All:
In the wake of the Enron debacle, there's been a continuing storm of
demands for campaign finance reform, accounting reforms, and so forth. But
how about management reforms? Why haven't we heard about that? How about
reforms that would make it nigh to impossible for management in a company
to engage in unethical management practices to begin with? How about
making management in organizations more open and more accountable to its
own population of employees, stockholders, and other stakeholders?
If we think about the conditions in a firm that make it possible for
managers to engage in illicit, or even unwise, practices, what if we were
to change the rules for how organizations adopt the knowledge they later
put into practice. In other words, what if we were to change the rules
for making rules?
When I think of what happened at Enron, I see a hierarchical oligarchy --
the normal mode of management in most firms -- run amuck. I see a handful
of management elites making decisions behind closed doors, away from the
light of day, much less the scrutiny of their own constituents. I see a
tiny fraction of an organization's population of stakeholders making
decisions on behalf of its membership in the worst tradition of
authoritarian rule. If ever we needed a testament to the value and
importance of knowledge management and organizational learning, there it
is right before us -- a heap of ashes and broken lives that we used to
know as Enron. And there it is, right before us -- an extreme case of
what conventional organizations do every day: allow small teams of elites
to make plans on behalf of large populations of people even as they
disenfranchise their constituents from the learning and decision making
process that will bind them. How stupid can we get?
In the alternative conception of what some of us in the KM field are
referring to as the "Open Enterprise" (OE), an Enron debacle could rarely
happen. Why not? Because too many eyes and ears in an OE would be
exposed to patently bad ideas before they got that far. In the OE,
management serves at the pleasure of its constituents, not the reverse.
And in the process, learning and decision making is a whole firm affair.
Contrast this to most organizations, in which all of the real learning
leadership is relegated to the ranks of management, while the rest of the
firm is expected to merely carry out strategy, business processes, and
orders, as it were. How often in the course of developing strategy at,
say, IBM is the general population of its workers invited to the table?
How about never?
I heard someone recently point out why certain factions of Islam have
gotten themselves into so much trouble over the years. A few centuries
ago, I can't remember how long, Islam suddenly abandoned its policy of
inclusiveness for women. Up until then, Muslims had been leaders among
leaders, captains of industry, science, art, and the humanities. But soon
after they institutionalized the marginalization of women, their
performance on the world stage, on the stage of humanity, began to
decline. Now we have the Taliban. Is this true of all Muslims? Of
course not. No more so than it's true that all managers in all firms
engage in Enron-like behaviors. But when a body of faith or practice
(whether it be in religion or in business) systematically disenfranchises
large chunks of its own population from its own process of organizational
learning and decision making, an appreciable number of bad decisions and
outcomes can be expected to follow.
By excluding women from its formal learning and decision making processes
at an organizational level, the practice of Islam will generally lead to
bad decisions and bad outcomes more often than not. Similarly, by
excluding the vast majority of workers from learning and decision making
processes at an organizational level, the practice of business will
generally lead to bad decisions and bad outcomes more often. In fact, any
organization or social system that systematically deprives itself of its
members' learning and decision making contributions can expect to receive
exactly what they deserve in return -- more bad outcomes more often.
This business of restricting the authority to learn and make decisions in
large organizations to small centralized groups, even as they deny their
underlying constituents access to the process is a uniquely human foible.
No other species seems predisposed (i.e., dumb enough) to behave this way.
Even in the realm of social insects, we see decision making emanating from
the bottom up, as it were. David Stark at Columbia University calls this
'heterarchies.' We still get socially coherent behaviors, but the
organization benefits from the learning of its entire population, not just
the artificially sanctioned leadership at the top. How many more Enron's
will it take for management, industry, and society in general to take
knowledge management seriously -- a management discipline that seeks to
enhance organizational learning by focusing on improving the rules for
making rules? This is all very tangible, high value stuff.
Regards,
Mark W. McElroy
--"Mark W. McElroy" <mmcelroy@vermontel.net>
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