Posts Tagged ‘innovation’

We are getting Talent Wrong

April 19, 2012

A lot of people really enjoy the various talent shows that have rippled out across the world over the last decade – Britain Has Talent, America Has Talent, … and all the variants that stretch from Australia to Korea.

The shows of course serve up the maximum of weirdness and horrible lack of talent too, which perhaps says something about how deluded some people are about their abilities, and that performance requires not just passionate enthusiasm (or gall) but also excellence of ability.
To be really successful at anything, of course, requires more than just piles of eagerness, and some people are unskilled and also unaware of it.(Kruger and Dunning 1999; Hodges, Regehr et al. 2001)

I find the shows horrifying though, and I am left staring into space thinking that what the shows really demonstrate is that we have got something very, very wrong.

Let me explain.

It isn’t that I don’t also feel the emotional surge when some little child like Holly Steel or Jackie Evancho or Ronan Parke belt out a vocal with voices that belong more in the body of somebody in their 30’s with a lifetime of experience and training than in somebody under 12yrs old. The thing is that these people have more or less already been “discovered” early in life and are pretty much the “normal quota” of stunningly good performers. These are the ones that become a Sarah Brightman or a Celine Dion, and while their trajectories are in an early, nascent phase, they can be plotted out into the future with little stretch of the imagination.

One can look at Olivia Binfield the 7yr old poet and champion of animals, and it is easy to see her future mapped out ahead as the next Carol Ann Duffy or Jane Goodall.

I feel that same sense of wonder over them as the audience does, and these are the people that Simon Cowell means when he says that these are the “special, special talent” that he is there to find, but I think that these leave us so awe-struck that we miss the bigger picture.

The performers that chill me to the bone are the adults – Jamie Pugh (37), Julian Smith (40), Paul Potts (41), Susan Boyle (49), Fiona Mariah (50), or Janey Cutler (80).

These are adults whose talents have been available but unknown to anyone but themselves and their immediate circle for decades – at the time of his first public audition Jamie Pugh was driving a van as a day job and delivered pizza by night, Paul Potts sold cellphones, Fiona Mariah was a busker, and Janey’s singing was known only to local pubs in Lanarkshire.

For every Faryl Smith (12) or Zara Larsson (10) that can make your jaw drop in amazement, is there perhaps an eighty year old Janey who just never got heard until just two years before her death, or never at all?

One might think that at least there are shows like these that make some inroads into the numbers that we must be missing, but as such they only scrape the surface – they focus only on a very narrow band of human ability related to performance art, and there is no real equivalent to the rest of the spectrum of what people are capable of – There is for instance no mathematics, engineering, or general science equivalent to “X-Factor” or “America’s Got Talent“.

Happenstance discovery through game shows is really not a satisfactory way to deal with either our problems or with the planet’s talent, we simply should do better.

That is my story, and I am sticking to it.


Hodges, B., G. Regehr, et al. (2001). “Difficulties in recognizing one’s own incompetence: novice physicians who are unskilled and unaware of it.” Acad Med
76(10 Suppl): S87-9.

Kruger, J. and D. Dunning (1999). “Unskilled and unaware of it: How difficulties in recognizing one’s own incompetence lead to inflated self-assessments.” Journal of Personality and Social Psychology
77(6): 1121-1134.

Gossip and Rumor – The Natural Instruments of Cultural Learning?

January 26, 2011

Gossip in organizations is almost universally seen as a negative phenomenon and one that in a work situation should be stamped out if at all possible, but what if there were valuable knowledge to be gained from gossip and information that could improve corporate governance and innovation?

For the purposes of this article I am going to conflate gossip and rumor to a large degree, although at a finer level of granularity the two become very different (McAndrew 2008)– Rumor deals more with externalities and objects, whereas gossip involves interpersonal relationships more.
Gossip is a natural human communicative phenomenon that is part of our evolution (McAndrew and Milenkovic 2002) that does several things, amongst which are articulation of what people are worried about, worries that are insufficiently known, instances of cheating, and changes of positional power or influence.

In case you get bored by the discussion later on, I am going to discuss a quick win first – mining the gossip in your organization as an early-warning system.

Early Warning System

Perhaps I should qualify “early” here – I don’t mean like you have a radar that can detect an oncoming wave of bombers long before they reach your shores, I mean in the sense that you get to sample what is already eating away at your foundations and which may give you an idea of what you are dealing with.
For this reason I strongly recommend that gossip be sampled regularly in order to get on the radar screen threats and weaknesses that might otherwise have been missed until they made themselves known more overtly and systemically.

The technique is to gather gossip without people being afraid that the intent is to track the source and to mete out punishment.
If people fear retribution, the gossip doesn’t go away and neither do the causes, it just goes silent – silencing gossip is the equivalent of switching off power to the radar screen.
The idea is not to encourage gossip as much as simply sample and monitor it.

Depending on the level of trust in your organization, there are two main ways to sample gossip:

  • Get them from the people in the organization who are the Connectors, those who lie at the nexus points in your Social Network
  • Provide staff with an anonymous postbox

OK, so I lied a bit, there is another and far more accurate way, but you aren’t going to like it.


Gossip is often the stuff that people believe to be true or likely but that they feel uncomfortable to tell management. This might mean they just have a hunch, but it may also mean that they know something but won’t say it for fear of being embarrassed or the retribution that may visit them if they come clean.

This is where Prediction Markets come in, and boy are you going to hate this!

If you ask how a project is going or what the sales forecast is, you are likely to get the sanitized and upbeat evaluation, but if people bid on a market – even with fake money, something different happens, and you are likely to get a far more accurate picture. Asking “how is the project going” gets you a CYA response, but if there was a pseudo-stockmarket in which people bid on a specific question such as “Project X will achieve Y milestone by Z date”, the results are likely to be far more accurate.
Share-value in the market rises or falls according to the insider knowledge and conviction of buyers, and if the identities of bidders are unknown, it represents the most accurate sampling of the organizational knowledge that one can get.

The downside is that questions must be highly specific and need to be somewhat Boolean in nature (Manski 2006), and people must not be able to game the system for personal gain which is perhaps an insurmountable obstacle since you could get the equivalent of “insider trading” in which a person might deliberately sabotage a project to gain benefit from the market.
However, some academics show evidence that “bear raids” and other attempts to game the market tend to be short-lived and self-correcting (Hanson, Oprea et al. 2006)
On the other hand, economists were the same geniuses that said this about the real stock market prior to the Global Financial Crises that appeared from the shadows and ate about $8 trillion.

I told you that you wouldn’t like it! – but let’s talk very quickly about what gossip is really, after all.

Cultural Learning

In a very real sense gossip is a manifestation of “cultural learning” (Baumeister, Zhang et al. 2004), it emerges under several distinct conditions that have to do with (amongst others) detection of social cheating, message incongruity, fragmented information scent, and power vacuums. It also manifests when there are threats and insufficient information available. Rumors often start because of simple information underload.
In the case of social cheating, gossip functions as the channel to communicate cheating and as the foundation for what has been termed “Costly Punishment” (Henrich, McElreath et al. 2006)

Gossip not only communicates efficiently and fast, but also delivers peer pressure to correct non-conformance with norms of behavior – and this is where there is both a problem and an opportunity.
If organizational goals and policies are out of step with the organization’s social norms, then gossip will “correct” behavior to satisfy the social norms rather than the organizational goal, and people will tend to obey the “ground rules” (Davenport and Prusak 1998; Stacey, Griffin et al. 2000) rather than the institutional rules, and this bears repeating – if the social rules are at odds with your institutional rules, the social rules will win almost every time.
Peer pressure is faster and stronger than institutional power, so it is wise to sample the gossip stream to see if there is significant divergence between the two and measure the results of any remedial interventions for signs of success. – bringing the two closer together puts peer dynamics into play to achieve organizational objectives, rather than undermining or corroding them.

At a different level, sampling the gossip-stream also gives a very good picture of what the organizational culture really is like and to what degree the organizational mission as communicated is infectious, sticky, and resilient – A poorly crafted mission statement simply won’t stand up to the test.

“Ba” and the Water-Cooler Dilemma

One of the foundational objectives of Knowledge Management as a practice is to create both built-environment and mental space that fosters and encourages innovation and knowledge diffusion. In his conceptualization of “Ba”, the mental and physical knowledge terrain (Nonaka and Konno 1999), Nonaka proposes the “water-cooler” phenomenon – that more often than not breakthroughs and acquisition of critical knowledge happens in the spaces between formal meetings and workareas rather than in them, that sometimes the water-cooler and other social spaces see more real work than the formal work areas.
While this is certainly a strong argument, what is also clear is that when left to their own devices, people tend to talk about sports, celebrities, and gossip more than they do about work, and that even when they talk about work it tends to be more about their idiot boss, the lazy workmates, or which members of staff are in a romance or likely to leave, than about work itself.

This leads to somewhat of a dilemma – creating “Ba”, areas and time in which staff can mingle, chat, and relax certainly does increase the likelihood of real innovation and productive spread of knowledge, but it also increases at a larger rate the amount of gossip and non-work related talk.


Gossip isn’t going to go away anytime soon and while it can be reduced both by disciplinary action and removing some of the information-gap causes, it can also be monitored as a good error-signal and mined for content to flag things that are miss-matches between organizational objectives and social rules. Gossip is also a reliable indicator of organizational culture, and can be a valuable source of information that can lead to beneficial intervention programs.
Gossip is something that is likely to increase if knowledge management is done well, but the upside is that it becomes a mechanism for good just as much as it does for serving the craving people have to know about the personal foibles of the powerful and who is sleeping with whom in the office.


Matthew Loxton is a Knowledge Management expert, holds a Master’s degree in Knowledge Management from the University of Canberra, and provides pro-bono consulting in Knowledge Management and IT Governance to various medical institutions.


Baumeister, R. F., L. Zhang, et al. (2004). “Gossip as cultural learning.” Review of General Psychology
8: 111-121.

Davenport, T., H. and L. Prusak (1998). Working knowledge: how organizations manage what they know. Boston MA, Harvard Business School Press.

Hanson, R., R. Oprea, et al. (2006). “Information aggregation and manipulation in an experimental market.” Journal of Economic Behavior & Organization
60(4): 449-459.

Henrich, J., R. McElreath, et al. (2006). “Costly punishment across human societies.” Science
312(5781): 1767.

Manski, C. F. (2006). “Interpreting the predictions of prediction markets.” Economics Letters
91(3): 425-429.

McAndrew, F. (2008). “Can Gossip Be Good?” Scientific American Mind
19(5): 26-33.

McAndrew, F. T. and M. A. Milenkovic (2002). “Of Tabloids and Family Secrets: The Evolutionary Psychology of Gossip1.” Journal of Applied Social Psychology
32(5): 1064-1082.

Nonaka, I. and N. Konno (1999). The concept of Ba : building a foundation for knowledge creation. Boston MA, Butterworth-Heinemann.

Stacey, R. D., D. Griffin, et al. (2000). Limits of systems thinking Complexity and management; fad or radical challenge to systems thinking. London, Routledge.


Passion and Purpose : An Attainable Intrinsic Motivator?

December 21, 2010

The topic of work satisfaction either as a construct on its own or as a predictor of performance or productivity goes all the way back to Elton Mayo’s Hawthorne Plant study at least, and must be one of the top three most researched and published topics in IO Psychology. However the existing instruments tend to stay in the 40’s and 50’s for predictive power against performance, and that seems to be where they are stuck.

For an area that takes up such a big slice of our life, it deserves better – a typical career starts at around 18 years of age, and for about 48 weeks of the year it occupies us for nine hours day (at least) for five days a week (if you are lucky). Knock off 8 hours for sleep, an hour for commuting, and all you get in change for your 24hr terrestrial rotation is six hours to be “yourself” and life outside work.
Many people socialize with people from work, take work home, and marry somebody they met at work.
Losing a job is for most people somewhat of a personal identity crisis.

Clearly work takes a huge slice of our lives, and the degree to which you find it interesting and rewarding has been shown to be critical to health and happiness if not also wealth.
From a Knowledge Management perspective the implications for Intellectual Asset Management are also immense – people who are disinterested in their work produce results that are far inferior both for them in terms of health and happiness as well as for their employers in terms of productivity and ROI.
A really good worker that is engaged in what they do and puts in effort that results in achieving organizational goals is a critical competitive advantage in the market, and it is from them that much of the growth and innovation comes.

Measuring Work Behavior

Most instruments take the approach of a quasi market, and view this work thing as a quid pro quo of “this work for that pay”, and then help the management to ask how to get more work done – and if they are also Taylorite or Theory X in approach they go further and ask how to get more work for less pay and benefits.

However, like Maslow, they are undone by the concept of passionate people, but first let’s just sketch what I am talking about here.

Going back to a blog post I did about Leadership Replacement there is a kind of matrix for what one would get out of various combinations (modified a bit here), it looks like so:




Result: You have a …





















Clearly by this matrix, if you want a person who punches a card and does the expected list of tasks each day, then passion isn’t required, just an equitable exchange of money for ability.

However, if you want a slice of discretionary effort and the chance at pulling ahead of the competition, more than disinterested exchange of labor becomes mandatory.

One measure that is frequently used to tell if staff are pulling in the same direction as the corporate mission requires, is Attachment.
This construct has been studied from a variety of angles, ranging from the similarities between work attachment and romantic love (Hazan and Shaver 1990), staff turnover and attachment (Koch and Steers 1978; Abrams, Ando et al. 1998; Maertz Jr, Griffeth et al. 2007), to studies on attachment as a basic human need that plays itself out in work settings (Hepper and Carnelley ; Baumeister and Leary 1995; Simmons, Gooty et al. 2009).
In a real sense the phrase “I love my work” is more than just a casual metaphor, and speaks to real and deep-seated needs within people for affiliation, interaction, and purpose.

Attachment speaks mostly of affiliation, but also of alignment to a shared purpose, and to a sense that what is being done and achieved is valued – people with high levels of this sort of attachment also feel a sense of deeper interest in the work itself – but there is a curious thing that happens when that interest runs deeper still.

You get a person who becomes a bit obsessed and develops more than just an interest, in fact, a passion – and this has been largely missing from the original theories of work.

Mayo, Taylor, Gilbraith, and even Maslow, not much mention of passion.


Passion gets a bit unnerving because it goes beyond mere interest and the person that comes under the spell of a passion for a subject area forms an affiliation and bond with the subject itself, sometimes to the virtual exclusion of everything else.

A person who regards their work as a calling, something they are passionate about, needs no extrinsic motivation and seems to see no need for a work/life “balance”.
It isn’t that they balance differently, it’s as though the term simply becomes meaningless because work and life become entangled to the point where the person’s work and life are virtually identical and where their work is an essential part of their identity both publicly and personally.

We could view such people as some sort of aberration, a kind of benign obsessive pathology that visits itself on the broad population to produce here a Mozart, there a Michelangelo, and on occasion a Kasparov.
An alternative view is to regard these people as simply having more of something on a scale and whose skills and interests set each other on fire – the hint seems to be that passion is something that can be grown and increased in people that lie just under the combustion point.
Be that as it may though, we certainly want to know who in our organizations are either already passionate, or have the propensity to become passionate, and to be so about something that is aligned with the corporate mission.

So ala Seth Godin and Mihaly Csikszentmihalyi and others, I want to measure to what degree a person is passionate about what they do as an occupation and also see how close that aligns with both the role they occupy and the organization they are in. Does the corporate image and mission fit like a surgical glove over their passion, and if not, how far from it is it?

In the 2nd release candidate of a Knowledge Management & Organizational Learning Climate survey, I added two items to measure respondent’s self-perception of their degree of passion for their job and their area of specialization where I had previously just asked about their passion for the company’s mission.
The initial results show an interesting split between respondent’s feelings of passion for their company’s mission and their subject domain on the one hand, and that for their job on the other.
While it is far too early to claim a tendency, it is fascinating to wonder what it would mean in terms of potential job enhancement.

However, this instrument was not designed to delve into passion as such and we should perhaps recap on the current thinking on what constructs comprise job satisfaction and performance.

Constructs ahoy

My initial construct ideas gleaned from various authors and many TED talks are:

  • Passion/Purpose
  • Autonomy/LoC
  • Feedback/Reward
  • Expertise/Excellence

I have several questions to solve before an instrument can be built – for starters, are “passion” and a “sense of purpose” part of the same construct, and can I measure them both at the same time?
Secondly, since various authors have also posed
Locus of Control (LoC) as a component of job satisfaction (Brett 2001) it makes sense to measure this, but I suspect that LoC and “Autonomy” are the same thing or closely related (Aubé, Rousseau et al. 2007). There is even a hint that a combination of passion and internal LoC is critical to entrepreneurship (Carsrud and Brännback 2009)
Thirdly, I wonder if “Feedback” and “Reward” are also at least stable-mates and that measuring for a cluster that includes both would also be significant

The biggest question is whether passion is ever entirely internally fueled, or whether autonomy/LoC is mediating the degree of feedback/reward and level of expertise/excellence that is needed to turn an interest into a passion. Once passion is fired up, is it the case that as long as LoC remains internal, that feedback and perception of excellence are mostly internal, or would an organization need to “pump” a bit?

… and of course, how exactly does one manage a passionate person?- Does one just leave them alone and provide infrastructural support, and what does one do if their passion is diverging from the organizational goal?

Next Steps

My plan is to build up a model of passion as it applies to the work environment and construct an instrument to measure it in that context.
The general idea is to have a tool with a Knowledge Management perspective on passion vs performance, and at the same time to benchmark and see what external factors can prime and steer passion.

Stay tuned!



Matthew Loxton is a Knowledge Management expert and holds a Master’s degree in Knowledge Management from the University of Canberra. Mr. Loxton has extensive international experience and is currently available as a Knowledge Management consultant or as a permanent employee at an organization that wishes to put knowledge assets to work.



Abrams, D., K. Ando, et al. (1998). “Psychological attachment to the group: Cross-cultural differences in organizational identification and subjective norms as predictors of workers’ turnover intentions.” Personality and Social Psychology Bulletin
24(10): 1027-39.

Aubé, C., V. Rousseau, et al. (2007). “Perceived organizational support and organizational commitment: The moderating effect of< IT> locus</IT> of control and work autonomy.” Journal of managerial Psychology
22(5): 479-495.

Baumeister, R. F. and M. R. Leary (1995). “The need to belong: Desire for interpersonal attachments as a fundamental human motivation.” Psychological bulletin
117: 497-497.

Brett, J. M. (2001). “The Psychology of Work: Theoretically Based Empirical Research (Organization & Management Series).”

Carsrud, A. L. and M. Brännback (2009). Understanding the entrepreneurial mind: opening the black box, Springer Verlag.

Hazan, C. and P. R. Shaver (1990). “Love and work: An attachment-theoretical perspective.” Journal of personality and social psychology
59(2): 270-280.

Hepper, E. G. and K. B. Carnelley “Adult attachment and feedback seeking patterns in relationships and work.” European Journal of Social Psychology
40(3): 448-464.

Koch, J. L. and R. M. Steers (1978). “Job attachment, satisfaction, and turnover among public sector employees* 1.” Journal of Vocational Behavior
12(1): 119-128.

Maertz Jr, C. P., R. W. Griffeth, et al. (2007). “The effects of perceived organizational support and perceived supervisor support on employee turnover.” Journal of Organizational Behavior
28(8): 1059-1075.

Simmons, B. L., J. Gooty, et al. (2009). “Secure attachment: Implications for hope, trust, burnout, and performance.” Journal of Organizational Behavior
30(2): 233-247.


Building a CoP Maturity Model and Questionnaire Instrument – WIP

November 2, 2010

This blog is a slight departure from normal, and discusses a work in progress rather than a statement of fact or opinion. It is also an invitation for readers to participate and to contribute in something that everyone can reuse when done.

Those who wish to contribute can do so on the CoP Maturity Model Workshop Wiki


In anticipation of my next job, I have been doing several little projects, one of which was looking for a questionnaire instrument with which to measure the Community of Practice (CoP) status in an organization.

The idea was to get a snapshot of where the firm is in terms of CoPs, and then to both measure progress from that point as well as to use the knowledge to better shape an approach and to know where to push and where to pull.

The first step in any research or endeavor is usually to conduct a review of current literature – look to see what has already been done and to leverage that if possible rather than waste time re-inventing something that already exists.

What I found was absence of evidence – no questionnaires to be seen, and none of my 500+ LinkedIn contacts or network of Knowledge Management practitioners responded with any knowledge of such a tool.

CoP Construct Structure

Questionnaire design is hard work but quite enjoyable if you have the time, and presently I have some of that, so I set about the first step of questionnaire construction.

No, not writing a bunch of questions, but doing a mind-map of the constructs – two key principles in questionnaire design are to have high construct-validity and reliability over time.

The mind-map at time of writing looked like this:

[fig 1]

The major dimensions or constructs of “CoP Status” I believe are:

  1. Maturity
    Structure to be determined
  2. Penetration
    How far across the departments CoPs have spread, as well as how far up and down the hierarchical structure they concepts and practice has spread. Maturity could thus differ horizontally and vertically, with empty spots, immature patches, as well as enclaves of highly mature CoP presence.
  3. Activity/Energy (can’t decide between the two yet)
    Basically how busy are CoPs and how much effort are people putting into them. A CoP may be mature and have penetrated well, but still be subdued and exhibit low activity.
  4. Externalization
    A measure of whether CoPs had stayed within the organization or have spread outside to domain-specific bodies (e.g. SIGs, Fraternities, professional organizations, etc.), suppliers, customers, or business partners.

The bit that seemed least fleshed out was a maturity model, and again I surveyed for existing literature – and again came up relatively empty. Those people that already had a maturity model regarded it as proprietary, and those that didn’t, didn’t.

First-Pass CoP Maturity Model

Not to duplicate effort, I borrowed the basic CMM model, added a level 0 which I took to be a naïve baseline that would look something like Argyris’s Model-1 state rather than a null situation – The thought being that a naïve state would be structured in a typical silo fashion by department.

  1. Level 0 – Learned Incompetence
  2. Level 1 – Awareness of process
  3. Level 2 – Repeatable process
  4. Level 3 – Defined process
  5. Level 4 – Managed process
  6. Level 5 – Optimized process

I have added to each level a first pass substructure of what I think would be going on at that level of maturity.


  1. Level 0 – Learned Incompetence
    1. Unaware of CoP concepts
    2. No efforts to organize or associate
    3. SMEs isolated from others beyond silo boundaries
    4. Silo’s, Silo’s everywhere, nor any flow between
    5. ..?
  2. Level 1 – Awareness of process
    1. Awareness of basic CoP concepts
    2. Initial efforts to self-organize
    3. Initial definitions of purpose
    4. Invitation by social network across boundaries
    5. Sporadic flow between silos
    6. Celebration of desired outcomes
    7. Connectors and Mavens identified
    8. .. ?
  3. Level 2 – Repeatable process
    1. Scheduled meetings
    2. Membership criteria
    3. Rules of interaction
    4. Codes of conduct
    5. Controlled vocabulary
    6. Enforcement of norms
    7. Inter-silo flows regular but dependent on Connectors
    8. Salesmen identified and empowered cross boundaries via Connectors
    9. … ?
  4. Level 3 – Defined process
    1. Defined CoP purpose
    2. Domain defined
    3. Objectives defined
    4. Policies formalized
    5. Norms formalized
    6. KPIs and success factors defined
    7. Inter-silo flow mechanisms established and documented
    8. … ?
  5. Level 4 – Managed process
    1. Formalized processes and norms enforced according to a formalized process
    2. KPIs monitored and wayward activities brought under control accordingly
    3. Celebration events controlled
    4. CoP Champion formally identified
    5. Budget provisions for CoP activities established
    6. … ?
  6. Level 5 – Optimized process
    1. CoP is integrated into strategic decisions
    2. CoP utilized to gain competitive advantage
    3. Hiring mostly done via CoP external connections
    4. CoP forms integral part of marketing and branding
    5. … ?

What’s Next?

The next step is more minds and a bit of basic collaboration – I need some input and thoughts to flesh out, and then flatten, sharpen, and contextualize the framework so that we get something worth testing.

  1. Workshop, Brainstorm, Re-jig, and then Formalize the Model
  2. Test it out by seeing if it mirrors what exists out there.
  3. Construct the questionnaire instrument
  4. Test the instrument on a small population of well known organizations
  5. Rinse and repeat until it seems to have adequate reliability and show signs of construct validity
  6. Give it to everyone and hope they find it useful


CoP success in a firm is vital to many things and having tools to measure what level of maturity, penetration, and level of activity there is in this regard is important. Furthermore, CoPs can play a vital role in the branding and market image of a firm and CoP activity in external bodies can be a critical source of innovation at low investment cost.

This blog is a starting point to develop a usable instrument with which to carry out such measurements.


Please contribute to my self-knowledge and take this 1-minute survey that tells me what my blog tells you about me. – Completely anonymous.


Matthew Loxton is a Knowledge Management professional and holds a Master’s degree in Knowledge Management from the University of Canberra. Mr. Loxton has extensive international experience and is currently available as a Knowledge Management consultant or as a permanent employee at an organization that wishes to put knowledge to work.


Death, Learning, and Corporate Survival

October 26, 2010

Why do mature companies die or grow frail and get eaten?

After all, once they have passed through the helter-skelter of childhood and have attained stability after the hectic days of early formation, why don’t they just live on forever?
This was a topic that interested Arie de Geuss of Royal Dutch Shell and he asked a similar question to one that led to a breakthrough in medical science almost four centuries ago – could the same hold for how we look at corporations?

Death as a subject

In 1662, John of Graunt built tables of mortality for the city of London, listing for each year the numbers of deaths by cause. This required not just the collection of data about death, itself a valuable exercise, but also required him to think in terms of categories of causes of death. Although many of the categories have changed over time, this process of thinking once set in motion, led to steady revision and improvement.

For example, from the year 1632, Graunt lists these as the top five causes of mortality:

Chrisomes*, and infants        2268
**                     1797
Fever                                    1108
Aged                                     628
s†, and the small Pox    531

*Infant mortality before 1 month of age
†Means “sediment”, but it is unclear what Graunt meant by this in conjunction with Smallpox

This systematic approach paved the way for tracking and intervention, and gave birth to the science of demographics and enabled epidemiology to develop.
You could say that Graunt was a necessary and key player in the development of modern medicine.

The Mortality of Companies

In his analysis of companies in terms of mortality, de Geuss created categories from the data that led him eventually to conclude that companies die because they develop learning disabilities – they became deaf and blind, and stopped learning – and therefore eventually succumbed to external forces that they were unable to notice or against which to marshal an appropriate response in time.

I view this in terms of Organizational Learning (OL) – which is why I describe my occupation as “Knowledge Management and Organizational Learning”, and I break it into five major components:

  1. Stimulus-Response Learning
  2. Vicarious and Promiscuous Learning
  3. Scenario Planning
  4. Ongoing Professional Development
  5. Innovation Intent

Stimulus-Response Learning

This is the kind of thing that even an earthworm can do, but which many organizations seem to lack.

If an earthworm touches an electrified wire, it eventually learns to avoid the wire, no matter which part of its body did the touching. In contrast, some companies will repeat the same mistake over and over again, seemingly needing to reiterate the same mistake several times with each and every business unit and team before the message finally gets through and becomes part of its adaptive repertoire.

Being smarter than an earthworm should not be that difficult for a corporation made up of smart people, but it means that internal communications and repositories are done in such a way that if one part of the organization makes a mistake or encounters something that poses a risk, that all other units and geographies have access to that same information in a way that they can actually use (and do!).

This turns out to be more difficult than one might assume and the “plumbing” side of providing email, portals, knowledge-bases, and content management are only about a third of the solution. The remainder is a corporate culture that is able to learn across divisional boundaries, and for this you need both leadership and vibrant Communities of Practice

Many organizations never get this far, and die because the rock that they stubbed their toe on last year, came back and hit them in the head this year.

Vicarious and Promiscuous Learning

Once one has evolved past the realm of Annelids, the next big advantage is to learn from other people rather than needing to take the lumps yourself. This saves money and time, and is therefore a direct competitive advantage.
Rome learnt from Carthage, apprentices learn from their tradesmen, and hopefully a company can actively look for examples of what to do and what not to do by observing others. Except where patents and copyright are an obstacle, the keyword is to “shamelessly borrow” ideas and then modify them to fit localized conditions.

This is best done by the leadership team, and by the Communities of Practice who can effortlessly dig their roots into the pool of expertise and experience that lies outside the organization but within their domain of excellence. When an SME comes back from attending a trade show or seminar they can mutate the ideas to suit the organization and spread them throughout the organization via the interdepartmental CoP structure.

Just achieving this stage will provide a significant competitive advantage and add decades of life-expectancy.


So far we have dealt with the past and the present, and the next evolutionary phase is to consider the future beyond the next departmental quarterly review. Scenario-planning is a toolset that attempts to break at least partially free from the learned helplessness and practiced defensiveness that Chris Argyris outlines as part of “Single-Loop Learning“. By posing “what if” scenarios, there is the possibility, if you are nimble, to catch yourself before the auto-protective blinds come down and to notice the stealthy approach of a hidden predator, or surprise yourself with an outcome that was unexpected.

This is the playground of the giants mainly, because everyone else is too busy “just surviving” to look several years down the pike and try to make out the fuzzy shapes on the horizon or in the shadows. The irony is that it can lead to complacency (look at BP and the recent gulf of Mexico debacle), in the same way that seatbelts and airbags led to less careful driving in some people.

Scenario-planning requires a mix of dogged fact-finding and logical step-wise thinking, systems-thinking, and imaginative brainstorming. Plenty of DIY books exist on the topic, but usually a firm needs external help at least in the beginning. It also requires a mix of culture and technique that is frankly beyond most firms. After producing various scenarios and plotting the likely outcomes, and then working back to find solutions, it requires a very peculiar kind of management culture to stare the scenarios in the face and put money and executive sponsorship behind remedial action.

Although this is a critical component of achieving and maintaining longevity, its very success is a risk, since dodging future bullets makes a firm more likely to become complacent and also to value the process less. People in westernized countries are less likely have their children immunized because they have forgotten or have never experienced the real diseases – dodging them makes them seem less like the killers they are.

Ongoing Professional Development

Another dimension in successfully competing is simply having better skills and intellectual assets than your competitors. This runs the gamut of identifying people with better SKAs than your competition, to acquiring and keeping them, to putting them to work more efficiently and effectively than the next company in your market space. However, time passes, things change, tools rust, and if you want to keep ahead of the competition, having a workforce composed of people who actively pursue their own ongoing professional development is surely the best.

This is also the key element in forming a CoP, and without a culture of ongoing learning, the intellectual assets of a company will slowly gather dust and be buried.
The absence of a vibrant and concerted effort to maintain professional expertise is an early sign of cognitive degeneration in a firm, and a harbinger of senescence. If your staff don’t actively pursue their own ongoing professional development, you are already a dead-man walking.

Innovation Intent

The final dimension is the desire for change, and perhaps the hardest of all to achieve.

As companies age, like people, they tend to grow more conservative in outlook and more comfortable with the tried and true over the new and exciting.

This is a perfectly logical risk-aversive approach since most novelty, most innovation either fails or is deleterious. Mutations, for example, seldom produce an improvement – usually they just result in cancer. So sticking to what has already proven to work adequately is a very safe bet – in the short term.

However, this leads inevitably to rigidity in the face of change and decreased ability to formulate new solutions when the old ones no longer apply. Think of this in terms of bacteria – over time bacteria will acquire resistance to existing medications no matter how effective they were originally, and unless novel attacks are discovered, eventually the bacterium starts gaining ground and flourishes.
For this reason one has to have a deliberate intent to innovate, to test out new approaches and ideas before the old ones are exhausted and overrun.

However, this requires a cultural environment in which experimentation is supported, controlled, and encouraged. An early warning sign is if mistakes are typically punished rather than treated as learning opportunities – If punishment is the first and foremost reaction, then you have a safe bet that there is little innovation and the firm is already gathering moss and accumulating risk.

A word of caution is appropriate here – Major innovations don’t typically come from individual work, nor from steady evolutionary refinement over time, but from importing mature ideas from other domains and collaboration between people and across domains and organisations.
If individual work is rewarded and there is a winner-take-all culture, you already have a massive handicap.


Studying the causes of death in firms serves two valuable purposes – knowing the facts of death itself, and the formation of a classification on which to build remedial efforts. This provides a framework against which to take preventative and generative action, and with careful action, a firm can greatly extend its productive lifespan.

Most of the steps require a cultural component, and all require leadership and executive support that can look beyond the next quarterly earnings. But for those companies that have the character and desire, the processes listed can provide not just a new lease on life, but significant competitive advantage.


Matthew Loxton is a Knowledge Management professional and holds a Master’s degree in Knowledge Management from the University of Canberra. Mr. Loxton has extensive international experience and is currently available as a Knowledge Management consultant or as a permanent employee at an organization that wishes to put knowledge to work.

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