Ignorance Management

Ignorance Management Defined

As published in Business Information Review in 2010...


Before there were Chief Knowledge Officers, before the craze over Knowledge Management (KM) as a tool for productivity and even before the late, great Peter Drucker was born, there was Ignorance Management. From poor project documentation, to padded expense reports, to executive careers built on the “Peter Principle”, Ignorance Management is an integral part of the business landscape. And it’s killing your profit margins. This article explores a few of the more common forms that Ignorance Management takes.

Ignorance Management (IgM) - the science of achieving local or personal, short-term gains or savings at the expense of system-wide, long-term performance

As a knowledge management expert, having started and run KM programs, consulted on KM projects and deployed KM systems, I can tell you, definitively, KM can’t help you half as much as IgM is hurting you. And what’s more, KM can’t really help you much at all until you stand up and address Ignorance Management in your company.

Most companies start their dance with KM doing some sort of analysis of how knowledge impacts their company. They engage in knowledge inventories, look at knowledge-related processes, see how they can improve use of lessons learned, capture more tacit knowledge and retain the institutional knowledge imbedded in their long-term employee’s brains. And all of these, although time consuming, are worth-while exercises. After all, what part of your business wouldn’t be improved by a better understanding of where your intellectual property is, how information could be better distributed and re-used in your company and strengthening your corporate culture through better mentoring relationships and programs? But in the end, KM teaches us to do very little that we don’t already know that we should be doing anyway.

So why do we feel compelled to create a program or department that is designed to support managers in doing what everybody knows they should be doing? The answer is because IgM has taken hold in your company. The answer to countering IgM at its core isn’t to develop a squad of KM experts who will cheer your company into sharing, caring and giving on a more consistent basis. The answer is to recognize that the roots of IgM are in normal, if exacerbating, human tendencies that can be addressed with tools you already possess in your operations management arsenal. All it takes is the courage and discipline to enforce the right behaviors and disciplines. Behaviors and disciplines you already know you should be enforcing.

Recently we have been blessed with new, writ-large examples IgM to consider. Bernie Madoff has shown us the negative impacts of keeping customers ignorant, while buyers and sellers of derivative securities have shown us the potential results of ignoring their own ignorance and lastly the leadership at America’s big auto manufacturers have provided a lesson in the dangers of ignorance perpetuated by magical thinking.

Why work to understand the lessons in these examples? Because the very same motivations, tactics and damage that each of these public fiascos has brought to light are in play to some degree in every company in America, and with similar mitigating effects on our collective success, global competitiveness and economic security.

Bernie Madoff – Managing Customer Ignorance

People are essentially the same all over the world, regardless of their occupation. There is a part of all of us that will consider taking advantage of a situation for immediate personal gain if we think we might get away with it. Bernie isn’t really remarkable in his yielding to the devil on his shoulder, only in the acumen with which he could carry a lie in his heart and still look credible in the eyes. Bernie’s example should do far more than make us re-evaluate our 401K’s. It should provide us with a wake up call to examine how this natural human tendency is impacting our own business operations right now.

Consider a LAN Administrator for a professional services company in charge of that company’s network. It’s a great job, because the core competency of the company isn’t IT services, which means the average employee’s understanding of his job responsibilities isn’t exactly penetrating. Rather than look at this as an opportunity to educate and become a strategic partner to the profit centers of the company, the LAN Admin decides to relax and take it easy. To protect his chosen approach, his response to many simple requests is “Well, we could do that, but it’s very complicated and time consuming.” In fact, many of these requests are not complicated, and executing them would not be time consuming. But in repeatedly pulling the wool over the company’s eyes in an area where they don’t have direct expertise, he gets to set his own pace for achievement, or lack thereof, every day.

As he has decided not to challenge himself, our LAN Admin’s skills and job performance are likely to fall behind, reducing his ability to manage tasks and in his ability to apply best-practice approaches to problems. He simply isn’t as interested in keeping up with industry standards as he is in enjoying each and every minute of his lunch hour. All the while, the company’s reliance on IT is growing. After a time, that growth forces his hand and he HAS to repeat his now familiar refrain about things being too time consuming. He doesn’t have the time to even do the simple things, as his IgM methodology has built a house of cards. He does the bare minimum to keep the status quo going, but has no time to actually improve his performance, or the business’s return on the investment for his services even if he wanted to. Visibility into this situation would reveal a costly decision for the company: either support the LAN Admin in maintaining the status quo at current costs while suffering ever greater opportunity costs, or bite the bullet and spend money on an overhaul of the systems and processes under his care.

This is an example of a front-line Ignorance Manager working to protect their status, their ego and their job by actually providing their fellow employees misinformation about the nature of the work they do. In effect, their actions protect their immediate interests at the expense of organizational learning to take place in your company.

Imagine the difference if he had taken the time to execute simple requests quickly, to improve the workflow around these requests in order to complete tasks more efficiently, and possibly even to deputize his fellow employees by educating them on how to accomplish some of the simpler tasks themselves. Knowledge Management tries to instill all of these more enlightened behaviors in organization members by preaching the value to be gained by the collective, which is great. However, the tools to effect the biggest change quickly in employees like this LAN Admin are not in any tool bucket that can be characterized as uniquely KM. They are things such as meaningful metrics, work break down transparency and stretch goals tied to performance bonuses.

Which means the LAN Admin isn’t even half the problem. His manager’s behavior points to the bigger issue. She is smart enough to know that he has fallen behind, has heard enough feedback from the rest of the business to know that they are frustrated. But she isn’t knowledgeable enough to know when his assessments of task complexity are accurate and when they are just lazy. In fact, it’s quite possible that our LAN Admin sets the metrics for his own job performance and she is perfectly happy to report to her superiors that he hits them, almost without fail, every year. The combined results of your LAN Admin and his manager’s behavior will have fewer implications for the global economy than some of their fellow Ignorance Managers, but it’s useful to replace “LAN Admin” with “Bernie” and “his manager” with “SEC” to understand the potential implications. And this leads us to our second, more problematic flavor of Ignorance Management, namely managers’ ignorance of the disciplines they are managing and thus their lack of ability to properly evaluate their direct reports.

Derivatives Brokers – Ignorance is Bliss

Like sales, the discipline of management has skill sets which can be sharpened independent of what’s actually being managed. But just as the brokers of mortgage- backed debt derivatives have wreaked havoc by doing a great job of selling something they didn’t understand, there is an enormous risk to a company in assuming that managers don’t have to deeply understand the domains of expertise they are managing. The derivative brokers acted as impact amplifiers of products which were essentially bad bets. The brokers put on their best suits and their biggest smiles which masked their ignorance of the derivatives’ inner workings. They simply did a good job of passing on products that they had been handed by somebody else, with very few questions asked in the process. Sales people rise to the top because they can get customers to trust their recommendations. By not insisting that they earned that trust by understanding what they were recommending, they acted as amplifiers to a dangerous finance strategy. Managers rise to the top because their superiors trust them to drive performance. By not insisting that they take the steps to understand what good performance looks like in detail, they are acting as amplifiers of your company’s ignorance.

There are several ways companies install managers who don’t quite understand enough about the daily activities of their direct reports to avoid problems. One of the most pervasive channels is through the handling of internal hires. I am continually amazed at the lack of re-training that internal hires moving from one department to another are subjected to – especially at the management level. Somehow, we seem to feel that managers should be afforded a level of respect that insistence on re-training severely undermines. It is true that having leadership in every department that really understands the core business competencies will better align that department’s operations with the company’s revenue generating activities. Accordingly, there is often a sacrifice in deep IT, HR or even Financial credentials in favor of familiarity with the company’s industry and people when filling department leadership positions.

Well, I’ve got news for you. Managing a business in today’s day and age of global presence, economic instability, virtual employees and outsourcing, requires deep smarts in each of your back office departments as well as your client facing business units to keep pace with the competition. Like those derivative brokers, your department managers can serve up charts, reports and metrics that look and smell great. But the real question is, who decided what to measure, and are they the right things to track? With a manager whose visibility into the specifics of the discipline they are managing is weak, inevitably you have the employees telling the manager how hard they are working and how they are doing. And if the story is well put together, how is the manager to know different? It’s relatively easy to know that something is wrong or to sense that a department is off track. But it takes deep smarts in the specifics of a discipline to figure out where the problem is and how to make changes that will support the company’s overall competitive position.

KM works to limit pockets of ignorance by facilitating transparency and promoting a culture of organizational learning. Everyone should be learning more about the core disciplines they are responsible for every day, from both internal and external sources. But the quickest and easiest way to improve transparency in your company is to insist that managers develop an intimate understanding of best practice standards within their discipline. Training, a best practice concept in business around long before KM, is designed to combat ignorance. But without a mandate from the executive ranks for your managers to spend a certain % of time engaged in training, ignorance will continue to be amplified by those same managers. This brings us to the coup de grace of Ignorance Management, namely executives who, in spite of dramatic changes to their immediate business environment, think that the keys to future success lie somewhere in their company’s past.

GM and Chrysler – The Ignorance in Arrogance

The nervous system is designed to clearly indicate change. Nerves “settle in” and stop sending signals to the brain if exposed to things like tight muscles or hot bath water long enough. Sooner or later, circumstances, regardless of whether they are healthy or not, start to feel “normal” and thus comfortable. This sense of normalcy can be a clear obstacle to things like continuous improvement and risk management, both constant requirements for continued success in a rapidly changing world. In the case of the GM and Chrysler, their fascination with their past success has lead to the outright magical thinking that, somehow, modest tweaks to their aging business models would lead to the re-birth of success.

Strength, commitment and perseverance are all admirable qualities in an executive. But today’s business environments and competitors are moving too fast to not couple those qualities with intense curiosity, flexibility and humility. Deep commitment to any single strategy or tactic without a regular re-evaluation against competitors, the changing business environment, comparable industry best practices and simple common sense, will not only cause your company to miss opportunities for improvements but also to ignore mounting risks. And this analysis can’t stop with an evaluation of the customer-facing aspects of your operations. The margins by which competitive advantage is measured in the global economy are thinning. Every aspect of your company needs to at least be on par with some sort of global average to avoid erasing a clearly established competitive advantage in another area.

Returning to a previous business model allows executives to implement metrics, reports and standards that not only brought them success before, but that they understand intimately how to manage. They are actually looking to tackle IgM. Viewed through this lens, the company has simply lost its understanding of how to compete. Bringing senior executives out of retirement is seen as a way to re-educate the business in tried and true methods. To be fair, often there are key elements to past successes that have dropped away due to laziness, expansion or external shocks. But the times, they are a changin’, and although reviving principles instrumental to a long-standing organizational value proposition should be seriously considered, how those principles are implemented in the modern world needs to be weighed very carefully and with minds that have an intimate understanding of how the business landscape has changed in each and every process that contribute to the company’s operations. Taking executives whose primary experience is with a business model that has jumped the tracks, providing them with a dozen articles and asking them to re-think the business isn’t going to do it. Their nervous systems have settled in. Even changes which seem from the outside to be straightforward and healthy will feel shocking.

An early warning sign of an executive team starting to settle in is a tangible disconnect between corporate rhetoric around innovation and a clear corporate plan for continuous improvement, quotas for continuing education and financial support for organizational learning. It’s hard enough for executives to make the right moves in this world being shrunk by information saturation, global market penetration and interdependent economies. But to ignore the need for a steady stream of new ideas to choose from and still hope for future success in a changing world is simply the implementation of the greatest folly that IgM has to offer you company. Recycling is generally a good idea. But it only makes money if you can take something used and actually transform it into something new. Taking the automaker’s tack of simply polishing something old and trying to re-sell it, no matter how good it once was, isn’t likely to generate steady income. Transformation comes from the adoption of new ideas. Setting the stage for organizational transformation comes from the top and is best lead by example.

So What To Do?

It doesn’t matter what level of the organization you call home, mitigation of IgM starts by looking in the mirror. But ultimately, the key domino to knock over is a commitment on the part of corporate executives to eliminate their own blind spots. Executives simply have to get smarter about and more attentive to the processes they oversee. They must understand, in detail, what solid performance looks like today and what it might look like tomorrow, compared to competitors, compared to standards from other industries and in relationship to the resources available. And not just for your customer- facing transactions, but for every discipline employed in your business.

You can’t really fix this problem by squeezing additional layers of management in to fill the ignorance gaps. You might get lucky with inserting a domain expert in middle management as a proxy. But if the hiring executive can’t evaluate that manager’s ongoing performance, they must rely completely on this person’s reputation and past performance as proof they are responding to new conditions appropriately. This simply inserts another opportunity for IgM to take hold. The real fix for this problem is for Executives to make the commitment to really understand the entire business. If you are the CEO, you better understand enough about IT, Finance, Operations and Legal to have some idea if the employees of your direct reports are any good. Likewise, your C-level execs better know enough about one another’s domains of expertise to spark meaningful debate. Without this put right, attempts at any other level of the business to either implement KM or mitigate IgM will be constantly undermined. It is within the boundaries of these executive blind spots that skilled practitioners of Ignorance Management have room to work.

I know, I know, I can hear the cries of “micromanagement!”. I am almost as against micromanagement as I am against Ignorance Management. But really these are not concepts at odds with one another. Because you are micromanaging doesn’t necessarily mean you have any idea what you are doing. Whether you sit back and allow your staff room to breathe or micromanage every detail of their lives, successful mitigation of IgM will make your departments more effective than they otherwise would be. Regardless of your management style, you have to know what quality looks like so you can assess directly whether or not you are getting it. If you want to take that understanding and micromanage your direct reports to the point that they want to quit, at least you’ll be in a good position to assess possible replacements. But more often, it is the confidence that comes with knowing what quality work looks like that allows supervisors who care the ability to site back and let their teams deliver.

Ignorance Inventory vs. Knowledge Inventory

A comprehensive knowledge inventory will turn up some surprises and lead to improved business performance to be sure. But if IgM is at work in your company, you probably have a much poorer sense of what you don’t know. Although it is good to know what you know, you probably already have a sense of that scope. It is also more than likely that what you don’t know about the blind spots of your company will hurt you worse if business conditions suddenly change than an affirmation of what you do know. You want to ride into a storm knowing exactly where your weak points are so you can cover your assets effectively. What’s more, times of stress tend to cause Ignorance Managers to circle the wagons and hunker down. Chances are you are less likely to discover instances of ignorance management and be able to make corrections during a fire drill.

So before you embark on a knowledge inventory, try an ignorance inventory instead. It’s a much faster process, doesn’t require any special software and leads to much clearer and more direct ways to improve your operations immediately, prepare your company to withstand shock and increase its agility. An ignorance inventory starts with a process hierarchy diagram of the company and indicates the individuals responsible for each process. (For many companies that have grown “organically”, simply sorting out this diagram is a fantastic learning exercise.) Managers should score their ability to evaluate the processes that directly contribute to performance of their department. Then employees responsible for those processes score the ability of that same manager to evaluate their performance. These evaluations are compared – the manager’s evaluation of their own capability to supervise against the assessments made by their direct reports.

Figure 1. A section from the supervisor acumen assessment of an Ignorance Inventory. Although there are other possible explanations for the score discrepancy, clearly in this example there is cause to review the performance of the company’s public web site independent of the metrics John has been reporting. Similarly, with John being critical of his own ability to properly assess press releases, an independent review of Carl’s work products is also warranted.

Simply asking your company to participate in this exercise will spark discovery, conversation and debate. There will be disagreements and probably a bruised ego or two…or three. But if your management team is basically comprised of honest people, many of them will be immediately motivated to engage in self-improvement and to address those areas where they scored themselves as weak. Care needs to be taken wherever a manager has scored themselves highly and where a subordinate has indicated the opposite. In our example above, Rene may have shown great courage in making an honest assessment. Or there could be other serious points of friction between John and Rene that should be addressed. Either way, the scores should lead to additional questions and healthy, if potentially uncomfortable dialogue.

But, of course, these scores won’t tell you much about departments whose managers and process owners are equally ignorant about their assigned domains of responsibility. So the performance of each department is gauged by the internal customers of those departments. These scores should be used to qualify the supervisor acumen comparison results. Both a process owner and their department manager may feel that performance is fine and the right metrics being chosen. But if the performance of that team is rated very low by its customers, questions need to be asked about the talent in the entire department, the resources available to them and any other restrictions that might lead to a perception of low performance by others in the company. Taken on aggregate, what the comparison scores and the department performance scores will expose is the blind spots in your company’s ability to directly discern between solid and poor performance throughout your operations. If your metrics are right and a manager understands what quality looks like, then comparatively very little can be hidden from that manager. However, if the manager is unsure of what he or she is measuring, there is very little that can’t be hidden from them.

Figure 2 A section from the department performance assessment of an Ignorance Inventory. HR and Sales have indicated that the public web site is underperforming for their needs. This seems to indicate that Rene has a point. HR and Sales have also seemed to validate John’s sense that there could be improvement in the performance of his department’s press releases. John may want to look at getting training not only for himself but also for Carl.

The results of an Ignorance Inventory can be powerful and transformative. However, they can also be entirely meaningless. If this exercise is not accompanied by a mandate to spend company time engaged in ongoing training and/or other forms of self-improvement, the impact will be entirely temporary. Addressing IgM has immediate benefits, but it also suggests the need to take a longer view of the company’s approach to continuous improvement and innovation. Addressing IgM properly means senior executives leading by example in transparency, accountability and the acquisition of new ideas.

Yes, you should be nervous about trying this. It will expose a lot that is hidden away which can always cause friction and emotional upset. Again, the number 1 ingredient for successfully tackling IgM is the courage of senior executives to publically address their own blind spots. They need to lead by example in order to mitigate feelings of vulnerability and blame as the evaluation process works its way down the org chart. With courageous executives leading the way, the resulting catharsis can be both dramatic and incredibly energizing, leading to a re-vitalization of enthusiasm for learning, for the principles of accountability in your company and for consistent innovation. Without it you are likely to continue de-motivating the employees who do know what they are doing, promoting employees who don’t know what they are doing and leaving profit on the table.

Chris Rivinus

June, 2009