People-focused knowledge management

Leaders Create Powerful Reference Models
Managers and influential people at all levels of the enterprise wield
enormous power (Anonymous 1998). Because of people’s natural
tendencies to copy and mimic the behaviors, perspectives, and values
of others, the managers set examples — good and bad — that are 
imitated and followed by people around them. Hence, much too
often without being aware of it, they directly affect the attitudes,
mentalities, and culture within their operations. Tacit behavior by
management automatically becomes a guideline for the rank-and-file
for permissible behavior, desired practices, and practical demonstra-
tions of the enterprise’s intent.
It follows that, in any enterprise, the daily behavior of its leaders
creates important reference models. Since people try to be like their
leaders and use them as role models, all leaders need to provide living
examples for governance, ethics, operational philosophies, practices,
and for how to deal with each other, customers, suppliers, problems,
and the enterprise in general. As indicated in Chapter 3, people
behave and act by “covert activation of biases related to previous
emotional experiences of comparable situations.” There is no escape
for leaders who automatically will act out their mental models
(Bechara et al. 1997). Their examples will be replicated by the mental
reference models they build in their coworkers’ minds as they observe
the leaders’ behaviors and engage in tacit implicit learning. Their atti-
tudes will be copied; their mentalities will be imitated; and their ways
of handling problems will be emulated. Top leaders, to a large extent,
function as organizational reference models that often are emulated
throughout the enterprise by managers, professionals, and other
people.
Some important examples of areas where leaders become role
models include how customers, suppliers, and employees are treated
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People-Focused Knowledge Management
and what level of emphasis should be placed on short-term profits
and on “meeting the numbers” balanced against long-term objec-
tives, on willingness to experiment, on attitudes toward taking risks,
and so on. A particular area of the importance of leadership guid-
ance relates to attitudes toward resolution of tradeoffs and dilemmas
where conflicting objectives lead to difficult situations. An important
example here is how the enterprise should deal with damage control
when unanticipated problems occur.
If any member of the top management team exhibits unethical
behavior, someone within the organization will surely copy it. Simi-
larly, if any pacesetters exhibit sloppy behavior in any way, that too
will be copied. One might argue that corporate and public leaders
have obligations to behave ethically and effectively, and their exam-
ples will be copied liberally by others, who then by their individual
behaviors will make the enterprise behave likewise. Since we expect
ethical and effective behaviors from these enterprises, their leaders —
often tacitly and without awareness — are instrumental in creating
the enterprise behaviors.
Notes
1. Within the discipline of psychology, the debate on how people reason is
still ongoing, although it appears that most researchers conclude that
people employ many different strategies with which they reason.
2. Our perspective is that decisions imply action that is intended to change
the state of the target situation over time (or, on occasion, nearly at once)
and lead to the desired outcome. Decision–action–change–outcome
implies a dynamic system (the “situation”) with inputs (action) and
outputs (outcome).
3. When a decision maker looks for an option that is just “good enough”
s/he “satisfices.” Simon (1945) introduced the concept of satisficing to
characterize the expedient behavior of decision makers who stop short
of finding the best solution that fulfills all criteria to the best degree. This
notion contrasts Collins’ (2001) notion of always needing to do the very
best to succeed.
4. Performance support systems cover many functions such as “Lessons
Learned Systems” and, when intelligent, often utilize technologies such
as automated case-based reasoning. See, for example, Wiig (1995) and
Weber et al. (2001).
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5
A K
NOWLEDGE 
M
ODEL FOR 
P
ERSONAL
S
ITUATION-
H
ANDLING
Premise 5-1: Situation-Handling Requires Action
People are required to act in all kinds of situations — large and
small. Whenever changes are needed, they will be achieved through
actions. Actions are required even in simple situations to keep
balance when walking, purchase food for dinner, copy a letter, write
a business report, close a sale, deal with customer problems, create
new products, and so on. The actions that are required depend upon
the situation, its context and objectives, the person’s understanding
of the situation, and the person’s capabilities. Actions always require
energy or resources to be implemented. Energy may be physical
energy or mental energy — at a psychological cost. Resources may
be financial or physical assets or personal, organizational, or societal
resources such as time, attention, or other intangible assets. To handle
the situation, action is always required.
Premise 5-2: Good Situation-Handling
Is the Result of Effective Actions
Good situation-handling by people implies that the resulting per-
sonal performance will be good. Personal situation-handling perfor-
mance results from the quality of personal actions. When personal
actions are effective — that is, when they are based on appropriate
understanding of the situation and its context and directed to max-
imize relevant personal, enterprise, and other objectives within the
contextual constraints — then cumulated personal performances
leading to enterprise performance will be good.
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Personal Situation-Handling: 
A Customer Service Example
Susan Stark, a customer service manager, is informed that a key
customer returned a recently shipped high-technology instrument,
indicating that it did not work correctly. From additional informa-
tion and previous experience, Susan quickly recognizes that the
instrument indeed has quality problems. She needs to decide how to
deal with it in a manner that is practical and provides effective
support of the enterprise’s intent and strategy and at the same time
satisfies her personal performance goals.
Susan handles this situation tacitly and rapidly; she does not need
to explore it extensively or consult with others. Three immediate
action-options come to mind: (1) cancel the sale and let the customer
place a new purchase order when a new instrument is needed; (2)
repair the returned instrument and send it back to the customer; or
(3) manufacture and deliver a new, problem-free instrument as soon
as possible. In turn, she tacitly and automatically performs quick
mental simulations to explore the acceptability of each outcome. By
examining what she is about to do from the perspective of her enter-
prise’s intents — its strategy — and her personal attitudes for how
business should be conducted, she immediately rejects choices (1) and
(2) and decides that the company’s best approach is to manufacture
a new item as fast as possible. She implements her decision by order-
ing and expediting the building of the new instrument. Furthermore,
she decides to inform the customer personally of what her company
will do to correct the problem. Parts of this situation-handling
process are outlined in Figure 5-1.
Introduction to Personal Situation-Handling
The handling of situations is at the center of all life, of all work,
and of all progress. Our world is dynamic with constant changes,
both beneficial and detrimental. In this environment of change with
its opportunities, problems, and issues, interventions in the form of
actions are required whenever expected outcomes of undisturbed sit-
uations fall short of desired goals.
It is generally accepted that good knowledge produces good 
enterprise performance and that better knowledge leads to even
better performance. Exactly how this happens is normally not 
specified or explored, and most knowledge management (KM) efforts
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A Knowledge Model for Personal Situation-Handling
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are conducted without considering the underlying knowledge
processes that utilize the knowledge to generate operational and
strategic behaviors and performances. That is almost as detrimental
as flying blind and, not surprisingly, has led to many KM failures.
This book’s purpose is to outline some of the mechanisms and
processes in which people and organizations engage as part of work.
To handle situations, people obtain information about situations, use
knowledge to perceive what they are about, decide how to handle
them, and implement appropriate actions while attempting to maxi-
mize their own and their enterprise’s interests (Suchman 1995).
Actions of any kind result from decisions that may range from
automatized and tacit to deliberate and explicit.
1
Decisions to act are
based on the nature and requirements of the situation at hand, the
applicability and quality of available knowledge, the ability to 
implement them, and many other factors. Quality and appropriate
availability of information is one factor. To better understand some
of these processes, decision making has been studied and described
by many authors, particularly during the last 50 years. However,
much of that work has not had the benefit of the recent research in
cognitive science. In addition, making the decision is only one of
several tasks that people perform when confronted with situations