Knowledge organisation: Getting the DNA right

Creating a culture where knowledge is at the heart of everything requires intelligent selection, leadership commitment and leading by example

Teaching a company to learn, turning it into a genuine learning organisation, is the only cure for cultures of ignorance. This is not a new idea. Writers on organisational knowledge, such as Peter Senge in The Fifth Discipline, Arie de Geus in The Living Company and Ikujiro Nonaka and Hirotaka Takeuchi in The Knowledge-Creating Company, have argued for creation of 'knowledge organizations' or 'learning organizations' dedicated to the creation of knowledge through learning, which de Geus famously claimed to be the only sustainable source of competitive advantage.

What do these terms actually mean? The term knowledge organization confuses some, who think it is a special type of organisation. Is there an opposite, a 'stupid organization', perhaps? Anyone familiar with my bank might well be forgiven for thinking there is, but that is not the point that de Geus and the others are making. Their manifesto is that organizations need to put the gathering and management of knowledge at the heart of their business model. A knowledge organization is not one that just collects a lot of facts and hoards them in its library. It also uses knowledge to innovate and create. It sifts knowledge from many different sources - not least from the minds of its employees,which are endless fertile and creative if we know how to engage with - and puts it to work to create value. It doesn't just do the same old things over and over because that is all it knows how to do; it searches for new things to do, and new ways of doing the same things better. This is what Barwise and Meehan advise in Beyond the Familiar: make yourselves experts in the art of incremental innovation by constantly looking for little things that you can do better.

Barwise and Meehan cite a number of examples of modern companies that do this, including Apple and Procter & Gamble. But the absolute master of knowledge management was a largely forgotten figure, Edward Cadbury. In the late nineteenth and early twentieth centuries, the Cadbury family turned a small English chocolate company into the global leader in the confectionery market, a position it held for more than forty years. Cadbury Brothers is remembered for its philanthropic activities, but the real genius of Cadbury was its model of knowledge management.

Edward Cadbury saw his employees as a vast source of knowledge and ideas. He developed several methods for engaging with employees and getting their ideas. There were suggestion schemes - not those fig-leaf schemes that some companies have, where employee suggestions end up in the waste bin, but real schemes where ideas were genuinely taken up and employees were rewarded. There were works committees, where management and workers sat down around a table and discussed strategy and innovation on an equal basis. Cadbury also hired employees of proven intellect who would be capable of working with and engaging with management. The result was an almost unique company where everyone participated in innovation and, as one observer noted, 'Everybody thinks'. The Tata Group also has schemes that recognise employee innovation and also one that I have not encountered anywhere else: an awards scheme called 'Dare to Fail'. Every year, three employees from across the group are singled out and rewarded for innovation efforts that didn't actually work, but were so audacious and ingenious that the Group wants them to keep trying. Tata has cracked the secret of how to learn from failure; and once you can do that, you really are managing knowledge.

Creating a culture where knowledge is at the heart of everything requires intelligent selection, leadership commitment and leading by example and organizational structures that support knowledge and learning. Both Peter Senge in The Fifth Discipline and Nonaka and Takeuchi in The Knowledge-Creating Company offer recipes for how to do so.

Source | Business Standard | 15 June 2015