Nothing Ages Faster than the Future: How do companies deal with obsolete knowledge?

(This article was first published in German on www.t3n.de)

We live in a knowledge society. For the game changers from Silicon Valley, the proportion of intellectual capital on the company balance sheet has long since overtaken the traditional elements. Knowledge and the use of knowledge can provide any company with a competitive edge on the market. But in a business world that is moving faster and faster, knowledge soon becomes obsolete: new technologies and processes, disruptive business models and flexible organisational forms mean the market is constantly changing. To successfully establish new knowledge, organisations need to identify old knowledge and move away from it. They need to unlearn.

The pressure to innovate is increasing

There are consequences to rapid technological progress. A disruptive business model can render my offering useless overnight. Competition is no longer only between products and processes, but across business models too. What’s relevant today might be obsolete tomorrow. To keep pace with the market, companies need to acquire new knowledge on a regular basis. The advice “never change a running system” is no longer up to date.

In companies, all processes, guidelines and decisions are based on certain mental “historical” models, systems of thought and action. The role of future-oriented management is to consistently scrutinise these systems in a brave and honest way, and to bring them up to date. It is important to be more innovative than the competition. From a strategic point of view, it can also be a good idea to question your own business model before others do.

Unlearning is part of the transformation process

At first, managers often do not want to accept that a rethink is needed within their organisation. Until they can no longer ignore the reality. The media industry has undergone extreme disruptive change in the last 10 years. But it’s not only the music industry, publishing houses and the TV industry that have adapted their content and the way it is presented to new user behaviour.  Many companies need to abandon tried-and-tested knowledge to make space for new approaches to content.

Today, with environmental policy dominating the public discourse as part of the sustainability debate, the automotive industry has to grapple with unlearning. The move from the combustion engine to the electric powertrain will make tens of thousands of job specifications surplus to requirements. At a time when constant change has become the new normal, companies need to have a strategy ready for dealing with old knowledge. Managers should view unlearning and its many facets as part of the transformation process.

To successfully establish new knowledge, organisations need to identify old knowledge and move away from it. They need to unlearn.

Dr. Frank Behrend

Four approaches to unlearning

There is explicit knowledge, such as concepts and patents. And there is implicit knowledge, such as values, habits and attitudes. Getting rid of unsuitable knowledge is not always met with enthusiasm in the workforce: experts in areas that are now obsolete fear the loss of power, control or even their job. Tact and transparent communication are required to retain top performers and to keep the majority of employees motivated. Classic change management techniques are useful here, as they help to involve all those concerned.

If managers actively integrate the concept of unlearning into the company culture, the organisation can react more flexibly to change and reinvent itself on a regular basis. There are four approaches that companies can use to move away from old knowledge. All these approaches require is an awareness of the applied knowledge portfolio: What is core knowledge? What is the industry standard? Which knowledge is obsolete? On the one hand, knowledge is available in human form: humans store and impart knowledge. On the other hand, knowledge is available in analogue and digital form: such as paper documents and databases.

1. Devil’s advocate in the workplace
   One step is to make yourself and all those involved in the company aware of which knowledge is outdated or detrimental. There are a number of different ways of implementing this approach. It requires healthy and respectful scepticism of current methods and ways of thinking. Because having sceptics around you forces you to come out of your comfort zone on a regular basis and consistently question your own actions. Involving customers in the development process allows you to draw important conclusions about whether the knowledge applied is still relevant or not.
2. Hit the emergency stop button:
   Another important stage of unlearning is to stop using old knowledge. For example, if you are introducing a new ERP software or a new operating system, stop using the predecessor. Suspending production due to a new technology is one example of this approach. Electromobility springs to mind here.
3. Stop the development of old knowledge:
   This approach not only involves no longer using obsolete knowledge, but also changing the knowledge generation and absorption process. This includes stopping research and development projects on outdated technology and purposefully preventing the transfer of knowledge. But even Blackberry, once a status symbol for mangers, missed out on the technological development of the touchscreen in 2008. As a result, the company stopped developing obsolete keyboard technology and exclusively focused on IT and services. They completed the turnaround last year.
4. The surgical procedure:
   The most aggressive approach is to remove all obsolete parts of the organisational memory. This includes throwing out old hardware and software, archiving old documents and breaking away from experts whose knowledge is obsolete. The automotive industry is another current example of this: how many combustion engine job profiles will no longer be needed once the electric powertrain has established itself? And what happens to these people? Business and politics have to find the answers to this.

Conclusion

To take in and use new knowledge, it is necessary for companies to unlearn outdated practices and discard obsolete knowledge. Managers should see unlearning as a conscious, systematic process that is an integral part of transformation. Companies that activate unlearning approaches within the organisation find it easier to overcome organisational and cultural change, increase competence and establish new processes. Or as Peter Drucker summed it up: “The greatest danger in times of turbulence is not the turbulence – it is to act with yesterday’s logic”.