Massachusetts Institute of Technology
Sloan School of Management
Executive Programs
Prof. Tom Allen, MIT
Knowledge Management
• Gaining Knowledge
– Technology Transfer
• Between Organizations
• Within Organizations
– Gatekeepers
• Disseminating Knowledge
– Technical Communication
• Organization Structure
• Physical Structure of Facilities
What do we know about technology transfer?
• It is a 'people process'.
• Transferring documentation is, at best, an auxiliary process.
• People must be in direct contact and understand each other to
transfer knowledge.
• The best 'package' for knowledge is the human mind.
• Moving people is the most effective way to move knowledge
• This can imply either organizational or geographical movement.
• Organizational boundaries impose a serious barrier to the
transfer of technology
• This is due to the development of different organizational
cultures.
The Context of the Study
X X X
X X
Project Team
Organization
'Twin' Projects
X X X
X X
Company 'A'
X X X
X X
Company 'B'
Sources of Technology
Outside
Experts
X X X
X X
Internal
Staff
Literature
Literature & Documentation
Outside
Experts
X X X
X X
Internal
Staff
Literature
18%
4%
People as Sources of
Technology
Outside
Experts
2X
X X X
X X
1X
Internal
Staff
Literature
Technology Sources for Product Development Projects
People Outside
People Inside
All Written Material
0
10
20
30
40
50
Proportion of Messages
60
People as Sources of Technology
Outside
Experts
Neg
ative
Literature
X X X
X X
Pos
itive
Internal
Staff
Customer Evaluation of Solutions as a Function of Idea Source
0.6
0.5
0.7
0.4
0.6
0.3
0.5
0.2
0.4
0.1
0.3
0
0.2
0.1
Internal
0
External
High
Low
ution
l
o
S
f
o
n
io
t
a
Source of Idea
Evalu
Proportion
Proportion
0.7
'Boundary Impedance' of the Organization
Outside
Experts
Neg
ative
X X X
X X
Internal
Staff
Literature
Science and Technology
• Science is Universal.
• Technology is Local.
Technology
•
•
•
•
•
•
•
Technology is defined in terms of:
The Business Goals
The Marketing Strategy
and most importantly,
The Culture
of the organization in which it is developed.
Technical problems are thus defined in terms
of that culture and its system of values.
The Local Nature of Technology
• This implies that:
• Anyone outside of the organization cannot fully understand the
way that those within the organization define technical
problems without understanding the organization's culture.
• This difficulty in understanding the problem is the principal
barrier to technology fransfer.
• Barriers of this sort arise any time that we try to transfer
knowledge across organizational boundaries.
• It thus holds true for internal communication as well as
communication with other organizations.
• It is one of the causes of poor interfunctional relations in
organizations.
Q u ality o f T ran sfer
(F ew er E C s)
Performance in Transferring Designs to Manufacturing
as a Function of CAD System Use for Communication
H ig h
p < 0.02
Low
0
0 .2
0 .4
0 .6
0 .8
1
1 .2
Mean Com m unications per Day
(T hrough C AD System )
1 .4
Using a Common Reference to Reduce Ambiguity in
Communication
Product Development
Manufacturing
Engineering
7
5
3
at
io
n
C
oLo
c
st
s
Te
ll
Te
&
Sh
ow
tin
gs
tM
ee
ue
n
Fr
eq
In
te
rv
e
nt
io
n
1
M
gt
Performance Score
Effectiveness of Strategies for Reaching Common
Understanding of Problems by Product Development and
Manufacturing Engineering
Partial Layout of the BMW Forschung und
Ingenieurung Zentrum
Product
Development
Prototype
Manufacturing
Engineering
The Effect of Transfers
A
N1
B
Continuing Relations
A
B
Potential Contacts
N1
More Continuing Relations
A
B
Potential Contacts
N1
N2
Referrals
A
B
Referrals
N1
N2
A Typical Technical Communication Network
Netgraph of Communication Among Software Developers
(N > 600)
Netgraph of Communication Related to Age
50
Year
Olds
40
Year
Olds
30
Year
Olds
20
Year
Olds
20
Year
Olds
30
Year
Olds
40
Year
Olds
50
Year
Olds
Dept B Dept A
Netgraph of Communication Related
to Organizational Structure
A1
A2
A3
B1
C1
C2
C3
C4
Dept C
C5
C6
C7
C8
Dept D
C9
D1
D2
D2
D1
C9
C8 C7
C6
C5
C4
C3C2C1 B1
A3 A2 A1
Netgraph of Communication Related to
Physical Location
Fl 2
Bldg. C3
Fl 1
Fl 7
Fl 6
Fl 5
Bldg. C2
Fl 4
Fl 3
Fl 2
Fl 1
Fl 2
Fl 1
Bldg.
Bldg.
B1C1 Fl 1
Bldg. B1 Fl 2
Bldg. A1
Bldg. A1
Fl 1
Bldg. C1
Bldg. C2
Bldg. C3
Netgraph of
Communication
Related to
Organizational
Structure
Manufacturing Plant
Manufacturing Plant
Communication Mapping
• Order by
location
Communication Mapping
•
Order by
Project
Development
Process
Groups
Netgraph Showing the Low Level of Communication
Among Groups in Laboratory ‘K’.
Groups
Communication Network in a Small Laboratory
High Communicators Compared with Colleagues in Readership
of Refereed Journals
p < 0.001
Laboratory 'A'
Laboratory 'G'
p < 0.02
Laboratory 'E'
p < 0.01
Laboratory 'L'
Laboratory 'M'
Laboratory 'H'
Laboratory 'S'
p < 0.05
p < 0.05
p < 0.01
p < 0.01
p < 0.01
Laboratory 'T'
p < 0.01
Laboratory 'U'
Laboratory 'V'
0
High Communicators
All Other Staff
N.S.
5
10
15
Mean Journal Readership
20
High Communicators Compared with Colleagues in Terms of
Regular Informal Contact Outside of the Organization
p < 0.05
Laboratory 'A'
p < 0.05
Laboratory 'G'
p < 0.001
Laboratory 'E'
p < 0.05
Laboratory 'L'
p < 0.01
Laboratory 'M'
Laboratory 'H'
p < 0.01
p < 0.01
Laboratory 'F'
0
High Communicators
All Other Staff
1
2
3
4
5
Mean Number of Contacts
6
The Gatekeeper as a Link to Outside
Technology
Outside
Experts
X X X
X X
Gatekeeper
Literature
Gatekeeper Characteristics
•
•
•
•
•
•
•
•
•
•
•
•
•
High Technical Performance
Not 'just communicators’
Highest technical performers in the organization.
Cannot be created by management.
Low in the Organizational Hierarchy
Concentrated at first level of technical supervision or below.
Seldom found at higher levels of management.
Seldom found on the technical ladder.
Visibility
They are easy to identify.
Everyone knows who they are.
Approachability
Must be at least receptive to people.
International Gatekeepers
International Gatekeepers tend to be
Engineers or Scientists, who have worked in
other countries and returned home.
Engineers and Scientists visiting from other
countries had very high foreign contact, but
insufficient domestic contact to be
International Gatekeepers.
A Managerial Career
VP
AD
DM
DH
SH
$$$
GS
$$
LE
$
The Dual Ladder
Technical
Managerial
VP
AD
DM
?
DH
SH
$$$
GS
$$
LE
$
SDSS
$$$
SSS
$$
SS
$
Engineer A
Engineer B
Engineer C
Distribution of Positions in One
Firm's Dual Ladder
100
90
Proportion (Percent)
80
70
60
50
40
30
20
10
0
Managerial
Technical
The Dual Ladder
Technical
Managerial
VP
AD
DM
DH
SH
$$$
GS
$$
LE
$
SDSS
$$$
SSS
$$
SS
$
Engineer A
Engineer B
Engineer C
Criteria for Technical Ladder Promotion
Technical
Managerial
VP
AD
DM
DH
SH
$$$
GS
$$
LE
$
SDSS
$$$
SSS
$$
SS
$
Engineer A
Engineer B
Engineer C
The Biggest Problem with the Dual Ladder
Technical
Managerial
VP
AD
DM
DH
SH
$$$
GS
$$
LE
$
SDSS
$$$
SSS
$$
SS
$
Engineer A
Engineer B
Engineer C
The Dual Ladder
Technical
Managerial
VP
AD
DM
DH
SH
$$$
GS
$$
LE
$
SDSS
$$$
SSS
$$
SS
$
Engineer A
Engineer B
Engineer C
Proportion of Engineers & Scientists in Ten Organizations
Choosing Each of Three Possible Career Paths
„
MANAGEMENT
32%
„
TECHNICAL LADDER
20%
„
PROJECT ASSIGNMENT
48%
Career Preference as a Function of Age (N
= 1,402)
70
Interesting
Projects
Proportion (Percent)
60
50
40
Management
30
20
Technical
Ladder
10
0
20
30
40
Age (Years)
50
60
Career Preferences of Technical Ladder Staff as a Function of Age (N = 351)
70
Interesting
Projects
Proportion (Percent)
60
Management
50
40
30
20
Technical
Ladder
10
0
20
30
40
Age (Years)
50
60
Career Preferences of Managers as a Function of
Age (N = 374)
Management
120
Proportion (Percent)
100
80
Interesting
Projects
60
40
20
Technical
Ladder
0
20
30
40
Age (Years)
50
60
The Process of Innovation
Technology
INNOVATION
Market
Departmental Organization
Technology
D1
D2 D3
D4 D5 D6
Market
Departmental Organization
Technology
D1
D2
D3
D4
D5
Market
Time & Coordination
Project Team Organization
Technology
P1
P2 P3
P4 P5
P6
Market
Matrix Organization
Technology
D1
D2 D3
D4
D5
D6
P1 P2 P3 P4 P5 P6 P7 P8
Market
Matrix Organization
Technology
D1
D2 D3
D4
D5
D6
P1 P2 P3 P4 P5 P6 P7 P8
Market
The Basic Tradeoff and Dilemma in Product Development Organization
•
Departmental Organization
• Departmental structure is more closely mapped to the structure of the supporting technologies
• It thereby provides a better
connection to those
technologies and better
ongoing technical support to
the project effort.
• This is, however, accomplished at the cost of much greater difficulty in coordination of the project tasks and less responsiveness to market change.
•
Project Team Organization
• Project Team structure groups
people from different disciplines
together in a single team all
reporting to a common manager.
• It thereby provides better
coordination of the project tasks
and increased sensitivity to
market dynamics.
• This is, however, accomplished
at the cost of a separation from
the disciplinary knowledge
underlying the project effort.
When this is carried to an
extreme, it will gradually erode
the technology base of the
organization.
Organizational Structure Space I
Iss
dK = rate of change of
dt
knowledge
Iss =
subsystem
interdependence
dK
dt
Organizational Structure Space II
Iss
x x
x xx x
+
+
+
Project
Team
+
+
+
+
+
Departments
o o o
oo
o o
+
+
dK
dt
Organizational Structure Space III
Iss
Project
Team
Ti
T1
T2
T1 > T2
Department
dK
dt
Structuring the Organization
• Standard Industrial Practice
– Ignores the rate at which technologies are
developing (despite the fact that this can
often be measured).
– Usually ignores the interdependencies in
project work (seasoned project managers
are an exception).
– Focuses on project duration (and usually
makes the wrong decision on this
parameter).
Organizational Structure Space IV
dM
dt
Project
Team
Iss
Ti
Department
dK
dt
Organizational Structure Space V
dK
dt
Ti
Department
Project
Team
De p a
rtmen
t
dM
dt
Iss
Project
Team
BMW FIZ I Concurrent Engineering
Matrix Connections to Market and Technology
Technology
Dept
Head
Proj
Mgr
Proj
Mgr
Proj
Mgr
Proj
Mgr
Proj
Mgr
Market
Proj
Mgr
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Matrix Connections to Market and Technology
Technology
Pr
Mgr
Dept
Head
IPT
IPT
IPT
Mgr
Mgr
Mgr
IPT
IPT
IPT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Market
Some Problems
Technology
IPT
Dept
Head
Dept
Head
IPT
IPT
IPT
IPT
Market
Competition for
Resources
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Problems with Imbalance
Technology
IPT
IPT
IPT
IPT
Market
OUT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Tech Integrity
IPT
The Need for Balance
Technology
IPT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
IPT
IPT
IPT
IPT
Market
OUT
B
A
L
A
E
C
N
Dept
Head
Dept
Head
Dept
Head
Dept
Head
The Inescapable Conflict
Technology
IPT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
IPT
IPT
IPT
IPT
Market
OUT
T
C
I
L
F
N
O
C
Dept
Head
Dept
Head
Dept
Head
Dept
Head
A More Complete Matrix Using Integrated Product
Teams
MKTG
PROD
DEV
MFG
Integrated
Product
Teams
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
IPT
IPT
IPT
IPT
IPT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Matrix Connections to Product Development and
Manufacturing Engineering
Manufacturing
Engineering
Dept
Head
Dept
Head
Product
Development
Integrated
Product
Teams
IPT
Dept
Head
IPT
IPT
IPT
IPT
IPT
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Dept
Head
Management of Transitions
• The critical points of vulnerability in the life of
a project are the points of transition.
– Transitions can involve many parameters, for example:
•
•
•
•
People
Management
Leadership & leadership style.
Primary organizational responsibility and reporting
relationships.
• Nature of the work.
• Types of knowledge required.
• Physical location.
• To change all of these simultaneously is to
court disaster.
Management of Transitions II
Project Size & Scope
Transition Points
Time
Management of Transitions IV
• Projects must be protected through
transitions.
– There must be areas of continuity to offset the areas of
change.
– Team size must grow in a gradual fashion.
• This has implications for both organizational structure and
physical architecture.
• Both must be very flexible to allow this to happen along with a
gradual transition in reporting relationship.
– There should be an extra effort to retain a sense of
‘ownership’ among team members.
• Avoid ‘runway management’.
Project Size & Scope
Management of Transitions III
Transition Points
Time
social order
spatial order organizational order
Tom Allen, MIT
Transition Performance
1
Performance
0 .8
p < 0.001
0 .6
0 .4
0 .2
0
Separate
Co-Located
Location of Engineers
PERFORMANCE AS A FUNCTION OF
GROUP AGE
(PELZ & ANDREWS
P e rform a nc e P e rc e ntile
55
50
45
40
0
2
4
6
8
10
Mean Tenure of Group Members (Years)
12
Smoothed Project
Performance
Project Performance as a Function of Team
Age
(45 Chemical Industry Projects)
1
0.5
0
0
2
4
6
Mean Tenure of Project Team Members
(Years)
S m o o th e d P ro je c t
P e rfo rm a n c e
External Technical Communication as a Function of Team Age
(45 Chemical Industry Projects)
5.5
5
4.5
4
3.5
0
2
4
6
8
Mean Tenure of Project Team Mem bers
(Years)
WORK PREFERENCES AS A FUNCTION OF MEAN
TENURE
(PELZ & ANDREWS)
Proportion of Group Members Reporting
(Percent)
65
60
55
50
PREFERENCE FOR BROAD
PREFERENCE FOR DEEP
45
40
35
30
0
2
4
6
8
10
Mean Tenure of Group Members (Years)
12
Perceived Influence Over Project Goals &
Objectives
(Teams with Mean Tenure Greater Than Five Years)
Project Team
Performance
Engineers
Project Manager
Low
High
0
0.2
0.4
0.6
0.8
Mean Perceived Influence
1
PERFORMANCE AS A FUNCTION OF GROUP AGE
(PELZ & ANDREWS)
Group Performance
55
50
45
40
0.5
2.5
4.5
6.5
8.5
Mean T enure of Group Members (Years)
10.5
Smoothed Performance
Project Performance as a Function of Team Age
(45 Chemical Industry Projects)
0
2
4
6
8
10
12
Mean Tenure of Team Members (Years)
14
Smoothed Performance
Project Performance as a Function of Team Age
(45 Chemical Industry Projects)
0
2
4
6
Mean Tenure of Team Members (Years)
8
Project Performance and External Communication as a
Function of Team Age
(45 Chemical Industry Projects)
Communications Per
Person Per Week
2
1.6
1.2
0.8
0.4
0
0
1
2
3
4
5
Mean Tenure of Team Members (Years)
6
Project Performance and External Communication as a
Function of Team Age
(45 Chemical Industry Projects)
2
0.8
1.6
0.6
1.2
0.4
0.8
0.2
0.4
0
0
0
2
4
6
Mean Tenure of Team Members (Years)
8
Communications Per
Person Per Week
Smoothed
Performance
1
WORK PREFERENCES AS A FUNCTION OF MEAN
TENURE
(PELZ & ANDREWS)
65
Degree of Preference
60
55
Broad Exploration of New
Areas
Deep Exploration of Narrow
Areas
50
45
40
35
30
0
2
4
6
8
10
Mean Tenure of Group Members
(Years)
12
Team Performance
Perceived Influence Over Project Goals & Objectives
(Teams with Mean Tenure Greater Than Five Years)
Low
Project Manager
T eam Members
High
0
0.2
0.4
0.6
Degree of Influence
0.8
1
We Shape Our Buildings
"On the night of May 10, 1941, with one of the last bombs of the last
serious raid, our House of Commons was destroyed by the violence of the
enemy, and we have now to consider whether we should build it up
again,and how, and when. We shape our buildings, and afterwards our
buildings shape us. Having dwelt and served for more than forty years in
the late Chamber, and having derived very great pleasure and advantage
therefrom, I, naturally, should like to see it restored in all essentials to its
old form, convenience and dignity."
-WSC, 28 October 1943 to the House of Commons (meeting in the House
of Lords).
Notes: The old House of Commons was rebuilt in 1950 in its old form,
remaining insufficient to seat all its members. Churchill was against "giving
each member a desk to sit at and a lid to bang" because, he explained, the
House would be mostly empty most of the time; whereas, at critical votes and
moments, it would fill beyond capacity, with members spilling out into the
aisles, in his view a suitable "sense of crowd and urgency."
Distance Measurement
Proportion of Communication Partners as a Function of
Distance
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Probability of Technical Communication as a Function of Distance Between Work Stations
P ro b a b ility o f W e e k ly
C o m m u n ic a tio n 0.25
0.2
0.15
0.1
0.05
0
0
20
40
60
80
Separation Distance (Meters)
100
Intradepartmental and Interdepartmental Communication and Physical Separation
S m oothed P robability of
C om m unication
0.4
INTRA-DEPARTMENTAL
INTER-DEPARTMENTAL
0.3
0.2
0.1
0
0
20
40
Separation Distance (Meters)
60
The Effect of Organization I
P(C)
D = f(1/N)
DISTANCE
The Effect of Organization II
P(C)
D = f(1/N)
P = f(Iss)
DISTANCE
Some Obvious Points
P(C)
S < S
2
1
p < p
2
1
S3 < S1
p > p1
3
p3
p1
p2
S3
S2
Distance
S1
Probability of Communication
Departmental Size
1
Smoothed P(C)
Raw Data
Power (Raw Data)
0.8
0.6
0.4
0.2
0
0
10
20
30
Size of Department
40
50
Face-to-Face and Telephone
Communication
PROBABILITY OF TELEPHONE
COMMUNICATION
0.05
0.02
0.01
0.005
0.002
0.001
0.0005
0.0002
0.0001
0.0001
0.0002
0.0005
0.001
0.002
0.005
0.01
PROBABILITY OF FACE-TO-FACE
COMMUNICATION
0.02
0.05
‘Bandwidth’ Limitation
High Complexity Information
Low Complexity Information
Within a
Floor
Within a
Floor
Within a
Building
Within a
Building
Within a
Site
Within a
Site
Between
Sites
Between
Sites
0
20
40
60
80
Proportion of Contacts
Face-to-Face
Telephone
100
0
20
40
60
80
Proportion of Contacts
Face-to-Face
Telephone
100
Steelcase Ground Floor
Steelcase Third Floor
M ean Num ber of
C o m m u n ic a tio n P a rtn e rs p e r
P e rs o n
Effect of New Steelcase Building on Breadth of Communication
14
12
10
8
6
4
2
M ove to New Building
0
0
2
4
6
8
10
12
Time (Weeks)
14
16
18
20