Information Management for the Intelligent Organization

Chapter 8: Learning to be Intelligent

"In living systems, a dynamics of information has gained control over the dynamics of energy, which determines the behavior of most non-living systems. How does this domestication of the brawn of energy to the will of information come to pass?"

(Christopher Langton 1991, Artificial Life II)

"The knowledge of knowledge compels. It compels us to adopt an attitude of permanent vigilance against the temptation of certainty. It compels us to recognize that certainty is not a proof of truth. It compels us to realize that the world everyone sees is not the world but a world which we bring forth with others. It compels us to see that the world will be different only if we live differently. It compels us because, when we know what we know, we cannot deny (to ourselves or to others) that we know."

(Humberto Maturana and Francisco Varela 1992, The Tree of Knowledge, page 245)

Selections from Chapter 8

The Intelligent Organization

This book began with the premise that an organization is an open system that exchanges energy, resources, goods, and services with its environment. The most valuable resource of the organization is its information, or more accurately, information that has been processed and purified into knowledge that is ready to be used. There are three kinds of knowledge in an organization. Tacit knowledge is practical know-how that is embedded in an employee's ability to make judgement and exercise intuition. Rule-based knowledge is formal knowledge that has been encoded as procedures and programs in order to maximize operational efficiency. Background knowledge provides the cognitive framework by which people in the organization make sense of their actions and the changes in the external environment. All three forms of knowledge are critical to the organization - tacit knowledge ensures that the organizational tasks are performed well so that the goals of the organization may be attained; rule-based knowledge enables a sufficient level of efficiency, control, and equability; while background knowledge engenders the commitment and purpose that holds an organization together.

The intelligent organization is skilled in managing and mobilizing all three forms of organizational knowledge. The intelligent organization pursues its goals in a changing environment by adapting its behavior according to knowledge about itself and the world it operates in. The intelligent organization is therefore a learning organization that is proficient at creating, acquiring, organizing, and sharing knowledge, and at applying this knowledge to develop its behavior, position, or objectives. For the intelligent organization, learning and adaptation must paradoxically embrace their own opposites. A crucial part of organizational learning is to unlearn the assumptions and norms that have been inherited from the past and which are no longer valid. A powerful way of adapting to the environment is to know when to enact the environment so that it will develop in ways that are advantageous to the organization. These are the double challenges facing the learning organization.

Organizational learning is a continuous cycle of activities that include sensing the external environment, perceiving the external changes taking place, interpreting the meaning and significance of these changes, and developing appropriate adaptive behaviors based on the interpretation. Organizational actions and decisions alter the external environment, generating new messages and signals that in turn drive the cycle of learning. How an organization perceives a situation and interprets its meaning depends on the frames of reference and rules of interpretation that it has learned from past experience and represented in its organizational memory. Practitioners and researchers have stressed that effective organizational learning requires mastery of this cycle of learning activities at the personal, group, and organizational levels. Building the learning organization requires establishing a new organizational climate that promotes the accumulation and sharing of knowledge, an open-mindedness to deal with the unfamiliar and the unfavorable, and the boldness to experiment and innovate. Knowledge creation is everyone's concern, and not the responsibility of a specialized few.

Information Management

The basic goal of information management is to harness the information resources and information capabilities of the organization in order to enable the organization to learn and adapt to its changing environment. Information creation, acquisition, storage, analysis and use therefore provide the intellectual latticework that supports the growth and development of the intelligent organization. The central actors in information management must be the information users themselves, working in partnership with a cast that includes information specialists and information technologists. Information management must address the social and situational contexts of information use - information is given meaning and purpose through the sharing of mental and affective energies among a group of participants engaged in solving problems or making sense of unclear situations. Conceptually, information management may be thought of as a set of processes that support and are symmetrical with the organization's learning activities. Six distinct but related information management processes may be discerned: identifying information needs, acquiring information, organizing and storing information, developing information products and services, distributing information, and using information.

The identification of information needs should be sufficiently rich and complete in representing and elaborating users' true needs. Since information use usually takes place in the context of a task or problem situation, it is helpful to recognize that information needs consist of two inseparable parts: that pertaining to the subject matter of the need (what information is needed), and that arising from the situational requirements of utilizing the information (why is the information needed and how it will be used). Asking questions such as is the problem well or poorly structured, are the goals specific or amorphous, are the assumptions explicit and agreed upon, and is the situation new or familiar, will indicate the kinds of information that could be of greatest value to the user. Depending on the information use requirements, information could emphasize hard or soft data, elaborate existing goals or suggest new directions, help define problems or make assumptions explicit, locate historical precedents or provide future forecasts, and so on. Identifying information needs therefore not only involves determining the topics of interest to the user, but also the attributes of the information to be provided that will enhance its value and usefulness.

Information acquisition has become a critical but increasingly complex function in information management. Information acquisition seeks to balance two opposing demands. On the one hand, the organization's information needs are wide-ranging, reflecting the breadth and diversity of its concerns about changes and events in the external environment. On the other hand, human attention and cognitive capacity is limited so that the organization is necessarily selective about the messages it examines. The first corollary is therefore that the range of sources used to monitor the environment should be sufficiently numerous and varied as to reflect the span and sweep of the organization's interests. While this suggests that the organization would activate the available human, textual, and online sources; in order to avoid information saturation, this information variety must be controlled and managed. The selection and use of information sources has to be planned for, and continuously monitored and evaluated just like any other vital resource of the organization. Furthermore, incoming information will have to be sampled and filtered according to their potential significance. Such sampling and filtering is an intellectual activity best performed by humans - it requires human judgement based on knowledge of the organization's business as well as the strengths and limitations of information resources.

Organizing and storing information may be facilitated with the application of information technology. Traditional data processing technologies were first used to raise work efficiency, whether on the office floor or the shop floor. The operational use of computers generated an abundance of detailed information about transactions, customers, service calls, resource utilization, and so on. While such systems are tuned to provide high throughput performance, they are inefficient at and sometimes incapable of retrieving the information that decision makers need to have for planning and problem solving. Organizations with significant volumes of transactional information could need to reorganize and unify operational data from several sources, and provide friendly but powerful analysis tools that allow decision makers to trawl the raw data for strategic insight, so that, for example, they can discover patterns and opportunities buried in the lodes of data about customer transactions or service calls. The information assets of an organization are not confined to the transactional; they vary from the highly ordered to the ephemeral, and some of the most valuable information may be hiding in sales reports, office memos, study reports, project documents, photographs, audio recordings, and so on. The organization, storage, and retrieval of textual and unstructured information will become a critical component of information management. The learning organization needs to be able to find the specific information that best answer a query, and to collate information that describes the current state and recent history of the organization. Well integrated archival policies and records management systems will enable the organization to create and preserve its corporate memory and learn from its history.

In developing information products and services, the objective is not only to provide information that is relevant to the users' areas of interest, but also to provide information in a form that increases their useability. In other words, information products and services should deliver and present information so that their content, format, orientation, and other attributes address the situational requirements which affect the resolution of the problem or class of problems. This represents a value-added approach to the design of information products and services. The potential usefulness of messages is enhanced by increasing their ease of use, reducing noise, improving data quality, adapting the information to increase its pertinence, and saving the user time and money. Information services need to be constantly innovating, in a continual effort to move closer to satisfying the many facets of the users' information needs.

The purpose of distributing information is to encourage the sharing of information. A wider distribution of information promotes more widespread and more frequent learning, makes the retrieval of relevant information more likely, and allows new insights to be created by relating disparate items of information. The delivery of information should be done through vehicles and in formats that dovetail well with the work habits and preferences of the users. The separation between information provider and information user should be dissolved: both ought to collaborate as partners in the dissemination and value-adding of information to help ensure that the best information is seen by the right persons in the organization. To encourage users to be active participants, it should be made easy for them to comment on, evaluate, and re-direct the information they have received.

Information use is a dynamic, interactive social process of inquiry that may result in the making of meaning or the making of decisions. The inquiry cycles between consideration of parts and the whole, and between practical details and general assumptions. Participants clarify and challenge each other's representations and beliefs. Choices may be made by personal intuition, political advocacy, as well as by rational analysis. Managers as information users, for example, work in an environment that has been described as informationally overloaded, socially constrained, and politically laden. As new information is received and as the manager reflects and acts on the problem situation, the perception of the situation changes, giving rise to new uncertainties. The problem situation is redefined, the manager seeks new information, and the cycle iterates until the problem is considered resolved in the manager's mind. The organization's information structures and processes will have to be as open, flexible, and vigorous as the processes of inquiry and decision making they support. Information managers and specialists should be participants in decision processes so that they have a first-hand understanding of the information needs that emerge as the process unfolds and the extent that these needs are satisfied.

Understanding Environmental Scanning


Designing an Effective Scanning System


... Table 8.1 Knowledge Experts in the Intelligent Organization

Figure 8.1 Knowledge Pyramid of the Intelligent Organization


New Ways of Organizational Learning and Understanding the Future

Organizational learning requires `knowing' enough about the future in order to plan and respond to a changing environment. Future learning does not seek a detailed forecast of future events, but is aimed at understanding what forces, relationships and dynamics will influence the form and direction of change. Although some organizations may think that even this is an intractable task, a few organizations (such as Royal Dutch Shell, Canon, Motorola) have been able to time and again unlearn and relearn their mental frames of reference as they successfully anticipate and manage the future. Recent years have seen the diffusion of planning approaches that emphasize learning and envisioning rather than forecasting, and the intensification of cross-disciplinary research by biologists, computer scientists, economists, physicists, and many others that offer the promise of new ways of analyzing and modelling complex social systems such as industries or societies.

Scenario Planning


Systems Thinking


The Science of Complexity


The New Dynamics of Competition



We - people working in organizations, practitioners, researchers - have a great deal more to learn and understand about managing information as a process of discovering meaning, as a collection of resources and skills, and as an intellectual infrastructure for organizational intelligence. Like the seventeenth century physicists who first detected and measured the properties of air, we are only starting to apprehend the character and behavior of an entity that has for so long been transparent, invisible, and taken for granted. Just as no living thing can be without air for more than a short time, no social organization can be without information and survive. Information is the air that organizations breathe. Yet in many organizations, the vital respiratory systems are barely puffing along. Like an ill-trained athlete whose respiratory function is uncoordinated with and unable to support the physical demands of running a race, the organization with an underperforming information physiology will not have the energy nor the capacity to be able to withstand the rigors of competitive growth. The goal of information management is to develop processes, structures, and systems that will function both as the circulatory system that filters and distributes nourishing information throughout the organization, and as the central nervous system that synthesizes incoming information into representations and interpretations for collective action. Learning to be intelligent begins by learning how to manage information - this promises to be a dance of many recursive cycles, for we will in effect be learning about how to learn.

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