1 Leadership and Management in the Knowledge Era Dr. Charles M. Savage Knowledge Era Enterprises, Inc. Co-Creating the Organizations of the21st Century BMW Bildungszentrum Gut Schwaerzenbach February 6, 1998

Copyright (c) 1998 KEE, Inc.2 These slides are being make available to the participants of the “Inventing the Organizations of the 21st Century” conference held February 6 and 7, 1998 in Gmund am Tegernsee. Please feel free to use any or all of these slide in your internal presentations. All I ask is that you keep the KEE, Inc. logo and the copyright sign on the slides. I would like to hear from you as to your efforts and your vision to move us more rapidly into the Knowledge Era. And if I can be of help in any other way, please do not hesitate to contact me. Dr. Charles M. Savage, President & Mentor Knowledge Era Enterprises, Inc Worcester Road, Suite 428 Framingham, MA Phone: , Fax: Web: KEE-Inc.com

Copyright (c) 1998 KEE, Inc.4 New Vortex of Understanding about Knowledge Era Organizational Learning & Self-Organizing The Web Intellectual Capital Core Competencies Innovation Knowledge Management Emotional Intelligence

Copyright (c) 1998 KEE, Inc.5 Knowledge Dynamics Knowledge Management Explicit Tacit Intellectual Capital Human Structural Customer/Supplier Learning Communities Innovating with customers Context Process: VerbObject: Noun Vision/Values/Fractals Competencies Teaming & Networking Control Intellectual Assets

Copyright (c) 1998 KEE, Inc.6 Knowledge Dynamics Explicit Tacit Context Process: VerbObject: Noun Knowledging Knowers Known Unknown

Copyright (c) 1998 KEE, Inc.7 Historical Eras AgriculturalIndustrialKnowledge

Copyright (c) 1998 KEE, Inc.8 Capabilities and Aspirations StoryStory Capabilities Aspirations

Copyright (c) 1998 KEE, Inc.9 Sources of Wealth: Agricultural Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

Copyright (c) 1998 KEE, Inc.10 Sources of Wealth: Industrial Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

Copyright (c) 1998 KEE, Inc.11 Sources of Wealth: Knowledge Era Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

Copyright (c) 1998 KEE, Inc.12 Sources of Wealth: Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources

Copyright (c) 1998 KEE, Inc.13 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

Copyright (c) 1998 KEE, Inc Finding Faults Finding Strengths Trust Distrust === = = == Individuals: Functions/ Departments: Lines of Business: == Suppliers/ Partners: Customers: Customers’ Customers: Knowledge Turns (2) Knowledge Turns (2)

Copyright (c) 1998 KEE, Inc.15 Knowledge Turns: Results

Copyright (c) 1998 KEE, Inc.16 Knowledge Turns: Results

Copyright (c) 1998 KEE, Inc.17 Knowledge Era - The Dilemma! Labor Hands Knowledge Heads Land & Resources Knowledge Assets: 10 x + Trust: Very Low Competency Leveraging: Very Low

Copyright (c) 1998 KEE, Inc.18 Sources of Wealth: Labor Hands Knowledge Heads Capital: Money & Machines Land & Resources Economy of Scarcity Economy of Abundance

Copyright (c) 1998 KEE, Inc.19 Competitive Power of IC  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

Copyright (c) 1998 KEE, Inc.20 Financial Focus Process Focus Customer Focus Human Focus Renewal & Development Focus IC Framework at Skandia

Value in waiting Value creation resultant Value creation interaction Human Customer Structural Dynamics of Knowledge Capital Dynamics of Knowledge Capital Charles Armstrong, Toronto

Copyright (c) 1998 KEE, Inc.22 Wealth and Organizations Land Labor Capital Knowledge Feudal Proprietor- Steep Knowledge Feudal Proprietor- Steep Knowledge ships Hierarchies Network- ships Hierarchies Network- ing ing Source of Wealth Types of Organizations Late Agricultural Early Industrial Late Industrial Early Knowledge

Copyright (c) 1998 KEE, Inc.23 Wealth and Organizations Land Labor Capital Knowledge Feudal Proprietor- Steep Knowledge Feudal Proprietor- Steep Knowledge ships Hierarchies Network- ships Hierarchies Network- ing ing Source of Wealth Types of Organizations Late Agricultural Early Industrial Late Industrial Early Knowledge

Copyright (c) 1998 KEE, Inc.24 Wealth and Organizations Land Labor Capital Knowledge Feudal Proprietor- Steep Knowledge Feudal Proprietor- Steep Knowledge ships Hierarchies Network- ships Hierarchies Network- ing ing Source of Wealth Types of Organizations Late Agricultural Early Industrial Late Industrial Early Knowledge

Industrial Era Knowledge Era

HumanStudiesTheory X & Y B P R Industrial Era Knowledge Era

Complexity: Break Apart (Abteilung) Industrial Era: Management Knowledge Era Pay: What you do, not what you know Organization: One person, one boss Values: Distrust Resources: Scarcity

Industrial Era Knowledge Era

Industrial Era Knowledge Era: Leadership Complexity: Discover patterns (Synergy) Pay: What you do AND know Organization: Community of leaders Values: Trust and valuing competencies Resources: Scarcity AND abundance

Theater: Role Playing Industrial Era Knowledge Era Drama: Authentic Interaction

Theater: Role Playing Industrial Era Knowledge Era Drama: Authentic Interaction Uncertainties of “where do I fit”

Copyright (c) 1998 KEE, Inc.32 Supply Chain SupplierCompanyCustomer

Copyright (c) 1998 KEE, Inc.33 Supply Chain - extended Customers’ Customers SupplierCompanyCustomers

Copyright (c) 1998 KEE, Inc.34 Customers’ Needs and Aspirations Problems & Needs Aspirations & Opportunities

Copyright (c) 1998 KEE, Inc.35 Supply Chain: Needs & Aspirations SupplierCompanyCustomers Customers’ Customers NeedsAspirations TransactionsOpportunities

Copyright (c) 1998 KEE, Inc.36 Valuing Cluster: Interactive View SupplierCompanyCustomers Customers’ Customers CompanyCustomers Suppliers/Partners Customers’ Customers

Copyright (c) 1998 KEE, Inc.37 Opportunities Grow Revenues Company Customers’ Customers Suppliers/Partners Customers Opportunities Capabilities Aspirations

Copyright (c) 1998 KEE, Inc.38 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

Copyright (c) 1998 KEE, Inc Skandia AFS Working the Whole System Skandia End Users Funds Managers Brokers , Million

Copyright (c) 1998 KEE, Inc.40 Transactions Product Solutions Business Solutions Mass Customization Partnering Dynamic Teaming, Virtual Enterprising & Knowledge Networking Structural Capital Human Capital Customer/Supplier Capital Evolving Business Model

Copyright (c) 1998 KEE, Inc.42 The Values Shift Survival Traditional Hierarchy PartneringGlobal Functional Skills Interpersonal Skills Imaginative Skills Community Skills Industrial Era Knowledge Era Brian Hall, Values Shift

Copyright (c) 1998 KEE, Inc.43 Enduring Companies It’s not what you make, it’s what you stand for Jim Collins

Copyright (c) 1998 KEE, Inc.44 Summary: Leading & Managing in Knowledge Era  Seize opportunities through strategic dialogue with suppliers & customers  Build upon strengths and energy in culture of trust  Entrepreneurially, team capabilities and aspirations to grow revenue  Support community of authentic leaders  Leverage power of the web

Copyright (c) 1998 KEE, Inc.45 Enable Knowledge Era Enterprising Knowledging The Key: The Culture of Valuing makes Knowledging Possible