Strategy for the knowledge economy

Citation

Davenport, T.H. (2003), "Strategy for the knowledge economy", Strategy & Leadership, Vol. 31 No. 2. https://doi.org/10.1108/sl.2003.26131bae.001

Strategy for the knowledge economy

Thomas H. Davenport is Executive Director of the Accenture Institute for Strategic Change (thomas.h.davenport@accenture.com), and President's Distinguished Professor of Information Technology and Management at Babson College. His new book is What's the Big Idea: Creating and Capitalizing on the Best Management Approaches.

Strategic Management in the Knowledge Economy

Marius Leibold, Gilbert Probst, Michael GibbertPublished by Publicis Corporate Publishing, Erlangen and Wiley-VCH, Weinheim 2002ISBN 3-89578-168-1(online: www.publicis-erlangen.de/books or www.wiley.com)

I don't normally find myself reading business school textbooks, but this is no ordinary text. It's Michael Porter updated for the twenty-first century. It's Henry Mintzberg without the crabbiness. It's James Brian Quinn minus the messianic view of software. This is a highly synthetic and contemporary approach to strategy that could excite even the most credential-hungry MBA.

Granted, many other authors have written about the knowledge economy. But these three professors take for granted that it's here, and take strong positions as to how firms should make strategy when their key asset is the knowledge of their employees, customers, suppliers, and friends. The authors have written elsewhere about knowledge management, but in this book their focus is how firms make strategic choices about knowledge-oriented products, services, and relationships.

Knowledge, however, is hardly the only dimension of strategy that's explored by the authors. Just about every fashionable strategic notion is thrown into the mix: globalization, networks, collaboration, biological metaphors, chaos and complexity, environmental sustainability, etc. The collection of all these enthusiasms would be a bit tedious except that the authors are somewhat restrained in their worship of them, and each of the individual ideas begins to carry the weight of credibility. I did wince a bit when the term "socio-cultural co-shaper" appeared as the final answer to how we should view contemporary organizations, but only the term was bad; the underlying ideas were reasonable and verged on profound.

The fact that this book is a textbook is a mixed blessing. On the one hand it's largely a synthesis of existing ideas, rather than any great breakthrough in itself. However, the ideas certainly needed synthesizing. The real benefit of the textbook format is that the authors are free to include the writings of others: interesting Harvard Business Review articles, interesting case studies, interesting tables that are adapted from a wide variety of sources. The emphasis is on interesting. One can view this new world of knowledge-oriented strategy through a variety of lenses. Certainly a professor will find it useful to draw out connections among the diverse illustrations of the issues, though an individual reader may have some difficulty making sense of some of the fragments in the kaleidoscope. It's fun to try to guess the authors' intent in including a particular piece, since they don't reveal it explicitly. I believe, for example, that they put Michael Porter's article on "Strategy and the Internet" in not because they agreed with it, but because they wanted illustrate some retrograde thinking on this exciting technology. But I could be wrong!

The first two-thirds of the book lays out the new landscape of strategy, and the last provides a set of tools for traversing it. I like very much, for example, the focus on acquiring knowledge from customers that is one of the key tools for a responsive strategy. The chapter on "sensemaking", however - not by the authors - doesn't really qualify as a useful tool, since it's more abstract than Karl Weick's fine portrayal of the idea.

If I have any lingering dissatisfaction with the book, it's that the authors went a bit too far in their preferred strategic model of organizations. They justifiably dismiss mechanistic models, and then move on to ecological models of strategy and organization. I got excited about this direction, since I believe ecological models offer a great deal to our potential understanding of how complex organizations change. Yet they then equate the ecological model to chaos and complexity theory, which I believe renders organizations totally unmanageable and incomprehensible. They also resort to the socio-cultural model as the preferred stage of strategic evolution, while I would argue that the socio-cultural issues they care about could have easily been accommodated within the ecological metaphor. Still, it's all just words - though some are more elegant than others.

What scares me about this book is that it's the first thing I've ever read that made me want to teach a strategy course in a business school. There have to be some pretty powerful and interesting ideas flying around to make me venture into that territory (in which I am largely without formal credentials). The book is really too good to be offered only to MBAs, however. It should be studied seriously by anyone interested in strategy or the role of knowledge in organizations.