Tag Archives: Knowledge

Uncovering the secrets of innovation; the turning point in Knowledge Management

When we talk about innovation it’s easy to come up with the iPad example but the product itself is only one side of the story. We’re just looking at the tip of an iceberg. Have you ever wondered what’s below the sea? Let’s take a few moments to see how this innovation world looks like.

In the beginning there was darkness

Do you remember the first verses of the Bible? What happened in the darkness when our universe, the most amazing innovation, started to exist? It is written that “God said”. Whatever darkness you may face, you will never get out of it if you do not start to communicate. Communication is where it all begins.

Being innovative is not a statement or a nice attachment to your logo. It’s a long-term and continuous process. We are challenged to create the business of tomorrow even as we focus on keeping the organisation lean today, with more immediate incremental improvements supplemented by long-term big bets.

The key for this process is to enable connections between people and ideas. The tools we now have available are supporting communication more than ever. When you’ve read the word “connections”, your mind probably jumped to social tools such as Facebook, Google+, or Twitter. Indeed, businesses generally consider how to take advantage of these or similar web tools to communicate inside and outside the firm: enabling employee knowledge sharing, providing customer support, building the brand, or marketing products and services.

PwC recently launched the “Global Innovation Survey”, the largest and most comprehensive study of its kind exploring innovation from a global, multi-sector perspective. It uncovers insights obtained from interviews with board-level executives from 1,757 companies, across more than 25 countries and 30 sectors, who are responsible for overseeing innovation within their company.

Figure1The study shows that the most innovative companies use social media more often to collaborate externally and support the innovation process: 67% (most innovative companies) vs. 39% (least innovative companies) and they are more likely to manage innovation efforts formally or in a structured way: 78% vs. 66%. Moreover, when it comes to developing new products and services with external partners, the most innovative companies collaborate over three times more often.

The importance of collaboration can also be seen in the number of companies that are now working with customers or other businesses to co-create new products and solutions. The rapid upsurge in the sale of e-readers and e-books is a good example of how these collaborations can create game changing opportunities for some businesses and the threat of marginalisation for slower moving competitors.

Starting to communicate is not a requirement for innovation staff only but an innovative culture is required. Seven in ten of the executives interviewed by PwC also feel that a successful innovation culture relies on the organisation’s ability to foster an environment where smart exploration is encouraged even if does not always lead to a successful outcome. Leaders know that breakthrough innovations require exploration of entirely new types of business models and technologies. Sometimes, the experiments do not provide the expected results. Sometimes called a failure, those unexpected results are valuable discoveries that can guide the innovation team to bigger and better outcomes.

More lights in the sky

As we go deeper into creation we see that during the fourth day God made the stars to shine on the earth. Have you ever wondered why would we need stars since we already have light from the sun? Aren’t stars redundant lighting?

As companies begin to experiment and have success with social collaboration tools, they will begin to understand what we call the collaboration paradox: adding more information to the mix (so called “social information”) actually can help companies combat info overload by creating additional context that makes it easy to find exactly what you need.

The navigation techniques have always used stars as guidance on the ocean. We use “interest graphs” (maps of topics, ideas, or business issues and how they’re interrelated) to make it possible for individuals to navigate through our own oceans of information.

Effective innovators have structures and practices in place to make innovation more systematic. This allows them to “control” accidental discoveries, and to be continuous innovators. Such structures include a grassroots approach – empowering employees to act like entrepreneurs – as well as strong leadership backing and centralised support.

The leading innovators in PwC’s survey have clear preferences for a more structured innovation approach. Only a fifth (21%) of the most innovative companies manage innovation informally, compared with a third (32%) of the least innovative companies. In order to get the leading lights in the ocean of innovations, many leaders are shifting away from total reliance on informal structures.

Be fruitful

Why would a creator empower creation? We see fruitfulness as one of God’s requirements even for land and sea. Why would we require innovation at all levels? Well, especially in the knowledge days there is simply no other way.

Figure2A clear indication of innovation’s move into the mainstream is that many companies now expect staff to allocate at least some of their time to developing and supporting new ideas, rather than simply relying on a few bright sparks. Many participants talked about the need “to empower frontline staff”. The fact that talent is quite low down the list would further underline the move from innovation being “alchemy” by the few to “cookery” by the many.

While in the past R&D units would have focused on ways to enhance the product range, the PwC survey shows that many CEOs are looking to go much further by transforming what they sell and how they sell it. A soap powder manufacturer might open up a chain of launderettes or an engine maker could move from selling engines to charging users for running them, for example. What brings these new business models together is a shift in focus from products to solutions. The product is clearly an important part of the solution, but not everything. In turn, the role of technology goes beyond creating new and improved products towards gaining sharper insights into what customers want and how to deliver it. A common thread in the feedback from participants was the need “to spend more time in the marketplace”.

The most successful companies have gone further in seeking to create a culture of innovation. However, in keeping with innovation’s changing risk/reward profile this includes giving people extra time to create and nurture opportunities and being prepared to tolerate a level of risk and failure.

The turning point

The beautiful creation days have met a turning point and its effects are still here today. Why? Because there was a disruption between the knowledge Adam and Eve had and the way they decided to act. Interrupting critical knowledge in the decision making process is the turning point where most beautiful stories have ended tragically.

Figure3Some years ago I began to work on “capitalizing” knowledge in PwC for the EMEIA region, which is a territory covering all offices from the northern countries to South Africa and from the UK to India. This made me look with great interest on the efficiency of information flow and I realised that organizations that have dysfunctional knowledge management begin to suffer the same effects that the Alzheimer disease has on human brain: intellectual abilities are lost, even reach inability to think abstractly, the coordination is limited, and they have trouble performing daily activities. As a result, innovation becomes increasingly rare till it disappears completely.

Since its evolution is similar to an organization’s brain, in an article I wrote last year, I named this disease “Knowledgeheimer”. Thinking about an organization as a patient appeared to be making more sense to me when dealing with knowledge management. “Knowledgeheimer” is the turning point that burns a beautiful story into ashes.

In 1991, Knowledgeheimer’s treatment involved maximizing the organization’s intangible assets. Later, however, innovation was in the forefront of concerns – materialised into projects like Skandia Future Centre, a prototype to test the operation of new methods of capitalization of knowledge and, in particular, human intelligence within the organization. The basic principle was to stimulate new ideas and creative processes.

Today it becomes more obvious that establishing and fostering an innovative culture is a subtle mix of encouraging the right behaviours and giving people the means to take ownership of their innovation efforts. The Innovation Survey offers a glimpse of how this mix would look like.

Just as with Alzheimer’s, to combat “Knowledgeheimer”, the organization’s brain should be looked at consistently and intentionally, in a pro-active manner. Access to knowledge retention and taking benefit of this knowledge has to become part of the daily workflow.

Article published by Romanian Business Digest, October 2013; PDF copy here.

Knowledgeheimer’s treatment: unlocking value and productivity through social technologies

I remember how eight years ago I was explaining to one of my clients the benefits of having an online platform that could be easily updated by his sales force, used by both client facing and back office and act also as a sales platform for anyone accessing the internet. It was an innovative idea, custom made but the word “social” had nothing to do with it. Technologies have come a long way and we often hear the word “social” sticked to some other ones such as “knowledge sharing” or “business benefits”. Nowadays, by not reaching the full potential of the existing knowledge sharing system, companies begin to suffer the same effects that the Alzheimer disease has on human brain, as we’ll see shortly.

According to McKinsey’s “Social economy” report, the social technologies today look like this:

  • over 1.5 billion networking users globally;
  • 80% of online users interact with social networks regularly;
  • 70% of companies are using social technologies; 90% of them report business benefits from such technologies;
  • knowledge workers spend 28 hours per week writing, searching and collaborating inside the company.

However, their potential is somewhere here:

  • between USD 1 billion and USD 1.3 trillion could be unlocked by social technologies in four sectors;
  • twice potential value from better enterprise communication and collaboration;
  • 20-25% potential improvement in knowledge worker productivity.

About Knowledgeheimer

During the last few years, I understood that knowledge management comes in fact to maintain the organization’s brain, to keep it active, to develop it so the organization is able to work and innovate. I observed that organizations with dysfunctional knowledge management begin to suffer the same effects that the Alzheimer disease has on human brain: intellectual abilities are lost, even reach inability to think abstractly, the coordination is limited, and they have trouble performing daily activities. Since the evolution is similar to an organization’s brain, I named this disease Knowledgeheimerclick here for details on this concept.

How do we treat these symptoms?

McKinsey’s report shows that two-thirds of this potential value lies in improving collaboration and communication within and across enterprises. The average interaction worker spends an estimated 28% of the work week managing e-mail and nearly 20% looking for internal information or tracking down colleagues who can help with specific tasks. But when companies use social media internally, messages become content; a searchable record of knowledge can reduce, by as much as 35%, the time employees spend searching for company information. Additional value can be realized through faster, more efficient, more effective collaboration, both within and between enterprises.

The amount of value individual companies can capture from social technologies varies widely by industry, as do the sources of value. Companies that have a high proportion of interaction workers can realize tremendous productivity improvements through faster internal communication and smoother collaboration. Companies that depend very heavily on influencing consumers can derive considerable value by interacting with them in social media and by monitoring the conversations to gain a richer perspective on product requirements or brand image – for much less than what traditional research methods would cost.

To reap the full benefit of social technologies, organizations must transform their structures, processes, and cultures: they will need to become more open and non-hierarchical and to create a culture of trust. Ultimately, the power of social technologies hinges on the full and enthusiastic participation of employees who are not afraid to share their thoughts and trust that their contributions will be respected. Creating these conditions will be far more challenging than implementing the technologies themselves.

Interpretations of Innovation

A little while ago I wrote an article on innovation – What does innovation mean to you?

There were a few reactions on what innovation really is and whether it is a sub-set of change management or integrated into knowledge management. Leaving the operational part aside, I found on Jeremy Gutsche’s speach some very interesting ideas, including some comments on failure and its role. Have a look when you’ve got a chance, it takes 30 minutes but it’s time well spent:

Where does KM fit in?

Open Knowledge
Image by okfn via Flickr

At the end of the 90’s, KM challenges were addressed through technology-based solutions. When you told someone about KM, they would reply with a tool or a software-driven initiative; usually a corporate-wide one. It took a few years to find out that an IT project would not solve the need of knowledge and would not necessarily improve knowledge sharing culture within company.

Later on, KM was perceived not along with IT but rather with HR. To comply with both, a key message soon became that organizations have to acknowledge people over technology as the active protagonists in knowledge-sharing. And now we come to the next step: processes. KM later was associated to managing processes and understanding the knowledge flow. So, where does KM fit in at the end? Does it need a separate entity? Should it be part of something else?

After reviewing a large number of situations, reports and statistics, I see that there are two situations:

  1. KM is perceived as a response to a strategic need (especially after the downturn) that often even remains unidentified. They call it somehow else but they are trying to manage knowledge flows, have a knowledge-sharing culture and even build some IT if necessary. As KM is not defined, it’s not even called that way.


  1. Top management perceives KM as something they “must do” to be ahead of competition. They say they are engaged to harmonizing knowledge-sharing processes across the organization but the exact reasons why they are strategically implementing KM is still not very clear. As KM is defined, it is established as an individual separate entity from other organisational structures.

So, again, where does KM fit in? Any experience is different but here might be similarities we can work on to better understand how this is developing.

Challenges of today’s knowledge management: providing the tools is just not enough

knowledge share fair 2009 - fishbowl demonstration
Image by Petr Kosina via Flickr

Genuine business value comes on one hand from managing knowledge acquired from external sources and, on the other hand, from creating and exchanging it internally. Keeping knowledge in the heads of your most experienced talent lowers your return on investment to its minimum. How can other colleagues from the same unit or even other territories replicate and improve it? Well, there are two stages of this point:

Stage 1: Your experienced talent has to invest time and energy to transform their knowledge into a form in which it can be exchanged. I should also say that the value of knowledge should be high enough to cover the cost of sharing.

Stage 2: Team members from similar projects invest time in searching for knowledge, replicating and improving it. They might as well become “Stage 1” experts as the improved knowledge may be shared if there is significant added value. I should mention again that at this stage, in order to be cost-effective, knowledge should worth the price of seeking it.

You can call it a market and in some companies it literally is. Maybe at a later time I’ll come back with a story of a company that pays employees with its own currency for sharing knowledge and charges knowledge consumption – a way to determine talent to share at least as much knowledge as they benefit of.

You may observe that there is a strong technological background for knowledge sharing but I’m not going to refer to this side for the time being. I’d rather have a look at one of the most common management mistakes we face on the process today. The trap is to assume that with some big investments in technology solutions such as document management systems, shared repositories, and intranets, employees will become eager to put their knowledge in the internal marketplace.

Investments in technology alone are useless because of two basic reasons:

Firstly, your talent may not be so eager to share what they know. In many cases that is merely because they know their knowledge is their strongest asset in the corporate hierarchy. You have to motivate them to share. They have to realize that the value of sharing is worth their own investment.

Secondly, most of shared knowledge may not be some of the best quality it can be. Volume of irrelevant documents may become overwhelming, and you may find many of them of poor quality and hard to replicate. Controlling both the quality of shared knowledge and the usefulness of the search systems is an imperative to ensure that shared knowledge is worth the price of seeking it.

Both centralised and decentralised approached to knowledge management can bring value to your business; it really depends on what your business is about and how knowledge is created or where it is most relevant. Distributing top-down messages about previously filtered knowledge has its limitations but can work in a process-focused risk averse company.  At the opposite, letting local units solve their own knowledge problems may bring enthusiasm and motivation to highly creative businesses with a focus on local markets rather than on the global one. Approaches have pluses and minuses and, most likely, a company may be in the position of having a mix of both.