Is division, confinement, and hierarchy of knowledge the model to create and sustain an organization in the upcoming decades? No.
This is supported by theory with successful case studies and field evidence from around the globe. However, little attention and application has been advanced in Pakistan. In many ways, we remain stuck with the business model of the industrialized century: hide, confine, and protect knowledge to self, whether in the form of an organization or person.
Unfortunately, the internet will not allow this model to flourish for too long. Its inherent features of freedom, equality, and access provide new opportunities tailored to knowledge sharing, openness, and empowerment. Pakistan on the other hand has yet to face the realities of the internet dominant world, therefore protection still flourishes. This is due to the limited use and access of the internet to the public, catering only to a small fraction of the population base. But growth in usage and eventual overturn is inevitable.
The concept of learning through informal and open exchange is not new, it has existed throughout history but the integrated, accessible, and connected world has enhanced its coverage, scope, and influence over a wider audience. For example, it has been widely documented that clustered organizations outperform scattered ones, whether it is academia or any other industry. One of the core reasons for this is the spillover feature that interaction and social presence of firms and people is able to create, referred to as ‘untraded interdependencies’ by Steven Pinch and Nick Henry [1]. This is probably the most natural, indigenous, and localized form of learning to have existed over time, where people learn with and from one another. Its pedagogy may differ per region but the essence of interaction remains the same.
Similarly, open and integrated spaces are overtaking the old wave of cubicle, closed door and isolated office spaces. In Pakistan, we are still confined to the box. We need to take a leap and step outside our box of comfort — and our traditional business parameters.
Motor Sport
Let’s consider the success of ‘Formula 1’ as a learning experience. The culture is predominantly based on collaborative forms of learning and competition — an underlying condition to generate a degree of competitive balance between teams. Healthy competition is necessary to attract crowds — with financial benefit to the industry. This is a subtle feature that a one-sided outcome would not achieve. Although teasing to the traditional mind, competitive balance cannot be acquired through pure confinement and minimal exchange, as learning and new knowledge is regularly shared to maintain a degree of competition in the industry. Moreover, knowledge generation itself is a cumulative outcome of exchange between diverse viewpoints and cannot be optimized in isolation. In [5], Steven Pinch and Nick Henry show that minimal learning is attained through formal exchange in conferences or industry wide journals; passive at most. Active forms of learning are through physical presence in the pit stop, employee turnover, and social interaction.
Bill Taylor [2] of the Practically Radical says ‘the only sustainable form of market leadership is thought leadership…the most powerful way to demonstrate your position as a thought leader is to teach other organizations what you know — whether they are customers, suppliers, or even direct competitors’.
According to Dr Kaplan of Virgin Mason, ‘the more we educate, the faster we move as well.. By teaching others what we’ve learned, it forces us to keep learning’. The approach ‘is not to out-market the competition, but to out-teach the competition. Why? Because teaching creates a different kind of presence in the marketplace. It creates a higher sense of loyalty among those who learn from you. And it helps the company create not just customers for its products but an audience for its ideas — in the same way that famous chefs are willing to share their recipes so as to build a following for their overall approach to cooking’ says Bill Taylor.
Innovation and Technology
A major feature underlining Google’s creative and social success lies in its ability to respond to market need and create a new business model. The company predominantly relies on creating an environment fostering creativity through collaboration, interactivity, empowerment, and sharing rather than protection and storage of learning between few. In Pakistan, our mental and social colonization, under-utilization of capacity, and minimal pursuit of continuous learning, stemming from our education system — which does not seed features of lifelong learning along with other cultural factors — are probably some of the reasons underlying our attachment to the business model of the 20th century.
Is lack of research a cause of our inability to innovate? At best, it is the surface of the cause and an outcome of the approach and mind set.
Is lack of human capital the cause? Not really: most potential does not attain its due worth. Most of the brightest graduates aim at attaining middle management jobs at multinationals — a core feature of structural dependency of the economy. There are various companies in Pakistan which are constrained by mindset rather than their ability or acumen — inevitably influencing the human capital it retains — putting in place a vicious cycle between cause and effect. These companies need to feel self confident — invest, cultivate, and subsequently envision human resource as their capital.
After all, the DVD as a product technology was created in the industrialized world, but was eventually replicated and mass production took off in the developing world. This did not mean that the industrialized world lost its power, infact it gained on the contrary, as the dependency on the industrialized world ‘to create’ further increased.
Academia and Research
The London School of Economics shares its public lecturers locally (in session) and internationally for free. This does not mean that the School is losing its market power or competitive edge. In fact the opposite is true. It is a tool used to create social power, generating the ‘wow factor’, and instilling a strong desire among students to be part of the process, another reminder of the knowledge driven future. Open Course Ware at the Massachusetts Institute of Technology and the recent advancement of Professor Sandel (Harvard University) to television underlines the case. The internet has changed the parameters of competitive edge in business.
Successful academia has started using knowledge to create tacit power, utilizing it as a tool to market and attract students — if you constrain exchange and dissemination, the internet will outpace you — use it before you become redundant.
The competitive edge of a university is maintained through the interactivity between students and faculty in and outside the classroom, the social, intellectual, and economic opportunities it provides, the presence of diverse viewpoints and mindset, and most of all the ‘chaos’ — creating avenues for ideas, learning, and breakthroughs.
An interesting example exists on how research is shared and disseminated. International firms such as Mc Kinsey and Company, Price Water Coopers, and Boston Consulting Group share some ideas, publications and analysis with the public for free (readily available on their website), utilizing it as a form of tacit marketing strategy. You would not find such information on most corporate websites in Pakistan. Similarly, universities and broadly faculty share and upload their publications and research articles online for free view. This reflects a social and intellectual mindset gaining precedence and force in the new generation of learning, a feature you would not find on websites of most organizations in Pakistan including many universities and research organization.
As the modern models of exchange evolve, thought leadership is social leadership, which reinforces economic and political leadership. Business models need to respond to changing times –– the year 2010 is much different from the year 2000. We need to envision the use of the new approach in Pakistan; take the step forward and overcome the innate fear. Lead and benefit, as many still remain plugged to the old business model.
The opportunity is there, and the dividends are for the taking. A wise man once said ‘the timing of decision is more important than the accuracy of choice’. The time is now!
Ali Sohail is an economist with a postgraduate focus in local economic development from the London School of Economics and Political Science. He is currently working on the development and launch of an interdisciplinary university in Karachi. The views expressed in this article are solely those of the author and do not necessarily reflect the views of STEP.
References
[1] Pinch and Henry (1998) Paul Krugman’s Geographical Economics, Industrial Clustering and the British Motor Sport Industry, Regional Studies, Vol. 33.9, pp. 815-827.
[2] Bill Taylor (2009) The Teaching Organization, Practically Radical, Harvard Business Publishing http://blogs.harvardbusiness.org/taylor/2009/11/companies_with_class_the_rise.html
[3] Cohen (2009) Morals Class in Starting: Please Pass the Popcorn, The New York Times http://www.nytimes.com/2009/09/26/arts/television/26sandel.html
[4] Michael Todaro and Stephen Smith (2003) Economic Development, Eight Edition, Pearson Education Limited
[5] Pinch and Henry (1998) Paul Krugman’s Geographical Economics, Industrial Clustering and the British Motor Sport Industry, Regional Studies, Vol. 33.9, pp. 815-827.
[6] Porter, M.E. (1998). On Competition. Boston: Harvard Business School Press.
[7] Porter, M.E. (1990). The Competitive Advantage of Nations. London, Macmillan.