Knowledge Management

Concepts and practices of knowledge management are soon approaching mainstream adoption, and this focuses not on fundamental definitions of knowledge and strategy, but on more practical applications of knowledge management tools and technologies in industry. Knowledge Management Tool, in a sense, are the “face and place” as well as the “nuts and bolts” of knowledge in the 21st century workspace.

“If the smart manager knows one thing, it is that knowledge management is not just about technology. But, if the smart manager knows two things, the second is that in today’s age of technology-driven communication and information production, the role technology can play to facilitate knowledge managementshould be examined”. Information and communication technologies play a key role in facilitating knowledge management in today’s globalized company, which operates in a complex web of partnerships and alliances. However, it is important to keep in mind that technology is not the panacea for a knowledge management practice, though an easy-to-use knowledge-sharing infrastructure is an important enabler.

Organization-wide access to knowledge managementarchitecture, Web-based applications, groupware, data mining tools, mobile devices, worldwide access, high performance, user friendliness, a standardized structure, and an easily administered controlling system are key requisites of the supporting knowledge management infrastructure. We realized fairly early that the knowledge management initiative has to be, of essence, peoplecentric.

Nevertheless, technology has been an important dimension in our efforts to demonstrate the multiple possibilities of knowledge management to our people, draw them to the movement, and help keep them committed. In this journey, a key lesson we have learnt is that unless people are able to see and experience the direct benefits of knowledge management, no amount of incentives, rewards or recognitions are likely to elicit sustained enthusiasm, participation and involvement”.

Knowledge management enabling tools thus play a useful facilitating role in learning organizations, especially in dealing with the “info-glut” or information overload that is plaguing most organizations that have launched an intranet, enterprise resource planning (ERP), or Business Intelligence Systems.

While amplifying existing knowledge processes, information technology(IT) tools can also create new kinds of knowledge experiences in the long run, particularly among generations of users who grow up in IT-pervasive environments. Technology enables new knowledge behaviours.

Tools that currently fall under the Knowledge managementumbrella have evolved in various phases since the 1980s, starting off with IT tools for computation and databases, followed by publishing and communication tools, and then accompanied by sophisticated platforms for collaboration, wireless delivery, search, and network modelling. From automated agents to workflow tools, knowledge management technologies span almost the entire alphabetical spectrum.

While technologies and tools should not be the sole focus of knowledge management efforts, culture and capacity building are as important. Knowledge Management Toolare finding increasing support from management in terms of being able to address some of their business pressures.

According to a new study, companies are increasingly leaning on more and better methods of assessing economic uncertainty to reach elusive growth targets. Most notably, contingency planning and knowledge management rose through the ranks, both in usage and satisfaction.

Building Sustainable Relationship

This killing tendency is all too common. When you talk at someone, you’re talking down to her. You’re being condescending. Often this kind of approach is accompanied by pointing a finger or pen, and the frequent use of words like “I want” and “you should.” It can’t even be called “giving orders” — it is attacking people with rank and the threat of retribution. The result? Over time, team members will either leave or, perhaps worse, gradually become what your tyrannical style is teaching them to be: responsive only to direct orders … not self-starters … distrustful of management … uncommitted to your vision … unmotivated to operate beyond performance minimums. This absolutely destroys any connection or rapport with the person you are trying to reach.

Manager should talk with team members. One of the best ways to do this is to start using the words “we,” “our” and “us.” “We’ve got our work cut out for us in order to make the deadline we committed to.” “Well, we blew it on that order. Let’s figure out what we learned and do our best not to repeat the error.”

The Developing Person Through the Life Span

Written Communication Skills

Written communication has several advantages. First, it provides a record for referral and follow-up. Second, written communication is an inexpensive means of providing identical messages to a large number of people. The major limitation of written communication is that the sender does not know how or if the communication is received unless a reply is required.

Unfortunately, writing skills are often difficult to develop, and many individuals have problems writing simple, clear, and direct documents. And believe it or not, poorly written documents cost money. Therefore, managers must be able to write clearly. The ability to prepare letters, memos, sales reports, and other written documents may spell the difference between success and failure.

Interpersonal Communication is real-time, face-to-face or voice-to-voice conversation that allows immediate feedback. Interpersonal communication plays a large role in any manager’s daily activities, but especially in organizations that use teams. Managers must facilitate interpersonal communication within teams and reduce barriers to interpersonal communications. Common barriers to interpersonal communication include the following:

• Expectations of familiarity (or hearing what one is expected to hear). After hearing the beginning comments, employees may not listen to the remainder of the communication because they think they already know what a manager’s going to say.
• Preconceived notions. Many employees ignore information that conflicts with what they “know.” Often referred to as selective perception, it’s the tendency to single out for attention those aspects of a situation or person that reinforce or appear consistent with one’s existing beliefs, value, or needs. Selective perception can bias a manager’s and employee’s view of situations and people.
• Source’s lack of credibility. Some employees may negatively size up or evaluate the sender based on stereotypes. Stereotyping is assigning attributes commonly associated with a category, such as age group, race, or gender to an individual. Classifying is making assumptions about an individual based on a group he or she fits into. Characteristics commonly associated with the group are then assigned to the individual. Someone who believes that young people dislike authority figures may assume that a younger colleague is rebellious.
• Differing perceptions caused by social and cultural backgrounds. The process through which people receive and interpret information from the environment is called perception. Perception acts as a screen or filter through which information must pass before it has an impact on communication. The results of this screening process vary, because such things as values, cultural background, and other circumstances influence individual perceptions. Simply put, people can perceive the same things or situations very differently. And even more important, people behave according to their perceptions.
• Semantics and diction. The choice and use of words differ significantly among individuals. A word such as “effectiveness” may mean “achieving high production” to a factory superintendent and “employee satisfaction” to a human resources specialist. Many common English words have an average of 28 definitions, so communicators must take care to select the words that accurately communicate their ideas.
• Emotions that interfere with reason. Tempers often interfere with reason and cause the roles of sender and receiver to change to that of opponent and adversary.
• Noise or interference. Noise does not allow for understanding between sender and receiver.

CASCADING THE BALANCED SCORECARD

The effects of constant change on the modern business organization are difficult to overstate. Regardless of size, market, location, or maturity, every company in every industry is facing tremendous change. The electric utility industry is certainly not immune to the new realities, and is facing fundamental change of its own, as many jurisdictions around the world begin to deregulate the industry. As the industry prepares itself for the challenges and opportunities of the 21st century, it has started to examine new strategies, build on previously unconsidered synergies, and look for tools to effect the changes necessary to thrive in this new landscape.

For many companies utilizing the BSC, the method has evolved from a measurement tool to what Robert Kaplan and David Norton describe as a "Strategic Management System." Used in this manner, the BSC allows an organization to link short-term actions with long-term strategy by integrating the system into key management processes. BSC has been linked to many critical systems. For example, the annual business planning and budgeting process is now driven by the Balanced Scorecard. This new system is called "Strategic Resource Allocation," because it provides the opportunity to display how resource allocation decisions directly influence the achievement of strategy. The Scorecard is also linked to the incentive compensation system, and has been cascaded throughout the company to ensure goal alignment at every level.

Perhaps most importantly, the BSC is a powerful communication tool, signalling to everyone in the organization key success measures, and how they can influence them. Kaplan and Norton suggest that a well-constructed Scorecard should tell the story of the organization's strategy through a series of cause-and-effect relationships inherent in the measures. While the development of these measures can prove a challenging task, the results are worth the effort because the Scorecard will then provide a focal point for disseminating strategy throughout the entire workforce.

Producing a series of aligned Scorecards throughout the organization ensures maximum effectiveness of the Scorecard system. By cascading, we are able to use the BSC in all three ways described above: measurement tool, strategic management system, and communication aid.

Many companies started by creating a high-level Corporate Balanced Scorecard, representing the critical drivers of future success for the corporate entity. Consistent with Scorecard theory, the company worked hard to create a document that told the story of their strategy and after minor modifications, they created a multifaceted business performance tool.

At its core, the new Scorecard was a measurement system. Tracking results on objectives and measures helped gauge the effectiveness in fulfilling company strategies. More than that, it allowed the corporation the plans to create a strategic management system by linking the Scorecard to compensation and business planning, management reviews, and other key processes. Finally, the Scorecard served as a powerful communication tool. By distributing the Scorecard, every employee in the company was aware of the company's vision, strategies, and measures of success.

The question to consider was this: Did mere awareness of corporate vision and strategies lead to change at all levels of the organization? Literature on creativity and motivation in the workforce suggests that informed employees do in fact exhibit greater creativity.

To truly maximize the effectiveness of the Balanced Scorecard, it had to align individual employee performance with overall company strategies. The goal was to give every employee the opportunity to display how their day-to-day actions could influence the achievement of the company's key strategies.

That is what the idea of cascading is all about — creating a line of sight from the employee on the shop floor back to the company's long-term strategies. Kaplan and Norton consider cascading the Scorecard an important method of increasing employees' intrinsic motivation; a method that leads to innovation and problem solving. Given these advantages, cascading the Scorecard to ensure goal alignment is a natural extension of the process.

The Balanced Scorecard as a Management System

Many companies already have performance measurement systems that incorporate financial and non-financial measures. While virtually all organizations do indeed have financial and nonfinancial measures, many use their nonfinancial measures for local improvements, at their front-line and customer-facing operations. Aggregate financial measures are used by senior managers as if these measures could summarize adequately the results of operations performed by their lower and mid-level employees. These organizations are using their financial and non-financial performance measures only for tactical feedback and control of short-term operations.

The Balanced Scorecardemphasizes that financial and non-financial measures must be part of the information system for employees at all levels of the organization. Front-line employees must understand the financial consequences of their decisions and actions; senior executives must understand the drivers of long-term financial success. The objectives and the measures for the Balanced Scorecard are more than just a somewhat adhoc collection of financial and non-financial performance measures; they are derived from a top-down process driven by the mission and strategy of the business unit. The Balanced Scorecard should translate a business unit's mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers, and internal measures of critical business processes, innovation, and learning and growth. The measures are balanced between the outcome measures-the results from past efforts-and the measures that drive future performance. And the scorecard is balanced between objective, easily quantified outcome measures and subjective, somewhat judgmental, performance drivers of the outcome measures.

The Balanced Scorecardis more than a tactical or an operational measurement system. Innovative companies are using the scorecard as a strategic management system, to manage their strategy over their long run. They are using the measurement focus of the scorecard to accomplish critical management processes:

1. Clarify and translate vision and strategy
2. Communicate and link strategic objectives and measures
3. Plan, set targets, and align strategic initiatives
4. Enhance strategic feedback and learning

BALANCED SCORECARD

Basic Concepts : Accountants communicate with financial statements. Engineers communicate with as-built drawings. Architects communicate with physical models. It seems that almost every profession has some means of communicating clearly to the end user. However, for people engaged in strategic planning there has been an on-going dilemma. The finished product, the strategic plan, has not communicated and reached the end user. Sure strategic plans are nice to look at, full of bar charts, nice covers, well written, and professionally prepared; but they simply have not impacted the people who must execute the strategic plan. The end result has been poor execution of the strategic plan throughout the entire organization. And the sad fact of the matter is that execution of the strategic plan is everybody’s business, not just upper level management. Upper level management creates the strategy, but execution takes place from the bottom up.

So why do strategic plans fail? According to the Balanced Scorecard Collaborative, there are four barriers to strategic implementation:

1. Vision Barrier – No one in the organization understands the strategies of the organization.
2. People Barrier – Most people have objectives that are not linked to the strategy of the organization.
3. Resource Barrier – Time, energy, and money are not allocated to those things that are critical to the organization. For example, budgets are not linked to strategy, resulting in wasted resources.
4. Management Barrier – Management spends too little time on strategy and too much time on short-term tactical decision-making.

Therefore, we need a new way of communicating strategy to the end-user. Enter the Balanced Scorecard. At long last, strategic planners now have a crisp and clear way of communicating strategy. With balanced scorecards, strategy reaches everyone in a language that makes sense. When strategy is expressed in terms of measurements and targets, the employee can relate to what must happen. This leads to much better execution of strategy.

Not only does the Balanced Scorecardtransform how the strategic plan is expressed, but it also pulls everything together. This is the so-called “cause and effect” relationship or linking of all elements together. For example, if you want strong financial results, you must have great customer service. If you want great customer service, you must have excellent processes in place (such as Customer Relations Management). If you want great processes, you must have the right people, knowledge, and systems (intellectual capital).

In the past, many components for implementing a strategic plan have been managed separately, not collectively within one overall management system. As a result, everything has moved in different directions, leading to poor execution of the strategic plan. Like a marching band, everyone needs to move in lockstep behind one overall strategy.

Therefore, you should think of the Balanced Scorecard as a management system, not just another performance measurement program. And since strategy is at the center of value-creation for the organization, the Balanced Scorecard has become a critical management system for any organization. In 1997, Harvard Business Review called the Balanced Scorecard one of the most significant business developments of the previous 75 years.

Balanced scorecardsprovide the framework around which an organization changes through the execution of its strategy. This is accomplished by linking everything together.

This is what makes the Balanced Scorecard so different; it captures the cause and effect relationship throughout every part of the organization. In the case of Mobil Oil, the truck driver pulls a balanced scorecard off the visor in his cab, outlining the five things he must do as a truck driver. Like a laser beam, strategy now has a clear path to everyone in the organization.

Learning Opportunities

Turn difficulties into learning opportunities. - Albert Einstein

Peter Senge’s Five Disciplines

Systems thinking
•mind shift & understanding change processes.
•‘feedback’ to reinforce/counteract action.
•recognise recurring structures
•remove root causes/problems

Personal Mastery
•personal competence and vision
•developing patience to look at reality objectively

Mental Models
•changing ingrained assumptions about influencing factors.

Shared Vision
•use instincts, intuition by sharing personal vision
•pictures of the future

Team Learning
•dialogue, discussion, group relationships
•accelerate org. learning thru. Synergy 2+2=5