The future that has already happened

The productivity of knowledge and knowledge workers will not be the only competitive factor in the world economy. It is, however, likely to become the decisive factor, at least for most industries in the developed countries. The likelihood of this prediction holds implications for business and for executives.

• The first - and overarching - implication is that the world economy will continue to be highly turbulent and highly competitive, prone to abrupt shifts as both the nature and the content of relevant knowledge continually and unpredictably change.
• The information needs of businesses and of executives are likely to change rapidly. We have concentrated these past years on improving traditional information, which is almost exclusively information about what goes on inside an organization. Accounting, the traditional information system and the one on which most executives still depend, records what happens within the firm. All recent changes and improvements in accounting - such as activity-based accounting, the executive scorecard, and economic value analysis (EVA) - still aim at providing better information about events inside the company. The data produced by most new information systems also have that purpose. In fact, approximately 90 percent or more of the data any organization collects is information about inside events. Increasingly, a winning strategy will demand information about events and conditions outside the institution: noncustomers, technologies other than those currently used by the firm and its present competitors, markets not presently served, and so on. Only with this information can a business decide how to allocate its knowledge resources to produce the highest yield. Only with such information can a business also prepare for new changes and challenges arising from sudden shifts in the world economy and in the nature and the content of knowledge itself. The development of rigorous methods for gathering and analyzing outside information will increasingly become a major challenge for businesses and for information experts.
• Knowledge makes resources mobile. Knowledge workers, unlike manual workers in manufacturing, own the means of production: they carry that knowledge in their heads and can therefore take it with them. All the same time, the knowledge needs of organizations are likely to change continually. As a result, in developed countries more and more of the critical work force - and the most highly paid part of it - will increasingly consist of people who cannot be "managed" in the traditional sense of the word. In many cases, they will not even be employees of the organizations for which they work, but rather contractors, experts, consultants, part-timers, joint-venture partners, and so on. An increasing number of these people will identify themselves by their own knowledge rather than by the organization that pays them.
• Implicit in all this is a change in the very meaning of organization. For more than a century - from J.P. Morgan and John D. Rockefeller in the U.S., to George Siemens in Germany, to Henri Fayol in France, through Alfred Sloan at GM, and up to the present infatuation with teams - we have been searching for the one right organization for our companies. There can no longer be any such thing. There will be only "organizations" - as different from one other as a petroleum refinery, a cathedral, and a suburban bungalow are, even though all three are "buildings." Each organization in the developed countries (and not only businesses) will have to be designed for a specific task, time, and place (or culture).
• There are implications for the art and science of management. Management will increasingly extend beyond business enterprises, where it originated some 125 years ago as an attempt to organize the production of thing. The most important area for developing new concepts, methods, and practices will be in the management of society's knowledge resources - specifically, education and health care, both of which are today overadministered and undermanaged.

Prediction? No. These are the implications of a future that has already happened.