the companies surveyed have the IT tools and information necessary for true enablement (see chart, "Empowered to Perform"). Worse, only about one-third of the companies have the appropriate teamwork structures in place and only 15 percent have the financial and human resources needed.

Achieving true enablement cannot be done overnight. Although there is no one path to follow, the study points out general steps that successful companies have taken. Among the tools that the surveyed companies most frequently cited as improving employee enablement are:

• Data warehousing
• Knowledge management
• Project management
• Content management

Also high on the list are portals, collaborative software, instant messaging, and employee and customer contact databases.

In addition to providing people with IT tools, finding the right balance between employee autonomy and management control is critical to business success, the study shows. Too much autonomy can lead to mistakes and greater risk, while too much control leads to inflexibility, dissatisfied customers, and negative feelings among employees. What's more, these side effects of excessive control reduce productivity.

Taking intelligent risks is part of the autonomy equation and determines what the EIU calls "bounded autonomy." In other words, risk-taking is productive as long as it is documented and justifiable within the parameters of the organization. According to the study, 62 percent of the surveyed managers tolerate reasonable risk-taking.

"Management must allow business unit managers and employees to take smart risks within parameters that limit potential losses," the EIU's Holloway says. But granting autonomy is complex, and acceptable levels of autonomy vary greatly by country, industry, and function. Cultural impediments, such as finding a way to foster an adequate level of trust between employees and managers, also may require attention (see chart, "Impediments to Enablement").

The survey results have concrete value for many parts of a business. For example, in sales and marketing organizations, providing the right level of autonomy in the areas of sales targets, setting prices, and maintaining customer information is a key to greater enablement. The EIU study sponsored by Microsoft found that sales and marketing organizations have considerable autonomy when targeting customers (73 percent) but much less autonomy in working with outside suppliers and partners (less than 40 percent). Holloway believes that a lack of trust is often to blame when people are reluctant to share information in these areas.

So what does all of this mean for IT and business executives who are determined to improve their company's performance?

It is time to embrace greater enablement. To begin this shift in corporate culture, evaluate where your company ranks in its enablement efforts using the Microsoft-sponsored EIU study's findings. For example, one survey question asked people to place their jobs on a continuum from extreme command and control (with little enablement) to a networked organizational model (with lots of authority and a significant amount of enablement). Holloway says managers should place their companies on that continuum and then determine whether moving toward the enablement end would enhance corporate performance.

The next steps are to choose which actions will alter the corporate culture so that employees can take reasonable risks and to give employees the tools they need to excel. "This study proves that a higher degree of enablement enhances corporate performance," Holloway says. "So whatever steps managers can take will help move them in the right direction."