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Conversations
with Debra M. Amidon The contents of these discussions, enhanced with numerous supporting charts and diagrams, have been published through Amazon.com as an online downloadable ENTOVATION Architectural Primer. Go to the ENTOVATION web site for ordering instructions.
Editor's note: This is the second in a three-part series synthesizing the knowledge gained during the tenure of Debra M. Amidon as guest moderator for the AOK Knowledge Architecture/Structure Discussion Group in February, 2001. It is part of the AOK Star Series which brings leading leaders in knowledge enterprise to the AOK table. Debra was asked to address in broad terms the structuring of knowledge management.
is with the permission of Debra M. Amidon and remains protected.
Jerry Ash: This is the week we discuss knowledge architecture. Debra, I know you are going to address the five elements of management architecture on each of the five days of this week, as well as address questions from the members. But at the outset, I wanted to ask you to address these broad questions:
My guess is these questions cut across all five elements of a knowledge-based architecture, so I'll understand if you respond to them on the days where it is appropriate. As you know, I look forward to the subject matter of this week because it is highly relevant to the purpose of the KA/Structure CoP. Debra Amidon: First, here are my responses to Jerry's general architecture questions:
Isn't this wonderful?! Now that we fundamentally understand the complexity of building a knowledge system - and all of its parameters, we can actually begin to simplify into a simple, elegant framework that enables more systematic management - as opposed to serendipity. The answer is that there should be ONE management architecture, period - not one for knowledge and a separate one for organization processes. The organization structure (i.e., the Sociology) is ONE part of the architecture.
Similar to above, the answer is "no." Sociology is sociology; structure is structure. One can have substructures, but the over arching element is the structure of relationships - one dimension of the architecture. Many are looking at the knowledge activity as a discreet activity when, in fact, it is the nature of doing business. The difference is that we manage the knowledge - how it is created, exchanged and applied - as an explicit activity. It is the business, or how to mange the business, whether your organization be profit or not-for-profit. It matters not your size, your industry or geographic sphere of influence. Management is management.
No, the knowledge enterprise IS the enterprise. The question is whether it is being managed according to the "flow of knowledge" rather than the "flow of financial resources." This is why the focus on knowledge is far more a function of business strategy - and how human talent is harnessed - than what has come to be knowledge management (KM) as it has been implemented. It DOES, however, require a cross-organization expertise (e.g., Finance, HR, IT, Marketing, Sales et al) in order to ensure full implementation. And so, it is not a matter of restructuring as it is having one corporate mindset, shared vision and common language - and oh yes, a knowledge-sharing culture!
The reality is that many companies that have gone through the reengineering (that became a Trojan Horse for "downsizing") have lost considerable intellectual wealth for they restructured for the wrong reasons and had no knowledge management system to guide their judgments. For some companies, it may be a matter of unlearning of the recent practices that have now stagnated innovation - and relearning or rediscovering their heritage and sense of purpose. Is it radical? I'm not sure it need be; but it is not just continuous process improvement either. For each organization, it would be different, for knowledge is what makes each organization unique.
We don't. Why would we want to "reinvent" anything?!? The term is "innovation" - preserve the best of your past and realign to take advantage of the opportunities of the future.
Debra Amidon: Our first week explored the "Why" of the Knowledge Economy - primarily the new Knowledge Value Proposition that goes beyond cost, quality and time indicators for success. In a few days, we have not all the answers, but we have a direction and understand the imperative. In our AOK second week, we examine in more depth the five aspects of the Knowledge Architecture - Performance, Structure, People Process and Technology. Attention to each of these individually helps us understand the "What" elements to be managed. Debra Amidon: I can still remember the day that Ken Olsen (CEO of Digital at the time) insisted that we develop some management metrics as part of our company transformation. "But sir," said we, "such measurements do not exist." "Yes," he responded, "and this is precisely why it must be addressed." We set about to research the potential metrics - no small task. Of course, today - 12 years later, we understand that it is a matter of measuring intangible value; and moreover, there are multiple ways to do so! This shift in orientation to intangible assets will revolutionize the way enterprises are measured. Whether dealing on the level of the enterprise, the nation or society-as-a-whole, there is an entire new way to value economic wealth. For many of today's executives, "if it cannot be measured, it is not of value." And yet, as we now understand the "productivity paradox," we realize that these factors - a new Knowledge Value Proposition - must be defined, monitored and evaluated as an essential foundation of the knowledge economy. Intangible assets are now recognized as integral to the functioning of any organization. With the new global knowledge economy and the removal of trade barriers, cross-cultural knowledge - simply because of economies of scale and scope - becomes a competence of a major firm to leverage. Even smallest performance entity - the factor of one - may be the individual entrepreneur; and "economies of learning" becomes the universal measurement. (Innovation Strategy for the Knowledge Economy, Chapter 6). When I was writing about "intellectual capital" in 1986, the only other person who was also doing so was Karl-Erik Sveiby (Sweden) who produced the "Know-How Company" - still one of the best resources in the field. And Hiroyuki Itami - then a student of Ikujiro Nonaka (Japan) - was writing about "invisible assets." Several years later, we have The Balanced Scorecard (Nolan & Norton) that expanded the perspective beyond financial metrics; and Leif Edvinsson was producing his renowned Supplements to the Annual Reports as one way to navigate into the future. If you have visited the Global Knowledge Leadership Map, you will note that there are several researchers and practitioners - in addition to Sveiby (now in Australia) and Edvinsson (Sweden) - who drive the knowledge agenda from the perspective of performance, such as Ante Pulic (Austria), and Baruch Lev (USA). You can get a sense of his material and the newly publish report from The Brookings Institute from our article. Nick Bontis (Canada) - has established the first Institute for Intellectual Capital Research and is also the CKO of KNEXA - one of the new Knowledge Trading Companies. David Skyrme (UK) - an AOK member - has published a research report on the topic. But the metrics being developed are not only from the enterprise or micro-economic level. Edna Pasher (Israel) has managed an IC Report of the nation and Lars Kolind (Denmark) has been creating indicators for the country based upon the company indicators. Read about these initiatives in the article - IC of Nations. And Darius Mahdjoubi (Iran/Canada/USA) is involved in his doctoral thesis that will define the navigation between the enterprise and national economy - or Technopolis - levels. And Bryan Davis (Canada) is researching performance as it relates to e-Knowledge Markets - for which AOK a sponsor! On a personal note, when I visited China, they wrote about me as "the first Knowledge Economist to visit their country." At first, this was quite disarming, but the more I reflected upon how we are architecting the Knowledge Economy, the label sounded appropriate. Even Leif Edvinsson is now a professor of Knowledge Economics at the University of Lund. This focus has put me on a new path of understanding the real value of intangible wealth - how it is created and how it contributes to profitability and prosperity. Debra Amidon: Measurements monitor the performance of the system such that "inputs" are measured against the "outputs" of valuable products and services given the time-value of the investment. This dynamic measure holds for a network of organizations, a network of businesses in a micro-economic system for a country or a global interrelated set of countries evolving in the new economy.
Knowledge Structures If performance MEASURES provide the "Economic" understanding of management, then the STRUCTURE of the organization defines the "sociology" or "anthropology" (i.e., culture).
We have seen quite an evolution of a variety of structures - experimentation increasing in recent years. Please don't hold me to the dates - nor should this be considered a comprehensive list, but here are a few:
The multidimensional enterprise is comprised of carefully defined semi-autonomous interdependent business units configured in a "knowledge network" which creates wealth by "adding value". It should be viewed as synergistic when designed as a Strategic Business Network - SBN - with symbiotic relationships among partners, suppliers, customers and other collaborators. [Note: This goes well with Strategic Business Unit - SBUs - as was the Alfred Sloan divisionalization strategy of the 1950's.]
Debra Amidon: The Knowledge Economy has placed the attention on the human being - where it belongs! It is not "information" - nor is it "digital technology," it is individuals - how they create knowledge, share it with one another and put it into use to add value. And so now we know that people ARE important, how they are organized in "structures" to optimize learning as individuals and as organizations. But the real architectural issue may not be a matter of expertise, skills, know-how as it is a function of PSYCHOLOGY - how they are motivated to innovate. [Note in the previous postings that Performance was a matter of economics and Structure is a matter of sociology and anthropology.]
In our research report, we have an entire chapter dedicated to "Roles and Skills for the Knowledge Age". The summary findings from the case studies (i.e., TelTech, the US Army and Anglian Waters among others) include:
Therefore, a strong management system is comprised of talented, dedicated, self-managing "knowledge workers" who can balance entrepreneurial contributions with the business imperative of the team. Individuals - each as a "unit of one" - are encouraged to seek new ways to add "knowledge value" to the system to advance the state-of-the-business. Role/goal agreements are carefully negotiated to optimize the decision-making capability of the whole.
Debra Amidon: You see the cross-organization processes described in a variety of terms:
"Theory to Practice" - "Seed to Need" - "Cradle to Grave" - However the phases may be labeled or segmented, each description refers to the process of innovation. It infers the value chain (Porter) and Stage Gate (Cooper) processes that have been defined by researchers and put into practice with great success. The knowledge economy, however, is an economy of kaleidoscopic change. Time-consuming, linear processes are no longer enough to capitalize upon the opportunities afforded a global economy. It is not the speed of change of a variable or the speed of change of multiple variables. It is the compounding effect of the speed of change of multiple variables creating a business landscape that demands more systems approaches.
In our research report (Skyrme/Amidon, 1997), there is a chapter dedicated to "Value-Adding Process" in which we explore several case studies, such as Hoffman LaRoche, Booz Allan & Hamilton, Price Waterhouse, CIGNA, and the UK Department of Trade. We discovered that organizations should develop knowledge processes at three levels: the top, strategic coordinating one, specific tools and methods to underpin each subprocess and the skills and techniques to perform the knowledge work. A key function of knowledge processes is to give better support to knowledge workers in their day-to-day activities. However, in depth understanding of knowledge work is still at an early stage. Researchers are finding that social science methods, like ethnography and situation theory, can help improve our understanding of these basic work processes. Analysis of our research data shows that six main factors underpin success in the day-to-day practice of knowledge management:
Our conclusion was "The benefits of knowledge management will come through when the perspectives of information management, human learning and innovation processes, and supporting technologies are fully integrated." Now, 4 years later, we would just simply add that the performance measurement of intellectual capital can and should also be added! These cross-organization processes should ensure streamlined practices that provide efficient and effective planning, review and monitoring of investment strategies. Activities should cross the boundaries of functions, businesses, industries and geographies. Knowledge capability/accountability is valued more than hierarchical authority. The system enables "realtime innovation" and "global resource optimization".
Denham Grey: Debra, thanks for your piece on knowledge processes. Would like to add to the dialog here on two fronts: Process vs. practice - a key distinction, and community practices - where knowledge happens! Process vs. practice: I believe there is a key distinction to be made here with the help of the Xerox PARC folks:
This distinction is very important when we work with ideas, insights, intuition, i.e. intangibles rather than data, forms, physical objects, information or intellectual property. This is why quality questions, continuous learning, creative abrasion, situated cognition, safe spaces, learning from failure, diversity, games, concepts, classification, metaphor, analogy and dialog are key issues in knowledge work. Applying a process paradigm and mindset to knowledge work is dangerous IMO, it tends to turn knowledge generation into an industrial production system. We need to make fundamental accommodations to leverage knowledge, e.g. open communication and access to information, recognition of diversity, insights come from everywhere not in an ordered sequence, nor from a particular level in the hierarchy. In many ways knowledge is around identity and relationships a way of 'being' rather than process to produce. Avoid the trap of looking at knowledge as a thing, it cannot be commanded, it happens!, design for emergence & context (Ba) rather than optimizing for throughput; value awareness and contributions rather than applying workflow and pushing information. We need to be mindful of levels and abstraction when we talk practices as the lines between task =>activity => practice => meta-practice tend to be very fuzzy. I think Debra's piece made this very clear. The second point is around the structural coupling between (local) community and (wider) networks. The 'stickiness' and 'slipperyness' qualities of knowledge of Brown and Duguid, 2000. Knowledge creation and generation happens in communities and is best leveraged at the local level. I strongly favor the approach of Gorge von Krogh and Dorothy Leonard, who advocate experimentation with language (metaphor / analogy), simulation, prototyping with artifacts, creative abrasion and deep dialog. At the same time, recognize it is important to build and maintain relationships to thought leaders and to participate in domain level activities (networking). The key is testing knowledge claims at both these levels, remaining open to new ideas, practicing deep listening, being aware of the ever changing environment. So I strongly question the validity of "systematization of information and knowledge PROCESS" and favor an approach that seeks PRACTICES at community level and networking to the wider community. Some of these practices have been mentioned: making distinctions, crafting ontologies, developing pattern language, sharing meaning, using analogy / metaphor, supporting the context for knowledge emergence (Ba), being responsive to subtleties associated with tacit knowledge. This needs to be coupled with personal networking to bridge levels and communities, increase connectivity and awareness of shifts in the larger system. I'm ambivalent about the intellectual capital movement, in particular, efforts to measure knowledge, trust, social capital. It seems we have more than enough work to do just building communities and networks right now. I have this faith that, "knowledge speaks for itself", any accounting is pure guesswork!! Debra Amidon: Denham, you make some very good points about the distinction between process and practice; and I do not disagree. However, it may be from which perspective of the management prism you are viewing. I have had a similar discussion about "strategy" and when others query if/where it "fits" into the architecture. My response is that "strategy" overlays ALL 5 elements of the architecture. Indeed, the management strategy IS the interrelationship between the five: Performance, Structure, People, Process and Technology. I would say the same thing about "practice." Practice underlies ALL 5 elements of the architecture. There are performance (i.e., economic) practices, structure (i.e., sociological) practices, people (i.e., psychological) practices, etc. Remember, we started with the realization that it matters not what architecture you choose, but that you choose one - one that makes sense in your organization culture, language and priorities. The elements - and how they align - are a function of the optimal frame for a given enterprise. You have made an interesting observation, however - one that is not well distinguished in the knowledge profession. Usually, when executives refer to practice, it is in the context of "Best Practices." Personally, I believe that less than 15 percent of an organization's resources should be dedicated to such a task. I advise organizations to establish standards rather than imitating best practices. Oftentimes, following best practices may be a prescription for mediocrity. Your description is far more in line with what I would describe as establishing the standards; and I believe it is Nonaka and Itami that should be credited with providing the context/process link - as well as the value of metaphors - with the "knowledge spiral" and the "Ba" - both to which I do subscribe. Nonaka himself has admitted to me that the "process" is really one of "innovation" and that organizations should be seeking Chief Innovation Officers rather than CKOs! I cannot agree enough with your comments about avoiding the trap of looking at knowledge as a thing. I do not believe in any of my writings you will see such evidence. In fact, in this AOK conversation, I was affirming that the notions of architecture - and the knowledge movement itself - should be human and "humane." I agree about those who have fallen into this trap (i.e., knowledge as a thing) are the ones who pretend to have the "silver bullet" or the "knowledge solution." They have changed the labels on their information bases to knowledge bases without understanding the difference between a thing and the human in which knowledge grows, and the context or situation - as you suggest - that it is shared. I do believe, however, that process is an integral part of a management architecture - in the ways that both of us might agree - and that process is best described as the innovation process, the subject of next week's discussion. Through innovation, knowledge becomes actionable. To not manage it explicitly is to leave it to serendipity. The nice thing about referencing the other economic levels (i.e., enterprise prosperity, vitality of national economies and advancement of society in industrialized and developing nations alike) is that innovation provides the common language. I believe that communities are emerging on all three levels simultaneously and require the attention you suggest. You might enjoy my recent article on the 'Innovation SuperHighway' that has been the focus of the entire GKII effort since 1993. And your ambivalence about the Intellectual Capital movement (i.e., the performance measurement) is understandable, but I believe that these approaches are not only inevitable; they are essential to the full functioning of the new Knowledge Value Proposition. As impure as they may be, they are a step in the right direction toward understand how to monitor - perhaps not in discrete financial terms - the potential navigation for successful management in the future. Debra Amidon: This fifth element of the management architecture has been the primary focus of many knowledge management programs - at least in the United States. According to our research, to exploit technology to the fullest, organizations need to give due attention to the human and organizational factors (i.e., the new Knowledge Value Proposition! This is the area that has experienced the most radical transformation of all as evidenced by the e-Commerce and e-Learning explosion.
Technology solutions are used to augment knowledge processes at different stages of knowledge flow. For example, they can support human thinking, facilitate information access, help the human interpretation of complex data, and provide decision-support. We have seen the rapid evolution of data warehouses, document databases, discovery tools (e.g., data mining, genetic algorithms, parallel processing systems, neural networks), knowledge-gathering tools (e.g., intelligent agents, text retrieval) thinking and simulation aids, guidance systems (e.g., case-based reasoning, business flight simulators), and collaborative technologies =F1 not to mention the Internet and Intranets. Modern technological advances are employed to optimize the "knowledge flow" of the enterprise infrastructure. These processing systems accelerate the development exchange and application of useful knowledge required for distributed deliberations. They also integrate all business strategies, plans, and operations into a coherent assessment of situational positioning at any point in time.
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Architecting Success
Not Just for KM: One Management
Architecture
