We all intuitively know that smaller groups seem to operate more efficiently, but why? Malcolm Gladwell refers to the concept of transactive memory in The Tipping Point, referring to the work of psychologist Daniel Wegner from the University of Virginia. Simply put, transactive memory is based on the idea that individuals can provide external memory for each other. In the example of a married couple, the husband may not pay attention to the yard care equipment since he knows that his wife handles this area of the household; the wife may in turn rely on the husband for detailed information regarding the computers in the house. This enables the couple to handle more information as a team, since they don't both need to try and remember everything necessary to run the household.
The ability to manage transactive memory gets more difficult as the size of the organization increases. In the example of a married couple, it is obviously easy to track who is the keeper of specific information: either the husband or the wife. Although larger organizations may have more total knowledge available, it is often very difficult to tap into that knowledge, and the cost to mine the knowledge often outweighs the gain from the knowledge itself. Gladwell discusses Gore Associates (the makers of Gore-Tex) and their management of transactive memory by limiting operational units to 150 people. He quotes a Gore associate: "It's not just do you know somebody. It's do you really know them well enough that you know their skills and abilities and passions. That's what you like, what you do, what you want to do, what you are truly good at." (The Tipping Point, page 190).
How can organizations develop their transactive memories? An obvious area to consider is size of operational units. Gladwell mentions several other examples which indicate 150 as a "magic" upper limit on organizational size. However, I believe that collaboration tools, and particularly social networking tools may be very useful in helping to develop transactive memory, even in larger organizations. How can organizations help their employees to connect and get more in depth knowledge of each others strengths, weakness, passions, etc? Is time spent reading each others blogs (even our personal blogs), really wasted time for the organization? Rather than viewing social networking tools as time sinks, leaders should instead consider how to encourage their employees to connect with each other more frequently, and at a deeper level. Such organizational knowledge enables incredible efficiency and rapid innovation: instead of endless meetings to manage turf wars, and assign and monitor tasks, the organization will in a sense be able to self-organize quickly as new challenges arise. Such collaborative self-organization is only possible when employees are intimately aware of each others interests, strengths, and idiosyncrasies.
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