Unintelligent Enterprises Revisited

David J. Skyrme

Prompted by a question at his book launch (see Knowledge Digest by Leif Edvinsson: "What is the difference between a learning and intelligent organization?"*, I was prompted to revisit the very first I3 UPDATE feature (in issue No. 1) entitled 'The Unintelligent Enterprise'.

Indeed, earlier that day we seemed to have an example from the UK government. A proposed Regulatory Investigative Powers Bill, that would give many department, ranging from social security to health and safety, the right to view private emails was abandoned. The ministers admitted "making a mistake" when they kept trying to push the measure forward when all the intelligent people around them said it would be highly contentious. More widely known is the demise of Enron and to some extent Andersen, which most people would agree had some very intelligent people working for them.

So why do many organizations often seem less intelligent than the people who are part of them?

Scaling Up Is Hard To Do

One of the problems is scaling up. Every day we learn more and more about the wonderment and complexities of the human brain. In our early update, we put the intelligence of computers less than that of a slug. Perhaps today, they are a bit past that, but well short of the intellect provided by the 100 billion or so neurons in the average human brain. However, we cannot easily connect human brains together to amplify their power. What we can do is exercise and stimulate them, through all the techniques of knowledge discovery and learning, so that each of us individually has more connections.

What we can scale up is some part of memory. I don't know about you, but I have difficulty in recalling facts that I should know. However, my databases on my computer, and the wealth of resource on the World Wide Web is a great help. When we talk of organizational memory, at one level we are referring to the collective resources on an intranet. Of course, they are not as well connected as those in the brain - there are hyperlinks to some relevant pages, but not all. The difficulty of course, is the effort to turn our tacit knowledge into explicit, and then all the overhead (sorry - I mean knowledge management added value) of organizing it and making it readily retrievable and usable by others.

And although progress is being made in neural networks and natural language analysis, it will be few year yet before a tightly coupled network of computers matches all the capabilities of the human brain and many more before it can match the collective brains of an organization. If you consider other aspects of knowledge processing, such as pattern recognition, problem solving, synthesis, analysis, some scale up better than others. For example, it takes many years of just two people working together to act seamlessly like a single scaled up mind with attributes of both - some would say never. In other words, some aspects of an individual brain scale up better than others; some can scale up better through computerization, others less so.

Characteristics of An Intelligent Organization

Before going further, it might be useful to consider what characterizes and intelligent from an unintelligent organization. An organization is highly intelligent when it:

• has broad sensing mechanisms - capturing knowledge from and sensing changes in the external environment
• knows who might value this information, disseminates it appropriately, and stores it wisely
• maintains active intelligence (up to date information including personal contacts) on matters of organizational interest (markets, customers, business trends, internal processes, supplier competences etc. etc.)
• alerts individuals and management where new opportunities and threats are emerging (or there are significant new developments in areas of interest)
• makes its information and intelligence resources easily accessible to those who need it and are authorized to access it - time, quality, filtered, sorted and refined information; points people to the most relevant experts (internally and externally)
• makes good decisions based on the knowledge at its disposal
• is innovative and creative in the use of its knowledge resources and exploitation of market opportunities

plus of course, that it does not act in an obviously stupid way!

The KM Contribution

Let me suggest several ways in which a KM programme can help build organizational intelligence i.e. pooling the knowledge and intellect of individuals for greater effect:

• Provide easily accessible repositories of information - sort out your intranet, develop information architectures, and provide some decent navigation and smart search tools
  
  
• Highlight - automatically if possible - the lessons, experiences and risk profile associated with new proposals, plans of action
  
  
• Help people make connections - expertise directories, through rich hyperlinking, clustering of concepts
  
  
• Stimulate and motivate knowledge development - some people like the use of tactile tools; others creating informal environments that encourage brainstorming and creativity; targeting communities of practice to address organizational challenges is another stimulant (just make sure participants have enough time leeway in their 'day job')
  
  
• Organize sharing events - workshops, seminars, exhibitions etc. - but leave plenty of "white space" (time for people to interact informally outside of the formal agenda)
  
  
• Above all, bring minds to bear on the problems, challenges and opportunities that matter.
  
  

In other words, probably much of what you are already doing anyway.

But Do We Act on What We Know?

But even if we could scale up human knowledge, would it be enough? In I3 UPDATE No. 1 we suggested the main reason for organization intelligence failure was 'groupthink'. Interpret this as herd instinct (why did many telecomms companies bid for 3G licences in 1999 at prices that to many analysts seemed astronomical even at the time?). But also add a dose of CEO ego (bigger is better), stubbornness ("I've made up my mind so no logic or new knowledge is going to change it now") and believing one's instincts. The latter is quite powerful. There are, after all, many cases where a person's instincts are right despite all the evidence to the contrary (remember the Walkman story how Akio Morita saw the opportunity when all the market research said there wasn't one).

So even if we have the best knowledge, the best intelligence, the smartest people, plug the exposures to criminal and fraudulent damage, there is always something that can derail an otherwise intelligent organization. It is up to every one of us, to use the power of our knowledge vigilantly and not be afraid to put our head above the parapet and make our voice heard. "I told you so" in hindsight is of less value than "don't do it or else.." in foresight.

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* The answers are to be found on page 108 of the book: 1) The focus of the intelligent organization is on learning and knowledge for value creation; 2) Its emphasis is on making sense of the future rather than sifting the past.

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