Why do intranets fail?

When Hewlett-Packard Co.’s executive committee decided in June to ask all employees to take a voluntary payroll reduction, the decision was posted immediately on the company’s @HP portal, the intranet that binds together nearly 90,000 employees in 150 countries. A tool enabling employees to volunteer for the reduction accompanied the announcement. The first day 10,000 employees signed up; within three days 30,000 had volunteered. Kathy Dolan, director of @HP, believes the portal played a central role in making the program work. Instead of finding out by word of mouth whether people were signing up, employees could check the site to find the current tally of volunteers; as the count steadily increased, it convinced more people to participate. Ultimately, more than 90 per cent of HP’s employees volunteered for pay cuts.

That is the power of a successfully deployed intranet. Unfortunately, many companies invest in the seemingly simple project of building a corporate intranet only to have their efforts met with lukewarm success or abject failure. Lack of strategic planning, inadequate executive sponsorship, waning financial support or inconsistent content management spell disaster for most internal Web sites before they even get off the ground. Although it can be difficult to measure the financial impact of a failed intranet, the losses are often considerable.

Suboptimal intranets can drain corporate coffers in two ways, says Jakob Nielsen, an intranet pioneer who in the mid-1990s was a lead designer of SunWeb – the original intranet at Sun Microsystems Inc. – and is now a principal of the Nielsen Norman Group, a consultancy in Fremont, Calif. First, searching on a poorly organized intranet is a huge time waster. “[Think about] every time you have to download a change of address form or any of those small things that take half an hour rather than five minutes,” he says. “When you multiply those 25-minute periods across a big company, there is a very direct and very explicit loss.” Second, countless decisions are made every day based on low-quality information because employees often can’t find the data that they need on the intranet. Some might say the cost of ineffective intranets is incalculable, but Nielsen’s willing to take a stab at the math. He estimates that if you multiply the number of people in the world using intranets by the number of minutes they’re wasting on them each day, it’s approximately a US$1 trillion problem.

What Went Wrong?

The fact that many internal corporate Web sites go unused – or worse, waste employees’ time – is vexing, given the alluring promise of intranets. The same technology that made the Internet a revolutionary communications tool was supposed to revolutionize the corporation as well. The intranet would give employees access to the latest news about the company, become a repository for the wealth of knowledge inside employees’ heads and virtually eliminate paper, saving hundreds of thousands of dollars in printing and processing costs. And in doing these things, it was supposed to weave the fabric of the corporation ever tighter. So what happened?

The very ease of use that makes the Web so appealing was the undoing of many intranet efforts. Initial enthusiasm for the technology quickly outpaced any sense of self-discipline. Small groups of techies, librarians and knowledge management ideologues built most of the early intranets. But as Web publishing tools proliferated, people throughout the company started cranking out content like crazy and posting it willy-nilly. There were no consistent design templates, style guides, navigational techniques or structured databases to provide any semblance of order.

“It was a gigantic intra-mess,” recalls Howard McQueen, CEO of McQueen Consulting in Baltimore and an early intranet architect. Many employees were spending a great deal of corporate time and energy creating sites and posting information – some of it useful, some of it junk – with little or no governing authority; meanwhile fellow employees wasted time in fruitless searches for valuable content on the intranet and often gave up in frustration.

The growing popularity of the Internet as a way for companies to communicate with their customers only added to the problem. Many intranets quickly became the poor stepchildren of their companies’ flashy Internet site. After all, went the executive reasoning, why throw money at a site that only your employees will see when there are valuable customers to be wooed? Many companies stopped funding internal Web efforts but hung on to their intranets because every company is supposed to have one. Today intranets are often just obligatory corporate shells that nobody knows quite what to do with.

Despite the plethora of failed intranets, some shining exceptions like @HP prove that devoting the appropriate resources and attention to internal Web sites can really pay off in the form of greater efficiency, knowledge sharing, employee productivity and cost savings. Now that corporate penny-pinching is back in vogue, such benefits are more appealing than ever. For companies that have focused their attention in recent years on high-flying B2B and B2C initiatives, now is a good time to turn inward and refocus on the traditional tenets of business – including ensuring that employees have the tools they need to be productive. “The business has to run properly again,” says McQueen. “And that really spells good times for the intranet.” Here’s a look at many of the common pitfalls of intranet development. Knowing what they are can help you avoid them – and get your money’s worth – the second (or third or fourth) time.

Insufficient Planning

When you launch an intranet, it’s easy to get caught up in all the possibilities: the technologies and services it will offer, what the site will look like, and how to get people to use it. Planners often overlook why they are doing it in the first place. “There are a million distractions” in the intranet creation process, says Ben Goodman, founder and president of New York City-based Web design and development company First Light. “You can do employee communications, Web enablement and project management, but without some kind of clear decision-making framework that looks at how [the intranet] will affect your strategic objectives, it will become a black hole.”

At Los Angeles-based Occidental Petroleum Corp., adding such a framework made the company’s third attempt at building an intranet a success. In previous iterations, chaos reigned as each department built its own site without central oversight. Now, says Bill Dykes, director of communications and Web development, each internal site (there are hundreds) has to conform to basic structural and navigational guidelines. On orders from President Dale R. Laurance, each Web site proposal must have a site development plan that includes a value analysis of the site’s offerings, specifies the strategic business objectives and describes the content. The plan must also spell out where data will be housed, how the site will be marketed to its constituency and what training will be required.

Although Occidental hasn’t explicitly measured the value of cracking down on renegade intranet sites, other companies have. When Hewlett-Packard’s @HP portal and its services went live in October 2000, the initiative reduced the number of internal Web sites by 2,000, delivering in six months a run rate savings of US$50 million annually on the company’s initial US$20 million investment. The company was able to eliminate benefits and payroll paperwork, streamline processes such as travel bookings, eliminate the need for call centres, consolidate Web sites, and reduce costs for printing, fax machines, copiers and servers.

Ignoring the User

Many intranets languish because they don’t deliver value to employees. Stale content and lack of meaningful service offerings are, rightfully so, a big turnoff. The key to choosing the right blend of content and services, according to McQueen, is remembering that your employees are selfish. Approach what will be on the intranet from the employees’ perspective: Give them things that will help them do their jobs, and don’t waste their time.

The best way to determine your employees’ needs is to go right to the source. At Allied Van Lines Inc., Senior Manager of Strategy and Development Annette Pierson emphasizes the importance of involving Allied’s 600-plus agents in every new intranet product. Before introducing a move-management system, the company beta tested the new service with a core group of move coordinators in the field. “They helped us identify functionality that needed to be changed or enhanced,” says Pierson. Last fall Allied redesigned the user interface based on coordinator feedback.

When intranets lack fresh, relevant content, managers have usually failed to entrust content ownership and management to those closest to it. To encourage topic experts and authors to contribute and maintain their own content (within the intranet’s guidelines) companies should consider offering incentives for contribution. At Chicago-based Andersen, where the ability to capture and retain the knowledge gleaned in consulting engagements is central to the company’s expertise, contribution to the intranet is an element of each employee’s performance review. “There is often a disincentive to share knowledge,” points out Mark Allen, director of Internet services at Andersen, “especially in a weakened economy when employees worry that if they put everything online they’ll reduce their own relevancy and importance.”

To ensure that employees draw upon the new content and services, companies should shut down access to that information by other means. For example, remove the HR forms from the supply closet if you want employees to use the new HR self-service area on the intranet.

Lack of Organization

Finding information on your intranet shouldn’t be a game of hide-and-seek. Yet companies often complicate the employees’ task of finding what they need by basing their intranet design on their organization chart. This creates or perpetuates individual informational silos in HR, benefits, marketing and sales, making it difficult for employees to transact business.

“Your employees don’t know what HR is and they don’t care,” says Lisa Sulgit, founder and evangelist of Lisa@sulgit.com, a New York City-based Web consultancy. “They just want to get the stuff they need.” She recalls that Prudential had a pension calculator on its intranet that few employees were able to find; it was in the IS department’s section of the Web site because the tool had been created by IS.

Sulgit, who has consulted with and worked for companies including Con Edison, Pitney Bowes Inc. and Time Inc., recommends that companies organize their sites by scenarios. Have people go on the site and try to manage life events like having a baby and look at each step, such as changing medical information or setting up a maternity leave. Although these changes involve multiple departments, the process should be seamless.

Companies also need to consider search capabilities and taxonomy. Everyone has had the frustrating experience of having an Internet search engine recommend 15,000 (mostly useless) links. As intranets grow in breadth and depth – IBM Corp.’s intranet is now bigger than the entire Internet was a couple years ago – they are becoming just as difficult to sift through for relevant data. Pitney Bowes, which has to deal with a lot of regulatory documents, created an intranet taxonomy that’s very specific to its business – in essence, a corporate vocabulary that helps employees find what they need.

Many companies neglect to build metrics into their intranets, so they have no way of knowing what kind of content is being accessed or which tools are used. Before Occidental added its first site analysis tool in 1998 to measure intranet usage, the company’s best guess (based on the number of calls when the site went down) was that a few hundred employees out of a few thousand were visiting the site. In fact, more than half of all employees were visiting the site at least daily but weren’t staying. Until then the company hadn’t realized the tool’s strategic potential.

Nobody in Charge

Since multiple departments have to cooperate to make an intranet successful, governance can become a sticky issue. Companies often delegate ownership to a single department that’s ill-equipped to handle the project – or worse, split ownership among a triumvirate of departments, usually IS, corporate communications and marketing. Politically, splitting ownership is a huge mistake and frequently leads to corporate infighting and finger-pointing when something goes awry.

The strongest department – or the one closest to the core of the material – should lead the project, according to Sulgit. She also recommends an oversight committee of stakeholders from all departments involved in the site. It’s important to have a champion for the site as well, an internal cheerleader who can get people involved and interested in the intranet. “The leader should be somebody who can reach out beyond politics and gather a team to really invest in the intranet and believe in it,” says Pamela Patton Cone, former senior manager of Web development at AOL Time Warner Inc. in New York City. “It should be someone with terrific corporate savvy who can bring together a team and make them feel they’re contributing to a revolution.”

Management’s Disconnect

The most critical support for an intranet project, however, has to come from the top. Many companies never achieve this buy-in because project leaders fail to communicate effectively to the management team what the intranet will achieve. Executives don’t want to hear about all the bells and whistles of HR’s new Peoplesoft system; they want to hear that it will let them speed up the hiring process by 15 days.

CEOs can avoid this communication problem by appointing an executive sponsor, whose job is to probe for the concrete business value of the project and communicate it to upper management in language they understand. This individual should also be in charge of rallying management’s fiscal and strategic support.

If an intranet is effective, executives often aren’t prepared for the resulting cultural changes. “Senior executives will embrace the idea of empowering employees by giving them direct access to information,” says First Light’s Goodman. “But in reality, that has some pretty radical implications.” Intranets tend to flatten the corporate hierarchy. This can be scary to executives who, after posting a memo to the ranks on the intranet, can suddenly find themselves deluged with employee feedback. Rather than fearing this aspect of the intranet, executives should focus on the benefits of being able to communicate strategy and vision more directly to employees and leap at the chance to take the corporate pulse.

Sal Rasa, a former consultant with Watson Wyatt in New York City, recalls a study of CEOs’ biggest regrets upon leaving office. Many said that they had dismissed the issue of communication as “soft” only to realize later that the unleveraged knowledge of employees was one of the biggest inhibitors to value creation. “The CEO should be the one setting the tone for the [intranet’s] value,” says Rasa. “Anything the CEO does to undermine it will be as profound as what he does in support of it.”


Intranet: An internal Web site offering content and services to employees. Although it may link to the Internet, an intranet cannot be accessed by the general public.

Corporate portal: An internal Web site that provides proprietary corporate information to employees as well as access to selected Web sites, such as those of suppliers. Individuals or user groups are given the ability to customize the portal page, which includes a search engine for internal documents.


Jakob Nielsen cut his teeth as the usability lead for SunWeb, the original intranet at Sun Microsystems, in 1994. Today, he’s a principal of the Nielsen Norman Group in Fremont, Calif.

Darwin: What intranet metrics should companies pay attention to?

Nielsen: The simplest one is a usability metric. Define three or four things that you’d like people to be able to do with the intranet and have 10 people try to do them. I bet people will be stunned at how long it actually takes average employees. We find it will take people half an hour to download a tax form for changing their withholding or some other really simple thing.

Darwin: Are the number of hits a site gets or cost savings germane?

Nielsen: I think those are the wrong statistics to look at, because more traffic is not necessarily better. And the purported cost savings of putting something on the intranet is only a cost saving for the department that did it. It does not take into account the time investment of the employees in all the other departments who now have to struggle because it’s too complicated. What is the impact of that on employee productivity? That’s where I see big problems, and that’s what’s usually not measured.

Darwin: What lessons have you learned in your years of work with intranets?

Nielsen: There is a tender balance between too much and too little central control. If you have an intranet where nothing can happen without going through five committees, well, guess what? Nothing will happen. More often, people will put stuff up without asking anybody and there will be no structure, no way for people to find what’s on the intranet.

You have to have a lot of follow-up and evangelism when you try to instil consistency in an intranet because there is so much departmental turf protection. They are against the notion of somebody else telling them what to do with their material. Yet otherwise you have chaos. So, you have this delicate balance between letting everybody loose, which leads to chaos and low productivity, and too much heavy-handed enforcement.

There is virtually never a budget for an evangelism program, but it’s very necessary. A large number of people suddenly are being turned into publishers and application providers. These are roles that they have not traditionally had, so you need to educate them.

Darwin: Are there other keys to creating a successful intranet?

Nielsen: An intranet is an employee tool, and the way to get a good employee tool is by studying people’s workplace behaviour. When you do, you’ll often find people using cumbersome workarounds.

With studies, you can identify big time wasters where there’s an opportunity for a simple little tool that could help people. Those are the kinds of things that really grab people and make them feel happy about [the intranet]. Give them a little tool that in two or three screens will save them 10 phone calls.