The following article is my editorial summary of the book ” The Knowing Doing Gap by: Jeffery Pfeffer & Robert I Sutton
How Smart Companies Turn Knowledge into Action
The so-called knowledge advantage is a fallacy – even though companies pour billions of dollars into training programs, consultants, and executive education. The reason is not that knowledge isn’t important. It’s that most companies know or can know the same things. Moreover, even as companies talk about the importance of learning, intellectual capital, and knowledge management, they frequently fail to take the vital next step of transforming knowledge into action.
They wrote this book because they wanted to understand why so many managers know so much about organizational performance, say so many smart things about how to achieve performance, and work so hard, yet are trapped in firms that do so many things they know will undermine performance. There are more and more books and articles, more and more training programs and seminars, and more and more knowledge that, although valid, often had little or no impact on what managers actually do. So, it was clear that knowing what to do is not enough. It was clear that being smart was not enough to turn knowledge into practice. It was evident that reading, listening to, thinking, and writing smart things was not enough.
They suspected the problems were largely in organizational practices, not individual psychology, but they needed more evidence. So they launched an intensive long-term research effort to discover what prevented organizations that are led by smart people form doing things that they know they ought to do.
Here is what their research led them to conclude:
1) Knowing what to do is not enough
Each year, more than $60 billion is spent on training in and by organizations, particularly management training. Much of this training, on subjects such as Total Quality Management (TQM), customer service and building customer loyalty, leadership, and organizational change is based on knowledge and principles that are fundamentally timeless – unchanged and unchanging. Regardless of the quality of the content, the delivery, or the frequency of repetition, management education is often ineffective in changing organizational practices.
One of the most important insights from the research is that knowledge that is actually implemented is much more likely to be acquired from learning by doing than from learning by reading, listening, or even thinking.
Great companies get remarkable performance from ordinary people.
The problems associated with transfer of knowledge within HP have led Lew Platt, the CEO, to lament,”I wish we knew what we know at HP.” Another study of the transfer of best practices, or knowledge, within the firms noted:
You would think that ….better practices would spread like wild fire in the entire organization. They don’t. As William Buehler, senior VP at Xerox said “You can see a high-performance factory or office, but it just don’t spread.” . . . One Baldrige winner [said], “We can have two plants right across the street from one another, and it’s the damnedest thing to get them to transfer best practices.”
The First Principle: If you know by doing, there is no gap between what you know and what you do.
2) When talk substitutes for action
One of the Main Barriers to turning knowledge into action is the tendency to treat talking about something as equivalent to actually doing something about it. Just like planning for the future is not enough to produce that future.
Making decisions as a substitute for action
Making presentations as a substitute for action.
Preparing documents as a substitute for action.
Using Mission statements as a substitute for action.
Planning as a substitute for action.
Why does talk matter so much?
Smart talk happens now, smart actions happen later
It is natural human tendency, to form impressions of others. First impressions are particularly potent and often difficult to alter. Appearing smart is mostly accomplished by sounding smart; being confident, articulate, eloquent, and filled with interesting information and ideas; and having a good vocabulary. A problem arises when smart talk is confused with good performance.
Talk, sounding smart or not, is all we often evaluate. It is all we see at first.
Negative people seem smarter
Unfortunately for getting anything done in organizations, one of the best ways of sounding smart is to be critical of others’ ideas. Professor Teresa Amabile of the Harvard Business School summarized her findings by noting “Only pessimism sounds profound. Optimism sounds superficial.” If all that has happened is that those with the courage to actually propose something have been devastated in the process, the organization will be filled with cleaver put down artists and with inactivity. Be very wary of judging people just on the basis of how smart they sound, and particularly on their ability to find problems or fault with ideas. These are dangerous people. They are smart enough to stop things from happening, but not action orientated enough to find ways of overcoming the problems they have identified.
People who talk a lot have more stature.
Another reason that talk is so valued in organizations is that people who say more are more likely to be judged by others as influential, high status, as leaders. For better or worse, people who want to get ahead in organizations learn that talking a lot helps them reach such goals, perhaps even more reliably than taking action or inspiring others to act.
The mystique of complexity.
In addition to saying smart things and talking a lot, another way to impress others is by using complex language, complex sentence structure, and complex analysis in addressing organizational issues. The use of complexity hampers implementation when the leaders, managers don’t really understand the meaning or implications fro the action.
Confusing ease of understanding with ease of implementation.
Complex and incomprehensible talk wastes time if managers just use it to gain status. Complicated talk does even more harm, when managers actually try to use it as a basis for designing structures, work procedures, and strategies. In an effort to gain status through complexity, the leaders wind up confusing others in their organizations and hinder the ability to turn knowledge into action.
You are likely to find talk substituting for action when:
- No follow-up is done to ensure that what was said is actually done.
- People forget that merely making a decision doesn’t change anything.
- Planning, meetings, and report writing become defined as “action” that is valuable in its own right, even if it has no effect on what people actually do.
- People believe that because they have said it and it is in the mission statement, it must be true and it must be happening.
- People are evaluated on how smart they sound rather than on what they do.
- Talking a lot is mistaken for doing a lot.
- Complex language, ideas, processes, and structures are thought better than simpler ones.
- There is a belief that managers are people who talk, and others do.
- Internal status comes from talking a lot, interrupting, and being critical of others’ ideas.
Sustainable competitive advantage is built by doing things that are difficult to imitate. But this line of reasoning confuses ease of understanding with ease of implementation. Ideas like decentralization and delegation of decision-making responsibility, sharing performance information, recruiting fro job skills as well as cultural fit, and treating people with respect and dignity are easy to understand. But actually delegating, a process the entails giving up decision making power, is quite difficult to accomplish in practice. Actually putting people first and treating them as if they matter to the organization’s success, although easy to talk about and easy to understand, is notoriously difficult to implement.
Complexity interferes with turning knowledge into action because for knowledge to be implemented, it usually must be understood by large numbers of people who often work in widely scattered locales.
Leaders who know and do the work
Valuing simplicity and avoiding unnecessary complexity
Using Language that mobilizes action and follow up on decisions
Organizations that successfully turn knowledge into action have an urgency to do so. They don’t take problems or obstacles as reasons not to do something. Rather they frame issues as how to get things accomplished.
3) When memory is a substitute for thinking
Organizations that fail to implement knowledge often behave as if the present were a perfect imitation of the past. And, although executives in such organizations may deny it, the ways that people are hired, socialized, promoted, and rewarded means that when new comers join the firm, they soon act like imitations of those who came before them. People in an organization who use memory as a substitute for thinking often do what has always been done without reflecting. Even when they realize that a new problem confronts the organization, problem solving means finding practices from the organizations past.
Other human frailties that cause organizations to get stuck in the past.
Why do firms rely on precedent instead of fresh thinking and analysis?
The need for cognitive closure.
According to social psychologists, the “need for cognitive closure refers to an individual’s desire for a firm answer to a question and an aversion towards ambiguity.” The factors that affect the motivation for cognitive closure – fear, deadlines, and decision pressure, stress and fatigue, and valuing certainty by important others – high – light organizational factors, including behavior of leaders.
Unexamined and misguided assumptions about human behavior.
A second factor that produces mindless and almost unconscious behavior is being rooted in a set of theoretical assumptions about organizations and people are implicit and, as a consequence, not directly examined or questioned. We take good ideas from other areas and try to use them in our area – without really understanding what made them work.
Because the theories are not surfaced or conscious, they can’t be refuted with data or logic. In fact, people may nit even be conscious of how the theories are directing their behavior.
You’re likely to find Organizations trapped by history when:
- The company has such a strong identity that anything new is viewed as being “inconsistent with who we are.”
- There are pressures to be consistent with past decisions, to avoid admitting mistakes, and to show perseverance.
- People have strong needs for cognitive closure and avoiding any ambiguity.
- Decisions are made based on implicit, untested, and inaccurate models of behavior and performance.
- People carry expectations from the past about what is and isn’t possible, and what can and can’t be done in the future.
How Organizations Avoid Using Memory as a Substitute for Thinking:
Not all organizations are trapped in the past, doomed to repeat the same errors simply because they were done before, or constrained by their history from learning new things or applying what they know. There are three main ways that organizations avoid relying on the past as a mindless guide to action.
1) You can start a new organization or subunit, one that is designed to have a distinctive character and to be free of the constraints and history of the parent corporation.
2) Organizations hampered by excessive reliance on the past can sometimes through dramatic means, make people mindful of problems with doing things in old ways, make it difficult to use old ways, and create and implement new ways of doing things.
3) Last and most rarely seen, organizations can be built and managed so that their people constantly question precedent and resist developing automatic reliance on old ways of doing things.
4) When fear prevents acting on knowledge
In organization after organization that failed to translate knowledge into action, a pervasive atmosphere of fear and distrust was evident. W.E. Deming’s prescription for success: Drive out fear. Unfortunately, there is some skepticism that fear and its first cousin, distrust remain pervasive problems in today’s supposedly enlightened workplaces. There are still many people who admire “tough,” “hard-nose,” or even mean-spirited bosses. We have never met anyone who actually wants to work for one of these people. Fear and distrust of management remain problems even today in many workplaces. Fear and distrust undermine organizational performance and, more specifically, the ability to turn knowledge into action. Fear helps create knowledge-doing gaps because acting on one’s knowledge requires that a person believe they will not be punished for doing so – that taking risks based on new information and insight will be rewarded, not punished.
How some organizations drive out fear?
A number of organizations have, in an intentional fashion, developed practices to drive out fear. By doing this, the organizations have built healthy groups where knowledge is readily developed and shared.
How to drive fear and inaction out of organizations:
- Praise, pay, and promote people who deliver bad news to their bosses.
- Treat failure to act as the only true failure; punish inaction, not unsuccessful action.
- Encourage leaders to talk about their failures, especially what they have learned from them.
- Encourage open communication.
- Give people second (and third) chances.
- Banish people – especially leaders – who humiliate others.
- Learn from, and even celebrate, mistakes, particularly trying something new.
- Don’t punish people for trying new things.
Driving out fear during hard times:
- Prediction: Give people as much information as possible about what will happen to them and when it will happen
- Understanding: Give people detailed information about why actions, especially actions that upset and harm them were taken.
- Control: Give people as much influence as possible over what happens, when things happen, and the ways things happen to them; let them make as many decisions about their fate as possible.
- Compassion: Convey sympathy and concern for the disruption, emotional distress, and financial burdens that people face.
There is one other important point.
If all other things being equal, organizations that have mean-spirited, fear inducing management practices are no more or less effective than those that treat people with dignity and respect, then there is no excuse for not treating people well.
5) When measurement obstructs good judgment
Measures and measurement process, especially badly designed or unnecessarily complex measurement systems are among the biggest barriers to turning knowledge into action. There are a lot of examples where measurement processes that fuel destructive behavior inside organizations. What is even more striking, however, is that when we encountered counterproductive measurement practices, managers often recognized and complained bitterly about them and described to us why and how they should be changed. Yet the use of such unproductive measures persisted.
Measures that create problems
Everyone knows that measures focus attention on what is measured. Everyone also knows that because what is measured is presumed to be important, measures affect what people do, as well as what they notice and ignore. As a consequence, everyone knows that what gets measured gets done. People want to do well on dimensions that are important to their organization.
Knowing this you might think that management would focus their measures on elements of management practice, business strategy, and firm culture that truly matter for long-term performance. And you might think that organizations would recognize the need for fewer focused measurements.
Why poor measurement practices persist
- Many companies operate using an oversimplified or incorrect model of human behavior.
- Because that model of behavior is widely shared, it has become institutionalized in certain types of measures.
- The primacy of the capital markets and shareholder concerns creates pressures fro measurement practices that are relevant to shareholder’s interests but may irrelevant or even counterproductive for the ultimate success of the business.
The model of behavior implicit in the measurement system used by most firms is that individuals are atomistic and economic, rather than social creatures. The atomistic view is captured in having measures for each individual. But if there is one thing we know for certain, it is that organizations are systems in which behavior is interdependent.
Using measures to enhance the development and use of knowledge
We found that a simple principle was applied in firms in which the measurement systems helped – rather than undermined – the ability to turn knowledge into action. Such firms measured things that were core to their culture and values and intimately tied to their basic business model and strategy, and used these measures to make business processes visible to all employees.
Measurement that turns knowledge into action
Based on examples of both good and bad practices we have seen, we can conclude that measurement practices that help organizations develop knowledge and turn that knowledge into action typically have the following properties:
- The measurements are relatively global in their scope, focusing less on trying to assess individual performance, which is always difficult in interdependent systems, and more on focusing attention on factors critical to organizational success.
- The measures are often focused more on processes and means to ends, and less on end-of-process or final outcomes. This focus results in measures that facilitate learning and provide data that can better guide action and decision making.
- They are tied to and reflect the business model, culture, and philosophy of the firm. As a result, measurement practices vary from one firm to the other as the business imperatives, cultures, and philosophies vary. And, in measuring things such as adherence to values, recruitment, and retention, and working cooperatively with others, the measures depart from conventional accounting-based indicators.
- The measures result from a mindful, ongoing process of learning from experience and experimentation. There is no sense that the system is ever completed. Rather, there is the view that the measurement system can always be improved and, because the business environment is likely to change, practices that are effective now may be ineffective in the future. Measures evolve to serve fundamental core business and operating philosophy or strategy that is more constant.
- The measurement process uses comparatively few metrics. Although, these firms may collect a large amount of data, they emphasize and attend to a small set of measures that are believed to be especially critical for supporting the company business model, philosophy, and culture. A focus on critical issues and processes is emphasized at the expense of comprehensiveness and complexity – things that dilute attention and that mix the important with the trivial.
- At its best, measurement closes the loop, auditing and assessing what the organization is doing, thereby ensuring that the organization does what it knows.
In each of the instances in which effective measurement practices were used, knowing what to do, why it needed to be done, and having the persistence and courage to do it helped leaders turn knowledge about how to enhance performance into organizational action.
6) When internal competition turns friends into enemies
The degree of competition in any society or company is largely a matter of choice, not the inevitable result of some property of human nature. Companies and societies vary dramatically in how much they use competition to organize what people do. Some companies and cultures have less competition and instead emphasize cooperation. Others particularly in the United States, emphasize competition as an organizing principle. Most Americans believe that competition is good for national economic systems, producing innovation and efficient allocation of resources. Competition . . . is believed to inspire superior performance and to be the engine that drives the economy and accounts for the success of capitalism.
In an analogous fashion, competition inside firms is also widely thought to promote innovation, efficiency, and higher levels of organizational performance.
How internal competitive dynamics create knowing – doing gaps:
- Undermining Organizational Loyalty
- Undermining Teamwork
- Undermining Knowledge Sharing
- Undermining the spread of Best Practices – Identifying with the unit rather than the organization
Why Organizations continue to foster dysfunctional internal competition:
The cases we reviewed suggest that internal competition often undermines the ability of companies to turn knowledge into action. Yet management practices that foster internal competition continue to be widely used. Why is this so? Part of the answer is that as we saw in “When memory is a substitute for thinking”, when people have strongly held but unexamined beliefs, they act on those beliefs without ever surfacing the underlying assumptions and asking if, indeed, their beliefs are logical and empirically sound.
Let’s challenge the underlying logic for using organizational practices that encourage internal competition.
- Doing well is not the same as winning
- Internal competition may seem fair to individuals, but the cost to the organization is usually high
- Management entails mostly novel intellectual tasks, not routine physical work.
- Interdependence, not independence, is the fact of organizational life.
- Leaders are often trained and rewarded for valuing internal competition\
Internal Competition Is Most Likely to Be Prevalent and Harmful When:
- People have incentives to avoid helping others or even to undermine their work.
- Leaders act as if performance comes from the sum of individual actions rather than interdependent behaviors like cooperation, knowledge sharing, and mutual assistance.
- The way that work is managed distracts people form the task at hand because they feel under scrutiny, are constantly being compared to others, and are focused on what internal rivals in the company are doing.
- Comparative or relative, rather than absolute evaluations are emphasized.
- Leaders are selected because they value competition and have a history of dominating peers in zero-sum contests.
- Little attention is paid to the power of expectations and the self- fulfilling prophecy, so people are labeled as “losers” or being a part of a bad unit and feel a lack of self-worth and resentment toward the firm.
Winning a competition, in school or on the job, is frequently, an individual activity, a matter of individual ability and performance. But, “studies of managerial performance have found that the most critical skill . . . and one most often lacking is interpersonal competence, or the ability to deal with people problems.” Thus even as we train and develop leaders in settings emphasizing internal competition, the most important skill for leadership actually entail the ability to work in teams, to collaborate, and to empathize with others. There is a striking discrepancy between what we know about leadership and what we do in many settings in which leadership is presumably taught and learned.
External versus Internal Competition:
We don’t want to create the impression that competition is always a bad thing. Organizations such as SAS Institute, AES, The Men’s Warehouse, and Southwest Airlines are fierce competitors, not laid back companies, which is one reason why they have been successful. It is just that their competitive juices are aimed at external competitors rather than at people within their own company.
How Companies Avoid Turning Friends Into Enemies:
There are a number of ways to overcome the problems that occur when there is too much internal competition, not enough time spent sharing information and helping others and not enough focus on enhancing the organization’s overall performance. One of the most powerful and straight forward is to reinforce a common organizational identity and common goals and interests by highlighting external threats and enemies.
Ways of Overcoming Destructive Internal Competition:
- Hire, reward and retain people in part based on their ability and willingness to work cooperatively with others for the company’s welfare.
- Fire, demote and punish people who act only in their individual short-term interest.
- Avoid compensation and performance measurement systems that create individual competition.
- Have measures that assess cooperation.
- Build a culture that defines individual success partly by the success of the person’s peers.
- Model the right behavior via leaders acting collaboratively, sharing information and helping others.
- Promote people to top management positions who have a history of building groups where members cooperate, share information, and provide each other mutual assistance.
- Use power and authority to get people and units to share information, to learn from each other, and to work collaboratively to enhance overall performance.
As Dean Tjosvold, a researcher and writer on the subject of competition and cooperation, noted, “Competition stimulates, excites, and is useful in some circumstances, but those situations do not occur frequently in organizations, and the widespread use of competition cannot be justified.”
Turning Knowledge into action
We have seen that the knowing – doing gap is a pervasive and important problem. Organizational performance often depends more on how skilled managers are at turning knowledge into action than on knowing the right thing to do. Knowledge and information are obviously critical to performance. But we now live in a world where knowledge transfer and information exchange are tremendously efficient, and where there are numerous organizations in the business of collecting and transferring best-practices. So, there are fewer and smaller differences in what firms know than in their ability to act on that knowledge. It is widely recognized that many firms have gaps between what they know and what they do, but the causes have not been fully understood. Managers know what to do to improve performance, but actually ignore or act in contradiction to either their strongest instincts or the data available to them.
Eight Guidelines for Action:
- Why before How: Philosophy is Important
- Knowing Comes from Doing and Teaching Others How
- Action Counts More Than Elegant Plans and Concepts
- There is No Doing without Mistakes. What is the Company’s Response?
- Fear Fosters Knowing-Doing Gaps, So Drive Out Fear
- Beware of False Analogies: Fight Competition, Not Each Other
- Measure What Matters and What Can Help Turn Knowledge into Action.
- What Leaders Do, How They Spend Their Time and How They Allocate Resources, Matters