It was about SOA all along! Chapter 7

[Continuation of my commented reading of Andy Mulholland’s book: “Mashup Corporations. The End of Business as Usual”].

Chapter 7 is about the “typical” barriers to implementing SOA throughout an organization. The authors added this chapter in the 2nd edition following a suggestion by Avrami Tzur (VP of SOA at HP). I will start by saying that I was a bit disappointed with this chapter: it does literally focus on the specific resistance to SOA without considering the probable more generic reasons for this resistance. But maybe it’s me again expecting cultural issues to be mentioned everywhere! At least, this chapter has the merit of existing. I am sure Avrami was far from being the only one noticing the need for addressing this topic after reading the 1st edition of the book.

This chapter deals with the fears and needs of technologists - used to a “develop and control” centralized infrastructure – that are being asked to adapt to SOA and the flexibility, openness and informality that comes with it. These fears and needs would typically raise questions such as:

• How do I know what services are available for me to use?
• How do I know exactly what each service does?
• What happens when a service I am using is changed or upgraded?
• What happens when I have to debug an application based on services?
• How does the new world of services fit and interoperate with existing IT systems? Etc,…

Five rules are then proposed to encourage adoption of SOA:

• Use visibility to reduce fear, build trust
• Put it in writing
• Extend existing management processes to SOA
• Support new pattern of collaboration
• Provide incentives for SOA adoption
  

The authors do introduce these rules as enablers of communication and knowledge sharing. I agree. However, if your organisation has a command and control culture where knowledge sharing is not the norm (I take you back to my 16 traits of such a culture) following these 5 SOA adoption rules won’t be enough. But maybe it could be argued that a “command and control” organisation would not initiate a SOA in the first place (now that could be a topic for a lively debate).

The authors do explain that the << adoption of SOA do reflects an evolution in the skills and systems of a company >> ( I would like to add that it reflects an evolution in the organisational culture as well). This evolution is made of 3 stages: Integration, Architecture and finally Operations. I finally noted that successful SOA adoption will rely on 3 groups of people: the Enterprise Architects or designers, the Providers or builders of services, and the Consumers of these services.

It was about SOA all along! Chapter 6

[Continuation of my commented reading of Andy Mulholland’s book: “Mashup Corporations. The End of Business as Usual”].

Chapter 6 is about “Internal IT” or the effect the SOA transformation can/should have on the internal IT department/functions. With the help of a meeting with all the managers of the fictitious company Vorpal’s IT department, it explains that a SOA does not only support the informal edges of the organisation but also the formal transactional hub. What unifies it all are “the processes that flow through the business” and link “the informal processes at the edge” with “the more formal controlled processes at the hub”. It is therefore important (in order to successfully become a service-oriented organization) to adapt the company’s functional structure. The functions must mirror the key business processes that SOA has formalized.

The authors then suggest a new structure for Vorpal’s IT department. Below are the original (standard) structure followed by a new service-oriented structure:

Old:
End-user support
Development
Infrastructure (CTO)
ERP
Engineering
New:
· Composition (about defining the common services)
· Services Creation (about development of the services)
· Disruptive Innovators (about the creation of new services)
· Consolidation (about the link with the core systems)
· Services Repository (about keeping track of all the services available)

The authors do make it clear that this is only a suggested structure and that each organization would adapt it to suit their needs.

And then reorganizing the IT department around SOA is only a start. The whole organization structure should be reviewed. For example, I can see new cross-functions between sales, marketing and public relations departments: Services to a specific customer group could benefit from having a function (an individual or a team even) pulling resources from these 3 departments to better satisfy these customers no-less specific needs.

It was about SOA all along! Chapter 5

[Continuation of my commented reading of Andy Mulholland’s book: “Mashup Corporations. The End of Business as Usual”].

With the family reunion of the Christmas break, I have only managed to complete Chapter 5. In my defence, it is probably the most important chapter of the book judging from the powerful messages it conveys. The following chapters seem to be only about some of the consequences of taking on the challenge defined in this chapter: “Creating a Program of Service Enablement”. The authors describe such a program in terms of three levels or steps:

1. Designing a Single Service.
2. Designing Systems of Services.
3. Service-Enabling your Enterprise Applications.

According to the authors, no company has yet (at the time of writing) reached level 3! This is probably still true but I wonder if a company like Google that seems to have been implementing step 2 for years now, is not already well into service-enabling its core applications (and maybe they were designed as such from the beginning). In any case, what is implied here is that the first companies to successfully reach (and complete) step 3 are likely to be the success stories in the coming years.

The chapter starts with a wonderful email sent by the CEO of the fictitious company Vorpal. She writes to all the staff to involve them in building a new service-focused culture. The goal is to foster technological innovation throughout the company and “take shadow IT out of the shadows”. Once again, I’m not aware of many CxOs (let alone CEOs) with such an open-mind on new technologies and the courage to initiate and lead the drastic cultural change that a SOA demands. Such forward-looking leadership is indeed a must for a successful SOA implementation.

Chapter 5 describes 5 rules for successful SOA implementation. I want to comment only on the first two:

This chapter’s first rule is about promoting Shadow IT. The authors are quick to note that it is not a new phenomenon. Probably since IT was provided to people to do their work, most of them would work out their own “tools, procedures and workarounds” to increase efficiency at doing their job. Most importantly, this personal or team innovation is done without the IT department (official) involvement and in most cases even without it’s knowledge. This unofficial but productive IT is what the authors define as Shadow IT. I will quote their conclusion on this topic: “Failure to embrace and support Shadow IT in the long run means wasted resources, and inability to maximize the value of your company’s collective candlepower, and lost opportunities”.

The second rule is “Institute a Service Culture”. This is for me the cornerstone of an SOA implementation. The author only give this rule half a page but a lot more is implied. Service-enabling an Organization means adapting its internal culture. “Creating a lifecycle process in which services are made, reported, judged, and finally supported by IT, is essential to maximizing the potential of your homegrown and ecosystem-developed services.” I would add that all this creativity and innovation resulting in productive services must be formally recognized and rewarded. New pay, rewards and even promotion mechanisms will be needed to foster Shadow IT.

Going back to the second level of a Service Enablement Program introduced above, the authors give a brief but useful explanation of how to build a good set of services. In a nutshell, [each service must be] “sufficiently granular to allow for easy reuse; good design is decomposing process steps into a suite of services that can be orchestrated to solve the business need in question, while allowing for recombination.” This implies a potentially large number of services that will then need to be cleverly referenced, tracked and maintained.

The last comment I will make on this chapter refers to its last section (before a set of real life examples) titled “Rethinking Your Architecture”. SOA implementation will eventually (when reaching the level 3) mean a completely new organisational physical structure, and not just limited to IT but hierarchies and departments as well. When embarking seriously on the SOA adventure, you must be ready for significant no-turning-back – sometimes painful - changes that will transform your Organization.

It was about SOA all along! Chapter 4

[Continuation of my commented reading of Andy Mulholland’s book: “Mashup Corporations. The End of Business as Usual”]. Chapter 4 is about how SOA can transform the relationships with your suppliers. I will quote from the book how a Vorpal supplier defines these SOA-driven relationships it has built with it’s customers (p.57). He is responding to one of Vorpal’s manager who noted that the collaborative meeting they just had was unusual in style: “Yes, we’ve noticed [this change] as soon as we created our new services and started doing mass customization for our customers, the relationship changed pretty quickly from a Darwinian struggle to a win-win situation – from conflict to collaboration, if you will – because we’re both going to make a lot of money that way. I like to think of it as negotiation jujitsu – it’s now my job to use your strength to create new business for us instead of just holding the line on price while you pummel me.” With an SOA, suppliers and customers work hand-in-hand to generate value. They help each other out. Another useful quote on the next page is: “[…] don’t just define your suppliers as services – define your own operations as services to them”. You could say that you are helping your suppliers to serve you better. It is then in fact suggested that we should think of our partners and suppliers as members of ‘our’ dynamic ecosystem, where each member contributes directly or indirectly to the growth of all the others. Another good concept given is to see your suppliers as a channel. Your supplier’s customers are potentially new customers for you.

It was about SOA all along!

I was recently introduced to Andy Mulholland by a mutual friend. After reading some recent articles on his blog I quickly realized I had to read his latest book about Service Oriented Architecture (SOA) titled: “Mashup Corporations. The End of Business as Usual”. I ordered it on the famous mashup-rich website Amazon and started reading it yesterday. After only reading up to the end of the Introduction chapter, it suddenly stroke me: All my thoughts and ideas that initiated the articles on this blog since its creation in 2005 were calling for, relating to or assuming SOA! And the most amazing is that I never even mentioned SOA. My understanding of SOA was that it was a modern method to organize the IT infrastructure for a more flexible applications delivery. So, I had the technologist view (sorry but I’m an IT guy after all) and was missing completely the point. SOA is not just about delivering services and the IT infrastructure, it is first about the adoption of new business models and a conducive corporate culture. Business models! Corporate culture! To those of you who have been in touch with my blog for a while, aren’t these recurring topics in my writings? Oh boy, how this realization got me excited! So, I decided that I will keep posting about my reading of Andy’s book, and how it will surely make my understanding of the leveraging of organizational knowledge evolve to another level. I will stick here to this enlightening Introduction. It gives “five kinds of relationships upon which SOA will make the most impact” and the associated questions it will attempt to answer are: << How can you harness the ideas and energy of [innovators] eager to help [from inside or outside the company]? How can you bring your customers closer to your core business processes? How can you create a win-win relationship with your suppliers instead of an adversarial one? How can [IT enable] innovation to break new ground while protecting critical data? How can you best structure your IT resources to reflect the needs and new capabilities of SOA? >> The virtuous process of Human Capital Formation is concerned with the first question. My article on this process was focusing on the employees, but it could be adapted to cater for the contribution of people outside the company (I might do this when I have time). The second question relates to one of the most important concept I have written about on my blog: Organize the whole company around the customer-facing functions in order to be closer to the customers and therefore satisfy them better. See “knowledge-driven not simply customer-driven”, and “becoming a knowledge-driven organization in response to more knowledgeable customers in the luxury market” and also a more specific case “knowledge-sharing for a Retail Manager”. The third question is about the collaborative playing field of the Knowledge Economy where companies must collaborate with in fact not only their suppliers and customers, but even increasingly with their competitors. I will leave the last two questions more concerned with the company’s IT function/department for now. Of course, with my experience there is a lot I could say about it, but this blog was initially avoiding this subject and no doubt I will be drawn into it in later chapters. Let's read on...

The Age of Collaboration

Read the following article in CIO Today: http://www.cio-today.com/story.xhtml?story_id=0020006F2KP6&page=1 It starts with this unfortunately correct quote from an Accenture executive:

  << When it comes to collaboration, many companies have a long way to go. "We are early in the cycle, maybe the second inning," says David Smith, head of the human performance practice in North America for Accenture, a global consulting and technology services firm. "Companies are beginning to attack it. Very few are getting it right." >>

The Age of Collaboration as the article defines it below is a direct consequence of the Knowledge Economy, considering Knowledge as the most important asset: 

  <<[…] The 21st century is likely to be the age of collaboration because many of today's problems are complex, often demanding cross-disciplinary expertise. Collaborative technologies are also in demand by companies that have global staffs and greater numbers of employees who telecommute. Supply chains demand collaboration among dozens of companies. Some technical problems are so expensive to tackle that even competitors collaborate. For example, IBM, Samsung Electronics and Chartered Semiconductor Manufacturing cooperatively develop semiconductor manufacturing processes. ST Microelectronics and others recently joined them. Finally, there's evidence of a societal shift toward collaboration as more workers network around the clock via cell phone and computer. In the July-August 2007 issue of Harvard Business Review, authors Neil Howe and William Strauss discuss the effects of generational differences on this trend. Those born between 1982 and 2005 -- the first generation to grow up with mobile digital technology -- expect nonstop interaction and cooperation with peers. "They will tend to treat co-workers as partners rather than rivals ... and use information to empower groups rather than individuals," the authors write. […] >> 

And the article concludes with this short but to the point warning: 

  <<[…] In the years ahead, the winning organizations will be those that learn to be collaborative and share employees' knowledge. >> 

How many of these articles will be needed for the majority of leaders to finally understand the importance of a knowledge-sharing culture for their organizations? The ones who wait for their competitors to try it first will regret it. 

 Peter-Anthony Glick http://leveragingknowledge.blogspot.com/

European organizations are failing to effectively create and manage their intellectual capital

[Post written in 2007 about an article on the 2006 gobal MAKE winners (link no longer available) ]

The 2006 Global MAKE Winners have been recognized as leaders in: 

 • creating a corporate knowledge-driven culture 

• developing knowledge workers through senior management leadership 

• delivering knowledge-based products/solutions 

• maximizing enterprise intellectual capital

 • creating an environment for collaborative knowledge sharing 

• creating a learning organization 

• delivering value based on customer knowledge

 • transforming enterprise knowledge into shareholder value 

[..] Successfully managing enterprise knowledge yields big dividends. The 2006 Global MAKE Winners trading on the NYSE/NASDAQ showed a Total Return to Shareholders (TRS) for the tenyear period 1995-2005 of 24.2 % – over twice the average Fortune 500 company median. 

[...] The most visible trends over the past nine annual Global MAKE studies are:

 • A growing number of organizations are taking on ‘Global’ characteristics – especially consulting and professional services firms, financial services, energy and media companies. These ‘Global’ organizations tend to operate as ‘independent’ companies within a Federal structure and without the traditional corporate head office. 

• The capability to innovate and create new products is seen as the competitive edge across a wide range of business sectors. 

• Asian knowledge-driven organizations are competing on an equal knowledge ‘footing’ with their European and North American counterparts. 

• European organizations are failing to effectively create and manage their intellectual capital. Although US companies maintain a lead in this area, Asian businesses are rapidly narrowing the gap and may surpass American firms as regional wealth generators within the next five years. 

I let you draw your own conclusions. If you're a leader of a European Company, I hope you got the message loud and clear. 

Knowledge is only in our minds or not?

Nimala recently asked on her blog to suggest KM topics for her to write on. I suggested the following:

 "Recently, I have been confronted with "KMers" (not sure I agree that they are) that consider that you can only manage information and not knowledge because "knowledge" is only in people's minds, and that what can be communicated is only "information". What would be your arguments to support the view that knowledge can be "managed" and is not only found in our minds?" 

 Read her interesting response and my subsequent comment here: http://nirmala-km.blogspot.com/2007/06/can-we-manage-knowledge.html#links 

 http://leveragingknowledge.blogspot.com/

The search for the unified definition of Knowledge...

I could not resist! 

Knowledge has nearly as many definitions as the number of authors who wrote about it or about a related subject such as Knowledge Management (by the way, you can find quite a few definitions of KM as well and maybe this explains that). Well, guess what, I had to give “my” own definition! 

On the ActKM listserve (http://www.actkm.com/ ) a still on-going debate on the definition of knowledge generated very valuable insights. I have extracted a few extracts and composed a definition attempting to synthesize the thinking of all these bright individuals: 

Dave Snowden (http://www.cognitive-edge.com/ ) quoting Prusak and Davenport in their book “Working Knowledge”: "Knowledge is a fluid mix of framed experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. It originates and is applied in the minds of knowers. In organizations, it often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms" 

Joe Firestone’s definition (http://www.kmci.org/media/Whatknowledgeis%20(non-fiction%20version).pdf ): “Knowledge is a tested, evaluated and surviving structure of information (e.g., DNA instructions, synaptic structures, beliefs, or claims) that is developed by a living system to help itself solve problems and which may help it to adapt.” 

Han Van Loon’s version of Joe’s definition (http://www.lc-stars.com/ ): "Knowledge is a learned and analysed structure of awareness based upon information (e.g., DNA instructions, synaptic structures, beliefs, or claims) that is developed by a living system." 

A suggestion of a synthesis: Knowledge is a learned and evaluated fluid mix of framed experience, values, contextual information and expert insight; that is developed by a living system. In organizations, knowledge often becomes embedded not only in documents or repositories but also in organizational routines, processes, practices, and norms. Living systems use knowledge either instinctively or in a state of awareness (typically the latter first then the former through acquisition of reflexes for repetitive actions) to compete for resources and survival, through solving problems, adapting to challenges and setting objectives. 

Still on the ActKM listserver, Kaye Vivian (http://dove-lane.com/ ) writes: “The abstraction we call "Knowledge" has three aspects (I propose): (1) what is acquired by learning (2) the sum of everything known (3) a state of awareness and perhaps a fourth for those who argue that knowledge can exist in neural, hormonal or sensory systems: (4) instincts." Kaye goes on then asking us all if we can think of an instance of knowledge that does not fit into any of these four aspects. 

Assuming for a moment that none can be found, I think that my suggested definition above does try to cater for all 4 of these aspects. But hold on! Don’t get over excited! I surely have not suddenly stumbled on the unified definition of knowledge. I will post it on ActKM as well and I anticipate quite a bit of constructive criticism. I will keep you informed and will amend the definition accordingly. So watch this space... 

 http://leveragingknowledge.blogpsot.com

Questions to Verna Allee on how to start a Value Networks analysis

This week I attended a (tel. conf.) presentation by Verna Allee on Value Networks. I then sent her 3 questions (in blue) and here are her answers below: Can a VN approach be used to initiate a cultural change in an organizational context where hierarchy is prominent, departmental boundaries are strong and guarded and knowledge tends to be protected rather than shared? Or is it an approach only effective when the value of collaboration and knowledge-sharing is already recognized? Absolutely it can be helpful in culture change. Value network analysis (VNA) zeros in on the most mission critical and essential intangible exchanges that support the work. This is not just "nice to do" stuff and it is not some vague encouragment to "share your knowledge." What people spell out, through conversations, are the specific deliverables and behaviors that they need and expect from each other in order to work effectively and build good relationshps. "Knowledge" is not a deliverable - it is an asset - but you must convert that asset to some negotiable form of value in order to put it into play to create value. You extend your knowledge in very specific forms: a report, professional advice, market intelligence, referrals, etc. VNA forces people to negotiate around intangibles such as various forms of knowledge in a very clear,specific direct way. Forget "knowledge sharing" - that doesn't meananything. "Timely input of market intelligence," is a specific knowledge output that can be delivered, can have performancestandards, and that someone can be held accountable for. The very process of this negotiation "loosens up" the knowledge flows because there is an intuitive sense of fairness and reciprocity that kicks inonce people talk about knowledge sharing in this way. It is a very interesting dynamic. You aren't beating on this big concept of "culture" but are focusing on the very specific behaviors that are essential for people to successfully work together. Making those "visible" in this way is very powerful, not only for affirming how important they are but also for making it much more likely thatthey will happen. For more tips on naming intangibles see ValueNetwork Mapping Tips at http://www.value-networks.com/howToGuides/ValueNetworkMappingTips.pdf 2."What is the most effective method for collecting the informationneeded to build a VN diagram? Is it assumed that a relatively highproportion of subjectivity will be captured?" There are two different approaches for different purposes. If you are using VNA as a collaborative sense making tool then facilitating the mapping as a group process is absolutely the way to go. You WANT the subjective nature of value to become clear to the group - this is a major "ah ha" and learning that can help a group of people dramatically reframe what they are doing and start thinking about value in a whole new way. It also is a beautiful way to surface unspoken expectations and the "mental models" of how people are really thinking it all works and about different issues. I have used it this way for years with great success. In this case most of what people need to discover happens in the mapping process, not in the deeper analytics. In other cases you absolutely do not want the value network analysis to be skewed by subjective input - and you will want to run the more advanced analytics in order to see patterns and opportunities. This is especially true when you are doing something like a market space analysis or a large scale analysis like we are doing for the European Commission. There we are evaluating innovation networks across all 255 regions and 25 nation states. We now have the technical capability to use real corporate data sets to generate the value network visualization. For example we took a month of call data for all the calls handled by Cisco's Customer Interaction Network and used the data to generate the value network visualization. These kinds of data sets can be coded for tangible and intangible exchanges and the "real" network patterns are revealed. In the case of the European Commission we have identified 4 network archetypes within these large scale innovation networks depending on the real purpose of the network. In some cases the stated intent ofthe funded project was to do one thing, but the data shows that they actually created something different. Very interesting. The application I am referring to is the open source GenIsis application developed by my brilliant colleague Oliver Schwabe. The open source version uses an Excel-based workbook to capture and organize the data. If you are interested in the enterprise level database version you will need to contact me off-line, but the open resource version is readily available and you can learn about it, and download it. Some of you may also be interested in the value network data model that is being supported by the Value Networks Consortium, which is sponsored by companies like Cisco and is leading standards and open source tools for value network analysis. http://www.vncluster.com . Value network language and models are popping up everywhere and someof it is very good work, but there is also a lot of "junk" or old wine in new bottles masquerading as value network analysis. The consortium is a good way to stay grounded in the quality work and avoid some of the pitfalls. 3. "What is the typical scale and scope of the very first "proof> of concept" VN implementation for an organization? Scale meaning> how large is the section of the organization to consider. Scope> meaning how many processes to consider. Where do we start? I suggest you start by focusing on a particular activity where you can easily identify somewhere between 4-8 roles that are required for that activity. The Mapping tips above have some tips on scope, scale and boundaries and there are other tip sheets in the How To Guides at http://www.value-networks.com/ . They are designed to address FAQs such as this one. That said, I just want to share that at the beginning of a workshop in the Netherlands a clearly skeptical partipant asked, "I want to know where I would actually use something like this." At the end of the day he said, "I get it - you use it with whatever is on the table." You can use VNA at virtually every level from shop floor (example Mayo Clinic looking at how to reduce scheduling time for a procedure) to business unit level (exampel AT&T getting ready for a product launch) to business webs (the eBay value network) or at the macro economic level as we already mentioned. Youdo need to decide what level you want to look at - ground floor, rooftop, helicopter, jetliner or satellite and not mix your level. Doread the "how to guides," sit down with a couple of friendlies and try it out. It doesn't do any good to just read about it - just do it. One of our practitioners suggests that people start by simply mapping their own most important role and their everyday key interactions. There are also a number of case studies on the http://www.value-networks.com/ site that will give you a good sampling of how people are using it. The community goal for that site is to really give people an on-ramp to learn all the trade secrets to the method and provide enough tools and examples that they can get started. Hope this is helpful. I am glad you enjoyed the presentation and encourage you to jump in and get your feet wet. Like anything there is a learning curve but it can be a very fast track to some good results. An executive with Openwave came to one three hour workshop on VNA, went back home and completely reorganized a company of three thousand people over the next two months using the method. He said it was the smoothest reorg they ever had with zero productivity loss the entire time. There is a slide deck on that in the case studies tab on the resource site, too. I appreciate that you asked your questions in a forum as they really are FAQs and this gets the word out to more people on where to find the support. Oh, yes, I always forget to mention we do have a commercial "deep dive" ValueNet Works Practitioner Qualification for a fee. You can learn about that at http://www.alleevaluenetworks.com/ . You can tell I am a maniac on a mission because most of the time I forget to even mention the commercial offerings, but I have a cat (insert dog, child, partner) to feed just like everyone else. Our qualified practitioner community stretches literally from Iceland to Tasmania and lucky for you Peter there is a nice little "hotbed" of practitioners on the UK who are also very supportive of new folks. Good luck. Verna Allee >> I will get my feet wet now and try out VN. I particularly like the idea that VN can be used to bypass the culture issue by focusing on the value-adding interactions. Knowledge-sharing is a byproduct of the process, not the objective. Knowledge is the asset, added-value the output. Peter-Anthony Glick http://leveragingknowledge.blogspot.com/

“Knowledge management strategies that create value”

I found a very good article with the same name as this post on the Accenture site. It was written in 1999 by Leigh P. Donoghue, Jeanne G. Harris and Bruce E. Weitzman.
(Accenture.com article) It presents a rather visionary KM approach considering it is now about 8 years old.

The article starts with this statement I totally agree with: “There is no one-size-fits-all way to effectively tap a firm's intellectual capital. To create value, companies must focus on how knowledge is used to build critical capabilities”. I would add that the more pervasive a Company’s organizational culture is, the more this is true. So many technological solutions have been presented as THE knowledge-sharing solution, and nearly as many have failed.

“[…] Knowledge management is complex and multifaceted; it encompasses everything the organization does to make knowledge available to the business, such as embedding key information in systems and processes, applying incentives to motivate employees and forging alliances to infuse the business with new knowledge. Effective knowledge management requires a combination of many organizational elements—technology, human resource practices, organizational structure and culture—in order to ensure that the right knowledge is brought to bear at the right time”. Well, this is what I (and many other KMers) have been writing for some time now. You cannot count on technology alone, or on a structural change alone, or on a new reward and recognition mechanism alone, to instigate a deep, long-lasting and effective leveraging of an Organization’s Knowledge. You need a holistic approach with both top-down leadership and bottom-up initiatives, being aware along the way that different core processes will require different KM solutions. The authors then present a framework created and used by the Accenture Institute for Strategic Change. Its aim is to associate “specific knowledge-management strategies with specific challenges that companies face”.





Well, my first impression of this framework presented this way was: whow! That looks simple (if not simplistic). I was reassured a bit when reading two paragraphs down that “[..]It is important to note that there are no hard-and-fast connections between a certain core process and a work model, because the same process can be performed in different ways”. In other words, you cannot actually plot core processes on the table above to build a model to fit all companies. This would also contradict the initial statement that there is no one-size-fit-all solution. So this is where the Accenture consultant comes in. The way the work is performed in the organization must be defined in order to select the right KM approach.



In the above diagram, the authors show how an Organization’s work processes can be aligned with a specific KM model.

I think this framework is approaching the issue in the correct manner, i.e. holistically and with a good deal of flexibility in order to adapt to any organizational context. However, there is a level of flexibility that I believe is missing. It could be that it was omitted by the authors in this rather short presentation. Nevertheless, I can only judge on what is given here. The flexibility that seems to be lacking is the consideration that within a specific work process, say Retail operations, you can be faced with a rather more complex context than what is assumed with the different diagrams given in this article. In the example above, the authors have assumed that Retail operations would be aligned to the Transactional Model. The authors define this model as the one “in which there is a low degree of both interdependence and complexity. Work is typically routine, highly reliant on formal rules, procedures and training, and depends on a workforce that exercises little discretion”.

Indeed, Retail relies on direct transactions with the end-customer. However, the definition above is valid in a mass-market context with low value, low margin, high quantity and relatively low product differentiation. Take instead the luxury market context (and I choose this example because I have 14 years of experience in it) with high value, high margin, low quantity and very high product differentiation. Within the Retail operations of a luxury products (and/or services) organization, you will find:

* A rather low degree of interdependence, so the Transaction model still fits for this dimension.

* There is relatively high degree of complexity. In the jewellery business for example, the expertise in gemmology of the sales-associate can represent the key added-value for the customer in search of a diamond necklace. Experience in how to satisfy very demanding and difficult customers is typically what can make a good sales-associate very good.

* Work is not “routine” to the same degree as in a mass market since each transactions can differ greatly due to the uniqueness of the product sold, the customer’s varying requirements and behaviours and the sales-associate varying level of expertise and experience.

* Work relies on formal rules and procedures but not exclusively. There is also a significant degree of informal relationships between sales-associates or between them and their customers, with whom they build strong relationships over time. Often, a sale is made as a result of this informality.

* Work does initially rely on training - especially for Brand and product knowledge as well as sale-techniques – but the best performers among sales-associates rely even more on their intuitions and experience.

* Work does depend on a workforce capable of making decision on their own, such as proactively contacting customers, deciding on which products to suggest to a customer, or offering/accepting a discount in a responsible manner.

The Expert model would therefore come to the rescue in this context but not as a replacement of the Transaction model. I am suggesting here that a combination of both models is needed to map a luxury business’ Retail operations. In this Retail context, there is still a degree of “routinization” and automation, and there is a definite “productization”. However, there is also a significant need for experienced hiring and capability protection. Capability/skill development is also a concern. (Apprenticeships used to be commonplace in luxury retail businesses some 20/30 years ago, but was replaced by a more individualistic and internal competition-oriented approach. I foresee that it will come back as a result of more knowledge-conscious management – read my earlier post on the subject: http://leveragingknowledge.blogspot.com/2007/03/knowledge-sharing-for-retail-manager.html).

Now what would such a mix of these two models mean in terms of practical solutions? The authors do not provide (for obvious reasons) the list of KM solutions they would implement for each model. However, I can guess one here.

The degree of “routinization” involved in luxury retail operations would demand solutions delivering just-in-time information (as opposed to just-in-case) to the sales staff. This could be in the form of a CRM tool providing a sales-associate specific information about an unfamiliar but regular customer sitting in front of him/her. It could provide the list of all the products the customer purchased so as to enable the sales-associate to suggest matching products among new or older collections. It could also have the anniversary dates such as the customer’s or his/her partner’s birthday, or their wedding date; for the sales-associate to wish him/her and suggest suitable gift ideas. All this customer-specific information is valuable but it can really create significant value when it is associated with context-sensitive information – in effect, offering expert knowledge. This is where our authors’ Expert model comes in: In the situation above, our sales-associate would benefit from the relevant knowledge of a more experienced colleague. More experienced here does not necessarily mean more seniority; it can mean better specific knowledge about the customer being served, or even about the customer’s cultural background. What is needed is therefore an apprenticeship-like solution associated (or better integrated) with the CRM tool. For example, the sales-associate could be informed that the customer is of Indian origin and Hindu, with the “warning” that between August and October, all Hindus purchase gifts (and in particular luxury products) to offer on Diwali (their annual “festival of lights”). The sales-associate could happily then suggest: “Oh Diwali is coming soon isn’t it? Please let me show you this brand new collection of jewellery that should look stunning when worn with a sari” (typical Indian dress).

I have here mixed the Expert and Transaction models but I am sure similar combinations will be needed in other contexts, sometimes involving 3 or even all 4 models. Graphically, this means to allow a work process to be plotted in the middle so as to overlap 2 or more models. The Process mapping diagram shown above seems to allow this (“customer service” work process overlaps the Integration and Transaction models) but it is not clear if it was really intentional (probably they worked it out themselves since then). In any case, it was a promising framework and I would love to learn of its implementation successes.

Peter-Anthony Glick
http://leveragingknowledge.blogspot.com

Dave Pollard's "KM quick wins" against my "organizational cultures not conducive to knowledge-sharing"

Dave Pollard recently posted the following on his still amazing weblog: Knowledge Management: Finding Quick Wins and Long Term Value. First, do read it. Then, consider the association I have made below between his list of quick wins and longer-term programs, and my list of cultural traits hindering knowledge-sharing (http://leveragingknowledge.blogspot.com/2007/03/organizational-cultures-not-conducive_20.html#links ): Six 'Quick Win, Low Hanging Fruit' KM Projects. 1. Make it easy for your people to identify and connect with subject matter experts. This deals with: 7. Lack of Awareness of internal knowledge. And even maybe in a more medium-term with: 4. Organizational silos that do not (or poorly) communicate/collaborate. 2. Help people manage the content and organization of their desktop. 3. Help people identify and use the most appropriate communication tool. 4. Make it easy for people to publish their knowledge and subscribe to the information they want. These three quick-wins help people be more efficient so could help with: 8. Lack of Availability of internal knowledge. The quick-win no.4 also deals with the cultural traits 4 and 7 above. 5. Create a facility for just-in-time canvassing for information. 6. Teach people how to do research, not just search. These last two quick-wins again deal with the same three traits above (nos 4, 7 and 8). Six Longer-Term Big Payoff KM Programs. a. Make your information professionals anthropologists. This program will have a similar impact to most of the quick-win above. It will further help in making people more effective and efficient and at connecting with one another, so will help with: 7. Lack of Awareness of internal knowledge. 8. Lack of Availability of internal knowledge. 4. Organizational silos that do not (or poorly) communicate/collaborate. b. Embed intelligence in systems, processes and tools. I think the only trait this effectiveness/efficiency improvement program helps with is: 8. Lack of Availability of internal knowledge. c. Teach your information professionals to be sense-making specialists. This program focuses on the information professionals and for them will help with: 15. Modesty resulting from lack of encouragement. 11. Job Description framing. 8. Lack of Availability of internal knowledge. d. Use knowledge to drive innovation. With open-minded top-executives, this program could maybe help with: 16. Top-executives misunderstanding KM challenges. If innovation is rewarded then this program would also indirectly help with: 3. Reward achievements of each individual based solely on personal objectives. And it could also drive the insertion of "being innovative" through "collaboration/knowledge-sharing" in job definitions so helping with: 11. Job Description framing. e. Canvass the wisdom of crowds. This programs helps with the following traits: 8. Lack of Availability of internal knowledge. 1. A strictly hierarchical top-down structure. 13. Only money talks. f. Collect, and attract people to use, stories and anecdotes. At first, I thought this one would not relate to any of my traits but it does. This program would help making people feel more comfortable in sharing their knowledge; in fact, some would share knowledge without realizing how valuable it can be to others. Therefore this one helps with the following two traits: 14. Perfectionism resulting from fear of being wrong. 15. Modesty resulting from lack of encouragement. I have managed to associate 10 of the 16 cultural traits to Dave’s 12 quick-wins and longer-term programs. It’s good and I would certainly agree that all these initiatives would move an organization, or more precisely some of its collaborators, in the right direction. However, the six “anti-knowledge-sharing” cultural traits left-out are significant in my view. Dave’s approach is based on the principles of Personal KM and, as I already wrote (http://leveragingknowledge.blogspot.com/2006/11/personal-knowledge-management.html#links) I do not believe you can sufficiently change an organizational culture with only a bottom-up approach. The only initiative in Dave’s list that attempts to initiate a top-down change is the program (d) about using knowledge to drive innovation. I did loosely associate it to the trait relating to top-executives misunderstanding KM. This is because within a culture not conducive to knowledge-sharing, you will need more than that to have your top-executives truly understand and support KM. You could be told: “We are innovative already and we must be using knowledge in the process, so we’re fine, no need of KM”. Using Dave’s quick-wins and some of his programs can surely help drawing the attention of top-executives. With a few influential sponsors on-board, you could then hope to tackle all the non-conducive cultural traits including the other six such as 5. Lack of trust, 6. Internal politics, 9. Too much pride or 2. Reward achievements of each individual based solely on personal objectives. So PKM will help but will not succeed on its’ own if the goal is a deep and lasting cultural change.

Peter-Anthony Glick

http://leveragingknowledge.blogspot.com

Knowledge-sharing for a Retail Manager

In a retail company, who is at the centre of value generation? Undoubtedly the person making the sale: the sales associate (I am talking about markets relying on differentiation, not cost advantages). You would then expect these organizations to focus on facilitating each of these key value generators in generating more and more value. Yesterday, I had a very interesting conversation with a retail boutique (store) Manager. She started on the issue of retention (or the lack of) of knowledge when an experienced member of her team leaves the company. It’s not only that no set formal hand-over process exist, it is more about the lack of a knowledge-transfer process well before an individual decides (or is made to) to leave. I told her that this issue is still encountered by most managers in most organizations (not many executive Boards have given much thought on this HR issue yet). In her case, this lack of knowledge sharing resulted in the loss of valuable customer relationships knowledge and contextual selling experience (selling effectively specific types of product to a particular customer group, in a specific geographical location, her boutique). Our discussion then went on about another aspect of knowledge sharing needs for her team and the retail department. She was concerned that - due to a 6-day rota giving a day off in the week to compensate for a Saturday duty - too often one member of her team misses her weekly review meeting. She then has to remember to whom she has to repeat some important information. We both agreed the solution would be an online intranet where meeting summaries and other departmental information could be posted for all sales-associates to read. Not rocket science you might say (indeed many organisations provide such tools) but most Knowledge leveraging solutions do not have to be technically complex at all in order to deliver noticeable benefits. In the context of this retail Manager, this simple intranet would be the solution. She then realised that this shared tool could also be used by sales-associates from different boutiques to exchange experiences, ask each other questions, debate on some common topics. Such interaction between sales teams is needed to learn from each other. In differentiation-focused markets, internal competition is entertained between sales-associates, between sales teams, between distribution subsidiaries and this even for the same Brand. This is fine and usually generates value. However, the fine line not to cross is that this competition should not be at the expense of the customer, and therefore at the expense of the company’s overall performance and the Brand’s image. Internal competition is typically a key reason for lack of knowledge sharing within a sales force. What are the potential costs of an experienced sales-associate leaving the company without a formalized and extensive transfer of his/her specific & valuable knowledge? Some of his/her best “loyal” customers will automatically follow him/her to the competition. Other customers might notice a significant difference in the service they receive from his/her colleagues and decide to at best, go to another sales team within the same company, or at worse, finally go to the competition. We could also face a drop in turnover on subsequent sales made to some of his/her usual customers remaining loyal to the Brand. This is because their usual sales-associate would have better known how to satisfy these customers and often entice them into buying more as a result. What are the potential costs of sales-associates not informed on time or misinformed? This is now related to the other knowledge-sharing issue the retail manager told me about. The possible consequences of sales-associates not informed properly are numerous. Some examples are: Not knowing about the arrival of a VIP, not knowing of the arrival in stock of a new collection, not knowing of an important security concern, or not knowing about a local event that should draw more traffic in the shop. I have already identified above a relatively simple and “cheap” solution to this problem. What about a solution to the “lack of knowledge-transfer between sales-associates” problem? An idea is that managers could establish “mentor/apprentice” relationships between pairs of sales-associates. The mentors’ performance (and recognition, and reward) would be dependant on their apprentice’s achievements nearly as much as on their own. In this way, the experienced sales-associate is encouraged to share his/her knowledge and customers with a “junior” sales-associate, so that if he leaves the company, there is a natural and effective hand-over. Other operational benefits can be identified such as the apprentice “covering” for the mentor when the latter is away (day off, holidays, sick leave, etc…). The mentor benefits by having his/her apprentice handling the sales for his/her customers during that time. The apprentice benefits by “holding the fort” and being put to the test. The company benefits: · By maximizing the chances to satisfy the mentor’s customers in his absence, therefore offering continuity in level of service. · By speeding up the learning of junior staff, therefore resulting in a more experienced sales-force overall. · By increasing revenue at relatively low cost, therefore increasing profits as well. In other words, a win/win solution. Peter-Anthony Glick http://leveragingknowledge.blogspot.com

will Web 2.0 social tools have a major transformational positive impact in the workplace?

Yesterday, I attended in London a David Gurteen’s Knowledge Café with the topic of the Web 2.0 social tools and what they will mean for organizations. The question to answer was: will these tools have a major transformational positive impact in the workplace? This K Café had an unusual format this time, starting with two speakers given 10mn to either answer positively or negatively. Then the 50+ attendance divided in groups of 5 to discuss/debate, followed with a speaker for each group addressing everyone with the conclusions reached by their group. The event ended with an informal vote on the question. Let’s start with the result of the vote: about 35 people chose to answer positively. It’s a majority but that still left 15 to 20 people (so about 1/3) either unsure, or believing that these new social tools will either have a negative impact or no significant impact at all. I felt that was still quite a lot. Being a supporter of any tools that can help to foster knowledge-sharing and innovation, I will focus here on the arguments given against them having a large impact. A key “negative” argument mentioned was that these social tools are over-hyped since the bulk of effective conversation can only be spoken, not written. Face-to-face conversation would always be required. I would agree with the over-hyped status but not for this reason. The Web 2.0 social tools are not designed to replace face-to-face conversation at all! They are to enable conversations and knowledge sharing that would for the most part otherwise simply not take place. You don’t start a blog and join online forums to discuss with your neighbors and the colleagues you see every day. Yes they might also take part but you intend to reach many many more people you will never speak to directly, let alone meet face-to-face. The reason these tools are over-hyped is that the issue is not about the technology but about the people and the organizational culture. As it was correctly highlighted yesterday, these tools are to be used for a purpose that make business sense to the people using then and to the organization they work in. In other words, they must contribute directly or indirectly to the bottom line: higher profits (or value for money in the public sector). Another “negative” argument I noted was the fear of information overload. More collaborative tools meant for many the risk of increasingly less control over the amount of incoming information. I believe this risk is real but so it was with the telephone a century ago, with email 15 yrs ago or with mobile phones 10 yrs ago. It didn’t stop our ancestors to install a phone in their home or for us to now receive emails on ou mobile phone(s)! It is a potential problem yes but not one that would prevent the Web 2.0 social tools from flourishing. This fear will influence more how we use them individually or collectively such as within an organization. On the whole, the majority agreed that the spread of Web 2.0 tools inside the organization was inevitable. It was only a matter of time. What was less clear was what would be their true benefits, what transformation they would generate. What is happening on the public web can give us some clues but it is indeed difficult to foresee exactly their impact on the workplace. Nevertheless, this is not a reason for not starting to use them, maybe just one to be cautious and not move too fast. But that’s ok, that was also the case with email back in the 90’s. Peter-Anthony Glick http://leveragingknowledge.blogspot.com

Knowledge-driven, not simply customer-driven

There are numerous hurdles/blocks for converting an organization to become “knowledge-driven”; but if we look at the fundamentals for commercial success, we see that it is the right way to go to efficiently leverage organizational resources (mostly the human part) and sustain competitive advantage through creativity and innovation.

Ok some of you might be thinking: surely “customer-driven” is the way to go, knowledge being “only” a mean to an end. There is some truth in this view. Indeed the customer’s satisfaction is often considered as the ultimate objective for all corporate projects and operational activities. It is also correct that organizational knowledge is to be used to facilitate this endeavour. However, is satisfying the customers really the drive for share-holders? No, they are driven by increased market share, increased profits and revenue and increased growth potential/forecast. 

Now, you might say: hold on, if you don’t satisfy your customers you wont get these increases! Yes and No. This view actually supports my first point: that a satisfied customer is a mean to an end, not the end of the means (if I can put it this way). 

Furthermore, being customer-driven often leads to a short-term view: it is about “pleasing them enough to enable us to make our sales target for the month [or the year]”. The long-term repeat business isn’t necessarily cared for. 

For long-term competitive advantage and growth, what is instead needed is to view the customers not “simply” as purchasers of goods and services but as “collaborators”. 

The customer participates (directly or indirectly) in as many stages of the product cycle as possible. The idea is to build a long-term partnership between the organization and its customers. The message to the customer becomes “we are partners/collaborators in this on-going endeavour to please you while at the same time growing our business”. This approach aims at more than satisfying the customer, therefore at delivering above his/her expectations. To achieve this, the organization needs to know well its customers (who they are, their cultural/social background, what they like/want, where/how they live, where/how they travel, etc…). 

Similarly (and this is where it gets really interesting) the customer needs to know well the organization (its products/services – past, present and future; its mission/goals; its history; its point of sales network – incl. of course its website; its successes and - yes why not – its failures; and lastly but certainly not least, its people). Knowledge is then at the centre of this collaborative relationship, hence the knowledge-driven approach.

Now, before enabling your customers to “know” your organization well, the organization must first know itself well. An organizational culture valuing knowledge-sharing is needed. Then, in order to sustain such a collaborative relationship with your customers, your organization will require continuous innovation, and not just in the product design department! Innovation must be encouraged in all functions. Everyone without exception can be creative/innovative. Innovation is fuelled by sharing knowledge/experience and by effective collaboration across departments and borders. This is where Knowledge Leveraging (or the so-called Knowledge Management) comes in... 

Peter-Anthony Glick http://leveragingknowledge.blogspot.com

Personal Knowledge Management

Yesterday, I attended a Knowledge Café in London arranged by David Gurteen (http://www.gurteen.com/gurteen/gurteen.nsf/id/kcafe-pollard ). The guest key-note speaker was Dave Pollard (http://blogs.salon.com/0002007/2006/09/27.html#a1657 ) and the topic: Personal Knowledge Management (PKM). Very simply put, PKM differentiates itself from “classic” KM as follows: KM => PKM Collection => Connection Content => Context PKM states that we should instigate better knowledge sharing with a bottom-up approach rather than the more classic KM top-down implementations. The basic idea is to send Information Professionals (IP) on “the field” to help/teach individuals with one-on-one sessions to be more knowledge efficient and effective. The IP would also in the process gather a lot of useful information about what technology employees really need to do their job better and to add more value. Of course, one-on-one sessions with everyone in an organization can be prohibitively expensive and time-consuming. Dave Pollard says that there can be ways to do this “economically” but the key is to convince top-executives that the increased efficiency and effectiveness more than cover for the costs. I believe this is indeed the main challenge of PKM. In fact, for a KM Professional, PKM does not resolve the key problem: getting board-level support to invest in knowledge leveraging initiatives. It might even make matters worse by not relying on an idealistic target state. It is harder to justify a multitude of “fuzzier” individualized initiatives (bottom-up) rather than a few collective ones with clear objectives (top-down). I do see a lot of benefits with PKM but I would intuitively believe that in many organizations, a more appropriate approach would be a mixture of “classic” KM and PKM. The latter implemented to support and sustain the initiatives of the former. I really do not see PKM succeeding on its own in an organization where knowledge-sharing is not part of the culture. I don’t see it as the magic bullet in such a context. One issue we chose to address at my table during this event was the fear that top-management usually has with wide-spread relatively uncontrolled knowledge sharing: the risk of some very valuable information falling into the wrong hands. A very pertinent approach was suggested to me: we first need to define exactly what type of knowledge is critically valuable to the organization, what makes it really competitively different. It is then this knowledge that would be kept secure. The rest can be left to be shared to add value and foster creativity and innovation. I am not saying this would be easy but it does make a lot of sense. Peter-Anthony Glick http://leveragingknowledge.blogspot.com

ROI or no ROI for KM?

I recently submitted a question to a KM mailing group about ROI. I basically wanted to obtain practical examples of KM initiatives (preferably company-wide) that have shown clear ROI in money terms. The discussion rapidly evolved into argumentations between the ones convinced that using the old-fashioned ROI method for justifying initiatives in the world of intangibles is complete non-sense and potentially counter-productive; and the ones that believe that ROI still has an important role to play, if not for anything else, for obtaining the support of “old-fashioned” top-management. At the time I asked my question, I was of course targeting the second group. The most virulent supporter of the “ROI is useless” view went to claim that network analysis and in particular Value Networks was the only way to go, citing Verna Allee as a leading thinker in the field. I then thought I should in fact ask her directly and via email, here is Verna’s response: "Any major corporate investment should be able to demonstrate some kind of positive impact in either financial or non-financial terms or you need to rethink what you are doing. However, for many knowledge focused initiatives the really big story is in building strategic capability for the future - which is all about intangibles- and is not about classic ROI. Of course ROI can include non-financial returns and impacts but people do not have that understanding so I generallly avoid using the term. People need to know how to tell both kinds of stories and know when to tell them. KM practitioners have completely dropped the ball in learning the language of intangible value then they wonder why they have so much trouble getting support for their efforts. Of course a lot of managers don't think this way but if the KM people just feed into their old way of thinking they are doomed for frustration. Step up to the plate and learn to the story of value in intangible terms. If you aren't educating your leaders to this way of thinking - who will?" Verna Allee. My reply to Verna was: Yes Verna, that is exactly the problem for most KM practitioners (at least it is for me): we know that we should do away with old methods but we don't believe our leaders can understand our new language without some transition using their language in a new context. Probably we underestimate them and should be more courageous. I recommend Kaye Vivian's blog entry on this topic: http://dove-lane.com/index.php/2006/10/17/km-and-myth-of-roi/ Peter-Anthony Glick http://leveragingknowledge.blogspot.com

What if we tried to foresee what will follow the currently unfolding Knowledge Economy?

What if we tried to foresee what will follow the currently unfolding Knowledge Economy? What will be the new buzz word for corporate leaders in 2050?I will not attempt here to answer these questions directly but will use scientific predictions as metaphors to give us a hint. While reading recently the very interesting scientific book “The Next Fifty Years – Science in The First Half of the Twenty-First Century”, a collection of 25 new essays by leading scientists edited by J. Brockman (A Vintage Original, New-York, 2002) I found three passages from three different authors that are relevant to my two questions above. First, here is how Alison Gopnik (professor of psychology at the University of California at Berkeley) ends her essay “What Children Will Teach Scientists”: “[…] At the end of the last century, knowledge began to become the most valuable currency, like land in a feudal economy or capital in an industrial economy. The new science of learning should tell us that knowledge is not just a prize to be won in some desperate test-taking struggle for places in the contemporary mandarinate. Instead it is, literally and not just rhetorically, our universal human birthright.” The way I read this (based also on the reading of Alison’s whole essay about the science to understand learning) is that our societies will progressively realise that knowledge is what makes us, humans, so special. The value of knowledge would then take the forefront in all aspects of our everyday life. We would continuously seek better ways to acquire it, to retain it, to share it, to nurture it. Of course, this should have a profound impact on management and organizational cultures. By 2050, the fact that knowledge is a vital asset will be a given fact and competitive advantage will be won by those who will leverage it faster and more effectively. This should mean that organizations of this future will have as a constant priority to make all their collaborators as creative and innovative as possible. Everyone in an organization will be empowered and encouraged to create/innovate making some mistakes along the way but learning a great deal more. This seems to be compatible with the next extract below. Mihaly Csikszentmihalyi - a Hungarian-born polymath, formerly chairman of the Psychology Department at the University of Chicago and currently Davidson Professor of Management at the Claremont Graduate University in Claremont, California – writes in his essay “The Future of Happiness”: “[…] Among the things we learned is that people who are engaged in challenging activities with clear goals tend to be happiest than those who lead relaxing, pleasurable lives. The less one works just for oneself, the larger the scope of one’s relationships and commitments, the happier a person is likely to be. […]” Mihaly sees that by 2050, societies at large but employers in particular will have understood that people are more productive when they are happier, and that people are happier if they have challenging objectives and if these objectives are clearly contributing to the corporate goals. This seem to suppose that individuals will be valued for their specific knowledge and competencies to go beyond what is initially expected of them, in order to create value for the organization. This nicely leads us to the third extract of this book I believe relevant to the leveraging of Knowledge. I found it at the end of Brian Goodwin’s essay titled “In The Shadow of Culture” where he attempts to explain why he believes a “science of qualities” is developing, where feelings and qualities have at least as much importance as proofs and quantities. Brian (a professor of biology at Schumacher College, Darlington, UK - where he coordinates a master’s program in holistic science- and a member of the Santa Fe Institute) writes: “[…] In the shadow of current science it is possible to see the components of a science of qualities which would restore qualitative evaluation to the place it occupies in our everyday lives, where judgments depend on quality as well as quantity. This restoration, together with the recognition that feelings belong not only to us but also to the rest of nature, in whatever form, presents us with a dramatically transformed set of possibilities for scientific knowledge, technology, and corporate and political action. A shift in scientific perspective of this magnitude is not going to happen overnight, if it happens at all. It requires new forms of education at a basic level, in which the sciences and the arts are united to keep people whole and in which scientific and technological decision-making require participation by all members of civil society, with knowledge joined again to responsible action.” This extract is heavy in meanings and could open up many philosophical debates. I will only say this: if science does indeed go through such a drastic shift towards valuing qualitative judgment, it will have an even bigger impact on other parts of society such as the business world. Accounting would no longer rely on quantitative analysis and the value of a company would give at least as much importance to qualitative aspects such as its intellectual property, including the specific knowledge of all its collaborators. Peter-Anthony Glick http://leveragingknowledge.blogspot.com

Traditional strategies to improve efficiency are failing in the Knowledge Economy.

It is really amazing and sad (and frustrating for some of us who can see the light) how much Company Boards concerned with cutting costs while sustaining growth can repetitively miss the most effective way to do this in the Knowledge Economy we leave in: leveraging the organizational Knowledge through the development of a knowledge-sharing culture to foster creativity and innovation. Traditional means of cost cutting are increasingly reaching their limits and sometimes even become counter-productive. For instance, the still somewhat popular engineering tools designed to map, understand and control organizational processes – to eventually simplify/standardise them to cut costs and improve efficiency - are all failing to meet their objectives. They at best provide a partial understanding of what is really going on, and at worse end up being themselves more complex and costly to manage than what they are supposed to represent. The key problem of these tools is that they miss a vital part of organizational processes: the human aspects (social, political, hierarchical, geographical, knowledge, skills, competences, etc…). Another example of a management tool usually not adapted to the Knowledge Economy is MBO or Management By Objectives. When managers’ performance is evaluated solely on annual objectives, they will naturally tend to focus their attention and efforts on these objectives and not be concerned with anyone else’s. In other words, MBO can have adverse effects on collaboration. Of course, there are ways to alleviate this problem such as including a knowledge-related objective for each manager. Assuming it is measurable, this objective would however probably drive the only knowledge-related activity a manager will carry out effectively, so not vey productive from a KM point of view. Cost-cutting is still too often synonymous of redundancies, recruitment freeze, modest salary increase, low (or no) bonuses, etc… Of course, who is making the most sacrifices and suffers the most: the workforce (the human capital). The problem with this is that it affects negatively what is increasingly the most important asset to an organization: its people knowledge and experience. Instead of sending the message that their very existence is a reason for lower margins, they should be asked and given the suitable environment to actively and creatively work out ways to cut costs and/or increase efficiency/effectiveness with same resources. A suitable environment means enabling a knowledge sharing culture. Peter-Anthony Glick http://leveragingknowledge.blogspot.com

Business Intelligence for simulating the future

Chris Caren (Microsoft’s general manager of Office business applications) had recently this to say about Business Intelligence: The latest three trends are: 1. BI products are usually considered as too hard for everyone to use and too expensive to roll out to as many people as one would want to. 2. Standardising onto one or two BI product lines that can serve all the needs of different types of user. 3. A change in the way people are thinking about BI: from a report-centric, historical view of the business, to a metrics-centric view – involving dash-boards and scorecards – of where the company is heading. I believe these three points are all valid and important but the last one is the key to success. The first two are more about technology, the last one is first about a change of approach and a change of objectives. It implies the realization that successful organizations will be the ones that focus on simulating the possible future rather than analysing the past. Peter-Anthony Glick http://leveragingknowledge.blogspot.com