Knowledge management and the world financial crisis

Since my last blog post, the world financial market has really taken a battering as large finanical institutions in the US, Britain and in Europe collapse under the weight of poor lending practices and even poorer management and control structures. The financial impact alone is enormous.

What has this to do with knowledge management, I hear you ask?

Well, knowledge management is about enabling informed decision-making and taking action. Knowledge management facilitates the information and knowledge assets of a business to drive operational efficiencies, create opportunities for growth and innovation, and establish sound information management practices and systems for preparedness and risk mitigation.

Knowledge management is therefore about establishing the internal operational conditions for making effective and knowledgeable choices and decisions across the business domains of a firm – and those business domains are where profits and losses are created.

An organisation’s codified knowledge and information (explicit knowledge), capacity for research and analysis, and capabilitiy to locate and disseminate this information will inform a workplace and the people within it; for decision-makers and for taking action.

At the same time, knowledge management involves people - the information and knowledge exchanged, re-articulated and reformulated by humans within particular contexts. The knowledge and experiences of people are unique, co-evolving, and able to be shared to develop or create new knowledge. This is what is commonly referred to in the knowledge management literature as tacit knowledge.

Knowledge management facilitates this interplay between explicit and tacit knowledge out of which organisations make decsions and take action. Knowledge management is therefore ongoing, cumulative and regenerating.

Knowledge management also works to reduce costs through improving workflow, facilitating efficient and effective information capture, access, and dissemination, facilitates conversation and human networks, and enhances collaboration and connectivity between individuals for common purpose.

Knowledge management is therefore about providing the infrastructure and capability for organisations to make informed decisions. As knowledge managers, we like to think that the outcome of knowledge management is Innovation and competitive advantage – and sometimes it is. But just as importantly is the strategic importance of using knowledge and information assets wisely to improve operational effectiveness, decision-making and governance issues – profit making and risk mitigation.

On the cost side, knowledge management drives down the cost of doing business through more efficient and productive operations (saving time is one of the obvious manifestations). Being able to find the right information at the right time is critical, as is preparedness through awareness. Being aware and having quick access to information and the right people allows for organisational agility and responsiveness that impacts on how opportunities are found and change is managed.

A strategic knowledge management approach to organisational perfomance is an excellent way for companies to make improved decisions for profit generation and risk mitigation while also saving costs and speeding up interaction within people networks for collective thinking and collaborative advantage.

Knowledge management offers a foundation, many paths and a network. Yet it’s true that senior management and executives choose which way to jump – and the frying pan at 700 or 870 degrees is one route. Wall Street, if it’s not to late, take heed!

On breakfast, lunch, and tea

There are a number of ways in which information and knowledge can be disseminated and exchanged, including breakfast, lunchtime or evening meetings. These meetings can be internally or externally based. Organisations, like the Society for Organisational Learning Australia (SOLA) for example, have run morning information sessions for members featuring a special guest speaker. I first heard Dave Snowden at such a breakfast in Sydney a few years ago. There are plenty of examples across a range of businesses and professional associations.

At Rabobank I organised a number of lunchtime meetings featuring a guest speaker to discuss a topic of interest. The last one I organised dealt with water infrastructure and the speaker was a friend of mine from a leading law firm. The lunch and discussion afterwards were a great success. I hope to arrange similar sessions in a different organisational context in the future.

Having been both an attendee and organiser of such functions, it is often difficult to gauge how successful these meetings will be and what size of audience will actually turn up. Breakfast and lunchtimes are often busy times for people too, even if outside the official working day. And worst of all, sometimes the quality of the presentations are marginal, causing a major rethink as to the value of these types of sessions.

So what is it that makes these events a success?

From my experience, and from the example of the Dow Jones Factiva breakfast session I attended this morning (and the previous session last year), there are five key dimensions:

1) the speaker/s MUST be of good quality with something interesting to say (they don’t have to be famous but they need to be able to speak to a group of people in a relaxed style and have something relevant to say)

2) the speaker MUST be able to present in a professional but informal manner

3) the session should not be too long (1-1.5 hours is sufficient) and timing must be tightly controlled to avoid wasting time

4) a good mix of people in the audience widens appeal and scope for questions and post-session conversation

5) the venue MUST be comfortable and able to fit the number of people attending

The Dow Jones Factiva session this morning had three speakers: Chris Pash from Dow Jones Factiva and his self-advertised blog, Hugh Martin from APN Online, and Martin Quadroy from Telstra). All three speakers in their individual ways provided interesting, entertaining, and relatively short presentations covering content, online marketing, and competitive intelligence.

Well done (again) Dow Jones Factiva!

On three ways of working

I am reading Gerard Fairtlough’s book, The three ways of getting things done.

The book examines three forms of workplace environment:

1) Hierarchy – the traditional organisational form of power relations in which there is a distinct progression of roles and powers from top to bottom. Hierarchies are usually inflexible, discourage learning and communication, and inhibit change. Hierarchies have been the dominant form of organisational context for so long they have become the accepted organisational orthodoxy, irrespective of the outcomes.

2) Heterarchy - the notion of multiple rule, defined as “a balance of powers rather than the single rule of hierarchy”. Examples of organisations in this form include professional partnership firms, inter-organisational departmental relationships, external strategic alliances, and organisational networks.

3) Responsible autonomy – where “a group decides what to do, but is accountable for the outcome” – accountability being the key here. Examples include workplaces where teams work together on products and services and where the outcome is based on performance and, often, profitability. One example would be an investment team investing on behalf of a particular equities fund and the outcome would be the return on investment, perhaps relative to the market or some other benchmark.

The book examines the three different forms, individually and in combination. The author tends to favour heterarchy and responsible autonomy, and I would agree based on my personal experience.

By effectively leveraging the human and social capital of an organisation, where much of an organisation’s competitive advantage resides, the organisation is better equipped to respond with agility to the changing internal and external environment, as well as enabling new ideas and knowledge to grow and flourish for improved organisational outcomes.

And in a competitive world where much of the codified knowledge is ubiquitous and commoditised, the individual knowledge and people networks of employees within the organisation form the basis of real competitive intelligence and competitive advantage. Knowledge management certainly has a role to play here.

Which organisational workplace environment would you prefer?

On new staff, new knowledge

One of the most under-rated resources in any business is the knowledge new staff bring to their new organisation. I am not just talking about the set of skills and capabilities that a new employee brings into an organisation, but the knowledge they bring with them from working at their previous employment.

One of my knowledge management activities has been in making contact with new starters and talking with them about their previous workplace experiences and observations. This usually formed part of my introductory contact with them that not only introduced me but also the information and knowledge services. Ideas about what was both good and bad were important in keeping abreast of the competition but also in terms of developing new ideas and refinements in my own knowledge management practices.

In addition, in the communities of practices I administered, previous workplace experiences were often shared in relation to a question or an insight into a particular problem. There was nothing unusual about this at all and proved immensely valuable.

I had a good chat about this information gathering exercise with new starters this morning with Mark Schenk from Anecdote in Canberra. I was lamenting the lack of interest by HR departments to take advantage of gathering important information from new employees on a systematic basis, since I was not always able to undertake the work myself (and my interest was focused on KM activities and internal communication channels). 

Mark suggested using anecdotes as a good way of capturing snippets of information about other workplace activities and processes. These anecdotes can become stories in their own right, capturing insights that may be valuable for the new workplace.

The important point to remember is that new starters still have their previous workplace experiences fresh in mind. Also, they are not yet enmeshed with the processes and culture of their new employer that might filter their perceptions of their previous work experiences.

Having the conversation with new starters and seeking anecdotes is really a great KM activity to do without it necessarily becoming a pure competitor intelligence debrief that alienates rather than engages.

Remember, it’s conversation, not interrogation!