May 14, 2008

Does Your Firm Really Value Knowledge?

How much does your firm value knowledge?  It's not a complicated question, but the answer can be illuminating.  The extent to which your firm values knowledge should be reflected in a proportionate investment in knowledge creation, capture and reuse.  The extent to which the firm understands the economic benefits of knowledge should be reflected in its organization and business processes.

A report of a recent interview with Larry Prusak brought these issues home with great clarity.  In his view, while many organizations have begun to understand that knowledge management is important to their health, now they have to grapple with the reality that KM is more than a "nice to have" -- effective KM is essential if they are to squeeze the economic value out of the knowledge within their organizations.  According to Prusak, most organizations reflect 19th century business values, which lead them to treat land, labor and capital as the critical sources of wealth.  (In the case of a major law firm, the outlay on salaries and office space usually dwarfs all other expenditures.)  And where did knowledge fit within this 19th century model?  Knowledge was a relatively scarce resource and "reside[d] in the heads of the owners and managers."  As a result, they created hierarchical organizations based on a "command and control" structure since this was seen as the most efficient means to transmit critical knowledge from the few to the many.  (Again, this structure looks a lot like the modern US law firm.)

So what would be different if an organization treated knowledge as a source of wealth that was as important as land, labor and capital?  Presumably, that organization would dedicate resources to knowledge management that were commensurate with its expediture on land and labor.  In addition, once the firm understood that its long-term viability depended on the effective creation and distribution of knowledge, that firm would act as if it had an undeniable incentive to create and foster a vibrant knowledge sharing culture.

So why should you care about the extent to which your firm values knowledge?  The answer to the value question will explain much about the context in which you must work.  It should give some indication of the resources you can expect to receive in carrying out KM initiatives.  In other words, the answer provides important context for your work, and may suggest the level of effort that you will have to exert in order to achieve even modest goals in the absence of necessary institutional support.   My previous post on Personality and Law Firm Knowledge Management was also about context in that it sought to explain one reason why knowledge management in law firms is so difficult.  Similarly, trying to push forward a KM program in a law firm that does not yet value knowledge like labor will be an uphill battle.  Clearly, law firm KM is only for the brave.

No comments: