Gordon Petrash
Strategy—Webster’s definition
A: a careful plan or method: a clever stratagem. B: the art of devising or employing plans or stratagems toward a goal.
The way the word “strategy” is defined and understood within an organization is critical before any meaningful discussion about
“Strategy” (with a capital S) can take place. This is somewhat evident in the chapters that make up the knowledge management strategy section.
Each of the authors advances the notion of strategy with a slightly dif- ferent definition and in varying contexts. All of their uses of the word and concept are valid. The imperative is that the author defines the term and that the reader understands the context.
I am continually perplexed with discussions regarding mega-terms and concepts like Strategy, Learning Organization, Leadership, Intellectual Capital, and Knowledge Management because of the shear challenge of bringing the participants to a common understanding of the definition of terms being referenced. It doesn’t matter that there may not be a common agreement on these terms as long as I understand your meaning and you mine.
Therefore, for the sake of this discussion, my use of the word Strategy is defined and elaborated as follows—a plan and a process that accom- plishes the enterprise’s desired outcome. It is a plan for action with clear and measurable goals linked to these outcomes. It is many times dynamic, having the ability to adapt to new information or situations. In the end it is the enterprise’s best knowledge and collective experience focused on the accomplishment of its goals.
The Enterprise Strategy is the road map of how to get to the desired destination. It is not the primary purpose of the strategy to determine
whether the destination is correct. That is left to the “vision and pur- pose” of the enterprise. The strategy may reveal things about the vision and purpose and certainly can impact them. But all too often within organizations, the strategy and the vision get intertwined and begin to cause each to lose focus and discipline.
Peter Senge addresses the importance of the definition of terms in con- text. His paper “Reflection on ‘A Leader’s New Work: Building Learning Organizations,’” characterizes part of the problem with the advance- ment of the concept with the “sloppy use of the word leader.” How the word is used in organizations is different from how it is used within the literature. He points out that leader is often meant to mean executive, which in many cases preempts leadership from occurring elsewhere in the organization.
Peter has adopted the definition for leadership by organizations as the following: In the abstract—“leadership is the capacity of a human com- munity to create its future.” In operation—“leadership is the ability in an organization to initiate and to sustain significant change, to work effec- tively with the forces that shape change.” I find these definitions of lead- ership very palatable.
Peter also defines “knowledge” “as the capacity for effective action, clearly distinguishing it from data and information.” Knowledge and Knowledge Management are words and terms that are being bantered around quite a bit today. Peter makes an observation that these are terms that have become fads. He makes the point that Knowledge Management is just another term in the ongoing continuum of business management evolution.
Leaders enable transformation. Creating a learning organization is one of the vehicles for accomplishing this. Peter’s paper is thought pro- voking and challenging regarding these often used terms and concepts.
David Skyrme’s paper, “Developing a Knowledge Strategy: From Man- agement to Leadership,” supports the premise that knowledge manage- ment has flirted with becoming a fad but in fact, has move beyond fad to take its place as part of the ongoing business management improve- ment evolution. The management of knowledge has firmly taken its place as one of the fundamental elements required for developing strategy.
David attributes knowledge management’s attainment of this stature in the past few years through the following sequence of events.
1. Recognition that knowledge and other Intellectual Capital have value by underpinning value creation and future value, both of which impact share price
2. Demonstration of clear business examples where management of knowledge has given companies competitive advantage
3. Availability of improved collaboration technology
4. The realization that business processes are a continuous evolution and knowledge management was the logical next step
The integration of knowledge management processes and principals into business strategy has significant measurable benefits that are out- lined in his paper “The Knowledge Advantage.” David certainly helps to make the case for knowledge management as a real part of the business management process and strategic thinking. He breaks the knowledge contribution to strategy into two “Thrusts.”
1. Making knowledge that is already known easily accessible.
2. Innovation, the creation of new knowledge that has value.
David advances the value of knowledge management by referencing very clear and measurable “Levers.” Knowledge management in practice is not linear; it laces the management of explicit knowledge and tacit knowledge together with the value proposition cited in the strategy.
Managing knowledge is not an easy task. He describes the management of tacit knowledge as an “oxymoron.”
Because it is difficult and messy doesn’t mean it cannot be done. David presents very real approaches to managing knowledge more effectively
Organizational Capital Human Capital
Customer Capital Value Represents
Knowledge Flow
Figure I.1
Intellectual capital growth from knowledge flows
and as an element of the business strategy. I particularly subscribe to his prediction that future business success will be determined through
“Knowledge Leadership” rather than “Knowledge Management.” The enabling of the knowledge movement and innovation rather than the hard processes of disciplined management would seem to be more palat- able to creative people, thus encouraging better performance and more successes.
“Knowledge Sharing Is a Human Behavior,” by William Ives, Ben Torry, and Cindy Gordon, really focuses on people as the key element of successful knowledge management. “Sharing insights and best practices is a human behavior that is critical to the success of any knowledge man- agement system yet it is counter to the culture found in most organiza- tions.” This is a fact that we all know and experience day in and day out in our work and personal lives. Andersen Consulting has developed a human performance model that specifies what a person needs to opti- mally perform any business task, as well as what leadership must be pro- vided in order to align performance with business strategies.
They have identified the following principal factors:
• Understanding the business context.
• Organizational performance factors—structure and roles, processes, culture, and physical environment.
• Individual performance factors—direction, measurement, means, abil- ity, motivation.
These factors must work in concert in order for human performance to be optimized. Each is necessary but by itself, not sufficient.
Knowledge management is personal. It is difficult and uncomfortable to put performance perimeters around humans. But it can be done and is being done every day in every organization. In many cases it is not formalized or explicit. The authors have put together a compelling argu- ment that for organizations to be successful, they need to share knowl- edge. Their paper effectively shows the key factors that must be managed in order for this to effectively happen and ultimately impact organiza- tional performance.
I think this chapter will stir some controversy among those that feel we are coming ever closer to managing and measuring people by some overriding business management process. And in doing so, we may start to lose the individual’s face in the attempt to more effectively manage
human capital to enhance organizational performance. I conceptually buy into the Andersen Consulting “Human Performance Model.” How it is implemented and presented by leadership, as in so many cases of implementing business models, is critical to its success.
“Building Intangible Assets: A Strategic Framework for Investing in Intellectual Capital” by Patricia Seemann, David De Long, Susan Stuckey, and Edward Guthrie, addresses intellectual capital, its definition, and how better managing the raw material “knowledge,” builds more of it.
The authors describe Intellectual Capital as being composed of Human, Social, and Structural Capital. All three are further defined in the paper.
I particularly like their definition of knowledge management—”the deliberate design of processes, tools, structures, etc., with the intent to increase, renew, share, or improve the use of knowledge represented in any of the three elements of intellectual capital.”
I have used Figure I.1 to define Intellectual Capital and show the impact the management of knowledge has on it. The knowledge flows grow each of the types of capital and at the same time, brings them into a more coincident position. In both dynamics, the area in the center,
“Value,” increases in size. This is the conceptual high ground, high value that is targeted by Intellectual Capital Management, Knowledge man- agement, and Learning Organization concepts. This paper fits nicely into my own philosophy of Intellectual Capital.
Each of the papers has different definitions and approaches to key ele- ments that are critical to strategy. These differences in no way should dis- tract the reader from seeing the underlining similarities in the analysis and themes of all four of these papers. I have gleaned the following from them:
• The definition, and the context of the terms must be understood before dialogue and action take place
• Knowledge management is but another step in a continuum of the ever evolving business management process
• Intellectual Capital, Knowledge Management, and Learning Organi- zation are terms rooted in action and the creation of value
• An integrated approach that blends into existing business practices is the most effect way to cause sustainable positive change
• Measures are critical for successful implementation
• An enabling leadership approach is the preferred approach
• Cultural change is needed for sustainable benefit
• It all starts with the individual and ends with the individual. Models and processes do not create new knowledge or value only people do
• A winning business strategy must have the management and leveraging of knowledge as one of its cornerstones
• Strategy is the implementation of knowledge toward measurable objec- tives that accomplish the enterprises vision and purpose
To quote Charles Savage, a leading thinker and mentor in the area of Strategy Development, Intellectual Capital Management, and Knowledge Management, “we are on a long journey and the trip has just begun.”
These papers will catalyze readers to focus their thinking on a critical aspect of business management and possibly advance their own and our journey toward an ever evolving business model that enables the creation of “value.”