Pre-conference e-mail

Date: 28 Apr 96 20:34:10 EDT
From: Charles M. Savage
To: All participants
Subject: Thoughts on May 3-5


With all the good help from our colleagues at CIBC, things are shaping up very nicely for our three days, Friday to Sunday. We expect from 38 to 41 persons, from Canada, the US, Switzerland, Italy, Germany and possibly Belgium. Our challenge is to use our own knowledge, experiences, capabilities and visions to help develop an understanding of the dynamics of Intellectual Capital, Knowledge Management, and organizational knowledge enhancement. In addition, we want to understanding ways value can be increased by values and valuing. In short, we will have an opportunity to try on ourselves ideas we will be developing with others. This will take a lot of humble listening and honest dialoguing.

What questions and ideas to you bring to our event? As you look over Hubert’s presentation and think about Brian Hall’s work on values, what ideas are beginning to perk?

We also have other wonderful work to draw upon, including that of Gordon Petrash on Intellectual Asset Management, Bipin Junnarkar on Knowledge Management, Francesco de Leo from Bocconi University on the intellectual content in products and processes, Brenda Wisniewski on new approaches to knowledge accounting at Arthur Andersen, Jo- Anne Raynes in new ways to lend against knowledge assets, Gene Meieran of Intel in new ways to communicate and coordinate knowledge, and the list can easily be extended for each of your efforts. Each of you has a wonderful background to bring and our challenge is to find ways to draw upon this experience. Do bring your own “work-in- process” with you so we can be enriched by it.

As I said earlier, we will create a rhythm of individual reflection, small team interaction, interaction between teams and whole group dialogue. We would also like to experiment with mutual-mentoring, where we work both our own and one other person’s themes throughout the three days. We will also be seeing what technologies help in our deliberations, from groupware, the internet and numbers navigation. If any of you have thoughts, suggestions, themes or other ideas which you would like to send us before the event, please do, and where appropriate I will share with others. It would be nice to have space on the internet where we can create a pre-event dialogue if someone can help us with this.

It will be nice to see you all in just a few days.
Charles M. Savage

Date: 01 May 96 12:48:35 EDT
From: Charles M. Savage

To: All participants
Subject: Key Questions and Thoughts for Discoveryshop
Thoughts in Preparation for our Discoveryshop:
We will be distributing some of Hubert's material on Intellectual or Knowledge Capital Thursday evening. (It was not sent out earlier).
Hubert and I just spoke about the event and shared questions or themes which we would like to explore:

  1. What does "knowledge capital" mean in the concrete arena of business?
  2. How can we tie together the concepts of the "learning organization," "knowledge capital" and "knowledge-value creation?" Are they not intimately interrelated?
  3. What are the best terms to use in referring to "intellectual capital"? Is "knowledge capital" a better term? Or "knowledge assets" or ??? How useful is "knowledge management" as a term? Need we think of knowledge just as a noun, or is it also a verb? What is the "knowledging process?"
  4. What is the relationship between "tangible" and "intangible" assets?
  5. What is the distinction between the "economy of scarcity" and the "economy of abundance?"
  6. How is "shareholder/stakeholder" value increased?

We do not have a specific agenda, but instead will spend the first day building off the work which Hubert and Brian Hall have been doing on knowledge capital and human values. We will establish a rhythm of quality listening to one another, individual reflection (and journaling), small team dialogue (four persons), team journaling (using a Home Page model for each team), interaction between teams, and dialogue with the group as a whole.
As Hubert and Brian are presenting their material the first day, we will pause often to ask the teams to reflect on what is being said, test it out, challenge it, stretch it, probe it, etc. We will also ask each team to identify a significant theme they would like to work on and then we will work to interrelate these themes throughout the three days. Brian has captured in his book, "Values Technology" the spirit of what we would like to create:

"Servant leadership is different than all the earlier forms in that it not only moves beyond any form of autocracy, but it also transforms the value of independence into interdependence. It recognizes that when peers interact professionally at high levels of trust and appropriate intimacy, there is a synergistic creativity that cannot be obtained by any one individual."
p. 181

If the Industrial Era was build upon the notion of "self-interest" (i.e. Adam Smith's "Invisible Hand" then the Knowledge Era may be well be built upon the notion of "interest in other selves."
It may well be that you or someone else in the room has the key insight which will take my thinking to another level of understanding, but unless I am open and listening, I may never discover it.
Likewise, your company may have a capability which will enable my company to aspire to a higher level, but if I am not open and listening, my company will never know what it might have become.
In this same spirit, Gordon Petrash has been reviewing Dow's patent portfolio, putting these ideas within a dynamic business context of his own company and others. In Brian's discussion of "imaginal" skills he has another set of ideas which is most timely for our work together:

"Example 1: Creativity. Skills. The ability to use brainstorming, research techniques, and personal reflection and investigation to bring new ideas and images into a practical and concrete reality. This ability includes the use of new technology such as computer software to enhance this possibility. The purpose is to enhance the goals and mission of an organization or project. You must be able to:

  • Make your values conscious.
  • Synthesize new facts.
  • Initiate totally new ideas from seemingly unrelated data.
  • Perceive hidden meaning in standard data.
  • Dream and Imagine new futures that are possible.

Generate new ideas and images by:

  • brainstorming
  • using "think tank"

Utilize several modes of communication, such as poetry, music, and dance. Fantasize a different universe with differing universal laws and see what new possibilities exist for solutions.
Talk about ideas with people from different disciplines or who have different perspectives."
p. 109

Brian, it is like you wrote this for our event. Thanks.
We'll be doing both "brainstorming" and "brainstilling." We'll be looking for new metaphors, new connections.
We will be working the chemistry of discovery, where one thing said will trigger new avenues of reflection.
Each of us comes from a specific context, and will be returning to this context, hopefully so much the richer in insights and leadership skills. I have a sense of urgency of moving quickly to build a basis for understanding the possibilities of the knowledge era, especially as the industrial era is hitting the wall.
We look forward to weaving all your thoughts and aspirations into the discoveryshop.
See you soon.
Charles M. Savage

Date: Thu, 2 May 1996 11:24:48 -0400 (EDT)
From: Robert Logan
To: All participants
Subject: Re: Key Questions and Thoughts for Discoveryshop

I can not pass up a set of challenging questions like the ones you have presented without responding. I am a sucker for thought provoking questions. Responding will help me to sharpen my thoughts and might result in something useful for the conference. Sorry for the late response but this was my first free moment since the conclusion of our workshop yesterday.

Thoughts in Preparation for our Discovery Shop:
1. What does "knowledge capital" mean in the concrete arena of business?

To answer this question we should be clear about the relationship of data, information, knowledge and wisdom. Data is just the facts without any structure. Information is structured data which makes the data meaningful. Knowledge is the ability to harness the information in such a way as to achieve the organization's objectives. And, finally, wisdom is the capacity to formulate objectives which are do-able [can be done], meaningful and are of value to all the stakeholders of the organization. Knowledge capital includes the sum of knowldege that resides in each of the stakeholders in an organization. By including stakeholders this includes suppliers and customers whose knowledge is of great value to the enterprise and is frequently ignored. Knowledge capital also includes the organizational structures that are in place in the enterprise. It includes the patents, the products, the services, the literature, the computer programs, and the history of the enterprise.
The knowledge capital also incorporates the information capital of the enterprise which the knowldge structures of the enterprise can access and harness. The information capital is the totality of all the information about the enterprise stored in people's head, on paper, in files, on computers, in the press, in libraries, etc.
The potential wisdom capital is the sum of the wisdom of each of the stakeholders. The actual wisdom capital is the wisdom of the stakeholders which can be accessed by the desicion makers. The actual wisdom is always less than the potential wisdom. One can make a similar distinction between potential knowledge capital or the sum of the knowledge capital and actual knowledge capital that which is accessed by the actual desicion makers.

2.How can we tie together the concepts of the "learning organization," "knowledge capital" and "knowledge-value creation?" Are they not intimately interrelated?

A "learning organization" is one in which the knowledge and wisdom capital is increasing ("knowlege value creation") and where a greater per centage of potential knowledge and wisdom capital is being converted into actual knowledge and wisdom capital *"decision-value creation"*.

3.What are the best terms to use in referring to "intellectual capital"? Is "knowledge capital" a better term? Or "knowledge assets" or ??? How useful is "knowledge management" as a term? Need we think of knowledge just as a noun, or is it also a verb? What is the "knowledging process?"

I would opt for knowledge capital or knowledge assets. Intellectual is an ambiguous term. I know many intellectuals who can not earn a living or do anything practical in life. Some people are anti-intellectual but they are not anti-knowledge. Knowledge management is really what I have called wisdom. This is not a term used frequently in business but most bad business decision are made because of a lack of wisdom not a lack of knowledge. In fact knowledge sometimes blinds people to their absence of wisdom. As we are gathering to pioneer new ideas for business I would humbly suggest we use the term wisdom perhaps calling it "business wisdom" or "organizational" wisdom or "enterprise wisdom". I like wisdom busines best but would like to hear other views.
A wonderful definition of wisdom can be found in the Talmud: "Who is wise? He who learns from everyone?" Perhaps this is another definition of a learning organization.

4.What is the relationship between "tangible" and "intangible" assets?

The intangible assets give meaning and value to the tangible assets. A product is not just what is in the box. It is also all the information and people who use and support that product.

5.What is the distinction between the "economy of scarcity" and the "economy of abundance?"

I have been serious up to now so permit me to share one of my father's gags from which we might derive an insight. "Rich or poor its good to have money." This joke is at least 50 years old. Let me update it. Rich or poor its good to have knowledge. Why? Because if you have knowledge and the wisdom to exploit it the scarcity will disappear because as we all acknowldge: knowledge create wealth. So let's work hard this weekend to find ways to put knowledge to work and we will only have the "economy of abundance to worry about".

6.How is "shareholder/stakeholder" value increased?

Knowledge and wisdom are those rare commodities like love and joy which increase as they are shared. So another definition of a learning organization is one in which each stakeholders value is continuously increasing and faster than it would increase if the stakeholder was not a part of the learning organization.

Bob Logan

Date: 02 May 96 14:45:53 EDT
From: Charles M. Savage
To: All participants
Subject: Re: How do we drink of these waters?
Some intriguing thoughts which Rod shared with me. They are nice background for our discussions at the CIBC Leadership Centre.
---------- Forwarded Message ----------
From: Rod Anderson
DATE: 4/25/96 12:48 PM
To: Charles M. Savage
From: Anderson)
Subject: Re: How do we drink of these waters?

You wrote:

To what extent is art values driven? what can we learn from art which will help us in our reflections? Where is the wellspring of creativity? How do we drink of these waters?

A very quick reply:

To what extent is art values driven?

Well life, I guess, is values driven and if an artist is alive no doubt art is similarly values driven in that sense. But I'm a little worried about "driven"-as it seems (a) very earnest and (b) very business oriented (looking for key 'drivers' etc.). I'd rather say that an artist has a passion rather than a driver-but perhaps this is semantics. Now-as to earnestness: I think there is an element of play and, yes, irresponsibility underlying artistic creation (and perhaps any creation). A poet whom I admire (William Stafford) said somewhere : "intention endangers creation". That is, if you set out with a specific purpose in mind, creation does not result. Top-down writing may be best for writing a business report (what is the subject, who am I addressing, what's the most important point to make first, what action do I want them to take as a result, etc. etc.) but it's not how you write a poem. You don't say: well, it's to be about environmental responsibility, and it's to appeal to the 20 to 30 age group, and it's to work in something about feminism along the way, -- forget it, no poem will result from that. And if it does, it will be propaganda not art. Rather write about that funny guy you saw next door-and somehow the other meanings will sneak in subversively between the lines.

what can we learn from art which will help us in our reflections?

A sense of play and irresponsibility. It's also necessary to turn off the judging role while creating. De Bono does this by keeping the black (judge's) hat away while one is wearing the green (growth and creation) hat. In the writing game, I find one does this by getting the left-brain editor to go away while the right-brain is creating. We'll need the left-brain editor later but not at the moment of creation. Everyone has their own way of doing this. My way is to tell the left-brain editor: Look, I'm just goofing around and nothing will probably come of this anyway so don't waste your time hanging around-then later, when one feels something magic has indeed happened one can call in the left-brain editor and say OK, I've got 5 pages of stuff here, help me to organize this mess into a useful shape. But don't get the left-brain editor(critic, judge, pessimist, flaw-finder) around too soon, or the right-brain just becomes tongue-tied. I know that some athletic trainers will use the same principle by getting the left-brain (the language expert) to say "bounce" when the tennis ball bounces-it gives the left brain something harmless to do so it won't meddle around and interfere with the right brain, which is the part of you that really learns how to play tennis (a game that the left brain, though it can talk about it endlessly, can never play).

Where is the wellspring of creativity?

Curiosity and play-qualities that the business world, with its drive to lean, mean efficiency and focus of purpose often does a good job of squelching.

How do we drink of these waters?

This is a tricky one. How do I get my team to lighten up on purposefulness enough now and then to be creative? Send them a memo telling them to lighten up? That's like the headmaster telling his charges: "Be gentle boys or I'll beat you until you are." How does Svengali get his 'puppet' to love him of her own free will and not merely as a result of his clever manipulations (which is then really only Svengali loving Svengali). How does one purpose to avoid excessive purposefulness? This seems to me a sort of Zen koan. And the answer doesn't come by earnest linear thinking. Rather, perhaps, as a lightning flash of laughter in the middle of a dark night of "stuckness". Anyway, looking forward to the weekend.
Rod Anderson Cobourg, Canada
personal Open House:
RodMerArts site:

Date: Fri, 3 May 1996 00:30:29 -0400
From: roda@eagle.caRod Anderson
To: Charles M. Savage
Cc: All participants
Subject: Re: Key Questions and Thoughts for Discoveryshop
Hi Charles and fellow Discoveryshoppers:
I had just sent this memo to Charles-but following Bob Logan's lead- perhaps I should have copied everyone on it-so here goes.

I noted down some of the following thoughts on the train from Cobourg to Ottawa this morning in response to your May 1 memo "Questions and Thoughts for Discovery shop". It's been a frantic 48 hours and now (10:40 p.m.) is my first opportunity to send them.
See you tomorrow morning.

1.Knowledge capital

Capital is a concept arising out of the concept of property ( =, of course: head of cattle, caput, cattle, chattel, capitol, capital) which began with the agrarian age. And certainly we have built up a management thinking structure around the acquisition, deployment, and earning power of capital. Probably this is useful and should be retained in the area of 'explicit knowledge' - merely extending the concept of intangible asset to yet one more category ('explicit knowledge'). But, following your idea of "both/and", maybe we can retain this viewpoint but at the same time adopt a different one in the case of 'tacit knowledge'.
For 'tacit knowledge' the concept of capital and therefore ownership, storage, objectification, manipulation (deployment), may be dysfunctional. Perhaps this shy, right-brained beast of 'tacit knowledge' will flee when the left-brainers march in with their clanking storage bins, ownership tags, yardsticks and stopwatches, and now cyber-technology. Just as astronomers sometimes look for faint visual details using 'averted vision' (our peripheral vision having greater acuity), so perhaps we can't stare head-on at this shy creature or it will run away. To seize and own (the Latin 'rape') may not be the right metaphor for experiencing the revelation of the tacit. I think something more like game, dance, play, adventure might be more appropriate. Maybe 'idea venturing'. The 'venturing' gives it a vaguely business ring - so that at least business people may entertain it at all - but 'idea venturing' is clearly not something that you own, but rather something that you do. A company with rich 'idea venturing' will be continuously creating and sharing 'tacit knowledge' (Nonaka's and Takeuchi's process of 'socialization'). Some ventures will fail (as the Venetian merchants knew), but some will succeed amazingly (and unpredictably). Indeed, we accountants have probably helped to enchain business thinking in the industrial age with concepts of earnings per share and return on capital that are thought to drip out at a constant flow, drop by drop, month by month, and quarter by quarter - and when reality doesn't oblige we try to 'smooth' it or 'normalize' it (using reserve accounting that financial institutions are so expert in). Rather, we should perhaps recognize, as the Venetian merchants did, that profits accrue in fits and starts ( a two-steps-forward-one-step-backward dance). When your ship comes in, you make a bundle. But some ships don't come in and you have to kiss their cost good-bye, smile, and send out new ships bravely into the unknown. This is not a mechanistic, industrial process. It's a game and a gamble. But a good idea-venturing company will win slightly more often that it loses.

2."Learning organization", "knowledge capital", knowledge value-creation"

Senge's concept of the learning organization deals well with, but only with, 'explicit knowledge' as Nonaka and Takeuchi point out. We should keep his concepts for explicit knowledge. But for 'tacit knowledge', as I have argued in #1 above, "knowledge capital" may be a dysfunctional term. Even "knowledge value-creation" may be dysfunctional. Why? Because it focuses too much on the outcome (knowledge and value). I think we have to downplay the noun and throw ourselves into the verb (idea-venturing) with the faith that the former often, though not always, results from the latter. And even then, if the goal (knowledge) is too much in our minds as we idea-venture, we will not succeed. "Intention endangers creation," as the American poet, William Stafford said. We have to "lighten up". In a sense, we really have to learn for the joy of learning (a playful game) and, as often as not, we'll end up with some financial benefit as well. But if we focus too earnestly on the hoped-for financial benefit, we won't really partake of the game and new ideas (tacit knowledge) won't emerge. It's a Zen trick. But our focus, I think, needs to be less of grit-our-teeth, jump-off-the-burning-platform, and maximize-our-earnings- doing-a-job-we-hate - but rather let's have fun and - magically - end up making some money at the same time too.

3."Intellectual capital", "knowledge capital", "knowledge assets", "knowledge management", "knowledge process"

These are all, perhaps, useful for explicit knowledge. But, as just argued above (oops, even 'argued' is too earnest), they may not be the right terms for tacit knowledge. Capital and assets are already imprisoned in storage bins - the heavy hand of ownership (which caused the native peoples on this continent such perplexity: how can you 'own land'? - like owning the air or the sky or the sun or the ocean) . You don't 'own' new ideas while they're still in an inchoate brain-dance inside our heads. Come to think of it, even 'tacit knowledge' may be an oxymoron. 'Knowledge management' also suffers from the fussy, caretaking hand of the administrator. Rather, for tacit knowledge we need to move away from the administrator/manager to the more free-wheeling, intuitive style of the entrepreneur.

4."Tangible", "Intangible"

Tangible assets can be kicked. Intangible assets are assets that we wish we could kick - and we classify them in an analogous way for accounting purposes. But new ideas in process of formation don't like being kicked. Noli me tangere. Nobody touch me. But dance with them - without holding.

5."Economy of scarcity", "economy of abundance"

Economy is based on scarcity. We economize to avoid waste. And that's good - whether it be economy of production (cost reduction and efficiency) or of thought (Occam's Razor). We need this. But, again using your "both/and" concept, we also need another viewpoint (certainly for tacit knowledge).
"Economy of scarcity" is the agrarian (and later, the industrial) model. Land is finite. We must conserve and protect our cattle and other assets. But "economy of abundance" is more the hunter/gatherer model (at least before we depleted all our fish stocks). The hunt is an adventure and, at least in the microcosm, not a zero-sum game. What I win does not have to cause you to lose. There are hundreds of ideas out there in the jungle and we're all welcome to go out and find them. "Economy of abundance" is really an oxymoron. When we're out on the adventure of the hunt (idea-venturing), our excitement is not at all related to the economic model of supply and demand. We're simply outside the blinkered view of economics.

6.Shareholder/stakeholder value

No comment comes quickly to mind here which is not simply a repetition of my previous points.

7.Synergistic interdependence

Yes. This is important. But the individual is important too. It's good to move from mechanistic hierarchies to creative teams (at least for the non-routine - because, as you argue, in the both/and concept we can keep hierarchies for efficiently handling the routine). But when we move to stress teamwork (and therefore denigrate 'lone rangers'), let's not enslave the individual in a new groupthink prison (the team). We need both: individual creativity and group creativity. Toynbee talks of civilizations (i.e., really big teams) going through phases of 'withdrawal' and 'return'. There is a time for the individual to withdraw into the wilderness for 40 days and then return re-inspired to the team. We need the benefits both of solitude and of interaction, both of individual insight and of group synergy, both of personal creativity and of group brainstorming. To be always alone is to lose the benefits of collaboration. To be always together is sometimes to produce a camel in committee when we intended a horse. We need to honour both styles of being. We are both individual and social creatures.

8.A further thought on values

I realize that what is an 'end' and what is a 'means' is, to some extent, a question of semantics. If the ultimate end is C, then steps along the way (A & B) can be viewed as 'instrumental ends' necessary in order to achieve C and then we realize that to achieve sub-goals A and B we may need subsidiary means A1, A2, ... and B1, B2, ... etc. Nonetheless, I would like to think of the more important values as being essentially ends and corporate success as being primarily a means (to achieve security, livelihood, career satisfaction, etc.). So I would not like to think of values as something that we manipulate in some way in order to achieve corporate profitability - that would be twisting ends into the service of means. But, that said, of course a group of people with shared aligned values may be able to accomplish more corporately than a group with conflicting values. So looking into values is certainly a worthwhile exercise, and Brian Hall's work provides very important food for thought. But when as corporatists we address the question of values then I think we have to realize that essentially we are trying to align our corporation within a larger context (values) that must have a far greater importance than our little company. Our company's survival is not the most important thing in the world. Of course, I hope my firm survives - as I will hurt financially if it does not. Indeed, I hope it does very well. But if I had to choose between it being (a) comfortably successful financially and spectacularly exciting, creative, and helpful or being (b) spectacularly successful financially and rather boring, unimaginative, and self-centred, I would unhesitatingly choose the former. Maximum profitability, maximum national GNP, even maximum global GNP are the not the most important things in the world (though I don't say they are trivial). If you ask us to look at values, you ask us to be conscious, at the same time, of many things that are more important than our own firm's economic returns.

I can remember a Zen book talking about 'the Way' and saying something like:
"Along the way you may notice flowers and other delights; no harm to enjoy them; but the Way itself is without colour, or taste, or ...etc.". Corporate profits are like the flowers along the way. No harm to enjoy them. But they're not the main point of everything.

Rod Anderson Cobourg, Canada
personal Open House:
RodMerArts site:

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