Moving towards the knowledge economy?
| by Fiona Westwood 03 Jan 2000 Diploma in Financial Management Relevant to All Papers |
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Moving towards the knowledge economy - what does this mean in practice and do professionals provide good role models for the manageability of knowledge workers?Fiona Westwood writes
Management
There is
general consensus among analysts that the future competitive advantage of
developed countries will come from their ability to become "knowledge
economies". What is the basis of this proposition and what does this mean
to those of us who work in and with the business community?
- the globalisation of the marketplace increasing the scale of competition and affecting production costs;
- the impact of IT on the speed of communications and accessibility and location of workers;
- a significant move away from our traditional manufacturing base to service industries;
- increasing sophistication of consumers; and
- decreasing product life cycles.
All of this is forcing our businesses to respond. For example, some UK companies, no longer able to compete with the wage costs of Asia, have adapted their workforce to design and check the quality of products assembled abroad.
Research is already indicating that successful economies, organisations and people are those which use knowledge effectively, are outward looking, flexible and adaptable, familiar with IT, innovative, good at collaborative working, and are comfortable with uncertainty.
"Economic growth can no longer come .... from putting more people to work - it can come only from a very sharp and continuing increase in the productivity of the one resource in which the developed countries still have a competitive edge - knowledge work and knowledge workers"(1).
What does this mean in practice?
This shift in emphasis creates a number of particular issues for
organisations. Knowledge workers are more mobile than manufacturing workers.
They tend to be more highly educated and better paid. They carry their knowledge
in their head and can therefore take it with them. For an organisation to be
flexible and adaptable, it requires people to work together without the
formality of job descriptions and hierarchy, taking responsibility for
themselves.
Collaborative working and creativity requires trust and respect, with good working relations and the ability to create partnerships with outside people and organisations.
Jobs and management are therefore becoming more difficult, more challenging and more intense.
Where can we find examples of how to manage this new breed of knowledge worker? The professionals have always been seen as knowledge workers. Are they good role models? What lessons do they provide?
How can it be done?
Creating and sharing knowledge cannot be forced upon people. They have
to agree to contribute their expertise and experiences. How can individuals be
persuaded to work together collaboratively? Handy offers one solution:-"How
do you manage people whom you do not see? And whom you cannot control or fire,
because they may not be your employees - by trusting them"(3).
This re-inforces the value of the professional as a role model. Professional partnerships are based on trust - they have to be because of the risks of unlimited liability. Looking at the definition of a professional (see box) highlights another area. One of the strongest defining elements of a professional is the importance of values.
The solution to the manageability of knowledge workers lies in the organisation’s ability to deliver trust and values. This is the key challenge for the next decade.
The benefits of achieving it will be people working together cooperatively, generating creative solutions quickly to meet customers’ needs. Internally there will be better decision making, faster response times, improving productivity and profitability, reducing costs, increased staff retention, all creating new business opportunities - the kind of things that senior managers and owners dream about.
Conclusions
If we are to
move towards a knowledge economy, we need to build on the strengths of
professionalism not its weaknesses - to change our business structures and
management styles to suit and support it. This will deliver people who work
closely with clients, who are able to tailor their services, who are committed
to continuous learning, who share knowledge and work well with others and who
place a high importance on values and serving society. Success for all
organisations will come from developing people into knowledge
workers/professionals who take responsibility for themselves and work without
formal constraints such as job descriptions and hierarchical structures.
The benefits for organisations and economies are significant. For those of us who are comfortable with professionalism we will see a move to management structures which reflects our preferred style.
What is a professional and how manageable are
they?
To define a professional in the first instance is not
that easy. However, if we look at the various elements of professional work, we
find that professionals:
- have considerable control over their own work, operate independently from colleagues but work closely with clients;
- have standardisation of skills and knowledge but because of the complexity of their work, require considerable discretion and judgment in their application;
- go through formal programming (university) and a long period of on-the-job training to external standards under close supervision;
- operate within the constraints of their professional body;
- are committed to continuous learning and upgrading of expertise;
- share and contribute to the success of others, train young professionals, acting as mentors and role models; and
- owe a higher duty to society and are highly influenced by their professional values.
"A professional is a cross between a worker and a manager, responsible both for performing work and for assuring its successful completion... perhaps the best
definition of a professional is "someone who does what it takes"(2).
Within the context of their working life, professionals do the work correctly not because someone is watching but because it matters to them. For them, the criteria of success is often based on the complexity of the work undertaken rather than its ultimate commercial value. Professionals do not respond well to being told what to do. They decide what is important and how the work will be undertaken. They are therefore not easy to manage in the traditional sense. Those of us who work within and with professionals know the difficulties of "managing" professional partnerships!
As described above, professionals are by definition difficult to manage. They place considerable emphasis on their professional values, often having a higher loyalty to their professional body than to their place of work. They will leave organisations if they feel that these are not being delivered. They like autonomy and want to do things their own way, often appearing arrogant and argumentative-not ideal team players. For them, success is based on their own reputation and stature, rather than the success of the organisation.
All of this illustrates that to develop an organisation of "knowledge workers" will provide managers with certain headaches. Coupling this with the current trend of downsizing, lack of loyalty and job security, indicates that the move to a knowledge economy will not be an easy one! Yet to succeed, we will need to be able to do this.
References
(1). Drucker P E (1997), "Looking
ahead: Implications of the present", Harvard Business Review, Sept/Oct.
(2). Hammer M (1996), Beyond Re-engineering, Harper Collins.
(3). Handy C (1995), "Trust and the Virtual Organisation", Harvard Business Review, May/June.
Fiona Westwood established her own management and training consultancy in 1994 after working as a solicitor in private practice for 20 years. Westwood Associates specialises in working on business development projects with senior management teams in general and the professional sector in particular.