Deep Smarts: An interview with Dr. Dorothy Leonard

by David Creelman
The Human Capital Institute

Dr. Dorothy Leonard joined the Harvard faculty in 1983 after teaching at the Sloan School of Management. She has conducted executive courses on a wide range of innovation-related topics such as designing work groups, structuring new product development, and technology transfer for corporations such as Kodak, AT&T, and Johnson & Johnson. She has written three books: When Sparks Fly: Igniting Creativity in Groups, co-authored with Walter Swap (Harvard Business School Press, 1999); Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation (Harvard Business School Press, 1995); and Deep Smarts: How to Cultivate and Transfer Enduring Business Wisdom, with Walter Swap (Harvard Business School Press, 2004).

Much of the time spent on talent management goes into trying to hire great MBA grads or sharp technical experts. Yet, there is a kind of deep knowledge that you don't readily find on the labor market nor create with traditional training. And certainly, at least for some firms, it is in "deep smarts" that true competitive advantage lies. Harvard's Dr. Dorothy Leonard has spent years investigating the experience-based ability to comprehend really complex relationships and make expert decisions quickly.

Can you outline the main issues around talent management of people with deep smarts?

The first issue facing managers is that we have an incredible wave of retirements coming up. Managers need to figure out which of those people walking out the door are absolutely essential to their organization’s competitive advantage. They then have to figure out how the experience base, and therefore largely tacit knowledge, can be imparted to people who are still in the organization.

A second issue is how to cultivate deep smarts in the first place, when there is such a large tacit dimension. You can't gain deep smarts in a classroom. In fact, you can't actually transfer deep smarts; all you can do is recreate it. The challenge is to provide the kind of experiences and knowledge-coaches to help people develop the relevant expertise more quickly than they otherwise would.

The third issue is how to provide people with a broad enough span of experiences so they can recognize patterns and make decisions quickly. A lot of what people call managerial intuition is the ability to make good decisions very quickly. That ability is based on pattern recognition, being able to say, "I've seen something like this before." Therefore job assignments are highly strategic; leaders need to think about the types of experiences rising stars are provided.

Another issue is that experts are not infallible. It's a challenge for managers to understand when deep smarts are really relevant and when the experts are actually leading them astray because of “false knowledge.”

What kinds of jobs do you find deep smarts in?

There is no specific type of job. We see deep smarts across the spectrum. You will find managers who have deep smarts and their pattern recognition abilities lie in the field of management. There are also technical experts. One of the examples we give in our book is about a technical person in a missile company. He was not a member of the project team developing a new missile, but he had more than 20 years’ experience in the industry and he knew why the first prototypes were failing in the field. He called the primary project participants into an auditorium and for several hours went over a proposal for detailed changes in order to make the product competitive. The audience was awestruck because he was able, without notes, to painstakingly proceed from the front to the aft of the missile design, explaining each needed change in software and hardware. The implications were tremendous. To redesign the missile would take 400 people a year and a half. But they did it, and 20 years later they still hold the contract they won due to this man’s deep smarts.

How do we distinguish deep smarts from just smarts?

People within the organization are much better able to define and determine who has deep smarts than someone from the outside. Nevertheless, I have a few questions I ask as a diagnostic. One is "If you had to replace that person, would someone coming out of a PhD program have roughly the same information and knowledge that he/she has?" If so, that person’s smarts don’t fit the criteria. If you can buy the knowledge and skills on the open market, they may constitute expertise, but they are not what we call deep smarts.

Most managers recognize where the critical knowledge in their organization lies—who is the indispensable talent. Successful organizations have some idea of where they differ from their competitors. Within that arena they have to find out—which will take some time and exploration—the people to whom others go to for answers to the tough questions. Those folks usually have the deep smarts.

Once you have identified it, what can you do to retain or recreate it?

You can start by figuring out how people got those deep smarts so you can be sure that at least you are not setting up barriers to other people acquiring their own deep smarts. It takes a lot of time to develop deep smarts—usually a decade. It takes practice and hands-on experience. There is a spectrum of knowledge transfer techniques. At the least interactive end, presentations and lectures provide some scaffolding or mental frameworks for learners—but no real transfer of deep smarts. A level up from that are techniques like story telling (with an imbedded lesson) and Socratic questioning, which requires more active learning. At the high end you have learning by doing, by which we mean guided experience with the help of knowledge- coaches.

Tell me more about guided experience.

Guided experience attempts to recreate the kinds of experiences that gave the expert deep smarts in the first place. There are at least four types of guided experience. The most obvious and familiar is guided practice, which is the way we learn tennis or golf.

A second is guided observation—something that is not used very much—in the form of shadowing, or learning by following someone around and then debriefing on what is observed. For example, you can have an experienced sales person shadowed by someone less experienced. After a sales call they can talk about an incident and explore things like "Why did you back off just when you did?" or "Why did you push this?"

There is also a different kind of guided observation, the object of which is mind-stretching. You take people and plunge them into experiences to expose them to something they normally would never see. This challenges their basic assumptions about the way the world works. For example, Best Buy CEO Brad Anderson allowed 35 of his upper-middle managers to take time to develop an innovative capacity for the company. One of the teams went to places like the American Girl store in Chicago. It’s a store for dolls. You can imagine taking these technology guys, who are used to 27-year-old computer geeks as customers, and putting them into an American Girl setting. But it's in this setting they got the insight that the store is an experience, a destination—not just a store. They saw that the dolls are a cross-generational platform for inter-generational communication. They also visited the Amish countryside, where people are generally very anti-technology, and on to Mexico City, where people use technology differently. Such experiences took them out of their comfort zone, caused them to think differently about their own technical products, and resulted in some innovative new product ideas.

Another type of guided experience is guided problem solving, where the novice and the expert tackle problems together. The novice absorbs the process, the knowledge-coach’s approach to the problem—not just the solution itself.

Finally, there is guided experimentation. When there is little definite knowledge about what to do next, and therefore even the knowledge coach may not know the solution, the best thing the coach can do is to help novices experiment, and to develop experimentation as a mindset so they can discover what they need to know. Some successful organizations such as Toyota and Bank of America recognize this mindset as increasingly critical.

Firms recognize that talent really matters and will be fascinated by your concept of deep smarts. But when you go on to say that this takes a long time to develop it's a dilemma because staff don't stay with a firm that long these days, and in any case, the pressure for short-term results is all consuming.

One of the answers is that every project can have a dual objective: to solve a current issue or deliver critical output and at the same time, build knowledge. Projects can be staffed and run so there is a deliberate exchange of knowledge; for example, through guided observation or problem solving. It may seem like you are overstaffing a project to mix experts and novices, but often what you get is a great blend of beginner's mind with expertise. You transfer knowledge and recreate the experience that develops deep smarts.

Dr. John Boudreau, who is now at USC, says the role of HR is not just to run programs, but rather to help line managers make smart decisions about talent. What you are talking about is not so much an HR program as something the line managers are doing on an ongoing basis. When there is a project they can look for opportunities to develop some deep smarts.

It may not be a popular statement to make, but I think line managers have a great deal to do with developing people and that it should be part of their daily routine to think about that. It's all about leverage. Leveraging the management time so you are developing people at the same time they are getting work done. HR can help managers think about hiring decisions, job assignments and project design.

Earlier you brought up the issue of expert fallibility.

There are two important things people don't think of as part of knowledge; beliefs or assumptions, and social influences. Peoples’ beliefs and assumptions frame and filter the knowledge they have, and that process is a double-edged sword. Experts can be misled by their assumptions. That's one of the reasons you need direct experiences that challenge assumptions.

Second is social influence: other people heavily affect our beliefs and actions. What respected people say is the right thing to do is tremendously powerful, and experts can mislead. We think of some of the financial experts who were misled in the recent Internet boom. They weren't stupid people, but they were caught up in the herd mentality, as we all can be. The more uncertainty there is about what to do, the more the herd governs our behavior.

And of course, even experts can be misled by thinking they are seeing a familiar pattern when it is really something quite different.

What can you do about that?

The more uncertainty there is about a situation, the less you can rely on an individual’s deep smarts to be accurate. You need to get more than one opinion and you need to experiment. When there are no patterns to be known, it's a totally new technology, or unprecedented social situation, then in fact there may not be any deep smarts about it.

Do you have any closing advice for senior managers?

There are many pressures in the world today that make us focus on the short term. But deep smarts are the engine of the organization. You really do have to pay attention to cultivating, retaining and recreating them. A first step is to understand their nature and value.