How new information keeps your knowledge relevant

How aggressively you acquire information impacts your future competitiveness

Quick summary:

• The knowledge-relevancy framework highlights the importance of new information

• Individuals and organizations start with a base of existing knowledge (status quo)

• Over time, this knowledge base becomes obsolete - it loses relevance in the future

• Investments are needed to acquire new information and avoid falling out-of-date

• If measures are not sufficient to maintain knowledge, it exposes an information gap

• By contrast, seeking information gain leads to a growth in knowledge and better positions you for thriving in the future

Too many of us take comfort in today’s status quo

I recently gave three presentations on blockchain, parametric insurance, and the future of insurtech at an agribusiness risk conference in Sacramento. After one of my talks, a woman approached me afterward and complimented me on having a “positive attitude” about new technologies. Her kind words caught me off guard: in my speeches, I generally try to educate professionals on technologies and trends that I believe will impact our future. My goal is to provoke thoughtful reflection and stimulate meaningful discussions about the future, not to be an unabashed optimist.

The woman alluded to a general belief based on her experience that most people are resistant to change. This is undoubtedly true for most people and organizations. I’ve written about the painful acquisition of hard-earned knowledge that we gain in our career journeys before achieving mastery of our craft. The same is true at an organizational level: firms gain a base of knowledge and capabilities that defines their competitive position and reflects today's status quo. The catch is that, as time progresses, if we do not seek to acquire new information and translate it into knowledge, our existing knowledge base becomes obsolete and loses relevancy.

Seek new information to avoid losing your knowledge

It should be clear that individuals and organizations must continually seek and acquire new information over time to remain relevant. The catch is that most of us do not do so in a strategic manner. There is a broad spectrum (represented by the width of the three arrows projected into the future on the chart above) of possible outcomes. Consider the following three reference points to guide our thinking about this process:

1. The new information gathered is insufficient to replace the rate at which existing knowledge is lost (this represents an information gap over time)

2. The new information gained precisely offsets the knowledge that is becoming obsolete (the same amount of knowledge is maintained over time)

3. The new information gathered is above that which is becoming obsolete over time (this represents an information gain over time)

When functional knowledge (that which is not obsolete) is being reduced over time, individuals and organizations struggle to keep up with unexpected future developments. Actions tend to be in the form of adjustments best positioned to manage the decline, but a decrease is inevitable. In real terms, this loss of functional knowledge over time could be represented in many ways. Perhaps employees retire or are laid off, reducing the amount of tacit knowledge available. Alternatively, if your firm runs on outdated technology, finding people who code in COBOL and FORTRAN becomes increasingly challenging. Another possibility is that customer tastes shift in ways that were not anticipated (think about “cord cutting” and shifting from cable television to streaming). However the loss of functional knowledge materializes in real life, the root cause is that new information is not being translated into functional knowledge fast enough. This makes it challenging to keep pace in a world of rapid change.

Now consider the opposite: how does functional knowledge grow over time? New knowledge comes from new information: this can be in the form of new people with different expertise or innovation efforts that yield new insights, for example. Conceptually, I distinguish between organizations that seek to maintain their functional knowledge over time and those seeking to grow it. Organizations must strive to learn and adapt to keep knowledge relevant and actively counteract the inevitable obsolescence curve. Rather than managing the decline of knowledge by seeking to plug a few leaks in the ship, learning implies keeping the boat afloat over time. This requires a higher level of resource investment to maintain relevance by seeking new information to replace the functional knowledge that is inevitably being lost over time.

Ambitious individuals and organizations seize on the opportunities provided within the knowledge-relevancy framework: they seek growth through information gain to expand their functional knowledge over time and thrive in the future. Such actors are looking to shape the future rather than merely respond or react to it. To achieve this, people and firms must embrace new information and actively seek to translate it into new functional knowledge. Experimentation is critical to gain new information and insights. Sufficient resources must be invested in gathering new information; for example, through robust innovation efforts such as pilots or proofs-of-concept (POCs) representing a mix of offensive and defensive innovation projects. These efforts have the advantage of being unique to you: they represent intellectual property (IP) with inherent value regardless of whether it can be monetized.

Where do you stand on the knowledge-relevancy curve?

So where do you personally stand within the knowledge-relevancy framework? Where does your organization stand as a whole? Are you making sufficient investments in being a lifelong learner? Do you have more of a passive approach to navigating through future changes or shaping them? Which areas, both individually and organizationally, do you see knowledge becoming obsolete? Using the knowledge-relevancy framework, you can contemplate your approach to the future, identify gaps, and formulate strategies and tactics to address areas of need or opportunity. Here are some potential areas to consider:

• Examine your talent recruitment, development, and retention strategy and tactics and identify areas where you need improvement.

• Identify where significant gaps in knowledge exist and actions to address them - perhaps you lack expertise in a particular discipline, subject area, or technology?

• Look at how information flows within your organization. Are the right people connecting? Is there an opportunity for serendipitous interactions or only intentional communications such as meetings or e-mails?

• How does information flow in from outside your organization? Do you rely heavily on a single source, such as outside consultants or subscriptions?

• Are you generating new information internally through innovation, experimentation, data science modeling, marketing, surveys, etc.?

• What techniques do you see leading organizations within your domain employing to stay relevant and shape the future competitive landscape?

Using the knowledge-relevancy framework, you can gain valuable insights into how well your organization processes new information and builds upon your existing knowledge base to maintain or grow your competitive position in the future.