KMWorld 30 th October 2001 Underpinning the Knowledge

KMWorld – 30 th October 2001 Underpinning the Knowledge Management Approach Aligning Corporate Mission, Vision and Entreprise Françoise Rossion Senior Manager

Today’s agenda is… Underpinning the Knowledge Management Approach q Using KM as the innovative driving force Transforming your business into a knowledge-based business q Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities q Exploring the Bottom Line Translating the KM Strategy into operational projects q Creating the cultural acceptance Aligning the corporate culture with the KM Strategies

Strategy: the missing link? ! Underpinning the Knowledge Management Approach ‘Such knowledge-based strategy employs both internal competencies and external information that flows from supplier and customer relationships, exchanges with competitors and a willingness to look beyond the industry’s current food chain in order to build company foresight and vision. ’ (R. Gorzynski, Strategy from the Heart, 1998)

The Knowledge-based business Underpinning the Knowledge Management Approach Let’s move on to the Knowledge Revolution! q Rule Maker Setting the standards q Rule Taker Following to the benchmark q Rule Breaker Setting their own benchmarks

Capital in the traditional sense of plants and financing is not such a big thing… Underpinning the Knowledge Management Approach Type of Economic on it Who focuses Analog Physical Focus Valuation Concept Physical Assets Stock Auditors Position Financial Income Flow Analysts Speed Intellectual Growth Acceleration Venture Capitalists Acceleration (From: S. Davis, C. Meyer, BLUR, 1998 ) Physical Financial Intellectual Cap

But Capital in the new forms it is taking has become more fundamental than ever… Underpinning the Knowledge Management Approach q Intellectual capital is the brain power of the organisation, codified and put into explicit, transferable form q Human Capital is the value of workers’ relationships and tacit knowledge q Structural capital is the experience and expertise of the organisation embedded in processes, policies and systems

Today’s agenda is… Underpinning the Knowledge Management Approach q Using KM as the innovative driving force Transforming your business into a knowledge-based business q Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities q Exploring the Bottom Line Translating the KM Strategy into operational projects q Creating the cultural acceptance Aligning the corporate culture with the KM Strategies

Relevance is critical! Underpinning the Knowledge Management Approach ‘Hence, there is more to knowledge management than just accumulated knowledge. Relevance is critical and the companies that survive from one dominant design generation to the next are those that develop capability as it is required, and before. ’ (W. L. Miller and L. Morris, Fourth Generation R&D, 1998)

Achieving your strategic objectives… Underpinning the Knowledge Management Approach Strategic Themes are the fundaments of the articulated strategy. Each strategic theme contains its own strategic hypothesis with its own set of cause-and-effect relationships. Strategic themes could be: q q q Operational Excellence Sourcing & Distribution Innovation Growth Be a Good Corporate Citizen The multiple indirect linkages required to connect improvements in an organization's intangible assets – the ultimate drivers of knowledge based strategies – to the tangible customer and financial outcomes of the strategy, will be described in each Strategic Theme through the cause and effect relationships.

and demonstrate the cause and effect relationships Diagram of the cause and effect relationships between strategic objectives Strategic Theme: Growth Financial Objective Cause & Effect Relations More Customers More Stores Underpinning the Knowledge Management Approach Statement of what strategy must achieve and what’s critical to its success How success in achieving the objectives will be measured and tracked Objectives Measurement The level of performance or rate of improvement needed Key action programs required to achieve objectives Customer Satisfied Customers Business Process Real Estate Learning Lowest Price Global Sourcing Train People • Global Sourcing Target • Avg. Purchase Price • 10 $ (Food) 35 $ (N. Food) by product category • 13 • Number of Bulk Purchases/Month Initiative • Global Sourcing program

Cause and Effect: Start at the root! Underpinning the Knowledge Management Approach Budget & Cost Mngmt Financial Results ‘Fast growth in the pharmaceutical sector and in a limited number of carefully selected activities’ CRM Customer Benefits ‘Bring adequate responses to the wishes of our customers’ BP Improvement Knowledge Management Internal Capabilities Knowledge & Competencies ‘Innovation and competitiveness. Fast adaptation to the fast evolution of the world’ ‘Share knowledge through the whole group and with clients, create a new culture’ (From: Solvay)

Defining the Global KM Vision: The Executive Workshop Underpinning the Knowledge Management Approach Executive Workshops Step 1 Step 2 Demonstrate KM Best Practices Build the Strategic Linkages with KM Week 1 Planning Workshops Step 3 Step 4 Workgroups Step 5 Step 6 Determine Translate Prioritize Build KM KM Focus KM Pilots for Initial Focus into implementation Project Initiatives Charters Week 8 to 12

Identifying… Underpinning the Knowledge Management Approach Core Competencies Know What ? Expertise, skills that provide access to markets or are used to create core products q Delivers fundamental customer benefit q q Difficult for competitors to imitate Core Capabilities Know How To ? Applied core competencies – business processes – infrastructure – resources – work organisation q Hard-to-duplicate business processes q Capabilities provide the means to deploy competencies to achieve competitive advantage

and strategic Knowledge! Underpinning the Knowledge Management Approach ‘Unlike physical assets. . . • • • Which knowledge is strategic ? Where is it located ? What knowledge is missing? Which knowledge should be shared ? What knowlegde should be reapplied ? To whom should it apply ? . . . knowledge can be in two places at once’

Today’s agenda is… Underpinning the Knowledge Management Approach q Using KM as the innovative driving force Transforming your business into a knowledge-based business q Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities q Exploring the Bottom Line Translating the KM Strategy into operational projects q Creating the cultural acceptance Aligning the corporate culture with the KM Strategies

Translating the KM Strategy… Underpinning the Knowledge Management Approach ‘If the other guy’s getting better, then you’d better be getting better faster than that other guy’s getting better… or you’re getting worse. ’ (Tom Peters, The circle of Innovation, 1997)

into operational projects! Underpinning the Knowledge Management Approach Executive Workshops Step 1 Step 2 Demonstrate KM Best Practices Build the Strategic Linkages with KM Week 1 Planning Workshops Step 3 Step 4 Workgroups Step 5 Step 6 Determine Translate Prioritize Build KM KM Focus KM Pilots for Initial Focus into implementation Project Initiatives Charters Week 8 to 12

Second phase of the KM Audit: Planning workshops Underpinning the Knowledge Management Approach From prioritized list…. identify the different types of issues around Knowledge Prioritized List Knowledge decide how it should be solved. . Knowledge availability around the Globe and how it will be enabled Culture Technology

Third phase of the KM Audit: Workgroups Underpinning the Knowledge Management Approach Criteria ns tio lu So es su Is n. ga ct Or pa Im le ab ic pl Re r so on Sp d ee Sp s fit ne Be t os C KM PILOTS 1 Documenting … Culture 2 Competitive Intelligence 3 Evaluation linked to K. sharing 4 Competency Development 5 Content Strategy 6 Knowledge Hierarchy Model Legend : Collaboration Content

Roll-out of KM Pilots Underpinning the Knowledge Management Approach Knowledge Management Programme (on-going) Capture & Apply Lessons Learned Project Management KM Processes (replicable) Change Management (on-going) Global IT Architecture (scalable & open) KM Pilot N + 1 Global DG KM Vision & Strategy KM Pilot N

Today’s agenda is… Underpinning the Knowledge Management Approach q Using KM as the innovative driving force Transforming your business into a knowledge-based business q Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities q Exploring the Bottom Line Translating the KM Strategy into operational projects q Creating the cultural acceptance Aligning the corporate culture with the KM Strategy

Creating the sense of urgency Underpinning the Knowledge Management Approach ‘I wasn’t convinced that this learning stuff would work, but I knew we would never achieve our goals if we kept working the way we were working’ - Fred Simon, Ford manager (cited by: Peter Senge, The Dance of Change, 1999)

Changing Organizational Culture Underpinning the Knowledge Management Approach ‘Although the tools and techniques may be present and the change strategy implemented with vigor, many efforts to improve organizational performance fail because the fundamental culture of the organization remain the same; i. e. , the values, the way of thinking, the managerial styles, the paradigms and approaches to problem solving (…) Culture change is a key to the successful implementation of major improvements strategies… ’ (From: K. CAMERON, Diagnosing and Changing Organizational Culture, Addison-Wesley, 1999)

Motivation for Change Underpinning the Knowledge Management Approach ‘Change Platforms’ ‘Motivation occurs when people perceive that the price for maintaining the status quo is higher than the price of change (solving a problem or capturing an opportunity). ’ Ernst & Young based on ODR, 1994

Reaching the level of commitment required for successful implementation of the strategy Underpinning the Knowledge Management Approach “I’ll do it, but I’ll find a way around it. ” Commitment Phase Grudging Compliance Installation “I’ll do what is asked of me, but not much more. ” Formal Compliance Installation Acceptance Phase Preparation Phase Contact Awareness Time Institutionalization Adoption Genuine Compliance Installation Understand the change Awareness Internalization Positive Perception Understand the change “I am 100% committed. This is good for XXX and good for me. ”

Conducting Initial assement of organizational Performance Levers (OPLs) Underpinning the Knowledge Management Approach Pay & Performance Alignment Leadership Communication Organization Design Staffing and Structure Deployment Education & Training Do current people processes and the current culture align with the future state?

Organizational ‘Levers’ drive Performance Underpinning the Knowledge Management Approach STRA Performance & Pay Alignment TEG Y Leadership Effectiveness Enterprise Education & Development Staffing & Deployment Organizational Communication Job/Role Struct ure ies c peten Com

How OPLs Impact Change Success Underpinning the Knowledge Management Approach , ni g co e , R es s rd ntiv a w e Re Inc Result & E Tr duc ai at ni io ng n & Co m m un ic at io O n r St ga ru ni ct za ur tio e& n al St D a D ff ep in esi gn lo g ym & e Pe nt M rfo an rm ag a em nc en e t Le ad er s hi p n tio = Accelerated Change – = Confusion – = Anxiety – – = False Start – = Ambiguity – = Frustration – = Gradual Change = Gradual or no Change

Any KM programme requires a Change Management Approach! Underpinning the Knowledge Management Approach Attempts to introduce changes firm: For example, in a Japanese that are radically different than the existingofculture usually are • Elevation the Japanese Culture not successful • Being a pioneer – not following others; doing the impossible • Encouraging individual ability and creativity CURRENT STATE Values Norms Practices Attempts to introduce changes that are generally consistent with the current culture usually are successful

Buckman Labs’ K’Netix Underpinning the Knowledge Management Approach ‘Those of you who have something intelligent to say now have a forum in which to say it. Those of you who will not or cannot contribute also become obvious. If you are not willing to contribute or participate, then you should understand that the many opportunities offered to you in the past will no longer be available’ - Bob Buckman

Another CM approach Underpinning the Knowledge Management Approach Change Management Communication Integration Stakeholder Commitment Aligned Culture Successful Business Change Capability Leverage Change Leadership Mobilise Vision Implement Business Case Align • Executive and Management Committment ‘Walk the talk’ • Identify KM Values and embed into DG values • Develop Corporate KM Culture • Embed Knowledge Sharing in individual and collective objectives • Build trust accross borders and companies • Empower people in relation with KM • Embed Learning & Development in the management style • Assess KM Culture progress • KM Measures • Assessment of KM Pilots through Vitality Indicators • Develop Communication Plan (awareness, acceptance & training) • Coaching & mentorship

Conclusion? ! Underpinning the Knowledge Management Approach ‘It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most adaptable to change. ’ Charles Darwin