I3 UPDATE / ENTOVATION International News
No. 27: February 1999
Will the Real Knowledge Management Please Stand Up - David J. Skyrme
Internet Shopping: High Street Chains and Supermarkets Face Bankruptcy as Economics No Longer Add Up - Jan Wyllie
Why U. S. Business Schools Avoid Innovation - G. David Hughes
Government Policies in the Knowledge Economy - Ted Lumley
Knowledge in Action - An Online Event
Knowledge Management Events
Welcome to this edition of I3 UPDATE / ENTOVATION International News, a free briefing analyzing developments and key issues in the networked
knowledge economy. This edition has a few provocative contributions, which
we hope will stimulate your thinking and feedback.
I3 UPDATE is also available by email. See the administrative information page.
David J. Skyrme
David J. Skyrme
With the continued relabelling of software products and consultancy
services (a topic first highlighted in I3 UPDATE No. 12, July 1997) and the recognition that many established good management practices contribute to effective knowledge management, it sometimes get difficult to decide what is included in knowledge management and what is not. Here are some of the short exchanges that regularly take place:
Q. "But isn't it just a document management system?"
A. "Yes and no. Yes it still does document management. But it also helps
you create communities"
Q. "We call that continuous improvement. Are you now saying it is knowledge
A. "Why not. If knowledge management helps you improve your processes."
Q. "How is what you do at the knowledge centre different to information
A. "Well instead of managing information, we manage explicit knowledge
Q. "So data mining is a knowledge management technology?"
A. "Yes. The computer discovers new knowledge"
Q. "How is a knowledge editor different to ... well .. an editor"
And so it is easy to apply knowledge words to .... well almost every
business tool or technique that deals with knowledge, which is most of
them. But does this confuse or help? Probably both. The use of language in
organizations, especially those that don't have time to stand still and
think, is often quite sloppy. One person's order is another person's sale.
One person's process is another person's activity. One person's task force
is another person's committee. One person's system is anothers procedure,
and so on. Only if people need to communicate seriously and exchange
knowledge do they need to delve beneath the veneer. Of course, a whole
political wordsmith industry thrives on finessing the veneer with ambiguity
and avoiding deep discussion, to produce communiques that conclude
important international meetings. But sprinkling the knowledge term
liberally around does cause some people to react and ask telling questions
Nick Willard (email: firstname.lastname@example.org), has developed a knowledge management workshop for Aslib, at which I usually have a slot. He has no qualms in cutting through the hype and boiling the essence of knowledge
management down to three things:
- Managing people - since that is where tacit knowledge is found
- Managing processes - the flow and conversion of knowledge
- Managing information - explicit knowledge.
When you think of it knowledge management this way, it is easy to see how
many existing management practices can fit quite easily under the KM
umbrella. Whether you label them knowledge management practices depends on
what reaction you want to provoke. In at least one recent situation, I have
been asked not to confuse people by using the dreaded K word: "use language
If you then think of all the practices that are used in knowledge
management, are there any that are uniquely associated with knowledge
management? Many that are frequently found are distinctive in their own
right, such as intranets and IRM (information resources management). You
might think that Communities of Practice, Sharing Best Practice or After
Action Reviews qualify. However closer examination shows that these
practices were being used by themselves well before knowledge management
came centre stage.
As part of some client work we have been doing with Trend Monitor International we have been mapping the types of practices that are described as part of knowledge management
programmes. We have fairly close to 100 now. Many are quite generic
practices, such as cross-functional teams. Others are more unusual but
gaining in prominence, such as story-telling. In fact, for every term that
does NOT have the word knowledge we can find numerous examples in other
contexts, whether it is TQM or human resources management. And for every
term that DOES include the word knowledge, we can simply redescribe it
under a more familiar term. There's not much new under the sun, is there?
The conclusion from our analysis is that at the discrete level of tools,
techniques and practices, there is nothing really that can be considered as
peculiar to knowledge management. And yet somehow, surely there must be?
A little like most inventions, the basic elements of knowledge management
are usually not very novel and are reasonably well known. Shakespeare's
plays still have universal appeal today, since they deal with standard
patterns of human relationships that have changed little over the
centuries. Much of knowledge management has been described as "common sense
but not common practice".
The creators of Invention Machine (http://www.invention-machine.com) found
that virtually every innovation is the result of a relatively small number
of standard principles. However, as we know, the power of knowledge is in
its combinatorial arithmetic. By taking different variations of a few
parameters the number of unique combinations is huge.
Therefore, although when individual practices are considered knowledge
management is not really new or distinctive, at a more contextual level it
differs in several respects:
- The knowledge dimension adds a new perspective and insights to many existing management practices
- It provides more explicit, formal and systematic approaches to dealing with knowledge in all its forms
- There is more general and widespread use of good management practice of the various facets of knowledge (e.g. information, people, processes)
- It brings together unique combinations of these practices within the context of a given organization
and not least
- The irreverent way in which the K term is often bandied around evokes cynicism, that (hopefully) results in deeper exploration and understanding of how consideration of knowledge underpins organizational performance.
It is these things that make knowledge management real. Although I am aware
of a growing backlash against knowledge management, and at least one person
who counts himself as a knowledge management terrorist, I for one, will
stand up and be counted as a knowledge management advocate.
See Readers Replies
High Street Chains and Supermarkets Face Bankruptcy as Economics No Longer
Jan Wyllie, Trend Monitor International
The principal finding of Trend Monitor's latest research into Electronic
shopping is that only a small percentage of the population -- estimated at
between 10 and 20 per cent -- switching to electronic shopping will make
the combination of high overheads and ultra-low margins of the major retail
brands economically unsustainable.
The consequences of this simple fact have been screened from view to date
both because electronic commerce started from such a small base, and a
growing economy meant that bricks and mortar retailers could generate the
huge volumes of sales on which their profits depend. However, as overall
growth rates slow, price competition is becoming much more intense, which
is when the pricing advantage of low overhead electronic selling becomes
the determining factor.
The research suggests that the argument that people are loyal to retailers
because they want "personal" service over convenience does not hold up in
experience. People's only reported problems with the online shopping
experience are slow and badly designed systems. Otherwise, the indications
are that people take to online shopping very quickly and easily. The
research also indicates that online sales growth has been consistently
higher than expected, even though the expectations of market researchers
have been very high.
Another finding is that the online option puts retailers and their
suppliers in competition with each other. Suppliers now have the
opportunity of selling cheaper products direct to their customers by
cutting out the cost of the middleman, at the same time as increasing their
The implications for the prices of retail property are liable to be
devastating for current owners. However, the report points to new
opportunities for new local businesses and cultural services which would
add quality to urban regeneration schemes. People's real need for personal
service comes from local convenience shops and boutiques, not from the
With digital TV and the price of computers falling so dramatically, the
availability of technology is no longer a barrier to the increasing take up
of electronic shopping. The Euro will give it a boost, too, by making
automated comparison pricing easy.
The report concludes that electronic shopping will open up major
opportunities for home delivery services, including Royal Mail and local
milk delivery systems.
Further information about this report (price £35) can be found at
G. David Hughes, President, Decision Labs Limited
Editor's Note: This is an excerpted version of the full article that appears on this web site, see also the author's web site.
Innovation has been credited with being the spark that makes companies
great and the power that has changed our lives in the last century. Yet
the topic is not central to courses in U. S. business schools, while it can
be found frequently in engineering schools and academic environments around
Innovation can be defined as using creativity to add value. Creativity is
going beyond the current boundaries of technology, social and political
norms, practices, and knowledge. But if creativity does not add perceived
value, then it is just a curiosity.
Creativity requires a mental process that is unfettered by past dogma and
deductive reasoning, but it is not anti-scientific. Now we begin to see why
business schools do not encourage creativity that leads to innovation.
Most business schools have a heavy investment in teaching deductive
analysis and related control mechanisms. But as knowledge becomes the
driving force in companies, it breaks down functional areas, and
hierarchical organizations because no one person at the top can keep track
of the rapid growth of knowledge. U.S. business schools have yet to adapt
to this flatter organizational structure.
We made organizations fit Newtonian mechanical models by putting
responsibilities into functions and people into roles with boundaries and a
secure sense of control. When we studied organizations, we thought we
confirmed these models because we used research designs that assumed cause
and effect relationships. We assumed also that these relationships move
toward equilibrium, when, in fact, they move away from equilibrium as they
learn and renew in response to an ever-changing environment. Stacey
challenges the present organizational models by noting that stability,
harmony, predictability, discipline, and consensus, which are central to
most Western management practices, are all wrong. Instead of equilibrium,
he argues, we need bounded instability, which is the framework in which
Western business organizational designs can be traced to Western thought
that is dominated by deductive reasoning. Eastern philosophies, in
contrast, could greatly impact organizational designs. Vaughan says: "In
Buddhism reason is seen as limited, and the knowledge derived from it is
transient and unreliable. Reason is therefore not considered a trustworthy
source of knowledge of the absolute reality underlying a change. The
Buddha taught that intuition, not reason, is the source of ultimate truth
and wisdom." As businesses become global, will Eastern thinking influence
organizational designs by demonstrating that rationality and reason are not
the only sources of knowledge? Will future business leaders be ready to
include intuition in their organizational paradigms? Intuition is even
rarer than innovation in the typical business school curriculum.
Innovation will play an important role in the curriculum of U.S. business schools when one or more of the following events takes place:
- When businesses demand that students be trained in innovation and
creativity to prepare future leaders to participate in the new environment
and with the recognition that management fashions-of-the-month are just not
- When a few business schools see innovation as a means for taking a
leadership role in business education, thereby attracting students, company
recruiters, and financial resources
- When global competition brings non Western philosophies into
Read The Full Article
Editor's Note: These are extracts from an email I received from Ted in
response to the article in I3 UPDATE No. 26 on the UK White Paper 'Building the Knowledge Driven Economy'.
In reading your account of the UK white paper the 'knowledge economy', I am
struck by the apparent persisting absence of a systemic view. It is
almost as if the government view is to simply substitute knowledge for raw
materials within the same old smokestack, win/lose competitive economy
which has characterized the industrial age (adding a few nice words on the
theme of 'collaboration'). ......
As we go into the knowledge economy, a certain geometry is present; i.e.
for every 'knowledge product or service', there will be a corresponding,
systemic, 'reciprocal disposition impact'. So the question is, will
'economy management agencies' such as the UK DTI remain neutral to such
effects, as they seemingly did with respect to open standards in industry,
and help to promote corporations on an equal footing, regardless of their
systemic impact on the social and environmental economy-ecology?
For an alternative view, one can browse The "7th Generation Bill" being
proposed in the Canadian Parliament at:
This bill implicitly acknowledges that a 'knowledge economy' is not simply
shifting gears from trade in material product terms to trade in explicit
knowledge, but that
powerful new systemic effects can be unleashed (e.g. the knowledge of how
to make everything from LSD to agents of biological warfare are becoming
available to the individual).
The goal of this bill is similar to the goal in local currency initiatives
(e.g. LETS); i.e. to 'give eyes' to the tools which we use to manage
investments so that the public is not constrained to managing financial
investments, taxation, support programs etc. on the 'blindered' basis of
stand-alone financial indicators which say nothing about socio-natural
systemic impact (evolutionary consequences of the investment).
Boudewijn Wegerif, Project Leader of a Monetary Studies Research Programme
in Idaberg Sweden comments on the proposed Canadian Bill, which addresses
both investment tracking and taxation issues:
"The '7th Generation Bill', proposes an improved measure of well-being. It
will account for depletion of natural resources and subtract 'regrettable'
expenditures. It will also acknowledge contributions to well-being for
which no money is paid. Homemaking, child and elder care and voluntary
community activity all improve our well-being.When they are not recognized,
as when GDP ignores them, they are depreciated. The result is fewer of
these services provided less enthusiastically. Improving our measure of
well-being would be like getting new eyes with which to see as we steer our
way into the future."
In the 'material economy' of the industrial age, the management of
knowledge in a systemic implication sense was stewarded by the individual,
the local community leader, the individual shop and company owners who were
operating out of a sense of local 'harmony' etc. (the quality of such
stewardship obviously varied a great deal). Such stewarded management of
the systemic effects of traffic in knowledge is largely bypassed in a
'knowledge economy', thus there is an imperative to build 'new eyes' into
the tools by which we individually measure and manage investment to ensure
that we have a means to engage our intuition of evolutionary consequences
and to put it in a primacy over out-of-context financial 'facts', to ensure
the discriminatory nurture of the harmonious and healthy, relative to the
dissonant and destructive, avoid shooting ourselves in the ecological foot.
If it is true that the UK government; "sees the transfer of best practice
as perhaps the single most important action, ... to "learn from the best
in the world", and by doing so, ".. boost the economy by over UKP60bn.",
and if it is also true that the UK plans to persist in doing this in a
self-blindfolding manner, where knowledge-management opportunities are
viewed in a purely financial sense, out of the context of their
'negative-space' system effects, ..... social and environmental
'well-being' is likely to continue to fall as the economic indicators rise.
An Online Event
This event organized by Edna Pasher Ph.D & Associates and Caucus Systems,
Inc., is a public event that will take place entirely on the web from 1 -
21 March 1999.
It follows on from the success of the 3 face to face annual Knowledge in
Action Conferences, 15 face to face public meetings of the Knowledge Café
Forum and the 4 face to face meetings of the Hi-Tech Knowledge Café.
Experts who are contributing and with whom you can have electronic
Leif Edvinsson, Dr. Karl-Erik Sveiby, Dr. Edna Pasher, Dr. Lisa Kimball,
David Skyrme, Verna Allee, Debra M. Amidon, Prof. Ben Gilad, Ward Bell,
Prof. Baruch Lev, Dr. Khin Ni Ni Thein, Prof. Tzvi Raz, Richard Jordan,
Prof. Nava Ben Tzvi, Ron Dvir, Dr. Rob Van Der Spek, Nachman Agmon, Dr.
Scott C. Hammond, Dadi Lapidoth, Moria Levy, Galit Caspi, Fanni Russo, Ilan
Oshri, Rachel Pasher Eijkenaar, Alberto Pucci Jr., Eyal.Faran, and Caroline
ENTOVATION Founder Debra Amidon will run a keynote session 'Innovation
Strategy in the Knowledge economy' in week 2 (7-15 March), while David
Skyrme will run a workshop 'The Seven Levers of Knowledge' in week 1 (1-8
March). Update (Aug 1999) - There is an introduction to the seven levers in the article Developing a Knowledge Strategy. For more see chapter 2 in Knowledge Networking, and for practical guidelines read the executive briefing.
Other topics include Developing Competitive Intelligence in Your
your Knowledge Assets, Managing Virtual Teams, Using Information Technology
to Support Knowledge Management, Strategic Renewal of Organizations, The
Patterns of Successful Dialogues, and much more.
The event will feature facilitated discussions with noted keynote speakers,
opportunities to participate in interactive workshops, access to a virtual
exhibit hall, an opportunity to create and facilitate your own discussion
topic, a full and diverse resource center, and demonstration
of new technologies to support your work.
For further details and registration form visit the KIA '99 website at http://www.tmn.com. Update - the KIA99 link has been removed.
Details supplied by Amy Eunice (Email: email@example.com)
1-29 March. KIA Online '99, a Knowledge in Action public event that will
take place entirely on the web.
8-9 March (San Francisco); repeated 15-16 April (New York). The 1999
Conference on Knowledge Management and Organizational Learning. The
16-18 March. Leveraging Knowledge: Addressing the Challenges, Walt Disney
World, Florida. Giga Information Group.
17-19 March. Designing and Measuring the Value of Knowledge Management, New
24-25 March. Knowledge Management: The Information Management Event,
London. Learned Information.
29-30 March. IKMS '99. Delphi's International Knowledge Management Summit.
5-23 April. Knowledge Innovation: Operationalizing the Concepts, Debra
Amidon. A three week virtual course sponsored by the Knowledge Ecology
13-14 April. Knowledge Management in R&D: Emerging Trends in Innovation
Management, London. IQPC.
26-28 April. Designing a Virtual Corporate University, Washington DC.
Corporate University Xchange.
12-13 May. Return On Intelligence: Innovative Strategies at Work, Toronto.
Strategic Leadership Forum, Toronto Chapter.
© Copyright, 1999 David Skyrme Associates Limited and Authors - All rights reserved.
This newsletter is copyright material. In the interests of dissemination of
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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®
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® Knowledge Innovation is a registered trade mark of ENTOVATION International.