I3 UPDATE / ENTOVATION International News
No. 18: April 1998
A Special Welcome to ENTOVATION Colleagues
Time to Think
Customer Knowledge is not Knowledge of the Customer
Measuring The Value of Knowledge
Corporate Innovation Through Knowledge Management (Conference Report)
The Global Reach of Ken
- The Value of Knowledge
- Collaborative Innovation and the Knowledge Economy
- Y2K: The Millennium Reckoning
Knowledge Jobs Link - A New International Recruitment Service
Reader's Reply - Making Sense Of Mind Tools (Stephen Jupp)
Welcome to this latest I3 UPDATE, a free briefing analysing developments in the networked knowledge economy. As a Business Affiliate of ENTOVATION International we are pleased to announce that as from this edition, I3 UPDATE is merged with ENTOVATION International News. We welcome colleagues of ENTOVATION International who will find a personal message from Debra Amidon as our first item.
On the administration page you will find important information about leaving and joining the distribution list. We hope you enjoy this UPDATE, and welcome comments, contributions and feedback at email@example.com.
David J. Skyrme
Debra M. Amidon, Founder and Chief Strategist, ENTOVATION International
The ENTOVATION Network is one of the most successful virtual enterprises in the world. We have grown from 400 to 2200 theorists and practitioners in 48 countries in only 5 short years. We include many interdependent businesses ranging form learning systems to business strategy, including those of the ENTOVATION Fellows who come from the United States, UK, France and Australia. And we are growing...
From this issue forth of I3 UPDATE, we have decided to merge our own briefing services with the monthly email briefing by David Skyrme Associates which already enjoys a wide international electronic distribution.
Please do NOT consider this a spamming exercise. We have treated the ENTOVATION mailing list with considerable care and have not used the contact information for anything other than activities directly associated with ENTOVATION International.
We are indebted to the time and talent devoted by many ENTOVATION Colleagues who have had considerable impact on the knowledge innovation movement. We are learning and, indeed, innovating together - and I look forward to what the interactions of 1998 might bring.
I believe that you will enjoy the combined I3 UPDATE and ENTOVATION International News. If for any reason, you would prefer not to receive this monthly electronic UPDATE, please let us know. Your privacy and preferences will be honored. That is my promise.
David J. Skyrme
"If you're not twitching, you're not working" was the phrase once used by a manager I know. His notion was that if you were not on the phone, typing away at your computer keyboard, talking to someone, or in meetings, then you were obviously not working. The idea that you could sit still, read a magazine or even shut your eyes and THINK was an anathema!
In today's corporate climate we are told of the strategic advantage of time: the importance of faster cycle times, faster time-to-market, faster customer response. This creates an urge towards furious activity, rushing to solve a customer problem here, charging off to a meeting there. Yet how effective is all this? I seem to be continuously on the receiving end of poor customer service, or trying to contact firms whose key people all seem to be suffering from 'meetingitis' - one wonders what all their frenetic activity achieves.
We see similar attitudes holding back telework schemes, which if properly managed can be very productive and beneficial for the firms concerned. The issue is one of lack of middle management confidence: "if you can't see people at their desk in the office, how do you know what they are working?"
Take Time Out
The problem in the above situations is that there a focus on inputs, not on outputs or outcomes. If a person or organization performs, you shouldn't within reason (e.g. ethical or moral considerations) worry about how they achieve results. Too often, organizations and individuals in them are in the proverbial swamp of alligators, and do not take time out to reflect and think. I recall a situation when as a product manager I had just inherited a problem product. The phone rung incessantly and the problems got worse. So, I did two things. For one week, I had all calls and responses logged, even though it slowed down call handling. Then, for two days I diverted the calls to a holding area, and took the team out to think. By analysing the call log, and sharing our knowledge of the problems, we were able to devise a course of action, develop a set of answers to frequently asked questions and by spending time at the manufacturing plant, put in place new procedures to reduce the problems. The problems subsided and the product went on to become a moderate success.
It is only if you take time out to think that you can move forward, make breakthroughs and develop winning strategies. Successful business people are often those who seem quiet and unassuming. They listen intently, think deeply, and even take time out to sleep on the job - after all its a great brain refresher. For example Richard Branson is cited for taking a short nap frequently after his lunch.
If knowledge is important to the organization, then its repository, the human brain, needs time to work effectively. Throwing lots of short bursts of random activity may help to stimulate it, but too much will not help its owner to organize their thoughts and ideas. Time is a precious resource. It does not multiply like knowledge. Once time has passed, there is no getting it back. Here are some practical steps that learning organizations use to create such valuable thinking time:
- have plenty of 'white space' in meeting agendas - one colleague reports that one management meeting recently was the best meeting they had ever had; it happened because two expected speakers did not turn up; it gave them time to talk among themselves.
- provide time at the end of each session in a meeting for reflection - one manager I knew worked around the 55 minute hour: the last 5 minutes being for "lessons learned during the last hour"
- Build enough free time into diaries - deliberately for thinking - and not just catching up on paperwork.
- Allow key people to go away, do something different and recharge their batteries (brain cells) - it amazes me how many executives feel stressed and do not take their full holiday allowance.
- Have away-days, which give teams time to talk to each other, and work in a more considered way to consider new ideas and convert them into new opportunities or ways of working.
And Thinking of Time
And when you next give yourself time to think, think of the different ways in which you can exploit time as a strategic lever, not by doing things faster, but using time differently. Here are some ideas:
- Use technology to displace time - aggregate your voice and email messages and handle them in a consolidated chunk of time
- Do some tasks asynchronously, not synchronously. For example, do you really need a meeting to review a specification, when individuals can comment on it in a more informed way at a time of their choosing?
- Go parallel, not sequential. Hopefully BPR has helped you revisit your inefficient processes. But are you doing enough operations in parallel e.g. using objects such as forms and documents that several people can process simultaneously, rather than using only sequential workflow?
- Let other people make productive use of your busy/idle time; through shared documents; other people in your organization, perhaps in different time zones, can work on the same document when you are busy doing something else, or taking that nap.
- Automate some of your standard responses e.g. by standard email replies. Effectively that means you are responding 24 hours a day.
- Turn fixed time into flexible time. Work when it suits you best. Go out and enjoy the sunshine (or snow, as it is today) when it beckons. I turn this into a benefit for my clients by giving them a reduced rate if I can choose the time I work on their assignment.
- Right first time. Remember the adage that slower can be faster. More haste, less speed.
Did you know that in the run up to the millennium, that the Greenwich Obseravtory (formerly the keeper of GMT - Greenwich Mean Time) has licensed out, (for a hefty fee) the term to Guinness who will call it Guiness Mean Time during 1999? A good example of the value of intellectual capital!
This turned out to be an April Fool - See Gotcha!
Congratulations to American Airlines, who on my recent US trip, were on time or ahead of time on 6 of the 7 legs and only 5 minutes late on one - in stark contrast to the 'untied' airline who had such a bad record on my previous US trip.
Do you have thoughts on time to share? Send them to me at firstname.lastname@example.org
Debra M. Amidon
It has been a long time coming, but enterprises all over the world are beginning to realize the value in treating 'customers as a source of knowledge' - not just someone to whom products and services get delivered! Of course, we defined it in 1993 with research at MIT and there were other theorists long before us. But, over the past few years, several companies have begun to reap significant economic value from the strategy.
Steelcase developed the Business Week Product of the Year in consort with customers. Buckman Laboratories speaks of a span of communication of one...which includes customers. Hubert Saint-Onge (Canada) has been able to differentiate between transaction processing and partnering with customers. Siemens most recently has adopted an 'Innovating with the customer'(sm) approach to delivering services in the Network and Communications group.
There is a new journal on the topic - Journal of Customer Relationships - which includes an article in the most recent edition by me on "Customer Innovation: A Function of Knowledge." I wrote:
"Customers have always been integral to the innovation process. What else is the purpose of productization and commercialization? However, current global business conditions have shed a new light on the value of customer interaction and the scope and structure of the innovation process itself. Moreover, what good are your customers if they are satisfied, and not successful? This article defines some of the elements of this new economy, provide a rationale for the innovation value-system and illustrates how companies can manage the development of their new products and services to fulfill unarticulated customer needs and unserved markets. This is the only road to sustainable competitive advantage."
Technology Solutions Group (Chicago, Illinois U.S.A.), the journal publisher, will be participating this month in the ComputerWorld Smithsonian Awards Program. For a free subscription, send a note (email@example.com) and mention that you are an ENTOVATION Colleague.
March 10-11, 1998, World Trade Conferences hosted an entire conference on the topic of "Increasing Customer Loyalty through Knowledge Management" in London. The range of speakers included experts from Lotus Consulting, American Express, Xerox, NatWest, Motorola, ABB, AT&T, Nortel, ICL and more.
The messages were clear: customers need to be the focal point of activity.
What has changed, however, is the way that the knowledge of customers can be utilized. Progressive companies are realizing that a learning partnership is a most more viable way to build the long-term relationship they seek. This can be costly. ENTOVATION provided a way to map current products and services against the information/knowledge continuum as well as the degree of customer involvement.
[Note: A short 10-minute videotape which was prepared by RM Consulting of the Royal Mail, was made of Debra M. Amidon and can be obtained for $10 plus shipping costs.]
David J. Skyrme
Just as the new report 'The Value of Knowledge' was put to press, new studies by Ante Pulic and Mannfred Bornemann of the Karl Franzens University, Graz (Austria) came to my attention. They have developed measures of Intellectual Potential for companies and national economies.
They are critical of existing approaches to measuring intellectual capital (Sveiby, Edvinsson and others). They say that they are both subjective and use unhelpful ratios e.g. revenues per employee. While business success is measured by financial results, this too should be the ultimate measure of the result of application of intellectual capital.
By studying the two contrasting economies of Croatia and Austria, they show common results:
- there is no correlation between a firm's performance and its use of physical capital
- there is a significant correlation between a firm's performance and its use of human capital
This correlation demonstrates that intellectual potential (the human resources) of a company are a "decisive resource for corporate success, which is completely in accordance with the knowledge-based economy".
Strassman, they feel, is on the right lines since he considers value added by management (see Chapter 4 in Creating the Knowledge-based Business by Skyrme and Amidon). They extend this to all employees and come up with a ratio VAIP - Value Added Intellectual Potential Coefficient which is VA/IP where:
VA - Value Added - is the difference between sales and inputs (excluding labour costs)
IP - Intellectual Potential - labour inputs (salaries etc.)
This measure they argue is "precise and objective" and should receive more attention by business strategists and managers, particularly as most companies spend more on intellectual potential than physical capital:
"Increasing the efficiency of the IP is the easiest and cheapest way to achieve long term business success".
These are interesting studies backed up by quantitative data. While their arguments are powerful, my own opinion is that the IC measures of those they criticize continue to have valuable merit as management tools. Their measures, while useful indicators, suffer from similar problems to those of other high level measures like Shareholder Value Added (SVA). They are aggregated output measures and difficult for managers to get to grips with. Managers need to know the value drivers over which they may have a degree of influence.
Nevertheless these papers represent an important contribution to the debate. They can be found at http://www.measuring-ip.at/
On 1st and 2nd April, delegates at this ICM conference in New York were treated to some interesting insights into the evolution of knowledge management in innovation practice. Chaired by ENTOVATION founder Debra Amidon, this conference brought together in one place a unique mix of people that blended many different perspectives. Although there were some familiar faces from the conference circuit, their experiences continue to develop, giving delegates new insights. In contrast there were others making a debut appearance, adding a refreshing injection of knowledge from new directions.
The key messages that I took away reinforce many of the factors that we have cited in earlier I3 UPDATES, including:
- Innovation is driven by knowledge; it is about linking ideas to problems, and converting ideas into products and services faster: "knowledge is the fuel for innovation" (Kent Greenes, BP)
- Successful programmes need a holistic perspective - information management, attention to culture, developing new roles and skills
- Intranets are evolving, beyond the communications and publishing stage towards applications, shared learning and knowledge construction through communities of practice.
- Customers and other stakeholders are vital players in the innovation cycle. However, their involvement is often only peripheral, and not central. Customer knowledge is vital knowledge (cf. Debra's article above.)
- A change of culture, through changing attitudes and behaviours is invariably needed for the full value of knowledge innovation to be exploited. Knowledge leaders must mobilize change, provide tools and coaching and lead by personal example.
- Connectedness. Providers and users of knowledge must be brought closer together and be aware of what each other knows. Enabling technologies (Intranets, groupware) and communities help.
Highlights of selected sessions are given below. Regrettably space prevents us from featuring every one of the many excellent speakers.
Francois continued his theme of earlier conferences of the social nature of organizations. He outlined the balance needed between organizational and individual knowledge bases. He described seven innovation levers along with their connections to intangible assets:
- Strategy Innovation - aligns with organizational capability and talents
- Work design innovation - developing internetworking through a ' contract fulfilling network'
- Services innovation - using knowledge management systems to deepen customer relationships
- Learning innovation - developing the human asset
- Valuation innovation - creating market value through intangible value drivers
- R&D innovation - developing technology assets
- Innovation of Innovation - the management asset: managing and improving the innovation process.
A practical case study of the major transformation at Siemens Public Communications Networks. Siemens needed a new perspective, not as purely a products company, but of value creation through know-how, values and perceptions. The essential ingredient was a mind shift and culture change: "Everbody in the learning organization is an empowered co-creator of organizational intellectual capital". The culture change has occurred in three phases:
Phase 1 (1995) - Mobilization: developing understanding; the need to change; initiating team learning. At this stage some 35 key managers were involved. In turn they engaged with 5 people in their network. 200 people (the trend setters who others follow and trust). Finally a company wide meeting of 1500 people which developed the core values.
Phase 2 (1996-7) Customer knowledge. First a focus on internal customers later extended to external customers. A carefully managed process to "manage from the future", developing an innovation infrastructure to meet customer needs. It involved cross functional teams, global teaming, and reward systems to create new futures.
Phase 3 (1997- ) Global Business transformation. Working to achieve total customer satisfaction through customer teaming; development of the learning organization; leadership in virtual and inter-cultural worlds.
All phases draw together in alignment the following elements - vision/values, strategies, products and intellectual property, processes, structures and systems - "innovation is everywhere". In conclusion Christian noted that "most important is the people, not the programme".
Teltech Resources Network Corporation links clients with problems to a network of experts who have potential solutions. Through a unique schema and the use of knowledge analysts, Teltech have developed an expertise at making effective connections. Its premise is that 90 per cent of problems have been solved elsewhere, perhaps in another field. A specific example of how knowledge jumps across fields unexpectedly was that of an apparently insolvable leakage problem in a biomedical device that operated in a saline environment. The client had struggled for 6 months without success. In two weeks, the problem was solved, through Teltech connecting their client to an expert who knew how to solve similar problems in submarines.
An interesting part of this presentation was the results of a survey on knowledge management commissioned by Teltech. It showed the current state of organization as follows:
- Preoccupied - with other things (45%)
- Unconscious 'readiness' - some awareness, and grass roots efforts (40%)
- Talk It (9%) - formal leadership support; km activities take place
- Walk It (6%) - reflected in corporate mission and embedded in culture.
One of several key learnings about knowledge management is that "behaviour is 90 per cent of the challenge".
This presentation showed how BP's activities are guided by a very simple but highly effective model:
- Learn before Doing
- Learn while Doing
- Learn after Doing
Each is supported by various practices that have been introduced. These include virtual teaming (that has been widely reported elsewhere), After Action Reviews (along the lines of the US Army) and Peer Assist. This latter is an interesting approach since it involves people spending valuable time to support their peers in other business units, without any corresponding flow of funds between business units. Its described as "something to help you think about what you are about to do", typically from someone who has gone through a similar experience before. Initially such acclivities were mostly conducted face-to-face but many are not done virtually. A key component of BP's programme is its Intranet, where individual experiences are recorded, and many real life situations brought to life through video clips and the actual words of those personally involved. Kent describes BP as going through not just a culture change but a global climate change, with knowledge and learning at the forefront of everything they do: "we have taken the lid off the pot".
Knowledge Ecology: Building Communities of Practice (George Por)
George described his work in creating Communities of Practice. Using a guiding architecture that blends knowledge, technology, business and social factors, he showed how these co-evolve as a community develops. He provides a check list of questions that help participants design a community for sustainable success. The interesting challenge is how to scale up communities that work successfully with up to 350 people to much larger communities of 20,000 or more.
Like other speakers, George notes that "technology is no problem - it's the social and facilitation aspects". One approach he is advocating is that of key neighborhoods within the wider community.
Communities of Practice are part of the wider interdisciplinary field of knowledge ecology that also embraces other aspects of strategy, knowledge management and complex adaptive systems. Its aim is "to continuously improve the relationships, and methods for creating, integrating, sharing, using and leveraging knowledge."
See also http://www.co-i-l.com.
Meet The Press
This unusual gathering brought together for the first time in a conference setting (at least on the other side of the table!) representatives of the Knowledge Press. Represented were:
Rory Chase - Journal of Knowledge Management
Britton Manasco - Knowledge Inc. (http://www.knowledgeinc.com/)
David Keckwick - Knowledge Management
Bruce Taylor - KM World (formerly Imaging World)
Karen Speerstra - Butterworth Heinemann (knowledge series)
The contrast was interesting - the specialist subscription journals/magazines with circulations of a few thousand and KMworld - described by Bruce as the "tabloid" - with a circulation of 40,000 plus. Panellists were asked how they saw the future of KM unfold as a fad or something different.
Rory saw the KM fad continuing, at least for about another year. He felt it would then segment into niche markets. Longer term he saw regional social issues between the knowledge haves and have-nots.
Britton has observed a shift from internal learning to applied knowledge with customers. He sees this stronger learning with customers as a growing trend. Another trend he foresees is a knowledge skills shortage as a barrier to growth.
David thought that the fad might be growing too strongly for its own good, and there was danger of an equally fast decline, unless it was linked to core competencies and core business processes.
Bruce saw bifurcation on the document side of knowledge management into archive/library management and collaborative documents. Ever the entrepreneur he thought he saw an opening coming for 'Wisdom World'!
Karen described the Business Literacy project, where business book readers come together in study sessions to discuss key management books. Knowledge management she felt would only thrive long term if it moved away from the tools to key principles and mastery of knowledge and learning skills.
Other Speakers included:
Staurt Haggard - Department of Veteran Affairs - benchmarking;
Rick Dove - Paradigm Shift - Knowledge Management and Agility;
Kuan-Tsae Huang - IBM - Measurement and Reward Systems
Bob Wiele - Centre for High Performance - Thinking Styles;
Another unusual, but beneficial, aspect of the conference was the time allowed for small group discussion, for example, using the thinking profiles and fast tracks provided by Bob Wiele of Smart Skills. Altogether, the conference was an intellectually stimulating event of collective knowledge evolution by the knowledge community.
Synopsis by David J. Skyrme.
(Note: While every effort has been made to report faithfully we apologise to any presenter who feels they have been wrongly cited and offer them the opportunity to make any corrections in the next edition of I3 UPDATE / ENTOVATION International News).
Debra M. Amidon
Innovation Strategy And The Knowledge Economy: The Ken Awakening
(ISBN: 0-7506-9841-1) hit No. 7 on the Books for Business Bestseller List. This was largely due to the coordination of Bryan Davis, President, Kaieteur Institute of Knowledge Management (Toronto, Canada). It has been translated into Chinese by Zhouying Jin and Jin Chen (China) and into Portuguese by Marcos Luiz Bruno, Director of Instituto Pieron (Brazil). More versions are coming!
David Skyrme, published by Business Intelligence.
This report has gone to press and will shortly to be published by Business Intelligence. Its main conclusions are that:
- the pressure to measure intellectual capital is growing
- most currently used systems e.g. balanced score card do not go far enough
- there are interesting insights to be gained from macro-economic measures
- a new generation of methods focused on IC measures are now proving successful
- it will take many years to change the accounting habits of centuries
The report outlines different approaches and gives practical guidelines based on the experience of a wide range of users.