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I3 UPDATE / ENTOVATION International News
No. 27: February 1999

Contents

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

Editorial

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
Managing Editor


Will The Real Knowledge Management Please Stand Up

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 management?"
A. "Why not. If knowledge management helps you improve your processes."

Q. "How is what you do at the knowledge centre different to information management?"
A. "Well instead of managing information, we manage explicit knowledge ...um.. information"

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"
A. "Mmmh"

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 like "why?".

Nick Willard (email: user947361@aol.com), 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 they understand".

Peculiar Practices?

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?

Knowledge Combinations

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.

Email: david@skyrme.com

See Readers Replies


Internet Shopping:

High Street Chains and Supermarkets Face Bankruptcy as Economics No Longer Add Up

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 margins.

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 major chains.

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 http://www.trendmonitor.com

Email: jan@trendmonitor.com


Why U. S. Business Schools Avoid Innovation

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 the world.

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 nature innovates.

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 working

  • 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 organizational designs.

WWW: http://www.unc.edu/~gdhughes/
Email: gdhughes@email.unc.edu

Read The Full Article


Government Policies In The Knowledge Economy

Ted Lumley

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'.

"David,

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:

http://www.cyberus.ca/choose.sustain/well-being.shtml

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.

Regards,
Ted Lumley"

Email: emlumley@mailhost.onramp.net


KIA Online '99: Knowledge In Action

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 conversations are:

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 Stenfelt.

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 Organization, Protecting 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: amye@tmn.com)


Knowledge Management Events

1-29 March. KIA Online '99, a Knowledge in Action public event that will take place entirely on the web.
http://www.tmn.com

8-9 March (San Francisco); repeated 15-16 April (New York). The 1999 Conference on Knowledge Management and Organizational Learning. The Conference Board.
http://www.conference-board.org

16-18 March. Leveraging Knowledge: Addressing the Challenges, Walt Disney World, Florida. Giga Information Group.
Email: conference@gigaweb.com

17-19 March. Designing and Measuring the Value of Knowledge Management, New Orleans. IQPC.
http://www.iqpc.com

24-25 March. Knowledge Management: The Information Management Event, London. Learned Information.
http://www.knowledge-management.co.uk

29-30 March. IKMS '99. Delphi's International Knowledge Management Summit.
http://www.ikms99.com

5-23 April. Knowledge Innovation: Operationalizing the Concepts, Debra Amidon. A three week virtual course sponsored by the Knowledge Ecology University.
http://www.knowledgeecology.com/keu/reg/index.shtml#form

13-14 April. Knowledge Management in R&D: Emerging Trends in Innovation Management, London. IQPC.
http://www.iqpc.co.uk

26-28 April. Designing a Virtual Corporate University, Washington DC. Corporate University Xchange.
http://www.corpu.com

12-13 May. Return On Intelligence: Innovative Strategies at Work, Toronto. Strategic Leadership Forum, Toronto Chapter.
http://www.slf-canada.org


© Copyright, 1999 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.