Many companies have embraced the notion that to operate effectively in today’s economy, it is necessary to become a knowledge-based organization.1 But few truly understand what that means or how to carry out the changes required to bring it about.
Perhaps the most common misunderstanding is the view that the more a company’s products or services have knowledge at their core, the more the organization is, by definition, knowledge-based. So, for example, a research institute or consulting firm whose product is entirely knowledge would be at the high end of the knowledge-based continuum, and companies making and selling simple physical products like cement would be at the low end. That is a dangerous assumption, both for industrial-age businesses that may believe they can’t change and for information-age businesses that complacently believe they don’t need to change the way they operate.
In short, the focus on products or services as a means of categorizing companies or defining the knowledge-based organization leads to a distorted image. Products and services are only what are visible or tangible to customers — they’re the tip of the iceberg. But like the iceberg, most of what enables a company to produce anything lies below the surface, hidden within the so-called invisible assets of the organization — its knowledge about what it does, how it does it, and why.To read the complete article, login or sign-up using the form below.
Become a premium subscriber today to read this and all MIT Sloan Managmeent Review articles.
Buy this article. Purchase one or more copies of this article in PDF form.
Become a premium subscriber today to read this
article and the entire archive of MIT SMR articles.
Upgrade your existing subscription to premium
Sign in if you are a premium subscriber.
Do you subscribe the MIT Sloan Management Review in print? Enter the email address and password you used when ordering. Don't remember? Lookup your subscription account information
