Learning from History - Inside Knowledge

Feature

posted 1 Dec 1998 in Volume 2 Issue 4

Learning from History

The rail, telephone, electrical, and banking infrastructures in the United States, which emerged in the late 19th and early 20th centuries, may provide a number of useful insights into the nature of the emerging infrastructure surrounding information and knowledge management. In this article, Jeffrey Kenyon identifies some specific lessons from those industries in the areas of leadership, technology, and economics, and examines how they may inform current knowledge management efforts.

Over the past several years, the Corporation for National Research Initiatives has sponsored and published a series of monographs on the development of the rail (Friedlander, 1995a), telephone (Friedlander, 1995b), electrical (Friedlander, 1996), and banking (Friedlander, 1997) infrastructures in the United States. In addition to their value as histories, these monographs have been used to stimulate thinking on the parallels that may exist between these earlier infrastructure industries and the information infrastructure of the late 20th century (Stipp, 1997).

This article examines six specific lessons that are recurring themes in the Friedlander monographs, in the areas of leadership, technology and economics. Each lesson also contains a brief commentary on how the lesson may apply to the development of a knowledge or information management infrastructure.

Lesson 1: Infrastructure emerges from visionary leadership.

While certain infrastructures may emerge at the direction of government (e.g., public roadways), none of the infrastructure industries examined by Friedlander were of this nature. In rail, the first railroads were private, local lines. After 1850, this existing physical network began to expand rapidly as islands of population emerged, along with an accompanying need for service between these islands. New routes, by and large, emerged only when railroad companies believed they were economically viable. The electrical infrastructure, originally implemented specifically to support interior incandescent lighting, emerged in affluent densely populated urban areas, responding to consumer demand. With telephones, the physical infrastructure was built in those locations where National Bell believed it could make money (again, densely populated urban areas).

The growth of these particular infrastructures did not take place under the guiding hand of government leadership that perceived these services as a public good to be nurtured. Instead, there was visionary leadership from private citizens acting in their own economic interests. Rail had its barons (Vanderbilt, Morgan, Harriman, and others) who were willing to invest in placing specific rail lines, foreseeing a future payoff. Telephone had Theodore Vail of AT&T, with the vision of and investment in a national long distance network in 1900, despite the fact that at the time, 97% of all calls were local. The electrical infrastructure had Samuel Insull of Chicago Edison, with his strategy of stimulating demand by developing new uses of electricity in the home. These were people who were able to see beyond technology in its current form, to what that technology could deliver.

Corporate knowledge management efforts can be approached on a piecemeal basis, or grow slowly through grassroots efforts (e.g., facilitating communities of practice). However, knowledge management as an element of a specific corporation s information infrastructure will be driven forward by individuals who are able to articulate a vision of their knowledge management needs and with sufficient organisational authority to drive their enterprise toward that vision. Examples of knowledge management "visionaries" include Bob Buckman at Buckman Labs (Rifkin, 1996), and John Browne at British Petroleum (Prokesch, 1997).

Lesson 2: The majority of users do not care about technology

Technology is often a key element in infrastructure. But while it may be a driving influence in some infrastructures, as was the case in the early development of the telephone and electrical infrastructures, the rail infrastructure emerged using decades-old technology. Banking, as an infrastructure based on information transactions, had no underlying technology of its own. In short, technology can be a significant enabler, but it is only one component of successful infrastructure.

This point is elaborated upon by Moore (1991), in his approach to marketing high technology. Moore describes a technology adoption life cycle, where, to be successful, marketing efforts must bridge a series of chasms as new markets are targeted. Moore divides the market for technology into five segments:

" Innovators" or "Enthusiasts" : Individuals who like technology for its own sake

"Early Adopters" or "Visionaries": Individuals who are able to match a technology to an opportunity, and sell it to their own organisation. They can be sold technology, because they can make the necessary jump from technology to how it can transform the organisation

"Early Majority" or "Pragmatists": Individuals looking for return on investment, and proof that the marketed technology can deliver that return

"Late Majority" or "Conservatives": Individuals who are technology-negative; the fact that there s new technology involved is a strike against. They may invest in a new technology, but only if it is required to stay even with the rest of the pack

"Laggards" or "Skeptics": Individuals who cannot be sold on new technology

While Moore suggests there are small chasms between each group, the most critical chasm is between the minority who will buy on the basis of technology (the early adopters and the visionaries), and the majority that will only buy on the basis of task (the pragmatists and the conservatives).

Technology alone does not lead to infrastructure. Brown (1991) expressed this perfectly in this quote:

"It's never enough to just tell people about some new insight. Rather, you have to get them to experience it in a way that evokes its power and possibility." (p. 109)

This is the difference between demonstrating a steam locomotive on an isolated section of track, and offering freight and passenger service between Chicago and New York City. The majority of people don't care about the locomotive per se. They care about it performing a specific task, for less money, in less time, with higher quality.

How can the chasm between knowledge management technology and solutions be bridged? Donald Norman, in The Psychology of Everyday Things (1979) offers a solution: "Design follows the task, not the technology". As Norman points out: "You don't go to the kitchen to use an electric motor; you go to use the refrigerator, or the blender, or the dishwasher. The motors are part of the task." Knowledge management as a field has yet to invent its refrigerator.

Lesson 3: New technology re-defines old technology

As an infrastructure advances, it sometimes makes a prior technology obsolete within its old niche. Yet, it is possible for a technology to re-define or re-invent itself in a new niche and emerge even stronger.

A key example of this was electricity displacing gas in interior lighting. While gas originally tried to compete (by improving its technology and cutting prices), it was eventually forced out of the interior lighting market. However, technology improvements enabled gas to burn at higher temperatures, which positioned it to enter the markets for heating and fuel. Another example comes from railroads, where rail displaced turnpike companies for transportation over long distances. The increased need for short distance transport (between rail stations and the final destinations for their cargo) more than compensated for the loss of long distance revenue.

Technology can also go away and come back. Two good examples from the world of medical technologies are the re-appearance of leeches (to restore venous blood circulation following cosmetic or reconstructive surgery), and thalidomide (as a treatment for oral and oesophageal ulcers, various types of cancer, and other conditions where the inhibition of new blood vessel growth is desired).

This is a key lesson for knowledge management, since a major component of the discipline is the use of information outside of its original context - the user provides a new context and reuses the information in a way that may not be foreseen by the originator. Think of it as "New Knowledge Re-Defines Old Knowledge." In this context, the goals of the knowledge repository become (1) preserving the old knowledge, and (2) enabling the examination of knowledge as flexibly as possible, to support its retrieval within as many relevant contexts as possible. For example, a shift in the corporate information architecture may render a set of guidelines for designing X Windows applications useless for its original purpose. However, the same document may provide a number of useful and valuable insights into the design of user interfaces in general. If that document is categorised only by the technology to which it applied (X Windows) or its document type (development guidelines), the knowledge it contains on a very relevant topic (user interface design) becomes lost.

Lesson 4: Infrastructure is driven by end user demand

There's a famous quote attributed to Willie Sutton (sometimes known as Sutton's law), responding to the question of why he robbed banks. He responded: "Because that's where the money is." That's a good, one-line explanation of why infrastructures emerged as they did. Railroads started out as local lines, which became linked when there was an economic demand; there was money in providing long-distance service. The electrical infrastructure to provide interior lighting started out in affluent, densely populated urban areas, where people could afford the service, and where there were enough people within the one-mile limit of the DC generation plant to make it worthwhile. Telephone service became available in urban areas where there were enough potential subscribers to justify the cost of the physical infrastructure. These infrastructures emerged and grew because they were economically viable in their own right; because the intended users wanted the service and were willing to pay for it.

In each case, there was a supply and a demand. In the case of the railroads connecting islands of population, those islands got connected because of demand. In the area of knowledge management, the expression "islands of knowledge" is familiar, as are the variations on the theme that knowledge management is about making connections between those islands. But connections have to make sense. For whatever it is that must flow along the connection, there has to be a willing consumer on one end, and a willing provider on the other end.

Even when end-users demand and consume goods and services, the benefits of that consumption are not always readily apparent; this is known as the "productivity paradox" (Friedlander, 1996). The term originated to describe the paradox that, although there were rapid improvements in the technological infrastructure surrounding electricity, national productivity numbers took literally decades to catch up. The explanation is that it takes time, not only for new technology to become diffused, but also for the surrounding processes to be re-engineered to take advantage of the technology.

The parallel to corporate knowledge management is clear. Management cannot introduce any fundamentally new technology and expect immediate improvement in the accompanying metrics. It takes time, both for the technology to get to its intended audience, and for the audience to learn to take advantage of the opportunities that new technology presents.

Lesson 5: Metcalfe's Law

Robert Metcalfe, one of the pioneers of the computer industry, is perhaps best known for what has come to be known as Metcalfe's Law (Gilder, 1993). This law states that the potential value of a network with n nodes is n-squared. Put more plainly, any network becomes more valuable as it reaches more users. Just as it is true for networks, it was (and is) true for telephones, for railroads, for electricity and for banking.

This in essence, is the theory of increasing returns (Arthur, 1994), which is complementary to the traditional theory of diminishing returns. The theory is applicable to those areas of the economy that are knowledge based. The theory maintains that people chose a particular path. One example Arthur uses is the choice between VHS and Beta video formats - by a variety of essentially random factors (corporate positioning, external circumstances over which the companies had little or no control, arguments on technical superiority, etc.). As more people choose an alternative, the more likely the alternative is to become "locked in." For example, as more people try to rent VHS, video store owners stock more VHS titles, which reinforces the value of VHS, leading to more people buying them. The lock in appears to be independent of technological superiority. On the plus side, however, the more people who select a technology, the more it improves and the more desirable it becomes for future selection. Moore (1991) reinforces Arthur in his belief that the outcome can be driven by essentially random events, as opposed to technological superiority.

Metcalfe's Law applies just as easily to a "knowledge network" as a Local Area Network; the value of that network increases dramatically as you add useful content (members, formal knowledge assets), and the benefit of remaining "on the sidelines" approaches zero. The key here is the phrase "useful content" . Unless the knowledge repository enables users to perform their job more efficiently, the number of assets in the repository is meaningless, as is the "superiority" (real or imagined) of the underlying technology.

Lesson 6: Maximise Reuse

When the infrastructure industries named above sought to maximise their revenues, each did so by attempting to maximise the use of the existing physical plant, through providing new services. For example, electrical generation plants have to be built for peak demand. Originally, since the only use of electricity was incandescent lighting, this meant that peak usage was the evening hours, with virtually no usage the rest of the time. Samuel Insull of Chicago Edison began to aggressively find other uses for electricity such as electric motors (that could be used in mass transit, industry, etc.), and heating elements (that could be used in irons) to take advantage of unused plant capacity.

For railroads, maximising the use of the physical plant meant a transition away from a competitive model, in which each company built and maintained track for its own exclusive use, to a co-operative model in which companies would share facilities so that each could offer through traffic.

From the telecommunications industry, recent history offers an excellent example of maximising the value of the physical plant. The various flavours of Digital Subscriber Line (often referred to as xDSL) are a technical innovation that allows local telecommunications providers to squeeze significantly more value out of their existing copper-pair infrastructure.

The lesson for corporate knowledge management is to take inventory of organisational assets that have already been bought and paid for; computer hardware and software, data networks, centres of expertise or even hard-won cultural shifts (e.g., initiatives to encourage continual learning). Then ask whether those assets are being used to their fullest potential.

Conclusion

Several of the lessons above focus on de-emphasising technology and focusing on task; solve the business problem that a user community acknowledges, and apply technology as necessary. This may appear painfully obvious. However, the equally painful truth is that many organizations focus primarily on technology, and either ignore the issue of how that technology is to be applied, or believe that it will eventually sort itself out:

Davenport (1994) describes failure in deploying groupware when training issues are ignored

Norman (1988) has filled an entire book with examples of smart technologists who design bad solutions because of their inability to package technology in a way that meets the needs of the intended audience

Moore (1991) cites a number of examples of companies or products that failed, because management could not see technology from the user's point of view

This may be considered a "meta lesson" from the previous lessons cited. Success in developing and deploying infrastructure comes through taking a "whole product" approach. Edison didn't just invent a light bulb; he invented a complete solution of (1) the power generation system, (2) the transmission system, (3) the meter, to measure usage, and lastly, (4) the lamp. For knowledge management, this meta-lesson may be expressed as: success in knowledge management will be dependent upon how well knowledge management principles and technologies can be related to the work done by people who don't care about knowledge management.

This concluding lesson can be put into an even more ancient historical context: the Trojan War. The Greeks (the forces of knowledge management, in our analogy) sit outside the walls of Troy (the targeted population, both in history and analogy). Frontal assault (marketing brochures and demonstrations of superior technology) proves futile. The denizens of the city are unwilling to surrender their current way of life without a struggle. How do you breach the walls? By building something that the citizens want and can relate to. In knowledge management, this will be a clear solution to a business problem that the target population understands and acknowledges that they have. This solution is the "Trojan horse", and knowledge management will hide inside.

Knowledge management will not succeed unless that horse is built. If knowledge management principles and technologies are ever to reach the level of ubiquity required to be considered "infrastructure", those elements must be designed into applications that will stimulate demand, and demonstrate, in Brown's words, the "power and possibility" of knowledge management.

Jeffrey D. Kenyon is a member of the Technical staff at Global Village Labs, U S WEST Information Technologies, Inc. He can be contacted at:

jkenyon@uswest.com

References

Arthur, W.B. (1994). Increasing Returns and Path Dependence in the Economy. Ann Arbor, MI: The University of Michigan Press.

Brown, J.S. Research That Reinvents The Corporation. Harvard Business Review, January-February 1991, 102-111.

Davenport, T.H. (1994). Saving IT s Soul: Human-Centred Information Management. Harvard Business Review, March-April 1994, 119-131.

Friedlander, A. (1995a). Emerging Infrastructure: The Growth of Railroads. Reston, VA: Corporation for National Research Initiatives (http://www.cnri.reston.va.us/).

Friedlander, A. (1995b). Natural Monopoly and Universal Service: Telephones and Telegraphs in the U.S. Communications Infrastructure 1837-1940. Reston, VA: Corporation for National Research Initiatives (http://www.cnri.reston.va.us/).

Friedlander, A. (1996). Power and Light: Electricity in the U.S. Energy Infrastructure 1870-1940. Reston, VA: Corporation for National Research Initiatives (http://www.cnri.reston.va.us/)

Friedlander, A. (1997). In God We Trust All Others Pay Cash: Banking as an American Infrastructure 1800-1935. Reston, VA: Corporation for National Research Initiatives (http://www.cnri.reston.va.us/)

Gilder, G. (1993). Metcalfe s Law and Legacy. Forbes ASAP, September 13, 1993.

Moore, G.A. (1991). Crossing the Chasm. New York, NY: HarperBusiness.

Norman, D.A. (1988). The Psychology of Everyday Things. New York, NY: Basic Books.

Prokesch, S.E. (1997). Unleashing the Power of Learning: An Interview with British Petroleum s John Browne. Harvard Business Review, September-October 1997.

Rifkin, G. (1996). Buckman Labs is Nothing but Net. Fast Company, July 1996.

Stipp, D. (1997). Idol of the Geeks. Fortune, 3 March 1997.