Larry Prusak On: Knowledge Management and Leadership

Event Summary:

Larry overviewed the global macro events and clearly stated that the IT revolution has not led to an anticipated nirvana but it has decreased the value of information whilst increasing the value of knowledge.  Knowledge can be embedded and processed but it is not capturable and the global diffusion of knowledge and capability is changing the whole world economy.  Knowledge is now the source of wealth providing competitive advantage.  The business model of managing land, labour and capital has been overturned.

Larry commented "You train animals but you teach people".  Research shows that employees learn on the job and from their peers because knowledge is tacit, local and contextual.  Training is not the key to knowledge as there is a huge difference between - 'know what' and 'know how'.  People learn most effectively through peer to peer learning and stories. 

How ready a company is to take on new ideas is what is termed as 'absorptive capacity' and a company has to balance exploitation with exploration.  Companies tend to work with knowledge for three reasons: efficiency, effectiveness and innovation.  This impacts on other business relationships which shouldn't be purely transactional but reciprocal to share knowledge for even better results. 

Larry recommended you should "hire smart people and leave them alone"