Sense:Nonsense Ratio

One of my favorite concepts for what KM brings to the table is the “Sense:Nonsense” ratio that Jules Goddard from INSEAD and the Management Innovation Lab introduced me to. If your KM program isn’t giving these kinds of insights, then it really isn’t strategic.

Sense Nonsense

Below is the snippet from our PM KM paper that describes it:

Knowledge management also transforms the balance between “sense” and “nonsense” within and between organizations. Most competing firms share common ideas about the market, its future, their products, etc. The common ideas that are true are “common sense,” while the shared ideas that are wrong are “common nonsense.” An example of “common sense” is analysts’ market growth estimates; an example of “common nonsense” would be that this market had barriers to entry that were too high for new entrants (e.g., UNIX versus Linux). These shared wisdoms and delusions are curious, but they tend to cancel each other out or are known by all players quickly. What knowledge management should focus on is increasing a firm’s “uncommon sense,” or those true things that only the company knows (or knows well). In turn, there should be a parallel effort to debunk myths that persist only within the company – “uncommon nonsense” – that hold it back.

One Response

  1. […] (Paul Ritchie, if I read the leaves well), and has shared some insights of late. Specifically, here he shares thoughts and a representation of the impact of good knowledge management on the “signal to noise” ratio (OK, so he […]

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