The People Are the Company

Communities of Practice Emerge

Like the organizations we are all part of, these principles aren't clean and neat. They lack the allure of off-the-shelf implementation promised with each new consulting nostrum. To some extent they are counterintuitive: to win in the new world of business, managers shouldn't try to gain control, they should surrender it. In other words, these ideas are real. And they match what we're discovering about the nature of working in the Knowledge Era.

How can we begin to convert these principles into action? With communities of practice (CoPs) -- the critical building block of a knowledge-based company.

What are CoPs? Think back to National and the PLL engineers. At the simplest level, they are a small group of people (in this case, about 20) who've worked together over a period of time. Not a team, not a task force, not necessarily an authorized or identified group. People in CoPs can perform the same job (tech reps) or collaborate on a shared task (software developers) or work together on a product (engineers, marketers, and manufacturing specialists). They are peers in the execution of "real work." What holds them together is a common sense of purpose and a real need to know what each other knows. There are many communities of practice within a single company, and most people belong to more than one of them.

Companies do much of their most important work through CoPs -- especially in the overlaps and alliances that bring disparate communities together. Indeed, it is precisely in these overlaps that core competencies live. Most companies make the mistake of defining competencies as discrete technologies: patents, trade secrets, proprietary designs. But a real-world competence -- a sustained capacity to outperform the competition -- is built as much on implicit know-how and relationships as on tangible products and tools. You can't divorce competencies from the social fabric that supports them.

National Semiconductor has gone further than any other company in promoting and catalyzing CoPs. And it's done so for hardheaded business reasons. Over the past five years, National has experienced a dramatic -- and at times wrenching - transformation. In the late 1980s, the company built an array of high-volume, low-margin, commodity chips -- "jelly beans" in industry jargon. When its competitive environment changed, its business model collapsed.

A new CEO, Gil Amelia, arrived in 1991 and began a process of restructuring and rationalization. Now the agenda has changed from cutting costs to growing -- and from commodity manufacturing to product leadership. Part of National's strategy involves building its core competence in mixed-signal technology -- computer chips that function as the electronic interface between the "real world" of voice and video and the "digital world" of computing and communications.

Communities of practice are playing a central role in this redefinition. At one level, they energize and mobilize the company's engineers -- the critical people for a company in transition from slashing headcount to pioneering markets. They also shape and enact strategy. A cop focused on communication signal processing (an application of mixed-signal technology) includes engineers from a variety of product lines. This community, built slowly over an 18-month period, has gained a powerful voice in the company's strategy.

The PLL community focuses on execution. For more than 20 years, PLL designers at National swapped ideas, shared insights, helped each other solve problems -- even though they worked in stand-alone business units that seldom cooperated. They were a "loose" community of practice with tremendous potential.

In May 1994, after a first-ever gathering of key technologists across National's product lines, this loose group became a recognized community of practice. Its charter: to make its know-how about circuit design accessible; to spread the word about notable product successes and failures; to continue building National's PLL competence.

The PLL community does not "report" to any business unit or product line; it is of, by, and for its members. But it is not a debating society or an affinity group. It exists to perform real work and to provide a vehicle for collaboration and interaction among technical people. It conducts formal design reviews. It won special funding to develop two advanced PLL prototypes outside the control of any specific product group. It has even created a "PLL place" -- a lab, borrowed from one of the product groups that benefits from its work -- that houses special equipment the CoP buys.