5th Generation Management

Preface
to the Revised Edition

It has been six years since we published Fifth Generation Management. A lot has changed since then, and yet so very much is still the same. In this updated and revised edition, we have completely rewritten the first five chapters, the story of a president who casts aside his traditional organization chart. We have added references to some new and exciting books in Chapter 7, books that echo the themes of this book. And we have made appropriate changes throughout the rest of the book.

The subtitle is new: Co-creating through Virtual Enterprising, Dynamic Teaming, and Knowledge Networking. This replaces
the former subtitle, Integrating Enterprises through Human Networking. It captures more effectively our understanding of the new business environment. Instead of just selling to our customers, we are co-creating with them new products and services. When Microsoft involves thousands in its beta testing of Windows 95, it is involving them in a co-creative process. Virtual Enterprising is the process of combining the talents and capabilities of many companies to produce a product or service, much as Boeing combined the talents, knowledge, and experience of not only its subcontractors but also United and Japan Airlines in the production of the 777. Dynamic Teaming is the process of teaming and reteaming resources both within a company and between companies to seize and deliver on concrete market opportunities. And Knowledge Networking is the process of combining and recombining one another's knowledge, experiences, talents, skills, capabilities, and aspirations in ever-changing, profitable patterns. This requires, among other things, a change in the way we value one another's knowledge. Typically the industrial era has bred a culture of devaluing that has made our knowledge assets less accessible to one another.

In four years we will all experience a new millennium. What we experience will be our own creation as much as anything else, for
good or evil. Over the past millennia we have nurtured ourselves
and built wealth through the use of land, labor, and capital. We
have benefited by the abundant resources of nature, both above
and below ground. In fact, during the industrial era, the last two
hundred years, we have been subsidized by the riches of nature,
be they oil, bauxite, or ferrous oxide. We have built machinery,
cars, ships, planes, and buildings; ladders, cans, and silverware;
and writing pads, pens, and stamps.

In the latter half of this century the ecology movement has taught us that these resources are more limited than we thought. Our
waste products not only clutter the landscape, but the micro-garbage, the chemical toxins, cause cancer and other health problems.

We are quickly realizing that land, labor, and capital are not enough to build the future on. We need a new resource in addition to these three. What could it be?

For centuries the riches of nature lay buried below the earth's surface. Could it be that the new source of wealth is already within us, but that we do not see it? Could it be that our attitudes and assumptions keep it hidden?

Could it be that the ancient Greeks' notion that "quotwork is punishment,"quot that Aristotle's notion of clock time, that Descartes's notion of the split between the thinker and objects,
and that Frederick Winslow Taylor's split between "quotplanning
and doing"quot all conspire to keep the fourth source of wealth
hidden?

Could it be that we have learned to mine below the surface of the earth, but that we do not know how to mine the human mind?

Could it be that knowledge and knowledging, taken together, are the fourth source of wealth, along with land, labor, and capital? It is not just what we know, but how we combine and recombine what we know (knowledging) that makes knowledge valuable. It is the substance (knowledge, capabilities, skills, experience, aspirations, etc.) and the process (thinking, feeling, seeing, listening, calculating, learning, integrating, innovating, creating, anticipating, etc.), that, when combined, give us this new source of wealth.

Some will argue that this is nothing new, and in some ways this is
true. We already think, discuss, plan, record, analyze, innovate,
and create. Could we do them better? Absolutely. Preliminary
studies done around the world indicate that we are leveraging from five to fifteen percent of our knowledge potential in our organizations.

We have developed an elaborate language for describing the transformation of raw materials into finished products, but we hardly know how to talk about the transformation of raw ideas
into finished products and services. We can tell how effectively we are turning our inventory, but we hardly have a clue as to how well or poorly we turn our knowledge. Companies have an opportunity to start to excel in developing new ideas and weaving them together. This challenges us to continually envision the possible, to continually sort out our knowledge, capabilities, experience, and learnings, and to act in a timely manner. These three elements, envisioning, knowledging, and taking decisive action, are the three themes which underlie this book.

The heart of the book is in the exploration of "work as dialogue" and "human time and timing" in Chapter 10. Work is an expressive and creative dialogue and human time is the frame in which we discover meaning and significant patterns. Certainly as we take more seriously knowledge assets and intellectual capital we will need to fundamentally rethink the nature of work and the ways we relate to the past, present, and future.

Some companies are leading the way. Dow Chemical in the United States, Skandia in Sweden, the Canadian Imperial Bank of Commerce in Canada, Sharp in Japan, and Mettler-Toledo in
Germany have all realized, in their own ways, the value of knowledge, intellectual capital, and collaborative intelligence. Dow has an innovative world-wide project to sort through its patent portfolio. Skandia is a leader in accounting for intellectual capital. CIBC has set up a group that focuses on lending against
"knowledge assets." Sharp has developed an easily sharable knowledge base. And Mettler-Toledo effectively uses the knowledge and skills of its customers to jointly develop new
products.

Our future is not given, but is up to us to create together with one another, as individuals, companies, and countries. If we can indeed realize that we co-create through virtual enterprising, dynamic teaming, and knowledge networking, we can begin to lay the foundation for the next economy. Everyone is needed, because the simple truth is that it will be an economy that will thrive as we learn to value and take one another seriously.