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I3 UPDATE / ENTOVATION International News
No. 21: July 1998

Contents

Are You Being Served? - David J. Skyrme
The Search for New Knowledge Standards (in Finland) - Debra M. Amidon
Y2K Bulletin: The Fear of Panic - Jan Wyllie
Resources
Events
Snippets

Editorial

Welcome to this edition of I3 UPDATE / ENTOVATION International News, a free briefing analysing developments and key issues in the networked knowledge economy. This month there are features on customer knowledge and service, and of a recent conference in Finland, always an interesting bellweather country of how management trends unfold. Also on trends, Trend Monitor's ongoing analysis of the Y2K problem continues - the news seems to get worse as time ticks away.

I3 UPDATE is also available by email. See the administrative information page.

David J. Skyrme
Managing Editor


Are You Being Served?

David J. Skyrme

Customer knowledge invariably comes out top in surveys as a company's most vital knowledge. My colleague Debra Amidon spelt out the distinction between knowledge of customers and customer knowledge in a recent I3 UPDATE (No 18 - April 1998). However, this knowledge is of little value if not converted into a business benefit such as better customer service.

Good Customer Service is Knowingly Appreciated

When you experience good customer service, you really appreciate it. I buy my business stationery and office supplies from an organization a long way from my workplace. In fact, it is based in the city that claims to be the centre of England - Leicester - clearly good for distribution. I can place an order at up to 8 o'clock in the evening and get next day delivery. Prices are lower than suppliers in my home town, and service is excellent. Only once in many years did part of an order go wrong, and a replacement was on its way, no questions asked, the same day. The supplier remembers what I have bought and sends occasional reminders with special offers unique to me e.g. "You last ordered fax rolls on 21st March. Your special price for this item is XXX." It even sent me a gift on my fifth anniversary of trading with them. In other words, not only do they know my buying habits, they have products, prices and service to match.

More Often Than Not...

In contrast to the above example, which relates to tangible goods, you might expect that for intangible services and through use of technology, service should be even better and faster - wrong! Two of Britain's leading banks have egg on their face this week. 400 ATM terminals at NatWest went out of action - you simply could not get access to your own bank account or withdraw cash. Apparently, it did a system upgrade over the previous weekend, but ran into trouble with its new client server application.

Barclays, like many others, are offering banking by phone: "call at any time, and do all your transactions from the convenience of your home". However, as many of their customers discovered, it is not so convenient when all you get is the busy tone. A spokesman from Barclays in a radio interview added insult to injury when he said that the problems were because it was too successful in attracting customers!

My own recent dealings with utility and financial service companies associated with our move (see details at the end), indicate the growing demise of customer service through inappropriate voice response technology. Several services made me wade through three layers of options of 4-5 items in each. Couldn't a telephone operator route me quicker?

These are examples of where technology, rather than improving customer service, has actually harmed it. And all this before Y2K problems start to hit! (See Jan Wyllie's Bulletin below).

Served by the Web?

Every day we read about the benefits of electronic commerce. A typical banking transaction costs over a dollar when done by conventional methods, yet only cents over the web. However, as suppliers like Amazon.com have shown, the real benefits come not just through reducing transaction costs but by increasing your knowledge of customers and focusing offers to them. When an author publishes a new book, interested customers are notified by email of the new title. Through technology the customer relationship is deepened.

Figures cited by analysts for the value of electronic commerce are mind blowing - quadrupling every year to exceed $1 billion by 2000 is not untypical (though we need to remember that this is still less than 5 per cent of retail sales). But for every Amazon.com that uses the new media effectively, there are many who do not. For their potential customers it is an ordeal to find any useful information yet alone place an order. One recent survey showed that only a third of companies gave meaningful information and less than 20 per cent allowed you to place an order. It almost seems that the bigger the company, the less the information and the longer the wait to find that what is there.

Several times recently, I have tried to conduct online transactions without success. In several of them, after 3-4 clicks you finally got to what you thought would be the page with product and pricing information... then were given a phone number to call (and not a 24 hour one at that). This defeated the purpose for me - trying to use my time more efficiently by placing orders in the evening. Another corporate home page loads Java, followed by about 110K of information - quite a long wait. Even more annoying is one home page that insists you load Shockwave, so as to view their graphics wizardry. Now I've nothing against Shockwave - if your product is multimedia and you need to see it to its full effect. But not for what I was trying to view, and certainly not without having any alternative work around. Insisting that customers go and download another plug-in seems a very effective way to put them off. I did come back to that site later when I had more time. But then I found the Shockwave page rather off putting - it looked like a major software installation to me, with all the problems one might expect if it does not go smoothly. So sorry, XYZ, I still have to get past your home page.

Not All Bad News

Yes, corporate webmasters are still trying to show off all their gizmos, rather than getting down to fundamentals e.g. giving fast routes to information and engaging potential customers in knowledge exchange and a deepening relationship. But compared to matters when I did a survey a year ago, there are two significant improvements:

First, News and information services. As well as the Push technology channels (e.g. Pointcast or Backweb), serious news and information providers are steadily improving their offerings. My own current favourite is NewsPage (http://www.newspage.com) that offers a degree of personalization. It also has a category on knowledge management, so I set that as my default home page, and get the day's knowledge management news every time I use the Web (unfortunately, 90 per cent of knowledge management news is only about technology - if you don't believe me, look at the news section in the June edition of Knowledge Management - 10 out of 12 stories are IT related. One of the two that isn't is on a "new survey" from Ernst and Young, which seems to be the survey done jointly with Business Intelligence in late 1996 and published in Creating the Knowledge-based Business over a year ago! The other item of non IT news is another survey with the headline "Culture, not IT, the barrier to success of KM initiatives, says IBM report" - call that NEWS?). So please, is there any non-IT KM news??

The other significant improvement is that many corporate web sites do now respond to their email. When I did a survey a year ago, I got only a 40 per cent response and only 15 per cent from knowledgeable people; normally the webmaster or a junior clerk was fielded to handle email enquiries. Today, the response rate seems closer to 75 per cent (though I haven't done a similar systematic survey). From two recent enquiries, I actually received product literature in the post the very next day i.e. these suppliers really are treating the Internet as a serious marketing channel.

Additionally, there is general progress on companies trying to use the medium more strategically. The business sites of Dell (with build and price your own computer and Internet-only special offers) and American Airlines (complete with flight arrival times) are good examples. With developments in electronic payment mechanisms, and the increasing ease of creating web pages linked to databases, it is hoped that we really will see some significant improvements in customer-centric web sites in the near future.

10 Ways to serve Your Customer Better (with an emphasis on the Internet)

1. Listen - every conversation reveals more of their needs. Are you capturing this knowledge? Many telesales people who call me definitely do not.

2. Share that knowledge - is feedback to customer service, or telesales come that, held on a database for subsequent sharing? (obviously within any legal constraints of holding personal data).

3. Know where your customers congregate - attend their events; make sure you have links on relevant web pages, often resource directories or publications (e.g. http://www.truckworld.com for truckers http://www.quicken.com (US) or http://www.moneyworld.co.uk for financial information.)

4. Make your Web site crisp and clean - even in today's graphics intensive world, sites like Commercenet (http://www.commerce.net) are simple but effective. In contrast, Philips (http://www.philips.com) takes a while between the images to figure out what is there.

5. Make it easy for visitors to find their way around - on websites, use navigation tools that are easy to find. Xerox (http://www.xerox.com) has a text menu bar at the top (so it always comes up first) and a search tool. On the phone make sure your receptionist knows where to point the potential customer more intelligently than most voice response systems do.

6. Be informative - it is not just your products visitors want to know about. Give them white papers, application notes, case studies, links and resources. Marshall Industries, (http://www.marshall.com) for example, does most of this and also serves visitors with industry news, details of events, useful links etc.

7. Engage in dialogue - OK let people fill in a form for marketing purposes, but don't ask too much too soon. On Internet forms, show which fields are mandatory and keep them to a minimum (2 or 3) for first time arrivals. Keep up the dialogue e.g. through regular emails, or as at Amazon.com (http://www.amazon.com) according to specified interests.

8. Guide people to the choice that is right for them - this is what good dialogue with a salesperson achieves, so you have to offer viable Internet alternatives. Xerox uses Saqqara (http://www.saqqara.com) to guide users to appropriate products. Marshall's (http://www.marshall.com) goes one better.As well as its Interactive Selection Guides it has a 24-hour chat line on its web site (Help@Once) where you can 'talk' to a technical support engineer.

9. Offer multiple routes for ordering - on the Internet, don't force people to go to the phone; let them order, even if they have to print out and fax an order form. On the other hand, give a phone alternative. Even when they have ordered by phone, let them check the progress of their order c.f. FedEx (http://www.fedex.com)

10. Make support easy to obtain - no more busy help lines please with excruciating music when on hold (presumably to make you put the phone down!). Provide an ability to feed back problems out of hours e.g. on answerphone or even better via email.

In all of these activities, you are capturing knowledge (especially if you run a focus group of consumers using your web site). Perhaps the most important way to service your customer better is to make sure you capture that knowledge and use it to good effect in better products and services, by refining it and pushing it around your organization.

And Five Big Don'ts

1. DON'T use technology gizmos for technology sake (frames, Java, Shockwave etc.). Make sure you can address 95 per cent plus of Internet users (e.g. Commercenet will work with Version 2 Netscape and Internet Explorer browsers - will yours?)

2. DON'T misuse frames. Some of the worst sites have clumsy frames that cut up the screen into too small segments and don't give non frames alternatives.

3. DON'T relegate dialogue to an afterthought. Provide response forms and allow targeted email replies from different pages. Don't let users wait 5 days for a reply, or leave any sales enquiries to a webmaster rather than a trained response team.

4. DON'T omit basic details e.g. of how to get in touch - office locations, addresses, phone and fax numbers (it's amazing on how many sites you have to work hard to track these down). It is also useful to put the page URL and revision date on every page.

5. DON'T ignore the needs of your users - they want information that is easy to find, accurate and up to date, with pointers to additional help, including real people.

David J. Skyrme
email: david@skyrme.com


The Search For New Knowledge Standards
The Finland Agenda

Debra M. Amidon

In May, Esko Kilpi of Sedecon Consulting organized two major events in Helsinki, creating a national dialogue. In his opening remarks, he outlined new frontiers of knowledge management:

  • theory of organizing, power and governance
  • contrast of authoritarian and democratic power
  • the power of purpose
  • management accountable for the flow of ideas, not any one owner or group of people

With the formula

Capital = Community + Creativity

he suggest that the heart of the movement is actually a function of the flow of meaning. The challenge then is to connect people in a meaningful way and enhance their capacity to transform information into invention and initiative.

Using the Hamel/Prahaled chart (customer needs met/unmet), he argues that it requires an understanding of unarticulated needs, to serve the new needs of customers: "If acompany wants to see its future, 80 per cent of what it is going to have to learn will come from outside of its own industry. Connectivity is the focus. The thicker the networks - including partners, customers and other stakeholders - the richer the knowledge."

In presentations for the Ministry of Education in a conference "Knowledge Management and Knowledge Productivity in Contemporary Society and Organizations", useful insights were provided by various experts, including Rob van der Speck (Cibit), Lilly Evans (Global Learning Web), Annikki Jarvinen (University of Helsinki), Seija Kulki (Helsinki School of Economics) and Debra M. Amidon (ENTOVATION).

The key messages can be summarized according to a management architecture:

I PERFORMANCE has become a balance of tangible and intangible assets. The investment/return equation has been challenged. It is far more a matter of linking human potential and economic value. Incentives need to reward knowledge-sharing and resources allocated for the long term.

II STRUCTURES represent connection - clusters of knowledge, communities of practice. We are beginning to observe fields of knowledge-creation both personally and professionally. Through multiple relationships, things are happening.

III Real value lies within the INDIVIDUAL. It is a matter of becoming a better practitioner, not a matter of best practice. Cognitive processing has shifted from serial to parallel causing quantum breakthrough impacts. We rely on the individual for the capacity to innovate.

IV The PROCESS is one of innovation - idea creation through commercialization. At its core is participation, interaction and interdependence. The context is the international marketplace and a variety of cultures which value these and bridge and build interfaces.

V The TECHNOLOGY - an integral enabling factor - shifts from information to knowledge processing. Communications requires an externalization of knowledge - both human and technical, which takes the form of groupware, Intranets and the Internet - leading towards a global innovation infrastructure.

In summarizing the conference, Finland's Minister captured the key themes that echoed throughout the day:

  • The need for 'context'
  • The half life of knowledge
  • The importance of meaning and purpose
  • The difference between "have to" and "want to"
  • The relationship between knowledge management and life-long learning
  • The value of participatory innovation
  • The multi-dimensionality of the topic.

He suggested follow-up activity which would include training of the public sector, a focus on dissemination and diffusion, continued international discussion, and further elaboration of ideas.

Debra M. Amidon
Email: debra@entovation.com


Y2K Bulletin: The Fear of Panic

Trend Monitor International Monthly Bulletin (July)
Jan Wyllie

Now that it is virtually certain that grave consequences will flow from the Y2K "timebomb", the most pressing issue which must be faced is what and how much should the public know. There is concern in government and industry to prevent "chaos mongering" from causing "public panic". This concern among businessmen and politicians in the face of an ignorant and helpless public is understandable, although it is no doubt also combined with a natural human tendency not to expose their own failings.

Sadly, it is not surprising that the techniques employed in the name of "panic reduction" are the same as traditionally used by any group trying to defend the indefensible, that is, to discredit the messengers and impugn their motives, rather than deal with the facts of the matter. For example, reliable sources are saying that a prominent Y2K spokesman in the UK is the target of an orchestrated campaign.

Trend Monitor's last Y2K Bulletin (June 20, 1998), on indications of the growing disparity between the official message / public view of the phenomenon and the view of people who really know, was itself accused of self-seeking panic mongering by no less a personage than Anthony Judge, http://www.uia.org/, the man responsible for compiling the Encyclopaedia of World Problems and Human Potential. In his critique, he discredits the motivation of the "panic mongers" by dividing them into the following types:

  • computer people "taking advantage of the situation"
  • constituencies "who want people to get all stirred up for any reason"
  • those who are "into end times scenarios / apocalypse etc."
  • "alienated" people and groups "who have a special psychological need to have a major benchmark and focus in their lives"
  • constituencies who "recognise that humanity needs invading Martians".

There may be some of these kinds of individuals around, but I must say that all the people I know who are the most concerned because they are the most knowledgeable, do not fit the descriptions on which Mr. Judge's personalised, ad hominem "arguments" are based. The software engineers, journalists, members of think tanks, academics and self-made experts of whom I aware are fearful and frustrated, not for any of Mr. Judge's reasons, but because of the overwhelming body of evidence pointing towards some kind of systemic breakdown. Most have been watching in increasing horror for more than two years as the story of procrastination, denial, mismanagement and irresponsibility unfolds. They are desperate to push the message out, so that people have time at least to take some contingency measures before it is too late.

As for the panic scenario, I can report an interesting development. An increasing number of Y2K-savvy people are beginning to move beyond the "frozen in panic" stage. They are now beginning to conceive of the crisis in a different light, not as an insoluble problem, but as an opportunity to create a more sustainable way of living in an economic system where people are more self-reliant, rather than being so dependent on giga-scale computerised infrastructures. Don't take my word for it. Three excellent examples of this kind of emergent thinking are papers by John L Petersen, http://www.arlinst.org, Douglass Carmichael, http://tmn.com/~doug and Larry Victor, http://www.azstarnet.com/~nuu/Y2K/Y2K_A&R_WEB.htm.

People typically move from denial to panic to action. Some panic may be unavoidable. Still, contingency action involving social and economic prioritisation (triage) informed by a spirit of opportunity and trust, rather than the policies based on deception and secrecy, is the practical antidote to panic.

"Shooting the messengers" and trying to pretend that it can be business as usual and that the authorities know best is the perfect recipe for real panic and justifiable anger on the part of the public when in six to 18 months "the chickens come home to roost", as content analysis suggests, they are increasingly liable to do.

A full Intelligence Update (£ 40 / $85 paper, £ 25 / $55 HTML) which contains all the trends and supporting analysis for this Bulletin can be purchased from:

Email: jan@trendmonitor.com
Web: http://www.trendmonitor.com.


Resources

It becomes increasingly difficult to keep pace with the growth of knowledge management resources. Now in its second issue is Knowledge Management magazine, by Learned Information, first launched at its conference in March, and a companion to its Web site (http://www.knowledge-management.co.uk). More newsy and lightweight than the more serious and case study oriented publications (e.g. Knowledge Inc., Knowledge Management Review and Journal of Knowledge Management), it nevertheless has some interesting features, interviews, as well as web site resources.

We checked most of these out. It you're looking beyond technology only two even half captured our interest:

  • The Knowledge Manager (http://www.educom.com.au) - Interesting since it covers the Australia / New Zealand scene, but it does have a document management emphasis. Update (1999) - This does not appear to have continued beyond the first issue!

  • Knowledge at Work (http://www.knowledge-at-work.com) - Some useful resources e.g. on vendor's white papers (but only up to 1997), and various articles, books. But it seems to promise more than it delivers and the site seems to be updated only on an ad-hoc basis (the last update even today was in May).

See Knowledge Management Resources for current resource links.


Events

13-17 July 1998. Knowledge '98, London. Exhibition plus accompanying tutorials/workshops.
http://www.unicom.co.uk

3-5 August 1998. The World Innovation and Strategy Conference 1998 (WISC98) incorporating ISQFD 98, Sydney.
E-mail: wisc98@icmsaust.com.au

10-12 August 1998. Winning Strategies for Knowledge Management, Chicago. IQPC.
http://www.iqpc.com

17 - 19 September 1998. 3rd Chief Learning Officer Conference, Boston.
http://www.linkageinc.com

23-28 September 1998. Telework '98. Lisbon. Europe's main annual assembly on telework and related topics.
http://www.teleman.pt/telework98/

13-15 October 1998. KM Expo '98, Chicago.
http://kmexpo.com

13-14 October 1998. Knowledge Management. Munich. Auf Deutsch und Englisch. ComMunic.
Tel: +49 89 74 11 7270

22-23 October, 1998. Third Annual Symposium on Knowledge Management "Lessons from the Leading Edge", Williamsburg, Virginia. AQPC.
http://www.apqc.org

For telework events visit the events calendar at European Telework Online
http://www.eto.org.uk/events/


Snippets

The Fad Bit is Past

In last month's edition, I cited a recent survey that reported only 2 per cent of managers believing that knowledge management was still a fad. I had mislaid the source at the time, but it was the 1998 KPMG Annual Knowledge Management survey, which also has some other interesting results. Interestingly, a recent Delphi survey came up with a similarly low figure, 6 per cent, confirming the sharp decline in 'faddishness' since a year ago. Copies of the KMPG report are available free from Robert Taylor at KPMG
Tel: +44 171 311 8021, E-mail: robert.taylor@kpmg.co.uk

Demand for CKOs Increasing

A recent Information Week article (19th June 1998), cited strong demand for CKOs and CLOs (Chief Learning Officers): "Companies are serious about implementing learning and knowledge programmes.... salaries of $200K-$235K are typical... at the high end, they may reach $750K". The article noted that there appears to be no standard qualifications. Frank Bordonaro, CLO at Prudential Insurance says that the most fundamental requirement is the right temperament: "a propensity towards calculated risk, a dissatisfaction with the status quo and an impulse to integrate things that haven't been integrated".


© Copyright, 1998. David Skyrme Associates Limited and Authors - All rights reserved.

This newsletter is copyright material. In the interests of dissemination of information, forward circulation is permitted provided it is distributed in its entirety including these notices, that it is not posted to newsgroups or distribution lists and that it is not done for commercial gain or part of a commercial transaction. For other uses please contact the publisher.

I3 UPDATE / ENTOVATION International News is a joint publication of David Skyrme Associates Limited and ENTOVATION International Limited - providers of trends analysis, strategic advice and workshops on knowledge management and knowledge innovation®

Email: info@skyrme.com    debra@entovation.com
Web: http://www.skyrme.com    http://www.entovation.com

® Knowledge Innovation is a registered trade mark of ENTOVATION International.