Are There Laws of KM?
Preparing for Conversations with Stephen Denning

Stephen Denning, Michel Pommier and Lesley Shneier1
Not for citation or quotation without permission

Knowledge sharing is becoming the central driver of the 21st century economy. Among the many companies which now recognize their stock of human capital as the major asset to business success, access to knowledge and just-in-time learning are more important than ever before. The continuous changes and innovations in information technology and telecommunications will make knowledge even more accessible.

As the unit costs of computing, communications and transactions decline towards zero, all economic sectors are going through major and rapid transformations. Economic success in this fast pace environment requires considerable agility and adaptability. Those countries, sectors, and organizations that can adapt will be the winners of the 21st century.

Over the last five-to-six years, companies have increasingly been using new organizational models to capture and spread new ideas and know-how. Communities of practice and networks have emerged to complement existing hierarchical structures. As a consequence they have radically galvanized knowledge sharing, learning and innovation.

As experience has been acquired of implementing knowledge sharing in many different organizations in different countries and different cultures in the public and private sector, the initial impression was one of diversity of terminology, concepts and approaches, along with the differences in context in which knowledge sharing was being applied.

More recently, however, as the richness of the knowledge sharing experience has been digested, it has become clearer that certain features of the knowledge sharing experience are common across most, if not all, organizations that attempt to implement an organization-wide program. If the universality of these features is confirmed by further study, these features might eventually attain the status of the "laws" of knowledge management. Some hypotheses as to what these universally experienced principles might be, include the following:

• Knowledge sharing is essential to economic survival - In the new knowledge economy, knowledge sharing is sine qua non to survival. Traditional hierarchical organizations cannot cope with fast changing client demands unless they are able to agilely share knowledge among employees, partners, and clients. Innovations and the creation of new business lines depends on communal rather than individual knowledge. The knowledge of the community is always larger than the individual's. Capturing what is already known by someone else in the group and adding one's own knowledge is faster and more efficient than an individual reinventing a solution. This requires that organizations develop knowledge sharing culture and processes. In this situation, knowledge sharing is not merely an alternative strategic option: knowledge sharing is required for organizational survival.
  
  
• Communities of practice are the heart and soul of knowledge sharing - Knowledge sharing is only taking place on a significant scale where organizations have organized themselves into communities of practice. These communities need to be "integrated" to the company's strategy and its organizational structure. The phenomenon of communities of practice is known under different names. In the World Bank, they are called thematic groups; in Hewlett Packard they are "learning communities" or "learning networks"; in Chevron they are called "best practice teams", and in Xerox they are know as "family groups". Whatever the name, the formation of professional groupings where people come voluntarily together with others to share similar interests and learn from others' skills has become the common feature of knowledge organizations. Vibrant communities operate in an environment of trust and mutual understanding which encourages learning and candid dialogue. They are safe places where people who do not know can learn from those who do know. Learning and knowledge transfer is accelerated when community members are electronically linked to each other by email or the World Wide Web. Insufficient by itself to create knowledge, information technology is a catalytic tool which gives global reach to community members across large distances and time zones. This would have been scarcely possible even ten years ago. What we have discovered in effect in effect is that building a learning a "learning organization" requires building communities within which that learning can take place. Without communities linked to structure, organizations don't learn very fast at all.
  
  
• Virtual community members also need physical interactions - While technology has dramatically expanded the possibilities for global communities operating in a virtual mode, with members scattered around the world communicating seamlessly by email and the world wide web, many organizations have found it difficult to launch communities without initial face-to-face meetings of at least some of the members. We don't know of any true communities in which a portion of the members do not periodically get together in person, see each other face-to-face, look each other in the eye, sniff each other out, and interact so as to establish the bonds of trust and affinity that are needed in communities. Without such face-to-face meetings, most organizations have found it difficult to get communities even started. Once a community has been launched, the absence of periodic face-to-face time leads to entropy, as the community starts to lose energy, and eventually dies.
  
  
• Passion is the driving force behind communities of practice - The success of the industrial revolution and the modern enterprise in building wealth has been built on a rational and mechanistic approach to problem solving. Clearly documented procedures and guidelines left little place, if any, to human emotions. The experience of knowledge sharing is showing, however, that communities of practice only flourish when their members are passionately committed to a common purpose, whether it be the engineering design of water supply systems, the pursuit of better medical remedies, or more efficient economic techniques. Efforts at building communities in a hierarchical or top-down fashion are at best successful on a temporary basis. Soon they come unstuck as members refuse to contribute their time to activities which have no meaningful purpose for them. Instead, they will be looking for professional interest groups which will give them a sense of professional and personal raison d'etre. This is a hard lesson for companies and executives who have spent their lives trying to keep emotion out of the work place. Nevertheless the lesson repeatedly emerges from case studies and benchmarking of knowledge sharing programs.2 As a result - for reasons of sheer efficiency and effectiveness - the modern workplace is finding it necessary to provide time and space for both the head and the heart.
  
  
• Communities enrich organizations and personal lives - Nurturing communities of practice and building on positive human emotions in the workplace provides a key to creating and developing healthier forms of organizations. The limited liability company has been an invention that has helped generate immense wealth. It has also led for the most part to emotionally desiccated lives for the individuals who work in these organizations. The emergence of non-hierarchical communities of practice and the central role of passion in cementing them can lead not only to an enhanced form of organization capable of generating even greater wealth, but would also provide more meaningful lives for those who work within.
  
  
• Knowledge sharing has inside-out and outside-in dynamic - Starting and implementing knowledge sharing in an organization must be done from inside, not outside. This means that using outsiders such as consultants to "kick start" or "do it for us" doesn't work. The successful knowledge sharing programs appear to be driven by insiders. This means that the person charged with starting/implementing knowledge sharing must have credibility among both the line and staff functions, so that when he/she says "here's the direction we're going in," people start moving in that direction. Similarly, when he/she says "this way, not that" or "that's interesting/useful, let's build on it/share it," then they do, and also "that's interesting, but not useful/not appropriate now, not part of the agreed-upon strategy" that person has the clout to stop those "red herrings" (well, almost stop them). It is vital that the changes be made from inside the organization, not grafted on from the outside (or by outsiders). The insiders must "own" the process, be involved in all aspects of it, make the changes happen, encourage others to make the changes and to get involved, tell the stories. Only they can do that legitimately, and with organizational (or internal political) savvy. That said, the inside person must also use the outside world to validate and "push" the agenda forward within the organization. For example, using the external recognition and knowledge fairs and expos as ways of showing that what is happening internally is valid, good, useful, appropriate, adds value, correct, etc. This legitimizes the activities, which consequently makes it "alright" for others to jump on board.
  
  
• Storytelling ignites knowledge sharing - As organizations start on their knowledge journey, they inevitably find great difficulties in communicating complicated ideas through abstract forms of communication. This is even more true where this knowledge journey also implies large scale changes in behavior and understanding of the mission of the organization. Telling stories that build on real knowledge sharing situations, enables individuals to gather in some of the tacit understanding of the storyteller as well as recast the story into their own contextual work environment; hence adding their own tacit understanding to the process. Institutions are finding that the marriage of narrative and abstract communications provides a more powerful tool for sharing knowledge, than merely abstract communications.

These seven "laws" of knowledge management have three corollaries which are found across a very large number of organizations:

Knowledge sharing is at some point confused with IT - We don't know of any organization trying to share knowledge where at some point building the knowledge sharing program has not been confused with building an information management system. Successful knowledge organizations have learned that building web sites and offering knowledge management IT tools neither create nor transfer knowledge by itself. They discovered that employees will stop visiting these web sites or use these IT tools if a community of practice is not bringing credibility and contributing content to these instruments. IT tools are made to facilitate knowledge sharing among users rather than constraining the emergence of a sharing culture by imposing complex technical requirements. Unfortunately, some organizations never learn this. They continue to solely pursue IT-based approaches long after they have been shown to be unproductive, continuing in a dysfunctional mode for years.

Middle-management resists - Knowledge sharing strategies are usually attractive to forward-looking chief executives who are anticipating efficiency gains, quality improvements and innovation. It is equally appealing to front-line employees who feel more valued in carrying out their work. When a knowledge sharing culture takes roots, employees seek solutions among their peers across traditional organizational boundaries. They stop looking solely up to their managers to solve their problems. Middle-managers are usually less enthused. The role of managers changes from control to facilitation and mentoring. It is not therefore surprising that middle-management resists such changes. This is a widespread phenomenon observed when introducing knowledge sharing in an organization. Middle managers have often built their lives and careers on mastering the hierarchical pathways of organizations. They can feel threatened by the emergence of new non-hierarchical work flows which no longer require command and control management behaviors. Communities of practice are indeed less orderly than hierarchies and it always takes time for middle-managers to understand that maintaining order can advantageously be replaced by facilitating and cheer-leading knowledge sharing initiatives.

Vibrant communities of practice attract new talents - The rapidly evolving knowledge economy is creating greater mobility among skilled workers. Companies are competing for these workers like never before. Those organizations that nurture communities of practice and let passion permeates the workplace offer a work environment more attractive to the best talents while retaining the knowledge workers they already have. Conversely, those that resist building communities end up with a work environment devoid of interest to their employees and unattractive to new talents, whatever compensation packages are offered.

The combination of the seven "laws" of knowledge sharing and their three "corollaries" opens new perspectives.

In organizations sharing knowledge, we see evidence of a virtuous circle emerging. Knowledge is shared. Communities are nurtured. The head and heart are integrated in the workplace. The process leads to greater economic productivity. Where this is occurring, organizations are more efficient and effective by offering an environment that builds employees satisfaction and loyalty.

At the same time, we see organizations that are trapped in a vicious cycle. Rigid hierarchical organizational structures prevent the sharing of knowledge, and undermines existing "natural" communities. Top-down approaches de-motivate the workforce and lead to the growth of bureaucracy, depleting the social capital of the organization. The organizations find it difficult to innovate, or how to get out of the vicious cycle.

In some organizations, both phenomena -- the virtuous circle and the vicious cycle -- are simultaneously happening in different parts of the organization. This evolution is occurring at different speeds in different organizations, but these phenomena are spreading.

The phenomenon appears to be global. These transformations are occurring initially in those parts of the global economy where email and the Web have reached the greatest penetration. This enables the formation and rapid growth of global communities. Knowledge sharing principles, however, will inexorably make their way across the entire global economy in the coming years.

A wider and deeper understanding of these trends would enable the virtuous circle to occur sooner and faster than it otherwise would. This would avoid counter-productive efforts to promulgate and reinforce ever-more tightly engineered hierarchical structures with all their attendant problems. Particular attention needs to be given to the following.

Understanding the implications and variants of knowledge sharing: New knowledge sharing organizations, offering a balance between hierarchical structures and human communities, have already emerged. More work is needed however to understand the implications, document various practices, and develop and disseminate more efficient ways of evolving the new form of organization. Over time, it will be important to document the economics of implementing -- or not implementing -- this new form of organization.

Helping organizations discover the benefits of knowledge sharing: The benefits of sharing knowledge are already widely understood by organizations that have studied knowledge management, such as APQC, the Conference Board and the business schools. Many managers around the world, however, still do not understand the basic principles of knowledge sharing and indeed are confused by the very term "knowledge management". This terminology creates an impression of some kind of ephemeral fad or of an IT "black box". This confusion is further reinforced by efforts of IT vendors to sell software and hardware as "solutions" to knowledge management. A more universal understanding of what is at stake in sharing knowledge remains to be disseminated.

Helping organizations avoid or minimize the KM traps: Knowledge sharing at some point inevitably gets confused with IT, and middle-management inexorably resist the implications of a sharing culture. This occurs even in organizations where everyone is aware of the IT and the controlling behavior pitfalls. It is almost as if organizations have to experience the pitfalls themselves in order to overcome them. Research is needed on whether it is possible to minimize or reduce the cost of these learning experiences. Can middle-management be induced to welcome the culture shift? If ways could be found to facilitate and accelerate the shift, large-scale savings could be made.

Communicating knowledge sharing principles: Relentlessly communicating the basic principles of knowledge sharing both inside and outside organizations may help them avoid falling into the knowledge management traps. New techniques for exploiting the potential of narrative are now emerging. These will contribute to make the laws of knowledge sharing truly universal.

¹ Stephen Denning is Program Director, Knowledge Management, World Bank. Michel Pommier is Senior Advisor, Private Sector and Infrastructure Network, World Bank; and Lesley Shneier is Senior Knowledge Officer, World Bank. The views expressed in this article are the views of the authors and not necessarily those of any organization.

²See for example the benchmarking of "Successfully implementing knowledge management" by the American Productivity and Quality Center, February 2000.

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