Why you would have a strategic edge if you’d attended “Leading Strategic Growth and Change” in the 9
Though Sparks
WHY YOU WOULD HAVE A STRATEGIC EDGE IF YOU’D ATTENDED “LEADING STRATEGIC GROWTH AND CHANGE” IN THE 90’S
Rita McGrath
It’s fun to reflect on how my course “Leading Strategic Growth and Change” has evolved over the years. I first took over as the Faculty Director for the course in 1998. Everyone was abuzz about this new thing we called “the Internet.” Venture capitalists had uncapped free-flowing pens, MBA students were talking about becoming entrepreneurs and it seemed that we were on the brink of a whole new age. It turned out that we were, just not in the way we expected. Way back then, the late Max Boisot was miles ahead of just about everyone in identifying the nature of digital goods and what that meant for organizations strategically.
A FRONT ROW SEAT TO THE REVOLUTION
Max Boisot was a brilliant scholar and theorist who was among the first to recognize that the advent of the digital revolution was not just about another whizzy technology but a fundamental shift in the logic of value creation. He argued that the industrial revolution involved harnessing nonrenewable energy sources to produce industrial goods. The Information Revolution, whose outlines were only becoming dimly understood in the late 90’s, involves substituting information for energy to produce knowledge-intensive goods.
THE “ISPACE” OR INFORMATION SPACE
Max Boisot's Information Space (I-Space) Framework offers a powerful lens for understanding how organizations can architect information flows. The framework maps information along three critical dimensions: codification (how structured the information is), abstraction (how conceptual versus concrete), and diffusion (how widely shared). Together, these create a three-dimensional space where different types of knowledge live and move.
THE FOUR STRATEGIC ZONES
The I-Space is a conceptual model with four distinct zones where knowledge operates, each with different strategic implications.
Zone 1: Tacit Knowledge
(Low codification, high abstraction, low diffusion) This is where breakthrough innovations often begin in the minds of individuals or small teams.
Zone 2: Proprietary Knowledge
(High codification, moderate abstraction, low diffusion) This is historically where many knowledgeintensive companies built protections and barriers that kept others out of their territory.
Zone 3: Public Knowledge
(High codification, high abstraction, high diffusion) This becomes commoditized quickly.
Zone 4: Common Practice
(High codification, low abstraction, high diffusion) These are industry standards and best practices.
THE MOVEMENT IMPERATIVE
The real strategic insight behind all this is that knowledge doesn't sit still in the I-Space. It moves. And the companies that master this movement outperform those that don't.
Amazon's AWS success illustrates this. The company took tacit knowledge about managing massive computing infrastructure, including the need to completely refactor their systems which few other companies had ever done (Zone 1).
THE EXECUTION CHALLENGE
The I-Space Framework isn't just analytical it's actionable. But execution requires rethinking how you manage knowledge flows. Most organizations optimize for knowledge sharing (diffusion) without considering the strategic implications of what they're sharing and when. Further, in many typical bureaucracies what Max called “blockers” are often allowed to run rampant – political interests, incentives and other personal motivations can get in the way of the free flow of knowledge development that forms the center of information goods.
THE COMPETITIVE REALITY
In an era where information moves faster than ever, understanding how knowledge flows are moving across your organization isn't optional it's essential for strategic survival. Companies that treat all knowledge the same way, or that optimize for transparency without considering competitive implications, will find their advantages eroding faster than they can build new ones. The question isn't whether your knowledge will move through the I-Space. It will.
Want to spark some thinking in your own organization?
