Business Book Review

Wednesday, November 01, 2006

Building A Knowledge-Driven Organization - by Robert H. Buckman - MAKING THE CHANGE

Reading Suggestions & CONTENTS
About the Authors

You need to encourage change in the direction that you want to go. Culture change cannot be demanded; it can only be encouraged by opening the windows of opportunity for change. Just be sure the new direction is tied in with your strategy, so that you do not have your people chasing something that will not take them—or you—in the direction you want to go.
If you want the kind of productivity that comes from knowledge sharing backed by the wholehearted and willing support of all your associates, you have to set things up so the effort is personally valuable to them. And then you have to keep building the system so that the effort becomes more and more valuable as time passes.
The best way to solve your problems is to focus on your business opportunities—on what your customers want. Let the organizational model flow to where you have what you need to meet the needs of the customers as you go into the future.
How does an organization make the change to a networked organization built around the flow of information and knowledge? By getting people to assume responsibility for making things happen. The first requisite is to develop the culture of knowledge sharing within the organization to the point where the response to the customer becomes automatic, without any central command structure to compel people to take action. The second requisite is to develop online learning so that it can be delivered over the organizational network to anybody in the organization, wherever and whenever it is needed. The third requisite is to put all this together so that employees will have the confidence—and the authority—to give customers whatever they need.

As Buckman discovered, technology is the easy part; the hard part is the culture change that has to take place within an organization. In terms of technology, the author recommends choosing software and hardware that will provide a communication infrastructure 24/7, on both the server and the individual side because knowledge-based work takes place anytime, anywhere, especially in a global organization. The system should be “people-centric,” so that it is easy to use, and people will use it. Knowledge becomes an organizational resource. For example, at Buckman Laboratories, the IT department was revamped into the KT department, a move which was aligned with the company’s strategy not to simply store and secure information, but to leverage the collective knowledge of the entire organization to serve Buckman Laboratories’ customers. In this way, the company gained a competitive edge that was both sustainable and global. “The basic ability to handle information and knowledge is changing for the better every day. To take advantage of these improvements, it is essential to push the development of knowledge systems that will help redefine the time equation of work.”

In understanding how to create culture change, it is important to differentiate between knowledge management and knowledge sharing. Knowledge management is a process of organizing what is already known. According to Buckman, “dynamics of a company don’t change when it organizes specific knowledge.” Knowledge sharing, on the other hand, is “engaging people and arousing their interest and trust, making them willing to move their knowledge across the organization to where it was needed, when it was needed.” To accomplish this, the company has to build a culture of trust. People have to trust the information they receive, and they have to have a high degree of trust in each other.

By getting involved with each other, people grow more comfortable in the building of relationships across time and space. Through socialization, they begin building the trust that allows the dialogue to move to the next level by sharing more substantive discussions. One of the means by which Buckman Laboratories built trust virtually was through employee access to an electronic break room, which the author sees as comparable to building morale and a company culture in much the same way as Industrial Age firms did with employee cafeterias and company picnics.

Organizations have to make work across time and space possible. It has to be made desirable for people, and it has to be safe, which means that computer systems have to be based on the realities of “distributed use.” In establishing a knowledge-driven organization, one of the benefits will be what the author describes as a break-up of internal competition, with a resulting advantage in cooperation. “When people share what they know, as opposed to simply passing along the output of what they do, their whole outlook toward work changes radically.”

Knowledge-driven work takes place in virtual open space meetings, which are on-going discussions of customer needs, and solutions, that flow back and forth around the world. Virtual open space meetings operate on four basic principles: 1) Whenever it starts is the right time; 2) Whoever comes into the group (discussion) is right for the group (i.e., in helping to solve the problem or provide the solution); 3) Whatever happens is the only thing that could have happened; and 4) When it’s over, it’s over.

In addition to spontaneous virtual open space meetings, there are times, Buckman acknowledges, when certain projects will have a definite beginning and end, or assignments will require a group of employees with specific expertise. In these instances, there is a need to create virtual teams to carry out these projects. These are teams that are formed by management to accomplish specific tasks, and to accomplish their goals in the shortest amount of time possible. Therefore, the teams need to operate within established protocols for interaction. Virtual teams are much like traditional face-to-face teams. Virtual team members, however, may be quite geographically dispersed, and rely on technology as their means of communication and interaction. Many organizations will find themselves with “part virtual teams.” The author gives these kinds of teams astronomical designations. There are, for example, “planets,” team members who share a physical location, while the other members—“moons”—are located in dispersed geographical locations.

Rewards for employees, particularly for those who adopt the new way of working early and use it well and often, are almost inherent. People derive—so the author believes—an intrinsic sense of reward from being able to help others, which then stimulates a desire to be helpful. And, in virtual communities, the opportunities for helping—and being helped—are multiplied many times over when compared with traditional face-to-face interactions. Further involving employees in the process of feedback and continuous improvement of the system sends a message to employees that they are important, and that their opinions matter. Buckman even recommends that those who do the best job of knowledge sharing be upgraded to the latest hardware and software more quickly than those who might be hesitant to get involved in knowledge sharing. And, of course, pay does still matter. Those who do the best job of knowledge sharing should have pay increases tied to their actions that benefit the whole organization, and not to their position on the organizational chart.

Knowledge sharing only takes an organization so far by making it more efficient and effective. The next question is how does new knowledge come into an organization? Institutional learning expert and MIT professor Peter Senge has outlined three ways: research, practice, and capacity building. Although the first two are important and necessary, the author focuses here on capacity building, “setting things up so your people keep growing, by giving them both informal and formal opportunities to learn new things.” The goal of any business is to continue to grow, to increase its competitive edge which means considering what its knowledge base should be five, ten, fifteen, or twenty years going forward. Building employees’ competencies and strengths is crucial. The same technology that permits knowledge sharing across an organization also makes education possible across time and space, and at a fraction of the cost of traditional classroom-based education.

Buckman Laboratories developed its own e-learning department, which it calls The Learning Center. The Center promotes company-wide globalization efforts, productivity improvement programs, and process improvement programs. It serves as a change agent, and as a source of leadership development to produce what Buckman calls “internal management bench strength.” It also focuses on individual skill development and on managing the process of career development in the company. Finally, it helps employees learn to work efficiently with customers and suppliers. The Buckman Learning Center uses a blended approach to education. Coursework may be face-to-face, online synchronous, online asynchronous, or self-paced. The most important element is “the seamless transition among the different forms to achieve the best transfer of knowledge to the student.”

People will not, however, willingly share their knowledge with others if their workplace culture does not support learning, cooperation, and openness. In most instances, the culture change will take place in three phases, or cycles. The first cycle is marked, usually, by incredulity rooted in a fear of the proposed change. The second cycle involves realization that the change is not going to go away, that it is for real. Finally, in the third phase, employees begin to accept, and to commit to, the new way(s) of doing things.

For Buckman, the “ultimate payoff of the change to a knowledge-sharing organization is that you learn to react to your customers’ needs as they feel them—perhaps even before they feel them—cementing your relationships and enhancing your income at the earliest possible moment.” This is what, Buckman believes, redefines value added to customers and achieves competitive advantage. However, it is necessary to have measures of customer effectiveness that track what customers want, and a measurement of knowledge sharing that tracks what it is contributing to the organization’s success. The focus should be on outcomes rather than on processes. One important metric is focused speed. Is the company reaching conclusions, and therefore solutions, faster than the competition? Another important metric is innovation. How much distance is the company putting between itself and the competition? “Whether you are dealing with a product or a service, the need is the same: to measure innovation as part of the outcome that is generated. And the best place to measure the outcome is as it is accepted and paid for by the customer.”

Peter Drucker has pointed out that knowledge work is the key to economic growth now and in the future. Neither resources nor capital can create an ongoing competitive edge in the face of superior knowledge. Organizations have to know what they want, and they have to know if their actions are producing what they want. People must be able to concentrate on results that promote the organization’s overall purpose—without being distracted by approvals and procedures. Companies must, says the author, “be organized for constant change. The company must be organized for innovation. Innovation is essential to survival in a fast-changing world. That means we have to work on the assumption that perpetual destruction of existing approaches is the norm.”

References and a subject index are provided.


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