Sure, knowledge is power, but what's the best way to get it and to manage it? In her book Wellsprings of Knowledge: Building and Sustaining the Sources of Innovation (Harvard Business School Press, 1995), Dorothy Leonard-Barton writes about how companies can better manage their strategies, practices, and expertise, to stay ahead of the competition. The William J. Abernathy Professor of Business Administration at Harvard Business School, she recently told Inc. Technology how small companies can use technology to create the type of workplace that makes that possible.

On building an innovative company:
Often small companies scramble just to get the first product out the door instead of stopping to think about the creative process and all the things that go into it, like incentive systems, educational systems, and recognition systems. But it's important to do that. For example, if a manager calls for a new-product development meeting, he or she usually hopes the meeting will yield creative ideas. The manager needs to take a few minutes, though, to think about process: How are we going to organize this? Who's going to talk? How much time should we spend brainstorming? When everyone knows the procedures, the manager can spend less time fighting fires because the company has an engine in place for innovation. The more time the company spends building the engine, the less likely its competition will be able to imitate its methods for success.

On technology's role in innovation:
To problem-solve creatively, we need to bring together people who think very differently. One way information technology (IT) helps is in capturing and storing knowledge in increasingly sophisticated ways, using products like Lotus Notes. It's an enormous advantage for companies to be able to codify what they do into knowledge that's easily transferable from one group to another or from one project to another. Of course, that can be a double-edged sword. If we can access information other people have already gathered, then we can be sure we're not reinventing the wheel. We have to make sure we're constantly tapping new sources and challenging our existing knowledge.

On making the most of IT:
Oticon, in Copenhagen, a company that makes hearing aids, has gone so far in using IT that it shreds virtually every piece of paper that comes into the office after the information has been entered into the computer system. You can actually sit in Oticon's cafeteria and watch a steady stream of shredded paper fall from an upper floor, where information is entered into computers, to the bottom floor, where it's collected as so much trash. The management at Oticon feels that the company's ability to gather people quickly around a workstation anywhere in its open-architecture environment, rather than have them sit in cubicles working on their own, is part of the reason it has been able to be so innovative.