December 14, 2002

Wisdom For Sale

Peter Merholz, in a much-discussed post, is astonished when organizations adapt their business to newly-purchased software in order to "purchase wisdom."

Part of the reason they bought this software was for the "wisdom" the software was meant to have embedded within.... There was a "wisdom" in how the software presents work processes, and that the company ought to learn from that wisdom and adjust their work accordingly, taking advantage of this "wisdom."

This totally took me aback. How on earth could this enterprise software tell you how to do your work? It's your work!

These organizations aren't crazy. At least, not necessarily. They're merely trying to implement the apprenticeship strategy familiar to many small business people.

Most fields of business have a host of arcane trade customs, practices, and rules of thumb. If you want to start a sandwich shop, there are lots of things that everyone knows, but you don't unless you've already worked in the business. How tall should the tables be? How much cash do you keep on hand? How much change? When do you pay your food supplier? What sorts of tricks will an experienced, dishonest cashier try to play on you? What kinds of political favors are you going to need? In some glamor businesses, you can look this up in books. The rest of the time, you need to hire experience or acquire it.

If you hire experience, you're going to be relying on whoever you hire. You'll be at their mercy. They'll know this. (Lots of tech acquisitions in the 90s followed this scenario, and we all know where that led)

The alternative is often to go out and get a low-level job, working for a friendly business like the one you're starting (but far enough away, or different enough, that you won't be a future competitor). In other words, you can hire expertise and hope it works out, or you can become an expert and hope you can learn what you need quickly enough.

Enterprise software embeds all sorts of implicit knowledge about a business. If you're a startup or you're a mess, the way someone else does it may well be a whole lot better than what you're doing now. You wouldn't use this strategy for a core competency, of course, or in a facet of your work at which your organization really needs to excel. Often, though, clawing your way back to average is fine.

If you've got, say, a design agency and your accounting and bookkeeping people are always fouling things up, doing things Just Like The Other Guys sounds pretty good. You weren't expecting to conquer the design world with superior accounting, right? If you're a retailer and starting out Web commerce site, you probably don't need great fulfillment, you just need to avoid terrible fulfillment. PeterMe's CIO isn't demented, she's just applying a small-business heuristic in a big-business environment.