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|In: Business Ethics|Last Updated:

No, no, no. I wasn’t talking about Social Security and credit card numbers. It’s all the stuff companies claim is uniquely valuable, that has never occurred to competitors, and that would never occur to them unless and until someone sent them a PowerPoint deck.

Last week’s KJR made the case that most businesses have become so permeable that it’s a fact, not a problem, which means they have to deal with it, not solve it.

And further, that the best way to deal with permeability is to take advantage of it as a better path to profitability than trying to build ever-higher and thicker walls around the enterprise.

As all software testers know, good test plans include a plentiful portion of edge cases, so it isn’t surprising some correspondents expressed concern that KJR might take the position that corporations should relax their controls on information whose compromise could result in, for example, identity theft.

These edge cases are good tests, only not of the overall principle. Customer identification and privacy information? Protect it to the best of your ability. Short-term plans where whoever gets to market first wins big? Protect those to the best of your ability, too.

The process you use for purchase-order/invoice reconciliation, or, as Jimmy John’s notoriously seems to think needs protecting, for making a ham and cheese sandwich?

Uh … no.

As pointed out last week, many business theorists and leaders, for several decades now, have considered employees to be fungible commodities, to be traded into and out of the pool of available talent without compunction or regret.

But when they’re traded, they take their knowledge with them — an apparently unintended consequence of this employment philosophy.

Shared knowledge is at the heart of the Cognitive Enterprise. One consequence of replacing a long-term employee who has a vast fund of institutional knowledge is …

Well, it depends. If the employee’s replacement is quite a lot less experienced, or if there is no replacement, the enterprise’s total shared-knowledge account will have been diminished.

If, on the other hand, the business replaces the departing employee with one who has just as large a fund of institutional knowledge, or larger, only it’s a fund accumulated in different institutions, then the enterprise’s shared-knowledge account will increase.

It’s permeability in action, even without any electronic knowledge sharing. Imagine the company chart of accounts had a way to track shared knowledge. Think its executives might make different staffing decisions?

It would be an intriguing exercise in finance, figuring out how to tote up all of the valuable knowledge held in an organization. The trickiest part wouldn’t be how to put a number on it. Not that this would be easy, understand, but given how many non-disclosure agreements claim that revealing any of it would cause irreparable harm, you’d think someone would know how big a number “irreparable” is, at least approximately.

Not to keep you in suspense, here’s what would be the trickiest part: In a cognitive enterprise, knowledge is widely shared — it’s what the whole organization knows that counts, not just what an individual who works there knows.

Which gets to one of my own trade secrets, which I’m allowed to share with you because it was knowledge I had that preceded my joining Dell Services: No matter what the challenge or issue, there are employees who know all about it and what to do about it. Their problem, and one of my best ways of earning my keep as a consultant, is that until my team and I show up, nobody has any interest in what they have to say.

To be fair, after my teams and I show up and do listen to them, putting it all together into a nice, coherent narrative and plan, very often client leadership doesn’t want to hear it from us, either. It is, I guess, cognition prevention at the highest levels of leadership.

This is also why embracing permeability is a safe knowledge management tactic: If your company’s stuff makes it into, for example, a LinkedIn discussion forum where the employees of other companies read all about it, you have little to worry about.

The odds are long nobody will listen to them after your employees have made them smarter. If you’re smart, you won’t duplicate that mistake.

So stop trying to protect your own IP and learn from all those other folks who are sharing theirs.

Once more thing. If you think this week’s KJR is worth sharing, please do so. Just make sure to respect the copyright notice at the bottom when you do.

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|In: Cognitive Enterprise|Last Updated:

It was in the 1970s that the “Japanese invasion” … of automobiles like Toyota, Honda, and Datsun (now Nissan) and consumer electronics like Panasonic and Mitsubishi … pounded lots of nails into the coffins of America’s complacent manufacturing practices. Depending on the product it took somewhere between a decade and not quite yet for American products to achieve anything like parity in the global marketplace.

As American industry scrambled to regain lost ground, it changed the unwritten employment contract, from cradle-to-grave employment, complete with gold watches given for 50 years of service, to today’s at-will employment and layoffs whose sole purpose is to “send a message to Wall Street” that the company is serious about cost-containment.

A roughly the same time, businesses decided they had to protect their intellectual property.

“Intellectual property” is a phrase with a nice ring to it. It sounds official and important. Businesses invest an inordinate amount of time in mostly fruitless attempts to protect it. It’s property — it’s mine and you can’t touch it.

Also, it’s a concept that’s mostly outlived its usefulness.

The U.S. Constitution in no way recognizes such a thing. What it says is, The Congress shall have Power To … promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.

The term “property” makes no appearance. Having an exclusive right to something for a limited time a lease more than a title, and unlike real property rights, copyrights and patents are explained as means to an end: promoting scientific and artistic progress.

Sure, this is academic nitpicking that’s so academic even academics have no interest in it.

Here’s what isn’t academic: The whole idea of patent protection now subverts its original purpose. Rather than promoting scientific progress, patents in their modern form actively impede it. But that isn’t this week’s point. It was the point of “How to fix the software patent system: Get rid of it” (KJR, 7/29/2013). Read it and weep.

This week’s point, taken from what’s probably the most controversial chapter of The Cognitive Enterprise, the new book I co-authored with my colleague Scott Lee, is that protecting your company’s intellectual property is, more often than not, both impossible and a bad idea.

It’s impossible because corporate permeability is a fact. Corporations act as though it was a problem, but it isn’t: Problems can be solved. Facts must be dealt with.

Large-scale corporate permeability probably got its start with the aforementioned change in employment security that resulted in large numbers of employees being pushed out the door. They took all the knowledge they’d acquired with them. It remained intact inside their heads where it was now available to any competitor that had the wit to hire them.

Thus was born the non-compete agreement.

In the era of the cognitive enterprise, corporate permeability has increased by orders of magnitude.

Remember the new formula for success — the one that’s supplanting the old “people, process, technology”? It’s customers, communities, capabilities. This is one reason permeability is a fact.

Back in the era of job security as an expectation, a person’s place of employment defined one of his (or, occasionally, her) most important communities. For some professionals, local associations held monthly meetings and constituted a community as well, but with few exceptions these ranked much lower in a person’s sense of affinity than even the local watering hole where people congregated after work.

Now? Between Facebook, LinkedIn discussion forums, and specialty sites on the social web, the sense of community connecting people with shared interests outstrips any sense of loyalty to an employer. Of course they do: They belonged to these communities before being hired for their current position, and expect to belong to them long after they’ve taken different positions in different companies.

They share what they know with their communities and become more adept at their trades as other members of their communities share right back at them.

Heck, with GitHub they share actual working code, too.

Is some of this valuable intellectual property? Yes it is, and the more it’s shared, amplified, tested, and adjusted the more valuable it becomes.

Community members help each other learn, solve problems, and figure things out. Which is why community is one of the driving forces behind capabilities.

Which is, in turn, why we firmly believe businesses that embrace and take advantage of this evolving permeability will, in the long run, out-compete businesses that distract themselves trying to seal their borders.

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