Management Lessons: The Gurus Within

 | August 08,2011 10:23 am IST

Companies spend dearly to gain learning from external sources, but fails to take learning from people within. External knowledge can be obtained by any one, even your competitor, at a price.

Internal knowledge cannot be bartered, which can give you real competitive edge.


Does external knowledge earns a manager more status within the organization?
Many times it may so happen that within a particular environment managers earn more status within company by bringing in things from outside, rather than building upon things already prevalent in set up. Specially when spin doctors are roped in, they perceive everything done earlier was wrong. This might actually be far from reality. In actuality there might be profound knowledge within the system awaiting exploitation. But in wake of horn effect (A psychological phenomenon where one large negative in a person overshadows our perception to see everything as negative in him) of negativity everything goes unutilized or under utilized. Even within managers there is latent competition to get ahead of others. Bringing something new gives specialist status to a manager, and makes him think being “worth more than others.”


Does external knowledge provide competitive edge?
When external knowledge is valued it is more likely that talented people inside the system feel hurt intellectually. When their say is ignored, while company is spending money to hear exactly what they are saying to the company. This devaluation is extremely de motivating to achievement oriented people who form the backbone of company’s think tank. What a company can get from outside, any other company can also obtain it. Whereas the things which can give company much more competitive leverage is the knowledge from within, which is harder to copy by a competitor.


Knowledge coming from inside the organization gets devalued and not used. Knowledge coming from outside, which is paid for seems to be very important to organization. Everybody from top till bottom management works extra mile to understand that un comprendable learning. Actually, source of the knowledge should not matter; merit must matter. Companies who fail to understand this, carry de motivated people who feel undervalued and in competitive, which reduces the overall competitiveness of organization.

Is knowledge legitimacy more important than its content?
By virtue of human nature, we all run to seek, what Sir Pfeffer terms as external legitimacy. A concept emerges from somewhere, is marketed, adopted by some major leaders in business. And the cycle starts. If GE Capital has done it, IBM has done it, Dell had done it, then it would be good. Actual matter of fact is, it may be or not be suited to your environment at all. But leaders adopting something give such a legitimacy to it, that rest of the companies get deep into exploring it. Seldom evaluation of fitness is done. Internal ideas seem more risky as they might have not been tried by the outside world. Many times we seek external legitimacy on our internal ideas as well. Many things internally generated, though very good, we seek external view and derive lot of satisfaction on getting it legitimized. It is good as far as it adds value. When this process is a fad or an attempt to satisfy our need, it becomes counterproductive.


Are failures, the treasures of latent knowledge?
For any knowledge to find its rightful place managers must perceive it to be important. Internal knowledge is easy to seek, easily obtained, easily transferred, and passes very easily. External knowledge on the other hand is hard to get, comes at a price, difficult to transfer, as a result every one values it more due to scarcity effect. (A phenomenon according to which people value those things more which are difficult to obtain.) It is perceived as something very valuable. In fact internal failures are great source of knowledge to all. But what happens is, the blame game acts so powerfully that the culprit is nailed by all and the opportunity of converting failure into knowledge is wasted. Organizations must have the right processes, one, to tap, this knowledge, second, to convert it into learning, third, mechanisms to transfer this learning, and, fourth, putting this knowledge to use, in the strategic interest of the enterprise.