Knowledge is Personal

Below is a piece I wrote in 1997. It has been in the back of my mind ever since but I have never before published it publicly.

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The Premise

Knowledge is personal. This paper begins and ends with the same statement. Everything in between is intended to support or make use of this single idea.

 

Knowledge Management, Intellectual Capital, Learning Organization. These are some of the most prevalent topics in today’s business press. They all deal, in one way or another, with the idea that people are the most important resource available to an organization. Simply put, if an organization could more effectively harness the full intellect and wisdom of all the individuals that comprise an organization, then that organization would have a significant competitive advantage. Nice idea but how do you go about actually doing it. My premise is that the organization that truly understands and embraces the idea that knowledge is personal will have taken an important step toward gaining a significant competitive advantage and toward becoming a knowledge-based organization.

 

My goal in writing this paper is threefold:

  • to explain what I mean by “Knowledge is personal”
  • to examine why this statement is significant in an organizational setting
  • to show, at least one way, how the concept that knowledge is personal can be leveraged to create value

 

The pursuit of knowledge has been going on since the first sentient beings, presumably humans, became … well … sentient.. The human race has been trying to get its hands around the concept of knowledge for a long time. This paper is not intended to be a definitive answer to this search. I only want to create a working definition of knowledge that can be used within the framework of the concepts presented here. I wish to use this definition and framework to show how knowledge can be used in an organizational setting to create value. One point I want to make is that my definition of knowledge herein is simple and mechanical. I am not trying to ascribe any type of valuation to knowledge or embark on the more philosophical discussions of wisdom, intelligence, etc. My hope is that you will accept my definition at face value, at least for the duration of this reading.

 

To help with my definition of knowledge, I want to present the first part of a model that relates facts, data, information, and knowledge.

 

 

Facts

 
 

Data

 
 

Information

 
 

Knowledge

 

 

  • Facts are what actually exist, the essence of what is reality.
  • Data are facts that have been recorded.
  • Information is data that has been gathered, edited, organized and otherwise made presentable.
  • Knowledge is information that has been registered in the human brain.

 

Between each level in this chain is a layer of process and interpretation. Facts that are recorded become data, but this is not a random occurrence of nature. It is a deliberate act, engineered in some way by someone. The act of recording the fact and creating the data was accomplished by some process; and some sort of interpretation was required to define that process. There are virtually an infinite number of facts in the universe and probably an infinite number of interpretations of each fact. Therefore the creation of data is merely the record of one interpretation of a fact by one process.

 

Essentially the same argument holds true for the creation of information. Recorded data might as well be infinite; we have become so good at creating it. The temperature at Raleigh-Durham Airport at midnight on December 13, 1997 , the closing price of Microsoft stock on December 23,… etc. The point being , for all this data to be useful it needs to be processed and interpreted. It needs to be turned into information. This information can be the output from a computer system; it can be a magazine or a book; it can be a spoken word. Information can take many forms, but it is always the result of data being filtered through process and interpretation before it is presented.

 

This leads us to knowledge. When we see, hear, smell, taste, or touch, the sensation is registered in the brain. The brain performs the process of trying to place the sensation within a known context. The brain is trying to filter the information based on past experiences already sensed. The human brain is by far the best mechanism ever devised to perform this task of creating context. It is the ultimate implementation of the process and interpretation filter.

 

The definition that I am presenting is that knowledge only exists within the human brain. Knowledge is, therefore, unique to each individual. Knowledge is personal.

 

By this definition, knowledge is not something that you can explicitly record or pass on to someone else. As soon as an individual imparts her knowledge to an external audience, by writing a book, giving a speech, or having a conversation, her knowledge is rendered into information. (Of course this is also referred to as communication.) This information is then passed on to the receiving person and becomes new and different knowledge for the receiver. The knowledge of the receiver is necessarily new and different because their existing knowledge provides a new and different context for the newly received information. Since every individual has unique knowledge and since all existing forms of communication are primitive compared to the internal communication network of the brain, it is impossible to explicitly pass on knowledge.

Why Is The Premise Important

Why is the premise that “knowledge is personal” important within the context of an organizational setting? To answer this question, I will expand the model I started in the earlier section.

 

 

 

Facts

 
 

Data

 
 

Information

 
 

Knowledge

 
 

CID’s

 
 

Benefit/Value

 

 

Arguably, the primary reason for the existence of most (or all) organizations is to provide value or benefit to someone somewhere in some direct or indirect way. The question is, how does an organization create this benefit/value. My contention is that benefit/value is generated by some type of process or interpretation generated by the organization. The output generated by the company, cars made, drug developed, consultant’s report deliver, is the result of someone’s conclusion, innovation, or decision. (From here on I will use the acronym “CID” to stand as a generic label for any conclusion, innovation, or decision.) Organizational outputs do not (or should not) occur by random chance, but rather by someone’s conscious CID.

 

If we accept this as a reasonable argument, let’s take one step back up the chain. Let’s ask “What is a CID and how is one created?”

 

My definition is that a CID is a specific output generated by the mind of an individual. This output is the direct result of the individual applying their knowledge to a specific situation or problem. The immediate implication of this statement is that the quality of a CID is directly correlated to the quality of the knowledge possessed by the individual. Stated another way, better knowledge yields better CID’s. Since the CID’s made by individuals within an organization drive the processes that create benefit/value, the creation of knowledge within an organization will positively correlate with the benefit/value provided by the organization. If you allow this line of reasoning then you can begin to see why the premise that “knowledge is personal” can have significant impact on how we choose to design the systems, both social and technical, that define an organization.

 

What Does The Premise Imply For Organizational Design

If we ascribe to the premise that knowledge is personal and what that implies with regard to organizational output, then the way we approach the creation of knowledge becomes the primary element to be considered in organizational design.

 

My contention is that most (all?) internal infrastructure systems and processes should support the single goal of facilitating the creation of knowledge; this includes all management systems: IS systems, finance systems, compensation systems, i.e. everything not directly contributing to output for the customer. In short, management and infrastructure should only exist to facilitate the creation of knowledge within the individuals that comprise the organization. If management and infrastructure do an excellent job facilitating the creation of knowledge, then the professionals and content experts of the organization are properly equipped to make the best CID’s for the organization, thus providing the best output for the organization. This division of managers and professionals fits nicely with Sveiby’s[1] discussion in his book The New Organizational Wealth.

 

Following this line of reasoning, organizational design should be about knowledge creation. This concept is the basis for much of today’s business literature. In essence, what I am stating here is nothing new; I am merely attempting to build a framework to provide some structure for thinking about managing a knowledge-based organization. Reading the more renowned authors will provide more and better content than I am able to, but using this framework should provide a helpful way to understand that content. Among the other authors I have read and am referring to are: de Geus[2], Edvinsson[3], Hammer[4] [5], Peters[6], Drucker[7], and Stewart[8].

 

About The Creation Of Knowledge

Before delving further into implications regarding organizational design, I want to spend a moment discussing some ideas about how knowledge is created. My contention is that knowledge is created when information is available and the environment is conducive to the individual for receiving that information. These two points are critical to remember. First, it is impossible to create new knowledge without new information. This implies that making information freely and readily accessible is a necessary condition for the creation of knowledge. Second, knowledge will not be created if the environment surrounding the individual is not supportive of receiving information, even if the information is available. Again, a supportive environment is a necessary condition for the creation of new knowledge. Though both of these conditions are necessary for the creation of knowledge, neither condition alone is sufficient to facilitate the creation of new knowledge. Both conditions must be present for the effective creation of knowledge.

 

A corollary theory of knowledge creation is that the more varied the information that is received by the individual, the more opportunity there is for the individual to create significantly new and different contextual connections. The broader the range of contextual connections a person possesses, the greater the knowledge they possess. In other words, knowledge is best created in a dynamic environment.

How To Apply The Premise To Organizational Design

To facilitate the discussion of organizational design, I want to continue building the model presented earlier:

 

Facts

 
 

Data

 
 

Information

 
 

Knowledge

 
 

CID’s

 
 

Benefit/Value

 

 

I will call this “The Knowledge-Centered Model of Value Creation” or the Knowledge/Value Model, for short. Each of the six states of this model is separated by an interface or filter comprised of systems and/or processes. Each of these interfaces can be generically defined.

 

 

Facts

 
 

Capture

 
 

Data

 
 

Delivery

 
 

Information

 
 

Absorption

 
 

Knowledge

 
 

Application

 
 

CID’s

 
 

Use

 
 

Benefit/Value

 

 

  • Capture is plain old recording of facts. Nothing particularly new or interesting here. In an organizational setting this is entering an employee’s home address or annual salary rate, or recording the results of a test or experiment. This is typically a mechanical process
  • Delivery is where all the excitement has been for the last few years. The Information Age. The World Wide Web. Client Server Systems. These are all systems, mechanics, and concepts that have led to an incredible change in the way we think about information. Most literature that deals with the recent explosion of information systems and technologies, is really about the improved ability to manipulate (interpret) data and deliver it instantly regardless of distance or the number of destinations
  • Absorption is the assimilation of information that exists in the external environment into the mind of an individual person. Each element of information that is received by the individual is placed within the unique context of their existing knowledge to increase that knowledge.
  • Application is the use of knowledge to generate the true output of individuals, i.e. CID’s. All conscious acts of a person are, presumably, the result of that person applying their knowledge to the situation at hand. This could be stating an opinion in a meeting or having a breakthrough insight on a research project or deciding where to go for dinner.
  • Use is incorporated in what we usually think of as “business processes”. These processes would include a manufacturing process or a marketing plan. These processes are the result of CID’s and are what provide value to the customer.

 

Using the Knowledge/Value Model, we can now begin to investigate how to build a more effective organization. First let’s examine the distinction between information and knowledge. Most discussions about “knowledge systems” tend to use the words knowledge and information interchangeably. Without a structured definition, this can be confusing. Using the Knowledge/Value Model simplifies the discussion. Using the model helps us understand that most entities referred to as “knowledge systems” systems are really just information systems. Granted they may be sophisticated information systems, but information systems none the less. It seems that the use of the term “knowledge systems” is supposed to imply that these new systems are better than older “information systems”. What’s next then “wisdom systems”? Let’s just stick to fundamentals, any mechanical process that manipulates and/or presents data is just an information system, no matter how fancy it is. The only true “knowledge system” is the brain.

 

Understanding this distinction between knowledge and information helps to explain why many information systems do not deliver the intended results. If you confuse information with knowledge it is easy to operate under the assumption that once the information system is deployed that the job is done. If the focus is on the processes of delivery, all that has been accomplished it that the information is available, one of the two conditions necessary to create knowledge. The second condition necessary for knowledge creation is often neglected. That condition is the supportive environment. The supportive environment falls into the realm of social systems. If we look at only the mechanical processes then only half the job is done. We need to create the social systems that align with an environment where information is freely available. Unfortunately most social systems within an organization are based on the outdated models arising from the industrial era where physical assets and manual labor, not knowledge and information, were the most important resources. For today’s information systems to reach their true potential, we need to focus our effort in organizational design around the social systems that support an open information environment.

 

What exactly are “social systems”? Simply put they are everything about how we deal with the people in an organization: compensation practices, management techniques, corporate culture, etc. Basically most everything you read about in any book in the Business Management section at Barnes & Noble. My contention is that applying these ideas within the framework of the Knowledge/Value Model will provide a better understanding and direction for designing organizations. Again if we accept the premise that knowledge is personal and that better knowledge yields greater benefits for the customer, then the clear goal of organizational design becomes the facilitation of knowledge creation. This translates into developing social systems that align with an environment where information is freely available. Of course we need to continue to advance the mechanical process of information delivery, but we need to remember to not stop there. Newly deployed information systems must work in conjunction with the social systems of the organization. The people in the organization must want to use the information that is being made available.

 

One particular social system that can have a significant positive impact on knowledge creation is Diversity. If we return to the theory stated earlier that knowledge is best created in a dynamic environment, we have in essence stated the single most important reason for having a diverse organization. An organization populated with people having a similar background and mindset is not optimal for the creation of new ideas. The most valuable information a person can receive is information that is totally foreign and totally new, which can create new and unforeseen knowledge. In this sense diversity means more than just the traditional areas of EEO, but also extends to cross-training and lateral job shifts. As seen here, using the Knowledge/Value model can provide significant benefit in organizational design. It provides a fundamental basis for why we design organizations in a particular manner, as opposed to designing by gut feel or legal obligation.

 

Other areas of study that may benefit from using the Knowledge/Value model are the use of scenarios as a management and planning tool. (For more information about scenarios as a management tool check out The Living Company by de Geus2.) The model can also be used to debate the relative merits of information push vs. information pull systems and in what circumstances each would be appropriate. Tom Peters’ new book The Circle of Innovation6 presents fifteen B-I-G ideas. Each of these ideas can effectively be placed within the framework of the Knowledge/Value model. Go ahead and try some of your own ideas against the model and see if it holds together.

Conclusion

Hopefully this information has allowed you to create some new knowledge and generate some new ideas. But this is just the beginning; most of the work involved in creating a truly knowledge-based organization still lies before us. All we have to do now is to keep the original premise in mind, “Knowledge is Personal”.


[1] Sveiby, Karl Erik; The New Organizational Wealth: Managing & Measuring Knowledge-Based Assets; ã1997; Berrett-Koehler Publishers, Inc., San Francisco.

[2] De Geus, Arie; The Living Company: Habits for survival in a turbulent business environment; ã1997; Harvard Business School Press, Boston.

[3] Edvinsson, Leif & Malone, Michael S.; Intellectual Capital: Realizing Your Company’s True Value By Finding Its Hidden Brainpower; ã1997; HarperCollins Publishers, Inc., New York.

[4] Hammer, Michael; Beyond Reengineering: How The Process-Centered Organization Is Changing Our Work And Our Lives; ã1996; HarperCollins Publishers, Inc., New York.

[5] Hammer Michael & Champy, James; Reenginering The Corporation: A Manifesto For Business Revolution; ã1993; HarperCollins Publishers, Inc., New York.

[6] Peters, Tom; The Circle Of Innovation: You Can’t Shrink Your Way To Greatness; ã1997; Alfred A. Knopf, New York.

[7] Drucker, Peter F.; Managing for the Future: The 1990s and Beyond; ã1992; Truman Talley Books / Plume, New York.

[8] Stewart, Thomas A.; Intellectual Capital: ; ã1997;

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