By Bijoy Goswami, CEO, Aviri Inc., December 16, 2002

In the last ten years, thanks to leading thinkers such as Peter Drucker, organizations have come to recognize the power of knowledge as a source of competitive advantage. Numerous initiatives have been launched under the moniker of Knowledge Management or “KM.” In my previous article, “The KM Coat Collar” I argued that of the many places to start such initiatives – document capture, advanced technology or culture change – entirely miss the point. The real starting point is with individuals. Through understanding individuals’ unique drivers and talents, we discover how to support them in scaling what they already do, rather than fundamentally changing their behavior.

In this article, I will examine the area of culture change. KM practitioners have a distinct notion of the “new culture” they want to engender in their organizations – one where knowledge is always freely shared rather than hoarded, where individuals collaborate to solve problems rather than go it alone. While this notion has much surface appeal and caters to our idealism, it is, in fact, mistaken. We have unwittingly instated a kind of “corporate communism” inside our organizations. The parallels between corporate communism and communism carried out in nation states are striking and scary. “Nation communism” went through distinct stages of devolution, ultimately to totalitarianism. We see similar elements in corporate communism.

As usual, Drucker is right – knowledge is the weapon of competitive advantage in this century. To unleash the weapon of knowledge, however, we have to change our current organizational metaphor. KM practitioners must abandon the notion of communist collective they have unwittingly stumbled into and replace it with one we are very familiar with – that of capitalism. Knowledge is the economic good within the economy that is the enterprise - Smith trounces Marx yet again. A successful knowledge sharing economy within a corporation is unleashed only when, as Smith did, we treat individuals as self-interested agents, pursuing their own advancement.

Corporate Communism

Communism in nations took many decades to unfold. It started, innocuously enough, with Karl Marx’s famous manifesto. This doctrine captured the mind of Lenin, who engineered the first “revolution.” However, in order to gain the participation of the proletariat, Lenin’s Russia turned into Stalin’s totalitarian state. The state knew best about all things, including the allocation and pricing of goods in the economy. The politburo sitting in Moscow set the price of grain 4000 miles away in Vladivostok.

The first step in nation communism was that the state now owned all the farmland (and just about everything else). Individual ownership was abandoned. Instead, farmers were given the “great honor” of working the land collectively for the good of the country. In turn, they received a stable income, which was the same as their peers, even if they created greater output. In corporate communism, knowledge workers are told that the corporation owns their knowledge. After all, they signed a waiver at the start of their employment and signed away all rights to any intellectual property created while in the employ of the company. Now, as part of their duty to the corporation, they are asked to “give up” their knowledge by putting it into a corporate database.

Nation-communism, however, encountered resistance. Mao’s red book, the teaching of communist principles in learning iinstitutions, and the threat of the secret police were all methods to change people’s hearts and minds. If an individual was not persuaded, compliance was achieved through fear and force. In corporations, these indoctrination efforts came in the form of culture change initiatives. Workers were taught to give – to realize that their knowledge must be given up for the good of the company. Inevitably, they resisted – in the same way the hard-working farmer saw that giving up his land compromised his self-interest.

Internal corporation resistance came in the form of non-participation on the part of the employees. Unable to banish the worker to Siberia, “rewards” were put in place by the KM Politburo to motivate the individuals to participate. Asked to submit a number of documents to the knowledge database, they did so, with little attention to quality. As always, self-interest prevails: shown the rules of the game, individuals played to win. The result, document explosion and corresponding quality degradation. Faced with this, the KM Politburo invariably set up a submission process. Employees must now submit their documents to the corporate ‘Ministry of Information’ as it were, which then decides if the articles are worthy of the database. This is a task as futile and unsuccessful as the nation’s politburo, which tries to regulate the price of everything. Like their nation counterparts, the corporate Ministry of Information is soon overwhelmed by ever-increasing and ever-changing information. Invariably, it makes bad choices about what goes in the database, resulting in a highly restrictive set of information that cannot be easily applied to specific contexts. Furthermore, a huge backlog in submissions occurs. The bureaucratic red tape prevails. Finally, given the new and onerous process, knowledge workers are also further put off and submission rates decline. Back to square one!

Corporate-communism, as with its nation state counterpart has failed. Multiple real-world examples taken from efforts in the llast ten years of KM thinking and practice bear this out. It is not that our goal of unleashing knowledge in organizations is wrong; rather, it is the path we have chosen to get there. Happily, a familiar metaphor exists which will take us to the goal.

A Way Out of the Morrass - Back to Smith

Smith prevailed over Marx because he started with the proposition that individuals must be allowed to use their talents and skills to create goods and services that others could consume. Capitalism does not preclude sharing and collaboration. In fact, it has made conducive the right kinds of collaborations to occur. In the airline industry, for example, companies have created multiple alliances to respond to the needs of their customers who travel to global destinations. All manner of partnerships, joint ventures and such occur with increasing frequency in the world. As customers’ needs expand, so too must the offerings provided by organizations.

Conceptualizing our corporations as an internal marketplace where self-interested individuals trade their products and services lights the way towards unleashing the power of knowledge in firms. Indeed, not only is it a way forward, but it is an accurate description of how things occur within organizations today.

Let’s map the different elements of macro market-capitalism to the micro corporate-capitalism. These are:

• Sellers – knowledge workers who own their product or service.
• Goods/services – knowledge, relationships and actions.
• A currency – not cash to create wealth, but reciprocity which enhances personal reputations.
• A transparent marketplace where demand and supply can be matched.
  

Sellers, by definition, get something in return for providing their product. Likewise, sellers in the corporate marketplace must not be asked to give up their product without receiving something in return. What is the product? Broadly: knowledge, relationships and actions. These “products” correspond to mavens (specialists with particular knowledge), connectors (people who put people in touch with one-another) and evangelists (salesmen who connect people to ideas), as outlined in my previous article [1]. A functioning market requires a currency. Within the corporation, cash cannot be used as a currency of exchange. Conveniently, a much more basic currency mechanism already exists and is used every day by individuals – reciprocity. In return for help offered, an individual might expect to receive one or all of the following: recognition, an enhanced relationship, and the potential of future help. Lastly, a transparent marketplace is needed so that individuals can understand the overall “demand” for their goods and match that with appropriate supply. This marketplace already exists within corporations – it just happens to be very inefficient. In the same way that a local bazaar does not scale to the needs of a nation, so the bazaar of the hallway conversation does not scale in our modern corporations. Enter technology – marketplaces must be built for the corporation and will encompass all the elements outlined earlier.

Corporate marketplaces have other properties that should appeal to us. They are self-sustaining, do not require the KM Politburo and its Ministry of Information, and require minimal ongoing effort on the part of the Knowledge Manager. They also change the role of the KM team from having to produce and store the knowledge to facilitating the smooth functioning of the knowledge marketplace – becoming market-makers. Second, marketplaces will be self-regulating – knowledge areas of higher demand naturally rise to the top, while others wane. Individual agents can react to these changing demands by developing new skills and areas of expertise. Knowledge managers and those responsible for learning can also appropriately allocate resources for training and development.

Change the Metaphor and Success Will Follow

Our mental models and metaphors guide our KM initiatives. If this article causes leaders to critically examine the metaphors we have been using in knowledge efforts (and indeed, in other areas of our corporations, such as customer relationship management), I would consider it a success.

Changing our metaphor – or rather, returning to a familiar one that has been battle-tested in much larger contexts – will create the kinds of dramatic results we expected when we started this journey a decade ago. Once we subscribe to this “new” metaphor of the marketplace of knowledge, we begin to make real headway. An additional positive side effect might be the introduction of a new term, Knowledge Marketplace that more accurately describes what we are trying to create.

REFERENCES

[1] See “Picking Up Your KM Coat” article.

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