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Reengineering and Dumbsizing: Mismanagement of the Knowledge Resource
By Howard Eisenberg, President, Syntrek, Inc.

To understand the reasons for the radical restructuring process that has recently been occurring in the most modern organizations, people first need to appreciate the underlying transformation of their environment. This is an unusual era of change...

To understand the reasons for the radical restructuring process that has recently been occurring in the most modern organizations, people first need to appreciate the underlying transformation of their environment. This is an unusual era of change. Although the Greek philosopher Heraclitus noted that, "There is nothing permanent except change," back in 500 B.C., the nature of change itself has recently changed.

Paul Shay, a futurist and former vice president of a prestigious think tank, concluded that, "There are rare times in history when changes are so profound that it amounts to a change of kind, rather than degree; and this is the fourth such change in the history of Western civilization! (The first was the transformation from barbarianism to Greek civilization, the second was the Renaissance, and the third was the Industrial Revolution)." 2

In the past, change was predictable, incremental, and evolutionary. In other words, it was linear. In modern times, however, change is the opposite: It's "nonlinear." It's unpredictable, rapid, and revolutionary. Therefore, it's considerably more challenging.

The main driving forces behind this fourth transformation of change were the development of the personal computer (PC) and global telecommunications technologies. In the span of less than two decades, these technologies have totally revolutionized the world. For example, more new information has been generated in the past 30 years than in the previous 5,000 years, and the total amount of new information being generated is now doubling in time frames of less than five years.3 While the amount of new information is increasing, product life cycles are shrinking. What once took a generation for Ford's Model T is now down to several months for PCs.

The PC and telecommunication technologies have not only changed the processes used to produce goods and services, but also how those processes are managed. For example, the traditional management hierarchy no longer makes business sense because the critical wisdom and information needed to run the new processes are no longer containable at the top. In addition, automation and other advances have reduced the number of employees needed to produce goods and services, resulting in unemployment.

In sum, there has been an evolution from an industrial economy, which is based on natural resources and manual labor, to an information economy, which is based on intellectual capital and knowledge workers. Dealing with rapid, nonlinear change has been a challenge for both management and employees. This challenge is compounded by the erosion of personal time for rest, reflection, and planning. By 1989, the average American was already working the equivalent of an extra month per year as compared to his or her counterpart 20 years previously.4

The bottom line is that companies have had to retool their businesses without the benefit of historical precedents and without adequate time to properly assess all of the critical factors. Understandably, some major errors were made, but too many companies are continuing to make the same mistakes. They are failing to understand the basic concepts of knowledge management, which enable sustainable profitability.

Deep ecology and successful corporate cultures

Since organizations are composed of people, it is instructive to examine how living systems successfully adapt to changing environments. In The Web of Life, physicist and philosopher Fritjof Capra describes the scientific discoveries underlying the paradigm shift from a mechanistic view to a holistic systems view of the world.5 In the holistic systems view, which is called "deep ecology," the world is perceived as an integrated whole rather than a dissociated collection of parts. Thus, deep ecology requires:

We are all naturally creative to some degree in childhood. Predictably, creativity decreases as we are programmed to share a common perspective; we become increasingly risk-averse. So, the converse

This article was published in the May, 1997 issue of "Quality Progress" and is copyrighted by its Publisher - American Society for Quality.


Howard Eisenberg (howard@syntrek.com) is the President of Syntrek

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