On Internal Knowledge Markets

Abstract

In large organizations, knowledge can move rapidly or slowly, usefully or unproductively. Those who place faith in internal knowledge markets and online platforms to promote knowledge stocks and flows should understand how extrinsic incentives can crowd out intrinsic motivation.

In a Word In large organizations, knowledge can move rapidly or slowly, usefully or unproductively. Those who place faith in internal knowledge markets and online platforms to promote knowledge stocks and flows should understand how extrinsic incentives can crowd out intrinsic motivation.

From Possibility to Reality

There is no disputing the obvious: for organizations, ability and, of course, willingness to generate and share knowledge, especially tacit, internally across professions and disciplines––and the corporate silos that constrict them––are an essential source of competitive advantage. In the workplace, remarkable things can happen when people marry creativity and innovation with communication and cooperation. Sorry to say, mainstream organizations still make heavy weather of it. But the competition most face in the globalized economy, compounding the twenty-first century challenges we all face, compels them to move from possibility to reality if they are to raise productivity and endure. Why? Because data and information (and the contacts they can engender) have never been so cheap, so readily shared, and consequently so ubiquitous. Consequently, societies are experiencing unprecedented rates of change and organizational performance is increasingly defined by the capacity to capture, create, and deliver value to meet explicit or latent needs. And so, in the interest of their clients, audiences, and partners––therefore in their self-interest, organizations must put their houses in order so they may improve organizational effectiveness with knowledge solutions that scale scope. All the time more, they look to internal knowledge markets for help, hence the rise of communities of practice and other such networks.

Technology Impels Nations

Man often becomes what he believes himself to be. If I keep on saying to myself that I cannot do a certain thing, it is possible that I may end by really becoming incapable of doing it. On the contrary, if I have the belief that I can do it, I shall surely acquire the capacity to do it even if I may not have it at the beginning.

—Mohandas K. Gandhi

In progressive organizations that strive beyond adaptive learning to realize generative, better, radical learning, the objectives of knowledge management are to make the enterprise operate as intelligently as it might to get the most out of knowledge assets and so promote success and viability.¹ To these ends, as the discipline matures, theory and practice have been enriched by techno-centric—and alas, to a much lesser degree, organizational and ecological––perspectives, with the internet revolution supplying constant technological impetus.²

Biological systems are adaptable, resilient, and capable of generating perpetual novelty. That’s not a bad list of attributes for a company of the future.

—Margaret Wheatley

For sure, learning together is an important part of working together: sharing is an integral part of core knowledge activities that include identification, creation, storage, and use. In fact, how can know-how be brought into play if it has not been made available in one form or another? (Knowledge that does not flow cannot grow; in opposition, know-how that is exchanged sparks ideas and prompts new knowledge.) For that reason, in quick-thinking organizations, search parties for the Holy Grail of intrafirm knowledge transfer set off a long time ago. (Uncovering and transferring tacit knowledge were an early goal of knowledge management when that discipline emerged in the 1980s following the groundbreaking work of Peter Drucker, Dorothy Leonard-Barton, and Peter Senge in the 1970s.) In short, learning organizations have put great store in sharing across their entire body (preferably proprietary, in the private sector) insights into clients, audiences, and partners; innovations, and good practices that enhance the products and services developed and extended to cater to them; lessons from planning, acting, reflecting (both on and in action), and learning, as well as emerging research; etc.³

Discontent is the first step in the progress of a man or a nation.

—Oscar Wilde

New technology is common, new thinking is rare.

—Peter Blake

Still, it is a reality that in large twentieth century organizations , finding people with the experiences, insights, knowledge, and skills one needs on a specific topic remains difficult. The division of labor, standardization of procedures, formal hierarchy, and impersonal relationships that allegedly help large organizations achieve maximum efficiency draw boundaries within which knowledge can be combined and applied; they also hamper knowledge flows internally. (Incompleteness, asymmetry, and localness of knowledge are the outcome.) Peer assists, events that bring individuals together to magnify collective learning and develop networks among those invited, were introduced for the very purpose; they remain a rare occurrence. Inevitably, perhaps, knowledge management has relied on information and communications technology for sharing.⁴ To simplify, for instance, an early knowledge management prop involved online staff profile pages, aka Yellow Pages, as locators of in-house expertise. In the mid-1990s, forays deepened with the introduction of collaborative technologies such as Lotus Notes, a client–server platform. In the 2000s, organizations aimed to leverage semantic technologies for search and retrieval and to develop e-learning tools for communities of practice. From the mid-2000s, Web 2.0 “social technologies” based on the internet—e.g., blogs, bookmarks, tweets, and wikis—began to facilitate unstructured, self-governing, or ecosystem approaches that engage clients, audiences, and partners; let them have their say; and thereby build synergies through crowdsourcing .⁵ Nowadays, advocates of knowledge markets⁶ campaign for enterprise-wide electronic marketplaces and push to stipulate associated tasks (routines).

Out of Many, Many

This city has many public squares, in which are situated the markets and other places for buying and selling.

—Hernán Cortés

The vision is of a forum within an organization that matches knowledge seekers with knowledge providers. An explanation of what that might be would first define markets as actual or nominal places where the forces of demand and supply meet and where buyers and sellers trade goods and services, directly or via intermediaries.⁷ It follows that knowledge marketplaces would then be (broadly) defined as (real or virtual) environments, (formal or informal) community contexts, or (online) platforms for facilitating, aggregating, organizing, coordinating, brokering, and communicating flows and exchanges of data, information, and knowledge between seekers and providers, for free or against payment.⁸ (To note, knowledge markets already exist in intellectual property trading, recruitment, management consultancies, research and development, etc. The pervasiveness of the internet is simply moving the organizations involved more decidedly into the web. Helpfully, Kostas Kafentzis et al. make clear that the direction and speed at which they can forge ahead in the knowledge trading framework are conditioned by their strategic orientation, community, implementation processes, transactions and services, information and communications technology infrastructure, and knowledge assets .) The resources traded would be those parts of an organization’s intellectual capital that relate specifically to human, relational (or customer), and structural (or organizational) assets that are embedded in intellect, relationships, and routines. (They would be in explicit forms such as questions and answers, copyrights, databases, designs, documents, guides, good practices , information systems and technology, manuals, patents, procedures, project libraries, research and development, software code, etc.)⁹ The figure below illustrates the four basic types of marketplaces that organizations can operate in and indeed straddle based on their outlook and capabilities along two dimensions, namely, the openness of the community and the extent of commercialization of its knowledge products and services.¹⁰ Hereafter, these Knowledge Solutions refer exclusively to intrafirm knowledge transfer by means of online platforms.¹¹

Fig. A typology of knowledge marketplaces. Source Author

Let the Buyer Beware

There seems to be some perverse human characteristic that likes to make easy things difficult.

—Warren Buffett

“Rarely do we find men who willingly engage in hard, solid thinking. There is an almost universal quest for easy answers and half-baked solutions. Nothing pains some people more than having to think,” reckoned Martin Luther King. The search for the Holy Grail of intrafirm knowledge transfer has often led corporate knights-errant to worship iconic knowledge platforms in internal knowledge markets . Spellbound by technical genuflections, they cannot see that to democratize knowledge an organization must let personnel concurrently reflect, debate, cast votes, contend, and work in partnerships. What is more, democratizing knowledge opens organizations to new forms of corporate governance as well as new roles and functions for those who would help manage know-how , standing tall on the two legs of integrity and psychology.¹²

Characteristically, and in contrast to a social network that connects members to people they already know, intrafirm knowledge transfer is to be achieved by an information and communications technology–supported platform whose value would grow as more users join into share information, propagate good practices and impact stories, and fire off real-time responses to what questions personnel may have––all of this regardless of knowledge use. Paraphrasing Bryan’s (2004) critique of misguided management: Take it from the top, build it and they will use it, and let a thousand websites bloom!¹³

Were it that easy … At the simplest level, in organizations , people search for knowledge (and knowledgeable people) to find solutions to pressing challenges or simply to do better in their work: they derive utility from what they find in the open, barter for, or buy. Naturally, knowledge providers expect a fair return, at least through reciprocity.¹⁴ Markets for tangible goods and services have a price system so that exchanges can be rendered efficiently and recorded; however, money is hardly ever the form of payment in the case of intrafirm knowledge transfer even though a scarce resource has been exchanged. (Even then, factors such as consistency, quality, repute, and timeliness weigh more heavily still in the expectations of knowledge seekers, who might treat online knowledge with suspicion if it has not been evaluated and edited by a dependable broker. The result? More browsing than buying on the part of those in need, which devalues what knowledge might have been painstakingly imparted by the provider.) Therein lies the crux of the matter, the reason why internal knowledge markets time and again fall short. Hence, the critical issue is to build trust in the workplace as demand for highly specific knowledge products and services is bound to intensify and spread.

From False Principles

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

—Bill Gates

The technology-efficiency argument is deceptive: technology per se will not entice someone to share experiences, insights, and knowledge with others; technology alone will not make a disinterested party search or browse; and the mere availability of information and communications technology will not usher in a meritocracy, a knowledge-creating company, or a learning organization.

Management should not tout the virtues of knowledge sharing without substantively committing to change. Knowledge management initiatives such as internal knowledge markets—including online platforms—that do not consider the motivations of individuals are likely to fail, depressing morale and galvanizing resistance against future endeavors. Without a shred of doubt, where creativity and innovation are required, success and viability spring from intrinsic incentives . There must be social inducements to information sharing:¹⁵ devising them requires deeper thinking about human systems ,¹⁶ some enabling information and communications technology, and much more dedicated leadership in this area than organizations commonly deploy. Integrating these requirements, Hind Benbya and Marshall Van Alstyne offer advice on how to design effective internal knowledge platforms . Key recommendations are to (i) seed the internal knowledge market with key content and then subsidize the development of additional solutions; (ii) let prices float in the market; and (iii) manage the market like a market maker, not a central planner.