May 11, 1999, Volume 2 - Number 7
Knowledge management begins with a humble assertion
I Don’t Know
"It is the beginning of wisdom," Peter Drucker began, quoting a proverb, “to say ‘I don’t know.’” The proverb was a fitting entry into The Delphi Group’s International Knowledge Management Summit (San Diego, March 28-31). Judging by the number of badges I saw from the biggest consulting firms, knowledge management (KM) has the color of money. “This has been going on for a long time,” said one Big Six attendee. “We tried Total Quality Management, then Business Process Reengineering, but we never quite got it right. KM might get us a little closer.”
Closer to what? “I don’t know,” he said. Like many in the audience, this attendee turned for insight to the master of modern management. Nearly 90 years old—and about to release his latest book—Drucker held court on Sunday afternoon. He coined the term “information revolution” in 1953: but he said that the only revolution so far has been to automate existing operations. “We have no chief information officers,” Drucker said. “We have chief computer officers: people who manage how we run all this expensive equipment.”
Automation is no small feat, “but so far there is no information,” he declared. He compared our current era to the end of the first industrial revolution, which Drucker said began in 1750. By 1825 there were many examples of automating traditional processes, but “there were no new products,” he said. Within five years, with the introduction of the streetcar and then the railroad, mobility became the great new product—and the great achievement of the 19th Century. We could be on the cusp of just such a transforming age in which products appear that are totally different and have nothing to do with the automation phase of the information revolution. “We are now ready for information,” he declared.
“But there is no such thing as knowledge management,” Drucker cautioned. “There are only knowledge people. Information becomes knowledge only when it is in the hands of somebody who knows what to do with it. And that is what lies between our ears. That’s why to replace somebody it costs 20 times what it would have cost to keep them.” All businesses expense their investment in people. But, Drucker said, “human beings are not assets or resources; businesses should capitalize on this investment. They have to think, ‘where do we place this person so that they will be most effective? How do we challenge and train this person?’”
Drucker offered many insights about economic history and management. The Internet is nothing new, he said; it really began in 1860 with the transatlantic telegraph. High-cost industries such as commercial banks, which “depend on the incurable ignorance of customers,” are dying in the face of competing alternatives based on the availability of information. But his key insights had to do with people. “Each of us has a hundred weaknesses,” he advised, “but at least one area of great strength. Learn your strength—how you work best, how you learn best—and then know your assignment.”
Thus, to impact people productivity, executives and managers must create clear assignments. They must also avoid the impulse to apply universal rules, such as TQM. “Most management is where medicine once was—looking for a cure for everything,” Drucker said. “But modern medicine advanced when doctors began looking at individual ailments and finding ways to treat them.”
Information portals, XML, new search engines, and other technologies that fall under the KM umbrella hold great promise as launching pads for a true information revolution. But companies heading into KM would be wise to heed Drucker’s cautions: dismiss universal truths, and remember that people are the real fountain of knowledge.
