This blog focuses on how to leverage the knowledge held, created, shared in an organisational context; with the objective of fostering creativity and innovation for competitive advantage. Leveraging your organisational knowledge relates to Knowledge Management, organisational learning, human capital development, social media/networks strategy, multi-channels Customer Relationships Management (CRM)
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17 March 2008
"The Google Enigma"
09 March 2008
What should Web 2.0 mean for Luxury Brands ecommerce strategies?
19 January 2008
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.
09 January 2008
It was about SOA all along! Chapter 6
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.
30 December 2007
It was about SOA all along! Chapter 5
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.
19 December 2007
It was about SOA all along! Chapter 4
17 December 2007
It was about SOA all along! Chapters 2 & 3
12 December 2007
It was about SOA all along!
15 October 2007
The Age of Collaboration
31 August 2007
European organizations are failing to effectively create and manage their intellectual capital
22 May 2007
Sarkozy’s goal-driven government structure
Nicolas Sarkozy, the newly elected French President, is completely rearranging the Cabinet as it has never been done before. He is grouping departments together under the same boss (minister) that never worked together. He is also breaking up departments for the first time. The central principle is a very clever one: The Cabinet’s departments are formed on the basis of their main goal and purpose, no longer on the basis of their functional relationships. For example, the goal of transforming France into a “Green” country requires departments such as “Environment” and “Energy” to be joined together (the “Energy” would have usually been managed by the Economy and Finance” dept). Another example is to remove the management of visas from the Interior department, and associate it with the dept responsible for “Integration” and “National Identity” to form a new dept for Immigration. The goal here is clearly to have a more holistic approach to the issues related to immigration. Whether or not we agree on these political goals is not my interest here. I am however intrigued by the implications of these drastic departmental changes for the civil servants affected. The media have already reported a lot of mostly worried comments from some managers, and the point in common I could identify was anticipated problems due to cultural differences! Here we go again with the importance of Organizational Culture but this time in the Public sector. Another significant impact due to some redundancy in activities will be a reduction in the workforce. The most telling case is the one affecting the separation of the “Labor” dept from the “Economy & Finance”, and its association with the “Social Relations” dept. In the Labor dept, you typically find the ones who came out of the French civil servants schools with the top marks. They are usually very good in math, very rigorous and methodical. In the Social Relations dept, it could hardly be more the opposite! They usually graduated with the lowest marks, have more “artistic” mindsets (rather than scientific) and have better communication skills. Both sides clearly have no idea how they are going to work together! Nicolas Sarkozy’s idea here is to give them a common goal of improving labor issues, with the realisation that it will require a combination of economic and social changes. For example, one of the objectives announced is to level the salaries between men and women within two years (today in France, men can be paid up to 40% more than women for the same job)! It will be very interesting to see how all these departments learn how to work together. These collaborations will need to be rapidly effective and efficient for the new Government to meet its objectives and convince the French people that it is on the right track. I wonder if someone will think of calling on the services of Knowledge Management consultants. I now come to the point I really wanted to make here: does this goal-based organizational approach make sense for a private company? We could start with an example: consider the strategic goal to “set a rate of annual increase of say +20% for retail customer loyalty”. For simplification, that is the number of existing customers purchasing at least once each year (I am assuming a luxury goods industry here). Typically, such an objective would be given to the Retail department. Some other departments such as Marketing might also be made aware of it and asked to assist. Now, what would it mean to adopt Sarkozy’s approach? You would need to think out of the box and regroup together under the same leader various departments or teams (parts of departments). I can suggest the following list for this example (but this exercise is very context-dependant, so each situation can demand a different organization) :
- The Retail department
- The part of the Customer Service department (After-sales services) specifically dealing with Retail customers (as opposed to wholesale).
- The part of the marketing department focusing on the retail market.
- The Public Relations department.
- The Press department.
Possibly, you could even include individuals or teams from some of the shared services departments that usually devote most of their time for Retail matters. I can think possibly of:
- Information Systems (IS) support professionals. For example, the team supporting the CRM application, a key tool for such a customer-focused objective.
For the shared services, the question to ask is: “will the individuals or teams concerned add more value by being integrated into this new “Super Retail dept” or by remaining closely linked with all the other teams within their respective department?” You should really consider this from a Knowledge sharing point of view. For an IS support Analyst to report to the Retail Director would undoubtedly facilitate his/her understanding of the business needs and deliver tailored support. However, from this point on, he/she ceases to be a shared resource and the cooperation with the rest of the IS department is then seen as secondary. In other words, this makes sense if the workload generated by the Retail department’s IS requests justify this IS Analyst to be full-time focusing on them. So then, supposing a Company implements this goal-driven organization, isn’t there a risk to have to re-organize too often when the strategy changes? Yes, but I don’t see this as a risk if this process of reorganization becomes engrained in the Company’s culture. The whole Organization must be built on principles of flexibility: flexible structure, flexible processes, flexible roles. This implies in turn a knowledge-sharing culture. Employees need to be used to share knowledge across departmental boundaries. In fact, there should be no internal boundaries when it comes to knowledge sharing (except for what needs to remain confidential). Such flexibility of course wouldn't typically suit more an Organization operating in a fast-moving/fast-changing market, but it could be argued that all markets are changing increasingly faster in this flatter World. Peter-Anthony Glick
http://leveragingknowledge.blogspot.com
09 April 2007
“Knowledge management strategies that create value”
(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
16 February 2007
“Break the Mould”
25 January 2007
Knowledge-driven, not simply customer-driven
08 December 2006
The virtuous cycle of the Gift Economy
22 June 2006
Traditional strategies to improve efficiency are failing in the Knowledge Economy.
16 December 2005
Becoming a Knowledge-driven Organization in response to more knowledgeable customers in the luxury market
05 December 2005
Why all this fuss about KM now?
- Stop “reinventing the wheel”. => Similar or different solutions are applied to identical problems by different teams throughout the organization, when one solution could be applied for all. What are needed are processes and tools to facilitate knowledge encoding and accessibility. It must be facilitated to find out what has been done and who has done it.
- Induce a “Knowledge is power when it is shared” culture. What is needed is a top-management will and drive for a knowledge sharing culture, in which individuals, departments, teams, companies are encouraged, valued and rewarded for sharing their specific knowledge.
- Effective replacement of experienced staff through knowledge acquisition and transfer. A fraction of the significant costs associated with staff turnover could be directed towards proactive knowledge transfer from senior staff to more junior ones. Training, Coaching, apprenticeship, documentation are only some of the methods that could be generalized.
- A company-wide team spirit or the systematic involvement of all the relevant stakeholders in projects and activities, all sharing specific and valuable knowledge and experience. “When knowledge gained somewhere doesn’t move elsewhere, that’s not a learning organization; that’s just a bunch of projects” (Jac Fitz-Enz, HR analyst, founder of the Saratoga Institute). What is first needed is for individuals and groups of people to be encouraged and valued for using their own knowledge and experience to constructively challenge the production of others. Furthermore, positive and negative feedback from all parties involved in projects and activities should be formally collected and made freely available to all for re-use (this relates to first and last examples as well).
- Stop making the same mistakes twice (or many more times). The risk of repeating mistakes can be considerably reduced with the generalization of relatively simple processes and tools, all centred on the principle of proactive knowledge sharing. In other words, the reasons and impacts of a mistake along with what was done about it is to be systematically recorded in a database available for others to consult.
I found on Pera the Innovation Company's website (www.pera.com) this very good support for knowledge-driven stategies:
"Global Knowledge A Knowledge Based Business... The best businesses today recognised a long time ago that their use of knowledge would be key to making them successful and they did something about it! These businesses: Thrive on chaos and uncertainty because it confuses their competitors Welcome globalisation because it gives them access to customers and capabilities that their competitors are yet to comprehend exist Welcome reduced product lifecycles because they know they are agile enough to get in and out of these new business spaces at speeds others can only imagine Can be sure that China is not a threat because they know that the value they create comes from the man and not the machine But what did they do? Divorced themselves of the corporate mindset and released the spirit of the individual Developed their human capital first and then watched their financial capital multiply Looked across the business and to the world at large for inspiration not just to their leader Realised that they exist in an ecosystem, not linear world And then what did they do with this self-empowered, self-motivated, self-aware and profit hungry bunch of individuals? They fed them knowledge and they made them money……"
Peter-Anthony Glick Leveraging Organizational Knowledge