This presentation discusses the epistemology of living organizations by exploring the biological and evolutionary foundations of knowledge and life. It summarizes Karl Popper's evolutionary epistemology and theory of objective knowledge as problem solving. It discusses autopoiesis theory and how life and knowledge emerge from self-producing systems. It then explores how these biological principles apply to understanding organizations as complex adaptive systems that develop knowledge through problem solving and selection over time.

1. The Epistemology of Living Organizations
―
Theoretical Foundations and Practical Applications
Access my research papers from Google Citations
A unique area in
the state space of the
Mandlebrot set
An attractor
Presentation for Philosophy Forum, 6 October 2013
Attribution
CC BY
William P. Hall
President
Kororoit Institute Proponents and Supporters
Assoc., Inc. - http://kororoit.org
Associate
EA Principals – http://eaprincipals.com
william-hall@bigpond.com
http://www.orgs-evolution-knowledge.net
definition

2. Notes
 This presentation is based largely on
material drawn from a hypertext book I am
writing: Application Holy Wars or a New
Reformation - A Fugue on the Theory of
Knowledge. A preview, some topical extracts,
and a working draft can be found by clicking
here. Comments would be welcome on
william-hall@bigpond.com.
 Slides in this presentation are hot-linked to
source documents. Click underlined words,
etc. to access the linked documents.
2

3. My Background
 Early life: physics / natural history / cytogenetics / evolutionary
biology (PhD Harvard, 1973)
– Defining life as a physical phenomenon
– Understanding how it evolves
 1981-1989: Computer literacy journalism, technical writing,
commercial software development, banking
 1990-2007: Documentation and knowledge management systems
analyst/designer for Tenix Defence/$ 7 BN ANZAC Ship
Project
– Tenix grew to be Australia’s largest defence engineering prime
contractor and then failed.
– How did Tenix succeed and why did it fail?
 2001-now: Researcher trying to understand what organizational
knowledge is and why organizations have such major problems
managing and applying it3

4. Understanding the relationships between
knowledge and life
 Answering questions from my corporate career
– Organizations as complex adaptive systems
– James Martin’s Cybercorp (1996)
– < 2001: trying to combine my understanding of biology and
corporate experience
 Karl Popper’s evolutionary epistemology
 What is life - autopoiesis
 Human biology
– Adaptation
– Genetic vs cultural heredity (knowledge transfer)
– Origins of culture and social organization
 Theoretical foundations of organizational knowledge
 Putting theory into practice
 This talk only scratches surface - see my publications4

5. • Popper, K.R. 1972. Objective Knowledge – an Evolutionary
Approach. Oxford University Press / Routledge.
• Popper, K.R. 1994. Knowledge and the Body-Mind Problem –
in Defence of Interaction. Routledge.
• Hall, W.P. 2003. Managing maintenance knowledge in the
context of large engineering projects - Theory and case
study. Journal of Information and Knowledge Management,
Vol. 2, No. 2 - http://tinyurl.com/3yqh8j
Evolutionary Epistemology
(Karl Popper)
In his later work, Popper applied
evolutionary biology to his theory of
knowledge

6. Popper's first great idea:
“three worlds” ontology
6
Energy flow
Thermodynamics
Physics
Chemistry
Biochemistry
Cybernetic
self-regulation
Cognition
Consciousness
Tacit knowledge
Genetic heredity
Recorded thought
Computer memory
Logical artifacts
Explicit knowledge
Reproduce/Produce
Develop/Recall
Drive/Enable
Regulate/Control
Inferred
logic
Describe/Predict
Test
Observe
World 1 – External
Reality
World 2
Organismic/personal/
situational/subjective/tacit
knowledge in world 2 emerges
from world 1
World 3
The world of “objective”
knowledge
“living
knowledge”
“codified
knowledge”
The real
world

7. Karl Popper's second great idea from Objective Knowledge:
Knowledge = solutions to problems
7
Pn a real-world problem faced by a
living entity
TS a tentative solution/theory.
Tentative solutions are varied
through serial/parallel iteration
EE a test or process of error
elimination
Pn+1 changed problem as faced by an
entity incorporating a surviving
solution
The whole process is iterated
• All knowledge claims are constructed, cannot be proven to be true
• TSs may be embodied as “structure” in the “knowing” entity, or
• TSs may be expressed in words as hypotheses, subject to objective criticism; or as
genetic codes in DNA, subject to natural selection
• Objective expression and criticism lets our theories die in our stead
• Through cyclic iteration, sources of errors are found and eliminated
• Solutions/theories become more reliable as they survive repetitive testing
• Surviving TSs are the source of all knowledge!
Karl Popper, Objective Knowledge – An Evolutionary Approach
(1972), pp. 241-244

8. • Maturana, H.R., Varela, F.J. 1980. Autopoiesis and Cognition
– the Realization of the Living. Kluwer.
• Nelson, R.R., Winter, S.G. 1982. An Evolutionary Theory of
Economic Change, Harvard Uinv. Press.
• Kauffman, S.A. 1993. The Origins of Order – Self-
organization and Selection in Evolution. Oxford Univ. Press
• Hall, W.P. 2005.
Biological nature of knowledge in the learning organization.
The Learning Organization 12(2):169-188.
Autopoiesis
(theory of life)
Knowledge and life are
inseparable.
One cannot be understood without
understanding the other.

9. What makes a system living?
 Autopoiesis
– Self-regulating, self-sustaining, self-(re)producing dynamic entity
– Fundamentally cyclical, continuation depends on the causal structure
of the state in the previous instant to produce autopoiesis in the
next instant (ref Popper; Maturana & Varela)
– Selective survival builds knowledge into the system one problem
solution at a time
9 Self producing structures in a cellular automaton (Conway’s Game of Life)
0 0 0 0 0 0 0 0
0 0 1 2 1 0 0 0
0 0 1 1 2 1 0 0
0 1 3 5 3 2 0 0
0 1 1 3 2 2 0 0
0 1 2 3 2 1 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 1 2 1 0 0
0 0 0 1 1 2 1 0
0 0 1 3 5 3 2 0
0 0 1 1 3 2 2 0
0 0 1 2 3 2 1 0
0 0 0 0 0 0 0 0
1- 1 1- 2 1- 3 1- 4
2 - 1
0 0 0 0 0 0 0 0
0 0 1 2 1 0 0 0
0 0 1 1 2 1 0 0
0 1 3 5 3 2 0 0
0 1 1 3 2 2 0 0
0 1 2 3 2 1 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0
0 0 0 1 2 1 0 0
0 0 0 1 1 2 1 0
0 0 1 3 5 3 2 0
0 0 1 1 3 2 2 0
0 0 1 2 3 2 1 0
0 0 0 0 0 0 0 0
1- 1 1- 2 1- 3 1- 4
2 - 1

10. 10
Varela et al. (1974)
 Six necessary and sufficient criteria for recognizing an
autopoietic system
– Bounded
 System components identifiably demarcated from environment
 E.g., organizational badges, logos, reception desks, gates, etc.
– Complex
 separate and functionally different subsystems exist within boundary)
– Mechanistic
 System dynamics driven by self-sustainably regulated economic cash flows or
dissipative “metabolic” processes
– Self-defining
 System demarcation intrinsically produced
 E.g., employment policies, procedures, etc.
– Self-producing
 System intrinsically produces own components
 E.g., recruitment & training programs
– Autonomous
 self-produced components are necessary and sufficient to produce the system.
 Autopoiesis is a good definition for life

11. Structure of autopoietic system
11
Constraints and boundaries, regulations determine what is physically allowable
Energy (exergy)
Component recruitment
Materials
Observations
Entropy/Waste
Products
Departures
Actions
ProcessesProcesses
"universal" laws governing component interactions determine physical capabilities
The entity's imperatives and goals
The entity's history and present circumstances
HIGHER LEVEL SYSTEM / ENVIRONMENT
SUBSYSTEMS / COMPONENTS
Constraints and boundaries, regulations determine what is physically allowable
Energy (exergy)
Component recruitment
Materials
Observations
Entropy/Waste
Products
Departures
Actions
ProcessesProcesses
"universal" laws governing component interactions determine physical capabilities
The entity's imperatives and goals
The entity's history and present circumstances
HIGHER LEVEL SYSTEM / ENVIRONMENT
SUBSYSTEMS / COMPONENTS

12. 12
Spontaneous co-emergence of autopoiesis and
knowledge
 (Stuart Kauffman) The dynamic vectors of the present instant
result from causal events in past instants as reflected in the
adjacent possibles of the immediately prior instant
– Historical connections (heritage) determine the vectors in state
space of the present instant.
 Chaos: divergent paths lead to incoherent structures that dis-
integrate and lose the historical thread of successful autopoiesis
 Attractor basins: convergent paths may become coherently
autopoietic, such that the ensemble structure of a convergent
state in one instant generates an ensemble structure that
remains convergent in the next instant.
 Any convergent ensemble that remains after dis-integration
of divergent outcomes retains “structural” knowledge that
solved a problem of survival
Kauffman, S. 1993. The Origins of Order. Oxford Univ Press, London.
Hall, W.P., Else, S., Martin, C., Philp, W. 2011. Time-based frameworks for valuing knowledge: maintaining strategic knowledge. Kororoit
Institute Working Papers No. 1: 1-28.
Hall, W.P. 2011. Physical basis for the emergence of autopoiesis, cognition and knowledge. Kororoit Institute Working Papers No. 2: 1-63

13. Organization, knowledge, and life begin with
historical constraints
13
Ellis (2006) Evolving block
universe (Newtonian)
Ellis & Rothman (2010)
Crystallizing block universe
(quantum mechanical)
 Past is fixed
 Present is determined in
the instant of becoming
 Future is undetermined
 Solid line – what
happened
 Stuart Kauffman –
adjacent possible
– t1 Dashed lines represent
all of the possible future
states that can be
reached in the next
instant from the present
instant
– t2 One state was
realized at t1 , Dotted
lines lead to states that
could have happened at t1
but didn’t/can’t happen.
Dashed lines represent
states that can still be
reached from the state at
t2
 Future possibilities are
continually and progres-
sively constrained by

14. Hall, W.P. 2013. Evolutionary origins of Homo sapiens.
Extract from Application Holy Wars or a New Reformation:
A fugue on the theory of knowledge [in preparation] -
http://tinyurl.com/kqrcxsf
Human origins
&
cognitive evolution
Humans are bipedal apes who became
top predators on the African savannah

15. 15
Our family tree
White et al’s (2009) depiction of the adaptive plateaus achieved by the different species
grade shifts in the Pliocene radiation of hominins as our ancestors became more adapted
to more open and arid environments. CLCA = chimpanzee-human last common ancestor.
 CLCA was a forest ape using simple natural and biodegradable tools to increase
dietary range probably a lot like today’s chimps and bonobos
 Changing climates broke up forest into grassy woodlands. Ardipithecus adapted
by developing bipedal locomotion and use of tools for self-protection and to
harvest wider dietary range.
 Australopithecus became a successful savannah dweller
 Homo became top carnivore in Africa and Eurasia

16. We are tool-using apes
 Our close primate cousins, orangutans, gorillas, chimpanzees and
bonobos live in organized social groups that make and use tools
– Orangutans live in small single mum families but are effective tool users and
teachers
 Another video shows mother taking boat to raid a fish trap for a meal
– Chimpanzees work in larger social groups with a lot of interaction
16
Attenborough: Amazing DIY
Orangutans - BBC Earth -
http://tinyurl.com/avl8yby
Charlotte Uhlenbroek
Chimpanzees' sophisticated
use of tools - BBC wildlife –
http://tinyurl.com/lj8ejt2

17.  Grave risk of predation by big cats & other carnivores
on savanna
 Gangs of chimps can cooperate to deter cats
 Anthropoid apes aren’t the only primate tool users
Pleiocene climate change forced some apes onto a
savanna – a tough neighbourhood to survive in!
17
From Tattersall (2010)
Masters of the Planet, p. 49
see Kortlandt 1980. How might
early hominids have defended
themselves against large
predators and food competitors?
Journal of Human Evolution 9,
79-112 –
http://tinyurl.com/l5z5vu2

18. Development & sharing of cultural knowledge opened
the savanna
 A tiny technological improvement was all that was
needed for defence and stealing cats’ dinners
18
 Easy step from waving a thorn branch
to throwing a spear for hunting
 Evolutionary epistemology accounts
for the rest
Guthrie (2007) Haak en
steek – the tool that
allowed hominins to
colonize the African
savanna and to flourish
there. (in) Roebroeks, W.
(ed). Guts and Brains, pp
133-164 [download book]

19. Genetic vs cultural heredity (mechanisms for
knowledge transfer)
 Shared heritage defines the species/group
 Adaptation = change through time
 Natural selection eliminates entities with
maladaptive genes/knowledge
– Genetic heritage from one gen. to next is slow to change)
– Cultural heritage can lead to more rapid change
 More plastic but may not durable unless reinforced
 Can be shared laterally
 Capacity for language is very recent
 Linguistically expressed language can be criticized & peer
reviewed
 Tacit vs explicit sharing & transfer
 Self-selection / criticism to eliminate errors
– Memory of and learning from history
– Speech, writing19

20. 20
Increasing tool complexity in archaeological record
• Development of increasingly
complex stone tools (after Stout
2011), correlates with increasing
brain capacity (and more social
intelligence?)
• Exponential growth in
technology continues up to
today with development of
cognitive tools: speech,
writing, printing, computers
and the internet.
• Today computing technology is
growing hyper-exponentially
See extract from my draft book

21. • Hall, W.P., Dalmaris, P., Nousala, S. 2005.
A biological theory of knowledge and applications to real wor
. Knowledge Management in Asia Pacific, Wellington, N.Z.
28-29 November 2005
• Vines, R., Hall, W.P. 2011.
Exploring the foundations of organizational knowledge.
Kororoit Institute Working Papers No. 3: 1-39
Knowledge sharing
and foundations of
organizational
knowledge
Understanding organizational knowledge
and how to manage it flows naturally
from the biological point of view

22. 22
 Knowledge-based
autopoietic systems
may emerge at several
different hierarchical
levels of organizational
structure
– Nation
– State
– Council
– Community group
– Person
– Body cell
 For effective action,
flows of knowledge,
decision and action
must pass through
several hierarchical
levels
Scalability and the complex organizational
hierarchy
Hall, W.P. 2006
Emergence and growth of knowledge and diversity in hierarchically complex living systems
. Workshop "Selection, Self-Organization and Diversity CSIRO Centre for
Complex Systems Science and ARC Complex Open Systems Network,
Katoomba, NSW, Australia 17-18 May 2006.

23. Personal (i.e., human) knowledge
23
●Sense making
– W2 process
constructing tacit
understanding in
context
– We only know what we
know when we need to
know it
Nickols, F. 2000. The knowledge in knowledge management (KM).
in J.W. Cortada and J.A. Woods, eds. The Knowledge Management
Yearbook 2001-2002. Butterworth-Heinemann
(W2) (W2) (W3)
(W2) (W2/W3)

24. 24
Creating and building knowledge is cyclical
 Knowledge is solutions to problems of living
– Iterated cycles of creation and destruction (Boyd, Osinga)
 Creation = assembly of sense data and information to suggest
claims about the world
 Destruction = testing and criticizing claims against the world
to eliminate those claims that don’t work
– Popper: solutions are those claims which prove to work (at
least most of the time)
 Knowledge is mentally constructed
 Cannot logically prove that any claimed solution is actually true
 All claims must be considered to be tentative (i.e., potentially
fallible)
 Follow tested claims until they are replaced by something that
works better
 Knowledge building cycles are endlessly iterated and
may exist at several hierarchical levels of
organization

25. Personal vs organizational knowledge
 Important difference
– individual knowledge (in any form) is known only by a person
– organizational knowledge is available and physically or socially
accessible to those who may apply it for organizational needs
– Even where explicit knowledge exists, individual knowledge may be
required to access it within a useful response time.
 People know:
– what knowledge the organization needs,
– who may know the answer,
– where in the organization explicit knowledge may be found,
– why the knowledge is important or why it was created,
– when the knowledge might be needed, and
– how to apply the knowledge
 This human knowledge is critical to the organization
 Snowden, D. 2002. Complex acts of knowing: paradox and
descriptive self-awareness. J. Knowledge Management 6:100-111
– Personal knowledge is volunteered; it cannot be conscripted.
– People always know more than can be told, and will tell more than
can be written down.
– People only know what they know when they need to know it.
25

26. Cyclic construction of tactical/strategic knowledge
Achieving strategic power depends critically on learning more, better and
faster, and reducing decision cycle times compared to competitors. See
http://en.wikipedia.org/wiki/OODA_loop.
AO
OBSERVE
(Results of Test)
OBSERVATION
PARADIGM
EXTERNAL
INFORMATION
CHANGING
CIRCUMSTANCES
UNFOLDING
ENVIRONMENTAL
RESULTS OF
ACTIONS
ORIENT
D
DECIDE
(Hypothesis)
O
CULTURE
PARADIGMS
PROCESSES
DNA
GENETIC
HERITAGE
MEMORY OF HISTORY
INPUT
ANALYSIS
SYNTHESIS
ACT
(Test)
GUIDANCE AND CONTROL
PARADIGM
UNFOLDING
INTERACTION
WITH EXTERNAL
ENVIRONMENT
John Boyd's OODA Loop process

27. 27
OODA system of systems in the knowledge-based
organization
ORIENT (PROCESS)
PEOPLE
CULTURE &
PARADIGMS
INFRASTRUCTURE
“CORPORATE MEMORY”
SENSE
ANALYSIS
SYNTHESIS
PEOPLE
PEOPLE
GENETIC HERITAGE
DATA CONTENT
LINKS
RELATIONS
ANNOTA-
TIONS
OBSERVE DECIDE, ACT
DOCS RECORDS
Boyd 1996 see Osinga, F.P.B. (2005) Science, Strategy and War: the strategic theory of John Boyd. Eburon Academic Publishers,
Delft, Netherlands [also Routledge, Taylor and Francis Group (2007)] - http://tinyurl.com/26eqduv

28. Building and processing knowledge in the
organization / community
Vines, R., Hall, W.P. 2011.
Exploring the foundations of
organizational knowledge.
28
IFK
(W2)
FK
CK
EK
}
Semantics of explicit
knowledge are only
available via World 2
processes
Code:
EK – Explicit Knowledge
CK – Common Knowledge
FK – Formal Knowledge
IFK – Integrated Formal
Knowledge
For the purposes of this diagram
CK and FK are expressions
of explicit knowledge (EK)
WORLD 1
WORLD 2
PERSONAL
KNOWLEDGE
WORLD 3
KNOWLEDGE
BUILDING
PROCESSES
KNOWING
ORGANIZATION
(including organizational tacit knowledge)
ENVIRONMENTAL
CONTEXTS
SEMIPERMEABLE
BOUNDARY
?
?
DRIVE & ENABLE
ANTICIPATE & INFLUENCE
OBSERVE, TEST & MAKE SENSE
KNO
W
LEDG
E
FLO
W
S
&
EXCHANG
ESIFK
(W2)
FK
CK
EK
}
Semantics of explicit
knowledge are only
available via World 2
processes
Code:
EK – Explicit Knowledge
CK – Common Knowledge
FK – Formal Knowledge
IFK – Integrated Formal
Knowledge
For the purposes of this diagram
CK and FK are expressions
of explicit knowledge (EK)
WORLD 1
WORLD 2
PERSONAL
KNOWLEDGE
WORLD 3
KNOWLEDGE
BUILDING
PROCESSES
KNOWING
ORGANIZATION
(including organizational tacit knowledge)
ENVIRONMENTAL
CONTEXTS
SEMIPERMEABLE
BOUNDARY
?
?
DRIVE & ENABLE
ANTICIPATE & INFLUENCE
OBSERVE, TEST & MAKE SENSE
KNO
W
LEDG
E
FLO
W
S
&
EXCHANG
ES

29. 29
Hierarchy of knowledge building cycles
 3 stages in building reliable knowledge
– Personal/individual
– Group/team
– Peer review/formal publication
W1
Context
Individual
NOOSPHERE
Peer review /
formalization
Rework
Publication
Group/team
review/extension
W1
Context
Individual
NOOSPHERE
Peer review /
formalization
Rework
Publication
Group/team
review/extension
world knowledge-
base
application of
existing
knowledge
Knowledge
construction
cycle
Vines et al. 2011
Hall, Nousala 2010
Nousala et al. 2010
Hall et al. 2010

30. • Hall, W.P., Dalmaris, P., Nousala, S. 2005. A biological
theory of knowledge and applications to real world
organizations. Knowledge Management in Asia Pacific,
Wellington, N.Z. 28-29 November 2005
• Vines, R., Hall, W.P. 2011. Exploring the foundations of
organizational knowledge. Kororoit Institute Working
Papers No. 3: 1-39
Putting theory into
practice
Understanding how to manage organizational
knowledge flows naturally from the
biological point of view

31. Enterprises exist in contexts that must be
addressed as imperatives if they are to survive
 Enterprises are living entities
– Require cash flow & replacement of staff departures
– Failure to satisfy imperatives leads to disintegration
 No enterprise or subsidiary component should be
considered in isolation from its existential contexts
– What are its imperatives for continued existence?
 to maintain survival and wellbeing
 to maintain resource inputs necessary to survival
 to produce and distribute goods necessary to survival
 to survive environmental changes
 to minimize risk
 to maintain future wellbeing
– Organizational systems satisfying imperatives must track
continually changing contexts with observations, decisions
and actions31

32.  Fixed price contract (only adjusted
for currency changes)
 Procurement - 80% subcontracted
 17 years in production
 In service for 27 years
 Warranty
– 12 months for each ship
– 2 year latent defects period
– 10 ship years of Operational
Availability Assessment Period
The 17 year $7 Bn ANZAC Ship Project
 Design & systems integration
 Fabrication and assembly
 10 ships (8 RAN + 2 RNZN)
 3 training facilities (2 RAN + 1 RNZN)
 Support engineering (without this the
ships are scrap metal)
– Full ship fitouts & supply chain spares
– Crew training
– Operations manuals
– 2000+ maintenance procedures per ship

33. Imperatives for delivering knowledge or using it in
an engineering/production environment
 Customer end user's knowledge imperatives
– Correct
 Correct information
 Consistent across the fleet / product range
– Applicable/Effective
 Applicable to the configuration of the individual product
 Effective for the point in time re engineering changes, etc.
– Available
 To who needs it, when and where it is needed
– Useable
 Readily understandable by those needing it
 Readily managed & processed in computer systems
 Supplier's knowledge production and usage goals
– Fast
– High quality
– Low cost

34. 34
What does an imperative look like?
 10 ships must be accepted ≈ $A 7 Bn project value
 Payment depends on acceptance!
 Non acceptance = non-payment, project delay, liquidated damages +
reputational damage

35. Objective knowledge development lifecycle for a
large project
Project A
Design Study
Review, edit, signoff
Negotiate
Review, agree, amend
Project A
Prime Contract
RFT and Bid
Review, edit, signoff
Project A
Bid Documents
RFQs
Bids
Negotiations
Project A
Subcontracts
Review,
agree,
amend
Project A
Procedures,
Design Docs
Review,
edit,
signoff
Project A
Support Documents
•20 - 50 year lifecycle
Project B
Design Study
Review, edit, signoff
Project B
Design Study
Review, edit, signoff
Project B
Design Study
Review, edit, signoff
Operational
experience
Negotiate

36. The full support engineering knowledge
management environment
Tenix Navy

37. Tenix ANZAC’s measured improvements from KM
solution
 Tenix’s Ship 05 delivery challenge
– For safe maintenance “documents” must be understood by human
maintainers and computerized maintenance management system
– Document & engineering change management issues
– Client threat to not accept 05 if still dissatisfied
 Structured authoring solution resolved the issue
– Condensed 8,000 procedures for 4 ships to class-set of less than 2,000
‘structured records’ for 10 ships
 Routines delivered for Ship 5 CUT 80%
 Subsequent content deliveries CUT 95%
 Keyboard time for one change CUT more than 50%
 Change cycle time CUT from 1 year to days
 $ 7 Billion 17+ year long project completed successfully
– Each ship delivered on time - every time
– For the stringently fixed price – no cost overruns!
– For a healthy company profit
– The customers are still happy with the ships
 The company failed on its next largish project because it did not
transfer its learning from the old project to the new one

38. END