How to Manage Knowledge and ""Gold Collar"" Workers

The principal resource of the 21st century will not be labor, or raw materials, or even capital, according to such prominent business consultants as Peter F. Drucker, professor of social science and management at Claremont Graduate University. It will be knowledge: a fundamentally different resource from the other three.1 In science, especially in biotechnology, where the pace of gathering and transferring knowledge is rapid, proper management of this central resource is already a major challenge. Mary Ann Rafferty Unlike information, knowledge cannot be computer-generated. It is born of cognition and insight, and it develops in the minds of human beings. Knowledge workers own the primary tool of such industries, and they take it with them from job to job. Companies in any knowledge industry must deal productively with the constant growth and change of that fundamental asset. Thus arises the liberal art of knowledge management. "Knowledge, unlike lots of other resources, is not static. It's dynamic," notes Mary Ann Rafferty, vice president of human resources at Onyx Pharmaceuticals of Richmond, Calif. "Unlike a lot of other assets, preserving it is not really our main objective." She explains that enhancing knowledge, exchanging it, and using it effectively are goals of Onyx, a publicly held company engaged in discovery and development of novel therapeutics based on the genetics of human disease. Citing an "explosion of knowledge" in her industry, she opines that the winners will be companies that use this abundant resource to maximize productivity. That entails proper management of what she whimsically calls the "gold collar" worker. Newer and smaller companies might not understand the importance of knowledge management, Rafferty thinks. "It really depends on how business-oriented [their] leadership is." But applying too much management methodology to gold collar workers could be stifling. "The more you try to systematize them, the more you stigmatize them." Onyx deals with this problem by using project review committees to monitor, track, and enhance achievements related to particular projects. Such committees include heads of project teams, patent counsel, and, whenever appropriate, information systems representatives, Rafferty herself, or various ad hoc members. Aside from project review, another purpose of the committees is "to make sure we don't fall in love with our own bench work," she adds. Concentrating on results by setting goals is essential, according to George Renton, vice president of human resources at The Liposome Co. of Princeton, N.J. "You have to know what you're trying to achieve and be able to measure it in a concrete fashion." Knowledge workers should not be controlled so much as guided, to ensure they don't stray too far from the goal. "Certainly at the research end, you want to give people enough flexibility to tinker. But you need balance," he says. "Good managing is intuitive to a degree, and it's also situational to a degree." Gaylene Pringle "The greatest challenge to biotechnology companies is the pace at which they grow," declares Gaylene Pringle, president of The Leadership Edge, a private business training and development company in San Diego that works with biotech companies, particularly in biomedicine. One of Pringle's clients grew from 30 to 200 employees in three years, and she says helping senior scientists in such companies to make the transition into management is not an easy task. "These are very intelligent people, but they're not trained in management," she notes. "I think this was put best to me by one executive who said, 'Management was easy when the company was just me.'" One problem scientists have in making the transition from research to management is that, because many of their new charges come from academia, they may value individual performance over teamwork. Compounding this cultural factor is the mobility of young scientists. "I think of a lot of executives feel like they're herding cats, because everyone is going in different directions," Pringle laughs. These smart, young workers often have big egos, which means credit is important to them, and they may withhold important information. Also, the "publish or perish" mind-set is carried over from the university; and indeed, publishing remains useful in industry. To help facilitate knowledge transfer, many biotech companies use "cross-matrix teaming," Pringle says. This means managers must work with people who aren't always under their direct control, and therefore they must draw these employees into the project at hand. Brainstorming sessions and E-mail are helpful. In the end, business goals should bring everyone together. "Many people have said you can't set goals in science, and especially in research, because you don't know where you're going," Pringle remarks. "My response to that is, someone has set the goal for you: It's Wall Street." Some knowledge workers can be given an overall objective and allowed great leeway, he elaborates, while others require a more detailed plan and regular updates to track their progress. "I think the good managers are the ones who can recognize the situation they're in." Raymond Gilmartin In small biotech companies, senior scientists continue their own research while developing these managerial skills. "What you typically have in a small biotech company is a couple of scientists with an idea," Renton says. "As that idea comes to fruition, you typically get people from big pharmaceutical companies with other ideas." Liposome, which develops lipid-based and liposome-based pharmaceuticals, has grown to about 300 employees and is a fully integrated company with finance, sales, marketing, and a management team of seasoned pharmaceutical executives. The challenge now, he suggests, is to focus on the few courses of action that are best to take from the many good ideas at the company's disposal. "The product life cycle in biotechnology is far larger than it is in perhaps any other industry," notes Ronald W. Eastman, chief executive officer and president of Geron Corp. in Menlo Park, Calif. "The time from product idea to market is extensive, often upwards of 15 to 20 years. If you don't manage knowledge during that time, you're putting yourself at a significant competitive disadvantage." He believes, "When it comes to knowledge management, the primary issues relate to managing the amount of information available." Escalating advances in genomics, and the application of technology to biology, have generated masses of information, much of it extremely important, and much of it irrelevant. "The companies that become the most successful are those that figure out how to combine the manual or human analysis of this information with the technological analysis." Geron discovers and develops products based on the biological mechanisms of age-related diseases, and Eastman warns that arrogance is a major threat in such information-intensive work. "You can't suffer from the illusion that you can come up with knowledge all by yourself. It's important to leverage the knowledge of others," he says. "The key to successful management is having leading scientists in the field working both directly at the company [on staff] and ... directly in line with the company." Geron regularly forms internal teams, as well as teams that include other organizations. Reviews of these teams' performances are conducted regularly. "What helps is a very clear focus on objectives." Eastman sees a big difference between the management of a scientist and that of a manufacturing employee, for example. "I think scientists, by nature, are explorers," he says. "You need to create an environment where you can make a tradeoff." Exploration is important, but so is fiscal responsibility. Decisions should be reached jointly between manager and scientist on the most productive directions in which to explore, the scientist should be made aware of budget limitations, and everyone should have a vested interest in outcomes. All Geron employees hold company shares, Eastman notes. "I think our industry, because it is so young, does suffer from not having a plethora of experienced managers." It isn't whether those managers have science or business backgrounds that interests him so much as their relative youth, a problem time will fix. Meanwhile, he offers a summation on knowledge management: "It's a combination of being very analytical, having expertise and, let's not kid ourselves, at the end of the day there's a certain amount of rolling the dice." For the pharmaceutical giants, abandoning outmoded organizational forms to embrace new ways of transferring knowledge can be a major challenge. In 1994, when Raymond Gilmartin joined Whitehouse Station, N.J.-based multinational Merck and Co., as its chairman, CEO, and president, he brought a business management background that differed from the research expertise of his predecessors. One of Gilmartin's first objectives was to break down functional barriers, as a step toward creating work groups that were more responsive to marketplace demands. Management supplemented the project teams of 30 or 40 people that for decades had dominated product development in the industry with "commercialization teams" that are smaller, yet provide wider representation of different functions within the organization. Technical, regulatory, manufacturing, process, planning, and marketing expertise are all included in each group. Findings and recommendations are then presented to Merck's senior management team, the composition of which mirrors that of the commercialization teams. "There was skepticism of this approach early on, but I think most people now have recognized its benefits," says Bob Bissett, vice president of business process improvement. "There's no question we've seen improvement in both the product development and strategy areas." Ronald W. Eastman Researchers have gained more knowledge of the marketplace outside their areas of medical and scientific expertise, learning about such issues as pricing and government reimbursement. Conversely, marketing and planning people have gathered important information about the science-based concerns of product development. As a result, different opinions or possible problems concerning a particular project can be identified earlier in the process, leading to quicker responses. A corollary to these commercialization teams are Merck's worldwide business strategy teams. They likewise are cross-functional, creating business strategies for franchises that are followed through in each area of operation. Knowledge Ecology Network www.KnowledgeEcology.com/kenf Smith Weaver Smith Cultural Changemakers http://www.smithweaversmith.com/km.htm Syracuse UniversitySchool of Information StudiesSummer Institute CourseKnowledge Management: The Practical Application of Advanced Technologies http://istweb.syr.edu/design/academic/summer/500_2.htm "Our industry is becoming increasingly competitive, and other companies beyond Merck are looking at ways they can improve the use of the knowledge they're developing," Bissett notes. "We're not alone in this." Steve Bunk is a contributing editor for The Scientist. P.F. Drucker, "The Age of Social Transformation," The Atlantic Monthly, 275[5]: 53-80, 1994.

How to Manage Knowledge and ""Gold Collar"" Workers

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