5 September 2012
Power House Strategic Knowledge Management - Insights, Practical Tools & Technique

"Nicholas Newman reviews Victor Newman’s new book Power House "


Did you know that at least half the companies that work in the Fortune 1000 of 20 years ago have ceased to exist? Yes, I know that the likes of Ford and General Motors still exist today. However, old favourites like Pan Am and Woolworth’s have been terminated, whilst the likes of Kodak and IBM are busy reinventing themselves into companies quite different from their original selves.


This book will help you guide your organisation to adapt and evolve to meet the ever-changing conditions that companies face today by providing the insights, tools and techniques to promote what Victor calls “Power House” conversations about the creation and delivery of future forms of value. If you follow the advice in this book by Victor Newman, there are good chances that like IBM, your company will still exist successfully in 20 years’ time (though it may be doing something unexpected), and at the very least you will understand why you chose to fail.
Victor Newman has described himself elsewhere as a ‘knowledge terrorist’ though from reading this book I would suggest he is more of a ‘knowledge Machiavelli’ in writing about the power of Knowledge Leadership behind the superficial glitter of products and services, seeking to demonstrate how Knowledge Leadership is about designing new and unusual forms of value, and the power of managing the timing of its introduction.


planingThis book is divided into four chapters. Chapter 1 is concerned with introducing Strategic Knowledge Management; Chapter 2 looks at how knowledge works; Chapter 3 unpacks the concept of Knowledge Leadership in more detail and lastly, Chapter 4 explores the issue of innovation as a political act and suggests how to survive in “Sticky Organisations”.


Chapter 1 introduces the reader to Strategic Knowledge Management concepts and uses. Here Victor Newman emphasises the importance of context to strategy. He points out that every strategy like food has a sell-by date. Victor points out, that often the knowledge you have today to be a success is often not the knowledge you need to maintain your success in the future.

As someone once said, the future is an undiscovered country, finding the knowledge you need for guiding you to a successful future is often a difficult disturbing process as Victor points out. However, like with every other aspect of business, you need the right types of people in your team. The trouble is often the right types of people you need in your team are often the troublemakers!

changing the guardThe problem for many firms seeking change is that organisations are usually packed with people aiming to resist change, even when the company is in desperate need of change in the hope that by ignoring the issue it will go away and “normality” will return. An example of this is America's General Motors that refused for many years to adapt to the needs of the market, until due to the recession the American government had to rescue it and force through the necessary alterations required.

Victor then looks at knowledge strategies, pointing out that in many organisations current strategies are designed to maintain the trajectories of the past and not look for new paths. Victor then introduces creative thinking tools like “move-test-break” and illustrates the impact of thinking differently as a source of successful innovative strategies.

mystery shopperHe notes from personal experience, where companies have been so fixated with the process of innovation that they lost the ability to innovate. One of the early tools (“move”) introduces the power of moving or changing your perspective to understand a situation like Mary Portas’ use of the mystery shopper technique, and similarly how the mystery worker technique has provided great TV insight as well as exposing the reality of how businesses, products and services actually work, rather than the official, often fictional reality.


Chapter 2 shows Victor getting very picky about semantics, starting by illustrating how the story of innovation is the product of a data-information-knowledge-technology hierarchy. Data by itself, can be regarded as valueless, it is only when information-patterns become visible that it becomes interesting, and it is only when that information is combined with other pieces of information and put into a new context that it becomes knowledge with the potential to generate new value. Victor in his workshops gives participants a challenge to write down everything they know within 15 minutes. A few realise that there is no point to this exercise, without a context and so ceased to write, but many start feverishly writing notes until stopped.

structureHaving a context and structure is what makes data useful. As an energy journalist and knowledge producer, my purpose is to provide order and structure to data that will be valued by my paying readers. The same goes for London's black taxi drivers, who have an extensive knowledge of routes across central London. However, with the widespread introduction of GPS systems, the question is whether the practice of learning the 400 routes around London is nearing the end of its usefulness, beyond a rite of passage limiting entrants. The same applies in other sectors.


Victor also looks at what he calls Emergent Knowledge Management techniques. Emergent Knowledge is the stuff we don’t know we know until someone asks us a question, and is about finding the right question to ask. For example, 3M developed a product called post-it notes, but did not know what the customer wanted it for. So it gave it away to customers, and now we see it littering documents in both virtual and physical worlds. He introduces a technique known as KUBE (Know-Understand-Believe-Expedite) as a rationale for introducing 9 Emergent Knowledge techniques that include Baton-Passing, Predator, Smart Failing, 30/70 and Linguistic Torpedo!

These Emergent Knowledge techniques are used specifically to expose the “Believe” component in Not-Invented-Here (NIH) Behaviours evident in all organisations, and open it up for discussion and replacement. The inability to expose and overcome NIH is commonplace in many formerly-successful organisations, resulting in companies like Sony failing to produce a world-beating product for over a decade and Tokyo Electric Power Co. ignoring sensible advice from government and international regulators to improve the operation and design of its Fukushima nuclear power station (which could have wiped out a large section of the Japanese population).


Chapter 3 introduces core concepts and tools for recognising and crafting Knowledge Leadership strategies. Victor asks four crucial questions that a knowledge leader must ask about our understanding of knowledge, its use, purpose and sell-by date. It could be suggested that Apple’s current legal actions against its various rivals worldwide is part of its attempt to extend the sell-by date of its existing knowledge strategies. However, it is likely in the case of the latest tablet phones to stimulate further creative thinking strategies by its rivals, that could harm Apple’s long term prospects.

conceptsVictor, then introduces concepts such as new market value and the importance of maintaining a balanced internal Knowledge Economy. He then provides tools that aid the reader in identifying the need for new forms of Knowledge Leadership in military history and in healthcare. He also illustrates that the introduction of Knowledge Products can have a tendency to change their environment and their impact, as in the example of Long Term Capital Management and similarly the unexpected impact that the introduction of the first phase of EU emission trading has had on the European power sector leading to a switch to coal generation at the expense of cleaner natural gas.


Chapter 4 describes innovation as a political act. Victor in this chapter provides some very thought-provoking thoughts and questions, providing tools to evaluate whether you are really being effective in introducing change in an organisation. He points out that many organisations have suffered from a string of disappointed CEOs that have failed to have a significant impact on the firm they are in charge, due to a learned culture of resistance to traditional change models.

Conclusion

Overall, I have just tried to provide a taste of this fascinating book packed with examples, tools and stories. I suggest it should be essential reading for any innovator, entrepreneur, regulator and policy-maker seeking to provide effective leadership in a changing world.
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Professor Victor Newman

Professor Victor Newman is an Industrial Fellow at the University of Greenwich Business School, Chief Innovation Officer at the Milamber Group, and Innovation Adviser to Erisa.

His former roles include Head of Innovation Strategy and Economics at The Technology Strategy Board, and Chief Learning Officer to Pfizer’s global research and development operation. He is a Visiting Fellow and Professor to several universities on the subject of strategic knowledge management, leadership and Innovation.

Professor Newman has undertaken consulting work for Deloitte, the Financial Services Authority, British Council, UEFA, regulatory, financial services, biopharmaceuticals, foreign government national innovation development strategies, manufacturing and telecoms. He has also led successful initiatives for establishing collaborations with entrepreneurs and small to medium-sized enterprises. Professor Newman also contributes to several leadership development programmes.

He has been featured in the Wall Street Journal, contributed to the Harvard Business Review, and is on the Advisory Board for several organisations. He is the author of Made to Measure Problem Solving and his Knowledge Activist’s Handbook from Capstone/ Wiley & Sons has been cited as the “best management book within the last ten years”.

His blogsite is: http://the-knowledgeworks.blogspot.co.uk/

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