Knowledge Workers

by Krishna on January 5, 2009


The term “knowledge worker” was coined by Peter Drucker to refer to someone who primarily produces output based on their knowledge. This is as opposed to producing it by their manual labor. When we talk about management strategies, it is important to distinguish between managing knowledge workers and managing manual laborers.

The most important difference between a manual worker and a knowledge worker is that the former’s results are constrained by physical limitations (their physique or their tools), but a knowledge worker has few such constraints: The result of their work has no pre-defined upper limits.

Let me explain with a contrived example. Consider a person working a printing press. This person can produce only so many books as the printing press can print and so the revenue and profit of the firm has an upper limit. Now consider an author writing a book. The quality of the book can make a huge difference: It can bring riches and lasting fame to the author. In this case, the speed at which the author types the book draft pales in comparison to the potential that the book’s contents has.

Many management books are written with an expectation that the manager is dealing with employees who produce definite units of work per hour. But that is not reality when you are dealing with knowledge workers. There is huge variability between different employees, even when they are getting paid similar salaries. One employee could be producing value several times her cost while another employee could be making costly mistakes directly or through opportunity losses.

Let us take an example from programming. John Smith and Mary Doe may be paid similar salaries. But Mary writes excellent code, produces few bugs and works on high priority customer requests. John Smith, on the other hand, writes convoluted, buggy code producing customer service calls. John is costing the company money (until someone realizes this) while Mary is earning the profits for the company.

There is also great variability in the per-hour output of a single knowledge worker. Mary comes early to work and cranks out a lot of code by noon, but then her productivity takes a nose dive after lunch. The company would lose nothing by asking Mary to simply work 5 hours in the morning and go home. Or ask her to work the mornings from home, so that she does not spend the most productive time of the day commuting to the workplace.

To sum up, a knowledge worker’s productivity is not a function of how many hours they work or how much they earn. And this is completely the opposite of how most managements think. They have fine-grained rules about work hours and holidays, polished after decades of dealing with manual workers. Sometimes, these rules actually allow management to set a floor for low-performing knowledge workers, but they prevent high-performing individuals from achieving their true potential.

In most industries (in developed nations), knowledge workers vastly outnumber manual workers. We are not just talking about programmers. It could be salespersons, receptionists, accountants, lawyers, customer service personnel, human resource employees and so on. Each role in your organization has the potential to produce results that can make significant differences to your growth path. You just have to find the right people and tap into that.

[Image used under a Creative Commons license from scottpartee]


Kalpesh January 7, 2009 at 11:35 pm

AFAIK, there is no way to find out how useful the software was to the user? did it achieve the set goals for which it was developed? how much money was saved? hours saved? productivity improvement?

The idea of fixed hours comes from other industries where a process is set & parts are decided to make up a product (Assembly line).

We worry too much about languages/tools too much than to help client achieve what they need.

Not all of the above are knowledge workers (sales people, receptionist, lawyers) & they are not industrial workers at the same time.

In some sense, everyone is a knowledge worker. Assembly line person doesn't leave his brain aside when working (he works with fixed input & output. But there is some use of brain).

Robots are a different story 🙂

Its not just right people. Do you think Toyota just has the right set of people to make it work better than others?

If people feel that they are an important part of an organization (rather than a replaceable component), an organization can really grow well. I think the same theory applies to countries. Individuals work better to achieve something & expect the same level from others. The nation becomes better, if we set higher values and expect the same.

Krish January 8, 2009 at 10:46 am

Thanks for the comment, Kalpesh.

I do think that Toyota has/had the right set of people that makes it better than others, because the Toyota Way, which is responsible for Toyota’s success, did not come out of nowhere. It was conceptualized, implemented and refined by the people working at Toyota to make better, high-quality products. Now these may be a minority of the employees, but that is my point – they disproportionally made a huge change to the fortunes of Toyota, a change that lasted for decades.

It is true that productivity improvement is difficult to measure in highly precise terms, but that is not to say you cannot have a qualitative assessment. There are many ways of understanding when and how people are more productive and be able to tap into that. Managers, unfortunately, seldom take the effort and just bow to inertia.

NOUSHEEN October 28, 2010 at 1:13 am

well i just want to know that who are knowledge workers and where they exsists and how they are hired?Are they differs from other employees like manage and finance and IT Officers?

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