Strategy as if Knowledge Mattered

There is a corollary to the importance of tacit knowledge: people will not willingly share it with coworkers if their workplace culture does not support learning, cooperation, and openness. One office-equipment manufacturer sought to increase the rate of "knowledge-transfer" among its departments while simultaneously downsizing the workforce. The combination proved impossible. Who wants to share what they know when the boss is looking to cut headcount and consolidate expertise in a smaller and cheaper organization?

4. Organizations leverage knowledge through networks of people who collaborate -- not through networks of technology that interconnect. Despite endless media hype about groupware and the "interconnectivity of the '90s," computer technology is not the real story. The IT graveyard is littered with companies that followed high-budget, "visionary" CIOs down the path of this or that client-server investment, or rolled out new e-mail systems -- only to find that people still didn't want to collaborate to share and develop new knowledge. Interconnectivity begins with people who want to connect. After that, tools and technology can make the connection.

When it works, the combination of people and technology produces networks of people who transform themselves into "worknets" - suborganizations or informal groups whose collective knowledge accomplishes a specific task. The key to this worknet transition is that its members have compelling reasons for finding others with knowledge to share who in turn have compelling reasons to share their knowledge when asked. Which leads to our next operating principle.

5. People networks leverage knowledge through organizational "pull" rather than centralized information "push." The engine that drives knowledge development and sharing is the worker's need for help in solving business problems; the power comes from the demand side rather than the supply side. In fact, companies that push information at their people may actually cause information overload, blocking them from developing their own networks.

The "pull-not-push" principle suggests that problems need to be framed and articulated specifically. For this reason, knowledge-based strategies should emphasize on-the-job learning rather than traditional training. "Just in time" learning, which takes place in the moment of actual need, not only creates the most value; it also makes the biggest impression on the learner and the organization.

Ultimately, learning is up to each individual -- it's not something that management can require. The essence of successful knowledge-based strategies is a company's capacity to raise the aspirations of each employee. These are the people whose contributions and ongoing development become the life-blood of performance gains.

Brook Manville (brook_manville@mckinsey.com) is Director of Knowledge Management at McKinsey & Company; Nathaniel Foote (nathaniel_foote@mckinsey.com) is McKinsey's Director of Knowledge and Practice Development.