The Knowing-Doing Gap: How Smart Companies Turn Knowledge into Action

by Jeffrey Pfeffer

“most workplace learning goes on unbudgeted, unplanned, and uncaptured by the organization…. Up to 70 percent of workplace learning is informal.”

“Dumping technology on a problem is rarely an effective solution.”

Why has it been so difficult for other automobile manufacturers to copy the Toyota Production System (TPS), even though the details have been described in books and Toyota actually gives tours of its manufacturing facilities? Because “the TPS techniques that visitors see on their tours—the kanban cards, andon cords, and quality circles—represent the surface of TPS but not its soul.”

Attempting to copy just what is done—the explicit practices and policies—without holding the underlying philosophy is at once a more difficult task and an approach that is less likely to be successful.

Competitive advantage comes from being able to do something others can’t do. Anyone can read a book or attend a seminar. The trick is in turning the knowledge acquired into organizational action.

ONE OF THE MAIN BARRIERS to turning knowledge into action is the tendency to treat talking about something as equivalent to actually doing something about it. Talking about what should be done, writing plans about what the organization should do, and collecting and analyzing data to help decide what actions to take can guide and motivate action. Indeed, rhetoric is frequently an essential first step toward taking action. But just talking about what to do isn’t enough. Nor is planning for the future enough to produce that future. Something has to get done, and someone has to do it.

We would have a great idea and build a program around it. There would be special forms and 3-ring binders of instructions and reports and special meetings. Soon there was so much busy work, it overshadowed the original intent. Things became so bureaucratic that they died of their own weight.

Just as mission statements and talk can substitute for action rather than informing such action, planning can be a ritualistic exercise disconnected from operations and from transforming knowledge into action. Of course, planning can facilitate developing knowledge and generating action. But it does not invariably do so and often does the opposite.

She summarized her findings by noting, “Only pessimism sounds profound. Optimism sounds superficial.”

very wary of judging people just on the basis of how smart they sound, and particularly on their ability to find problems or fault with ideas. These are dangerous people. They are smart enough to stop things from happening, but not action oriented enough to find ways of overcoming the problems they have identified.

business schools and management consulting firms reinforce the view that prestige is achieved by winning in the conversational marketplace, not by being best at turning smart ideas into organizational action.

Now consider the essence of the management education process—the business school experience—as practiced at leading institutions in the United States as well as those throughout the world. The essence of this education process is talk—learning how to sound smart in case discussions or to write smart things (talk turned into writing) on essay examinations based on business cases. In business school classes, a substantial part of students’ grades is based on how much they say and how smart they sound in class discussion.

Management consulting, one of the hottest and most prestigious occupations, certainly as measured by the economic rewards for its practitioners, sells talk. This is not to discount the value that management consultants can provide. Some firms offer insights on the macro-economy, others provide industry expertise, systematic data and analysis, or valuable, novel perspectives. But what they rarely provide is implementation.

You’re Likely to Find Talk Substituting for Action When

This sums up all the above

We don’t reject informal talk, formal presentations, and quantitative analysis. These are often important precursors to intelligent action. It’s just that they are not substitutes for action.

We found that many organizations that avoid using talk as a substitute for action do one or more of the following:

interesting but not comprehensive

After each day of battle, these instructors hold “After Action Reviews,” in which they work with combatants to understand what went right and what went wrong and how they can do better in the next day’s battle.

The instructors place especially strong emphasis on learning from failure, viewing the acceptance of failure as crucial to the process of learning by doing.

There is a large literature demonstrating that attitudes follow behavior.39

Reframe the task from being one of merely finding all the problems or pitfalls for a particular course of action to one in which the task is not only to uncover problems but also to solve them. This reframing transforms talk about how something that may be useful and necessary can’t be done into talk about how to do it.

People had worked and tried hard in the past; why should there be anything about the future that would be different?

The usual place to stand is in the existing set of constraints, issues, and opportunities that confront the organization…. Using this approach, managers typically conduct a financial and organizational analysis, identify what opportunities and threats exist, what strengths and weaknesses the organization has, and then formulate a strategy that is intended to exploit the opportunities and minimize or eliminate the threats…. The boat is patched but it is still the same boat and most likely will only continue on the old course at about the same velocity or a little faster…. Our recommended approach is to stand in a future that is not directly derived from present conditions and circumstances…. Although the future is informed by the past, it is as “past-free” as possible…. When I say the future is “past-free,” I mean that the future should not be an extrapolation, extension, or modification of the past.

As Dennis Bakke, AES’s CEO, has said, the better and more competent central staff functions are, the worse it is for the organization. A particularly skilled and competent central staff encourages people to turn over issues such as public relations, strategy formulation and implementation, quality, safety, and so forth to the central office departments responsible for those activities. If the staff people weren’t too competent, people in the field would not trust them and would want to be involved themselves. So, ironically, the better the central staff, the more the rest of the organization comes to depend on those people. And the more centralized knowledge and skill becomes, the less responsibility people closest to where the work is done take for that work.

The time scale of the measurements—how often the firm assesses results—helps to establish the time horizon that tends to govern behavior in the organization. A quarterly budget focus at HP has produced an emphasis on the short term and actions designed to manage performance that take a short-term perspective. Time horizons are not inevitable but are, in fact, the result of organizational measurement practices.

Research indicates that human beings can keep only about seven things in their heads at any one time.

So, measurements should be guides, helping to direct behavior, but not so powerful in their implementation that they substitute for the judgment and wisdom that is so necessary to acquire knowledge and turn it into action.

There are two key differences between what these firms did and the balanced-scorecard approach: (1) The measurement systems are far simpler and understandable, and (2) they took mindful actions to build measures that suited their needs rather than mindlessly adopting measures that were well institutionalized in accounting firms.

Too many leaders confuse feedback with paperwork. “Filling out a form is inspection, not feedback,” says Kelly Allan… “History has taught us that relying on inspections is costly, improves nothing for very long, and makes the organization less competitive.”

And, the leaders of these firms were willing to break with convention and place less emphasis on what everyone else was doing and measuring.

When a leader believes that a person lacks skill or motivation, these negative expectations decrease performance.

Once a person, group, or division has lost in a performance contest and is labeled a “loser,” research suggests that subsequent performance will be worse because leaders and others will unwittingly act to fulfill the poor performance expectation.

Deming emphasized that forced rankings and other merit ratings that breed internal competition are bad management because they undermine motivation and breed contempt for management among people who, at least at first, were doing good work. He argued that these systems require leaders to label many people as poor performers even though their work is well within the range of high quality. Deming maintained that when people get these unfair negative evaluations, it can leave them “bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of the rating, unable to comprehend why they are inferior.”

Related research strongly suggests that competition inhibits learning and creativity because rather than focusing on the task at hand, in conditions of competition people focus their attention too heavily on what competitors are doing, on how well they are performing in comparison, and on the reactions of third parties such as leaders and peers who are the audience for the contest. Moreover, when a task is difficult enough or complex enough that it requires help and sharing ideas with others, internal competition is especially destructive.

One very effective way to reduce intergroup competition and conflict is to provide the groups struggling with each other with a common goal and a common external threat or enemy.

Don’t be afraid to do what your managers think is best, even if it goes against conventional wisdom.

Harlow Cohen, the president of a Cleveland, Ohio, consulting firm, has called this gap between knowing and doing the performance paradox: “Managers know what to do to improve performance, but actually ignore or act in contradiction to either their strongest instincts or to the data available to them.”

It also has a set of core assumptions about people that it tries to implement in its management approach: that people (1) are creative, thinking individuals, capable of learning; (2) are responsible and can be held accountable; (3) are fallible; (4) desire to make positive contributions to society and like a challenge; and (5) are unique individuals, deserving of respect, not numbers or machines.

In a world of conceptual frameworks, fancy graphics presentations, and, in general, lots of words, there is much too little appreciation for the power, and indeed the necessity, of not just talking and thinking but of doing—and this includes explaining and teaching—as a way of knowing.

CEO David Kelley likes to say that “enlightened trial and error outperforms the planning of flawless intellects.”

“The foundation of any successfully run business is a strategy everyone understands coupled with a few key measures that are routinely tracked.”