The Importance of Knowledge

The pages under this heading extend the commitment to “wisdom” expressed on the front page.”  It is in line with Douglas McGregor’s call for us to make explicit our theoretical assumptions (some of which may be subconscious) and be prepared to challenge them in light of modern research.


There is a Relationship
Thinking (theory) determine the Methods Used which Provide the Results


The fundamental recognition is that there is a relationship between how an organisation thinks (its underpinning theories) and the methods it uses.  If the organisation believes that we can motivate people then it will be persuaded to use reward schemes, such as bonuses, on the assumption that these schemes will motivate the individual to work harder.  If on the other hand the enterprise believes that we are intrinsically motivated and come to work already prepared to do our best, then the focus is more on the work environment and how it enables staff to do a good job.


This relationship between theory and method is expanded in a brief comparison – see “A Simple Comparison” – It polarises and contrasts two set of assumptions with the methods that evolve out of those assumptions.


These pages continue to explore alternative assumptions or new theories.  The methods that evolve out of these assumptions are developed on the pages titled “Methods.”  In practice these theories are not new, they have been around for at least 50 years, but they are applied in few organisations.  Why we have failed to make use of this knowledge is explored on the pages “Barriers”.



Alternative Thinking (Theories)
There is a comprehensive mass of knowledge out there. It can overwhelm us. To address this problem W Edwards Deming, in the later years of his life, drew together all this knowledge into a framework of interrelated concepts to guide our learning and enable our appreciation of the whole. He called this framework his Systems of Profound Knowledge, it has four cornerstones – Appreciation of a Systems, Psychology, Knowledge about Variation and the Theory of Knowledge. We highly recommend his final book, “The New Economics.” It simply explains these foundations and lays the basis for our continued search for knowledge and wisdom.
In structuring this page we have been guided (approximately) by Deming’s framework. We then have tiers. The first tier giving a straightforward description, which then provides links to more information and so on. It is hoped that with time, and with readers contributions, that these pages will provide a comprehensive description of modern alternative thinking(theories).
The Whole: The concepts described are all interdependent.  They interact with one another.  The successful manager does not need to be eminent on any one area, but they do need an appreciation of each area and how they interrelate.


  • Motivation: There are two aspects of motivation:
    Intrinsic which reflects our inner drivers such as pride, a desire to contribute and our wish to be valued.  The other is Extrinsic which arises from external motivators (rewards/punishment) set by other people.  We ourselves control our intrinsic motivation.  Extrinsic motivators are external, they are set by others to persuade the individual to achieve in a specific area.  Extrinsic and Intrinsic motivation do not compliment one another, they are like opposing pistons, the more extrinsic motivation is applied the less intrinsic motivation is available – and visa-versa.  We live in complex times, it is a fallacy to think that all our activities can be directed and channelled by extrinsic motivators.  The opportunity is to understand and utilise the thinking potential and willing commitment of intrinsic motivation of those working within the organisation (or society).
  • Systems Thinking: We have been taught from an early age to reduce complex problems into their component parts and address each part individually.  The underlying assumption is that the whole is the sum of the parts.  We now recognise that the parts interrelate.  The whole is the sum of the parts plus the interrelationship between the parts.  Systems Thinking recognises the need to manage the parts and the interrelationships.
  • Variation: Everything varies.  On the one hand it is a useful attribute in that it is through variety that we secure innovation and progress.  On the other hand if you have too much variety in an organisation it will lead to chaos. Furthermore every process contains variation and when measuring the performance of that process it is necessary to differentiate between expected and unexpected variation.  When we meet expected variation we secure improvement by redesigning the process.  If we have unexpected variation we investigate the event to ascertain if this type of event can be avoided in the future.  If we get this difference wrong we can make the situation worse.
  • Learning – Mental models – Theory of Knowledge – Wisdom: This is an area that most managers find uncomfortable.  Our management culture considers that management is a skill reflecting personal attributes such as communication skills and leadership ability.  In the main it is thought of as common sense that is developed through experience.  Eminent thinkers over the past 50 years are challenging this perception.  Douglas McGregor considered that “management” uses knowledge that had been developed scientifically, he thought “theory is important“.  W Edwards Deming, in his concepts of the Theory of Knowledge, considered that “without theory, one has no questions to ask.  Hence without theory, there is no basis for learning.” Peter Senge talks about our mental models and the importance of identifying these models and having the personal discipline to challenge them.  This section does not imply that relationships are not important, they are (see Relationships pages).  What is being said is that relationships should be supported by sound scientifically supported knowledge.



You may wish to start your exploration of motivation by viewing the truly excellent 10 minute video by Dan Pink available on the RSA’s site


Extrinsic: The dominate thinking in our society was represented by B F Skinner who was the Professor of Psychology at Harvard University.  He described the working of “Operant Conditioning”, which sees humans as entities that react to external stimuli.  The conclusion of this approach is that humans can be controlled and directed by developing the appropriate external stimulate.  If a reward follows a particular behaviour then that behaviour is likely to be repeated.  His thoughts were in line with the school of thought referred to as” Behaviourism.”
The modern equivalent of operant conditioning is management’s use of extrinsic motivation in the form of incentive and bonus schemes, targets, appraisal relative to meeting stated goals.  Even the use of exams and qualifications in our education system can be viewed as education by extrinsic motivation.  It is very popular within “Command and Control” cultures as it supports the concept that the bosses provide the instructions and the workers require to be motivated to follow orders.
Alfie Kohn in his research and writings is highly critical of Skinner’s work which he disparagingly claimed was a concept founded on the study of caged and starving rats with the findings being transposed onto healthy and free human beings.  Kohn’s view of humans is much greater and more complex that that of a caged animal.
Supported with extensive research, Kohn argues that when a reward is made available we distort the focus of the individual.  His phrase is “Do this and you will get that.” What happens in practice is that the individual’s focus moves from the “this,” the actual task in hand, to the “that,” the reward.  His/her motivation to do the job is damaged as energy has now moved onto how to secure the reward.
Furthermore the use of external stimuli such as a reward (or punishment) is a controlling or manipulative tool.  It is an attempt by one person (usually in authority) to influence the actions of another (a subordinate).
As humans we rebel at being manipulated, and invariably we manipulate back.  It was recognised way back in the Hawthorne Experiments of the 1930s that management lose control of any bonus system within 2 years of their introduction.  By that time the workers were manipulating the system to their benefit.
“The ingenuity of the average worker is sufficient to outwit any system of controls devised by management.” –  Douglas McGregor
The highly visible example of this effect is, of course, the use of targets in the public sector.  There is abundant evidence to demonstrate the creativity of staff in manipulating data to meet a target (see John Seddon’s book “Systems Thinking in the Public Sector).  This is the penetrating quote from W Edwards Deming:
“If management sets quantitative targets and makes people’s jobs depend on them – they will meet the targets – even if they have to destroy the enterprise to do it.”
We just need to consider the crisis in the banking industry to acknowledge the validity of this statement.
Alfie Kohn was not saying never use extrinsic motivators, they are useful when the job has no meaning in itself and all that is required is blind compliance.  Thankfully very few jobs fall into this category.  What he did observe was that external manipulators diminish our overall motivation.
There has been extensive work on our intrinsic motivation, starting with Abraham Maslow.  He was seen as the father of Humanist Psychology whose basic premise was that people possess the inner resources for growth and healing, and they achieve self fulfillment when circumstances allow them to express their intrinsic motivation.
And the many researchers who followed Maslow, with McGregor recognising that work and responsibility is a basic human need, the humanistic approach of Carl Rodgers, the achievement motivation of David McClellend, Deming’s recognition that we love learning and his call for organisations to provide “joy in work,” etc. etc.
The fundamental message is that if we want to utilise the spirit of people then we require to understand intrinsic motivation and set the circumstances to enable intrinsic motivation to flourish.
Recomended Reading:
  • “The Human Side of Enterprise” by Douglas McGregor
  • “Drive- The Surprising Truth about What Motivates us” by Daniel H. Pink
  • “Punished by Rewards” by Alfie Kohn


Systems Thinking
While McGregor et all were opening out our thoughts on theory and intrinsic motivation many including Deming, Senge, Ackoff, Checkland, Juran etc. have been developing the concept of systems thinking. Our basic education teaches us to reduce problems into their component parts and solve the problem at the component level. This approach goes under the name of reductionist or mechanistic thinking. However systems thinkers recognise that the parts influence each other, they interrelate.
H2  +  O = H2O (water)
To use a simple example – we do not understand water by studying Hydrogen and then Oxygen. It is the interrelationship between Hydrogen and Oxygen that produces water.
The majority of our organisations reflect reductionist thinking in that they are structured round the classic hierarchical organisation chart.  It has a Chief Executive supported by a range of departments such as Accounts, Sales, Design, Production, Maintenance, Purchasing, HR etc.  Each part is managed through having their own responsibilities with budget and targets they are required to achieve.  Communication and reporting responsibilities are up and down the hierarchy.  Little attention is paid to the crucial interrelationship between departments and between individuals.
A common theme found within reductionist organisations is a conflict between Sales and Production.  The Sales team, to secure a sale and meet their targets, are drawn into promising not only more than their competitors but also more than the capabilities of Production.  They consider meeting the terms of the contract the responsibility of the production team.  Production are then faced with meeting demands that are beyond their capability and are pulled into cutting corners at the expense of either delivery or quality.  This in turn creates problems for the sales team and future orders – and so on.  Systems thinkers recognise that all functions within an organisation have to work as a team and ensure that there is no impediment to cross functional communication and understanding.
One of the fundamental findings of systems thinking is that the outcome from a system is primarily dependant on the design of the system rather than the diligence and competence of the individual.  J M Juran considered that 85% of outcomes are due to the design of the system, Deming thought it more in the region of 97%.  Peter Senge talks about us being “prisoners of the system.”
Systems thinking is further extended through the work of Peter Senge and the Society for Organisational Learning.  They differentiate between “Detail Complexity”  and “Dynamic Complexity.”  Detail complexity looks at the detail of the connections while dynamic complexity recognises that systems are continually changing; they can reflect growth but they can also reflect decay, with the effectiveness of a system steadily getting worse.  Furthermore they have introduced the concept of “Delay”. The effects of an action taken today may not be apparent till some time in the future.
Organisational Learning (Societal Learning): The major implication of the fact that we live in complex dynamic systems is that it is beyond the capabilities of leaders to understand and direct the operation of their organisation.  A more constructive strategy is going to be around the design of a system that enables thinking individuals or teams within the organisation to be continually improving the design of the organisation’s system – a learning system within the system – a system that facilitates the continual learning of the organisation (or society).
For example, the Police, in their battle against drugs, will tell you that drug seizures actually have a negative effect.  By taking drugs off the street, the price goes up, which means that addicts have to increase their criminal activity to finance their drug habit, which of course causes more problems for the Police and Society.  To solve the drug problem it is necessary to dig much deeper into the root causes of the problem.
Another example would be in the lack of learning within our organisations.  In a command and control enterprise improvement suggestions usually have to be approved by the hierarchy.  But this process of gaining approval through various levels of management slows the whole process and invariably the suggestion gets lost in the process.  If there is no prompt implementation to the proposed idea, work face personnel become disillusioned and stop making any further suggestions.  In other words C&C companies have systems in place which slows learning.  They can even be considered to have a learning disability.
The Theories used by the Organisation: This may seem counter intuitive, but it is the organisation that holds the theories by which it operates rather than individuals.  It is the company, based on its underpinning assumptions, that determine its budgetary control systems, performance management systems, stock control systems etc..  The individual is required to conform, especially if they want to progress within the enterprise.  Furthermore we can observe that the theories with their resulting methods remain more or less static as people join and leave the enterprise.  The same can be said of our society.  Our society has developed its systems – such as its education system – around the current perceptions (theories) of our society; Individuals within the education system can do little to change the basic perceptions of the education system.
Margaret Wheatley extends these concepts when she talks about “organisations as living systems. They too are intelligent, creative, adaptive, self-organising, meaning seeking”.
Self Organisation: A high profile example of self organisation in the modern world is of course The World Wide Web. The design of the World Wide Web has enabled communication and the sharing of knowledge that could not have been imagined 20 years ago.  In particular we can consider the design of the Wikipedia site.  It is so structured that it uses the mass of knowledge that is held by the everyday citizen.  The site is now thought to challenge the Encyclopedia Britannica in the accuracy of its information.
We also have organisations as examples such as Toyota, John Lewis Partnership, W L Gore and Semco.  They have a culture and methods that enables the thinking potential of all their staff to effect how the work is done.  They reflect Margaret Wheatley’s vision of a living and continually improving entity
Recommended Reading:
  • “The Fifth Discipline, The Art and Practice of The Learning Organisation” by Peter Senge
  • “The New Economics, for Industry,Government, Education” by W Edwards Deming
  • ” A Simpler Way” by Margaret Wheatley and Myron Kellner-Rogers
  • “Profit beyond Measure” by H Thomas Johson and Anders Broms
  • “Seeing Systems, Unlocking the Mysteries of Organizational Life” by Barry Oshry
  • “The Art of Systems Thinking” by Joseph O’Connor and Ian McDermott



The person who opened out our understanding of variation within an organisation’s processes was Walter Shewhart (1891- 1967).  He did his main work at the Bell Laboratories where he recognised that simple inspection of output was insufficient.  It was necessary to appreciate the variation within a productive system.  It is worth taking a moment to read Wikipedia entry on him –
What he recognised was that there are two types of variation.  The first being the variation inherent within the operation of a stable system, which he labelled “Common Cause Variation” and  the second when there was variation caused by an unexpected event, which he called “Special Cause Variation.”  To differentiate between these two forms of variation he devised the “Control Chart” ( see the Wikipedia entry  When seeking improvement relative to a common cause we work to improve the system, when addressing special causes we investigate the actual event.  It is vital to appreciate the difference when seeking improvement.
Shewhart would have been very critical of the tabulated format of most management reports where period figures are compared with budget and say a single figure from last year.  It is looking at single figures rather than patterns.  Tabulated data is extraordinarily poor at reflecting variation, both common and special.  It allows managers to chase causes when there are no cause, just variation within the normal operating of the system.  An article on variation van be viewed from
Recomended Reading
  • “Understanding Variation, The Key to Managing Chaos” by Donald J Wheeler
  • “Mastering Statistical Process Control” By Tim Stapenhurst
Back to Alternative Theories


Learning – Mental models – Theory of Knowledge – Wisdom:
Let us open this section by quoting Peter Senge:
We are coming increasingly to believe that this (failure to implement modern concepts) stems not from weak intentions, wavering will, or even from non systemic understanding, but from mental models.  More specifically, new insights fail to get into practice because they conflict with deeply held internal images of how the world works, images that limit us to familiar ways of thinking and acting. That is why the discipline of managing mental models – surfacing, testing and improving our internal picture of how the world works – promises to be a major breakthrough for building learning organisations.
In a presentation to the Society in Sync conference in Aberdeen, Peter Senge used the analogy of an iceberg to portray the depth of thinking necessary.  He described how  Mental Models evolve into artifacts which underpin the systemic structures of the organisation.  Systemic structures are the interrelationships between variables that cause the organisation to behave in certain ways.  For example, an organisation may wish to eradicate the negative effects of “crisis management” only to find that the route causes are somewhere deep inside the organisation, originating in how they collect and analyse data and how they ‘motivate’ their managers.  We are usually unaware of these structures but they influence the more subtle patterns of behaviour, which in turn lead to observable events or results.
In other words if the organisation is not aware of the mental models that underpin their methods, then there can be little expectation that it will learn from the knowledge, and the many improvement opportunities that are available.
Revolutions in Science: Thomas Kuhn in his book “The Structure of Scientific Revolutions” postulated that there are there are three stages in the development of scientific knowledge.
  1. The Craft Phase – where there is no concept of theory.  Learning is through the passing down of craft skills through the generations.  The continual development of the knowledge is very limited, if at all.
  2. The Development Phase – where the community does have an agreed set of theoretical assumptions and resources are committed to developing and extending these theories and their application.
  3. The Transformation Phase – Where a few scientists begin to recognise anomalies in context of the accepted theories, till eventually a new theory is postulated that negates the validity of the accepted theories.  There is usually great resistance to these new concepts until bit by bit further experiments are carried out ‘proving’ the new theory.
An example of the Development phase would be the scientific law that states that water boils at 100°C.  It enables prediction.  It also enables experiments to refute this law .  If we attempted to boil water on the top of Mount Everest, we would find that water boils at 69°C.  We therefore need to revise our scientific law to say that water boils at 100°C when it is at sea level.  With each disciplined experiment we extend our knowledge.
An example of a transformation phase would be Einstein’s relativity theory, which he could not actually prove.  It engendered a lot of resistance and counter arguments, until with time the scientific world was able to conduct experiments to support his hypothesis.
The above raises the question as to where is “management” today?  Is management still in the craft phase where the majority of knowledge is acquired through experience with many skills being passed down from the culture of the organisation; or is it a profession that is progressing by identifying and continually developing its underpinning theoretical assumptions; or is it even in the transformation phase where there is an open wiilinness to test new theories?  If “management” is still in the craft phase then its learning capability is very limited.
There is a desperate need for “management” to move into the development and transformation phases of learning.
Recommended Reading
  • “The Structure of Scientific Revolutions” by Thomas S Kuhn
  • “Future Edge, Discovering New Paradigms of Success” by Joel Arthur Barker
  • “The Fifth Discipline” by Peter Senge (especially his sections on Mental Models and Personal Mastery)
  • “Presence” by Peter Senge, C Otto Scharmer, Joseph Jaworski, Betty Sue Flowers




A Simple Comparison
There is no one right set of assumptions.  One set of assumptions will be relevant to one situation and may not be relevant to another situation.  The manager’s skill is in knowing which set of assumptions to use in which circumstances.  Below we polarise two sets of assumptions, with the methods that evolve from those assumptions.  The first goes under the collective name of “Command and Control.”  It is contrasted with more modern concepts that have evolved from the extensive research in the social sciences over the past decades.
(The two diagrams used depict the contrast between old and new thinking.  The first represents command and control where the decisions and thinking occurs at the top. It fails to utilise the innovative thinking at the work face.  The second is a system diagram that shows the interdependence of all parts of the system.  W Edwards Deming considered that it was this diagram that transformed Japanese management thinking in the 1950s).
Command & Control
Modern Concepts
The organisation seen as a system – a cyclical flow of work
The Thinking Methods The Thinking Methods
That people are naturally lazy and require to be directed and supervised Hierarchy of supervision, regulation That people are intrinsically motivated, they come to work wanting to do their best Trust and a  belief in people
We manage the whole by breaking it down into parts and managing the parts Job specs, staff appraisal, training the individual, qualifications The whole is the sum of the parts plus the interrelationship between the parts Systems diagrams, internal customers, deployment flow maps, incorporating suppliers and customers in the design of the system
The Leader’s primary task is to direct and motivate their people Budgets, targets, appraisals, standards, incentives etc. The leaders primary task is to design systems to enable the intrinsic motivation of staff As above plus listening to staff, service users, suppliers etc. – as customers of the design of the system
The organisation can be managed through those things that can be measured. The monthly management report. Managers tend to remain remote from the work face. Only 5 % of processes within an enterprise provide figures, the rest, the unmeasurable still needs to be managed Observation, waste is evident to all and staff are enabled to make corrections to the system. The monthly management report for those areas that can be measured
A single figure compared with budget has meaning; it will show improved or worsening performance The monthly management report presented in tabulated form, comparing period performance against budget Acknowledging the existence of variation and that each piece of data has to be viewed in context of past measures Data presented in Control Chart format so that expected variation can be differentiated from unexpected variation
Knowledge – we learn from experience We learn by identifying and challenging our underpinning assumptions
A cyclical learning discipline that includes our assumptions, doing, studying the results and acting to close the loop to secure learning.