| General Motors for much of its storied history had sought to limit its reliance on individual judgment and interpersonal relationships through complicated organizational structures, highly formalized processes, and data. Ethnographic research determined why cross-functional product teams within the resulting mechanistic organization often failed to form or sufficiently communicate strong product concepts, to the detriment of product development effectiveness and efficiency.; To form a strong product concept, a product team must understand the needs of the target consumers and how these translate into product attributes. Much of this knowledge is unavoidably tacit. It cannot be sufficiently captured or communicated through market research. Individuals accumulate tacit knowledge of varying quality through experience.; Individuals' tacit knowledge can be applied through a number of mechanisms, including power, bargaining, organizational culture, and shared team membership. However, only the mechanism of interpersonal trust development controls for the quality of the tacit knowledge behind a proposal. Like the development of tacit knowledge, the development of trust in another's expertise requires time. Unlike trust in other contexts, it cannot be based on the threat of sanctions.; Within the GM organization, frequent job rotation, downsizing, an emphasis on data, and designed-in conflict undermined the development of both tacit knowledge and the high-trust relationships necessary to apply this knowledge. As a result, many product teams failed to form strong product concepts.; These teams further failed to sufficiently communicate product concepts to the extended organization. They overestimated the capacity of official channels: liaisons, documents, and infrequent large-scale meetings. Compounding this error, they underestimated the frequency, directness, and breadth of communication functional engineers required to enthusiastically and skillfully execute product concepts.; What emerges is a knowledge- and trust-based theory that emphasizes firms' reliance on their members for both tacit knowledge and evaluations of the validity of each other's knowledge. Firms whose mechanistic structures, processes, and cultures are based on gathering and processing data are poorly equipped to cultivate tacit knowledge and the interpersonal trust required to responsibly apply this knowledge. |
