Rethinking knowledge work: A strategic approach

Thomas Davenport

Here is an excerpt from an article written by Thomas H. Davenport for The McKinsey Quarterly, featured online by McKinsey & Company. Although the thrust of the material is focused on larger organizations, there are some key points relevant to all organizations, whatever their size and nature may be.

To read the complete article and check out other resources, please click here.

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Knowledge workers’ information needs vary. The key to better productivity is applying technology more precisely.

In the half-century since Peter Drucker coined the term “knowledge workers,” their share of the workforce has steadily grown—and so has the range of technology tools aimed at boosting their productivity. Yet there’s little evidence that massive spending on personal computing, productivity software, knowledge-management systems, and much else has moved the needle. What’s more, a wide variety of recent research has begun suggesting that always-on, multitasking work environments are so distracting that they are sapping productivity. (For more on this problem, see “Recovering from information overload.”)

After researching the productivity of knowledge workers for years, I’ve concluded that organizations need a radically different approach. Yes, technology is a vital enabler of communication, of collaboration, and of access to rising volumes of information. But least-common-denominator approaches involving more technology for all have reached a point of diminishing returns. It’s time for companies to develop a strategy for knowledge work—one that not only provides a clearer view of the types of information that workers need to do their jobs but also recognizes that the application of technology across the organization must vary considerably, according to the tasks different knowledge workers perform.

Few executives realize that there are two divergent paths for improving access to the information that lies at the core of knowledge work. The most common approach, giving knowledge workers free access to a wide variety of tools and information resources, presumes that these employees will determine their own work processes and needs. The other, the structured provision of information and knowledge, involves delivering them to employees within a well-defined context of tasks and deliverables. Computers send batches of work to employees and provide the information needed to do it.

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The greatest potential for productivity improvements involves bringing more structured knowledge to workplaces and processes where the free approach has dominated. So far, lower-level process work has been the primary beneficiary of structured-provision tools. However, advancing technologies are making them better suited to tasks that until now have been the preserve of free-access approaches—tasks centered on expert thinking and collaboration. In one example, a major academic medical center is employing “smart forms” that present physicians with all the available information about a particular patient’s disease on one screen and even produce first drafts of notes about their interactions with patients for medical records.

Some forward-looking companies are testing more structured approaches in a broader range of work, often with positive results.

Here are three areas of progress.

High-level work

Companies have considerable opportunity for applying structured technology and processes to the more routine aspects of even highly collaborative jobs. An insurance company, for example, implemented workflow- and document-management technologies to help develop and modify its investment portfolio. The system replaced numerous spreadsheets and e-mails with a common global system that synchronized communications and transactions among several different groups across several countries. Each group (including operations, funding, controls, and legal) now adds its components to the portfolio. When a new portfolio or modification is completed, the documents are finalized and sent to an external custodian for management and recording. Fund managers find the system relatively noninvasive; if their involvement is needed for a decision or approval, they are notified automatically via e-mail.

Better processes

Technologies are also being used to structure previously unstructured processes. For example, GE Energy Financial Services, which specializes in lending for large energy projects, has worked to boost the productivity and quality of decisions in its loan underwriting. A managing director with responsibilities for the unit’s marketing and investment strategy brought together GE analysts and researchers, who extracted typical decision rules from experienced company executives. The rules were embedded in a semiautomated decision system that scores prospective deals and recommends that they be approved or disapproved. Junior analysts can use the system to determine whether a deal is likely to succeed—without taking it to a credit committee comprising senior business unit executives, who can of course override the recommendation if they wish to do so. Deals made using the new approach have generated returns 40 percent higher than the old, unstructured one did.

Hybrid approaches

Some organizations combine the free and structured approaches. One of the easiest ways of doing so is to place partial restrictions on the types of information highly autonomous workers can use—for example, by limiting access to pornography, sports, or social-networking sites while at work. A more nuanced approach allows employees to be both free and structured. Partners Healthcare, which comprises several teaching hospitals in Boston, has a structured system that automatically recommends appropriate drugs and treatments to physicians but allows them to override it. The organization also makes a variety of free-access knowledge databases available to doctors, but the structured system, which incorporates medical knowledge into the process for ordering care, is used much more frequently.

A related approach imposes structured techniques for only some aspects of a job. Some companies, for example, use product-lifecycle-management systems to structure the back end of the product design process but don’t use them during the early product conceptualization and brainstorming stages. The key issue here is to decide which aspects of the relevant process could benefit from more structured technologies and processes and which should be left largely untouched by them.

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To read the complete article and check out other resources, please click here.

Thomas H. Davenport, an alumnus of McKinsey’s New York office, holds the president’s chair in information technology and management at Babson College.

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