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In praise of knowledge workers

Basex recently named the "knowledge worker" as our Person-of-the-Year for 2004, in recognition of the impact that knowledge workers are having on the economy. Today, without the knowledge worker, much of the business world would come to a standstill. At the same time, companies haven't yet figured out how to manage the knowledge work force, and the average company with 1,000 employees loses over $12 million annually as a result.

The definition of knowledge worker has proved elusive since coined by Peter Drucker half a century ago. Drucker intended the term to describe a successor class to factory workers, but today we can define knowledge workers as participants in the knowledge economy. The knowledge economy suggests an economic environment where information and its manipulation are the commodity and the activity (in contrast to the industrial economy where workers produced a tangible object with raw production materials and physical goods).

Today, knowledge workers comprise a plurality of the work force. While at the beginning of the 20th century, unskilled labor accounted for about 90% of the work force, today that figure is closer to 20%. As a result, the knowledge work force has become the linchpin to an organization's success, as the world morphs into a knowledge economy. The change represents a significant challenge to managers who are accustomed to managing workers in more traditional roles. The minimum cost of tools and technologies that supports these workers, estimated to be between $5,000 and $10,000 per employee per year, is growing steadily, yet most companies have failed to recognize the changes they need to make in how they conduct business.

Knowledge workers are sometimes referred to as information workers, and sometimes people argue that information workers perform more menial tasks than knowledge workers. But Drucker cited a wide spectrum of knowledge workers, ranging from the file clerk to the X-ray technologist and junior accountant, to the surgeon and engineer. Because a quick glance in the dictionary reveals that "knowledge" is defined as "specific information ... " and "information" defined as "knowledge," it is better to say that there is no distinction between knowledge workers and information workers and move on.

Instead of focusing on terminology, corporate managers need to look for ways in which they can view and manage their human resources as a pool of intellectual capital--raw material for the knowledge economy. Knowledge workers spend at least 20% of their time each day searching, and the majority of those searches fail or do not provide complete results. That costs companies thousands of dollars per worker and, more significantly, delays the completion of work. Companies have yet to recognize the high cost of "lag time"--the unproductive time that represents 90% of overall knowledge processes because they provide knowledge workers with outmoded tools. In aggregate, lag time cost the corporate world about $25 billion in 2004; that figure will increase by 15% in 2005.

Organizing Knowledge

The knowledge economy brings with it significant changes in terms of how we manage and store knowledge, some of which may pose a form of threat to the status quo. That is not a new problem--people have been struggling to classify and understand knowledge for centuries. The ancient Greeks had concerned themselves about the nature of human knowledge. That concern is called epistemology, and is the branch of philosophy that studies the nature of knowledge, its presuppositions and foundations, and its extent and validity.

Aristotle saw that knowledge reflected the organization of the world, which brings us directly to the Royal Library of Alexandria, said to have been seeded by one of Aristotle's students, Demetrius Phalereus. The Library was meant to hold every possible book on every possible subject, effectively to know everything on earth. To ensure no work escaped its grasp, Ptolemy III of Egypt decreed that any book or scroll brought into the city was to be surrendered and then copied by official scribes for the library; only then would the original (but sometimes the copy) be returned to its owner. But even the Library's half-million volumes were too much for any one person to make sense of, and the librarians devised a cataloging system where they listed works they deemed of particular importance, appending a brief description to the title.

Fast forward to 1876, when the Dewey Decimal System was published by Melvil Dewey. Dewey's system is a way to organize knowledge for libraries uniformly, clustering books by topic. In Dewey's system, a book could only be placed in one category, regardless of whether it actually belonged in five or even in 10 categories. In fact, that has been the case since early man began piling and sorting rocks outside the cave. The advent of information technology, on the other hand, has changed the rules and created an ability to place knowledge in multiple categories. More significantly, it allows knowledge workers to control the work environment, specifically referencing the placement and organization of information. Similar to how knowledge workers own the means of production as compared to factory workers, they also exert far more control over the work environment.

While in the factory, the owner dictates the organization of work, where things are placed, at what time things are done, participants in the knowledge economy may often experience just the opposite. Many knowledge workers are free to organize their work environment (meaning both computer and office) in the manner that best suits their work habits; in many cases, work will be performed at a time convenient for the knowledge worker, rather than in accordance with a fixed shift schedule. That alone explains why companies need to provide knowledge workers with flexible, collaborative business environments that facilitate knowledge work rather than hinder it.

An example: The world of knowledge workers is divided into browsers and searchers. Browsers move through taxonomies looking for information; searchers use the search bar. Fifty percent of information is found through browsing, and 50% through searching. What is interesting is that this does not mean that half of the world prefers one method over the other, but that knowledge workers choose the appropriate method based on their needs.

Views from leaders

The importance of the knowledge worker is not lost on IT industry leaders.

"Today, the knowledge worker who makes a difference is less a knower than a learner and applier," notes Mike Wing, IBM's (ibm.com) VP for strategy. "We should be long past congratulating ourselves for the simple epiphany that intellectual capital is better than physical capital. The key now is innovation .... Yes, it's important to have unique, differentiating expertise. But you have to be able to combine, use and evolve that expertise in a radically dynamic market."

According to Anne M. Mulcahy, chairman and CEO, Xerox, "In every enterprise, there are workers who are thinking up better ways to capture, manage and deliver information and knowledge. These knowledge workers hold the key to growth and productivity in today's information-driven business world. Now more than ever, they need solutions and services that streamline the way knowledge flows through the workplace."

"Today's competitive environment requires the ability to comprehend and manage vast amounts of information from multiple sources," said Clare Hart, president and CEO of Factiva. "It's not surprising that the knowledge worker is Basex's Person of the Year, recognizing the criticality of this role, and the systems that support it, to the success of the enterprise. As a result, smart companies are employing technologies that enable their employees to make better decisions, faster."

"The move to a knowledge-based economy presents companies that recognize this early on with a tremendous competitive advantage," said Andy Mattes, president and CEO of Siemens Communications. "This represents nothing less than a fundamental sea change in how companies will operate. Already today, companies need to connect their people not only to each other, but to knowledge and resources throughout their entire organizations. Basex's recognition of the knowledge worker as Person-of-the-Year highlights the need for companies to address the changes they will need to make for a new economic reality."

Jeff Raikes, Microsoft group VP, Information Worker Business, observed that there "is a global change happening in the way we work--a need to be more responsive and more connected to people and information, and a move away from the desk, the office and traditional hours. In today's environment, information workers have more options on how and when they work, and access to more tools to meet their work needs than ever before. It's exciting from a business, technology and innovation perspective to witness the greater productivity among individuals, teams and organizations in this new world of work and how it continues to evolve."

The next five years will be critical as companies and managers, in order to compete in the knowledge economy, will need to learn to focus on a previously overlooked asset: their people.

Jonathan B. Spira is CEO and chief analyst of Basex, e-mail jspira@basex.com.

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