"Everyone in a knowledge economy is a volunteer and we have trained our managers to deal with conscripts." This fighting talk comes from Dave Snowden, the leading new economy intellectual at IBM Global Services (GS).

In this exclusive interview with uk.internet.com, a sister website to vnunet.com, Snowden shares his insights. And, if we're all sitting comfortably, he'll begin.

Snowden has established story telling as a mode of knowledge exchange within IBM GS's consulting practice. Encourage staff to tell you a story about their company, he says, and you'll move beyond the usual corporate bullshit.

As a result, he is well known as one of the few creative thinkers in the over-hyped area of knowledge management. Approvingly described as "wild and woolly" by the research and development boffins at IBM's Thomas J Watson Labs, Snowden is emerging as an evangelist who can explain why complexity theory is something that 21st century businesses ignore at their peril.

Give us an example of how you use story telling to change mindsets in companies.
One of the things I do is use Longitude by Dava Sobe. It tells the story of 18th century clockmaker John Harrison who solved the problem of how to determine an east-west position at sea. He and his son were ignored for seventy years in favour of the British scientific establishment's astronomical pseudo-solution to the longitude problem.

Typically, I'll send that book to the senior executives in a company, and get them to give four or five examples of where they have treated their staff the way the establishment treated that clock maker. And they do it. Whereas if I said: "Give me five examples of where, through blind ignorance and stupidity, you ignored the creativity in your staff," I'd be shown the door.

There seems to be a strong democratic impulse in your thinking. Would that be right, and how does it go down with the business audiences you speak to?
It is right, and it goes down fairly well. Most middle class managers grew up in the 1960s and 1970s, so they have an affinity with the values behind my stories about women in call centres and guys on building sites. And society is less hierarchical than it was in the 1950s. In the electronic age, we're democratising by way of mass access to information technology.

How does your thinking around story telling as a mechanism for knowledge exchange map onto the realities of current ebusiness practice?
If you're forming a business-to-business partnership, you do not know what the other company knows. One of the prime uses of a story is as a knowledge disclosure device. So, by either capturing their stories naturally, or through the introduction of stories in workshops, you can elicit from your would-be partners the value they can really provide.

It also allows you to extract the values or beliefs around which each community in the prospective partnership is self-organising. So you can learn very quickly - say over a week - much more than you would find out through formal interviews or questionnaires. You can find out if the organisation's culture is actually bureaucratic or entrepreneurial - and you won't find that out by just asking.

Within IBM GS, who has taken to story telling as part of the consulting process?
People like me really. I went to school in north Wales, and was raised in a story telling tradition. Typically, IBM GS consultants who've taken to this have also come from cultures with strong story telling traditions, and often from minority traditions that have maintained a cohesive identity within a larger entity.

In the diverse story telling traditions you've looked at, are there commonalities, and do they extend easily to business stories?
Yes there are, and yes they do. For example, there are similar forms and practices to be found in western Canada, southern Arizona, and Australia to do with, for example, the ascription of human values to animals. Now, in modern corporations, we do that around heroic archetypes like Lou Gerstner at IBM or Jack Welch at General Electric. These play the same roles in corporate folklore as the animal spirits do in native folklore.

What are the limits and dangers of pursuing this kind of connection between folk tales and business stories?
There are huge dangers. We have an ethics statement at IBM to head off some of those dangers. I still get nervous when consultants try to use a story without proper supervision because you are playing around with something that is really powerful.

You shouldn't mess with the construction of myth - that is to say, the distillation of a bunch of anecdotes into a fundamental story that exemplifies and explains the culture, or some aspect of the culture, of an organisation. We once constructed a myth on a Wednesday afternoon, and by Friday it had inadvertently spread all over the company. So we now counsel against myth construction because it's too dangerous and too manipulative.

What are the emerging trends in business culture that you think we should pay special attention to now?
Complexity theory, for sure - but not that variant of it that is very mathematical and technology based. There is another school of complexity theory that is using it as a metaphor to understand society. This school recognises human will, and you will increasingly see tools emerging that focus on building environments, monitoring them and managing them gently - moving away from formal budgeting, for instance.

Another thing that will change is the continuance of the move away from the Thatcherite/Reaganite model of self-aggrandisement to one where power depends on your ability to operate collectively in a networked environment. So we will see the emergence of reward systems that are collectively based, such as the share options you get in startup companies.

There's much glib talk these days about the transition from an industrial economy to a knowledge economy. How would you characterise the transition we seem to be in?
We are in the equivalent of the transition from late medieval to the Renaissance, when the printing press met the capability to make cheap paper, and you had a cultural explosion. Also in the Renaissance, there was a flourishing of generalists, whereas the late medieval period was specialised to death.

What we are seeing today, with the decay of the scientific metaphor that was applied to management in the early part of the last century, is the re-emergence of generalists who make sense of what is a new space.

This happens to be a strength of IBM. We are generalists, and we have the ability to tolerate dissent. On the technology front, we focus on infrastructure because if we can make faster processors and more efficient storage, then we have a future, while the application vendors will become very narrow. The companies that remain open the longest, with lots of spare capacity, are the ones that will survive.