The Four Management Initiatives

For many enterprises, the challenges have been met by pursuing four management initiatives:

1. Provide systematic and comprehensive knowledge management distributed widely throughout the enterprise and guided (not controlled) from central management. KM is backed up by monitoring, incentives, and detailed understanding of knowledge mechanisms to ascertain appropriate actions everywhere.

2. Pursue integrative management practices on personal, departmental, and business unit levels, with collaboration and understanding of common goals and reinforced by measurements and incentives to leverage the synergy of joint insights and efforts.

3. Foster a widespread intellectual asset management mentality to maximize the operational and strategic value of human capital (people’s knowledge and their motivation to use and renew it), structural intellectual capital, and information capital.

4. Establish people-focused management and organization of knowledge-related work as a central condition to create and leverage capabilities and to provide competitive products and services in the global, knowledge-driven business environment. Advanced enterprises manage the six major challenges successfully by pursuing these initiatives. As a result, the challenges —and ways to handle them competently —are becoming better understood, although most challenges are not known in advance: they are novel.

In addition, information technology is becoming increasingly sophisticated and continues to expand its support of most areas of the enterprise, making the availability of appropriate information better and more timely. Still, the approaches and practices that vigilant organizations pursue are becoming ever more people-focused and rely on collaboration not only between people but also between organizational entities.

In philosophy, the new people-focus is quite different from the Taylorism era where the emphasis was on visible work and many workers were treated as replaceable “programmable automata.” Now, the focus has shifted to “invisible” and hard-to-observe intellectual work that relies on independent initiatives, personal reasoning, and innovation. As the executive vice president of a large enterprise stated: “Previously, we were concerned with what we saw —work flows, information flows, how people worked with their hands and so on. Now, to be competitive, in addition, we must focus on how people work with their minds and how knowledge and understanding are created, flows, and utilized and how it is exchanged with outside parties. These are new challenges.” The new practices have been found to be very effective and focus on making individuals, teams, and groups work better —with better understanding and insights, greater proficiency and foresight, higher involvement and motivation, increased responsibility and versatility, improved innovation and renewal, and increased building and sharing of expertise to enable others and promote better practices. All these changes rely on excellent tacit and explicit personal knowledge and understandings and on competitive structural intellectual capital assets. Knowledge management becomes a critical foundation for the change, enabling the reinvention of the business by systematic knowledge support, maintenance, and renewal. Compared to past practices, advanced enterprises have, in effect, reinvented the way they now conduct business. The story does not end there. Significant leadership is required to achieve the desired results. In addition, enterprises pursue and implement initiatives to create permanent practices for accountability and for monitoring short-term and long-term results, both accompanied by quick, flexible, and decisive retargeting when conditions change. Open-loop and “hopeful” operation in a changing and competitive world does not work