The knowledge: Richard McDermott

Richard McDermott has set himself a tough challenge: to help change the way businesses in the western world use, and compete on, knowledge. But given the understanding he has developed about how knowledge creates value, the role of communities within organisations and the importance of social forces in facilitating change, there is arguably no-one better placed in the KM field to achieve this goal. By Sandra Higgison

It may seem curiously ironic that a political leftist with no interest in the corporate world is today focused on helping companies improve productivity and pinpoint new areas of competitive advantage. Following years studying philosophy, psychology and sociology, Richard McDermott arrived at a crossroads when he witnessed the social theories he had spent years dissecting come alive in business. Companies were not only engaged in, and experimenting with, ways to change their organisations, they were also far more adventurous and cutting edge than anything he had seen at that time in the US political arena.

The diversion was permanent. After completing his PhD, which examined the social forces that led America’s industrialisation, McDermott rooted himself in the corporate world, launched an ongoing consulting career centred around organisational design and change, and has co-authored a critically acclaimed book on communities of practice. As he continues his work with organisations, McDermott has an eye on social changes occurring globally, the impact of which he believes has yet to be fully appreciated by the US, Europe and the world as a whole.

Today, McDermott’s work revolves around four inter-related areas. First, his involvement in communities of practice remains strong, particularly in assessing mature communities’ development and co-ordination in relation to overall business strategies. His long-standing interest in organisational design and change is his second constant theme. “I’ve been designing knowledge work since before KM and communities of practice became fads, and I still do exciting projects on improving knowledge-worker productivity,” he says. By understanding, improving and leveraging knowledge-rich best practice, McDermott helps organisations improve the productivity of their knowledge workers.

Enabling companies to look at their organisations from the point of view of their knowledge assets is the third area that absorbs McDermott. “This isn’t to simply measure them, but to turn them into competitive advantage,” he says. He describes how one client, an engineering firm under intense competitive pressure, realised that it had enough experience and knowledge to start making modules rather than individually customised designs. “By commodifying and re-organising knowledge, a firm can build a competitive strategy that fundamentally shifts the marketplace,” he says. Finally, McDermott focuses on the principles and dynamics of change. “Our work is only as good as the change we make in the world,” he says. “Altering how we use and manage knowledge, either organisationally or individually, is a fundamental change. But most organisations see change as an ‘implementation’ and fail to see that it is the degree of change, not the elegance of design that makes the difference.”

McDermott’s background in organisational design underpins all of this work. He draws on and blends the elements from a range of methodologies, including total-quality management, lean, six sigma and, of course, knowledge management. Few people work with all of these approaches in tandem and, as McDermott says, very little has been done to integrate them. “They are incredibly complimentary. If you understand the limits of each, there is a clear natural synergy between them all.”

Forcing organisations to follow just one approach is a pitfall he believes process re-engineering fell into. “Knowledge workers do half a dozen different activities, some routine, such as gathering and organising information, and some that require thinking, such as analysis, synthesis and innovation,” he says. “All of these are based on different tools and organisational structures. By uncovering best practices, you acquire a deep understanding of how processes can work when done well. But you don’t stop there. You can then see how other tools will improve them. This is a more context-rich approach than starting with a tool and then looking for processes to apply it to.”

McDermott regularly applies his knowledge of philosophy to each area of his work, which also serves as a reminder of how he was guided onto this current path while studying for his undergraduate degree. It was during this time that he glimpsed insights that would tempt him towards the corporate world. “I needed some money while writing my dissertation and got a job at Harvard University as a case writer,” he says. “I soon realised that many people were very experimental, thoughtful and deeply engaged in implementing change. Even though they did it in a business context, it wasn’t just to improve the bottom line, but was often a fundamental shift in the way they approached their work, leadership and knowledge. As a social theorist I became fascinated with business.”

With the subsequent completion of a PhD in the history of management theory, McDermott worked in Polariod’s corporate-education department. When his boss left to start consulting, McDermott followed and soon discovered how much he enjoyed working with different companies on cutting-edge issues. He has pursued a career as a consultant ever since. As McDermott has found, being at the knife-edge can be a solitary experience. On more than one occasion, he has been a practitioner in areas that would grow to become widely embraced management techniques before they even had a name.

He recalls an early project working with social workers at a call centre for an emotional-support help line. “They would often need advice from colleagues while in the middle of a call but they couldn’t turn to anybody for help,” he says. “We redesigned the office space to make people more accessible. We also set up weekly meetings for the social workers to share insights, discuss their problems and support one another. It was a very emotional environment and these groups offered help and comfort.” Although the term did not yet exist, these meetings were in effect the core components of a fully functioning community of practice.

Similar organisational-redesign work at a multinational oil company saw McDermott help previously functional divisions become cross-functional, while also preserving something of their previous value. “Groups of geologists had to be able to walk down the hall to talk to one another,” he says. “We created informal learning networks that bisected the operating teams. They became a huge hit within the company.” It was around this time that McDermott met Etienne Wenger, his co-author with William Snyder on Cultivating Communities of Practice. “We compared notes and realised that we were talking about the same thing. Although his networks were in the back office of an insurance agency, were less informal and less intentional than mine, the core elements of a community, with a focus on sharing knowledge and developing practices, were the same.” As Wenger’s term was gaining popularity, McDermott adopted it, even though he disliked the CoP acronym.

His introduction to the knowledge-management concept also coincided with his long-term work. McDermott attended the first APQC conference on knowledge management alongside some of the field’s leading thinkers, an event that is often recognised as a career milestone by many of the delegates. “Even though my focus has always been with knowledge workers and I’d read about KM, I felt fairly isolated. Attending the conference was a real eye-opener as I realised that this was an emerging field. More importantly, it was exciting for me to hear that other people were also dedicated to understanding knowledge work.”

Since then, McDermott has continued to help companies recognise and leverage their knowledge assets and he highlights two main areas that have given him greatest pleasure. “I usually have long-term relationships with my clients and, when I go back years later, I see that the community designs or approaches to knowledge sharing I helped implement are still at the core of their businesses,” he says. “It is very satisfying to see something you designed on the back of a napkin still having an impact.” He also takes pride in knowing how some of his ideas on communities – the rings of community participation or leadership roles, for example, and the tongue-in-cheek term ‘lurkers’ to describe people on the periphery of a network – have been embraced and have influenced the field as a whole.

The greatest inspirations on his own career have been ordinary people. “They are people who saw that something needed to be done either in themselves, their organisation or industry, and pursued it with passion and compassion,” he says. McDermott, for instance, describes a CEO of a construction company he worked with. “When I asked him what his firm’s competitive advantage was, he said, ‘It’s simple: we’re honest and we do what we say. In our industry, that’s a competitive advantage.’ He wanted to run his company well, had a tangible respect for the people that worked for him and wanted to do the right thing in his industry while keeping his business alive. He and others like him were a great inspiration. No matter what role we play, if we connect with each other on that purely human level, in that moment we will better understand other people, our own lives and the human condition.”

Trying to improve these connections through his work with knowledge and knowledge workers will remain a focus for McDermott, even though he questions the progress made by businesses in improving knowledge work. “Years ago, Peter Drucker said that this century’s most important challenge was to improve knowledge-worker productivity. Two years ago, Drucker observed that we’d made little headway,” says McDermott. “Some progress has been made, mostly in sectors subject to intense competition, such as financial services, and most of the improvements have been due to technology.” While McDermott endorses the use of technology to automate routine work, raise service quality and leave more room for thinking activities, he is concerned that American and European knowledge workers are unprepared for future challenges.

The years spent researching and writing his PhD led McDermott to realise that great social change occurs when technology meets social forces. “The invention of the single-shaft power train for running a weaving mill was a great technological invention,” he says. “But America was against industrialisation. The machine couldn’t find its true value until the owners taped into a social force: the collective hope of 60,000 young, rural New England women who wanted to leave the farm, get a dowry and see the world. The mill owners created a city that brought the world and its wonders to the girls. By harnessing their hope and this tremendous machine, the US was able to establish industrial production.”

McDermott sees a similar situation occurring today. “We have access to technology and bandwidth that make the landed costs of knowledge and service practically nothing,” he says. “Anybody who has called their credit-card company recently knows that the call centre is not local. A similar marriage is taking place between technology and the strongest social force for change: hope. But this time it’s not on European or North American soil, it’s global. Technology has made it possible for people in the third world to compete on a global scale to improve themselves financially and socially.”

He recognises that, from a spiritual perspective, this shift is wonderful. It broadens the knowledge society as a whole and reminds us that we live in a connected, human, global society. But from the American and European point of view, McDermott believes it will be difficult. “The chief resource in the western world has shifted from natural resources to knowledge,” he says. “If we don’t dramatically improve our ability to leverage knowledge assets and improve knowledge work, we will be left in the dust.” He points out that, for many companies, the response to this impending challenge has been to lay people off and retreat to a niche. “This is often the beginning of the end. Companies like the new global competitors that enter at the bottom of an industry often gobble up the main players piece by piece.”

Enabling these countries to recognise what lies at stake and, more significantly, helping them understand how to reposition themselves is an area to which McDermott is already dedicated. “By continuing to consult and write about these issues I hope to encourage Europe and America to realise how we can fundamentally change the way we use knowledge assets to remain key players in the brilliantly intertwined global economic world we helped create.” While this may sound like a massive challenge, McDermott’s experience as a pioneer, together with his unique knowledge and appreciation of compassion, will ensure he meets it head on.

Richard McDermott can be contacted at richard@mcdermottconsulting.com.