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Cyber Manager or Knowledgeable Leader

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The leap from a database to applied knowledge is ultimately one of the most important tasks of any manager or worker today. James Cortada explains that is why cyber-management is hype while managing the use of information is a reality.
This is an excerpt from James Cortada's book, 21st Century Business: Managing and Working in the New Digital Economy.
This chapter is from the book

One of MIT's great experts on computers, Michael Dertouzos, was right on the money when he argued in his book, What Will Be (1997), that notions of our future in cyberspace represented reality were, to quote him, "Baloney!" He argued—and history supports him—that the future is not a cyberspace but rather an information marketplace. Applications, practical uses, new devices that we can use in our work, and information that helps us make money or live better lives, are going to be elements of our future; indeed, they already are. The premium in that brave new world, which we are entering, is the same as it was in that of the Second Industrial Revolution of the nineteenth and twentieth centuries: acquisition and use of knowledge and hence, leveraging the elements that make up knowledge and wisdom, experience and information.

Dertouzos makes an important distinction from what we frequently read, particularly in the United States and in Western Europe. For a half century we have routinely been inundated with arguments that our lives will be filled with computer chips, robots will do our bidding, and machines will take over much work. The implication underpinning such messages is that there exists a technological determinism hard at work, as if the hand of God was robotic, leaving us little choice in deciding what to do. However, and despite some abuses in the use of technologies of various types or negative consequences we see from time-to-time, people always had choices. Technologies do not come into play unless someone elects to use them. Choices are always conditioned, however, by knowledgeable innovation. The eternal footrace all businesses participate in—competition—is increasingly won or lost based on the ability to innovate, to stay close to markets, and to exploit some new piece of knowledge or technology just a little faster than the next firm. This is an applications view of the world. That is the future, a world characterized by people applying information to work, not work being taken over by computers.

The distinction is subtle but important. By thinking in terms of information needed to do work, we force ourselves to make technology subservient to our needs. We rely more or less on computers to the extent that these machines provide more or less, better or poorer information relevant to what people do. Not all businesses are warehouses filled with computers and telephone lines. Some industries need to use this technology more than others but the flip side is also true; some industries need to use such technology less frequently than others. Why? Follow the flow of information, the volume of its consumption, the nature of its use, the speed and cost of its movement, and you will see find answer. A cement factory uses computers, but far fewer than an oil refinery. Why? Both process raw materials into products but their needs are different. You can find examples all over the place.

The value of information and knowledge, then, becomes an important issue. It is complicated by the fact that managers do not know how to manage knowledge in business as well as they manage the control and leveraging of other assets, such as factories, inventories, money, and employees. Information and knowledge are so ill-defined, changing, and enigmatic, yet so critical, that how we can manage and exploit knowledge is becoming one of the great challenges managers already face. No doubt the situation will get worse as we continue to evolve into an economy where information plays a crucial role. In earlier chapters I discussed knowledge management as if it were a well-defined discipline to make the point that it is an important theme. It is also a topic that is only just now emerging as worthy of its own business-based practices.

What we can expect in the future is probably a scenario that runs something like this. Market intelligence and product development will continue their historic merger closer to each other, influencing a firm's marketing strategy and business plan in more profound ways than in the past. Computers, software, and telecommunications are facilitating this great move to tighter coordination and intimacy. We will continue to see various technologies less as marvels and more as tools for the operation of the firm. We will learn more about the effective use of computing and information (not necessarily knowledge) to make work more productive. These will apply process management techniques to ensure they increase feedback on what employees, machines, and collective work experiences do, applying those insights to continue transformation of organizations, technology, and management and business practices. Investments will continue to be seen in this light as the way to go, as Chandler demonstrated was the case in several industries throughout the twentieth century. Press and television will continue to hype the sensation of new technologies, but the prudent manager will—as today—make judgments based on the realities of his or her situation.

Because so many changes are occurring so fast, and particularly now as a result of the Internet, we will have to spend a greater percentage of our time learning and keeping up-to-date than might have been the case two decades ago. As changes occur, so too does the requirement for new information, experience, and knowledge. That is why book and magazine publishers will continue to be useful as sources of information to help keep us current. Change and currency in turn create new churn, additional change, and generate new knowledge, because good managers apply what they learn for economic benefit. We pay managers to do this. Many managers already recognize that an important part of their work is to be students of their work and profession, having the inquisitive qualities of a researcher, while displaying the impatience and courage of an entrepreneur.

Those last two qualities are always at a premium during periods of change such as the one we are moving through to some as yet undefined future. One theory holds that eventually we will come to some steady state, where knowledge and experience stabilize for some period of time. The two previous industrial revolutions, however, offer evidence that if such a steady state exists, it does so for a very short period of time, and unevenly from one sector of the economy to another. Reality is that the transition from one state to another takes multiple decades, and forecasters never have seen the end as it really came to be. We know that we are in transition to a new future, which places a premium on handling ambiguity well. Ambiguity for a manager is both a danger and an opportunity. Those in a stable enterprise see it as a threat, those with less investment in the past as an opportunity. The competitive edge goes to those who act more as knowledge leaders than as experts in technology.

At both strategic and tactical levels, managers are learning how to function in an "Information Marketplace" (Dertouzos' apt phrase for it). Information has economic value:

  • The mailing list that can be sold

  • The information that leads to products customers want

  • The data that leads to lower costs of doing business

  • The experimentation that leads to innovation in existing products and services

  • The collective knowledge of a firm in retaining or expanding its market dominance

Already, the list can be made endless. We know there is junk info and useful information. We have too much of both and not enough distillation of what we need right now. The move from information and data to insight remains a problem, because it is easy to gather data (e.g., facts and numbers) but far more difficult to organize tacit knowledge. Outstanding CIOs admit to the great fiction in their job, the management of collective knowledge of an enterprise. The leap from a database to applied knowledge is ultimately one of the most important tasks of any manager or worker today. That is why cyber-management is hype while managing the use of information is a reality.

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