Complexity and Knowledge Management Navigators…
In 2006 The Economist Intelligence Unit published “Foresight 2020: Economic, industry and corporate trends“. The beauty of this report was in its simplicity and, for those of us that have been working the sharp end of KM, there were no real shocks.
Running an efficient organisation is no easy task but it is unlikely on its own to offer lasting competitive advantage. Products are too easily commoditised; automation of simple processes is increasingly widespread. Instead, the focus of management attention will be on the areas of the business, from innovation to customer service, where personal chemistry or creative insight matter more than rules and processes. Improving the productivity of knowledge workers through technology, training and organisational change will be the major boardroom challenge of the next 15 years. (p. 3)
This move from a focus on ‘Technical’ (complicated), efficiency driven knowledge process to ‘Managerial’ (complex), effectiveness driven processes, again, is not a shock. I’ve blogged enough on the drivers of the Knowledge Economy and the need for organisations to become more adaptive – requiring dynamic people who contribute to innovative outputs that bring about adaptive capacity. The shock for me is the apparent disconnect between the operations and these strategic drivers.
I have been involved in a number of meetings, seminars and presentations lately, where my focus has been on joining the dots between just that. What I have been left with is an uneasy feeling of blinkered short-termism. The dominant focus is very much on efficiency measures and the need to deliver better products or services with leaner resources. Fair enough. However, to maintain market position or to enable the organisation’s ability to continuously improve, then there has to be the acceptance of a shift in mindset, from managing the process to managing the people.
Two key findings standout in the Economist Foresight 2020 report, two findings that have serious implications and require deeper reflection:
1. Low costs will matter less as a source of differentiation. Make no mistake: cost control will be crucial. Pricing pressures and low-cost competition count as two of the three most significant risks that companies will face between now and 2020 (alongside poor management decisions). But two-thirds of respondents do not believe that having a low cost base will be a source of greater competitive advantage in that time-frame. What’s more, the value of price competitiveness to customers is expected to decline relative to other factors, such as personalisation of products and quality of customer service (p. 4)
2. Collaborative relationships will multiply and intensify. A majority of executives believe that high-quality relationships with outside parties will become more important as a source of competitive advantage between now and 2020. Collaborative problem-solving is expected to increase in volume inside and outside the organisation, as customers and suppliers become more involved in product development, as cross-functional and crossborder teams work together more frequently and as partnerships with other organisations proliferate (p. 4)
One thing that needs to be clear, the need for efficiency driven processes will always exist and they will always have a tangible impact on the bottom line of the business. However, if the knowledge intensity of organisaitonal outputs are high, built upon the the development of new products and services, then we need to realise that people are the source of our competitive advantage! Even within efficiency driven continuous improvement there can be the need for open engagement; why do you think that some of the most fiercely competitive oil companies in the world collaborate on benchmarking projects – sharing findings and learning form each other? A state of continuous improvement, efficiency or effectiveness driven, means a constant state of questioning and change; ‘how can we do this quicker and for less’? That’s the operational management, the output, side of the business. What about getting to that point? What about the design of new products and services, how do we get to the point where we are looking at efficiency in the first place. It is people, their ideas, their creativity, their innovations that keep organisations moving; not just for one generation, but for generations to come.
My blog this week might seem to go off on a bit of a tangent here, but bear with me…
If we can agree that people are the key to the here and now, as well as the future, then surely, getting the right people into the right role is crucial to success – whether through recruitment and selection or succession planning. And, if we can agree that problem-solving or communication/networking skills hold the key to future competitive advantage or, in the case of public organisations, public confidence and satisfaction in services, the, surely, we have to understand and test personal attributes that will take us into the future. This means, whether we like it or not, that we need HR to be strategic leaders and business partners in organisational foresight/scenario planning.
For example, something relatively simple: The person you are about to hire, are they a field independent or field dependent learner? Who cares? Take a look at these indicators and you tell me; reflect back on the Foresight 2020 statements and what are the implications for knowing this type of information about the staff you have/want in knowledge intensive positions?
Field Dependent: Like group-oriented and collaborative learning — Prefer clear structure and organization of material —
Attend to the social components of the environment — Respond well to external reinforcers — Prefer external guidance
Field Independent: Like problem solving — Prefer situations in which they have to figure out the underlying organization of information (e.g., outlining) — Like transferring knowledge to novel situations — Prefer independent, contract-oriented learning environments q Respond well to inquiry and discovery learning (Taken from ‘The Adult Learner’ p. 211)
The point that I am trying to make…
Understand the environment
Understand the knowledge intensity of the founding processes that drive your outputs
Understand that this is about people
Understand that this mean we need to work with HR partners to influence all aspects of the HR cycle
HR, you MUST up your game!