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Leadership for the Knowledge Economy

White Paper: 2005 Legacy Education


“I wouldn’t give a fig for simplicity; but I would give my right arm

for simplicity on the other side of complexity.”            Ben Franklin


Reading, ‘riting, and ‘rithmetic” were the foundation for business literacy at the beginning of the 20th century as the economy shifted from an agricultural to an industrial base.  Reading, writing and arithmetic are still essential, but they are insufficient for the information age and an economy based on the power of the mind.


The knowledge economy is an exponentially complex world, where the mind trumps muscle and machine, where a global corporation with only five employees can have annual sales of $160 million.  It is a fast and sometimes brutal world, where an industry leader like Netscape can be marginalized in just three years. 


A new construct for business literacy is needed if American industry is to remain competitive.  With alliterative license, “Three Rs” for the knowledge economy emerge—


Relationships, Research and Risk


Relationships--the ability to maintain a non-anxious, non-judgmental self in connection to other persons or groups in such a way that all are respected and goals achieved.


Research--the intellectually rigorous and creative exploration of divergent sources of ideas, information, and  resources.


Risk--the exercise of sound judgment and timely, decisive action.


The bottom line for any business venture is the capacity to produce goods and services—to get things done that are valued in the marketplace.  People (relationships) determine what the marketplace values, information (research) generates products and services, and decisions (risks) get things done.  Whatever concept, product, or service a business undertakes, relationships, research, and risks are central to successful implementation.


Competency, or lack of it, in the “new” 3-Rs is pivotal, regardless of title and position.  Leaders and workers alike must master them in order to contribute to the knowledge economy.  Roles and responsibilities may be fundamentally different, but every worker can lead within the context of their unique sphere of influence.  In other words, everybody counts.


Innate ability for relationships, research, or risks will vary from one person to the next.  Some will be more skilled than others, but no one should be counted out or left behind.  To do so would be costly in both personal and corporate terms, wasting resources the economy can ill afford to lose.


Skill in one competency does not preclude the necessity for ability in the other two.  Just as no one would suggest that if you can add, you don’t need to read and write, skill in relationships, research, and risk must be developed intentionally and universally—in  every classroom, in every workplace training program, in every leadership development seminar.




Relationships are a good place to begin, but the difficulty in developing and sustaining effective relationships should not be underestimated.  Relationships are the joy and/or bane of human existence—sometimes both at once.  We begin collecting, sorting, and storing relationship signals from our birth, and continue to do so daily.  In addition, we are intricately connected to our surroundings, tuned in to sending and receiving signals as surely as electricity is transmitted—silently and efficiently.  If we understand that any group of people assembled for a common purpose will instantaneously create an emotionally wired system, we begin to sense the depth and breadth of the skills required.  Effective relationships are even more important in a virtual world where it is often necessary to build trust across global networks.  We often need to see, assess, and relate to others with split-second speed and efficacy.




Knowledge and facts have always been essential to sound strategy.  Technical mastery is commonly accepted as a baseline credential for employment.  What distinguishes research within the knowledge economy is an overriding sense of urgency and an insatiable quest for innovation.  Implicit knowledge must become explicit, managed, and shared—capable of linking knowledge workers across continents.  Intellectual capital must be harnessed, organized, and measured as accurately as equipment and inventory.  Creativity must be constantly nurtured.  Knowledge workers, deluged with information, must hone their ability to discriminate and isolate with precision the solutions that give them a competitive edge. 




Relationships and research, pursued in isolation, can never generate the quantum productivity gains inherent in the knowledge economy.  Camaraderie is no substitute for competitive strategy.  Data overload can jam entrepreneurial radar.


Ultimately, the ability to assess and take risks becomes the third necessary competency.  Business leaders confronted with ambiguous and/or paradoxical situations must make hard choices.  To complicate matters, decisions are rarely static.  Every decision leads to yet another that, for a time, has the potential for success or failure.  Choosing to do nothing is equally problematic.  Will Rogers said it succinctly, “Even if you are on the right track, you’ll get run over if you just sit there.” 


There are persons for whom risk-taking is second nature.  They take risks often and easily, concentrating on relationships and research as retrospective exercises to manage the unintended consequences of their decisions.  Others spend their energy on relationships and research up front, paving the way more carefully so that risks are mitigated whenever possible.  Either way, risks are inevitable.


What can a leader do?


Adopting the new 3 Rs merely as a slogan or mantra is likely to be viewed as just another flavor of the month.   For such a simple alliteration to have an impact on competitive strategy, relationships, research, and risk must be ingrained in an organization’s DNA from top to bottom.


Organizations and leaders are caught in a conundrum. They want to learn--if it is cheap, fun, and easy--but are frustrated by the cost and complexity of the process.  Attending a three-day class (or sending someone else “who needs it”) is much easier than developing a clearly focused human capital strategy based on the personal mastery of its leaders. 


As Ben Franklin suggested long before there was any glimmer of a knowledge economy, simplicity on the other side of complexity is a good place to begin.  Leaders who model and teach effective relationships, rigorous research, and courageous risks can expect to have a powerful impact on productivity.  There is no time to waste.



Carol Tyler Townsend                                       LEGACY EDUCATION






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