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This essay explores the potential opportunities and risks of "emergent knowledge," which the author defines as categories of business information that were previously impossible, or at least impractical, to use on a regular basis but now are made feasible by advances in information technology. The essay offers a framework for organizing emergent knowledge efforts. And it explores two key challenges that all organizations will encounter: how to organize the myriad of efforts that will inevitably be spawned by emergent knowledge opportunities and how to gain the trust of customers at a time of heightened sensitivity and pessimism about the issues of information privacy and security.
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McGavick was not referring to the perennial problem of huge quantities of data piling up in his digital warehouses. Instead, he was looking beyond that. He was worried about the strategic opportunities and challenges as the mountains of data coalesced into qualitatively better and perhaps perfect information. McGavick was anticipating what I describe as emergent knowledge, categories of business information that were previously impossible, or at least impractical, to use on a regular basis but now are made feasible by advances in information technology.
In a range of industries, including insurance, financial services, healthcare, and complex consumer and industrial products, emergent knowledge is changing the strategic context in which companies manage their organizations, products, customers, and markets. Leveraged well, emergent knowledge about product and process conditions, customer preferences, and other environmental factors could spark numerous innovations. The innovation might come in the form of cost reduction and incremental revenue due to increased visibility or decreased risk. Or the innovation might be more radical, such as the creation of a platform that makes it possible to create killer apps that are, be they revolutionary products or new business models.
Yet, the allure of emergent knowledge has the potential to spawn corporate chaos and soak up investment dollars while delivering no lasting competitive advantage. Imagine scores of individual project managers, business units, and competitors scrambling to capitalize on newfound bits of knowledge. Internally, the collective outcome could be a mishmash of disparate applications and a cacophony of incompatible data streams. Competitors might race toward a series of "me too" offerings that lead to an expensive parity.
In addition, better knowledge will heighten existing sensitivities around privacy and security. It will raise questions of ownership and acceptable use, straining customer and business partner relationships and enticing regulators to intervene.
Since emergent knowledge opportunities are just now becoming viable, their strategic significance is not well understood, poorly leveraged, and rarely even considered. To help managers consider emergent knowledge, this article explores the potential opportunities and risks. It offers a framework for organizing emergent knowledge efforts. And it explores two key challenges that all organizations will encounter: how to organize the myriad of efforts that will inevitably be spawned by emergent knowledge opportunities and how to gain the trust of customers at a time of heightened sensitivity and pessimism about the issues of information privacy and security.
