Major
information flows in organizations, c. 1975
One
of the most important things I've learned in the last few years is
that, except for senior management, no one in most organizations really
understands what the business of the organizations is all about -- how
decisions are made, what information is used and how, etc. And, at the
same time, senior management really has no clue about what goes on at
the front lines of their organization, or outside their organization --
what potential new recruits think, what customers really think about
the organization, etc.
This should be obvious, if you think about it. Senior managers are
insulated from the front lines and customers. No one wants to tell the
boss what's wrong with the organization -- it's a career-limiting move.
And senior managers are too busy to spend much quality time with either
employees or customers. To the extent they interact with customers it's
with the senior managers of those customers, who are likewise
unenlightened about what is going on in their own organizations. So
decisions are made, often, in a vacuum, based on deficient and filtered
information.
As for the line employees, they usually have never been exposed to or
taught about what goes on in other parts of the organization, or how
managers make decisions. This is getting worse: The current generation
of young employees are likely to work in 12 organizations in their
careers -- not enough time to really figure out "the business of the
business" in any of them. The tragedy is that often neither they nor
their senior managers think they need
to know what the business is all about, unless and until they become
senior managers themselves. So most employees spend their entire
careers feeling under-appreciated, disconnected, unconsulted, and
annoyed at stupid instructions and useless information requests from
management. An they have a ton of very useful information about
customers, operational ineffectiveness, and what's going on in the
world and the marketplace, that is never solicited, and never proffered.
I care about all this because I have spent about 1/3 of my career in an
area called Knowledge Management. This discipline began about 15 years
ago, and has largely followed the track of other business 'fads' like
business process reengineering and total quality management -- a flurry
of investment and enthusiasm, followed by disenchantment and finally
abandonment.
The problem with KM is that the people charged with introducing it into
organizations were mostly front-line back-office people -- middle
managers with a background in library management, IT or training. Few
of them really knew how decisions were made and resources allocated in
their organizations. The library people saw KM as a content management
exercise. The IT people saw KM as a set of technology projects
(intranets, extranets, groupware). The training people saw KM as an
e-learning vehicle. Senior managers were mostly unenthusiastic, worried
that it would spawn more IT bureaucracy like e-mail, and not seeing any
new value provided by it. Their hope, tragically, was that KM might
automate some back office functions and allow cost savings (e.g.
blowing up the corporate library).
We might be able to understand the reasons for KM's failure if we
looked through the eyes of senior managers, front-line employees, and
customers, at the value of information to organizations. The diagram
above shows how this looked in the days before ubiquitous computers --
say, in 1975.
At that time, internal memos, typed up by secretaries, instructed
front-line and back-office employees what to do, and required them to
report production data that managers could use for making
decisions. Written information flowed vertically, not horizontally.
Managers talked with other managers, and employees talked with other
employees, and occasionally with outside colleagues, to learn their
jobs and share what they had learned. A few employees had started using
the Internet and other electronic sources of information for research,
but most research was done using the internal library or outside
journals. Customers received printed marketing material from the
organization, and submitted their orders. These were the principal
information flows in organizations at that time.
This actually made a lot of sense, when you consider how senior
managers saw, and operated, their organizations. The job of senior
managers was and is to make the organization sustainable. Managers do
this by making critical decisions, issuing instructions, capturing
performance data, and tweaking those decisions accordingly. The
variables they need to watch and make decisions about are:
- Cash flow: The net
result of sales, investments, loans and share issues, government
incentives, operating expenses, R&D, dividends, and capital
expenditures.
- Share price:
Investors' assessment of future growth in cash flow, which is critical
to obtaining low-cost capital.
- Risks and
opportunities: Threats from new and existing competitors, a variety of
threats to reputation and business continuity, regulatory changes, rate
changes, supply changes, frauds, disasters, and opportunities to
innovate, make acquisitions, outsource, reorganize or change capital
structure
To manage cash flow, they pressure employees to find ways to increase
sales and reduce costs. Budgets, resource allocations, and monthly
targets and reporting are their levers for doing so. To manage share
price, they need to ensure that cash flow is always steadily rising.
When cash flow from operations fails to meet targets, they look at
layoffs, outsourcing, capital budget reductions, increasing government
incentives through lobbying, cutting dividends or reorganizing (e.g.
divesting unprofitable operations).
To manage risks, they will acquire, sue or out-advertise competitors,
hire PR firms to whitewash and greenwash their social and environmental
misdeeds, put controls in place to reduce risk of fraud, buy insurance
and hedges to reduce exposure to rate changes and disasters, lobby
against new regulations, lock in or acquire suppliers, outsource
non-critical operations.
To manage opportunity, a few will invest in innovation, but for most
larger organizations, it is much safer to acquire small innovative
companies, to use leverage (borrow from the bank) when interest rates
are lower than profit margins, and through planned obsolescence by
constantly forcing customers to replace or upgrade, and locking them in
to the organization's product.
This is what senior managers do. It is not surprising, therefore, that
they tend to see IT, KM and training as "non-value-added" activities.
They were getting the information they needed before the advent of
computers, so why should they invest in new IT and KM projects? And
since they expect and receive little loyalty from employees, why should
they invest in training them, when the essential knowledge they need
must be obtained "on-the-job" anyway?
In the 1980s and 1990s, most organizations invested in three new
technologies, mostly reluctantly: fax, e-mail, and intranets. Fax was a
faster and cheaper way to send marketing materials to customers and to
receive orders, and send instructions to and collect performance data
from remote operations, and it was not an expensive technology to
introduce. Its heyday was a mere decade.
E-mail and corporate intranets were introduced in most organizations in
the 1990s. Senior managers expressed concerns that e-mail would be a
scourge, and many attempted to limit its use. They were right about it
being a scourge, but not successful in limiting its use. It was a
stealth success -- permitted because it was not that expensive, but
quickly used for mostly inappropriate purposes. Corporate intranets
were used at first to automate the two dominant types of shared
organizational information: policies and procedures, and directories.
Eliminating hard-copy manuals and directories was a welcome change, but
intranets quickly became massive repositories for millions of
context-free archived documents that were of almost no use to anyone
but the author. The consequence has been an explosion in complex server
technologies, taxonomies and search technologies -- for information
that almost no one finds to be of any value. Documents touted as
'reusable best practices' were dumped into the corporate intranet and
abandoned. Some organizations ended up hiring intranet 'garbage
collectors' to remove the most useless and obsolete content.
To try to connect to customers, many organizations in the 1990s and
2000s have invested in 'extranets' (websites that only customers had
access to) and sophisticated, interactive public websites.
They found to their chagrin that decision-makers in most organizations
were too busy to visit their websites, and that most of the people
browsing the web pages they had so carefully crafted were job-seekers,
students doing papers, the competitors, and the media.
So here we are in 2009, and the principal information flows in most
organizations are still exactly what they were in 1975, as depicted in
the chart above. What's changed:
- Instead of typed
memos, instructions are now sent to employees by e-mail; performance
data is sent back up to management by e-mail, or captured
electronically automatically.
- Peer-to-peer
conversations are still mostly real time and face-to-face or
voice-to-voice (or IM); asynchronous conversations in e-mail threads
are arguably the least effective. E-mail has allowed more conversation
with colleagues outside the organization, and with young workers much
learning occurs through such conversations, though IT security in most
large organizations prohibits many of the social media used by young
workers to communicate outside the organization, nullifying much of
this advantage and creating considerable animosity.
- The library has been
largely supplanted by the Intranet, but it is now much harder to find
things and there are fewer information professionals able to help you
find stuff, so searching takes longer and is less effective. The
Intranet in most organizations is still used principally for the same
two purposes: looking up policies and procedures, and directories. Most
other Intranet content is unused or in some cases misused.
- E-mail has allowed a
massive increase in the amount of work delegation between employees in
most organizations. It is easier to delegate work when you don't have
to face the person you're asking to do it, even though the chance of it
being done well is less. E-mail also allows much more procrastination
in organizations -- people send requests for information to others
Friday afternoon, as an excuse to put off working on a project until
the next week. There is considerable evidence that e-mail has had a
significant negative effect on productivity and work effectiveness,
because there is no accountability to the sender for time of the
recipients that has been wasted, and because it costs nothing to send
an e-mail to an unlimited number of recipients.
- After a period of
disintermediation (people doing their own on-line research instead of
having librarians, assistants or information professionals do it for
them) there has been a swing back to reintermediated research, as most
employees learned they lack the significant competencies needed to do
quality research. Young workers tend to still do their own on-line
research, but only until they find an appropriate intermediary and
reach the level at which they are permitted to delegate research.
- Most marketing
material is now sent by e-mail and also duplicated on the
organization's public Internet site, but in these electronic forms it
is mostly unread.
In other words, in adding to the volume and complexity of information
systems, we have added relatively little value, and in some cases
actually reduced value. The reason for this is simple:
- We have not done
anything to substantively improve the ability of senior management to
manage the business (i.e. to manage cash flow, share price, risks or
opportunities).
- We have not done
anything to substantively improve the effectiveness of any of the
information flows (arrows in the above diagram) that matter in
organizations, or the quality of the information.
We have, in short, implemented a solution that addressed no problem. We
introduced new KM tools because we could.
If that were the end of the story, we could just shrug off KM as
another business fad and move on. But there is something happening in
organizations today that is beginning to improve the quality of
information and the effectiveness of information flows that
matter, something that creates a second opportunity for KM people to
actually do something useful.
What is happening is that people are beginning to manage their own
information, and information processes. They are finding workarounds to
the dysfunctional processes in the organizations they work in. They are
finding ways to draw on people in their growing online networks to do
their jobs better. They are realizing that, if tomorrow's workers will
end up working in a dozen different jobs in their lifetimes, they need
to take responsibility for their own learning and their own knowledge,
and take it with them from one job to the next. Increasingly, they are
keeping their knowledge in their own personal repositories, and in
their own personal networks.
I have written before about what I call Personal Knowledge Management,
which is an attempt to enable workers to do this more effectively. My
problem was that PKM is impossible to sell to senior management,
because it has no value for them. I toyed with the idea of trying to
sell it front-line workers directly, perhaps by starting a magazine
called Working Smarter. The problem with this is that everyone is at a
different stage in their evolution towards PKM, and there are no
standard answers or approaches -- we each have to muddle this through
for ourselves, based on our own 'knowledge set' and information
behaviours.
But perhaps if we outlined a future scenario of where this PKM trend is
headed, we might be able to evolve an approach that would accommodate
the needs of both individual workers and the organizations struggling
to cope with this phenomenon.
To this end, let me start with a story of a young business analyst
named Jon:
Jon
spent the first week in his new job with Giant Co. trying to port all
the information, contacts, subscriptions, and software tools he had
been using in his three previous jobs to his new company-supplied
computer. He was stymied at every turn. He was not allowed to put the
tools he was familiar with onto his new computer because they were "not
supported" by his new employer. He was blocked by the security firewall
from using webmail in the office ("we consider this to be something
employees would only use for personal non-business purposes") even
though all his business contacts and subscriptions were on it. He was
blocked from accessing YouTube (where many of the videos he had
prepared for his previous employers, and some educational videos he
referred to regularly, were stored). He was blocked from using IM and
Skype, so he was cut off from his global network of experts and
colleagues who used IM and Skype exclusively for instant, free
knowledge sharing, advice, and quick lookups of useful research
materials. He was blocked from using Vyew, so instead of being able to
call people outside the office for quick, free conferences with
screen-sharing, he had to use the company's expensive pay-per-use audio
conferencing system (and everyone on the call had to be
pre-authorized), and send a huge deck of screen captures by e-mail to
participants in advance. He wasn't permitted to work from home. When we
worked on weekends from home, his web access to his work e-mail didn't
work properly, and because his co-workers didn't use it, he was told it
would be months before they would start trying to fix the problems with
it. After a long delay, he was approved for VPN, but only on his work
computer, so he began lugging it home every day, only to discover that
it degraded performance so much that even accesses e-mail with it was
agonizingly slow.
His boss dropped into Jon's cubicle about six weeks after he had
started work, and found Jon working away happily. But to the boss'
surprise, Jon had two computers sitting side-by-side on his desk. Jon
explained that his work computer was connected to the organization's
network, and he used it only to access messages and documents behind
the firewall, which Jon would immediately forward to his personal
e-mail account, or (using a USB drive) quickly transfer over to his own
machine. All work was done on Jon's own machine, which was connected to
the Internet (and all Jon's contacts, subscriptions and documents) by a
wireless connection that Jon paid for personally. Because all Jon's
outgoing e-mails came from his own machine, 90% of the e-mail he was
receiving from fellow employees was now being sent to his personal
e-mail address (most people didn't notice or care that Jon's 'reply to'
e-mail address on his messages wasn't his company e-mail address). Ten
of his co-workers at the company had followed his two-computer example,
and were using IM rather than e-mail for their communications. The boss
asked whether it didn't take a lot of time to transfer between the two
machines, and Jon replied "Less and less all the time". Jon's boss left
the office unsure whether to praise Jon for his innovative workaround,
or report him to IT to make sure Jon wasn't exposing the company to
security risks.
This is a composite of a number of real cases of young people working
around dysfunctional information systems I have witnessed in the last
two years. I expect it's going to become more and more common.
Let's suppose that, in twenty years, Jon's information behaviour
becomes the norm. Eventually organizations will have to face the
problem, and end the guerilla war that is brewing between the IT
security people and Gen Y in a growing number of companies and
institutions. I think it is unlikely that most will be able to resolve
the perceived security threats in such a way that they could allow the
Jons of the world to do what they want inside the firewall. What is
more likely is that, just like the calculator and telephone, the laptop
(soon to become even
smaller and more powerful) will
evolve to be a ubiquitous personal device that people will carry with
them everywhere. At that point having redundant computers (and phones)
on everyone's desk will become absurd, and IT security can start to
focus on protecting confidential data from being accessed,
rather than trying to lock down employees' appliances. At that point,
the role of the rest of IT, and KM, will have to change completely.
Here's a scenario of how I think it might look:
Major
information flows in organizations, c. 2025?
In 2025, every individual in every organization uses their own personal
computer for both personal and work applications. Almost all
information is Web-based, with organizations' proprietary information
only accessible through authorization software. E-mail has disappeared,
replaced by a virtual presence application that includes instant
messaging, screensharing, voice/videoconferencing, filesharing,
calendaring, tasklists. Employees maintain a Company Sector on
their machines in which they put information that can be accessed 24/7
by other employees. Most people also maintain a Public Sector on their
machines in which they put information that can be accessed 24/7 or
subscribed to by anyone in the world (this has replaced blogs and
applications like Facebook), and Community Sectors in which they put
information that can be accessed 24/7 by other members of that
Community. The aggregation of the Company Sectors of all employees of
an organization replaces the corporate Intranet of past generations; it
can be viewed by anyone in that organization. The aggregation of the
Community Sectors of all members of a particular community replaces the
community tools (forums, wikis etc.) of past generations; it can be
viewed by anyone in that community.
The IT department is still responsible for maintaining security around
the organization's proprietary information, but very little content is
left in this category. IT also checks that the information in
employees' machines' Company Sectors is appropriate for sharing, and
auto-replicating properly.
The KM department still manages the purchase of external information,
though almost all information in 2025 is free; information producers
have realized that their business model is to apply that information to
specific customers' business environment, in consulting assignments,
rather than trying to sell publications. Most of the mainstream media
were nationalized after they went bankrupt using their traditional
business models, and now operate as public services.
Most of what the KM department does now is trying to facilitate more
effective conversations among people within the organization and with
people outside the organization, including customers. They facilitate
many meetings that use the virtual presence application, especially
those that involve more than five people. That facilitation includes
organizing the meeting, distributing advance materials, facilitating
the discussion (conflict resolution, staying on schedule etc.), and
even recording, editing and publishing the meeting as appropriate. They
run courses in effective conversation, meeting and presentation skills.
In addition, the KM department conducts environmental scans and
conducts research in areas the organization wants to focus on, and
publishes and runs short video presentations on the results. They also
browse the content of the aggregate of the Company Sectors of all
employees of the organization, notifying managers and employees of
content that may be worthy of follow-up, and they assist employees to
manage their subscriptions to people's Public Sector content. And, when
the organization holds sessions and conferences on strategy, risk,
innovation or customer relationships, the KM department is on hand to
do advance and just-in-time research.
. . .
. .
If you're in KM, or in a business that has a KM function, I'd be
interested in your thoughts on this. I've been known to be a bit ahead
of my time in thinking about the future of business and technology, but
I think this scenario is quite feasible. The organizers of this fall's
KM World conference are looking for some thought leadership in this
area, and I plan to use this article to provoke some ideas from those
who have been working in this area as long as I have. So tell me what
you think.
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