Exploring the Design and Effects of Internal Knowledge Markets by Hind Benbya

Author:Hind Benbya
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

4.3.2 Governance Mechanisms

Introducing an internal market opens the firm to new forms of governance and creates completely new roles for those who would manage expertise. As noted in the earlier section, the IT department can no longer behave like a central planner but must instead behave like a Market Maker or Federal Reserve. As market maker, it steps into provide liquidity when market participants have failed to match, when they lack information, or when they are too busy to provide assistance. As Federal Reserve, the IT department manages the internal economy for optimal growth. Most executives have no idea how to perform these roles. But, they are crucial to bringing markets inside the firm.

This implies not only that executives change how their people interact, and change their tools, but also how executives change themselves. To run the company effectively, do they accept verdicts of their market? The true test of internal market adoption is whether firms use them for critical issues, not just fringe areas. When people pose better questions and post better answers, does the IKM empower them to influence firm choices?

Management must support the change in power that follows from a change in the sources of expertise. And management must accept, or at least acknowledge the market verdict. In one Pacific Rim bank we studied, over 90 % of questions travelled up from field offices to headquarters while answers travelled down in the opposite direction. Tapping expertise only vertically misses the full benefits of openness. Truly democratizing knowledge requires an open organization where employees can deliberate, argue, vote, compete, and collaborate horizontally across fields of expertise.

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