AOK: Preparing for Conversations with Mark McElroy

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Preparing for Conversations with Mark McElroy
Taking KM into New Territory

Mark W. McElroy
CEO, Macroinnovation Associaties LLC
President, Knowledge Management Consortium International

Introduction
Books
Star Dialogue Theme
Links

Introduction

We are pleased to have Mark McElroy, CEO, Macroinnovation Associates, LLC
President, Knowledge Management Consortium International, as our the second guest moderator for the 2003 STAR Series Dialogues.

Mark likes to think of himself as a "Corporate Epistemologist," a better description than "KM" for his interests, and a tighter fit with his degree in Philosophy. He is the Mark McElroy founder and CEO of Macroinnovation Associates, LLC in Windsor, Vermont, U.S. and president of the Knowledge Management Consortium International. He is also Board Chair Emeritus of the Sustainability Institute in Hartland, Vermont, where he lives with his family.

Mark is best known, perhaps, for his conception of 'second-generation' KM, and his related ideas of supply- and demand-side KM. He was also among the first in the field of KM to develop the thinking behind KM's connections to complexity theory and organizational learning. These ideas and more are discussed in his new book, The New Knowledge Management - Complexity, Learning, and Sustainable Innovation (Butterworth-Heinemann, 2003).

Currently, Mark is collaborating with his colleague, Joseph M. Firestone, in the development of what they call "The Open Enterprise" model. Closely related to this work is Mark's idea of conducting Openness Audits™ in organizations as a new foray of KM into the worlds of corporate governance and business ethics.

Mark is a 25-year veteran of management consulting, having spent much of that time at such firms as Price Waterhouse and KMPG Peat Marwick, where he was a partner. He also spent a year as a principal in IBM's KM practice in Cambridge, Massachusetts, U.S.

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Books

The New Knowledge Management (Butterworth-Heinemann, 2003). Released this past fall, offers a paper trail of the development of second-generation KM, The New KM, and related ideas. This book has already be adopted as a reader for graduate level courses in KM around the world.
Key Issues in the New Knowledge Management, by Joseph M. Firestone and Mark W. McElroy (Butterworth-Heinemann, 2003). To be released this spring, this book applies The New KM framework to many of the intractable issues swirling around in the field. Each chapter is devoted to one such issue such as, What is Knowledge?; KM and Strategy; KM and Best Practices; KM and Culture; KM and Intellectual Capital; and more.
The Open Enterprise Building Business Architectures for Openness and Sustainable Innovation, by Joseph M. Firestone and Mark W. McElroy (forthcoming, late 2003). This is the first full-length work on the Open Enterprise, what it is, and how KM can be use to achieve it.

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Star Dialogue Theme

Taking KM Into New Territory
Corporate Governance, Accountability, Ethics, Openness, and Sustainability?

If it is possible for a field to have completely outgrown itself, so much so that it borders on unrecognizable, I think I can say that KM has done this. What began as a kind of cousin to information management and IT has arguably expanded into what, to its early thinkers, must surely seem like foreign territory. As you can see from the theme title I've chosen above, I believe that KM has not only moved into new territory (i.e., corporate governance, accountability, ethics, sustainability, and openness), but that it has a unique contribution to make in these areas. What makes me say these things?

First, I have never been happy with, nor accepted, the conventional definitions of KM as being about enhancing knowledge sharing, capturing tacit knowledge, and getting the right information to the right people at the right time. To me, these were always rather limited and unfortunate interpretations of the field -- what I called first-generation, or "supply-side" KM. Mostly they were nothing but rehashed or repackaged forms of IT and related applications, much of which existed long before KM came along and did nothing but rename them.

The more interesting side of the field, for me, was always the social scientific side of it. I was especially interested in the application of complexity theory to KM, and also sought to strengthen the connections between KM and the organizational learning movement. Out of this work came the view that information and knowledge (a) are not the same things, and (b) are literally produced in organizations and other social systems by way of a social process that we call "Knowledge Processing." (Incidentally, much of this thinking was hatched under the auspices of the Knowledge Management Consortium International with the involvement of myself, Joe Firestone, Steve Cavaleri, Javier Francisco Carrillo, and many others.)

Once we are able to see that knowledge is produced and integrated into practice via social processes in organizations, the role of KM becomes clear: to enhance Knowledge Processing! Understanding the nature of this social process is greatly informed by an understanding of complexity theory and epistemology, as well, but I'll save the details of that for our discussion if anyone should be interested in hearing more about it.

Returning to the main theme of interest here (i.e., the migration of KM into new territory), the key notion of the distinction between KM and Knowledge Processing is crucial. KM is a management discipline; Knowledge Processing is a social process that KM can be applied to in order to support, strengthen, and reinforce it, but it is not the same as KM. In fact, all organizations engage in Knowledge Processing, even when there is no KM function around. In this sense, Knowledge Processing is a natural and emergent phenomenon in human social systems.

So why is this so crucial to our discussion of new territory? It is crucial because the new territories I speak of are deeply intertwined with Knowledge Processing. Consider, for example, the manner in which illicit plans were developed in firms like Enron, Worldcom, and the rest. Behavior in business, including bad behavior, is nothing more than knowledge in use. So we can fairly ask in response to the Enron scandals of the world, "What kinds of Knowledge Processing systems did they have that made it possible for such illicit ideas to get as far as they did in practice?" And also, "What role can KM play -- since KM is about enhancing Knowledge Processing systems -- in helping to correct related behaviors -- Knowledge Processing behaviors, that is?"

My colleagues and I, especially Joe Firestone, have started to speak in terms of an organizational model that we call The Open Enterprise. The Open Enterprise is an enterprise model for Knowledge Processing that seeks to ensure openness in knowledge production and integration in ways that help guard against corporate corruption and malfeasance, while protecting the authority of managers to make decisions and to commit the organization and its resources to action. It is the antidote to corporate corruption, and unethical and unsustainable behaviors, and it is entirely a creature of KM's creation. This is a very important idea in The New Knowledge Management. In fact, it is its central idea -- it's raison d'etre.

By focusing not only on enhancing Knowledge Processing in organizations, but also on how to make them more 'open' to inspection and inclusion by stakeholders, The New KM seeks to have impact on corporate governance, ethics, accountability, and sustainability outcomes -- not just knowledge making and sharing. This takes us squarely into new territory. After all, how many Ethics Officers, or Sustainability Managers, or Corporate Directors concerned with governance and transparency issues would naturally turn to KM for guidance? Precious few, I think. But if not for ourselves, who's minding the Knowledge Processing store? And who can deny that the quality of Knowledge Processing is an issue that precedes consideration of the quality of business decisions and related outcomes? First we learn, then we act.

What we need is quality control in Knowledge Processing as a strategy for improving knowledge use, and the decisions people make in business about what knowledge to use. All of that happens in a pre-use mode -- a Knowledge Processing mode. This is what makes Knowledge Processing of such enormous contemporary importance to corporate officers and managers concerned with reducing corruption, raising accountability, and strengthening ethics and sustainability behaviors. This, indeed, is what makes Knowledge Processing of such unparalleled and unprecedented importance to corporate governance. Ensuring the quality and integrity of Knowledge Processing in organizations has become the new fiduciary duty of boards in the twenty-first century, and doing so is an act of KM!

Warren Bennis perhaps put it best in the flurry of revelations last spring about Enron when he said:

What businesses need today more than ever before are managers who know how to create social architectures for openness.

This is the vision of The Open Enterprise, and the purpose and aim of The New Knowledge Management -- to help businesses transform themselves into "social architectures for openness." KM has never been so relevant to business as it is today. But this is The New KM, not the old one.

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Links

Here are some recent papers and presentations of mine that discuss many of the issues and ideas raised above.