The importance of "rules of thumb" in Knowledge Management

Heuristics, or “rules of thumb” are how many decisions get made. Here’s how KM can support this.

In the seminal book “Working Knowledge”, Larry Prusak and Tom Davenport take a wise and insightful overview of the whole topic of Knowledge as it applies to the world of work. One of the elements they pick out is the topic of “Rules of Thumb”. Here’s what they say.

“Knowledge works through rules of thumb: flexible guides to action that developed through trial and error and over long experience and observation. Rules of thumb (or, in the language of the artificial-intelligence community, heuristics) are shortcuts to solutions to new problems that resemble problems previously solved by experienced workers. Those with knowledge see known patterns in new situations and can respond appropriately. They don’t have to build an answer from scratch every time. So knowledge offers speed; it allows its possessors to deal with situations quickly, even some very complex ones that would baffle a novice”.

I was reminded of this paragraph when reading this description of how the billionaire Charlie Munger looks at business opportunities. He described his thought process as like a checklist in his head.

“You’ve got to use those (analysis) tools checklist-style, because you’ll miss a lot if you just hope that the right tool is going to pop up unaided whenever you need it. But if you’ve got a full list of tools, and go through them in your mind, checklist-style, you will find a lot of answers that you won’t find any other way”.

What Charlie is describing is his own heuristics, his own “rules of thumb” for analysing a business situations – rules of thumb, by the way, which have made him very rich. These rules of thumb allow rapid and reliable judgement to be made, on the basis of long experience.

The rules of thumb in the heads of experts form a very valuable knowledge resource within an organisation, and one focus of knowledge management can be to build a repertoire of shared rules, by bringing the experts together to talk about their work and about how they make their judgements.

Some of these rules – the most robust ones – can be written down in the form of external checklists, and the checklists used by surgeons and pilots represent a set of shared rules of thumb, built up from years of safety analysis, which allow them to perform their jobs effectively and efficiently. I certainly have my own “rules of thumb” for analysing a KM issue, many of which I have shared in The Knowledge Manager’s Handbook.

Other rules of thumb can be used as a framework for mentoring more junior staff, by providing them with a set of ways to think about a problem. Charlie Mungers mental checklist could be used as the basis for training or coaching aspiring business people, but will certainly need the presence of the trainer or coach for the knowledge to be effectively transferred.  I don’t think anyone could take Charlie s checklist and go off and become a billionaire, without also understanding some of the stories and case histories behind the rules, and knowing when and how to apply the rules.

The key to transferring rules of thumb is ultimately less about learning a set of rules, and more about using the structures that experts use in order to make decisions. Once the novice has learned to think like an expert, the knowledge has been transferred, and the mental checklist – the rules of thumb and the heuristics – has been rebuilt in the novices brain.

(Incidentally, the term “rule of thumb” comes from master carpenters, who would use their thumb  – combined with a lot of experience! – as an alternative to a ruler)