Kevin Kelly's main argument in Chapter 8 of his book New Rules of the New Economy is that in this new economy, companies must constantly walk the line between order and complete chaos to be truely innovative. Some of the points he makes are very important for maintaining a knowledge economy. While innovation is important, it is not useful if it is too radical nor is it effective if there are only subtle changes to the existing.
Knowledge management requires innovation and a framework in an organization to support new discoveries. Companies must understand that to have a rigid infrastructure is to stifle innovation. If there are too many rules, people are unable and unwilling to try anything new for fear of the repercussions and innovation becomes only minor changes to existing processes or products. Changes that will cost more to implement than they are ultimately worth. Companies must position themselves so that they have some structure, but not so much that they are unable to adapt to the constant flux that Kelly mentions in his book.
The flux is the constant changing due to innovation in the market. If companies are not flexible they will bend and break. If companies are too flexible then they will stretch too far, spreading resources thin and crumbling before they are able to gain their footing again. Knowledge management requires not only facilitating an environment of innovation and knowledge sharing, it requires finding a way to maintain the balance between too much order and constant chaos.
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