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 / Fourth Quarter 2002 / Issue 29(originally published by Booz & Company)


Yves Doz: The Thought Leader Interview

Making Knowledge Useful

s+b: You describe the metanational as an organization designed to prospect for, sense, and leverage dispersed knowledge. Many companies spent the ’90s buying knowledge systems, and adopting processes intended to make them into “learning companies.” Why has the return on those investments been so limited?

DOZ: Return is a complex term, and although it is something we have researched, I’m not sure we can measure the return on knowledge systems investment or be very conclusive about that. But I do think that most so-called knowledge management systems act like the Yellow Pages. They have been good at essentially two things: locating sources of knowledge internally, and tagging and cataloging existing knowledge in the company. But they haven’t been designed that well for prospecting and accessing knowledge outside the company. Most are fairly inward-looking, which is good for some consulting companies that have a lot of in-house knowledge, but isn’t necessarily as good for many other companies that don’t.

Also, once you have identified the locations of various types of knowledge, or the sources of knowledge in the company, how do you actually connect them effectively? That goes well beyond the point most knowledge systems have reached. They can handle only explicit, articulated knowledge. The ability to move from finding out where the knowledge is, to making that knowledge useful for your own purposes and in your own location, is a big jump.

In the book we describe four layers of knowledge complexity. Essentially, knowledge systems have been good at managing what we call “simple knowledge.” By “simple” we mean knowledge that can be made explicit, that can be codified in a reasonably universal way, and not an ambiguous way. But we need to become able to share another knowledge level: “complex knowledge,” which is tacit, context-dependent, or both. That becomes a lot more difficult to achieve. Most companies haven’t really learned how to manage and integrate complex knowledge. Complex knowledge is hard to learn and hard to understand unless you learn it in context, in the place where the knowledge exists. Yet learning complex knowledge from a distance is perhaps the most daunting challenge multinationals face today.

s+b: Learn by doing, in other words.

DOZ: Yes, if you learn by doing in the right place. In the book we use the example of Shiseido, which is not only a technology company, but now also a fragrance company, created here in Paris from scratch, with several new luxury brands. Shiseido, which is Japanese, plugged itself into France to gain knowledge about how to develop and market perfumes. Shiseido went to great lengths — by acquiring luxury beauty parlors to give it access to elite customers, by creating a French joint venture, and by collaborating with Issey Miyake and Jean-Paul Gaultier, two top designers. It also opened its own high-end beauty salon in Paris. The company learned by close observation and interaction with customers and collaborators in these various operations. This is, I believe, the key to acquiring complex knowledge.

The point is that easily codified knowledge, the kind that knowledge systems manage pretty well, is probably the least deeply interesting knowledge, because it is not likely to provide very sustainable competitive differentiation. Learning by doing indeed leads to original operating knowledge, of a very valuable, hard-to-imitate type.

s+b: Do you see a role for someone like a chief knowledge officer in a metanational?

DOZ: Yes, depending on how you define the role. I think part of the problem of so-called CKOs is the title. I can see very clearly a role for a CIO, someone who manages information systems, information tools and libraries, of various types. You are basically talking about someone who worries about intelligent idea infrastructure.

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