Conversations
with Tom Stewart
Board
of Editors, Fortune magazine
Real
Time Management
The leading
proponent of knowledge management
in the business press
Editor's
note:
This is a synthesis of the "Conversations with Tom Stewart"
held in April, 2001 as part of the AOK STAR SERIES. Each month
one of our four discussion groups enjoys the visit of a KM luminary
as guest moderator. During the course of 11 months, the STAR
SERIES will have delivered the best "conference" of
the year to the desktops of AOK members around the world for
a fraction of the cost of a physical conference and with the
convenience of continuous education that is at the right place
at the right time. Please Join
AOK and participate in these knowledge exchanges as they
happen in the future.
Table of Contents (Click on list item to
go directly to each topic)
 Introduction
Jerry
Ash, AOK chief executive:
Please join me in welcoming Tom Stewart as our fourth guest moderator
in the AOK*Domain Knowledge Inc. STAR SERIES. He will be with
us for the next two weeks and he brings to our table a new topic
- Real Time Management.
Tom needs no introduction,
but I want to remind you of the gift of knowledge he brings to
our table.
He is a member of
the Board of Editors of Fortune magazine where his monthly
column, "The Leading Edge," is read by 870,000 readers
world wide. He pioneered the field of intellectual capital in
a series of landmark Fortune articles that have earned him an
international reputation as the leading expert on the subject.
In 1994, the Planning Forum called him "the leading proponent
of knowledge management in the business press" and in 1996
he received the International Knowledge Management Awareness
Award presented at the International KM Conference in London.
His book - Intellectual
Capital: The New Wealth of Organizations - was published
in 1997 and he is working on a new book now. He is a much sought-after
speaker on a wide variety of business topics.
While Tom has "managing
in real time" on his mind at the outset of our discussion,
we look to the members to drive the "Conversations with
Tom Stewart." In addition to his series on real time management
last summer, Tom has written on a wide range of management subjects
from productivity to stock options, the emerging electronic marketplace,
the influence of networks on business, the economic and management
implications of the Information Age including "Managing
in a Wired World" and "Managing in an Era of Change."
This is our opportunity
to tap into the great intellectual resource which is Tom Stewart,
reporter, editor, thinker, leader, pioneer.
Welcome to our corner
of the virtual world, Tom. Let the dialogue begin.
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"Old Hands" Not
Always Best Practice Examples
Jerry
Ash: Thanks
again for the gift of your time and knowledge, Tom. I'll start
the dialogue with a question.
The first of your
three columns on Real Time Management (see "Preparing
for Conversations with Tom Stewart") reminds us that
many enterprises have already been in the business of managing
in real time for some time. Your example is an electric power
company; mine would be healthcare facilities.
But I'm wondering
what lessons these existing practices have to teach the newbies
and what lessons the newbies will eventually be able to teach
the old hands. Those who have practiced some of the components
of knowledge management by the seat of the pants prior to the
rise of KM as a discipline may not have known enough to establish
"best" practices. To have been in the 24/7 environment
doesn't necessarily mean that power companies and hospitals and
police departments have the best ideas on how to manage in real
time. Healthcare facilities have always been in the knowledge
business but they have much to learn from the much younger KM
movement. Right or wrong?
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System Tries to Catch Up
with Progress of Patient
Tom
Stewart:
Right and in spades. Actually I think that only parts of the
healthcare industry operate in real time - if TV is anything
to judge by, emergency rooms might, but most of the system batch-processes
patients, and anyone who has been in a hospital knows that delay
is the order of the day, while the system tries to catch up to
the progress of the patient.
And that's a knowledge
management problem. I'm no expert on health care, except as an
occasional consumer, but it seems to me that medical care delivery
systems mismanage knowledge (or fail to manage it) about as badly
as any other organization, and in some sense worse.
The issues are serious:
Life and death depend on getting the right information about
a patient or a problem to the right place at the right time.
Hospitals make this their excuse for special pleading - why "we're
different" and can't follow others' models. Of course in
many other industries life and death ride on similar knowledge
questions - air transportation would be a good example - so the
special pleading isn't accurate; but it never is. The issues
are voluminous: There's a frighteningly large information stream
that accompanies every patient's journey through the medical
establishment. The issues are complicated by privacy concerns:
Knowledge-sharing is all well and good, but do I want my neighbor
to know about my kidney stones or my employer to know about my
abortion? And of course they are complicated by litigation: One
of the reasons TQM hasn't had the impact on healthcare it should
is that it requires people to pinpoint the cause of errors, and
wouldn't the malpractice bar just love that?
All of which said,
on yea, there's tons healthcare can learn. A couple of examples:
(1) Knowledge and
information sharing across functions and organizational boundaries.
Some instances:
* An old slightly
off-color joke asks "what to a proctologist and a gynecologist
say when they meet?" The answer: "They say, 'excuse
me,' and continue with their examinations."
The personal care
physician - your old family doctor - is supposed to act as an
information and knowledge clearinghouse, a medical traffic cop,
sending you out to specialists, coordinating their decisions,
talking to you about their plans. Ha. Doesn't happen - and a
large part of the problem is keeping and managing a total patient
profile. There ought to be (1) an electronic document that keeps
everything in one place and accompanies me from dermatologist
to hospital to dentist. XML and hypertext and a little artificial
intelligence (applying configurator technologies to medical care,
so that a dispensing physician would be warned that the steroid
he's prescribing shouldn't be given to patient X because he has
osteoporosis, e.g.) would be a great KM project.
(2) Asset utilization.
Some of knowledge management's biggest successes have been in
improving the utilization of hard assets: scheduling freight
cars, reducing inventory by replacing it with information, and
applying lessons learned to projects like oil refinery turnarounds
(which are basically spring cleaning projects). Health care is
rife with opportunities for that: Moving a patient through a
hospital is a logistics problem, involving coordinating of the
work of many specialists, for example - think of all that waiting
time.
Assets: A few years
ago Fortune published a story about Karolinska Hospital in Stockholm,
where a new position, "nurse coordinator" was created
to manage "patient flow": one consequence: "Three
of 15 operating theaters have been closed, yet 3,000 more operations
are performed annually, a 25% increase."
There's lots more:
This is a huge, enormously complex, and enormously inefficient
industry. Knowledge management and realtime management could
make a large difference.
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Healthcare a Cottage Industry
Lucinda
Main, PhD, Pharmacist, Senior Vice President, American Pharmaceutical
Association (APhA):
Report Calls Healthcare a Cottage Industry: For those particularly
interested in information management, or the lack thereof, in
health care today, I reference a new report from the Institute
of Medicine (available on their web site) called "Crossing
the Quality Chasm". It calls for a wholesale reengineering
of the delivery and financing of health care today. Central to
the proposition for change is that the health delivery system
is a cottage industry when it comes to utilization of info technology
for knowledge management (or even fundamental record keeping
for individual patients). Lengthy but interesting reading for
those in the industry and those who can help us.
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KM is the "Last Fad"
Tom
Stewart:
Responding to Lucinda Main's point that the health delivery system
is a cottage industry.
" Those of
us who are advocates of new management ideas always like to think
we've invented the wheel - and that it will never need reinventing.
I remember once being asked after I'd given a talk about knowledge
management, "What's the next fad? What comes after?"
For a moment I hesitated, then, with a grin, said, "This
is it! This is the last fad! This is the last word in management
- you'll never need to learn anything else!"
I'm reminded of
this because Lucinda Main's observation brings up an excellent
point: Knowledge management builds on foundations that were laid
by TQM and (don't say it too loudly) reengineering. You'll remember
that one of Deming's first principles of quality is "drive
out fear." Unless you do that, you can't deal with facts,
because people bury them to cover their rear ends. That's one
of the major problems with knowledge management in hospitals.
People don't want to document errors, because documenting errors
means doing the plaintiff's work for him. Doctors don't want
patients (or nurses, for that matter) to know too much about
the details of their science (or is it the mysteries of their
art?) because (1) they're afraid people will do it badly and/or
(2) they're afraid people will discover it's not all that mysterious
after all.
You can't do KM
if you can't face facts. I watched part of the TV show "Boot
Camp" the other night. Something struck me as I listened
to the "yessirs" and "nossirs" and the orders
to drop and do twenty pushups - the cliches of a zillion war
movies and millions of real-life boot camp experiences. In basic
training, no one can weasel out of responsibility, even if whatever
went wrong is someone else's fault:
"I didn't do
it, Sir!"
"Who did?"
"Jones did, Sir!"
"Why didn't you stop Jones?
"I don't know, Sir!"
"Because you're a lily-livered idiot, right?"
"Yes, Sir!"
"Yes, what?"
"Yes, I am a lily-livered idiot, Sir!"
The result, when
it works, is pretty impressive: People take responsibility for
their actions and inactions. There's a mess. How did it happen?
Why did it happen? Who did it? Who didn't stop it? Who will clean
it up? That unflinching facing up to facts is pretty unusual
in corporations - and not just health care organizations - where
these questions frequently get political answers, not factual
ones. It's hard to break these habits, which is why the military
has to use an extreme, intensive regime like boot camp to break
them. It's why Jack Welch, at GE, never stopped pushing a series
of initiatives (starting with the famous WorkOut program) whose
purpose was to knock down pretense and posing, uncover facts,
undermine bosses' power, and, as he put it, turn meetings into
"interactive forums for disseminating new ideas and the
sharing of experiences - rather than political show-and-tell
sessions.
Bringing facts to
the surface fast and responding to them immediately isn't sexy,
but it's the first and most important step in knowledge management.
Debra
Amidon, ENTOVATION International: Is
the Globe Ready for Real-time? I wonder in your world travels
what you are discovering about the readiness of countries - industrialized
and developing alike - to embrace these modern management concepts
and practices? Is the Knowledge Economy creating a level playing
field as some might suggest?
Tom
Stewart:
Thanks for your question, Debra. You know that there's no simple
answer to it. There's too much divergence and diversity to generalize.
For example: We have evidence that income disparities are widening
- the rich getting richer faster than the poor are improving
their lot. Except that that's not true if you take the highest-level
perspective and realize that incomes in China and India have
grown faster than incomes in the West, so that, on the broadest
possible per-capita basis, the global gap is narrowing.
Also, it seems obvious,
the threshold measure of a person's standard of living should
be: Are you alive? And globally life expectancies have been rising
fastest in developing countries (from a very low base), narrowing
the gap between them and developed countries. The fact that we
can worry about income disparities is evidence of progress. Much
of that increase in life expectancy is attributable to knowledge
- to the Green Revolution, for example, which has essentially
wiped out famine except where politics causes it.
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Zillions
Without Extracting Natural Resources
We're also seeing
something else, which is the emergence of zillionaires in developed
countries who didn't get there by extracting their natural resources.
Wealth drawn from the ground represents wealth extracted from
a country. Wealth created by intellectual capital - I am thinking
of some of the software multi-millionaires in India, telecom's
multi-millionaires there and in Singapore, Hong Kong, etc. -
represents wealth created in a place.
This too, is a change
from the extractive, colonial, mercantilist mindset. The Asian
"miracle" of the last 30 years and the financial crisis
a few years ago all showed something about the power and sustainability
of a knowledge economy. First, the miracle itself happened most
miraculously in countries without significant natural resources
- Singapore, Hong Kong, Japan, Taiwan - and the effects of the
financial crisis were least there, too. (Japan's decade-long
recession is a special case.) They were knowledge-based miracles.
As to companies:
Golly, take your pick. I've talked to the executives of one of
Asia-Pacific's largest natural resources companies, whose stock
price has been lagging for a decade, and the CEO gets it, but
the division executives don't, and have blocked his every effort
to try to become a nimble, asset-light and knowledge-intensive
organization. On the other hand, Cemex, the Mexican cement company,
though still asset-intensive has become one of the great knowledge
companies in the world, a paragon of intellectual capital management
and also of real-time management.
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Transitioning
to Realtime Management
Joe
Katzman, C.A.T. Consulting, Toronto, Canada: I like the theme of "realtime
management" - certainly something the high tech sector is
experiencing in a negative way right now.
For most organizations,
however, real time is more than a stretch - it's so far away
from where they are that it isn't even on their radar screen.
In cases like that, moving into realtime operation immediately
is not a realistic option. Instead, there are going to be some
key enablers and transitional states along the way.
Interestingly, nature
works this way too. Kevin Kelly's "Out Of Control"
described the efforts of researchers to recreate ecosystems,
which failed despite the fact that they knew which species they
wanted to introduce. After a while, the order of addition was
discovered to be important. They also discovered that there were
transition species that would helped the ecosystems take a step
toward (or away from) their goal, but then might disappear soon
after with their work done.
So, let's accept
that real time is important and likely to become more so. Let's
also accept that knowledge management has a role to play in making
this happen.
Can you share with
us stories that illustrate some of the key stages on the journey
to real time? Some of the key "transition enablers"
and infrastructure requirements? Some of the things that make
individual champions successful?
You also said: "Bringing
facts to the surface fast and responding to them immediately
isn't sexy, but it's the first and most important step in knowledge
management."
In ANY management,
I should think. And this, more than anything else, is what makes
management difficult.
Tom
Stewart: Joe,
it's a good question, and there's no cookbook answer because
this is new and the chefs are out there improvising. So I'd welcome
other people adding their thoughts or amending these.
First, I think there
are some business and cultural prerequisites. If you've got a
command-and-control, bureaucratic, hierarchical organization,
you can't manage in real time. The very PURPOSE of bureaucracy
is to slow things down. That's its added value - and for a lot
of business history, there was added value in going more slowly.
(Why? Because the commitments of capital and other resources
were large and irrevocable: The money you turn into a steel mill
can't be liquidated and put into aluminum, let alone into foodstuffs
or cosmetics.) That's still true for lots of companies. Alcoa
manages a lot of its business in real-time, but the decision
to commit to fixed assets, while made quickly, isn't made on
the fly.
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Realtime
Requires Empowered Workforce
Also, if you haven't
got an empowered workforce, you can't operate in realtime.
And if you haven't
got reliable systems - I don't mean six-sigma quality, but I
mean most of your systems have to be in control - you have to
do that first. You can't operate in real time if you are always
having to go back to fix basic mistakes.
Second: Always -
for this as for anything else - start where there's a clear business
need. "Realtime sounds nice, let's do it" won't work.
Cisco got started because their salesmen were upset, and it's
not good to have salesmen upset. Alcoa got started because it
had an urgent business need to lower its cost base to compete
in a cyclical business with commodity elements. PJM Interconnection
got started because its customers needed decisions to be made
at the speed of a market, not the speed of a bureaucracy. Real
business needs.
Third: Watch the
support systems as you go, and don't go faster than your ability
to execute flawlessly. Again, Cisco, while a young company, found
that it already had about a dozen incompatible information systems
that had to be brought into sync. Alcoa methodically worked the
Toyota Production System.
Fourth: make a distinction
between what can and should be real-time (where that adds value)
and what shouldn't be. Phil Harris of PJM Interconnection told
me that you want "prudential systems" (values, strategic
planning, etc.) to be off-line, deliberate, thoughtful. People
who act and decide in realtime have to have a clear understanding
of your business model, value, and goals, so that their decisions
will be consistent with them.
Joe
Katzman: Tom
Stewart wrote: "First,
I think there are some business and cultural prerequisites. If
you've got a command-and-control, bureaucratic, hierarchical
organization, you can't manage in real time."
Joe
Katzman:
An expected accompaniment, but I wonder about the causal relationship.
In the organizations you looked at, is this radical empowerment
a derivative of real-time implementations that force a new way
of working . . . or is realtime a derivative of empowerment that
continues to take itself to higher and higher levels?
I can see organizations
trying the buildout process both ways. Does it matter which end
they start at? If so, why?
Tom Stewart also
wrote: "'Real-time
sounds nice, let's do it' won't work. Cisco got started because
their salesmen were upset . . . ."
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PJM, Cisco
and Alcoa examples
Joe
Katzman:
This wasn't covered in the article. Why were their salesmen upset?
Tom Stewart also
wrote: "People who act and decide in realtime have to have
a clear understanding of your business model, value, and goals,
so that their decisions will be consistent with them."
Joe
Katzman:
Good point, and I dare say that his kind of understanding may
also help spark demand for real-time operation. But getting to
that base understanding is no easy task. What did you see that
makes PJM, Cisco and Alcoa so effective in this department? And
what made them effective at this before the signals of
real-time performance could be relied upon?
Tom
Stewart:
Joe Katzman writes: "An
expected accompaniment, but I wonder about the causal relationship.
In the organizations you looked at, is this radical empowerment
a derivative of real-time implementations that force a new way
of working . . . or is real-time a derivative of empowerment?"
Tom
Stewart: Both
- but chiefly I think the empowerment is a prerequisite, a condition,
more than it is a cause. To wit:
You can have radical
empowerment and informality and not be operating in realtime.
You cannot have command and control and have realtime management.
If you try to operate
in realtime in a hierarchical environment, either your efforts
will fail or the hierarchy will break down. Given what we know
of corporate cultures, the former is more likely. One of Jack
Welch's recent schticks is to emphasize the importance of informality.
(Actually, I think he always acted this way - but only in the
last couple of years has it become an important part of his management
language.) "It's a big deal for an organization to become
informal" he says, again and again; he means that it's hard
and it's important.
If your question
is which is the horse and which the cart, I'd say begin with
the informality piece.
Cisco's salesmen
were upset for the most mundane of reasons: they were out breaking
their humps selling routers and so on, working 145 hour days
and traveling coach and sleeping in Motel 6s or whatever, and
their expense account reimbursements were slow. The company's
solution was to put them online and to approve payment immediately
rather than wait till they'd been inspected (turns out the cost
of checking was greater than the amount of cheating or error
found) and spot check afterwards.
This was so successful
that Cisco began to realize it could reduce the cost of finance
if it tried more. So the next step was to go after the salesmen's
commissions: Why can't we calculate them immediately, too? Doing
this was more complicated, because it meant getting into the
daily order information, rather than tallying up sales at the
end of every month or week.
Joe
Katzman asked:
"What did you see that makes PJM, Cisco and Alcoa so effective
in [understanding their business model]? And what made them effective
at this BEFORE the signals of realtime performance could be relied
upon?"
Tom
Stewart: I
can speak best about Alcoa, where the company has, over the dozen
or so years I've known it, developed an ever greater knowledge
of its business processes. When I first saw them, Paul O'Neill
had just come in as CEO and made safety his #1 priority. He did
it because it's right, because it would help repair frayed labor
relations, and because it's a fabulous way to get an understanding
of processes. (This is because - assuming a basic level of workplace
safety - accidents happen when people take shortcuts. And people
take shortcuts, deviating from the established process, when
they think that the process is inefficient. So by looking at
accidents and near misses, you can get an indication of where
bottlenecks are.) That and TQM went on for many years.
Alcoa was really
knowledgeable about the different production demands of its long-run
processes (making ingot and sheet) and its batch processes (extrusions
and so on). Then O'Neill and successor Alain Belda added a level
of sophistication in going to the Toyota Production System -
and Belda, in particular, expanded it into the Alcoa Business
System, realizing that the just-in-time philosophy could extend
beyond the factory floor. They didn't set out to become a realtime
organization. Only in the last couple of years has that language
appeared in their annual report, for example. They just evolved
that way, out of the logic of what they were doing.
Cisco seems to me
to have been more self-conscious about it. A younger company,
growing very fast, it was looking for ways to grow without having
to sink zillions of dollars into capital equipment. Solution:
Let suppliers carry the capital equipment, and we will carry
information to them. The model is not unlike the Dell business
model in that respect.
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Looking for KM in Action
K.S.Srinivasa
Murty, Head, Corporate Knowledge Management, Hindustan Lever
Limited, Mumbai, India: I
have been following with interest the discussions in all the
3 CoPs, now for about 3 months. I have found the discussions
very interesting and useful. I am relatively new to the KM field,
having been associated with it now for just about a year. I thought
I would share with you some of my thoughts and perceptions and
seek comments / suggestions.
Let me introduce
myself and our company. I am heading the knowledge management
initiative in Hindustan Lever Limited ( HLL), a leader in the
Fast Moving Consumer Goods Industry in India. This Indian subsidiary
of Unilever, with current turnover of about US $2.5 billion,
has over the years consistently achieved excellent growth and
is among the highly respected companies in India. I have had
an enriching experience in the Unilever group of companies in
India, spanning over 30 years, in Marketing, Commercial and General
Management areas.
I have been involved
in our knowledge management initiative for about a year now.
Till recently, I was championing KM in our company together with
my responsibility as the Head of our Strategic Services Group,
which consists of Media Management, Market Research, Business
Research and Corporate Planning functions. This month I assumed
full time responsibility for the KM role with a view to lead
this effort comprehensively and strengthen the implementation
across the company. Over the last nine months, we worked on developing
the senior management consensus on our company's knowledge management
strategy and implementation plans, consistent with our organizational
culture and business goals. We are currently implementing a few
of the identified projects and intend to simultaneously focus
on culture change initiatives, to support our knowledge management
initiative. We are very keen to learn from the experience of
companies which have successfully implemented KM.
Now coming to a
few comments, thoughts and perceptions on KM implementation.
1. If knowledge
management is to get serious attention of the senior management
of a company, the KM initiative needs to be perceived as evolving
into a company wide initiative, well integrated into all the
key business processes and strategic priority initiatives of
the concern. However, most of the case studies I reviewed so
far seem to reflect KM adoption limited to a few locations /
business processes in a concern. We are keen to learn how companies
have successfully progressed KM implementation from a few successful
isolated examples to a company wide adoption and over what time
span.
2. While all KM
practitioners fully endorse the criticality of senior management
buy-in, for successful implementation of KM, our experience has
been that this is not easy. One of the reasons for this difficulty
seems to be our inability to articulate to the senior management
in a persuasive and convincing way, what knowledge management
is and why it needs to be a corporate priority initiative. The
way KM is described, it is often seen to be fuzzy and amorphous
by many senior business managers - it is either seen as IT applications
(Knowledge portals / content management tools etc.) or HR (organizational
culture, performance development plans, rewards and recognition
systems to support organizational learning etc.). While both
are important enablers of KM, unless we are able to articulate
a holistic view of KM and how it promotes business excellence,
with some success stories, KM may remain somewhat peripheral
to the business. I am therefore keen to get some leads to companies
which have managed to integrate KM fully into their business
processes and strategic priority projects.
3. Another reason
for the difficulty in articulating KM to the satisfaction of
senior management may be:
Every company does
manage its knowledge / intellectual assets, adopting some knowledge
processes, even though it may not refer to that as knowledge
management. For example, the Innovation process management in
our company is, in my view KM, even though we do not refer to
it as knowledge management. Somehow, when people talk of KM,
it seems to always include reference to some communities of practice
and knowledge portals.
Possibly, one of
the key issues is - how deliberate, explicit and structured is
this management of intellectual assets / leveraging of collective
knowledge in the concern? Will such a deliberate and explicit
process for managing collective knowledge of an enterprise make
a significant difference to the performance of the business?
If we were to see
KM as explicit and structured management of collective knowledge
in an enterprise, the structures and systems of knowledge management
are likely to be dependent on the nature of the business and
organizational culture. What is an appropriate KM solution mix
for one type of industry / company may not necessarily be ideal
for another. It is in this context, I am keen to learn of KM
practices and success stories in industries other than consulting.
4. Much of the discussion
and debate in our AOK CoPs is between KM consultants, experts
and knowledge managers. These discussions do not seem to fully
capture the difficulty in establishing that KM is not a stand
alone, separate initiative, but is an approach to managing business
excellence through collaborative team effort, making effective
use of enablers like knowledge structuring tools and techniques
and information and communication technology getting senior management
buy-in. I feel we will benefit if the barriers to KM and solutions
are discussed both from the perspective of KM consultants / specialists
as well as senior operating management in companies.
5. When we look
for KM success stories, most of the case studies one comes across
seem to be from either the consulting industry or industrial
selling / service industry. I have compared notes with some of
my KM colleagues in Unilever. While we do have a few success
stories, we feel, on the whole KM is still in early stages of
implementation in our concern. I am interested in some leads
to successful company wide implementation of KM in the consumer
goods industry.
Editor's note: Look for Tom Stewart's
comments on Murty's points in Tom's closing remarks.
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That I.T. Doesn't Eat Its
Own Dog Food Astounds Me
Pauline
Harris, content manager, knowledge management, American Institute
of Certified Public Accountants:
"I think realtime cannot function if the IT guys are in
control of your organization, meaning, your staff cannot effectively
do their work because of constant hardware and software problems.
Tom
Stewart:
Brava, Pauline.
Half a dozen years
ago I wrote a piece for Fortune describing the never ending struggle
between the technocrats and the humanists, constantly warring
parties struggling for the managerial and organizational soul.
It astounds me that IT systems don't eat their own dog food.
For example: Computer
diagnostics will tell you if your car needs servicing, and can
do so in realtime; they can do the same for a photocopying machine.
But they will not do it for computers. I've had a computer's
hard-drive die on me (thank god the data had been backed up).
Techies told me there are warnings signs of this. Why didn't
the computer give me a message: "Hi, this is your hard drive
and I am having trouble breathing. Get me to the hospital ASAP"?
That, on a micro
level, is part of a macro problem with knowledge management in
general. Why is it so complicated to put content up onto a web
site? How can you run, say, a big catalogue on the web if every
price change has to go through one of a few designated webmaster/bottlenecks?
There are some small companies (Interwoven, e.g.) that
are working on this problem, but still.
Or take peer-to-peer.
When Napster first came out, I railed against it (as a producer
of intellectual property, I don't like the idea of a technology
that stealing it easier) but immediately started plugging the
idea that napster-like technologies should be picked up by knowledge
management people - here's a technology that makes it very easy
to share files/knowledge, makes it possible for me to drop by
and pick something off your shelf without disturbing you.
There is an issue
of size in all this, which hasn't been brought up. Radical empowerment
and deep knowledge sharing are hard to do in organizations of
25,000 people. I am told that the book The Tipping Point
suggests that the maximum size for real community-type sharing
might be about 150 people. That raises organizational design
questions. Is it possible to make a honeycomb company, where
all the cells are 150ish people, and build it out to significant
scale? And what would the role of IT be in that kind of company?
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F2F Still
Important to Communication
Paul
Cripwell: When
writing e-mail you can expect the reader to arrive at some other
interpretation of your message.
Pauline
Harris: I
think your point is well taken. I also think that one of the
ten (Mark Breier) tips covers your point: if you haven't figured
it out in three e-mails, time to get up and actually go talk
to the person!
Tom
Stewart: The
work of Thomas Allen, from MIT, still holds up. One of the most
consistent, important, and ignored pieces of research about knowledge
sharing is this: It won't happen if people are not near each
other. In a landmark study in the 1970s, Allen examined how often
researchers at seven different laboratories communicated with
their colleagues. On random days over periods of three and six
months, participants were asked with whom they had communicated
that day about technical and scientific matters - i.e.,
questions about the wife and kids didn't count. The interactions
were matched against the walking distance between the researchers'
desks. The shape of the doward hyperbola is astounding - it drops
precipitously. Ten meters between desks - thirty -four feet -
is all it takes for communication to become a trickle.
That's research
from the 1970s, before e-mail. E-mail might help a little, because
it's close to realtime, so it is more like speech. (Before, if
I sent you a memo, it might take 24 hours to get from my office
via the mail room to your desk, even if you sat three offices
down from me.) But the single biggest misdirection of resources
in KM, it seems to me, is its attempt to use technology to replace
face-to-face contact. It should instead use technology to enhance
and increase face to face contact.
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Empowered People Will Overcome,
But . . .
Joe
Katzman:
Pauline Harris wrote: "I think Joe's hit on a fundamental
dilemma we in the trenches face daily, that of empowerment forcing
a new way of thinking."
Joe
Katzman:
Not so much that it forces the issue, but that truly empowered
people will naturally do things that work to remove delays from
their work processes. Everyone wants stuff from them quickly,
so they have a strong incentive to build systems to support that.
As the successes
pile up, the cumulative effect is to begin moving the organization
(or part thereof) toward realtime. Which then begins to create
strains at the management level as soon as the enabled velocity
exceeds that which is comfortable for the management structure.
This is often the
critical juncture, where innovations can either be deliberately
crushed - or where the enabling structure starts to create changes
in the management structure. These changes then lay the groundwork
for further improvements. Firing the managers who make the wrong
choices at this juncture and promoting people who are likely
to do the right thing is probably the single biggest lever for
change in any organization. This is what Kotter means when he
talks about the importance of removing obstacles to change as
a key mid-game strategy. This is also what chaoplexity theorists
like Pirgione mean when they talk about systems reorganizing
at higher levels of complexity and throughput.
Tom, have I got
the picture here?
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Fire the Bastards If You
Must
Tom
Stewart: I'm
always loathe to say "fire the bastards" is the solution
- but if they truly are bastards and truly are making change
impossible, it may have to be done. It was at a midpoint in GE's
change that Welch came out with his famous "there are four
kinds of managers" analysis: The manager who doesn't make
the numbers and doesn't share the values: Out. The manager who
doesn't make the numbers and does share the values: A second
chance. The manager who makes the numbers and doesn't share the
values: Out. The manager who makes the numbers and does share
the values: The sky's the limit."
The third type is
the toughest, Welch said, but has to be removed. Now, GE's got
a more aggressive HR culture than most places, one of relentless
culling of the herd; that might not work elsewhere. Bob Buckman
said something kinder and gentler that works for him: The most
important signal a CEO can give, he said, is who gets promoted.
Promote people who believe in knowledge sharing, and make a point
of saying that their behavior led to their promotion. Promote
people who understand the kind of delegation realtime management
requires, and make a point of it. Pass the others by, leave them
in backwaters; the message will become clear.
Pauline
Harris:
If the I.T. guys are in control of your organization, meaning,
your staff cannot effectively do their work because of constant
hardware and software problems. IT does not provide help in a
timely manner, does not provide ways for staff to help themselves
(cheat-sheets, trouble-shooting seminars) and throws even more
"toys" at us.
Joe
Katzman:
I agree that I.T. is often the problem, but not necessarily in
this way. One key problem I see is that improvements get halted
because IT has standardized on the wrong tools for the job (and
won't back away). I vividly recall a conversation with some I.T.
turkey in the insurance industry. Seems his users were all asking
for a web-based intranet with search features. I know this because
he told me so. His (and I.T.'s) response was to give them a Lotus
Notes system, with fragmented databases and no central search,
and call that an intranet. Web-enable the databases with Domino?
Create a centralized search capability? Those things weren't
on the priorities list.
I don't think he
was fooling his users. He certainly wasn't serving them. As Monty
Python puts it: "it's people like you wot cause unrest!"
A second issue arises
with tools that are provided, but that require a lot of specialized
help to maintain and/or modify. When minor changes require a
long exercise with I.T. for prioritization, change in the system
slows to a crawl. Especially if you want to move toward realtime,
it seems to me that the front lines need to be able to make changes
in the system quickly, easily, and whenever possible - directly.
Anything else puts the project or application on too long an
evolutionary cycle.
That's often the
difference between eventual success and failure, especially in
an area where the likelihood of getting applications right the
first time is very low. An adaptable organization needs adaptable
systems . . . the challenge for I.T. is to do that within a robust
overall infrastructure, and that's usually a management and mindset
challenge more than it is a technology challenge.
Tom, have you seen
the "centers of excellence" approach as a useful enabler
along the real time path?
Tom
Stewart:
I think this is a key point. When the automobile first came out,
there were estimates (from Daimler, I think) that the total market
for cars would never be more than some risibly small number -
a quarter of a million, perhaps, but don't quote me. The limiting
factor: At that time, cars needed chauffeurs, and only so many
people would afford them.
Knowledge management
tools, if they are to become the day-to-day tools of the business,
needs to be as simple as the telephone.
Pauline
Harris:
I.T. is certainly not the enemy, but when your I.T. department
has lost sight of who the customer is, you are in big trouble.
Joe
Katzman:
Cisco's I.T. department works on a market-based model. This is
obviously very helpful; indeed, I'd argue that it's a key (and
often overlooked) underpinning to their success.
As the successes
pile up, the cumulative effect is to begin moving the organization
(or part thereof) toward real time. Which then begins to create
strains at the management level as soon as the enabled velocity
exceeds that which is comfortable for the management structure."
Tom
Stewart:
This is a very key point. It can work both ways, though. I've
seen companies where the management team was operating at 60
mph but the rest of the company - first-line supervision, etc.
- was plodding along at 30. Either way, the strains, the fault
line, comes at the level of middle management, which has been
used to collecting data for the top guys and translating strategy
into budgets for the bottom of the organization, and whose role
has to change.
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Helping the World Cope and
Capitalize on the Knowledge Age
Jerry
Ash, AOK chief executive:
Tom, I'd like to retell this story as a means of explaining just
how much your visit to AOK has meant to me.
In the early 70s
I finally left college after umpty-ump years as a student and
seven more as an assistant professor of journalism to pursue
the even more idyllic life of editor/publisher of my own weekly
newspaper.
Over 13 years I
learned many lessons; one of them was that a general assignment
reporter became a little bit knowledgeable on everything, but
an expert on none. It was a wonderful learning experience, but
when I measure it against Tom Stewart - well, let's just say
I know the difference.
There are too few
"beat" reporters left today - people who cover complex
subjects so consistently and thoroughly that they not only become
"experts," but they actually understand what they are
being told. How I longed for a reporter, during my healthcare
days, who had even a basic understanding of the subject!
Anyway, Tom, we
are not just Fortunate to have you here with us for two weeks.
We are Fortunate (yes I know I'm capitalizing here) to have a
knowing advocate like you in such a key position on one of the
world's leading business editorial boards - Fortune magazine.
The "knowledge business" still has much credibility
to build, and your ability to say it, to be heard and to get
the right people to listen, is as important to the KM movement
as your understanding of it.
So I thank you,
Tom - for two weeks at our table, and a career currently focused
on helping the world cope and capitalize on the Knowledge Age.
It is becoming a
tradition NOT to say goodbye to a guest moderator. Along with
all the others in the STAR SERIES, Tom has decided to become
a full Triple Plus member of AOK. So, it's not "goodbye,"
Tom. It's "welcome." We are building a KM community
here - and, with the additions of people like you, the "network"
is looking pretty darn good so far!
Thanks again, Tom,
for a great two weeks. We look forward to your next book, and
we are eager to have you back in the "Star" seat when
the book's published.
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Applauding
the Audience: The Benefit of Knowledge Exchange
Tom
Stewart:
In Russian theatre there's a tradition, I am told, for the performers
to applaud the audience after they have taken their bows, and
in addition to accepting your thanks I'd like to extend mine.
You and I both know, Jerry, that a journalist is only as good
as his sources - and that a source is only as good as the questions
asked. It's mutual, and if this discussion has been stimulating
to you all, it's also been stimulating to me. I was particularly
interested in the discussions, in the second week mostly, about
the migration path toward realtime management, and I think a
couple of excellent points came up.
First, indirectly
but overhanging all, the question about top management buy-in
so eloquently described by Srini Murty. Second, the discussion
of what you might call the midlife crisis in change management
- that midstream moment when "returning were as tedious
as go o'er" and a new resolution (and perhaps changes in
staffing) are needed. Always, I find, what makes change work
is a compelling business necessity or opportunity. Knowledge
management's no different.
As for the new book
- yes, it's coming, I hope in January of next year. I'd love
to return to the podium; but for now I'm looking forward to sitting
in the audience.
Tom
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KM Tools Need to be Simpler
than the Telephone
Note: Tom's tenure in the "Star Seat" ended before
the receipt of this post. But posts don't go unanswered. See
the editor's response below.
Garold
(Gary) L. Johnson, DYNAMIC Alternatives
Simplifying KM Operations
Tom Stewart wrote:
"Knowledge management tools, if they are to become the day-to-day
tools of the business, needs to be as simple as the telephone."
Or even simpler.
Currently the user is responsible for knowing the indexing system
that connects the people he wants to reach to the switching system
at the location (connection to the system) where they can be
found. The story goes that in Japan for a long time, operators
provided the memory and lookup because it was considered impolite
to equate people with numbers. To make a call you picked up the
phone and asked for the person you wanted. Now that's
simple!
An analogous knowledge
system would let you ask for what you want in much the same way
you ask a professional librarian - ask for it in any number of
ways and get a response that is nearly as good as though you
had the librarians intimate knowledge of where to look for information.
I had occasion years ago to do research in Pittsburgh at the
Cathedral of Learning, which is staffed by seniors and graduate
students in library science, and that was the way research went
- I had no clue where to start on the topic I had to find information
on, I just asked, and the books and references kept coming. There
were a few bad hits, but mostly I got only pertinent information
down to the book section or article - nearly nothing but "meat".
I agree that the
system must be as simple to use as the telephone since the argument
that was given for limited markets for telephones was that everybody
would have to become a telephone operator for the numbers to
rise beyond a certain point, and that is essentially what we
have done. A similar argument applies to knowledge workers.
The question is,
how do we simplify the operations of knowledge management, which
are far more complex both in size and interconnectedness than
the problems posed by connecting phones? Thinking, particularly
organized thinking, is not something that most people do well.
Thus capturing information in a way that is suitably indexed
becomes a major problem. Then when that same information is needed
with a slightly different index, how do we find it? We haven't
solved this problem in libraries yet, where the problem is analogous
to phone switching - connect a description, possibly vague and
uncertain, to a reference identifier (Dewey decimal number, ISBN,
publication reference, etc.) based on content. That we need to
make simple enough that everybody can both retrieve information
from the system by content and add information to the system
effectively so that it can be found by others using any "close"
description of the content or type of information contained.
Editor's response: Thanks for your posts,
Gary, and please keep them coming. We need more AOK members like
you. I've also said for years the Internet needs more librarians!
"Content management" is hot right now, but the focus
seems to be on software that can somehow match or outsmart people
in the process of sorting through the billions of documents on
the Internet floor. You have to believe that software can outperform
humans on the basis of volume. But, quality still depends on
the human component. At AOK, we have been tediously building
15 KM libraries one human judgment at a time. As a result, we
are receiving pretty good marks from members and visitors as
a rich content site. Look Ma, no CM software! Of course, we would
love to have some - as a tool for the LIBRARIAN. - Jerry Ash
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