Leader Volume 9, Number 9
Knowledge Into Action
Sutton and Pfeffer are professors in the Department of Management
Science and Engineering, Stanford University.
They are authors of The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action
(Harvard Business School Press, Cambridge, MA, 1999).
Implement. Stop talking and do something. Actions speak
louder than words. If you have a learning organization, it needs
to be a doing organization too.
No matter how you put it, the evidence is rolling in: The
distinction between so called “old economy” and “new
economy” companies are overblown.
Regardless of industry, knowing what to do isn’t enough.
Those companies and business units that dominate their competitors
win by turning knowledge into action.
Just recently, we
met with the founders of Reactivity, a company that consults to
Internet start-ups and is incubating several of its own start-ups.
Unlike most Internet start-ups, Reactivity has been profitable
since it was founded over two years ago.
When Mitch Kapor (the founder and first CEO of Lotus, and
designer of Lotus 1-2-3) learned about the company, he not only
invested a great deal of his own money, he convinced the young
founders to make him Chairman.
John Lilly, one of Reactivity’s co-founders, told us
"Good ideas are easy to find. By now, nearly everyone knows
what it takes to succeed. The problem is doing it; that is the hard part."
John Lilly’s words are nearly identical to what we have
heard from hundreds of executives in more traditional industries,
like automobiles, pharmaceuticals, energy, publishing, textiles,
and financial services. Executives
in these industries know which business practices and business
models will enhance performance.
The difference between winners and losers is what they do,
not what they know.
surprising that so many managers know so much.
Companies do a lot more than just draw on past experience. Most companies, and increasingly even small and young
companies, hire management consultants armed with the latest
managerial tools, they use inside and outside experts to keep
training their people, they have the Internet, Intranets, and
Extranets, and their thirst for information about what they ought
to do supports the publication of over 1700 management books a
Yet, so often,
all this knowledge doesn’t help much.
Managers at companies we speak to, consult for, and study
keep pulling us aside, and whispering that, even though they have
all this knowledge, their company isn’t turning it into action.
The problem isn’t just inaction.
It is usually worse than that.
More often, people know what to do, but their companies
keep doing things that clash with, or undermine, proven practices
that would enhance performance.
and curiosity about why so many companies are filled with smart
and hard working people, but still didn’t act on their
knowledge, inspired us to complete a four-year research project.
We call this the “knowing-doing” problem--the challenge
of turning knowledge about how to enhance organizational
performance into actions consistent with that knowledge. For
example, audiences often nod knowingly when we talk about “the
smart talk trap.” We
explain how, in many companies, knowing-doing gaps are created
when talk is treated as an acceptable substitute for action.
When something needs to be done in such places, people act
as if talking about it, making decisions relevant to it, and
planning are the same as doing something to actually
address the problem. There
are numerous meetings where, at the end, the decision is to have
even more meetings! In
such firms, there is often little follow-up to ensure that
anything is actually happening.
We don’t reject
informal talk, formal presentations, quantitative analysis,
mission statements, and strategic planning.
These often inspire and guide intelligent action.
It’s just that they are not substitutes for action.
Fortunately, not all organizations are plagued by this
companies use several practices to make sure that talk isn’t the
only thing that happens:
1. They have
career systems that bring people into senior leadership positions
who have an intimate knowledge of the organization’s work
processes because they have performed them themselves and have
grown up with, or been promoted from within, the organization.
Jim Goodnight, CEO of SAS Institute (a billion dollar
software firm) still spends about half his time leading software
development projects. George
Zimmer, the CEO of the hugely successful retailer, Men’s
Wearhouse, still spends at least a day week in stores.
2. They value
simplicity and do not reward unnecessary complexity. These are
places where calling something “common sense” is a compliment
rather than an insult, and where
the language used is simple, clear, and direct.
A key part of Steve Job’s turnaround at Apple Computer
was eliminating the dozens of product platforms that Apple was
selling when he took over in July of 1997. Within a year, Apple
had only four platforms, two laptop computers and two desktop
3. They use
language that is action oriented and, even more important,
followed up to ensure that decisions are implemented and that talk
results in action and not just more talk.
At IDEO Product Development, people get ahead by producing
prototypes for new products, not just talking about great ideas
for new products. An engineer who just talks, but never produces
any prototypes, will be teased and, and if that doesn’t lead him
or her to develop prototpyes, then shunned, by coworkers.
trap is just one of the five major causes of knowing-doing gaps.
These gaps are fueled by too much reliance on history and
precedent, fear, dysfunctional internal competition, and measuring
and rewarding the wrong things.
Special attention is required to avoid and reverse these
problems, and get managers to help their companies gain an action
advantage over competitors, which is all that counts in the end in
both old economy and new economy companies.