Why is it that people who have become "proficient" at typing with two fingers find it much harder than those who have never used a keyboard at all to learn to touch-type properly? And what has this to do with business innovation, knowledge management and organisational learning? The common thread running through all of these notions is "unlearning" - the destruction of established knowledge and patterns of behaviour.
Dennis Sherwood, a knowledge management consultant, has observed that the successful business innovation process has three phases: new idea generation, evaluation and development, culminating in commercial exploitation. Perhaps the hardest phase is new idea generation. Recently, the new chairman of Lazard, Marcus Agius was quoted as saying: "The world is awash with capital. Capital is a commodity. What is in short supply is good ideas." This confirms that new ideas cannot be created by dictat, and throwing money around does not inevitably produce new thinking.
To understand why new ideas are so hard to come by, we must first analyse their nature. Most new ideas are a recombination of familiar elements into a novel pattern, thereby creating a new functionality. Arthur Koestler's definition of creativity, cited by Mr Sherwood, is apt and eloquent: "The creative act is not an act of creation in the sense of the Old Testament. It does not create something out of nothing; it uncovers, selects, reshuffles, combines, synthesises already existing facts, ideas, faculties, skills." So, for example, all musical compositions are formed from different arrangements of the same notes.
In business too, we can see new ideas as recombinations of the elements in old patterns. Take the budget airline industry, originated by Southwest Airlines and adapted by Ryanair in the European context. Like traditional airlines, the budget carriers require certain ingredients: airports, aircraft, passengers, baggage, routes, etc. But the innovation means focusing on point-to-point short haul routes, secondary airports, aircraft fleet commonality, one class unassigned seating, and no free on-board services. Therefore, budget airlines can operate at very low costs, without the time consumption of full service airlines. This permits low fares and faster aircraft turnaround, two critical success factors in the budget airline industry.
If we study the differences between Southwest and Ryanair, in some ways, Ryanair's achievement is greater, even if Southwest was the originator of the concept. First, Ryanair had to have the insight that the Southwest model could work in the rather different context of the Irish-UK and then European markets. But perhaps a bigger challenge to Ryanair was that it was already operating (albeit unprofitably) as a full service airline. It had to implement the new formula when it converted to a budget airline and also unlearn much of the knowledge built up over several years of operation.
In idea generation, the elements for the new pattern have to be recognised and selected as relevant. These elements are part of existing knowledge, much of it tacit in nature. Therein lies a large part of the problem: knowing what we know.
It is customary to categorise knowledge into explicit and tacit. The former is apparent and communicable. But it is not so easy to pinpoint tacit knowledge, which lies below the level of awareness. Nevertheless, it is knowledge in use and grounded in action. People can use tacit knowledge in an unconscious yet effective way.
For example, the value of assigning the same contact person to a particular customer enables the contact person, over time, to anticipate the customer's needs and preferences. But if the contact person suddenly left the job, it would be impossible to pass on all that is known about the customer to a successor.
On the other hand, if the original contact person went to work for another company, his/her tacit knowledge of the customer might not be as valuable, since the application of knowledge, especially tacit knowledge is usually context specific. Companies which head-hunt apparent high fliers away from competitors should beware. In a new context, much of the tacit knowledge which made the high flier so successful may be useless. Research in the US has shown that exchange traders who move to new employers, on average, prove to be disappointing in their performance.
Common wisdom affirms that its very intangibility and context dependency is what makes tacit knowledge so valuable, because it cannot be easily copied or transferred. The Holy Grail is the capacity to transfer tacit knowledge internally in the firm, yet keep it away from competitors.
Yet, tacit knowledge has a dark side, in its inaccessibility to conscious articulation. We continue to behave in the ways we have learned. New pattern formation must be preceded by the uncovering, acknowledgment and break-up of old patterns - the act of destruction that precedes the reconstitution of the parts in a new way.
If we apply these aspects of knowledge management to the realm of business, there are many examples of companies which have come unstuck because they persisted in applying old learning and tacit assumptions that were no longer appropriate.
An interesting example of counterintuitive thinking was recently enunciated by Ryanair, which declared that over time, more and more passengers would fly fare-free, but were expected to subsidise their flights by buying on-board entertainment and goods. This is turning conventional wisdom on its head. Instead of the traditional model whereby ancillary services supplement airfare revenue, it will be the other way around. Time will tell whether this seemingly paradoxical approach will take off.
The wisdom of hindsight is a great teacher, but a better lesson is to avoid mistakes in the first place. As a general principle, a good start is for companies to strive to uncover their tacit knowledge and to evaluate whether its usefulness. If so, it should be transferred throughout the organisation. But a careful evaluation of tacit knowledge made explicit could produce the opposite inference, that a new pattern is required. This leads to the undeniable conclusion that existing knowledge should be discarded or converted, in other words, unlearned.
Dr Eleanor O'Higgins is a lecturer in strategic management and business ethics at the Smurfit Business School, UCD.
