Preventing the labyrinths of the knowledge economy

By Sergej van Middendorp

In the work I do, I notice the continuous tensions that exist in almost every situation I face. Do you recognise the following examples?

Tension between business and technology;
Tension between academic research and business practice;
Tension between investments in the future and urgent issues of the present;
The tension between the philosophy, science and practice of the industrial era and those of the knowledge era.

In my opinion, the major challenge that managers face in organisations today is to really grasp the meaning of at least two areas that are at a natural tension with each other and balance these, simultaneously, from an ‘architectural’ point of view.

Let me illustrate my point with a short story from ancient Greece, adapted from Flemish philosopher Arnold Cornelis.

He describes the labyrinth in the gardens of the mythical palace of King Minos. In Cornelis’s view the labyrinth and the palace were not two different structures; they were one and the same: the palace had evolved into a labyrinth because the masons who kept adding to the structure, responding to the continuous demands from Minos did not have architectural competencies at their disposal. They had no method to balance the tensions between stability and growth in building structures. Architecture as a human competence was born in this era as a result of failures like this.

To translate the learning of Ancient Greece to today’s organisational environment let us look at two management approaches that are at tension with each other and are in need of an architectural approach.

The focus on process standardisations inspired by the paradigm of the industrial economy.
The management tools for strategy in the 21st century, like network thinking, inspired by the paradigm of the knowledge economy.

Thomas Davenport, in a recent Harvard Business Review article, sees many business processes standardising and developing into commodities over the next few years. The buzz words of this transition in business are information work productivity, process standardisation and outsourcing. The risk for managers stressing focus on this perspective only is that the semantics, philosophy and meaning of these instruments will also be applied to equally important issues like innovation and strategic positioning.

On the other hand, we now have the tools that have emerged to work with the knowledge economy aspects of the organisation, such as organisational networks analysis. The overwhelming possibilities in this area make it easy to forget that large parts of any organisation still adhere to the laws of the industrial economy. Managers making this paradigm shift sometimes seem to forget their basics, or even to declare them useless.

We hence need managers that are willing and able to develop and take an architectural perspective on the tensions between industrial and knowledge economy approaches. Managers who go the extra mile to understand and work with both sides of the equation simultaneously. If we aim to create valuable ‘palaces of the knowledge economy’, on the tangible industrial economy fundamentals, we have no choice.