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Barnstorming with Lewis Perelman
By Educom Review Staff
Sequence: Volume 32, Number 2
Release Date: March/April 1997
Tom Peters has called Lewis Perelman "visionary" and gave his "idea of the year" to kanbrain: just-in-time
learning, expertise, support, experience and collaboration. Just as the Japanese kanban system of on-demand
delivery has transformed manufacturing, the kanbrain shift unleashed by the exploding power of knowledge
technology promises revolutionary changes in work, management and society in general.
Always provocative, Perelman's presentations of his bleeding-edge ideas to thousands of people in the U.S.,
Europe and the Pacific have won top marks from the Young Presidents' Organization and other executive
groups. A former scientist at Caltech's Jet Propulsion Lab and planning director in a Fortune 100 company,Perelman has consulted for IBM, Apple, the Western Governors Association and others, and is the author of the
best-selling book, School's Out (Avon Books, 1993). He is executive editor of the management newsletter,
Knowledge Inc., a monthly report on knowledge, technology and performance.
Educom Review: What was the reaction of the educational establishment to your book School's Out? Are you
persona non gratis?
Perelman: Actually, a lot of people who are in one way or another associated with educational institutions and
organizations took it very seriously and were very happy with it because it said things that they knew were true
but that nobody had put in print before. It was useful for them to throw it at other people and say, "Wake up andpay attention."
E.R.: So do you expect to be fully in the mainstream?
Perelman: That wasn't my goal. The book wasn't written for those people. It was never really intended to be
about education and I never really wanted to associate the word "education" with it. I wrote the book for the
people in the business community, to help them get clear about what's really going on in the modern economy
and the modern workforce and what they need to do to take advantage of it.
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E.R.: And what did you want them to do?
Perelman: To become actively involved in knowledge management - to learn how to manage in an environment
where knowledge represents the key factor of success. Many companies treat knowledge management as just a
new generation of information systems, in which knowledge is simply a commodity - something to be
warehoused, bundled, shipped, packaged. And that is only an incremental step over what we already have and
may even make things worse, because it's not confronting problems of serious misperception.
E.R.: Such as?
Perelman: Let me answer you with a story I've used in my executive presentations. The time is 1952. The U.S.
government decides it would be a good idea to subsidize the construction of the fastest, biggest, best transatlantic
steamship of all time. Well, the SS United States gets built and launched and immediately sets the all-time record
for crossing the Atlantic. A great accomplishment! Yet in the fall of that same year, BOAC, the British airline
which later evolved into British Airways, initiates jet passenger service with the DeHaviland Comet between
London and Johannesburg, which is more than twice the distance as across the Atlantic, and it did it in less than a
quarter of the time. A few years later, the Comet is carrying passengers across the Atlantic in less than six hours.
This story raises some basic questions. What does it mean, to be the "best"? Obviously, it is useless to be the
best in the wrong thing. And what I've been trying to get across in my book and other work in the last several
years is that the whole debate about education and the training of the workforce is based on criteria, concepts
and processes which are inherently obsolete. It just didn't matter that the U.S. now had the fastest transatlantic
ship, the best ship in the world. It was now irrelevant. The Newport News ship builders were not failures as ship
builders, they did not need better training, or higher standards; they were just in the wrong business. They built a
ship that, amazingly, could cruise at over 40 knots. But there was no "reform" of ship building that could get them
to 500 knots. There simply is no future in being best at something that has no future.
E.R.: Okay, we'll be careful about using the word "best."
Perelman: And be just as careful about using the word "better." Just what does the word "better " actually mean?
When I talk about hyperlearning and distance-learning and all this new-fangled stuff, somebody inevitably says,
yes, that's very nice but it's never going to be as good as the gifted teacher in a classroom or the personal
experience of going to Oxford or Harvard or whatever. They keep talking about the experience, they love that
word experience. Well, look at this situation in 1952 again. I put the pictures of the SS United States up on the
wall, the picture of the Comet jet plane, and ask the question: Which is better? Well, it depends to what purpose
If you need to be in Paris tomorrow morning to sign a contract, close a deal, there is no question; the plane is not
just the better option, it is really the only option. If you want to enjoy the "experience" of luxury and
entertainment, the steamship, with its swimming pools, restaurants, night clubs, movie theaters, sunshine, fresh airand all that, is incomparably better. So the word "better" is irrelevant unless it's given context.
The salient economic connection in both transportation and education is that the success of one new technology
wave eliminates the market for the old - not because it is better and not because on a particular test it gets better
scores. Rather, because the new takes away enough customers to make the old economically unsustainable. For
instance, the luxuries of the great transatlantic steamers were subsidized by the fares of the steerage passengers
who simply wanted to get across the ocean. Once those customers had a faster, cheaper medium to get where
they wanted to go, the steamship economy collapsed. There may still have been some customers who wanted
the unique experience, but not enough willing or able to pay the full cost. So the SS United States bled money till
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it went bankrupt after 12 years.
E.R.: What are the implications for business, for management?
Perelman: One implication is that you've got to get rid of the academic framework of thinking about how your
business is organized. Most of this current generation of management is so deeply steeped in academic
paradigms that they don't even realize the extent to which their academic experiences channel their approach to
managing a business. I'm talking about the idea of having departments of specialists - having a law department,
an accounting department, an engineering department, an MIS department, a human resources department, etc.,
just like a corporate university, with specialists who are hired to fit the slots on the organization chart in these
boxes, having credentials as experts in the particular areas.
E.R.: But surely there is expertise involved with law and engineering and so forth?
Perelman: Needing expertise is not the same thing as needing a department full of experts. For example, because
of the enormous cost of having their own corporate law departments or having a major law firm on retainer, a lot
of companies have figured out what they really want is answers to questions: If we do this, what does the law
say? If we do that, what are the legal consequences of that? Are we liable? And so forth. That's mostly what
lawyers do, they do research about the law. Well, cyberspace and the knowledge age and all of this architecture
of knowledge management provides much more cost-effective solutions to that problem than a law department
does, or lawyers. So what you have now is a growing market of online legal research services so that somebody
in management can essentially put the question out there and get answers - it's almost like the stock photo
business.
E.R.: And you think people will feel comfortable getting expertise from computers rather than from experts?
Perelman: Certainly. We have had more than a generation growing up in a technotronic environment, a Nintendo
generation that is quite unlike the TV generation and the radio generations which were formed essentially by
passive, broadcast media. We've had three media generations since my grandfather's day or his grandfather's
day. In Civil War days, regular guys - farmers from Wisconsin - were writing prose that today would win Pulitzer
prizes, because that was the environment they grew up in. Print was all they had, so they made the most of it.
Then we went to a passive media generation of radio and TV which were non-print, non-verbal in that sense,
oral and visual, and a different set of cognitive skills got encouraged. And then we leapfrogged in the last 15 or
20 years to the Nintendo/PC generation that has grown up from early childhood with interactive intelligent tools,
multimedia. As a result, they have brains different from ours. We don't know exactly how they are different, but
there is absolutely no question that they are different. One would assume that their brains are wired in ways that
are much more adaptive and facile to function in that kind of environment, which happens to be the environment
of the modern workplace. And the older generations who are designing things like national standards ofeducation and educational goals in terms of how their own brains work don't even know what questions they
ought to ask, much less how to observe the effectiveness of that kind of performance, how to meter it. So we
have this disconnection between the academic message that the American workforce is full of dummies and the
economic reality that the American workforce is the most productive and the most competitive in the world.
E.R.: Tell us about the new book you're been working on.
Perelman: It's about the paradigm shift in the workforce between two distinct classes. I've been talking about that
in my business consulting for two years, but I didn't have a good vocabulary to talk about it until I remembered a
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quote from the late writer Theodore Sturgeon that I used in my first book 20 years ago. He talked about the
quest for stability taking two basic forms, the form of a pyramid builder and the form of a seagull. The pyramid
builder builds a huge, massive, rigid, solid object, in the hope that it will resist the ravages of time, supposedly
forever.
Well, 3,000 years ago those guys thought they would last forever. Three thousand years later there's not that
much left of them. Seagulls, on the other hand, were around then, are around now, and are presumably going to
be around for a long time to come. Their stability comes from the stability of a living system, its adaptiveness, its
ability to grow and change and fit in with the changes in the environment. The very natural forces that give the
seagull life - the sun and the wind and the rain - will ultimately grind down the pyramid. I like that metaphor and it
occurred to me that if you translate that into human terms, organizational terms, you've got two very clearly
different cultures going on in the economy today. The one culture I call the masonic tradition, identified
metaphorically with pyramid builders and monument builders - and also with the fact that the Masonic order itself
is extremely hierarchical in its organization, and in fact very intentionally echoes the standard form of the modern
corporate organization chart, a pyramid.
E.R.: And the other tradition?
Perelman: The other tradition is what I call the barnstormer tradition after the people who pioneered the aviation
industry in the beginning of the century, from the Wright Brothers through Charles Lindbergh, the ultimate
barnstormer. For about a quarter of a century, those guys went out and simply built a new technology. They
didn't have training, they didn't have credentials, they didn't have permission; they just went and did it, because
they wanted it. And it was a very different kind of a generation, a different kind of culture, a different attitude and
thinking from the corporate, pyramid- climbing organization man.
E.R.: And who are the new barnstormers?
Perelman: People fluent with new technology and accustomed to PCs that are cheap and accessible. We have anew generation that really has grown up in the world of information technology and that feels completely at home
in it, that isn't intimidated by it. Not only not intimidated by it, it's just a natural act to them, to take these kinds of
tools and do things with them. With an older generation, there's an irreducible degree of anxiety, intimidation,
uncertainty and awkwardness which if you work hard at it, you can overcome to some extent. But the new
generation doesn't have to work at it. It's just as if they were born to dance, they just dance. I've talked to
management in a large number of corporations now for whom this is a tangible reality. We're not just talking
about pop social theory. This is a day-to-day reality in how their businesses are changing. Of course, whether it's
a crisis or an opportunity depends on how they respond to it. Some who are more visionary or just more aware
take advantage of it. They see that these 20-something young people coming into their organizations now don't
need a lot of training, don't need or want a lot of supervision or management. They want opportunities to beentrepreneurs, to be inventive, to be creative, and they want a piece of the action. They want ownership. They
don't expect to be there for 30 years; they don't want to be there for 30 years. Their time horizons in terms of
transactions is very short, sometimes as little as a day. "What do you want me to do today?" Five o'clock comes.
Okay, I did that today. Now I'm going off to my life. Tomorrow I'll do something else. And some of the older
management is appalled by their attitudes, by their behavior. It's frightened and angry and in some cases
disgusted by it, because they are so different. Others see an opportunity; they think, like, wow, we don't have to
ride herd on them, we don't have to tell them what to do. We give them a problem and they just go off and solve
it. So it is changing the culture of organizations drastically.
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E.R.: Have you found many "barnstormers" in higher education?
Perelman: Well, there are certainly some people in higher education who are trying very hard and who see
everything we have talked about. That's why I hear from them. Because they feel that I am the guru of what they
want to accomplish. They are trying to very radically and unapologetically change the nature of their
organizations, to modernize them to fit this new world. Can they? Will they? I don't know. I honestly don't know
I think it is admirable that they are trying. What kinds of things are they trying to do? James Madison University
in Virginia has created a completely new college which gets away from the idea of departments and specializedcurricula and so forth, and is really trying to create a truly interdisciplinary integrative approach to science and
technology as a holistic process. It's essentially a new concept of what a "liberally educated person" is -
somebody who is technically both broad and deep, with a lot of hands-on, practical, project-oriented, teamwork
kinds of experience - the sorts of things that echo and fit in with the way the modern economy works. George
Mason University, also in Virginia, has a new, more "virtual" college that has abandoned traditional structures like
seat time, and credit hours, and campus attendance. That such new organizational forms exist at all is very
impressive, maybe miraculous. On the other hand, the political backlash and resistance is intense. To some
extent, the more this kind of innovation succeeds, the more it is resisted and opposed by those who have a
traditional concept of what they think higher education is about and for. The barnstormers in higher education are
trying to break the mold, but the mold is awfully thick. It is controlled by people who have a very strong vestedinterest in keeping it just the way it is. But the customers of education are going to act just like the customers of
transportation, who said: You know, I want to get across the Atlantic as fast as possible, and if you can't take
me there, these new guys can. That's your problem; it's not my problem.
E.R.: So what will happen?
Perelman: Education is coming to a systems break, and when and how it will break I don't know. It's only a
matter of years or months.
E.R.: Months?
Perelman: You never know. Today happens to be November 22, coincidentally, and our generation's world
changed very drastically that day, in 1963. Things happen. What I'm saying is, we're dealing with a metastable
situation which, when it changes, is going to change very swiftly and very suddenly. It isn't going to be
incremental. And there are a lot of people who for one reason or another want to believe that educational
"reform" is an evolutionary, incremental, long-term process. I stipulate that that's true, and that's why it is a waste
of time and energy. Long before reform of the educational system comes to any conclusion, the system itself will
have collapsed. Not disappear entirely, but like the passenger ship industry, segue from bankruptcy as an
economic staple to a form of discretionary entertainment.
E.R.: What about organizations in general? How will organizations change in the years ahead?
Perelman: The smarter ones will start revamping their whole approach to people - how they find people, how
they hire people, what their requirements are, how they treat people, how they manage people, the very nature o
the work relationship, and whether it's even called "job." In the leading organizations it's all up for grabs. The
work relationships are much more fluid, much more ad hoc, much more project-oriented; they are more
outcome-oriented, performance-oriented, ownership-oriented; more oriented to styles associated with
companies that own intellectual property. In a sense, most new organizations will become much more like
Hollywood in the broad sense of the entertainment industry - where people work on projects, where the
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mentality is much more focused on finite projects. People don't have permanent jobs in Hollywood. They have a
job for six months. They have a job for six weeks. Then it's off to the next thing. And salary structures are based
on scales that are only floors; they are not ceilings. People don't want to have any kind of cap or ceiling on what
they can earn. And they would like to be paid in what they call points. They want to have a percentage of the
ownership of the intellectual property that's created. That's their form of payoff, not simply salary. And that
economy has been working pretty well for about 100 years, with some flaws. The whole Western economy is
moving in that general sort of direction.
E.R.: Back to education. What do you think about various current attempts to create "virtual" universities?
Perelman: I think mostly they're going in the wrong direction. They think the virtual institution is the way to get
unfettered from the campus, the building, the classroom, the library. Since all those things can be made location-
free by being extended globally through the Internet, you should in theory be able to provide services to
anybody, anywhere, at any time. That sounds pretty good, but, again, it comes down to questions such as: what
kind of service? what purpose? to accomplish what? If all you are doing is trying to increase your efficiency in
producing diplomas, then you are just not "getting" it, and in fact are only accelerating the arrival of that system
break I talked about.
E.R.: If that's the wrong approach, what's the right one? What would you do if you were a college president?
Perelman: I think I would probably do what some of these other guys are trying to do, which is to suggest that
we reinvent the business. Think about Westinghouse. Westinghouse for a century was a power plant company.
Now it is a TV company. That company was going downhill to nowhere, but new management took over and
said the future is in broadcasting and in media, not in electricity; the future is in quanta, not in electrons. And so
they just basically dumped the heavy metal power business and said they are going to be an information media
company. Westinghouse will continue to exist. You'll still see the brand, the name Westinghouse, and people
pretty well know that historically big name, Westinghouse. But it ain't going to mean what it used to mean. So as
a college president I would get rid of all the old buildings and bricks and mortar and grounds and go virtual, butnot go virtual just to become a more efficient diploma mill, which I think is a loser, but to really focus on what I
think the market wants, which is know-how - I would create a know-how market. And probably I would drop
the name university or college - because the new business, whatever it is, the new institution is not an educational
institution. And the customer knows that. To the extent that they want this new thing called "kanbrain," called
"hyperlearning" - call it whatever you want - they know it's not "school." If they want school, they want to be in
the top five percent, they want a diploma, they want to be an alumnus, they want to have a football team - and,
you know, if they want all that stuff, they don't want it on a TV set.
E.R.: So you're convinced that higher education as we know it will soon be a thing of the past?
Perelman: Absolutely. I was asked to speak on this last year at a conference on the virtual university and a
speaker who preceded me gave a very high-minded speech about five ways in which the university is drastically
changing, four of which would come right out of the pages of Educom Review - the virtualization of the library,
and so on. This fellow, who is a university provost, is a very hip guy, who knows what's happening
technologically about information technology and whatnot. And his fifth point was that nevertheless the university
has survived for 700 years and it somehow will find a way to exist in this new environment. And I stood up and
said, "I agree with everything he's said except the fifth point." I said, "Whatever continues to exist in that
environment most people are not going to recognize as a university." I think that if you use the same vocabulary,
the same label, you're just going to confuse the market. And some vendors, entrepreneurs, are going to come
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along and they are going to sell something completely different and not be trying to reform or carry the baggage
of the past, and to the extent that the customer base goes there, anything you call a "university" or "college" or
"school" - no matter how virtual it is - may not be able to make it, because the customers won't understand what
you are selling. In a way, that's the lesson of "New Coke": If you've got a truly new product, people who like the
"classic" don't want it "improved," and people who couldn't stand the original aren't going to be looking for
"improved" either.
E.R.: And how do people feel about all these changes you're predicting?
Perelman: There are entrepreneurial people in the knowledge business who are champing at the bit to get on with
building a new economy and making a fortune. But some people are very upset about what's coming. And, by
the way, not because they disagree with the forecast but because they believe it. They are nostalgic and they hate
thinking that all these familiar institutions will pass away. Look, there are also many people who are still very
nostalgic about the passing of the transatlantic steamships. Me too. I recently saw a TV documentary about "The
Floating Palaces" and I thought: This must have been a fabulous experience - going across the ocean in these
fantastic, elaborate, gorgeous ships! My wife's aunt, who is 86 years old, and who spent a lot of her youth in
Europe, made many trips across the Atlantic. She sailed on the great ships like the Aquitania. That was part of
her life. And we listen to her stories about that age, and you wish you could revisit it. Well you can revisit thepast, on what remains of the Queen Mary in Long Beach, or in a place like Colonial Williamsburg or Plymouth
Plantation. But it's not the same thing. It's an artifact, a museum piece. You can't really go back and live in the
past. The "Jurassic Park" paradox is that if you try too hard to recreate the past you simply spawn monsters.
Take me to the index