Corporate DNA: Using Organizational Memory to Improve Poor Decision Making

Citation

Kransdorff, A. (2010), "Corporate DNA: Using Organizational Memory to Improve Poor Decision Making", Development and Learning in Organizations, Vol. 24 No. 4. https://doi.org/10.1108/dlo.2010.08124dae.002

Corporate DNA: Using Organizational Memory to Improve Poor Decision Making

Article Type: Suggested reading From: Development and Learning in Organizations, Volume 24, Issue 4

Arnold KransdorffGower Publishing CompanyAldershot2006ISBN: 0 566 08681 6

The problem with business books is that they usually have a really good idea that is worthy of an article in a management journal but because it is in a book, well, you just have to fill up the other 200 pages with stuff.

Arnold Kransdorff’s second real book (the first was Corporate Amnesia: Keeping Know-how in the Company, 1998), Corporate DNA: Using Organizational Memory to Improve Poor Decision Making, is based on the idea that:

[…] individuals or organizations seldom learn from experience unless the experience is assessed and then assigned its own meaning in terms of individual and/or the organization’s own goals, aims, ambitions and expectations. From these processes come the insights and added meaning, which is then applied to new circumstances. The end product is better decision-making.

All of which is true.

As Arnie writes, “managers have largely been trained to administer fixed assets” but now “the activity base of companies has changed from manufacturing to employee rich service industries, where people are the predominant asset” leading to “more bloated management”. As he says, “managers are now often better able to identify what to do, but not how to do it” particularly in a more flexible work place and job market:

The worrying question for management educators is why their productivity scores are lower today than they were prior to formalized business education.

Precisely Arnie.

But here is the thing. Arnie’s answer to the problem is corporate history based on tacit knowledge, the knowledge of mistakes made and how things are done. This can be used to create tools ranging from oral briefings to new wave corporate histories that include the warts and other memories executives would rather never see again.

While these are really useful techniques they fall into the narrative trap that envelops all of us in business who are looking for the silver bullet in a book. All of us, even hard-nosed business types, love stories. We particularly like simple, compact stories that logically explain why companies like Hewlett-Packard, GE, Sony, Citicorp and Wal-Mart were built to last and searched for excellence and found it. Well, they were built to last and they found excellence … for a while.

In a Western culture dominated by the Protestant ethic, that success comes from hard work, versus the Eastern culture, where success can come from luck and that the Feng Shui man is as good if not better than the McKinsey man, we all buy the delusion that we can control the universe and guide our companies to above average returns. Unless of course, we use those favored management strategies of price fixing and monopoly.

Narrative stops us looking at facts independently. It forces us to link them into a story that really is a work of fiction. For example, Wal King has been boss of Australia’s largest project development and contracting groups, Leighton Holdings, for 20 years. During that time the share price has gone from around ¢70 to around $64. Leighton has also gone through some very rocky times. So what is the real secret of Wal’s success? To my mind it is pretty simple. Persistence, stubbornness and luck. Sometimes history and circumstances are with us, other times they are not. Bet you will not read that in too many business books.

John ConnollyJohn Connolly and Partners, Sydney, Australia

This review was originally published in Journal of Management History, Volume 16 Number 1, 2010.