Lifeblood must keep flowing
The saying “knowledge is the lifeblood of the business”, which became common currency in the 1990s, draws once again on the metaphor of the business as a biological organism. The premise is that every business requires knowledge to operate and those that fail to manage and create knowledge are doomed.
Arguments about organisational knowledge are often over issues such as what knowledge is, how to classify it, how to manage it and so forth. There is also a body of sceptics who deny the value of “knowledge management” and are incensed when companies appoint “knowledge managers”. As these are often glorified information technology managers, whose purpose is to manage systems rather than knowledge itself, the sceptics have a point. However, we can set these debates aside. What really concerns us here is whether knowledge is important enough to justify the comparison with blood and what does the comparison mean for management?
Although observers may be sceptical about knowledge management, there is no denying the importance of knowledge itself. Economists, including Adam Smith and Karl Marx, have commented on the importance of knowledge, and Charles Babbage, the mathematician and economist who is better known as the inventor of the computer in the nineteenth century, argued that better use of knowledge and technology could both make businesses more profitable and raise the standard of -living for workers.
But it was not until the 1980s and 1990s that the position of knowledge at the heart of the business became clearly understood. In his 1990 book The Fifth Discipline, Peter Senge, professor at MIT’s Sloan School of Management, described “the organisational learning cycle”. According to Prof Senge, this cycle has three components. First, we learn new skills and capabilities. As we do so, we become more capable and more confident. Our awareness changes, and we view our jobs, our colleagues and our customers in different ways. New awareness and knowledge leads to deeper changes in our attitudes and beliefs, and we become aware of new ways of looking at the world. This change in fundamental beliefs in turn necessitates learning new skills so as to explore those beliefs more fully, and round the cycle goes. It is not only individuals who learn in this fashion, says Prof Senge
