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Monday, March 22, 2004

                        The Savage State (Thomas Cole, 1836)

Organizational Problem Solving

In the opening blog of "All Life is Problem Solving", I gave a general account of how problem solving occurs in living things including humans. But are organizations living systems, or, at least, are they like living systems in their problem solving patterns? How does organizational problem solving happen?

In seeking an answer to that question, Iíd like you to recall Popperís theory of knowledge making as I explained it in my first blog. In living systems, ordinary activity sometimes leads to situations that donít match predispositional knowledge and expectations. This leads to formulating tentative solutions, and then to error elimination producing new knowledge and expectations.

With that theory in mind, letís begin with decisions and actions, the ordinary activity of organizations. Decisions are part of a sequence that has been described in slightly varying terms, using many names (e.g., the organizational learning cycle, the experiential learning cycle, the adaptive loop, and others). I call it the Decision Execution Cycle (DEC). It includes planning, acting, monitoring, and evaluating behaviors. Decisions are produced by planning and are embodied in acting. Decisions produce actions. And actions - activities - are the stuff that social processes, social networks, and (complex adaptive) social systems are made of. These are built up (integrated) from activities in ways my collaborator and friend Mark McElroy and I have described in our books (See McElroy, The New Knowledge Management, KMCI Press/Butterworth-Heinemann, 2003; Firestone, Enterprise Information Portals and Knowledge Management, KMCI Press/Butterworth-Heinemann 2003; and Firestone and McElroy, Key Issues in the New Knowledge Management, KMCI Press/Butterworth-Heinemann, 2003, and Excerpt #1 from The Open Enterprise: Building Business Architectures for Openness and Sustainable Innovation, KMCI Online Press, 2003).

Now let's distinguish three tiers of organizational processes: (1) operational processes, (2) knowledge processes, and (3) processes for managing knowledge processes. Operational processes are those that use knowledge but, apart from knowledge about specific events and conditions, whose acquisition doesnít require problem solving, donít produce or integrate it. For that, we turn to knowledge processes. There are two knowledge processes: knowledge production, the process an organization executes that produces new solutions to its problems; and knowledge integration, the process that presents this new knowledge to individuals and groups comprising the organization. Knowledge production and problem solving, on this account, are one and the same. There are at least 9 processes related to managing knowledge processes. I wonít cover them in this blog, but Iíll have occasion to return to these Knowledge Management processes in other blogs.

Incidentally, the three tiers of organizational processing I just distinguished, are part of a high-level model Mark and I developed at the Knowledge Management Consortium International (KMCI). We use the model as one of the organizing constructs in our Certificate course in Knowledge and Innovation Management (CKIM). You can see a graphic on p. 8 of the KMCI Brochure at:

Knowledge Processes

What corresponds to Popperís theory of knowledge making at the level of organizations? To begin, problems occur for organizations just as they do for other systems. Organizations go through problem production processes to produce their knowledge of problems. Here is how things work.

Operational business processes are performed by individuals and groups using previous knowledge, both their own mental knowledge, knowledge claims in organizational repositories; and also situational knowledge, the result of on-going non-problematic learning, to make decisions. Sometimes previous knowledge and situational knowledge do not provide the answers they need to perform their roles in organizational processes. If so, a problem has arisen -- an epistemic gap between what an agent knows and what it needs to know to perform its role in the organizational process. Such a problem initiates knowledge processing: specifically, a new knowledge production process.

Popperís second step of attempted solutions corresponds to three sub-processes of knowledge production at the organizational level:

    • Information Acquisition
    • Individual and Group Learning
    • Knowledge Claim Formulation
That is, once an organizational problem is produced, there is a need to formulate tentative solutions in response. These can come from new individual and group learning efforts to address the problem; or from external sources through information acquisition; or from entirely creative knowledge claim formulation efforts; or all three. Where the tentative solutions come from, and in what sequence, is of no importance to the self-organizing knowledge processing pattern of knowledge production.

Individual and group learning is itself knowledge processing. It produces knowledge claims for consideration at higher levels of analysis of knowledge processing. But at the individual and group levels, learning is knowledge production and also problem solving. Let's call this the recursive "nesting" of problem solving in organizations. Knowledge claim formulation uses the results of both information acquisition, and individual and group learning, and its own sub-process interactions to produce alternative solutions for:

    • Knowledge Claim Evaluation (KCE); the organizational sub-process corresponding to error elimination in Popperís theory.
Organizational knowledge is not produced until the tentative solutions, the previously formulated knowledge claims, have been tested and evaluated. And KCE is the way in which organizational agents select among tentative solutions (competitive alternatives), by comparing them against each other in the context of perspectives, criteria, or newly created ideas for selecting among them.

KCE is at the very center of knowledge processing and knowledge production. Think about it. Without it, what is the difference between information and knowledge? How do we know that we are integrating knowledge rather than just information? Or that the "knowledge" weíre using in operational business processes is of high quality? Absent a social process in organizations, be it formal or informal, through which competing claims can be held to tests of veracity or verisimilitude, how can we possibly make judgments about truth versus falsity? Knowledge claim evaluation, then, is what gives us the ability to know knowledge when we see it.

Once knowledge is produced by KCE, and an organizational problem is solved, the process of knowledge integration begins. Knowledge integration is an organizational process that may have a loose analog at the individual level in the processes of reinforcement learning, which fix knowledge in memory and synaptic patterns. Knowledge integration distributes organizational knowledge claims across knowledge repositories and also distributes beliefs about these knowledge claims across the organization.

Knowledge integration is made up of four more sub-processes, all of which may use interpersonal, electronic, or both types of methods in execution:

    • Knowledge and Information Broadcasting
    • Searching/Retrieving
    • Knowledge Sharing (peer-to-peer presentation of previously produced knowledge), and
    • Teaching (hierarchical presentation of previously produced knowledge)
There is no particular sequence to these integration sub-processes. One or all of them may be used to present what has been produced to the organization's agents or to store it.

Those agents receiving knowledge or information through knowledge integration don't receive it passively. For them, it represents a communication that may create a knowledge gap and initiate a new round of their own problem solving. The integration of knowledge, therefore, doesn't signal its "acceptance." It only signals that the instance of knowledge processing initiated by the problem is over and that new problems, for some, have been initiated by the solution. For others, the knowledge integrated is knowledge to be used: either to continue with executing the business process that initiated the original problem, or at a later time when the situation calls for it.

Either way, the original problem that motivated knowledge processing is gone. It was born in the operational business process, solved in the knowledge production process, integrated throughout the organization afterwards, and, in this way, it ceased to be a problem -- i.e., it died. This pattern is a life cycle, a birth-and-death cycle for problems arising from business processes and through which new knowledge is also produced. Since the life cycle gives rise to knowledge, both mental and cultural (linguistic), Mark McElroy and I call it the Knowledge Life Cycle (KLC) (See p. 12 of the KMCI Brochure for a graphic at:

Every organization produces its knowledge through myriad KLCs that arise from its problems. KLCs occur at the organizational level and also at every level of social interaction and individual functioning in the organization. It is through these cycles that knowledge is produced, and the organization acquires the solutions it needs to adapt to its environment.

The KLC is another critical organizing concept used at KMCI in our CKIM classes and developed extensively in our books. KCE is discussed in some detail in Chapter 5 of our Key Issues in the New Knowledge Management, KMCI Press/Butterworth-Heinemann, 2003, and I suspect this is the most complete treatment of KCE in the recent KM literature, where KCE is, most often glossed over, or ignored entirely.


Organizational knowledge and problem solving processes, of course, produce outcomes. From my point of view, knowledge is an encoded, tested, evaluated, and still surviving structure of information that helps the system (agent) that developed it to adapt. There are two types of knowledge important in organizations: (1) tested, evaluated, and surviving beliefs or belief predispositions (in minds) about the world; and (2) tested, evaluated, and surviving, sharable (objective), linguistic formulations (knowledge claims) about the world. There are also other outcomes of knowledge processes, the most important of which are knowledge claims about the performance of other knowledge claims during knowledge claim evaluation. Mark McElroy and I call these Ďmeta-claimsí, or claims about claims. Organizational linguistic knowledge consists of claims that have survived our tests, criticisms, and evaluations, along with their corresponding meta-claims, whose content records the performance of such claims.

The various outcomes of knowledge processes may be viewed as part of an abstraction we call the Distributed Organizational Knowledge Base (DOKB). The DOKB in organizations has electronic storage components. But it is more than that, because it contains all of the outcomes of knowledge processing in documents, and non-electronic media. And since it includes beliefs and belief predispositions, as well, it also includes all of the mental knowledge in the organization as well.

For More Information

Youíll find much more information on the theories and models offered in this paper at three web sites:,, and The last web site has the most complete information on the CKIM class team-taught by Mark and myself, and on our new KM strategy and methodology class called K-STREAM(tm). Many papers on The New Knowledge Management are available for downloading at all three sites. Our Excerpt from The Open Enterprise . . . may also be purchased at any of them. Our print books are available at Amazon, Barnes and Noble, or Elsevier/Butterworth-Heinemann. Finally, there will be many more blogs coming and these will apply the point of view expressed here to many of the major issues in Knowledge Management today.
1:05:20 AM    comment []

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