2.1 Stage 1: Understand pressures to change
2.1.2 Pressures to change
If a corporate strategy is about deployment of resources in pursuit of particular goals, then strategy development is about setting these goals, investigating resources, and coming up with feasible and acceptable options for achieving them. We can therefore say that a knowledge management strategy is about deployment of resources in pursuit of particular knowledge related goals that support the corporate strategy. Developing this knowledge management strategy is about setting these knowledge-related goals, investigating resources, and coming up with feasible and acceptable options.
In the development of a knowledge management strategy we use questions that any would-be strategist needs to ask:
䊉 Where do we want to be?
䊉 Where are we now?
䊉 How do we get there from here?
When answering the first of these questions – the focus of this section – we need to gain an understanding of the pressures on the organization, and the challenges it faces. These will typically include macro-pressures such as industry changes, demo- graphic trends, and the position of the local, regional and sometimes global economy. Closer to home, stakeholder pres- sures – from customers, suppliers, shareholders, banks and funding bodies – also have an impact, as do issues of availability of raw materials or expertise, and the activities of existing and potential competitors.
‘Where do we want to be?’ is not a licence for asking the impossible. Journeys (and organizations) always start from somewhere and with the opportunities there will be various constraints (financial, cultural, operational). In particular, exist- ing culture, or ‘the ways things are done around here’, may be a significant block to better sharing and reuse of knowledge.
People tend to be comfortable behaving in certain routine ways, so persuading them to change is often hard: the reasons for change must be clear and compelling to each individual, and they need to have appropriate tools, training and time to make the transition. It is not until these are in place that the required behavioural changes will be possible.
In addition, KM advocates may have to battle upstream against other potentially ‘unknowledge friendly’ changes such as
structural reorganization (for example, through a merger or following downsizing). The organization’s structure and man- agement processes may constrain – rather than encourage – the flow of knowledge and information by adding complicated communication channels and distance between people. Job uncertainties in difficult times tend to hinder free communication – with people falling back on an attitude of ‘knowledge is power’, keeping information to themselves. If, in difficult times, an organization sheds staff, then there is a risk that valued knowledge about products, operational strengths and weak- nesses, or core capabilities, will leave the company and either be lost altogether or – perhaps worse – will end up being put to use by a competitor.
Because of the various constraints and the complexities in the changing environment, the questions ‘Where do we want to be?’
and ‘Where are we now?’ are never entirely separate. It is always important when trying to visualize the future to comprehend and take account of various influences and factors affecting an organization (and we will look at tools in the next section to conduct this exercise in a structured way). An initial simple and effective approach is to examine your organization’s annual report. Take a highlighter and mark the areas where knowledge- related issues crop up: the sections where ‘people and skills’,
‘experience’, ‘goodwill’, ‘relationships’, ‘intellectual property’
and so on are mentioned. With most of today’s organizations, you will soon end up with a mass of yellow ink.
Information on the pressures to change will come from many sources, for example consider what knowledge and informa- tion-related activity is going on with industry partners and competitors? This can be done by keeping an eye on key publications, websites, and identifying case study material by attending conferences and calling on the help of consultancy organizations. Those close by in the same industry sector are likely to be facing the same sorts of macro issues (in the economy or industry sector) as your own organization – for example, pressures for more focused or personalized service with customers and suppliers, the need to speed up innovation and to move quickly into action when new ideas emerge.
These pressures provide strong clues as to what sort of knowledge management projects will help the most to deliver maximum strategic impact to the organization.
Most importantly the senior leaders, managers, and those with a ‘stake’ in the organization’s success should be asked what they
feel the organization should be like, or at least be moving towards. With these people identified the task turns to generat- ing ideas for knowledge management strategy. For this learning from others is an ideal starting point.
In the previous section, we discussed the headings identified in a research project at Cranfield University where a set of generic business benefits that can be expected from exploiting knowl- edge in an organization were set out. Here we reproduce the table (Table 2.1) in full as a useful prompt to help uncover possible options for improvement. In a consultancy environ- ment, we have found this table ideal for use with groups of stakeholders to facilitate discussion on knowledge-related issues.
In your organization, will improvements in any of these areas make a difference?
Opportunities have been identified using this method at all levels in the organization: at the macro, organization-wide level;
at business unit level; and at the level of the individual workgroup.
There are a number of ways this table can be used, depending on size, seniority of the group chosen to be involved in the strategy creation process, and the amount of time allowed, for example:
䊉 Sample method 1: Break into subgroups and consider the issues arising for the organization for each of the main headings, and come back with a list/description of issues and what it would mean for the organization if these issues were resolved. Check back towards the end of deliberations to see how many of the subheadings (in the left column) were raised in the discussion.
䊉 Sample method 2:Go through each point on the list in detail and consider the relative importance of each heading and subheading. Map this to the vision, mission and corporate goals laid out for the organization/group concerned (e.g.
from the annual report, in the business unit report, or in the objectives of the workgroup concerned).
See Appendix 1 for an initial template and example to assist you with such an exercise.
Regardless of the method used, don’t be constrained in the first pass through. Be prepared to be open to criticism of existing delivery methods and work processes, and be receptive to ideas about possible new ways of doing this. The important question that follows at this stage is not the difficulties or otherwise in achieving results. Rather it is whether improvements in any of the areas identified will prove compelling for senior manage- ment because they link to existing strategy and goals, or Table 2.1 Knowledge-based business benefits (Breu, Grimshaw and Myers 2000)
䊉 New products/services Innovation and growth
䊉 Research and development
䊉 New business opportunities
䊉 Developing new markets
䊉 Innovative capability.
䊉 Reducing geographical barriers
Organizational responsiveness
䊉 Organizational integration
䊉 Organizational flexibility
䊉 Sharing ideas
䊉 Organizational learning
䊉 Speed of decision-making.
䊉 Customer retention Customer focus
䊉 Customer service
䊉 Meeting customer needs
䊉 Product/services quality.
䊉 Supply chain efficiency Supply network
䊉 Integration of logistics
䊉 Supplier relationships
䊉 Sustaining existing markets
䊉 Time-to-market.
䊉 Process innovation Internal quality
䊉 Capability for change
䊉 Operational efficiency
䊉 Project management
䊉 Product/services management
䊉 Staff morale
䊉 Quality of decision-making.
whether they are instead just things that might be ‘nice to happen’. And it should never be too far from participants’
thinking that the ideas generated must at some point be firmly linked to clearly defined business benefits – a business case that lacks rigour, agreement, or proof is unlikely to lead to strong commitment and a successful implementation.
Once the pressures to change and the knowledge opportunities have been teased out from the stakeholders and linked to the overall goals and objectives, we find we have obtained the tools to gain a better high-level understanding of where we want to be and where we are now. It is now time for a more detailed understanding of where we are.
2.1.3 Inside the organization – a workplace