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Management, Response Ability,
and the Agile Enterprise
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This paper defines the agile enterprise as one which is able to both manage and apply knowledge effectively, and suggests that value from either capability is impeded if they are not in balance. It looks at the application of knowledge as requiring a change, and overviews a body of analytical work on change proficiency in business systems and processes. It looks at knowledge management as a strategic portfolio management responsibility based on learning functionality, and shares knowledge and experience in organizational collaborative learning mechanisms. It introduces the concept of plug-compatible knowledge packaging as a means for increasing the velocity of knowledge diffusion and the likelihood of knowledge understood at the depth of insight. Finally, it reviews a knowledge portfolio management and collaborative knowledge development architecture used successfully in a sizable cross-industry informal-consortia activity, and suggests that it is a good model for a corporate university architecture.
Knowledge management, organizational learning, collaboration, and the agile enterprise are all current concepts being explored by various groups of academics, consultants, and business managers. The general motivation for this interest is the observation that organizations are finding it more difficult to stay in synch with the pace of change in their operational and competitive environments. Though many of these explorations are still myopically focused on a single one of these issues, more and more are recognizing a convergence.
We examine this convergence from the point of view that all of these concepts are strongly interrelated, and argue that organizational agility is achieved when knowledge management and change proficiency are balanced organizational competencies.
This human thing we are distinguishes itself from other life by generating and applying knowledge. Our increasing population is building upon an increasing body of past knowledge - which increases the frequency of new knowledge generation and speeds the decay of old knowledge value - making the general business environment, which is built on knowledge, more unstable.
New knowledge demands to be applied. When one business applies new knowledge valuably, others have no choice but to follow, if they can.
Knowledge has no value until it is applied. When new knowledge is applied, it introduces a change into the environment, which generates a value. Change that comes from the application of new knowledge is called innovation when the value is positive. Knowledge which cannot be applied has no value. Knowing about the canals on Mars is just as useless to an automotive assembly plant as knowing about a new assembly technology that cannot be implemented.
In 1991 I co-led an intense four-month-long collaborative workshop at Lehigh University that gave birth to the concept of agile enterprise [Dove, 1991]. The group converged on the fact that each of their organizations were feeling increasingly whipsawed by more frequent change in their business environments. With even faster changes expected it became evident that survivors would be self-selected for their ability to keep up with continuous and unexpected change. We dubbed this characteristic agility and loosely defined it as "the ability of an organization to thrive in a continuously changing, unpredictable business environment."
The knowledge explosion is the cause, and knowledge management is one of two key enablers for agility. The other key enabler is change proficiency - a competency that allows an organization to apply knowledge effectively - whether it is knowledge of a market opportunity, a production process, a business practice, a product technology, a person's skills, a competitor's threat, whatever.
I now prefer to define agility succinctly as: the ability to manage and apply knowledge effectively. Balancing these two competencies is important, as shown in Figure 1.
Response Able Change Proficiency
We recognize change proficiency in both reactive and proactive modes. Reactive change is opportunistic, and responds to a situation that threatens viability. Proactive change is innovative, and responds to a possibility for leadership. With collaborative workshop groups we have analyzed hundreds of business practices and process, as well as product designs, for high adaptability. It was evident early that there are subcategories or domains of change within both reactive and proactive categories. Initially we found it a useful tool in analysis work to consciously think of four different types of change in each category and ask how the system under analysis manifests each of them. Eventually we found a natural order among these types of change that reflects priority and mastery as proficiency is developed, which resulted in an analytical tool we call the Change Proficiency Maturity Model.
Proficiency carries with it the concept of betterness, which implies a metric. We were inclined in the early days to measure change proficiency in terms of speed, until we understood that change at any cost eventually breaks the bank. This then led us to consider other dimension of proficiency, which added to time and cost the dimensions of quality and scope. These four metric dimensions were also found to have a natural order in priority and mastery as an organization became more proficient at change, and is reflected in the structure of the maturity framework.
The five-stage maturity framework in Figure 2 is used to assess existing corporate competency at change proficiency, as well as to prioritize and guide improvement strategies. The framework progresses through five stages of working knowledge and strategic focus, with separate competency tracks for both proactive and reactive change proficiencies.
Analyzing highly adaptable systems for the underlying design principles has revealed a set of ten that are generally employed. These RRS (Reusable, Reconfigurable, Scalable) principles are briefly outlined in Table 1. Examining them in any detail is beyond the scope of this paper. Here it is sufficient to know that purposeful design can ensure high change proficiency - or response ability as I like to think of it.
In the agile organization knowledge management is responsible for having the right knowledge in the right place at the right time. Some of the issues faced by this responsibility are listed in Table 2.
Having knowledge at the right time means it is available sufficiently in advance of when it must be utilized to allow for the application time. Having knowledge at the right place means having it in a specific someone's head, not in the wrong person's head and not in an on line repository or a corporate library or a document file. Having the right knowledge means managing the organizational knowledge portfolio to anticipate emerging needs, satisfy current needs, and weed out the obsolete needs - everywhere in the organization.
In the agile organization knowledge management is first about learning, second about application, third about purpose, and there is no fourth.
Knowledge management is first and foremost about learning - what should be learned, when should it be learned, and who should be learning it. The very knowledge explosion that is creating the need for knowledge management and change proficiency is also creating the means to respond. Biology, psychology, and cognitive sciences are generating knowledge about how the human brain learns; and have shown us that we can use this knowledge to intervene effectively in the learning process of virtually any and all humans.
Teaching is a push perspective, learning is a pull perspective. Creating and nurturing an environment for student-directed learning takes advantage of the student who has a driving curiosity or even a deep-felt need to learn something - a specific something. In collaborative learning workshops we have conducted over the last twelve years with industry participants we screen potential workshop subjects for real appeal to real people - and then require that participants have a real application for the results. The process we employ has evolved over the years, is called Realsearch, and has purposeful objectives, tools, and techniques for creating knowledge at the depth of insight and knowledge that can be readily diffused outside of the creating group. Table 5 highlights the Realsearch approach.
Realsearch is appropriate for collaborative learning projects - where a specific body of knowledge must be captured or created and then packaged as explicit knowledge for application and diffusion. Realsearch workshops are an appropriate vehicle for implementing a knowledge portfolio strategy driven by a portfolio management group, as well as for solving focused problems or pursuing specific opportunities manifested in multiple locations, both within and across normal community-of-practice boundaries.
Communities of practice are another very important collaborative learning mechanism. A community of practice emerges when people with similar interests seek each other for discourse, experience sharing, and problem solving assistance. This is self-motivated continuous learning that has always been present to some degree in the work place, but now gets major leverage from the corporate intranet and even more from the knows-no-bounds Internet. Collaborative learning mechanisms in Table 6 are at work in both organized Realsearch learning projects and in informal communities of practice.
Knowledge Packaged for Diffusion
Cognitive science tells us that we assimilate new concepts only if they are within a small reach of what we already know - within the zone of proximity, as they say. This is why it takes so long to learn a new subject - we have to do the learning one step at a time, and each step has to sink in before the next can be built upon it. Though the brain can parallel process many input channels, learning appears to be a sequential biological growth process. One way to speed up the learning process is to use multiple channels effectively. Accelerated learning is a body of educational technique that mixes verbal story telling and reading, graphics and visual stimulation, sounds and rhythm, movement and physical experiment, and other forms of input while teaching a student new material - and significantly speeds up the learning process in both adults and children. It isnt just parallel input at work here, but also the concepts of multiple intelligences and different learning styles.
Our objective is a way to package a piece of knowledge so that it can be quickly and effectively transferred from one person to another within an organization. A respected theory is that cognition is shaped by culture in general and language in particular. Our method utilizes concepts of language, culture, and pattern proximity. Basically we adopt a plug compatible standard that will require some learning time, but not much, from everyone in the group - and once learned, streamlines the knowledge transfer process.
Mechanisms we have tested in Realsearch appear to satisfy this promise. Im referring to a knowledge template Ive called a local metaphor model, a cultural context of change proficiency, and a language of change issues and Reusable-Reconfigurable-Scalable principles structured for systems thinking and communicated simultaneously in textual explanation, bulleted synopsis, graphic depiction, and connected story example (Figures 3 and 4). Importantly, knowledge is packaged as a solution mechanism and not simply as a specific solution. Specific examples of solutions are provided as guidance. The knowledge is not packaged as a recipe for solving a single problem, but rather as a process for solving a class of problems in a changing environment.
Purpose and Portfolio Management
Knowledge management is a tool to support an organization's strategic plan. Figure 5 depicts an architecture we installed at the Agility Forum in 1994 to create and manage a knowledge development agenda. A sizable body of knowledge was created in a few short years. Perhaps more importantly, some 1500 or so participants carried back to their home organizations a new knowledge base that they helped create and that has noticeably influenced many of them. The collaborative learning groups were the formation of informal networks and communities of practice that outlived the learning projects which originally brought people together (Figure 6).
Collaborative learning projects are an affective mechanism for knowledge agenda fulfillment, knowledge diffusion packaging, collaborative culture initiation, and community of practice formation. Communities of practice are an effective mechanism for nurturing a collaborative culture and increasing the velocity and richness of knowledge diffusion.
The knowledge base is exploding. The duration of value for any given piece of knowledge is shrinking as new knowledge makes old knowledge obsolete faster. This puts pressure on the speed of deployment. If useful knowledge is not deployed quickly enough it becomes obsolete before it generates a return on investment. This also puts pressure on the speed of knowledge diffusion and a focus on the anticipation of new knowledge needs.
Change proficiency in all systems of business will determine the ability to deploy knowledge effectively. At the same time, any knowledge management practice spurred into existence to deal with the knowledge explosion must recognize its own needs for being change proficient.
When an organization needs to learn quicker it must shorten the time of acquisition and diffusion of knowledge. Collaborative learning supported by a purposeful infrastructure and culture puts more diversity of thought into closer knowledge exchange and development proximity, and creates an architecture from which intelligence at the higher organizational level emerges. A corporate university architecture similar to that depicted in Figure 5, with a start-up strategy similar to that depicted in Figure 6, will create and nurture a culture of collaborative learning.
An organization with sufficient competencies in knowledge management and change proficiency, reasonably balanced to compliment each other, will be agile enough to live and maybe even lead in these interesting times. In the end, though an organization may well manage knowledge, it will never control it. Viability and leadership will be as much determined by organizational response ability as it will by knowledge portfolio management.
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