Knowledge Creation and Organisations of Today
I will begin this with two anecdotes. One, from a conversation with a Chartered Accountant and another from a teacher who taught me.
The Chartered Accountant (CA) once had a client coming in to his office for advice. During the discussions, the CA offered an advice which the client countered referring to an article that he read on the internet. The CA responded to the client asking whether he had checked the date of the article to which the client replied in the negative. The CA then added that what he was saying was as per the latest guideline from the concerned government department. The client seemed unhappy and went back to his home. A while later, the client called the CA on phone and said that this time he had checked the date and the year of the article was 7 years ago and that he saw the latest guidelines which were consistent with the advice the CA offered.
Years ago, when I was doing my pre-degree (plus two without uniforms, not in a school, but in a college), I was taught by a professor of Physics. I was not very good at the subject. But I distinctly remember one instance where he explained how he evaluated answers of students. He referred to Ohm’s Law and said, ‘If you state Ohm’s Law as the electric current passing through a conductor is directly proportional to the potential difference across it, I will not give a single mark for it. If you state the caveat ‘provided that the temperature remains constant’, then I will give you full marks for it.” For some reason, it remained etched in my memory.
I must say that the reason why these incidents find relevance and lead to strong convictions is because of my experience of working in the area of Elementary Education at Social Initiatives Group, ICICI Bank and I am thankful to my colleagues and partners there.
Now, these two instances point out two things. One is something academics are very familiar with; the issue of references. In the world of research and even in good business organisations, referencing is taken seriously. References do not just give due credit, it also helps us understand how an argument has been constructed and what are the crutches on which an argument is standing in very precise terms. A typical reference would include the following – title of book / paper / article, name of author/s, year of publication. If we are referring to a website article, then usually we should also include the time and date on which we referred to it because of the editable nature of web publishing. Now go back to the client of the CA. He clearly has not been immersed in a culture of referencing and therefore, he possibly missed looking at the year of the publication on the website. For his sake, let us assume that it was a one off instance of misjudgement from him. Therefore, he missed the dynamism of the legal environment pertaining to the particular issue he was referring to. Now let us ask the question, did he ever encounter a culture of referencing in his educative process – primarily in school and college. Unlikely in school; I do not recollect my school textbooks having a reference for any of the claims in any discipline’s textbook. It is very evident that the ‘textbook’ of those times were not designed in a manner that is consistent with the process of knowledge creation. In fact, it would be safe to go one step forward and say that textbooks were not designed to be challenged, they were designed as ‘source of knowledge for consumption’ and not as ‘facilitator for engagement with knowledge’. Perhaps, the National Curriculum Framework 2005 with its emphasis on constructivism might have changed the game for the school goers since then. In colleges as well, do we shed the habit of ‘consuming knowledge’ and adopt ‘engaging with knowledge’? From my own experience in my engineering college where there was a disdain for foreign authors – whose books were more consistent with the latter model – preference for ‘guides’ would suggest that even colleges have the same orientation as schools, namely ‘consumption of knowledge’. As an aside, any wonder we live in an era of fake news?
The second instance is a more familiar problem for all. The point about assumptions under which certain relations or laws hold. We often ignore the assumptions when making a claim or taking a position. It is to our own peril. Often, especially when we lead our every day life at home and at work, our decisions are premised on certain laws or relations we expect to hold. Unfortunately, we are not always conscious of the underlying assumptions and we miss to check them. Second, there might be a whole framework which is what might be giving us the laws. We may not even be aware or conscious about the framework and it is only the law that we are familiar with. Indian Government’s attempts at inflation control and stimulating demand using interest rates as an instrument is replete with instances where the debate seems to miss the whole point. Does interest rate reduction by RBI propagate through the Banks to reach the entrepreneur, is the lack of economic activity a supply side problem or a demand side problem? The public debate seems to be uninformed by any of this. Perhaps, it is hard to bring that in to the public space and it is better left to the economists handling it behind closed doors. Nevertheless, one can get a sense of how these things can go. These assumptions and frameworks are also one reason why multicultural work environment are also tough spaces to navigate for many. This is again another important reason why familiarity with the knowledge creation process including how our assumptions are being formed and having the right set of tools to test them out are important.
Coming to what I am driving at.
Many years ago, Peter Drucker, one of the foremost Management Experts published an article in McKinsey Quarterly (December 1, 1967) with the title “The Manager and the Moron” (1). Here is an excerpt from the article. ”Up until 1900, any society in the world would have done just as well as it did without men of knowledge. We may have needed lawyers to defend criminals and doctors to write death certificates, but the criminals would have done almost as well without the lawyers, and the patients without the doctors. We needed teachers to teach other ornaments of society, but this too was largely decoration. The world prided itself on men of knowledge, but it didn’t need them to keep the society running. As late as the mid-forties, General Motors carefully concealed the fact that one of its three top men, Albert Bradley, had a PhD. It was even concealed that he had gone to college, because, quite obviously, a respectable man went to work as a water boy at age 14. A PhD was an embarrassing thing to have around. Nowadays, companies boast about the PhDs on their payrolls. Knowledge has become our capital resource, a terribly expensive one.” What was true in 1967 is a ‘truism’ in 2020. More so when you know that Google’s Search – Google being the quintessential company of current times and Search it’s signature - was essentially the PhD thesis of one of it’s founders.
The above two points to the need for deep familiarity with the process of knowledge creation to be successful. While I tend to believe that the process of knowledge creation was critical to companies even earlier, the days of living off information asymmetries are numbered. They have been so since internet has become accessible to a large section of the global population. (As an aside, a new kind of dynamics is emerging around information which can again make markets tend towards oligopoly.)
I believe that for companies to succeed, it must necessarily have a good knowledge creation process internally. Here, ‘knowledge’ need not be new. In other words, it need not be companies doing research as in a PhD. But it is knowledge that borders more towards ‘praxis’ but generated in a method that is more akin to a rigorous research methodology. Perhaps, the first thing that will and should go out is the habit of ‘10 percent growth on previous year’s revenue’ as the preferred method of setting sales targets.
References
- https://www.mckinsey.com/business-functions/organization/our-insights/the-manager-and-the-moron, June 28, 2020, 10:40 PM