May 31, 2003

Two years ago, Elliott Ichimura, a colleague of mine, pulled together ideas from eight different sources to produce the Virtuous Cycle of Innovation shown above.  The eight sources he used are:    Weird Ideas That Work - Robert Sutton    Leading the Revolution - Gary Hamel    The Sources of Innovation - Eric von Hippel    The Art of Innovation - Tom Kelley    Serious Play - Michael Schrage    The Circle of Innovation - Tom Peters    Business Dynamics - John Sterman    MIT Strategy course - Rebecca Henderson At the time, the elegant inner cycle of entrepreneurship -> innovative ideas -> value creation -> cash flows -> incentives, primed by high leves of R&D investment, was still fueling many sectors of the economy. What stopped the cycle, and why? I believe four structural, systemic and cultural factors, which were temporarily overcome during the exuberant 1990s, turned the virtuous circle back into a vicious cycle and led to the abandonment of innovation as a driver of the economy: Short Term Focus: Businesses, especially public companies, are rewarded for short-term performance. The effect of this is to encourage actions that have positive bottom-line impact in the next fiscal quarter, even if their longer-term effect is negative. So in Elliott's chart, the arrow from profitable cash flows to investment (in innovation) was cut, as investment was shifted to activities with a more immediate payback. Oligopoly: In many sectors of the economy, it is cheaper to buy (or buy off) innovation than to encourage it. When one or a few companies dominate the sector, they can corral all intellectual energies in the sector, locking up whole areas of intellectual property with massive numbers of broad patent applications, fiercely pursuing entrepreneurs who threaten this intellectual property, and buying off entrepreneurs they can't scare off, then shelving the ideas. In the chart, the oligopoly's cash flow converts the incentive for entrepreneurship into a dis-incentive for entrepreneurship. Risk Aversion: The new age business thinkers of the '90s recognized that risk was a positive, an asset, rather than a negative. Some companies even exploiting this awareness, accepting and trading risk as a marketable commodity. Ironically, one of those was Enron. Cultural, this shift in thinking was unsustainable against our human aversion to risk. In the chart, the failure rate that was briefly considered a learning opportunity, began once again to be considered an unacceptable cost, and risks, even those that might have yielded huge opportunities, stopped being taken. Change Aversion: Very few people really embrace change. It is threatening, creates anxiety, makes it harder to plan and predict. Business, like people, changes when it must. What we saw briefly in the 1990s was a flurry of what is called discontinuous change, the Innovator's Dilemma . There were so many innovations occurring that some of them, often accidentally or serendipitously, began to impact completely different sectors of the economy in unexpected ways. Miniaturization, laser and fibre optics technologies, and connectivity technologies had especially strong and broad impact on many businesses. But as the number and pace of innovation slowed, due to the first three factors above, many businesses breathed a sigh of relief, shelved their e-business strategies and went back to business as usual. The reaction of the commercial entertainment industry to peer-to-peer networks (i.e. sue them and close them down, rather than adapting to them), is a perfect example. The rate of change in the business environment has notably slowed in recent years, and the recession has less to do with the slowdon than does basic human nature. Will we see another virtuous cycle of innovation in the future? Undoubtedly. Even the most conservative businesses realize that a lack of innovation stifles the economy and leads to stagnation. Our change aversion is balanced against our entrepreneurial spirit. We like new ideas and trying out new things -- that is how we learn and grow. Eventually the pendulum will shift back, driven by a new set of basic human needs, and the virtuous cycle will shift back into gear. 2:12:12 PM

	May 28, 2003

I've been trading comments and e-mails with Gary Lawrence Murphy at Teledyn about the current craze over Social Software and Network Enablement, and how that plays into the current sorry state of Knowledge Management. A big problem with KM is that, like the six blind men feeling different parts of the elephant, the term has come to mean many different things to different people, and hence nothing at all: Academics: KM is anything that allows us to do something better in business than we can do without it Consultants: KM is an aspect of business process improvement IT People: KM is any software that concerns itself at least vaguely with databases or content management systems Librarians: KM is the new name for what special librarians have always done HR People: KM is the process surrounding non-classroom learning curricula In most organizations KM is epitomized by the corporate intranet, the extranet, community-of-practice tools, sales force automation tools, customer relationship management tools, data mining tools, decision support tools, databases purchased from outside vendors, and sometimes business research and analysis. In other words, it's certain specialized technologies and information processing roles, with a thin wrapper of 'knowledge creating' and 'knowledge-sharing' processes. Most of the organizations that have implemented KM bemoan their people's inability to find stuff, the lack of demonstrable productivity improvement, the complexity of the technology, and the absence of significant reusable 'best practice' content. Now along comes Social Networking and Social Software, also with its adherents from academia, consultancies, and IT. Beneath the torrent of hype and theory, it may reveal an important truth about KM, business, and how we learn: Social networks can provide the essential context needed to make knowledge sharing possible, valuable, efficient and effective . What are 'social networks'? They are the circles in which we make a living and connect with other people. They transcend strict delineation between personal and business (there's often overlap between the two). They transcend organizational boundaries and hierarchies (we often trust and share more with people outside our companies, and outside our business units, than those inside, and often get better value from the exchange to boot). We are beginning to suspect that the essential yet elusive lesson of the PC is also the essential lesson for KM: It's all about portability and connectivity, not about processing power or content. If we were to 'reinvent' KM as, say, Social Network Enablement , what would change? Intranet as connector and link harvester: The intranet would become a people-to-people connector instead of a content repository. It would become a 'link harvester', scanning all traffic across it and dynamically identifying connections to people and their knowledge. New tools would be needed to allow such functionality. Decentralized content, with blog as surrogate for the individual: Content would shift from centralized, shared databases to personally- or team-owned databases, journals and stories, where the owner(s) provide essential context. (See my post on The Weblog as Filing Cabinet ). Each individual's subscribable, personally-indexed Weblog would be a surrogate for the individual when s/he's not available personally. Decentralized security, organizational boundaries blurred: Organizational boundaries become irrelevant. It doesn't matter whether the person you are sharing with is a work colleague, a supplier, customer, friend or advisor, an individual or a team, inside or outside the company. You share what you know with those you trust, the same way regardless. Security would be provided at the individual level, not managed by the enterprise. The same way employees know what hard-copy documents can be shared with whom, they set up subscription access to their blog categories correspondingly. Greatly enhanced weblog functionality, emphasis on access: Today's blogs are not nearly enough to fully enable social networks. They need much more connectivity functionality. A user should be able to call up a visual of their own network, or the network of expertise corresponding to a particular subject. The tool that does this would operate much like a search engine except it would retrieve people (and links to people) instead of documents. It would also have to aggregate various means of access to those people: e-mail, voice-mail, video and whiteboard, meeting scheduling, IM, weblog subscriptions and commenting, and new means of access just being developed. And it would need some mechanism to create a 'biography' of the user by automatically summarizing the total content of their weblog. Enhanced organizational change functionality: The exhaust from the increased connectivity could be browsed and canvassed to identify organizational change opportunities. Popularity indexes could pre-sage emerging business issues needing management attention, and could be used as a key part of the performance evaluation and reward process, and to identify de facto organizational thought leaders and potential strong recruits. It could incorporate Tipping Point functionality to propagate important ideas, Power Law analysis to identify and spell employees suffering from 'network overload' , and perhaps even new "Network Traffic Analyses" to identify communication logjams and disconnects. Intriguing, and perhaps a bit scary. Four important unanswered questions: What role can Social Network Enablement and social software play in enhancing individual and organizational learning?  How do you measure and reward contributions to a network (a) by full-time knowledge workers (people in the organization, like researchers and help desk staff whose sole value is contributing to the network) and (b) by network 'players' outside the organization?  How do organizations equip and foster networks without unduly controlling their actions and membership and therefore crushing them? How do we capture summaries and abstracts of organizational conversations that occur in other than written form (voice-mail, teleconferences and meetings), so that the blog record of networks is complete? SOCIAL NETWORKING ENABLEMENT IN ACTION: AN EXAMPLE The diagram at the top of this post is repeated below, to save scrolling. Suppose you are the person in the lower right corner of this chart, the CFO of Company Y, and you need to find out about a proposed change to the tax code for Research Tax Credits. Before Social Network Enablement (SNE), you would have typed the term into the intranet search engine, checked the public IRS website or some purchased tax service your company buys, or just picked up the phone and called Jan, your accountant who works for Company X. Alas, Jan just left on a three-week vacation. Since you've implemented SNE, however, everything gets easier. You key the term into your Expertise Finder and up pops the picture below.  As you expected, Jan appears (the person depicted at the bottom of the Company X oval) but that's just the start. This Expertise Network diagram shows only the experts and connections related specifically to the subject of Research Tax Credits. It tells you that the R&D department of your company has some information on tax credits on their team blog, which they've posted to the R&D Community of Practice intranet site. It also tells you that Jan has access to this intranet site, and that this intranet site subscribes to Jan's Tax Credit blog category. It also identifies two other people at the accounting firm that have expertise on this topic, since Jan is unavailable, and a customer of both your company and your accountant, who outsources his R&D to your company and qualifies for a 'flow-through' of the Research Tax Credit and hence is very knowledgeable about how these credits work. And a supplier who sells a Tax Credit Analyzer to your accountants, and a tax credit expert advisor to your accountants who, it turns out, went to high school with you and might cough up the knowledge you want for free, are also identified. So you have lots of alternatives. In Jan's absence you can phone or e-mail or IM any of six other identified experts, or subscribe to their blogs, or buy the Tax Credit Analyzer yourself (knowing your accountants thought it good enough to buy), or tap into the R&D group's CoP tool or the accountants' extranet. Problem solved. 7:41:31 AM

	May 11, 2003

There is a growing category of software tools designed to help you think better. Whether they help depends both on how you think and on why you think (i.e. whether you're analyzing or imagining). Probably the best known thinking tool is Peter Senge's systems thinking methodology. Basically cause-and-effect diagrams, they help turn negative reinforcing actions (vicious cycles) into positive ones (virtuous cycles). Here's an illustration of the tragedy of the commons that is leading Bush to want to privatize everything, in systems thinking, from Outsights : You can buy Stella and ithink systems thinking software. I used this process to diagram the positive reinforcement of the 17 Projects in my How to Save the World proposal, and again in my analysis of depression . A second category of thinking tools might be defined as deconstructing tools. They take an idea or an objective and decompose it into its elements or aspects. Here's an example of its use by Matt Mower to analyze the process of knowledge capture, using MindManager software: There are many other tools that help you organize your thoughts, and hence at least indirectly think better. These include critical path and GANTT charts, and a variety of scheduling, system design and project management tools. There are software versions of many of these tools. Some bloggers have developed tools that work in connection with their blogs to help them find relevant information and inspiration. Here's AugustDiva's links for thinking . I think it's a great improvement over blogrolls. How about right-brain, creative processes? Creative thinking gurus like De Bono and Michalko use models and exercises like Six Thinking Hats and Thinkertoys to stimulate the imagination, and perhaps remove blockages from creative thinking. It's a matter of opinion whether the creative process lends itself to processes (and hence software tools) as rigorous as those for the analytical processes. What do you think? Do you use any of these tools, and do they actually help you think better? 3:03:15 PM

	May 9, 2003

Fast Company's Seth Godin is writing about purple cows . What's a purple cow? Something that is remarkable, worth talking about, worth paying attention to, something that stands out compared to "perfectly competent, even undeniably excellent cows". Here's an example that Schindler Elevator came up with: When you approach their new elevators, you key in your floor on a centralized control panel. In return, the panel tells you which elevator is going to take you to your floor. With this simple presort, Schindler Elevator Corporation has managed to turn every elevator into an express. Your elevator takes you immediately to the 12th floor and races back to the lobby. This means that buildings can be taller, they need fewer elevators for a given density of people, the wait is shorter, and the building can use precious space for people rather than for elevators. A huge win, implemented at a remarkably low cost. Matt Mower of Curiouser and Curiouser thinks Knowledge Management (KM) needs a purple cow, a product, concept or innovation as remarkable in its way as Schindler's presorting elevator. He suggests KM is moribund, and says "the whole field of KM is dominated by the idea of being good enough". Matt is talking specifically about KM products, but what he says is true of the whole, newly-boring field of KM. Five years ago, six of the top ten best-selling business books were about KM, and the field was hot: today none of them are. KM gurus are blaming the economy, the unfortunate name "knowledge management", and each other for the sad state of the discipline. But the simple truth is, nothing remarkable and implementable has emerged in KM in years. If a purple KM cow could revive the discipline before it goes the way of TQM and BPR, where could we find one? Seth suggests ten ways to raise a purple cow: Find the customer group that's most profitable, or most likely to influence other customers. Figure out how to develop for, advertise to, or reward either group.  Launch a product that does nothing but appeal to, and let you dominate, one underserved market niche. Create two teams: the inventors and the milkers. Put them in separate buildings. Hold a formal ceremony when you move a product from one group to the other. Celebrate them both, and rotate people around. Get the email addresses of the 20% of your customer base that loves what you do, and make something extraordinary for them. Remarkable isn't always about changing your #1 product. It can be the way you answer the phone, launch a new brand, or price a product. Test the limits. Ask what it would take to be the cheapest, the fastest, the easiest, the most efficient, the most x. Think of the smallest conceivable market and describe a product that overwhelms it with its remarkability. Go from there. Find things that are "just not done" in your industry, and then go ahead and do them.  Ask, "Why not?" Almost everything you don't do has no good reason for it.  Ask what would happen if you simply told the absolute truth inside your company and to your customers? Think about the different aspects of KM in your organization: intranets, extranets, communities of practice, external database purchases, research, push/pull distribution. Think about the internal and external customer segments for each aspect, and how the ten ways above might apply to create a product, a process, or a tool for one or more segments that is really remarkable. I've pulled together a few possible purple KM cows from discussion with a couple of front-line KM practitioners. I'll share them here next Friday. 12:23:46 AM

	May 7, 2003

I'd like to thank David Gurteen for mentioning me in his e-newsletter, as over 200 of his readers have visited as a result. I'd appreciate your comments on my weblog or any of its articles. For Knowledge Letter readers who are unfamiliar with 'blogs', you can reply in two ways: by clicking on the 'Comments' button beneath this or any post, or by clicking on the envelope icon in bottom left to send me an e-mail. Welcome! 11:14:33 PM

	May 2, 2003

Even businesses with well-established knowledge management systems can find room for weblogs, and derive great benefits from integrating them into their existing KM architecture. This article summarizes a presentation I'm giving next week to the Conference Board on "Blogs in Business". In two previous posts, The Weblog as Filing Cabinet and A Weblog-Based Content Architecture for Business , I proposed that business weblogs could be used to codify and 'publish', in a completely voluntary and personal manner, the individual worker's entire 'filing cabinet', and outlined how a company's content architecture could be built around blogs. In this article, I suggest a process for integrating weblogs profitably and productively into companies that already have well-established knowledge management systems. Defining the Need Here are the six knowledge problems that you most often hear voiced in businesses with substantial, conventional KM systems: You're still hoarding: More knowledge is needed, can't be bought, and isn't being voluntarily contributed by the company's experts. It's out of date: A shortage of current, accurate knowledge is exposing the company to unacceptable risk. We don't know what this means: More background or context is needed to make the knowledge in the company's intranet useful. What have you shared this year?: A more formal process is needed to assess individuals' contribution to knowledge-sharing. We needed it over here: Employees aren't sharing what they know beyond their immediate business circle. We couldn't find it: Knowledge isn't getting to the people who urgently need it to make management decisions or succesful sales presentations. Articulating the Value Proposition The consequences of these problems are the kind that keep CEOs awake at night: Lost revenue opportunities, a dearth of innovation , foundering productivity, dissatisfied customers, disgruntled employees, and lost learning opportunities. Therefore weblogs can be effectively pitched to senior management of major organizations by explaining how they help solve the six problems: They make contributing knowledge simpler, easier, and more automatic They make it easier to update knowledge on a timely basis They make knowledge more context rich They allow the authors of key business knowledge to build and retain 'pride of ownership' They make contributing knowledge more fun, since it becomes more like 'publishing' Each individual's 'collection' of shared knowledge is easy to define and assess at performance evaluation time They make knowledge easier to route, to 'subscribe' to, to canvass and to 'mine' Finding the Right Niche The first step in capitalizing on these benefits is to decide where and how weblogs can best contribute to knowledge management in your organization. The knowledge process has five steps, shown in the diagram below. Two of the gurus of KM, Japan's Drs. Nonaka & Takeuchi, define the four blue and green steps in this process as the Knowledge Creation Cycle : Knowledge is 'codified' by putting it in written form, enhanced by synthesis, analysis and repurposing, internalized by the readers that learn from it, and shared peer-to-peer on the job. People participate in some or all of the five steps, sometimes in multiple roles within an organization, illustrated by the eleven figures in this diagram. Knowledge managers can determine where weblogs best fit in their organizations by answering three questions: Which of the six knowledge problems listed above are critically affecting the company? Which of the five knowledge process steps are adversely affected by these problems? Which roles of the organization are sub-optimized because of these problems? For example, you might determine that expert knowledge is being hoarded by the company's specialists in institutional sales, and that as a result new sales staff are unable to learn how to manage these critical accounts. From this exercise you can derive a list of people in the organization who would most likely benefit the organization by using weblogs. That list could well include community of practice coordinators, subject matter specialists, internal newsletter publishers, and selected others in the organization whose 'filing cabinet' contents are most coveted by others. It will be different in every company. Implementation and Training Each person selected to have a weblog then needs to be trained how to set up and use the tool. This entails: Setting up the weblog's personal taxonomy (categories) corresponding to their filing cabinet tabs or 'My Documents' folders Setting up the weblog's 'permanent files': documents that are regularly and repeatedly used such as contact lists and policy documents Setting up the weblog's links, directories, and subscriptions Helping the weblog owner decide on appropriate publishing decision rules : what knowledge (reports, analyses etc,) he/she will be expected to create, what knowledge from other sources he/she will be expected to propagate, and who will be permitted or required to access or subscribe to which weblog categories Helping the weblog owner decide explicitly what doesn't get published, to avoid confidentiality risks, intellectual property law violations, and information overload Training the weblog owner to pause each time he/she saves or sends a document, link, or message, and decide whether to publish it to the weblog at the same time, using the agreed-upon decision rules  Possibly teaching the weblog owner how to create document abstracts, how to properly categorize posts, and how to notify potentially interested users of a post who aren't already subscribed The Five Obstacles I forsee five major obstacles to the successful introduction of weblogs into large organizations: HTML / Microsoft format conversion. Most large companies use MS Office as their principal document standard, and the conversion of Office documents to HTML remains a bloated and untidy process. Authoring rights: Decisions need to be made about who can post to each weblog, and about the potential use of 'group' weblogs, which in many organizations will be political. Proprietary macros: Existing commercial weblog software is too complex and techy for the average business user, so customization will be needed to keep weblog maintenance as simple as possible for neophyte users. Intermediation: Many business executives will want to delegate responsibility for their weblog to an administrative assistant or knowledge steward, which may complicate the process and dilute the benefit of using weblogs. New knowledge behaviours: Weblog owners will need to learn to develop and use appropriate publishing decision criteria and how to abstract and categorize the knowledge they produce. It's no longer just their filing cabinet. The key to success is to pick the spots in your organization where weblogs can solve pressing business problems, make a compelling case for their use, ensure the weblog owners are properly trained, and anticipate and deal with obstacles in advance. Given the enormous potential of weblogs to realize some of the long-awaited benefits of knowledge management, this should be well worth the effort. 9:28:41 AM

	April 10, 2003

For those that may have been attracted here from the Recently Updated list, or by the disarmingly innocuous name of this blog, please note that this is just a mock-up for purposes of demonstrating how a weblog-based content architecture could work in business. The links at right are all for illustration only and don't work. To give it some actual content I'm also using it as a mirror site for the business posts on my regular, real Weblog, which is here . 10:14:42 PM

In our company, we've been supporting Communities of Practice (CoPs) as a key enabler for Knowledge Management for almost a decade, and we've developed a model and some operating principles that seem to work well. I was honoured that my paper on Re-Intermediation was selected as Library Site of the Day yesterday, and thought I would return the favour by sharing some of these principles with readers. There are three main types of CoPs, shown in the table below. All three share know-how (expertise), know-what (intelligence) and know-who (contacts), using electronic tools and databases to supplement face-to-face meetings, to accomplish set objectives: Life Purpose Shared-Problem Communities Indefinite Implement Solutions, then Continuously Improve Shared-Project Communities Finite Manage the Project Shared-Interest Communities Indefinite Share Knowledge and Viewpoints In many organizations, the majority of communities are focused on shared problems, such as the achievement of sales targets, bringing a new product to market, or improving the quality or efficiency of manufacturing or distribution. Most successful CoPs have clearly defined goals, roles, and processes. The goals depend on the purpose of the CoP (see above) and on the specific mandate set by the organization's, project's, or community's leaders. Goals may evolve over time, but they should be clearly articulated. Roles depend on the size and scope of the community, but most successful CoPs define at least six essential and distinct roles for community members and the organizational teams that support them: The Subject Matter Experts (SMEs) are the acknowledged leaders of the community. They are responsible for ensuring that it achieves its purpose, and that community members have the knowledge they want and need to fulfil their roles. The Core Community members are those that 'wake up worrying' about the goals of the community and are measured and rewarded on the achievement of these goals. They generally have 'author/editor access' to the community tools and databases. The Extended Community consists of others with a stake in achieving the goals of the community, and those that provide critical knowledge or expertise necessary to its success, but who are not involved with it on a day-to-day basis. Knowledge Stewards or Content Coordinators are responsible for assessing the knowledge content needs of the community and ensuring that knowledge is captured in the community tools and databases, often acting as intermediaries for the SMEs to that end. Researchers are those charged with collecting or creating the knowledge content to fill any gaps in it identified by the Stewards. Network Coordinators or CoP Facilitators are responsible for optimizing the flow of knowledge to and from community members. This entails arranging community meetings, canvassing community members, assigning work to researchers etc. It is important that community members understand their, and others', roles, and that they receive the necessary training, budget, and other resources to fulfil them. It is equally important that clear success measures for each role, leading to the achievement of the community goals, be articulated, and that those in each role be rewarded or recognized for attaining these measures. The community must then decide on its operating processes, its modus operandi. Like goals, processes will evolve, but they need to be defined to ensure cohesion of effort towards the community's goals. In shared-project communities, the processes will often be explicitly set out in the project plan or charter. In shared-problem communities, process decisions will include how, and how often, the community will meet, and how its work will be apportioned and carried out: who will do what by when. Intranets and other new technologies now allow communities to use a variety of tools and databases in a shared electronic workspace, to further the achievement of their goals. Here are the most common types of these I've seen: Tool/Database Purpose Library databases, including: - Harvesting, publishing or submission tools - Indexing, taxonomy and search tools - Distribution and subscription tools Store the accumulated knowledge (content and links) of the community - Capture requisite knowledge - Locate relevant knowledge easily - Deploy relevant knowledge to the community Discussion databases Record and store community 'conversations' IM or chat tools Enable instant access to community members Collaboration tools and e-spaces Enable virtual teamwork on specific tasks Demonstration, expert and learning tools Enable on-line learning by the community Canvassing tools Enable just-in-time information acquisition Event calendars Coordinate community activities Community directories Identify and reach community members and their expertise Project communities often use additional tools from the project manager's toolkit. Finally, here are the ten organizational and operating principles that seem to lead to highly effective and efficient communities of practice: Let CoPs organize themselves. Don't impose organization on them. They know how to do it. Let CoPs manage themselves. Involvement of people in communities is largely voluntary, whether the boss likes it that way or not, and nothing kills a voluntary organization faster than someone outside telling the members what to do and how to do it. Content quality is critical. The quality of the knowledge and expertise that is made available to community members will keep drawing community members back and keep them involved and engaged. Keep it simple. Don't make the tools so powerful and complex that they intimidate the extended community members. Keep it fresh. Just like with a Weblog, you need something new and interesting everyday to keep the community energized and momentum high. It's the people, stupid. Don't get so enamoured with tools and databases and processes that you forget that human interaction is the most valuable and most important mechanism for knowledge transfer. If it's dying, pull the plug. 'Indefinite' life for a community doesn't mean 'infinite'. If enthusiasm and engagement in community activities is flagging, figure out why, extinguish the 'old' community, and if there is still a critical problem, project or shared interest there somewhere, self-organize a new community around that. Understand members' knowledge behaviours. Some people insist on doing everything face-to-face. Others love working with virtual tools. Still others want relevant community knowledge pushed out to them. Accommodate them, don't try to change them. Make sure the network coordinator is a star. He or she plays the pivotal role in the community, connecting people to people and people to knowledge. That takes enormous people skills, exceptional energy, and a solid knowledge of the subject matter. Have fun. If the community is fun to be part of, members will put up with lots of other imperfections as you get the kinks worked out. 1:08:42 PM