Put it to the Board: Dorothy Leonard

Managers in the western world and parts of Asia are wrestling with an issue that has always been integral to managing knowledge. In numerous industries and countries the pending retirement tsunami of so-called ‘baby boomers’ will soon reach crisis proportions. Some employees will depart without causing even a momentary ripple in the flow of organisational operations, as much of their useful knowledge can be easily captured. However, in every organisation there exist a few individuals with ‘deep smarts’: those with crucial knowledge that fuels organisational engines. When these individuals leave, many operations will splutter, slow or even grind to a halt.

Deep smarts are a potent form of expertise based on first-hand experience, providing insights drawn from tacit knowledge and shaped by beliefs and social forces. Deep smarts are as close as we get to wisdom. They are based on know-how more than know-what: the ability to comprehend complex, interactive relationships and make swift, expert decisions based on system-level comprehension. These individuals also have the ability to dive into component parts of a system and understand the details. [More information can be found in Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom, by D. Leonard and W. Swap and published by Harvard Business School Press.]

We find deep smarts in the ability of a seasoned executive to make swift decisions, taking into account the system-wide effects of that action on employees and stockholders, but at the same time understanding what is feasible in a given location, function or market. We see deep smarts in the ability of a physician to diagnose a complicated illness or an engineer to unravel the intricate interactions of components in a complex product. We entrust our lives to people each time we have an operation, fly in a plane or go white-water rafting. And we always hope that those in charge have smarts deep enough to encompass unexpected and rare events – not just the routine ones that a relative novice could handle.

One of the great challenges for managers is understanding how to transfer such smarts within an organisation. The solution is far from simple. Experts build their wisdom upon years of experience across a vast array of different situations. Deep smarts are composed of high levels of tacit knowledge and, as a result, they can’t be transferred. They must be re-created in the minds of the relative novice. Knowledge coaches – those possessed of both deep smarts and a willingness to impart them to others – can speed the development of such smarts by guiding novices. This process (guided practice, observation, problem solving and experimentation) is different from the methods currently employed by most organisations to train the leaders of tomorrow and this difference is critical for knowledge management.