Intangible drivers impact tangible results in the form of efficiency, effectiveness, and productivity. The intangibles of knowledge, culture, and change do not appear on balance sheets, but ultimately do have an enormous impact on ‘bottom lines.’
Intangible drivers range across organizations in all their forms and manifestations: businesses, from micro-enterprises to multinational corporations; institutions of formal learning, from schools to universities; public sector agencies; and non-government and community sector organizations. Intangibles also extend beyond the boundaries of organizations, and take shape in the dynamics of supply chains, organizational alliances, networks, communities of practice, and capacity building.
The organizational story for intangible drivers may be different from situation to situation. However, across all of these contexts, a pragmatic focus persists — to examine the ‘organization’ and ‘management’ of groups of people collaborating to productive ends and to analyze what makes for success and sustainability.
What does it mean to have a knowledge economy? Contemporary economies are increasingly dependent upon technologies that assist the flow of information. The value of an organization is also increasingly located in intangibles such as business systems, intellectual property, and a social skills base. In this sense, knowledge has become a key factor of production. And human needs have been transformed to the point where, in the marketplace, consumers focus on knowledge-representations as much as they do on physical entities—design, aesthetics, product concepts, brand associations, service values. If anything, these are the things that make the knowledge economy different from the industrial economy in its time.
The knowledge economy is more significant than out-of-the-box IT systems, or content management systems, or cloud software ensembles — things often sold as knowledge management ‘solutions.’ To be sure, new technologies can enable and transform. But knowledge is also the work of constant talk, collaborative working relationships, personalized stories, and continuous learning. It is, in fact, no less than the core of human capital. In this way, thinking through the prism of a knowledge economy demands a longer view of the actual making of organizations.
Knowledge is the process of connecting the work of the mind and the context of the world. It is not a recorded thing (data, information), or at least, it is not just that. Knowledge is a form of action. 'Knowing' might be by experiencing (deep understandings, intuitions or judgments based on extended immersion in a particular situation), or conceptualizing (knowing the underlying concepts and theories of a particular discipline, system or vocation), or analyzing (linking cause with effect, interests with behaviors, purposes with outcomes), or applying (doing something practical again or anew). These are some of the ways in which 'knowing' is done.
And what does 'knowing' do? For one thing, it creates a different kind of organization. This organization is one in which certain types of knowledge rise to higher levels of validity. This is the knowledge that has been collaboratively constructed, is widely informed, is cross-referenced — and these processes give it a collegial or organizational imprimatur. This knowledge becomes authoritative to the extent that the methods of knowledge construction are made transparent. And the unidirectional (top-bottom, expert-novice, organization-customer) transmission of knowledge is replaced by knowledge as dialogue.
In practical terms, with or without technological assistance, knowledge management involves transforming personal knowledge into common knowledge, implicit and individual experience into explicit and shared understandings and ordinary common sense into systematic designs. It is also the business of codifying these designs as information architectures. It is the project of knowledge management to ensure that collaboration is institutionalized, and that knowledge sharing occurs. As a result, 'wheels' are not needlessly reinvented. Lessons are learned from mistakes, and these lessons shared. The knowledge of the organization or community is not dangerously depleted in times of change. Organizing and codifying knowledge creates more work, to be sure, but the more long-term effect of this extra work should be to produce less.
On the micro-scale, teams are driven by shared values—or is it perhaps the complementarity of differences of knowledge and experience? On the corporate scale, organizations try to enlist employees to their visions and ethos—or is it perhaps a matter of creating an inclusive space in which everyone’s motivations and energies are enlisted, even if they don’t fit a single obvious corporate mold? On a market or community scale, organizations try to get close to customers and forge tight supply chain relationships—or is this really a matter of negotiating the differences that are inherent to a world of ever more finely differentiated niche markets and subtly or not-so-subtly divergent organizational cultures? And on the macro, global scale, we may find ourselves operating across one world market—or is it perhaps, a world where, in crossing borders, successful organizations negotiate differences and become many things to many peoples?
Culture is a key organizational driver, but not because it has a simplistically unifying dynamic — of shared values, singular vision and cloning to the ideal of the corporate person. The dynamic of effective contemporary organizational cultures, more often than not, is one of productive diversity. This is not the diversity of affirmative action and remedies for discrimination. Rather it is the diversity that is at the heart of organizational cultures, including workaday domains such as human resource management, product and service diversification strategy, sales and marketing into a myriad of niches, and customer relationship management which recognizes that no two customers are the same.
Organizations find themselves buffeted by external forces: technological, market, political and cultural. They are challenged to become ever more efficient, effective, productive and competitive. How can they be active masters of change rather than reactive servants? How can change in organizations be driven by their people rather than the organization in the abstract? How can organizations change without their leaders having to drag along the led?
Organizations will fail if they are not capable of learning, in a collective sense, as well as ensuring the learning growth of the individuals who spend their days there at work. They will fail if they do not regard themselves as places of continuous personal and corporate reinvention, of individual and institutional transformation. The organization and every person within it need to envision themselves, not as a change object, but as an agent of change.