Understanding Knowledge The Knowledge Strategy Game Understanding Knowledge Strategy FOLLOW INSTRUCTIONS ON TOP CARD Resource Managing Knowledge PRICE $200 Methods Knowledge SWOT What We’ve Learned Sharing ? Alice in Wonderland is an allegory that suggests not only do we need to know our destination in today’s meeting (i.e., Table of Contents) but also that our clients need to know their E-Business destination. Otherwise they will wander around in e-wonderland for a very long time. Notice the question in the margin. This is on every slide because the number one message for today is ….. ? Don’t be Alice! This is our message to our clients and prospects. Don’t let them get lost in the internet WANDERLAND. They need an E-Business destination …. vision …. strategy otherwise they will walk for a very long time indeed.

Understanding Knowledge Strategy “A company’s KM strategy should reflect its competitive strategy.” Tierney (1999) With focus on creating value for customers, turning a profit, and managing people. (HBR) “… the most important context for guiding knowledge management is the firm’s strategy. Zack (1999) Knowledge is the fundamental basis of competition. Competing successfully on knowledge requires either aligning strategy to what the organization knows, or developing the knowledge and capabilities needed to support a desired strategy.” (CMR)

Understanding Knowledge Strategy A knowledge strategy details in operational terms how to develop and apply the capabilities required to execute the business strategy Joins financial, human and social capital as a strategic asset Do not confuse information and knowledge Strategy making process might be:- Set strategic goals for the organisation e.g. using BSC Prioritise critical knowledge ‘domains’ Identify people and connect them so that they can ‘steward’ the knowledge Needs or depends on CoP in one form or other Cultivate rather than manage Subtle leadership Can go alone but may not realise potential

Types of Strategy Survival vs. Advancement (von Krogh, Roos, Slocum, 1994) Survival – maintaining current level of success, mastering current markets and competitors Advancement – Future success based on new markets, nonreplicability – requires knowledge creation How do you plan/design strategy? Formal strategy and planning – Traditional strategy sets positions, targets, measures. Alignment means “follow the leader.” Learning and emergence – New thinking (not always in practice) shows strengths in organisation learning and preparing for conditions. Alignment means “Learn and collaborate.”

Strategic Drivers Growth through share, market strength, distribution – external market focus Forging long-term, deep relationships with customers – external focus, growing with customer success Market Growth Customer Intimacy Operational Effectiveness Profit through productivity and cost control – internal development focus Traditional KM driver, but should not be the only one!

Strategic Drivers Knowledge Strategy Business Strategy Market Growth Process Innovation Knowledge Sharing Developing Learning Culture Business Innovation Customer Knowledge Integration or CRM Branding Knowledge Product Innovation Knowledge Creation Intellectual Capital Knowledge Strategy Product Sales Time to Market Distribution Networks Pricing Strategy Patent & Product Leverage Process streamlining Supply chain mgt Accounting & Financing Business Strategy Customer retention Customer product needs Revenue growth Partnering / Alliancing Market Growth Operational Effectiveness Customer Intimacy

What Drives Knowledge Strategy? Business Strategy What knowledge does it take to compete? What are your critical knowledge gaps? Product Innovation Can you design breakthrough products? “Spark innovation” through a participatory culture? Organisational Complexity How can you adapt to speed & information overload? Build a quick-learning organisation? Customers and Markets Profound customer understanding Radically improved time to market Knowledge leverage in the marketplace

Managing Knowledge Strategy In 1997, several companies across Europe got together to try to understand how Knowledge was being exploited within companies using these different strategies to drive them. The following model was developed by that Consortium to show how organisations benefit from Knowledge leverage. The knowledge cycle (this circular process is a slightly simplified version of the models we were looking at earlier) must focus equally on both Creating and Sharing of knowledge, not just one or the other. This knowledge cycle exists within a context of what we describe as Enabling Conditions. These conditions are the organisational factors that either encourage or block the uptake and exploitation of knowledge. We categorise the Enabling Conditions into five areas. Leadership is about communicating priorities and embodying the objectives your set out for the business. Culture is the set of codified rituals and practices of an organisation, which sets out how things happen around here. If it contradicts your aims, you'll fail. Management Practices are the formal practices of the organisation. It is essential that certain aspects of KM change processes are actually embodied in management practices and procedures. Systems do not just include IT systems although, they are clearly one enabler. Systems will include mechanisms for control of work as well as recognition and reward metrics. Structures include both the formal organisational chart as well as the more informal examples such as networks to cross the organisation. This whole process should only be undertaken if it is driven by the Business Strategy and will deliver Value. Without both push and pull factors, the effort is meaningless.

Four Enabling Dimensions Knowledge Resources What do we know and where is it ? Culture and Learning Practices How do we get value from that know-how? How do we participate with this know-how? Collaborative Technology & Processes How do we support this know-how?

Linkage to Balanced Scorecard Financial Goals Customer Goals Internal Business Process Goals Learning & Growth Goals Outcome Measures Performance Drivers Business Strategy Knowledge Strategy Desired Outcomes Behaviours The business & knowledge strategy are totally integrated and form a skin around the organisation. This is what defines the organisation and contains its sustainable differentiation – the knowledge. The circle in the middle is the balanced scorecard: the articulation of the strategy to the organisation. It defines the chain of cause and effect relationships that link learning and growth to desired financial outcomes. The outcome measures define the long term targets (% market share), they can only be measured in the future (did we achieve the target) and do not modify the day-to-day activities. The performance drivers (say number of hours a month that a marketing person spends with key customers) can be easily measured and can be used to bring about change to the desired behaviour. This argument assumes that there is a direct correlation between building key customer relationships and long term market share.

Planning from Knowledge Perspective Cultural Assessment …Readiness assessment Knowledge Framework to embed Business Plan Portfolio of Knowledge Management Projects Champion for each project ‘Value from Knowledge’ Plan Business steering team review and presentation Phased Implementation

Knowledge Strategy Methods Knowledge SWOT Business + Knowledge Strengths, Weaknesses, Opportunities, Threats Establish or affirm current Business Strategy Evaluate internal drivers - impacts of current knowledge by: Resources Practices Culture and Learning Technologies Use these as basis for Strength and Weaknesses. Evaluate external drivers – impacts on knowledge Use these for Opportunities and Threats

Knowledge Strategy Methods Strategic Scenario Planning Create shared models of potential future conditions to guide dynamic strategy. Why? Scenarios provide robust tools for integrating very complex business conditions applicable to strategy. Also – people are good at remembering stories; SWOT chart points fall away quickly. How? Team workshop approach, with broad participation. You want new ideas, dissention, “out of the box” Strategy as “serious play” Source? Schwartz,The Art of the Long View Ringland, Scenario Planning

Knowledge Strategy Methods Strategic Scenario Planning Developing scenarios with accompanying strategies linked to a range of potential future trends and changes. Establish participatory scenario team (Futures’ workshop, Team Design, other workshops) Set scope for scenarios Generate sources for scenarios Develop initial categories Build mini scenarios as small groups Group review of mini scenarios Pull together themes and design four scenarios

Aligned Knowledge Management Business strategy guides your knowledge assets Linking knowledge requirements to: Resources: Making information accessible to point of need Info usability with common categories & process Culture: Enabling, rewarding teams & experts for cross-sharing Developing culture of knowledge creation Practices: Embedding new best practices in organization Transparent leveraging of expert knowledge

Strategic Knowledge Resources Core and complementary competencies Organisational capabilities Structured and unstructured information Personal knowledge and unique skills Customer relationships Intellectual property Collaborative Technology Infrastructure and standard systems Groupware and email applications Web-enabled portals and Internet applications Process management systems

Strategic Knowledge Resources Practices Business processes Organisational routines Embedded and specialised processes Practice communities “How things are done” Culture and Learning Core organisational values Personal values and leadership Organisational environment Hiring and enculturation “How we see ourselves” Individual and group skill development Organisational learning Style of management, work, engagement

Conclusions Good strategy is dynamic and adaptable - Knowledge Strategy is ongoing as well. Requires leadership and will – organisational change always requires focus on vision. Traditional management may require education for integrating knowledge into business strategy. Understand what’s worked for others, experiment, listen to your people, your culture.