Rethinking the Decision Factory

Companies everywhere compete to find the best talent in knowledge work, and often wind up with thousands of expensive employees who aren't as productive as hoped. So they lay off a huge number of them, and soon after are out recruiting again. This binge-and-purge cycle is highly destructive, writes the author: Aside from the human and social costs involved, it is an extremely inefficient way to manage any resources, let alone knowledge workers. The problem exists, he believes, because most companies misunderstand how knowledge work does and doesn't differ from manual work. They think they should structure the former like the latter--with each worker doing the same job for a full shift. But they also assume that knowledge is necessarily bundled with the workers--and is almost impossible to codify and transfer as one could do with manual work. The trouble is that knowledge work comes primarily in the form of projects, not routine daily tasks, so these employees often have downtime. Of course it's not in their interest to advertise any spare capacity--that could lead to a poor performance review or even a layoff--and this survival imperative gets in the way of knowledge transfer. The solution is to structure knowledge work the way professional services firms do--with capabilities flowing to the projects that need them--and to put key executives in charge of codifying knowledge.

• Economics
• Management styles
• Knowledge management
• Decision making