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Despite years of business media hype about knowledge management and its importance in the information economy, many organizations have been unable to transform promising theory into practice. Others have over-invested in complex knowledge management systems without fully considering the matter of human input. The T-shaped Manager framework, developed by Hansen and von Oetinger, essentially outlines a framework in which managers share knowledge with other managers while remaining focused on their own direct effect on the bottom line. [1]
The T-shaped manager framework is based on the idea that although it is easy to codify and transfer explicit knowledge, it is not as easy to do the same with tacit knowledge. Echoing the groundbreaking insights provided by Nonaka and Takeuchi in 1995, Hansen and von Oetinger state that to realize the full potential of its knowledge base, an organization must find a way of sharing the ideas and experiences of managers with other senior employees. [2]
The T-shaped manager framework offers a practical approach based on the experiences of BP, the petrochemical multi-national. BP is perfectly placed to exploit this approach since it consists of around 50 semi-autonomous business units, each with a CEO whose main concern is the performance of his/her unit. Although the framework is described with the large organization in mind, any organization, irrespective of size, can benefit from adhering to the key principles of T-shaped management.
According to Hansen and von Oetinger, the key to being a successful T-shaped manager is to carefully allocate the amount of time they devote to horizontal and vertical activities. This requires delegating some internal responsibilities to subordinates within their business units or departments (the vertical part of the ‘T’) to allow collaboration with managers in other areas of the business (the horizontal part). The authors call the particular type of meeting which BP uses to facilitate horizontal knowledge sharing between managers ‘peer meetings’.
Specifically, horizontal knowledge sharing by T-shaped managers creates value in five critical ways:
1. Increased Efficiency Through the Transfer of Best Practices
Typically, managers in larger organizations will find it difficult to share best practice insights. Hansen and von Oetinger state that managers operating in a T-shaped framework should be encouraged to share ideas and experiences of specific situations. If the sharing of best practices becomes widespread, as it did between business units at BP, it is likely to significantly improve organizational performance.
2. Improved Quality of Decisions Through Peer Advice
A T-shaped manager will also be able to benefit from seeking advice elsewhere in the organization. Another method of realizing the potential of tacit knowledge, particularly in a large organization, is to seek advice on important decisions from those with experience. Hansen and von Oetinger suggest using individuals with expansive networks as ‘human portals’ to identify the best sources of advice.
3. Growth of Revenue Through Shared Expertise
Hansen and von Oetinger state that one of the most visible areas of added value from horizontal knowledge management practices was additions to the bottom line. Again, peer meetings are particularly useful for sharing advice on revenue generating projects that require expertise in a number of disciplines from outside the core project team.
4. Development of New Business Opportunities Through the Cross-Pollination of Ideas
Nonaka and Takeuchi state that one of the most important ways of generating value-adding explicit and tacit knowledge is through using existing tacit knowledge. [3] They call the process of generating explicit knowledge using tacit knowledge ‘externalization’ and the creation of tacit knowledge from existing tacit knowledge ‘socialization’.
Similarly, Hansen and von Oetinger believe that organizations should use peer meetings to share and create ideas from existing knowledge. This is particularly beneficial to large organizations with huge untapped tacit knowledge resources.
5. The Promise of Well Coordinated Implementation of Strategic Moves
Finally, Hansen and von Oetinger believe that effective peer meetings will enable large organizations to manage dramatic strategic change effectively. They believe that improved confidence in the organization’s ability to successfully implement change will enable strategists to formulate ‘bold plans’ to optimize organizational performance.
From a strategic point of view, it is critical that organizations wishing to embark on successful T-shaped management initiatives must create environments that support T-shaped management. Hansen and von Oetinger believe that this is done through a combination of promoting and disciplining horizontal management behavior through top management, rather than adding another layer of bureaucracy. This can be done using three main methods:
- Create clear incentives.
It is imperative that managers are rewarded for the performance of the area of business in their jurisdiction. If they are to be effective T-shaped managers they should also be rewarded for their ability to share knowledge horizontally. - Develop economic transparency between departments and business units.
Another method suggested to help larger organizations implement T-shaped management initiatives is internal benchmarking, which encourages economic transparency between departments or business units. This will encourage healthy competition between leaders of business units or departments and help to signpost the need to advise and coach the leaders of under-performing units. - Formalize cross-unit interactions.
An excellent method of encouraging cross-unit or department interactions is through scheduled peer meetings with specific objectives.
Preferably, top teams should monitor the outcomes of these formal approaches to discourage inefficient networking. Hansen and von Oetinger suggest two main methods of discouraging unnecessary networking:
1. Be selective with cross-unit interactions
Although Hansen and von Oetinger recommend it is essential that horizontal interaction occurs between managers, they stress that each peer meeting should have a specific objective.
2. Replace bloated Rolodexes with ‘human portals’
The authors acknowledge the danger of ‘over-networking’. This occurs when individuals amass huge numbers of contacts within the organization and feel the need to stay in regular contact with them. The size and complexity of these networks could potentially hinder, rather than encourage, performance.
The solution is to cultivate small numbers of specific types of T-shaped managers that have the ability to connect others to a huge number of useful contacts in the organization, in the same way that an internet portal like Yahoo! connects people to useful Web pages.
The Benefits of T-Shaped Management
Hansen and von Oetinger believe that one of the main benefits of T-shaped management initiatives is that they are far more efficient than centralized systems which have been known to hinder innovation by being slow to respond to requests from individual departments. This difference in efficiency can only be exacerbated, particularly in larger organizations, as the speed of knowledge generation and knowledge transfer in future economies increases.
The T-shaped management framework is perhaps best suited to large multi-nationals which operate through individual business units. However, like Nonaka and Takeuchi’s knowledge creation model, it also reflects the importance of knowledge and ideas as competitive resources in today’s information economy. As such, the model is instructive to organizations of any size that wish to harness the power of their knowledge base.
References[1] M Hansen and B von Oetinger, 'T-Shaped Managers: Knowledge Management's Next Generation', Harvard Business Review (March 2001).
[2] I Nonaka and H Takeuchi, The Knowledge-Creating Company (Oxford University Press, 1995).
[3] Ibid.
