I3 UPDATE / Entovation International News

a free monthly briefing on the knowledge agenda

No. 48 February 2001





David J. Skyrme


David Skyrme Associates


Contents - Main Feature - Knowledge Digest


Architecture for the Knowledge Enterprise

Debra M. Amidon

The following are extracts from the first sessions of a 3-week "Conversation with Debra M. Amidon" at the AOK Association of Knowledge Work) email list. For a background to the dialogue see the white papers at http://www.kwork.org/Free/amidon.html (but you must be a member of AOK to do so). To join AOK and participate in the discussion forum register at http://www.kwork.org.

The dialogue started on 12 February and comprises three strands:

The the Knowledge Value Proposition (the Why?)

In the article, Power of Innovation Capital - you have the most succinct description of the "Knowledge Value Proposition." The research goes back to the mid-1980's when engineering and marketing experts worldwide were trying to understand why companies were not getting bottom-line results when they were modernizing with information technology. This was described as The Productivity Paradox.

Q. How can we frame the knowledge value proposition in terms that can be understood and accepted by those who are uneasy with or even hostile to the valuation and utilization of intangible assets?

A. There are very few people who disagree that there is a difference between book value and market value. Most will agree that we can label it intellectual capital; and most of them would agree that we should discover a way to "manage" these resources more effectively. There has been considerable confusion in the knowledge field with those who have just substituted labels on old programs in order to get to market quickly. Even in the profession, there are a group of experts who have focused on managing and measuring Intellectual Capital (i.e., Economics). A second group has focused primarily on the Learning Organization (i.e., Behavior). And a third group has focused on Knowledge Management - generally from the technology perspective (i.e., IT-reborn). The Knowledge Value Proposition requires a balance of all three - not one at the expense of another.

My practical suggestion is threefold:
1. Define the agenda in business terms, language and strategy. Innovation is the business!
2. Realize that the solution requires a balance of the Traditional/Financial Capital model and the Knowledge/Human Capital perspective.
3. Work with those that do get it and make their progress visible.

Q. How do we get away from the "stick to the knitting," "leverage our core competencies," "king of our niche thinking" and "more of the same, faster better and cheaper?"

A. Although we have evidence that many market leaders exemplify what we would call courageous knowledge leadership, there are as many - if not more - organizations that are entrenched in the old thinking. Worse, many of them invested considerable precious resources under the auspices of knowledge management only to discover inadequate returns. Many of them are now off into e-land, thinking that will provide the silver bullet. The reality is that there is no quick fix to thriving in the knowledge economy. A knowledge strategy - by definition - is complex and comprehensive. It requires a leap of faith to implement effectively. And true is the adage that "one does not get a second chance to make a first impression," so whatever pilot program is initiated better be relevant and successful.

And so, how do you "shatter the mold" as you suggest? My practical suggestion is to create a compelling, distinctive vision that - like a magnet - draws people forward. Make sure that it capitalizes upon its heritage and unique knowledge base. Build the foundation underneath that sustains a realization of that vision. Create the standards rather than belaboring best practices. Become the enterprise to emulate.

Elements of a Management Architecture (the What?)

In our AOK second week, we promised to examine in more depth the five aspects of the Knowledge Architecture Performance, Structure, People Process and Technology. Attention to each of these individually helps us understand the 'What' elements to be managed.

Take performance. The shift in orientation to intangible assets will revolutionize the way enterprises are measured. For many of today's executives, "if it cannot be measured, it is not of value". And yet, as we now understand the 'productivity paradox', we realize that these factors a new Knowledge Value Proposition - must be defined, monitored and evaluated as an essential foundation of the knowledge economy.

Q. How, when the situation/culture is not favorable, do we (re) create this culture of sharing and trust, taking time to develop a common language, coach people, hold strategic conversations etc. etc.?

A. On the first level, your question is about performance and the measurement of intangibles. But then, you ask a deeper question relative to the current economic conditions that, I will admit, are threatening. My response is threefold:

(1) Leif Edvinsson has said that he would rather "be roughly right than precisely wrong". Most executives today are measuring what they can measure because it can be measured.

(2) "We are in a transition period," suggested Bruce Bond, CEO of PictureTel, "between one era and another in which the old rules do not apply and the new ones have yet to be invented." It is as the Trapeze parable the trapeze artist must let go of one bar before catching the other and for a moment is suspended. For many, this describes their uncomfortable uncertainty with this future economy that is evolving.

(3) The knowledge economy demands a new kind of leadership. Our research report suggested the 10 characteristics of 'leaders' and 'laggards'. And, a summary of an article, The 7Cs of Knowledge Leadership" outlines some of the areas we should be 'measuring' Context, Competence, Culture, Communities, Conversations and Coaching.

Innovation Strategy (The How?)

Some of you have queried how to "architect a Network" . . . and what are the best practices of CoP's - which are self-organizing networks.

I have participated in several personally. Some are dedicated to the measurement of Intellectual Capital and creating knowledge trading systems. Some are dedicated to the principles and practices of Learning Organizations and progressive Human Resource methods; and others focus on the tools of the knowledge profession. There are few such CoPs that balance all three aspects of the Knowledge Value Proposition - Economics, Behavior and Technology.

Perhaps the best experts in the field - in addition to Etienne Wenger and George Por who can be credited with making CoPs real to us all - are Jessica Lipnack and Jeffrey Stamps, authors of the Age of the Network and The TeamNet Factor. It was there I discovered the concepts of 'holonomy', loosely described as nesting of networks. And so we used this concept to architect some order and defined relationship among the myriad of relationships. You can see our example on the Entovation Web site. Here you can see that there are multiple levels of Networks than can operate simultaneously. For those of you more interested in this evolution, I can offer a recently published article that describes the evolution of the Network.

Strategy and Practice

Q. Where does strategy and practice fit into the architecture?

A. My response is that 'strategy' overlays all 5 elements of the architecture. Indeed, the management strategy is the interrelationship between the five: Performance, Structure, People, Process and Technology.

I would say the same thing about 'practice'. Practice underliesall 5 elements of the architecture. There are performance (i.e., economic) practices, structure (i.e., sociological) practices, people (i.e., psychological) practices, etc.

Remember, we started with the realization that it matters not what architecture you choose, but that you choose one one that makes sense in your organization culture, language and priorities. The elements - and how they align - are a function of the optimal frame for a given enterprise. Usually, when executives refer to practice, it is in the context of 'Best Practices'. Personally, I believe that less than 15 per cent of organizations resources should be dedicated to such a task. I advise organizations to establish standards rather than imitating best practices. Oftentimes, following best practices may be a prescription for mediocrity.

The 'ENTOVATION Architectural Primer: Why, What and How' will soon be available for purchase. Contact debra@entovation.com to reserve a copy.

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© Copyright, 2001. Debra M. Amidon - All rights reserved.

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.



Power of Innovation Capital

The Trapeze parable

Leaders and Laggards

7Cs of Knowledge Leadership


ENTOVATION Network Evolution


Association of Knowledge Work


Customers: a new twist on knowledge management

Virtual teaming and virtual organizations: 25 principles of proven practice

Measurement myopia; those who measure and those who act

Portal power: gateways or trapdoors?

Creativity is not innovation

Virtual trust

China: accepting the knowledge challenge

Innovation action for Europe