Posts Tagged ‘Strategy’

Should we ‘Abandon Stocks and Embrace Flows’?

January 30, 2009

In a very interesting blog post John Hagel III, John Seely Brown and Lang Davidson look at the shift from organisations which horde stocks of knowledge in secret to those which actively participate in ‘knowledge flows’.

They explain that in the past, if you knew something which nobody else did it was effectively a license to print money, by protecting that knowledge and using it to create products and services based on that knowledge (i.e. the Coca-Cola formula). This attitude is ‘deeply ingrained in the minds of executives’.

Hagel, Seely Brown and Davidson explain that in this new digital age, where products and knowledge are changing ever faster, stocks of knowledge are depreciating at a faster rate than ever before. They argue that in order to keep up it is necessary to:

continually refresh our stocks of knowledge by participating in relevant flows of new knowledge.

They identify two challenges with participating in knowledge flows:

  1. Knowledge does not flow easily
    • tacit knowledge (‘know how’) typically relies upon active knowledge sharing, Nonaka & Takeuchi (1995) describe master and apprentice traditions in Japan, this usually requires long-term trust-based relationships.
  2. To participate in knowledge flows over the long term it is necessary to also provide your own knowledge.
    • Participants in knowledge flows do not want people to take advantage of their knowledge for free (“takers”) so those who do not give enough knowledge back in return will find themselves increasingly marginalised.

Towards the end of their post they describe a technique for making the most out of knowledge flows, and show how spikes of knowledge and expertise have materialised across the globe (Silicon Valley, Bangalore, St. Petersberg), where like-minded people and organisations gather they exponentially enhance knowledge flows and we have all seen the success of businesses in these locations in developing cutting edge products and services.

What does Richard think about this?

These ‘knowledge flows’ remind me of communities of practice, as discussed in some Knowledge Management literature, where like-minded people are brought together to share their knowledge and experience with others, providing valuable transfer of knowledge and hopefully boosting their performance and making their organisations more successful.

I personally like the idea of knowledge flows, especially in fast moving sectors where it is necessary to maintain your own knowledge to enable your organisation to continue to deliver relevant and current products and services.

Could it be utilised within the automotive industry I wonder? I know some manufacturers have technological partners in developing the latest technology (i.e. Nissan and NEC developing new batteries for electric cars), and also their R&D divisions often have close links to universities. But the idea of knowledge sharing between automotive companies would be very difficult (except between partners), due to the secretive nature and very long lead times for development. Many automotive companies duplicate time, effort and money in developing competing new technologies. So I can’t really see it happening in the automotive sector. However, I could see them working with technological leaders in other sectors to share knowledge on similar technologies.

I might look at this further in a later post, so stay tuned…