Harvard Business Review on Knowledge Management Discussion of Chapters 1- 3 Yun Kim Vladimir Visipkov

Topics for discussion Peter F. Drucker on Knowledge Management Middle Manager’s Role in New Organizations (Drucker vs. Nonaka)

Questions What does P. Drucker think about Knowledge Management as an emerging discipline? Does he believe that knowledge can be managed? If not, then ‘why’? If yes, then ‘how’?

Definitions used by Drucker “Information is data endowed with relevance and purpose. Converting data into information thus requires knowledge.” (Page 5) “In the information–based organization, the knowledge will be primarily at the bottom, in the minds of the specialists who do different work and direct themselves” (Page 6)

Recent Articles Managing Knowledge Means Managing Oneself by Peter F. Drucker Leader to Leader, No. 16 Spring 2000 http://www.pfdf.org/leaderbooks/L2L/spring2000/drucker.html Management Legend: Trust Never Goes Out of Style by Tony Kontzer (06/04/2001) http://www.callcentermagazine.com/article/IWK20010604S0011

“Managing Knowledge Means Managing Oneself” “For the first time, they [people] have to manage themselves” “The historic shift to self-management offers organizations four ways to best develop and motivate knowledge workers: Know people’s strengths Place them where they can make the greatest contributions Treat them as associates Expose them to challenges”

“Managing Knowledge Means Managing Oneself” “Knowledge workers don’t believe they are paid to work 9 to 5; they believe they’re paid to be effective.” “Organizations that understand this– and strip away everything that gets in their knowledge worker’s way – will be able to attract, hold, and motivate the best performers.” “This will be the single biggest factor for competitive advantage in the next 25 years.”

“Management Legend: Trust Never Goes Out of Style” Delphi Group’s Collaborative Commerce Summit Drucker delivered an opening speech on the topics of business processes and the role of technology in the modern company. Discussed with John Archer, senior architect for SilverStream Software Inc. about the role of technology in management of strategic business processes

“Management Legend: Trust Never Goes Out of Style” “Trust is a central issue in making the most of organization knowledge” “The workers shouldn’t be managed so much as entrusted to do the most with their knowledge” “You can't manage knowledge. …Knowledge is between two ears, and only between two ears.” “When employees leave a company, their knowledge goes with them, no matter how much they've shared.”

Summary of Drucker’s opinion Future organizations are information-based organizations of knowledge workers To gain a competitive advantage, these organizations have to attract, develop and motivate knowledge workers Knowledge workers will have to be able to manage their knowledge themselves

Middle Manager’s Role(1) Drucker:   - “the typical large business will have half the levels of management and one-third the managers of its counterpart today” ( p1) - “their main, if not their only, function is to serve as relays human boosters.. “ (p5) - “the toughest problem will probably be to ensure the supply, preparation, and testing of top management people” due to the reduced number of middle managers (p16)

Middle Manager’s Role(2) Nonaka: - Middle Up Down Model: middle managers - intermediary between top management and front-line employees - “In each of these cases, middle managers synthesized the tacit knowledge of both frontline employees and senior executives, made it explicit, and incorporated it into new technologies and products. In this respect, they are the true ‘knowledge engineers’ of the knowledge-creating company.” ( p45) - “In the U.S., middle managers are denigrated as cancer.” (conversation with Nonaka. http://www.dialogonleadership.org/interviewNonaka.html )

Why? Drucker Nonaka Main Concern Industry Non-Manufacturing Culture Western Long history From Tacit To Explicit Individual-oriented Oriental(Japanese) Admit & respect Tacit itself Team-oriented Focus The change of organizational structure The role of middle manager in new organization

Now, who is right? Individualism and incentive system of Western restricts the role of middle manager on tacit knowledge socialization The disadvantage from cultural difference in U.S. is overcome by the advance of the technology Drucker mention of the theoretical knowledge-based organization, whereas Nonaka talked about more realistic “knowledge-based orgnization In my opinion, Drucker’s concern about the shortage of top management source is exaggerated. Current autonomous team oriented organization can provide the top management.