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Smart Business: How Knowledge Communities Can Revolutionize Your Company. James W. Botkin (The Free Press, 1999)

Institute for Research on Learning (IRL)


Design Media, Inc.

Strategic Practices Group, Inc.




In our enterprises today, the search for talent is everything. It is all about recruiting, orienting, socializing, retaining, and renewing commitment and the social contract between employer and employee.

Whether in boom or bust times, recruiting and retaining the very best talent is bedrock critical. A robust economy only makes the challenge more competitive. But the challenge never goes away, no matter what shape the economy or a specific market is in at any given time.

The intellectual capital, knowledge, wisdom, and loyalty that employees choose to bring with them to work make or break companies today. The consequences of poor human capital policies are often swift and unforgiving.

Managers have no greater task than to support and nurture the development of human capital—and that means giving people what they need to succeed.

New, exciting technologies now drive the methods and speed of everything. We need to be ever more mindful that constantly improving innovation, performance, and productivity comes down to people and what they know, what they share, what they have learned, and what they choose to do with what they know.

And the key to gaining people’s loyalty, trust, focus, priorities, engagement, and commitment comes from culture, values, and beliefs, plus management and leadership practices. In order to increase the productivity and effectiveness of employees, we need to develop strong emotional connections between employees and the enterprise…from the first day on the job.

The constant realities in the everyday life of all our enterprises require us to redesign our employee orientation and management development programs. Most enterprises try to make them better, and we also constantly seem to be gearing up for yet another launch or the need to communicate a new strategy to our employees. Yet these tasks often rely far too much on deeply engrained training and communications practices that long ago lost their luster or their power to inspire.

Study after study tells us that people choose to leave an enterprise because they could no longer tolerate their immediate manager. Often, that manager never understood that a major part of their role was to facilitate learning, knowledge sharing, knowledge creation, and continual innovation across the organization—all integral to weaving the fabric of emotional connection and continuous learning.

Assuming compensation is fair (or close), what most employees want is a positive answer to these questions: “Can I grow here? Will I be able to learn what I need to know to be effective and competitive? Will I be able to learn all the time, any time, everywhere while I am engaged in the work of this company? Am I encouraged to learn from others? If I share what I know, will others share with me?”

It all comes down to learning, an organization’s ecology, and the supports in place for continuous learning in work.

While recruitment and retention are the visible critical tasks, building continuous, pervasive, everywhere, all the time learning into work practices is the key new challenge for healthy enterprises. Integrating learning seamlessly into work practices is less visible, less understood, and less spoken about. Nonetheless, it is the foundation for all we do to support and nurture the human capital that people bring to their work in order to remain engaged and committed. Doing this well, day by day, adds strategic and tactical value all along the journey.

Was It Not Ever Thus?

In these crazy, on–the-edge times of accelerating change and unnerving uncertainty, it is not enough to rely on “empowered high-performance work teams” to succeed. Nor do the buzzwords and platitudes around “knowledge management” and “empowerment” give us much insight. The new realities demand a deep understanding and belief in the ways people actually and naturally learn, and to act based on that understanding, day by day.

Bottom line: The manager’s core work in this new economy is to create and support a work environment that nurtures continuous learning. Doing this well moves us closer to having an advantage in the never-ending search for talent.

Even if this was ever the case, our organizations rarely give this need for continuous learning the attention it deserves. Now, more than ever before, it’s an imperative, and will be so for the duration.

I lay out below some of the principles that I believe should influence managers and leaders as they explore their new roles and responsibilities in the New Economy. I believe these principles can help us breed the innovation, loyalty, trust and unbridled creativity that will make all the difference in our competitive world. I originally wrote parts of this essay as a contribution for Jim Botkin’s 1999 book, Smart Business. With the never-ending competition for talent firmly in mind, I decided to revisit the issues I raised in that essay and want to share with you expanded and updated reflections based on nearly three years of additional practice and observation. 

By sheer force of habit, we often substitute training for real learning. Managers often think training leads to learning or, worse, that training is learning. But people do not really learn with classroom models of training that happen episodically. These models are only part of the picture. Asking for more training is definitely not enough—it isn’t even close. Seeing the answer as “more training” often obscures what’s really needed: lifelong, continuous learning in work and at work.

The Institute for Research on Learning (IRL)* has focused on the research and design of learning, in all its facets, to create effective learning. IRL has done this work in a highly iterative participatory design approach with myriad partners, both for K-12 schools and for the world of work. In the area of workplace learning—my focus here—this work has been conducted in a deeply collaborative and interactive model for research and design with lots of partners and customers, mostly from the corporate world. Those partners have included Xerox, Hughes, Hewlett Packard, Sun Microsystems, Zurich Financial, State Farm Insurance, Nynex, Motorola, and Steelcase, among others. Out of all IRL’s projects, a set of enduring principles of learning evolved that have been consistently recognized as important.

From Apprenticeship to “Communities of Practice”

Shortly after IRL’s founding in 1987 by a generous multiyear grant from the Xerox Foundation, IRL began to closely examine various models of apprenticeship. IRL discovered that apprenticeship is actually quite widespread, is usually deemed to be successful, and—very importantly—usually works because it requires becoming a member of a cohesive, informal community that goes beyond one master or mentor. Wanting to become “one of them,” to be accepted into a community, is a powerful dynamic of apprenticeship. Further, we came to understand that newcomers learn best as they become members of these communities. Moreover, they continue to learn as they, in turn, teach, mentor, and participate “in the practice.” Continuing to learn, we discovered, is an equally powerful prerequisite for continuing membership in those communities.

Out of that early work, IRL researchers, beginning with Etienne Wenger and Jean Lave, developed a term and concept, “Communities of Practice,” that has now gained recognition and encouraging acceptance in the learning literature. The Institute is proud to have coined the term, to see it spread, and to work with myriad partners on practical applications of the concept.

Communities of practice are simply those highly informal groups of people who develop a shared way of working together to accomplish some activity. Usually, such communities include people with varying roles and experience. Every organization has them. They don’t appear on the “org charts,” but this largely invisible informal but cohesive network of people get the real work done. They are also the place where people tend to learn the essentials of their job—just as apprentices do—by participating in them. One might even say that a community of practice is like a super apprenticeship system that continually feeds even the most knowledgeable members the new ideas and feedback critical to continuous lifelong learning.

What an organization knows is what’s embedded in and among its communities of practice. Recently, much has been made in the business literature of statements like “if company X only knew what it knows,” referring to the difficulty of capturing what many individuals know. We have come to understand that much of what any of us knows is “tacit knowledge” embedded in the practices we share with others. So, if we want to know what our organization knows, we should start by identifying our communities of practice and see them as the wellspring of what the organization really knows.

That is one reason why preserving the integrity of these informal communities is so important. The worst effects of downsizing and reengineering come from their complete disregard for communities of practice. The fact that training deals only with explicit knowledge, while the value is often in tacit knowledge, is another reason training can get at only part of what is understood to be effective. The other main limitation of traditional classroom training is that it is episodic and mostly relies on “push” (we want you to know this now) rather than “pull” (I need to know this now and am ready to learn it).

Another dimension to the community idea is seldom discussed, but critically important: Learning is powerfully driven by the critical link between learning and identity. We most often learn with and through others.

What we choose to learn depends on:

      Who we are

      Who we want to become

      Which communities we wish to join or remain part of.

So, not wanting to be like “them” can be enough to keep someone from learning. That fact seems to hold whether we are talking about company apprentices, high school gangs, or seasoned software engineers.

But it gets even more interesting: IRL studies, among others, have shown that as much as 70% of all organizational learning is informal. Everyday, informal learning is constant and everywhere. If this insight is true even in a bare majority of enterprises, why would we leave so much learning to sheer chance?

If those social dimensions of learning are as powerful and enduring as they appear to be—and much work (by IRL and others) strongly supports such a contention—then this is important news for organizations. Most organizations implicitly know they need to be continuously innovative through continuous learning. However, again, typical instructor-led classroom training alone does not even come close to addressing the challenge.

Seven Principles of Learning

From extensive fieldwork, IRL developed seven Principles of Learning that provide important guideposts for organizations. These are not “Tablets from Moses.” They are evolving as a work in progress. However, it is already clear that they have broad application in countless settings. Think of them in relation to your own experience.

1.   Learning is fundamentally social. While learning is about the process of acquiring knowledge, it actually encompasses a lot more. Successful learning is often socially constructed and can require slight changes in one’s identity, which make the process both challenging and powerful.

2.   Knowledge is integrated in the life of communities. When we develop and share values, perspectives, and ways of doing things, we create a community of practice.

3. Learning is an act of participation. The motivation to learn is the desire to participate in a community of practice, to become and remain a member. This is a key dynamic that helps explain the power of apprenticeship and the attendant tools of mentoring and peer coaching.

4.   Knowing depends on engagement in practice. We often glean knowledge from observation of, and participation in, many different situations and activities. The depth of our knowing depends, in turn, on the depth of our engagement.

5.   Engagement is inseparable from empowerment. We perceive our identities in terms of our ability to contribute and to affect the life of communities in which we are or want to be a part.

6.   Failure to learn is often the result of exclusion from participation. Learning requires access and the opportunity to contribute.

7.   We are all natural lifelong learners. All of us, no exceptions. Learning is a natural part of being human. We all learn what enables us to participate in the communities of practice of which we wish to be a part.

As an IRL trustee, Paul Allaire, Chairman of Xerox, once said, “To do things differently, we need to see things differently.” As managers think about what to do differently, it helps to appropriate some new eyeglasses and see through the new lenses that the above principles provide. The challenge for each of us is to put on these new eyeglasses and look through them at the realities we face every day.

Communities of Practice, In Practice

Some examples in practice that IRL team members have observed:

      These principles help us understand why kids on a street corner can learn to run all the complex aspects of an illegal drug business but, somehow, cannot learn math in school. Their identity is wrapped up in the first venture; their engagement absent from the latter.

      The seven principles also help us understand why co-location alone does not necessarily help a software team “cohere” and learn together. If its members have not developed a community out of which a new practice develops, no amount of physical or organizational rearranging will make a difference.

      When a new technology requires both sales and service teams to learn “the new stuff” well and faster, it may not be enough to gain the knowledge; it may also require a change or shift in professional identity in order to succeed with customers or other technicians.

      When a well-designed business process or a new system fails in its implementation, it may be because developing new practices, based upon a whole community’s understanding of the old ones and its limitations, was not part of the strategy.

All these examples make clear that training is not equal to learning. These examples also show that learning does not always go in stages, especially when we are exposed to rich environments in real-life situations. Also, simply specifying skills or competencies does not usually provide what people really need to know—and learn—even if they are placed in the right environment. The principles also help us understand that much of what we often see as “low-level” work is not as routine or as low-level as it may seem. There are essential connections being built, strengthened, and honed among different members of the informal work community.

Leveraging Communities of Practice: The Manager’s New Core Work

What does all this mean for those who are in positions of coaching, shaping, managing, and leading in the world of our new economy?

      The new work of managers and leaders is all about creating the enabling conditions for continuous learning, best done by supporting the informal communities in which it most effectively happens. That requires less control, more listening, more facilitation, more brokering and linking of resources and people to one another.  It also demands support for policies and practices that—without the benefit of seeing through the fresh lenses of the seven principles—may not appear to be “efficient” or cost justified.

To accomplish the above, managers will also need to shift their focus, perhaps changing their own identities as well. The shift needs to be:

      From teaching and training to coaching, mentoring, brokering, and ultimately continuous learning

      From selling only products to learning from customers

      From an infatuation with building innovative pilot projects—which seldom cross community boundaries—to building on existing pockets of innovation with explicit support to expand and spread what’s already working

      From “delivery” as the operative term to natural “construction” and “spread” of ideas and innovations.

It all boils down to some eternal truths, which many of our corporations and other enterprises need to remember or to learn for the first time:

      Listening, observing, and understanding that existing practices and informal communities—and a tenacious commitment to engage—is a prerequisite to effective management, and the management and nurturing of change.

      Thinking of the whole environment in which learning needs to take place—the culture and the facilities, as well as the professional and intellectual aspects—as we design and enable continuous learning.

      Facilitating greater, richer opportunities for those with whom we work. It is necessary to learn through the communities that already exist. Learning across communities and from one another requires special support and deep understanding.

      Supporting every opportunity for learning—and honoring the power of informal learning—is absolutely essential.

      Taking risks, making mistakes, and quickly and routinely learning from them. Remember the eternal truth of healthy organizations: “It is far better to seek forgiveness than to ask for permission.” Also, to quote David Kelley, founder of the Palo Alto award-winning design firm, IDEO: “Fail early in order to succeed sooner.”

Making these habits of mind and of practice part of organizational culture is key to building and sustaining a healthy learning organization.

What Do We Do Differently on Monday?

Enterprises that understand these principles rely on the power of informal learning as well as the reality of formal learning, through a rich blend of techniques.

The challenge for our leaders today is to exquisitely craft and support a hybrid/blended learning strategy. It needs to seamlessly integrate instructor-led training, elearning, peer mentoring, peer coaching, games, storytelling, learning maps, and simulations, intensive interactivity, relationship building, and community building. It can then convey an organization’s history, context, culture, values, beliefs, and challenges in addition to creating the learning foundation for all that will come to be learned day by day. With the same rich hybrid blend of learning tools, we can create the transparency and authenticity needed for employees to emotionally tie themselves to the enterprise and what it represents. When this is done well, knowledge acquisition, knowledge sharing, knowledge creation, and continuous innovation cannot be far behind.

For example: Storytelling. One of the values of exemplary corporate learning strategies today lies in its reliance on the power of storytelling to create authenticity and powerful connectedness to the company early on. Through a multi-media experience that shares stories, told by a wide range of diverse employees, a story unfolds that engages rather than simply “tells.” The best examples build connectedness to the organization early through the power of multi-media and then use hands-on discovery oriented interactive team-building techniques to create and sustain engagement and commitment. This approach creates high retention and commitment through a learning perspective that relies, again, on the “pull” (need, want, desire) from the learner, versus a “push” (should have now, deliver, force feed) from the instructor. This approach to telling the story of a company—its history, business context, values, beliefs and aspirations—helps new recruits see the company through the deeply human eyes of the people who ARE the company. Through these powerful messages and images, the learner comes to develop an understanding of the key insights with others, gaining a shared context and transparency early and maintaining that approach throughout the learning journey.

A number of companies, such as Charles Schwab, Levi Strauss, and Sun Microsystems with the help of learning firms such as San Francisco-based Design Media, Inc. are making authentic story-telling an integral part of their learning strategies, especially for orientation when the challenge of gaining commitment and emotional connection is greatest. Other companies, including Xerox, State Farm, Zurich Financial Services and Motorola have embraced the IRL Learning Principles in their learning strategies, with the initial help of IRL and now with the help of an IRL professional services firm spin off, the Strategic Practices Group, also based in San Francisco.

After the first orientation sessions, we cannot rely on great learning events in the classroom or on the computer screen. Activities such as tours, check in meetings, informal lunches, and peer coaching are integrated into an “after burn” strategy that keeps the learning ongoing, centered, and growing. As a result, new relationships develop and communities of practice are nurtured as new members join in a cognitive apprenticeship model.

These principles, tools, techniques, and their implications are essential foundations. They help all of us cope, survive, grow, and thrive in this exciting, brave, and scary world of the New Economy.

If we do not pay attention to this new management work—and what it demands of us—we face the reality expressed by Intel’s CEO, Andy Grove: “There is at least one point in the history of any company when you have to change dramatically to rise to the next performance level. Miss the moment, and you start to decline.”

Peter Henschel is Executive Director Emeritus of the Institute for Research on Learning (whose operations are now mostly part of San Francisco-based WestEd). He serves as a retained advisor and consultant for companies building or renewing corporate universities and learning programs, both adult and K12, and eLearning companies. He is a frequent national and international speaker on issues of learning, management development, innovation, human capital, and organizational health. Reach him directly at

The author expresses his gratitude for all of the work and insights of IRL and its people that informed his perspective in this essay.

Portions of this essay were originally published in “Smart Business: How Knowledge Communities Can Revolutionize Your Company,” by Dr. Jim Botkin, published in June 1999 by The Free Press, an imprint of Simon & Schuster.



* The Institute for Research on Learning (IRL) is a highly respected Silicon Valley based international interdisciplinary R&D learning research and design center that merged its operations into San Francisco-based WestEd in April 2000.

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