Corey Phelps Discusses Organizational Knowledge

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    • 00:01


    • 00:07

      COREY PHELPS: Corey Phelps.I work at McGill University in Montreal,Canada. [Corey Phelps, Associate Professor of Strategyand Organization, McGill University]And my field of research is in the areaof innovation and strategy.[How would you define organizational knowledgefor someone who is not familiar with the term?]So organizations are collections of individuals.So organizational knowledge wouldbe the collection of knowledge of the individuals

    • 00:28

      COREY PHELPS [continued]: in the organization.We tend to try to make a distinction in researchbetween knowledge that is specific to an individual,and what in fact is organisationalabout organizational knowledge.So it has to be shared by some part of the organization.That sharing can be through verbal communication,but oftentimes organizational knowledge is manifest in things

    • 00:50

      COREY PHELPS [continued]: like standard operating procedures, rules, routinesthat organizations follow.And essentially what those are isthat's the embodiment of the understanding of membersof the organization, in terms of howto perform certain activities.[What inspired you to start research in the fieldof organizational knowledge?]So when you're a Ph.D. student, oneof the things that you have to do

    • 01:11

      COREY PHELPS [continued]: is you have to write a dissertation.Your dissertation has to be original researchon some topic, something that could be publishedin a top academic journal.So I came into my Ph.D. Program very interested in innovation.And more particularly, I'm interested in howfirms, organizations use things like strategic alliances,

    • 01:34

      COREY PHELPS [continued]: acquisitions, mergers, in order to help them innovate.You think about innovation-- what is innovation?Innovation literally is the production of new knowledge.If we're going to produce a new product,that means we often have to create new understandings,the new features, the new functions in the product,but also how to manufacture those new featuresand new functions.

    • 01:54

      COREY PHELPS [continued]: So I was interested in innovation.I was interested in the role that cooperative relationshipslike alliances and acquisitions play in that.So that started me on my research stream,really looking at how firms, and under whatconditions organizations learn from partners.So that's how I got started in it,and that research then continues to this day.[Why is it important to study organizational knowledge?]

    • 02:19

      COREY PHELPS [continued]: So I mentioned just at the beginning of the conversationthat my research is at the intersection of innovationand strategy.So if I focus on strategy, most scholars of strategywould say that the fundamental question of strategy is,why is it that some organizations aremore successful than others?Now, when we talk about for profit organizations,

    • 02:41

      COREY PHELPS [continued]: we tend to define success in terms of profitability.So the question would be, why is itthat some firms are more profitable than other firms.In answering that question, strategy scholars say well,it's because some firms have a competitive advantage.By definition, a competitive advantageis something that allows a companyto create economic value for its customers,

    • 03:03

      COREY PHELPS [continued]: and to capture some of that economic valuein the form of profitability.In order to capture that value, theyhave to do something that other companies finddifficult to imitate.So you have to be able to create morevalue than your competitors, and howyou do that has to be difficult to copy.If it's easy to copy, very quicklyprofits will be competed away.

    • 03:24

      COREY PHELPS [continued]: So that's strategy.That's the fundamental question of strategy.The link to my interest in organizational knowledgeand innovation is, if you want to boil itdown to the end of the day why some firms earn moreprofits than other firms, oftentimes youcan point to some firms are betterat learning how to do new things, which is reallyabout understanding, which means it's about knowledge.

    • 03:47

      COREY PHELPS [continued]: So I would say the core of understandingcompetitive advantage is really trying to understand whyis that some organizations are able to learn howto create new sources of value?That could be a new business modelthat could be a new product, that could be new process.But that involves learning, and that learning,

    • 04:07

      COREY PHELPS [continued]: once it's shared in the organization,is turned into knowledge.So to me, there's a very strong relationshipbetween the creation of organizational knowledge,and the creation of competitive advantage.[Which key thinkers have inspired you,and who continues to influence you?]In the field of strategy and innovation, I can name a few.So Michael Tushman, who interestingly enough,

    • 04:31

      COREY PHELPS [continued]: I just came from a session at this conferencethat was celebrating Mike's research over the last 40years.Jim March, Bruce Kogut.Someone who I find a very strong relationshipwith, in terms of his research and mine,Lee Fleming, who's at the University of California,Berkeley.JC Spender, Rob Grant.

    • 04:53

      COREY PHELPS [continued]: If we go back further into time, Iwould say Schumpeter, the famous Austrian economist,who coined the phrase creative destruction.Because Schumpeter talked a lot about dynamic competition,competitive advantage.And basically what he said was, in this notionof creative destruction, it's the new combination of thingsthat we already know how to do that often

    • 05:14

      COREY PHELPS [continued]: lead to creative destruction.So for example, if we think about the automobile,the automobile was essentially the combinationof things that existed-- tires, internal combustion engine,metallurgy, things like that.They were just combined into somethingthat hadn't existed before, an internal combustionengine driven automobile.

    • 05:37

      COREY PHELPS [continued]: So Schumpeter talked a lot about innovation,and the source of innovation being prior understandingof things that already exist.On the philosophy side, Karl Polanyi,who made this distinction between tacit knowledgeand codified knowledge, which is very important in the fieldof strategy and innovation.Tacit knowledge being essentially, as human beings

    • 05:60

      COREY PHELPS [continued]: we know much more than we can say.So a simple example would be to teach you to ride a bike.It's almost impossible for human beingsto articulate, that is, write down a precise recipe for howto ride a bike.So riding a bike has to literallybe taught to you in real time, giving you

    • 06:21

      COREY PHELPS [continued]: feedback based upon hundreds of variablesthat the coach or the teacher is collecting,and giving you real time feedback.That's why it's very difficult to write down in advancea precise prescription.So tacit knowledge, we know more than we can sayand we can articulate.Codified knowledge, on the other hand,is we can write down in some sort of well accepted,

    • 06:44

      COREY PHELPS [continued]: symbolic language-- like a natural language like English,for example, or mathematical language--precisely how to accomplish some task, the classic exampleof which is software.The great advantage of software todayis that we can actually capture knowledge in a codified form,and then we can replicate it very, very cheaply.

    • 07:05

      COREY PHELPS [continued]: And from a strategy standpoint, thereare great advantages to that, because once wepay for the cost of developing the software, the marginal costof reproducing it, we can earn great returns.This is why software development firms haveextremely high profit margins.[What are the key debates or research questions in thisfield?]One of the key debates that continues--

    • 07:27

      COREY PHELPS [continued]: and I don't know if this debate will ever be resolved,because it's partially in the realm of philosophy,rather than the realm of empirical science--and that is, does organizational knowledge exist?That is, does knowledge exist independent of the human brain,or the human mind?

    • 07:47

      COREY PHELPS [continued]: This has been a debate that's gone on for decadesin social sciences.So before we used the term organizational knowledge,I think the in vogue term was organizational learning.And in that literature there was a lot of debate,and still is to this day is, can organizations learn,or do people learn?I think this debate has been partially settled in the sense

    • 08:10

      COREY PHELPS [continued]: that there's been a lot of research in social science,particularly in the area of organizational theoryand strategy, that talks about routines.And routines are essentially rulesthat are widely accepted amongst a group of people,about how to accomplish a particular task.

    • 08:30

      COREY PHELPS [continued]: Outside science, we can point to routines that existin all of our organizations.We often refer to them as standard operating procedures.So knowledge can be embodied in these standard operatingprocedures.Because what is a standard operating procedure, buta bunch of people that have agreedon how to accomplish something?Once we put it down into written form, or put it into software,

    • 08:51

      COREY PHELPS [continued]: or put it into a well accepted but tacitly held routine,it represents knowledge that is largely independent of any oneindividual.And therefore, that knowledge can be replicated,it can be passed down over time, it can be shared across space.So in that sense, organizational knowledge exists, in the sense

    • 09:12

      COREY PHELPS [continued]: that it is independent of the human mind.You still have this debate, though,that goes back and forth about if it's organizational,then we can take away the people that created the knowledge,and we could still replicate it.I think that's still a somewhat contentious issue.And again, I think that's partiallyin the realm of philosophy, because it dependsupon your views of what is reality, what

    • 09:36

      COREY PHELPS [continued]: is the nature of knowledge?And these are things that are best, I think,left to philosophers, rather than to social scientists.Along that vein, I think one of the other issuesthat's existing in research, at least as itrelates to my particular domain, is learningfrom other organizations.

    • 09:56

      COREY PHELPS [continued]: So if we take the individual as an example,I think it's intuitive for peopleto think about how they learn is they learn bestfrom other people.So if you frame it in that way, other people have insight,other people know things, so they have knowledge.So you can think about other peopleas being repositories, or stores of knowledge.

    • 10:18

      COREY PHELPS [continued]: And if I want to learn something new, what I often do is I oftentalk to other people.So I learn from other people.So that knowledge is transferred from them to me.Now, we can think about organizations in the same way.Now, organizations can have formal relationshipswith other organizations we oftencall those joint ventures, or strategic alliances.

    • 10:41

      COREY PHELPS [continued]: So we can think about an organization usinga strategic alliance as a way to learnnew skills, new capabilities, new competenciesfrom other organizations.And I think the challenge of this researchis being able to separate the interorganizational

    • 11:02

      COREY PHELPS [continued]: relationship, the contractual relationship thatbinds two fictitious entities-- because that's what firms are.You can't poke a firm and know that you're poking it.These are legal fictions that societies on the planethave created over time.We give them characteristics of human beings,so we often talk about them like they're human beings.

    • 11:24

      COREY PHELPS [continued]: We say that organizations think, organizations know.So in some way, we're anthropomorphizing,we're giving them human characteristics.But if we treat an organization as an entity,and if we think about organizations having knowledge,then one way for one organizationto learn new skills, new competenciesis to form some sort of collaboration,

    • 11:44

      COREY PHELPS [continued]: some sort of partnership with another organization.I think what we don't really understandreally well is how that learning actually takes place.So we know that there are people that work in these alliancerelationships, and we know that they share information.But what we don't really know is howthat information from one organization

    • 12:06

      COREY PHELPS [continued]: actually enters into a particular focal organization,and how it diffuses, and how it actually becomesorganizational knowledge.We don't really understand that.It's not so much a debate as it is, I think,a research challenge that we're still working on, and stilltrying to figure out.[Can you describe a case study from your research thatillustrates the relevance of organizational knowledge?]

    • 12:28

      COREY PHELPS [continued]: The example that I want to use is a companythat most people on the planet have heard about,and probably have used the product at some point.And the company's Kodak.So Kodak, when we think of Kodak-- Ithink when most people think of Kodak, we think of film.So if we went back in time to the year 1976in the United States, Kodak had a 90% market share

    • 12:51

      COREY PHELPS [continued]: on film, which means 90% of all film sold in US was Kodak film.85% of all consumer cameras were Kodak cameras.Kodak was as close to a legal monopolyis you could find in the United States.As a result, it was an extremely profitable companythat was held up as being one of the best managedcompanies in the world, one of the most attractive companies

    • 13:13

      COREY PHELPS [continued]: to work for in the world.If we fast forward to today, the year 2014, what do we know?We know that Kodak is a shadow of its former self.In 2012, Kodak entered bankruptcy.It was one of the longest bankruptciesin US corporate history, took them about 19 monthsto come out of bankruptcy.It was unclear if they would ever make it out of bankruptcy,

    • 13:35

      COREY PHELPS [continued]: because they were literally bankrupt,to the point of almost being insolvent.They had to sell a large chunk of their patentportfolio, their intellectual property,to raise cash to survive.Now, the reason I'm telling you this storyis you might ask yourself, what happened to Kodak?How did it go from being this once great company to a companythat was bankrupt, and laid off 90% of its workforce over a 10

    • 13:59

      COREY PHELPS [continued]: year period?Well, we all know the answer to this story,because we use these things on a daily basis.We have digital cameras on the back of our phones,but before we had smartphones with cameras built into them,we had digital cameras.So digital cameras were a substitutefor film based cameras.So you might wonder, why didn't Kodakadapt to this new technology?

    • 14:22

      COREY PHELPS [continued]: Well, Kodak tried, in a variety of ways.One way in which they tried to adaptwas by setting up an organization calledKodak Ventures.Kodak Ventures was established to make small equityinvestments in high tech startup firms thatwere working on technologies in areas that might disrupt

    • 14:43

      COREY PHELPS [continued]: Kodak's core business of film.This group was essentially establishedto allow Kodak to learn from other companies,in particular startup companies.Because we know the history of industrytells us that most of the time new,or radically new technologies are oftendeveloped by start up firms, not by large, established

    • 15:06

      COREY PHELPS [continued]: companies.So Kodak set up Kodak Ventures to try to learnabout these new technologies.So as I mentioned earlier, these new technology firmshave knowledge that Kodak lacks.One way for Kodak to learn this knowledgeis to make an investment in the company,have a Kodak employee sit on the Board of Directors,

    • 15:27

      COREY PHELPS [continued]: have access to information about the developmentof that technology, and then to tryto take that information back to the Kodak organization.The challenge for Kodak Ventures wasthat Kodak Ventures was an isolated islandinside the Kodak company.Yes, Kodak Ventures learned much about digital imagingtechnology from its investments in these startup firms.

    • 15:50

      COREY PHELPS [continued]: The problem for Kodak Ventures was getting that information,that knowledge to the parts of the Kodak organizationthat could benefit from it-- in particular, the R&Dorganization, and in particular, the corporate strategy group.So the challenge for Kodak wasn'tthat they weren't actively tryingto learn about digital imaging technology

    • 16:12

      COREY PHELPS [continued]: as a way to adapt to this new technology.It was the fact that this part of the Kodak organization,Kodak Ventures, had very little connection or integrationinto the broader Kodak organization.[What are the common challenges facing organizationsand employees relating to organizational knowledge?]I think the biggest challenge that organizations face

    • 16:33

      COREY PHELPS [continued]: is that organizations don't know what they know.This may sound oxymoronic, but letme explain what I mean by that.If we think about knowledge being somethingthat exists in the human brain-- and evenif it's collectively shared, it'snever collectively shared to the extentthat everyone in the entire company knows.So let me give you an example.

    • 16:54

      COREY PHELPS [continued]: If I think about management consulting firms,management consulting firms are organized into project teams.A project team works on a particular consultingengagement.So this consulting engagement could be with, I don't know,a fast moving consumer goods company like Unilever.So a consulting team from a management consulting group

    • 17:15

      COREY PHELPS [continued]: goes out works, with Unilever-- could be for six months,could be for a year, could be longer.They learn a lot about the challenges facing Unilever,they learn a lot about Unilever's industriesin which they compete.They use this insight, this knowledgeto make recommendations on how to improvethe performance of the business that they were hired to help.

    • 17:37

      COREY PHELPS [continued]: Then, what happens to that learning, that knowledgethat that project team from the management consulting firmdeveloped, as a part of that client engagement?Does it make its way back to other client engagementteams that might be located in different geographies,or working in different industries?So this is what I mean by organizations

    • 17:59

      COREY PHELPS [continued]: don't know what they know.There are parts of the organizations thathave some very valuable insights, some veryvaluable knowledge.The problem is, is there are other partsof the organization that continuallytry to reinvent the wheel because theydon't know what other parts of the organizations have learned.Now, we've known this problems existed for centuries.It's only been in the last few decades

    • 18:20

      COREY PHELPS [continued]: that we've really tried to tackle this problemfrom a technology standpoint.So over the last 30 years, you haveseen a rise in what is known as knowledge management.Now, the IT, the information technology counterpartto knowledge management is knowledge management systems.So if I've got that management consulting engagement team,

    • 18:42

      COREY PHELPS [continued]: they've learned a lot from that client engagement.That knowledge, which was very expensive to develop, how do wecapture value from it?Well, let's put it into a database.Once we put it into a database, we convert that tacit knowledgeinto codified knowledge.And the great advantage of codified knowledge,as I said earlier, is we can share very efficiently-- that

    • 19:06

      COREY PHELPS [continued]: is, very cheaply.So the idea behind knowledge management systemsis let's capture the learning, the knowledgethat takes place across organizations,in all the different activities that theyperform, across the different geographies that they perform.And once we capture it, we can share it.And once we share it, we can give other partsof the organization an advantage,

    • 19:27

      COREY PHELPS [continued]: an economic advantage in the sense that they don't haveto create that knowledge anew.They can literally replicate what they know.The problem-- or, there are many problems, I should say,with knowledge management systems, one of whichis it's been proven to be very difficult to translatein a precise, rich way the learning that a particular team

    • 19:49

      COREY PHELPS [continued]: of individuals gets from particular projectinto some sort of codified form in a database.On top of that, there's the issue of incentives.How do we incentivize these individuals to actually takethe time and effort to put that learninginto some sort of codified database, and share it?

    • 20:10

      COREY PHELPS [continued]: The simple question is, what's in it for them?Why should they do this?So there are cost related problems,there are incentive related problemsand then there is the issue of search.If I am another management consulting team workingin a different geography, working on a different clientproject, it's not so simple as I go into my database,I find another client engagement team that

    • 20:32

      COREY PHELPS [continued]: has worked on a similar client, and therefore Ithink what they've developed on that project,the knowledge they developed is going to be useful.I have to search actively in this database, whichmeans I have to use keywords.And we all know, because we use Google, we use Bing,sometimes it's very difficult to search for and findprecisely that information that we're looking for.

    • 20:53

      COREY PHELPS [continued]: So again, a fundamental challengeis organizations don't know what they know.We've tried solutions, such as knowledge management systemsto try to fix that problem.But this solution has so far shownto be a relatively imperfect solution.But to the extent that organizationscan capture what they learn from the variety of activities

    • 21:15

      COREY PHELPS [continued]: and interactions they have with-- whether its customers,or suppliers, or government regulators-- to the extent theycan capture that and share it with other partsof the organization, means that theycan have some sort of competitive advantage.That is, they can do things more efficientlythan organizations that are constantly recreating knowledgethat they already have in some parts of the organization.

    • 21:37

      COREY PHELPS [continued]: [What do you see as the big organizational knowledgestories of 2014?]The big story, as it relates to organizational knowledge,is not necessarily a 2014 story, but Iwould say it's probably a big story that'shappened in the last decade is the rise of open source.So traditionally, the term open sourcecame from software development.

    • 21:59

      COREY PHELPS [continued]: And open source was a particular legal approachto governing how software code could be distributed.The philosophical intent of open sourcewas the idea that essentially, knowledge should be free,information should be free.The idea was, if I develop some code that's useful,

    • 22:21

      COREY PHELPS [continued]: everybody should be able to use this codeand should be able to build upon this code.The idea behind open source was to put in placea contract, a license that forcedusers of that code to make their code also freely available.The idea was it would have this sort of exponential spillovereffect.And knowledge, once free, tends to accumulate more knowledge

    • 22:45

      COREY PHELPS [continued]: which becomes free, which accumulates,so it has this exponential growth.Now, what started primarily in the software worldhas now started to permeate to other parts of economic life.So it's not just software development.We see open source now in a varietyof industries, and the open source license being

    • 23:08

      COREY PHELPS [continued]: used in a variety of industries, includingone of the most protective industries of all time,which is pharmaceutical development.Historically, the idea behind Research and Development was,if a company invests dollars in Research and Development--for example, to developing a new drug--then they should be able to appropriate,

    • 23:31

      COREY PHELPS [continued]: that is, capture whatever value that that new drug creates.So there was an incentive effect.I'm willing to invest hundreds of millions of dollars, pounds,whatever currency it is into developing a new drug,because I can use the patent system to protectthat knowledge from being copied by anybody else.

    • 23:52

      COREY PHELPS [continued]: And because I can protect it, I can capture the valuefrom that invention.That has historically been the model, the economic modelof innovation, and research and development insidefor profit companies.We commonly refer to that as the closed model.Now, the closed model stands in stark contrast

    • 24:13

      COREY PHELPS [continued]: to the open model.The open model is I invest, and everybodygets to use it for free.Now, you would think that on the surfacethe open model is antithetical, the polar oppositeto the closed model, and no for profit organizationwould ever adopt an open model, an open model to innovation,for example.

    • 24:34

      COREY PHELPS [continued]: But what we're seeing-- again, I thinkthe big story of the last decade iswe're starting to see more and more organizationsstart to incorporate elements of the open source modelto their traditionally closed innovation approach,so much so that a researcher at the University of California,

    • 24:54

      COREY PHELPS [continued]: Berkeley in a book in 2003 coinedthe phrase, open innovation.Hank Chesbrough coined this phrase,to try to capture what he was seeing as this movementaway from the closed model of innovationto a much more open model of innovation.Now, this presents a fundamental challenge for corporations,because it presents a challenge for them

    • 25:15

      COREY PHELPS [continued]: on how to appropriate-- that is, how to capture value,how to capture profit on investments they make.When it's open, it's very difficultto capture those profits.So what organizations are trying to balanceis on the one hand, the profit incentive-- whichmeans we invest, we want to protect that investmentfrom being imitated.

    • 25:36

      COREY PHELPS [continued]: But on the other hand, the open modelsays that we can tap into a lot more people, a lot moreorganizations, and we can innovate potentiallyat a much faster, a much greater rate.So we're trying to balance this tension between the closedmodel, which means we're going to rely upon-- if we'rea company-- our own resources, our own capabilities,

    • 25:58

      COREY PHELPS [continued]: and therefore be able to capture the value.But we may not be able to innovate as well as if wewe're able to tap into the wisdom of the crowd,that is, tapping into the distributedintelligence of people that don't necessarilywork for the company, other organizations that are notnecessarily owned by the company.So I think from a knowledge management and knowledge

    • 26:18

      COREY PHELPS [continued]: development standpoint, the big storyis this move away from the closed model, and much moretowards an open model.[Could you explain a bit more about crowdfunding within thisfield?]Crowdfunding is very consistent with crowdsourcing,in the sense that if we think about the traditional financingmodel for startup firms, the traditional model was

    • 26:40

      COREY PHELPS [continued]: you have actors that came into existencejust after World War II, called venture capitalists.Venture capitalists, their job isto specialize in high risk investments.And as a result of that high risk,they expect very high returns.So if you're a new firm and you are capital constrained--

    • 27:01

      COREY PHELPS [continued]: that is, you need cash, like all new companies do--most entrepreneurs that I've ever metand then I know about aren't independently wealthy.Maybe if they're serial entrepreneursand they've been successful in the past,they are, but most companies aren't that way.So they need to raise money.Traditionally, in the last two decades,the traditional approach was I'm going to go to an organizationthat specialized in this, which meant the money

    • 27:24

      COREY PHELPS [continued]: was very concentrated, right?The advantage of crowdfunding, whichis similar to the advantage of crowdsourcingis that you tap into a far greater pool of money.So crowdsourcing, we tap into a much greater poolideas, of knowledge.Crowdfunding, we tap into a much greater pool

    • 27:46

      COREY PHELPS [continued]: versus the closed model of venture capitalinvesting of money.Now, what's made this possible is tremendous advancesin information technology and telecommunications--that is, the web.The rise of the web has made this very efficientnow to have a market making mechanism.On one side, you have technology start up firms.

    • 28:09

      COREY PHELPS [continued]: And on the other side, you have hundreds of thousands,if not millions of people that would like to makea small scale investment.Now, before the web, that was a very expensive propositionto match those hundreds of thousandsof people with small investments with the thousands of firmsthat needed that.Which is why you had specialized intermediaries, called VCs.

    • 28:31

      COREY PHELPS [continued]: The web has largely created efficienciesto allow for crowdfunding to come into existence.It's the same thing for crowdsourcing.It's the web that has made these crowdsourcing platformsable to come into existence.I would say a great example of a crowdsourcing platform that'sconsistent with my previous example

    • 28:52

      COREY PHELPS [continued]: about pharmaceutical firms is Eli Lilly.Eli Lilly is one of the world's largest pharmaceutical firms,based in Indianapolis, Indiana, in the United States.The model, as I said, historicallywas Eli Lilly would invest its money in R&D, in orderto develop a drug.They could patent the drug, then they would have a 20 yearmonopoly on that drug.Therefore, the returns that they would generate for 20 years

    • 29:13

      COREY PHELPS [continued]: were protected from imitation.Eli Lilly set up an organization--you can't quote me on this, because I'm on camera--but so I think it was maybe around 10 to 12 years ago,an organization that eventually became known as InnoCentive.The basic idea behind InnoCentive was this.As big as Eli Lilly was, in terms of R&D,as much resources that they had, they

    • 29:35

      COREY PHELPS [continued]: realized that they didn't have all the bright peoplein the world that could solve complex problems relatedto drug discovery.So they set up InnoCentive as a wayto tap into the wisdom of the crowd.The idea behind InnoCentive was simple.If you are working on an internal project inside EliLilly and you run into a problem that you need a solution to,

    • 29:56

      COREY PHELPS [continued]: rather than just rely upon other Eli Lilly employees,let's describe that problem as specifically, concisely aspossible.Let's post it on InnoCentive, which was a web based platform,and let's open it up to the world to solve this problem.And if they solved the problem, you can pay for that.

    • 30:16

      COREY PHELPS [continued]: So this was a crowdsourcing modelthat relies upon internet technology, thatallows an organization like a for profit pharmaceutical firmlike Eli Lilly to be able to much more broadly tapinto ideas that they may not have otherwise access to.You are starting to see this in many organizations.

    • 30:39

      COREY PHELPS [continued]: The Space Administration in the US, NASA--just getting back to your example about a new story--a couple years ago, some senior administrators at NASAwere convinced to take some of their most challengingtechnical problems that they faced,and to put them onto an open crowdsourcing platform,

    • 31:00

      COREY PHELPS [continued]: and open them up to the world.Now, when NASA did this, they were very skeptical--skeptical, in the sense that theybelieved that nobody in the worldcould solve these problems.If NASA can't solve these problems,nobody can solve these problems.It turns out that almost all of these problems--if I remember correctly, I think there were 17-- almost allof them were solved in a few months,

    • 31:21

      COREY PHELPS [continued]: because out there in the world are some really, really brightpeople that have a very different way of thinkingabout these problems than NASA did.So it made NASA realize that the open model hastremendous potential, just like Eli Lilly has demonstratedwith the creation InnoCentive, that there'sa wisdom in the crowd, and that that can actuallyhelp solve very, very challenging innovation

    • 31:44

      COREY PHELPS [continued]: problems.[How has the field changed, and which developments do youconsider relevant?]Well, I think one of the ways the field has changedis the phenomena has changed.What I mean by that is that the rise of these digital tools,the rise of internet related technologies,for example, packet switching technologies, and the things

    • 32:06

      COREY PHELPS [continued]: that enable that, such as routers-- but also allof the application software that'swritten on open platform.So this infrastructure of technologyhas created digital tools that nowmake it possible for organizationsto much more efficiently reach outbeyond the boundaries of their own organization,to tap into intelligence that before these technologies were

    • 32:30

      COREY PHELPS [continued]: created, they had a difficult time doing so.So as a result of these new technologiescoming into play, what research is now starting to look atis these technologies in particular.Because they didn't exist a few decades ago,they weren't really part of the research agenda.Now, we have people actively studying these technologies,and actively trying to think about the economic efficiency

    • 32:52

      COREY PHELPS [continued]: of an open model versus a closed model.This was a research stream that couldn'texist a few decades ago, simply because it wasn't economicallyviable for organizations to try to tap into the distributedintelligence that exists on the planet.So now what you're seeing is you're seeing a lot of researchfrom various areas.So you have people in computer science obviously studying

    • 33:14

      COREY PHELPS [continued]: these tools, because they have an interestin computer software, computer architecture.You have people from anthropology studyingthese tools, because they view these as cultural artifacts.You have strategy people studying these tools,because these are tools that can impactthe financial performance of organizations.So you have a lot of people studying these.And these tools, they are themselves knowledge.

    • 33:36

      COREY PHELPS [continued]: They are the product of learning of individualsand organizations.And in turn, these tools impact an organization's abilityto create knowledge, and it impacts an organization'sability to capture that knowledgeand share the knowledge.So this has been, I would say, a relatively new research stream

    • 33:57

      COREY PHELPS [continued]: that's happening.[Which new research directions do you find most exciting,and where would you like to take your own research?]Building upon what I just said about the riseof these different digital tools,I think that's really where a lot of the researchis headed now, is trying to understand the impactthat these digital tools have on knowledgecreation, on knowledge transfer, knowledge

    • 34:19

      COREY PHELPS [continued]: sharing within organizations, across organizations.And I think you'll continue to seethat research going forward.I think the challenge that this creates,or the interest it creates for the researchers isto what extent can these digital tools and the digital mediumbe a substitute for human interaction?

    • 34:42

      COREY PHELPS [continued]: I think since the dawn of mankind,we have learned through communicating with each other,through social interaction.And what prior research suggests is social interactionthat is co-located in time and space--that is, being in a classroom together in the same classroommeters apart from another, having a discussion,

    • 35:04

      COREY PHELPS [continued]: being able to see those very subtle cuesof facial expressions, body language,inflection of the voice, being able to respond to thatin real time, that has a big impact on how muchwe're able to learn, and therefore how much knowledgewere able to develop.I think the challenge-- and relatedto this challenge is the research

    • 35:25

      COREY PHELPS [continued]: interest-- is to what extent can these new digital toolssubstitute for that social interaction?So on the one hand, the rise of these digital toolsallows us in a more economic way to reach out and tapinto the wisdom of the crowd.But on the other hand, we know that these digital tools

    • 35:45

      COREY PHELPS [continued]: are highly limited in the ability of human beingsto actually collaborate in a rich way,and therefore more effectively learn from one another.And I think from a research standpoint,we're trying to understand when are these tools better?When do they have a comparative advantage

    • 36:07

      COREY PHELPS [continued]: compared to being co-located in time and space?When do they not have an advantage?And I think for people that are working in computer scienceand software development, what they're working onis they're working on technology substitutesfor physical co-location.And what I mean by that is, an example would be Cisco.

    • 36:28

      COREY PHELPS [continued]: So Cisco has a suite of technologies that they refer toas TelePresence.So imagine that you walk into a conference room,and what you see from four to the ceilingis super high definition screens.And on the super high definition screens are your colleaguesfrom all around world.You're all in the room together, and youcan, in almost lifelike fashion see, hear-- maybe not smell,

    • 36:53

      COREY PHELPS [continued]: and maybe that's where the technology willgo-- but you can have an experience thatis very similar to an experience you would haveas if those people were sitting in that meeting roomtogether with you.To the extent the technology can substitutefor physical co-location, means that wemight be able to tap even further

    • 37:15

      COREY PHELPS [continued]: into the wisdom of crowds.Because today, we still have to go meet with people, whichmeans we still have to get on planes,we still have to get into our cars,we still have to go on the bus, because upto this point in time in human history,we haven't quite figured out the perfect technologicalsubstitute for being able to sit in the same room,share ideas, brainstorm, and come up with novel solutions

    • 37:39

      COREY PHELPS [continued]: to difficult problems-- that is, create new knowledge.I think that's the challenge, from a research perspective,is understanding that.But it's also a challenge from an innovation perspective,a technological innovation is developing those toolsand unlocking the potential that wehave as human beings, to further create innovative solutions.

    • 38:00

      COREY PHELPS [continued]: [How do you approach this topic as a teacher?]The interesting thing about being a professoris we wear two hats.On the one hand, we're researchers, and thenthe other hand, we're teachers.Now, in theory, or what we're supposed to dois we're supposed to take what we learnedfrom research-- our own research--

    • 38:20

      COREY PHELPS [continued]: and translate it into our teaching.That is, we've learned this about a particular phenomenonfrom our research, and then we'regoing to go teach it to the world,that is, teach it to our students.There's a challenge to doing this.The research that we do as academicsis because of the fact that we face huge economic constraints

    • 38:44

      COREY PHELPS [continued]: and challenges to producing knowledge,we tend to specialize.We know from our own experience that specializationis beneficial.The more we do something, the better weget at it, which is why you tend to see somebody that worksin solid state physics research not also doing researchin anthropology, because the skill set,the knowledge that you draw on is very different.

    • 39:05

      COREY PHELPS [continued]: So we specialize.This is a long way of saying that because we specializein our research, we actually teacha far greater amount of topics than we could possiblyresearch.So I think what the challenge for teaching

    • 39:25

      COREY PHELPS [continued]: isn't just a challenge of translating our own insightsfrom our own research into our teaching,it's taking the insights that are developingacross researchers, across the world,and translating those insights into the classroom.And I think that's a challenge.Now, how I approach this is I have

    • 39:49

      COREY PHELPS [continued]: to start with the student, or the audience and ask,what is it that I'm trying to accomplish with this audience?What's the topical domain I'm teaching?What's the experience level of the participants,and what is appropriate content to teach them?Once I know that, I can then go back to my research and say,

    • 40:12

      COREY PHELPS [continued]: what is it in my research that I'vebeen doing that I've learned that wouldbe appropriate for that particular audience,for that particular content that I'm teaching?And then the challenge is, how do I translate this?How do I translate what I've learned from my researchinto something that is going to capture

    • 40:35

      COREY PHELPS [continued]: the interest, the attention of students?I use the word translate specificallybecause researchers, we're like all human beings.In a particular area of activity,we develop our own specialized terminology,we develop our own specialized tools,we develop our own specialized technology.

    • 40:55

      COREY PHELPS [continued]: This is great if you are familiar with those tools,those technologies, and that vocabulary--you're on the inside.It's terrible if you're an outsider,because the language that we use if I was to go talk to an MBAstudent is not the language I would use if I'm talkingto my research colleagues.So I have to translate the ideas, what I learned.

    • 41:15

      COREY PHELPS [continued]: And I have to do so in a way that Ithink is going to be engaging and interesting to them.So what I might often do, for example,if I'm trying to teach something about howsocial networks affect human creativity, what I might dois I might use animated imagery of a social network, how it's

    • 41:38

      COREY PHELPS [continued]: changing over time, and being able to observethe structure, the pattern of the relationshipsin the network, and use that as a starting pointof a conversation about well, you see how this network ischanging, and let's focus on one particular personin this network, Bob.Bob becomes a red dot, it blows up on the screen.

    • 41:60

      COREY PHELPS [continued]: Here's Bob, we see Bob's social network ties.We see how they're changing over time.Let's have a discussion about howwe think these changes in Bob's immediate social networkmight affect his ability to come up with new ideas.So that leads us into a discussion about how socialnetwork and the structure when social network mightaffect their creativity.

    • 42:21

      COREY PHELPS [continued]: So there's a body of knowledge that we've developed,and that I've developed in my own research,about how social networks affect creativity.I can go in and I can tell students,OK, this is a social network, thisis how social networks affect creativity,and I could bore everyone to death.Or I could do something much more engaging.I could create an animation using Java,

    • 42:44

      COREY PHELPS [continued]: and I can get them to sort of thinkabout themselves and their own social networks,and use that as having a conversationabout social networks and creativity.So I think the fundamental challengeis translating the insights from our research in two ways thatare engaging, interesting, and an emotional connection

    • 43:05

      COREY PHELPS [continued]: with the participants.[What has made you immerse yourself in this subject?]Part of it is ultimately personal.Well, I would say personal, connectedto my professional life.So my job, as I mentioned earlier, as a professoris to teach, but it's also to research.And if you're a researcher, you're measured on two things.

    • 43:29

      COREY PHELPS [continued]: You're measured on quantity-- so how many academic articles areyou producing-- and quality.Quality is difficult to observe.What we often use sort of as a proxy for qualityis how many people are citing your article.The more people that cite a paperthat you've written, the more impact it has-- thatis, the higher quality.

    • 43:51

      COREY PHELPS [continued]: Well, if you think about this, weknow just because of the fact that we'rein a particular community, some people are better than others.Some people produce more papers, and those papersare of a higher quality.You cannot be a human being and not ask yourself why?What's different about those people than me?

    • 44:12

      COREY PHELPS [continued]: Why is that person, who comes from a verysimilar educational background, similar age,has similar resources after institution,has identical incentives and performancemetrics as I do-- is very similar on those dimensions,yet still publishes more papers, still has greater impact?And part of the answer is something

    • 44:35

      COREY PHELPS [continued]: to do with their collaborative relationships.So part of my interest in the role of social networksaffecting creativity-- now, these social networkscould be the collaborative ties an individual,has but it could be, as I said earlier, companiesand the collaborative ties they have.So alliances they have with others.

    • 44:59

      COREY PHELPS [continued]: I'm very interested in trying to figure outwhy some individuals are more productive than others,from a research standpoint, and I'minterested in why some companies aremore innovative than other companies.It's the same thing, it's just applied to two different typesof entities.On the one hand, individuals, on the other hand, companies.

    • 45:19

      COREY PHELPS [continued]: But again the common connection is,how do these collaborative relationships affect my abilityto create new knowledge?So for me, it's just this sort of inherent interestthat I have in trying to understand how is itand why is it that new things come into existence,

    • 45:40

      COREY PHELPS [continued]: whether it's new ideas, whether it's new products,whether it's patents, but something-- the creationof novelty, I guess, is what I would put it.And for me it's been something that my memory, I can never--I can't think of a time that I was nevernot-- to use a double negative-- never not

    • 46:03

      COREY PHELPS [continued]: interested in novelty.So I was the kid that at five years oldtook apart the toaster, to figure out how it worked.I was the kid when I was 16 that took apartthe engine of my first car, to understand how it worked.I was always interested in how things worked.And behind that, I was interested in figuring outhow are these things created in the first place?

    • 46:23

      COREY PHELPS [continued]: So it's been this interest in the creation of novelty,and the interest in how collaboration effects that thathas sort of inspired and ignited my research interests,and I think will continue to do so into the future.[MUSIC PLAYING]

Corey Phelps Discusses Organizational Knowledge

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Professor Corey Phelps discusses organizational knowledge and how sharing information within an organization can be beneficial. Phelps discusses how he got into the field, why it is important to study organizational knowledge, and how he approaches this topic as a teacher.

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Corey Phelps Discusses Organizational Knowledge

Professor Corey Phelps discusses organizational knowledge and how sharing information within an organization can be beneficial. Phelps discusses how he got into the field, why it is important to study organizational knowledge, and how he approaches this topic as a teacher.

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