Here is the second in a series of session notes for?KM World 2010?and?Enterprise Search Summit 2010. I attended the keynote: The Wealth of Knowledge by?Thomas A Stewart, Chief Marketing & Knowledge Officer – Booz & Company. Tom is the Former Editor & Managing Director, Harvard Business Review and I have read his work for some time. These notes are near time so please excuse typos. Here is the session description:
“Our experienced author and practitioner shares winning strategies for developing and evolving knowledge-driven enterprises that are productive, innovative, and successful. Using real-world examples he illustrates how those strategies have worked in many different types of organizations. Stewart also looks into the future and suggests directions that knowledge-driven enterprises will engage in over the next few years.”
Tom started by pointing out the knowledge effort has been around for a while, running hot and cold like the Gartner hype curve. Investing in knowledge can still return great value. He began by looking at value in the knowledge economy.
He asked if the primary role of management is to address change or continuity. Change won, as did intellectual assets over physical assets.
Tom said that the knowledge economy stands on four pillars, First, knowledge is what we buy and sell. More of the money we spend now is on knowledge versus food, shelter, etc. Our smart phones have more knowledge than what was required to put a man on the moon. He now has a smart stove. This has created new strategic options for companies. For example, how are we going to package knowledge? One option is to put it into things. You can also distil your knowledge and sell it as a product. The third option is black box services such as what consulting companies and law firms do.
The TV show Mad Men shows old style marketing. They gave away marketing strategy to get the physical ads. Now these are separate and the ad agency game has changed. Firms such as law firms need new business models.
Knowledge now defines our work and activities. People need to ask what knowledge they need to do thier job. This is an opportunity for KM. This basic business case has limits. The first is that traditional organizations do not manage knowledge well and knowledge gets distorted in the communication process. Networks can be a solution. There are three kinds: the network of our team, networks from the center of an organization to those on the edge (including customers and partners), and networks to connect those on the edge with each other. Knowledge managers need to get these three networks under control.
Knowledge management needs to be able to handle fuzzy problems. When things are clear you provide best practices. When cause and effect is knowable you provide access to experts. When cause and effect are not known, you need to be able to take intelligent action within the chaos. This is where the most value from knowledge can be derived.
The third pressure on companies is the increasing globalization. First there was the globalization of markets, then production, now it is intellect. Now R&D budgets are being increasingly spent off shore. Distributed decision making only works when everyone understands the strategy and the knowledge to support it. Knowledge assets are what separate winners and losers. You need to be able identify your value to the market. Is it innovation, consistency, service, etc.? Does the sales force agree with management? This alignment is essential to compete.
The last pillar of knowledge economy is that return on knowledge should exceed that for other assets. This is how you create value. KM can accelerate this value creation.
Next, he addressed the rise of extreme competition. Everything is going faster. The customer expects 24/7 service. Customer power is growing. Pricing power is elusive. Traditional media has to compete against free products. Finding these products is much easier. Adaptability is key and KM can address this issue.
Then he covered pursuing a capabilities-driven strategy. The first order is defining what an organization really is. What is the identity? How do we create value for our customers? What do need to do this? To who are we selling what? The problem comes when these answers do not align. Problems when companies get side tracked to go after other goals because they seem easy. Coherence pays off. How can KM support this alignment? The answer will drive value in the 21st century.
Key questions include: Have we earned the right to win? Can we articulate the capabilities that give us this right? Have we created coherence in our KM system? How can we create the needed synergy by creating coherence through the same knowledge base? Tom suggests that knowledge management’s role has increased and become more strategic in today’s marketplace. I would agree.