Organisations that embrace cross-domain knowledge can attain sustainable agility. In this article, the author highlights the significant yet often overlooked difference between specialist knowledge and architectural knowledge in the promotion of organisational agility.
Today’s fast-paced digitalisation and increasingly turbulent global markets mean that the ability of an organisation to renew itself, adapt, and succeed is more important than ever. The effectiveness with which a company is able to respond to the increasing variability of markets and technologies is what we commonly understand as agility – its ability to adapt and swiftly reconfigure internal processes and resources to meet new challenges.
Back in 2006, researchers Stefano Brusoni and Andrea Prencipe wrote a case study for Organization Science called “Making Design Rules: A Multidomain Perspective”. In focus was the Italian multinational tire manufacturer Pirelli, who in the late 1990s introduced MIRS, the Modular Integrated Robotized System. At the time of that introduction, the tire industry was struggling with the dramatic potential of robotics in product development and manufacturing processes. Pirelli was in an especially difficult position, noted the researchers – caught between the high expectations of carmakers that required customised tires and its own low innovation trend. If Pirelli wanted to continue to meet the needs of customers in the medium to high-end market segments, however, innovation would be required.
After Pirelli’s bid to acquire a major competitor failed, MIRS was the company’s last hope to defend its reputation as a market supplier for high-quality tires. For Prof. Gianluca Carnabuci, Associate Professor of Organisational Behaviour at ESMT Berlin, the MIRS strategic choice illustrates how radical innovation paired with architectural knowledge can navigate a company through organisational change.
“Organisational agility tends to get slower as companies mature”, says Carnabuci. “This is not a phenomenon of just traditional manufacturing companies – all organisations, without exceptions, tend to such inertia. What top management is challenged to do, then, is to design organisational processes and human resource (HR) systems that can make an organisation sustainably agile. Knowledge architects are wanted and needed.”[ms-protect-content id=”9932″]
Where Specialisation Fails
Organisations are complex systems that need all parts to work well together. According to Prof. Carnabuci, for this to happen, they need to develop two kinds of organisational knowledge. The first – specialist knowledge – pertains to the organisation’s distinctive competence areas, such as logistics, marketing, or production. The second – architectural knowledge – pertains to the interdependencies that exist across those areas.
“Most organisations recognise the value of specialist knowledge and are well equipped to develop it”, says Carnabuci. “For example, HR departments are often charged with recruiting and training personnel to fulfil competence gaps within a company’s competence areas. This is a widely accepted strategy, yet there is a problem – it is architectural knowledge rather than specialist knowledge that makes an organisation agile.”
If building agile organisations necessitates architectural knowledge, why do many organisations fail to develop architectural knowledge? There are three reasons, explains Carnabuci.
• First, architectural knowledge is mainly tacit, hence hard to detect. It resides in the minds of those who have it but it is difficult to see by (or communicate to) those who do not.
• Second, the value of architectural knowledge tends to become visible only when it is too late, that is, when changing the organisation’s resource configuration generates cascades of unanticipated, cross-competence problems because no one really understood their deep interdependencies.
• Third, HR systems and managerial attention are still largely geared towards appreciating specialist knowledge.
Carnabuci brings it to the point: “Because architectural knowledge is often hard to gauge, management approaches that promote architectural knowledge are systematically overlooked because they appear inefficient and poorly motivated. But if managers continue to reward, train and recruit specialist knowledge alone, they sacrifice organisational agility.”
Knowledge Architects are Key
As Brusoni and Prencipe note in their research, Pirelli succeeded with MIRS by recognising, valuing, and furthering the cross-domain connections of knowledge architects. Yes, the company recruited those with specialised skills, such as tire designers and software engineers. But the introduction of robotics demanded an integrated approach, say the researchers, so that such specialists could contribute their knowledge to the development of whole other areas of organisational competence. Such radical innovation would have been otherwise impossible.
Knowledge architects are important because they can help the organisation adapt and swiftly reconfigure internal processes and resources to meet new challenges. Companies aiming to become agile should acknowledge, reward, and facilitate the role of knowledge architects as lubricants of the organisation. “This may require rethinking existing human resource strategies”, says Carnabuci, “but it is vital for businesses aiming to thrive in environments that demand constant change”.
About the Author
Tammi L. Coles is the Digital Editor for Corporate Communications and Marketing at ESMT Berlin. She has extensive experience in American English copywriting, content marketing, translation, and communications project management.