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1 Transforming Knowledge: The 21 Century Wealth Driver Dr. Charles M. Savage Knowledge Era Enterprises, Inc. “Shaping our Future …” Cable & Wireless Optus Melbourne, October 28, 1999

3 Knowledge, A Map Please?

4 Historical Eras AgriculturalIndustrialKnowledge

5  Sharing of logs  Superstition: Unlucky to go out twice with the same crew  Known split of profits from the trip Whaling Industry … Prototype of Knowledge Intense Industry

6 Knowledge & Energy Aspirations Capabilities Aspirations Capabilities Person APerson B

7 Sources of Wealth: Agricultural Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

8 Sources of Wealth: Industrial Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

9 Sources of Wealth: Knowledge Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

10 Sources of Wealth: Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

11 Sources of Wealth: Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources Economy of Scarcity Economy of Abundance

12 New Vortex of Understanding about Knowledge Era Organizational Learning & Self-Organizing The Web Intellectual Capital Core Competencies Innovation Knowledge Management Emotional Intelligence

Dynamic Stable Complex Simple Pace of Change Knowledge Requirements Nolan & Norton, 1988

VisionStrategyCultureValues BalancedScorecard Customers Finance Learning & Development Processes What investments in our customers bring them excellent results? How can we better organize our knowledge? How do we leverage the value of our customers’ knowledge ? How can we use ours and our customers’ knowledge more effectively? Innovating with our customers!

15 Inventory Turns = Cost of Goods Sold for Year Average Inventory for Year Knowledge Turns = Ability to Build Upon other’s Capabilities* Level of Distrust *Other’s Capabilities = Individuals, Functions, Lines of Business (LOBs), Suppliers, Customers and Customers’ Customers Knowledge Turns

Finding Faults Finding Strengths Trust Distrust === = = == Individuals: Functions/ Departments: Lines of Business: == Suppliers/ Partners: Customers: Customers’ Customers: Knowledge Turns (2) Knowledge Turns (2)

17 Knowledge Turns: Results

18 Knowledge Turns: Results

19 Industrial Era: Conceptual Confinement Help!!  I find little trust in the organization  Others are always looking for my weaknesses  My intellect & emotions are not valued  Relationships are not important

20 Knowledge Era: “Production” through Dialogue  Values (trust) are key  I must discover others’ capabilities & aspira- tions to build upon  We excel in teaming our competencies to seize opportunities  Learning enhances earnings

21 Tangible Assets Visible Finance Cash AR PPE External Internal Personal Competence Short-term Debt Loans Stock Equity Invisible Equity Obligation Karl-Erik Sveiby Customer Capital Structural Capital Human Capital Key Elements of Knowledge Capital

22 Financial Focus Process Focus Customer Focus Human Focus Renewal & Development Focus IC Framework at Skandia

23 Skandia Navigator Model Financial Capital Human Capital Customer Capital Innovation Capital Process Capital Organization Capital Structural Capital Intellectual Capital Market Value

Industrial Era Agricultural Era Adam Smith James Watt Henri Fayol Frederick W. Taylor

Industrial Era Agricultural Era

Industrial Era Agricultural Era A BC Culture of Mistrust Culture of Devaluing

Industrial Era Knowledge Era Agricultural Era

Master Servant Relationship With One Another Employer-EmployeeConcept “+/—” “X” Industrial Era Knowledge Era Agricultural Era

29 Supply Chain SupplierCompanyCustomer

30 Supply Chain - extended Customers’ Customers SupplierCompanyCustomers

31 Customers’ Needs and Aspirations Problems & Needs Aspirations & Opportunities

32 Supply Chain: Needs & Aspirations SupplierCompanyCustomers Customers’ Customers NeedsAspirations TransactionsOpportunities

33 Valuing Cluster: Interactive View SupplierCompanyCustomers Customers’ Customers CompanyCustomers Suppliers/Partners Customers’ Customers

34 Skandia AFS Working the Whole System Skandia End Users Funds Managers Brokers Wholesale Annuities Manage Funds Sell Annuities Invest in Future Select Events Uncertain Future Study

35 84 Skandia AFS Working the Whole System Skandia End Users Funds Managers Brokers , Million

Aspirations Capabilities Customers’Customers Customer s Company Knowledge Era Enterprising and Dynamic Teaming Aspirations Aspirations Aspirations Capabilities Capabilities Capabilities Suppliers/Partners “x”

37 Transactions Product Solutions Business Solutions Mass Customization Partnering Dynamic Teaming, Virtual Enterprising & Knowledge Networking Structural Capital Human Capital Customer/Supplier Capital Evolving Business Model

Dynamic Stable Complex Simple Pace of Change Knowledge Requirements Nolan & Norton, 1988 Your Company in 2001?

+ / — “ X “

Processes Finance Learning Customers Imaginative Systemic (Context Giving) Operational Interpersonal Inter-Organiza- tional Values Subtracting Value 7 Industrial Era Division & Subdivsion of Labor Distrust & Devaluing Follow Instructions SWOT

Processes Finance Learning Customers Imaginative Systemic (Context Giving) Values Multiplying Value 7 Knowledge Era Operational Interpersonal Inter-Organiza- tional Benchmarking & Benchbreaking Dialoguing & Innovating with Customers Teaming & Alliancing Redefing Rules & Seizing Opportunities

43 Competitive Power of Intellectual Capital  Intelligence and knowledge with unique insights your competitor can’t envision  Innovative products with superlative value your competitor can’t create  Innovative processes with extraordinary speed and efficiency your competitor can’t match  High integrity relationships with superior collaboration and loyalty your competitor can’t achieve Global Creativity

44 Summary: 5 Keys for Knowledge Era Enterprising 1. Build upon energy & strengths through a culture of trust (Clear Values and Guiding Principles) 2. Seize opportunities through strategic dialogue with suppliers & customers (Dynamic Teaming) 3. Team capabilities and aspirations to grow revenue (Create Self-Teaming Knowledge Era Enterprising Culture) 4. Supported by dynamic “Communities of Leaders” 5. And leverage the power of the Web

45 Enabling Knowledge Era Enterprising The Key: The Culture of Values & Valuing makes Dynamic Teaming Possible Web: kee-inc.com