“how valuable an asset in all walks of life is knowledge of people, of local conditions, and of special circumstances. To know of and put to use a machine not fully employed, or somebody’s skill which could be better utilized, or to be aware of a surplus stock which can be drawn upon during an interruption of supplies, is socially quite as useful as the knowledge of better alternative techniques.”
– Friedrich A. Hayek, The Use of Knowledge in Society, American Economic Review. XXXV, No. 4. pp. 519-30. American Economic Association
One, but only one, of the advantages of self directed teams is their capacity to utilize knowledge local to the person, the team, the culture, the time, or the location. F.A. Hayek recognized that information is dispersed, incomplete, and contradictory. We can take advantage of this in “wisdom of crowds” estimation, uncovering risks, finding usable tools or processes, and allocating work. Tacit and distributed knowledge is not unique to knowledge work, but in knowledge work it is especially important.
When you hear terms such as “tacit knowledge”, self organizing”, and “spontaneous order” , think of Hayek. Then remember that Hayek also claimed that to leverage tacit knowledge and self-organize into a spontaneous order requires law, general and abstract, known and certain, and applicable to all. Order comes not from chaos, but from rules. That is rules, not rulers. Process rules.