Just why is that "doing" Knowledge Management at law firms seems so
hard? Is KM itself simply an ineffable concept, meaning that virtually
no two people agree on what it means? (And that, when they then
try to go about it, the results are what you’d expect, as if every building
subcontractor on a construction site were looking at a different set
of plans.)
Is it just that lawyers don’t "share nicely" together (with the implication
that they never will)? Or is it merely a matter of getting the
incentive structure right, implying that heretofore we’ve relied on weak
and indirect incentives such as exhortation from above?
McKinsey, as befits them, has written a piece more
or less asserting that if we only wrap a classic marketplace structure
around knowledge management, our problems will be solved:
"[The most talented employees] will be unlikely to exchange
their knowledge without a fair return for the time and energy they expend
in putting it into a form in which it can be exchanged. […]"In short, effectively exchanging knowledge on a company-wide basis is
much less a technological problem than an organizational one: encouraging
people who do not know each other to work together for their mutual self-interest. There
is, of course, a well-known, well-tested solution to making it possible
to exchange items of value among parties who don’t know each other. We
call it a market."
This may come as a surprise to you, but I am of the increasingly firm
view that this is wrong: Paying colleagues within a firm (explicitly,
in dollars and cents) for their know-how will prove not only ineffectual
but divisive.
To be sure, McKinsey gets much of their discussion of KM right, starting
right off the bat with their recognition that both "Build it–they will
use it" and "Take it from the top" approaches will end in grief and disappointment. They
write that the approach of letting "a thousand Web sites bloom" is the
best alternative so far, but still not good enough across a "global"
organization because disparate "standards and protocols" will make information
generated by specialists in one sub-practice group inaccessible elsewhere.
I can only scratch my head: One
wonders if the author never heard of blogs—inexcusable,
if so, as the piece was written in the third quarter of last year.
Instead of neoclassical market models of motivation, I’d like to introduce
you to the concept of "peer production," a shorthand coined by Yochai
Benkler, a professor at Yale Law. In an interview running as
a sidebar to the cover story in this week’s Business Week, Benkler
explains the notion in a nutshell:
"[Benkler,] who studies the
economics of networks, thinks such online cooperation is spurring a
new mode of production beyond the two classic pillars of economics, the
firm and the market.“Peer production,” as he calls work such as open-source
software, file-sharing, and Amazon.com Inc.’s millions of customer
product reviews, creates value with neither conventional corporate oversight
nor market incentives such as payment. “The economic role of social behavior
is increasing,” he says. “Things that would normally just dissipate in
the air as social gestures become economic products.”
Indeed, peer production represents a sea change in the economy — at least
when it comes to the information products, services, and content that increasingly
drive economic growth."
This is a large claim indeed, so let’s unpack it a bit.
The most thorough
introduction to the notion of "peer production" comes, surprise,
in a paper by Benkler himself, "Coase’s Penguin, or Linux and the
Nature of the Firm,"
blessedly available online. The
guts of the Abstract (emphasis supplied) read:
"I suggest that [what] we are seeing
is the broad and deep emergence of a new, third mode of production in
the digitally networked environment. I call this mode “commons-based
peer-production,” to
distinguish it from the property- and contract-based models of firms
and markets. Its central characteristic is that groups of individuals
successfully collaborate on large-scale projects following
a diverse cluster of motivational drives and social signals, rather than
either market prices or managerial commands."The paper also explains why this mode has systematic advantages over
markets and managerial hierarchies when the object of production is information
or culture, and where the capital investment necessary for production-computers
and communications capabilities is widely distributed instead of concentrated.
In particular, this mode of production is better than firms and markets
for two reasons. First, it is better at identifying and assigning human
capital to information and cultural production processes. In this regard,
peer-production has an advantage in what I call “information opportunity
cost.” That is, it loses less information about
who the best person for a given job might be than do either
of the other two organizational modes."
(The title is something of an in-joke premised on my candidate for the
single most influential economic paper of all time, written by Nobel
laureate Ronald Coase,
his 1937 essay "The
Nature of the Firm," clocking in at all of 14 pages written in pellucid
English—need I add I commend it to you?.)
Back to KM in a law firm.
The incentive for lawyers to put their expertise on display? Not
"market prices or managerial commands," but "a diverse cluster of motivational
drives and social signals." Precisely.
And the single biggest "instant win" a KM system can provide? Identifying
"who the best person for a given job might be."
How do we, then, actually get it done? The foundational
building-blocks of such "peer production" today are the emerging generation
of Net technologies including file-sharing, blogs, wikis, and social
networking sites such as Tribe or Meetup
Inc. Tim O’Reilly, the famous tech book publisher,
characterizes the common theme of these tools with a felicitous phrase: They
share "an architecture of participation."
So: Motivated professionals responding to social signals adopt
tools designed to facilitate participation, and "peer production" takes
over from there. Will there actually come a day when the economist’s
arsenal of explanatory models puts that concept on a peer with the centuries-old
pillars of The Firm and The Market? Read Benkler. I’m
finding myself persuaded.
