From Knowledge to Innovation




FROM KNOWLEDGE TO INNOVATION

International Keynote by Ron Young to KM Singapore Conference, Singapore 16th September 2010

Both the video (40 minutes) and transcript are available here.

View 'From Knowledge to Innovation' video here

FROM KNOWLEDGE TO INNOVATION (Transcript)

International Keynote by Ron Young to KM Singapore Conference, Singapore 16th September 2010

Introduction

The title of my presentation this morning is ‘From Knowledge to Innovation’ and ‘Knowledge and Innovation’, of course, is the theme of this year’s conference. Therefore I would like to start to set the context for my presentation and this conference by reading a paragraph from the iKMS Conference brochure.

“The globalized and knowledge economy is increasingly based on exploiting knowledge and innovation. Most organizations today understand the importance of value creation by incorporating knowledge and innovation into their products and services. In their pursuit of knowledge excellence, organizations are, and always will be, as valuable as their knowledge and ideas and, most critically, their ability to transform their knowledge and ideas into valuable and successful competencies, products and services.”

I find these words very powerful indeed and I would like to discuss with you, particularly, the ability to transform knowledge and ideas into valuable and successful competencies, products and services..

My story begins in 1998, when I was called by the Innovation Unit of the UK Government, Department of Trade and Industry (DTI) , as it was called at that time, to be a part of a small team to help Government develop a ‘White Paper’ which eventually became a National Strategy for the UK for Knowledge and Innovation.

The White Paper can be downloaded here

Why did the UK Government want to do this? What were the origins of the Government White Paper?

Well firstly, there was a newly elected Government, with Tony Blair as the new Prime Minister at that time.

But, most importantly, the real problem was that UK productivity was falling, quite dramatically, compared to its G7 Industrial Country counterparts at that time. That is France, Germany, Italy, Japan, USA and Canada, who were all increasing their productivity. Furthermore, in line with falling productivity, the UK trading relationships and quality, with the rest of the world, was diminishing.

Prime Minister Tony Blair decided to create a new ‘Blueprint for the UK for the 21st Century’, to both enter and compete in the global knowledge economy, and to increase the productivity and quality of the country. This is what he said in the White Paper about Knowledge and Innovation.

First of all, he said that there are two new key things concerning knowledge.

1. Knowledge is the key determinant of future economic growth and national prosperity.

2. Knowledge driven competitiveness globally exploits the nation’s knowledge, skills and creativity – which is far more difficult to copy.

He went on to say that “Our success depends on how well we exploit our most valuable assets: our knowledge, skills and creativity. These are key to designing high-value goods and services and advanced business practices. They are at the heart of a modern knowledge driven economy”

But as well as increasing national productivity and quality through a knowledge driven strategy, he was also concerned about improving the effectiveness of Government itself. He said:

“Government needs to learn and innovate as much as the private sector and it must create new mechanisms for sharing ideas and best practices”

These words I also find very powerful. What we are talking about here is the great importance attached to knowledge, skills, creativity, advanced learning practices, creating new ideas and developing innovative products, services and solutions, and to be able to do this even faster.

I put to you that these words are even more important today around the world than they were then.

But what exactly is the relationship between Knowledge and Innovation? Is there a strong link between Knowledge Management and Innovation? Does Knowledge Management fuel innovation, and if so, how?

In 2007, my company Knowledge Associates was working with the United Nations agency IFAD, the International Fund for Agricultural Development, in Rome, Italy. The mission of IFAD is ‘enabling poor rural people to overcome poverty’. We assisted IFAD with the development of a separate Knowledge Management Strategy and, later, IFAD developed a separate Innovation Strategy.


Both can be obtained from IFAD here

In this Innovation strategy, published December 2007, IFAD concluded that “effective knowledge management can be a key(ing) ingredient of innovation as it can feed a continual flow of ideas into the process. “

However, it went on to say that “while knowledge management focuses, primarily, on learning from the past and on current good practices, innovation focuses on experimentation, prototyping, and the creation of the good practices of tomorrow.”

Also, “innovation may often be a higher risk venture and it depends on creativity and deviance from the established patterns and perspectives, whereas knowledge management encourages harmonization around proven practices.”

Finally, the IFAD Innovation strategy says said that “while knowledge management thrives on communities marked by commonalities, innovation thrives on diversity, crossing boundaries, and challenging and questioning established knowledge”.

So is there a natural bridge to be found between knowledge management and innovation? And if so, what are the intricate relationships between learning, knowledge, creativity and innovation?

In this presentation, I would like to share some of my thoughts and experiences about these questions, and in developing knowledge and innovation strategies.

To do this, I am going to briefly discuss three things:

• What does innovation really mean, especially in a global knowledge economy?

• What can history teach us about successful innovation in organizations?

• How do we bridge knowledge management and innovation?

What does innovation mean in a global knowledge economy?

Wikipedia says that innovation can be considered as “the useful application of new inventions or discoveries. “

It distinguishes here between invention and innovation. Invention is an idea that is made manifest, and innovation, is ideas that are applied successfully in practice. So the key words here are the ‘successful application’ of ideas.

I am happy to go along with this as, in my experience so far, organizations are certainly looking for increased growth and sustainability through new innovative products, services and solutions that can be successfully applied. That also means that, ideally, they can be easily replicated, and that they are scaleable. This was certainly the criteria set by IFAD to create more innovative solutions that could be implemented fast, around the world, to eradicate rural poverty..

The other description that I read just the other day was that “innovators leap across learning curves exploring new ways to deliver value, in the same way that Tarzan swings from vine to vine.”

And other, which I especially like, as I have a great passion for knowledge, is “Innovators who follow their passion, and are in it for the learning, always end up much happier making much more money”

But these definitions tend to describe innovators as individuals! Can we really have more innovative organizations or do we really have successful organizations led by innovative individuals? It poses the question ‘Can we mainstream innovation?’

What can history teach us about successful innovation in organizations?

I am sure you have seen this table many times before. If we look at history we are told that, within an organization, only

10% are creators/innovators

20% are enthusiasts, supporters and early adopters

50% are pragmatists (I’ll believe it when I see it)

20% are Ludites (They will never change)

Concerning the web, in public websites and private intranets, we are told that the ‘Participation Pyramid for web work/browsing’ is

1. The vast majority of us are ‘Couch potatoes’ – people who simply browse

2. Quite a large number of us are ‘Collectors’ – people who find useful information and save it

3. Even less of us are active ‘Critics’ – thinkers, reviewers, provide comments and feedback

4. And we are told that maybe only a minority of us are ‘Creators’ of content

Furthermore, in making the case for creative and innovative individuals, we are reminded time and again in our business schools that it is the individual ‘entrepreneurs’ who are the key innovators and leaders. People like Steve Jobs of Apple, Richard Branson of Virgin, and, of course, the founders of Google, Facebook, Twitter etc.

So are we therefore pretending to ourselves to believe that we can really create mainstream innovation in our organizations today? Because it seems, from history, that only a small number of people are creative and innovative by nature. We can certainly mainstream knowledge management across the organization, with more collective, logical and systematic knowledge processes embedded in our daily work, and with more dynamic knowledge flows across common communities of practice and knowledge networks, but, as we discussed earlier, the characteristics and properties of innovation are, actually, diametrically opposed to those of knowledge management?

Well that may have certainly been very true for the past, but I wish to suggest to you today that there are now new developments, this past few years, that provide new and even better options for mainstreaming innovation across the organisation.

I wish to propose to you that those organizations that are successfully practicing and mainstreaming effective knowledge management, across the organisation, now have a unique opportunity to successfully mainstream innovation too.

I wish to demonstrate to you that the key to successfully mainstreaming innovation, in organisations, is to create a bridge from effective knowledge management to innovation. There are several ways to create this bridge.

But, to understand the need for a bridge, let’s first of all look a little closer at the apparent differences, the diametrically opposed skills and abilities.

How do we bridge knowledge management and innovation?

I put to you that learning from the past, developing good practices, and harmonization around proven practices, that we seek in effective knowledge management, are predominantly logical, analytical, collective and systematic activities. You might say, for simplicity, they are logical left brain activities. On the contrary, new knowledge creation, experimentation and prototyping that involve taking risks, that we seek in innovation, are predominantly creative, and often, systemic, holistic, activities. You might also say, for simplicity, that they are creative right brain activities.

Communities of practice, marked by commonalities around specific knowledge domains have structure, whereas innovation, especially through challenging established knowledge, can be disruptive of structures. Good practices of today thrive on continuous and incremental change and improvement processes within an existing paradigm. Good practices of tomorrow can be formed through radical improvement, that is, discontinuous change, which can even change existing paradigms. Again, effective knowledge management is predominantly a logical left brain activity and radical innovation is predominantly a creative right brain activity.

You see, the logical left brain approach to solving problems is to first ask the logical question ‘How’. But the creative right brain approach to solving problems is to say ‘I’ll invent the how along the way’. The logical, pragmatic approach is to say ‘I’ll believe it when I see it’. The creative, innovative approach is to say ‘I’ll see it when I believe it’.

Interestingly, the left and right hemispheres of our brain are, also, diametrically opposed to one another. For example, the logical left hemisphere works in facts, black and white, judges and analyses (breaks things down), whereas the creative right hemisphere works in feelings, colour, accepts and synthesizes (into whole).

Most of us, in our organizations are working in, predominantly, left brain work activities. Some of us are working in, predominantly, right brain work activities.

Harold Leavitt, writing in ‘California Management Review’ recently said business schools produce “critters with lopsided brains, icy hearts, and shrunken souls”.

But I would like you to consider, for a moment, a standard dictionary definition of genius, which is ‘using the faculties of the left and right hemispheres to the full’. For example, Leonardo Da Vinci was a brilliant artist and engineer. Einstein was a brilliant mathematician and quantum physicist, and he was also very mystical and intuitive.

It seems that the key to genius, whether it’s a natural gift, or whether it’s developed, is going beyond the two separate hemispheres to working them together, better, as one. Genius is using the whole brain as one.

Using this analogy of the individual brain further, we need to strive to create organizational excellence through best using both our logical and creative talents in the organization to the full. And we need to go further, beyond this, and get the two diametrically opposed, and often separate parts of the organization working better together as one.

How can we do that better in our organizations today?

Well, for me, the answer came in four parts over many years. It started for me in the 1980’s when I was first introduced to the work of Cambridge Professor Meredith Belbin. At Henley Management College, UK, his work observed teams and the difference between success and failure.

He said, “Nobody’s perfect….but a team can be”

He observed and understood that successful teams contained the right balance of logical and creative abilities. You may know Belbin’s work well, and of course I do not have the time to go into his work today, other than to link his findings and conclusion to my work in knowledge management and innovation.

Suffice it to say that he identified 9 critical team roles that are required to be performed within any team by its members. They are plant (a highly creative individual who is good at solving problems in unconventional ways), a monitor evaluator, co-ordinator, resource investigator, implementer, completer finisher, teamworkers, shapers (to motivate and inspire) and specialists (subject matter experts with knowledge).

If you are not familiar with Professor Belbin’s work, he has a 20 minute questionnaire that you can complete yourself, as an individual, to identify which of the 9 team roles you excel in.


His website is here

The second part of the answer came for me from my observing and working with effective collaborative, and often, cross functional, virtual teams. In this case, the performance of the whole team is certainly greater than the parts. As well as effectively transferring information and knowledge to one another, as we all know well, the process of collaboration creates new knowledge and ideas, especially where there is synergy.

Successful collaborative teams are innovators. Successful collaborative teams are the new powerful engines of new knowledge and new ideas in a knowledge driven organization.

Successful collaborative knowledge teams can be a bridge between knowledge management and innovation.

The third part of the answer came from my work with Ernst and Young in London in 1995 – 1998. From that work I developed a Knowledge Management framework called the Knowledger Framework, which was based on their Lotus Notes based systems, automated workflow and practices.

In Ernst and Young, they identified four mega-processes in each company. All business processes then become sub-processes of the mega-processes of ‘Sell, Serve, Develop People, Develop New Products and Services’. Underpinning each of these mega-processes is knowledge. But, as organizations grow, the knowledge is interrupted and the knowledge flow fragments. However, through effective knowledge management, which has collaborative work teams at the heart of its strategy, the knowledge flow restores. Rather like restoring proper blood circulation.

This then restores a ‘virtuous circle or virtuous spiral’ of even more tacit and explicit knowledge creation and even more new products and services.

The final part of the answer came for me by identifying the key team competencies that are required to perform the collaborative knowledge processes and practices in the business processes throughout the organization. That is, competencies for better identifying, creating, storing, sharing and applying knowledge, and, also identifying the key team competencies that are required to perform the innovation processes and practices. That is, the competencies for better capturing and generating new ideas, qualifying them, developing, prototyping, testing, evaluating and implementing.

Putting it all together

So, if we put these four things together, that is the critical team roles defined by Belbin to make a perfect team, together with the process of effective team collaboration, together with restoring the knowledge flow across the mega processes of the organization to create a spiral of new knowledge and ideas, together with the knowledge working competencies required for completing the knowledge and innovation processes, some very interesting things start to happen.

Yesterday, I conducted a master class on ‘Understanding the four dimensions of knowledge management’. We talked about personal km, team km, organizational km and inter-organizational km. We discussed how each of these dimensions is critical to the overall success of knowledge management within organizations, and that if any one dimension was neglected or missing, the implementation would be mediocre at best, and could even fail. We talked about the need to develop for each dimension effective communications, collaboration, embedding the knowledge process to better capture, store share and apply knowledge into the daily work at all levels. We discussed that KM was for everyone.



'Understanding the Four Dimensions of Knowledge Management' paper is here

I put it to you that these same four dimensions apply equally for innovation.

We need to develop implementation strategies, processes, methods and tools for personal, team, organizational and inter-organizational innovation. This will ensure that effective collaboration, through knowledge management and creativity will fuel innovation.

But we need to mainstream innovation by making the bridge between knowledge management and innovation. The key is collaborate, collaborate, collaborate…in perfect teams…in competent teams. That is our challenge.

We certainly need to continue to encourage individual entrepreneurship and personal innovation, of course. There will always be a great attraction and demand for this and for great entrepreneurial leaders..

We need to mainstream team innovation, primarily through effective team collaboration, as a bottom up approach.

We also need to implement organisational innovation strategies and infrastructure, that will mainstream innovation across the mega processes of the enterprise, as a top down approach.

And, we need to implement inter-organizational partnerships and networks, across our entire stakeholder community, our customers, suppliers and even our competitors.

All four dimensions of knowledge management and innovation, well implemented, will produce Knowledge and Innovation Excellence.

All four dimensions are systemic, they are inter-dependant, they create a natural spiral of value creation. The whole will most certainly be greater than the parts.

Finally, this gives rise to the question ‘Do we need one Knowledge and Innovation strategy, or separate KM and innovation strategies?’ That, ultimately, is situational to the organization. What is important is that all the components of Knowledge and Innovation are implemented, as part of a virtuous circle, as part of a growing spiral of value.

Such strategies, I maintain, will transform organizations from, what I term ‘episodic learning’ to ‘mainstreamed continuous learning’, from what I term ‘episodic innovation’ to ‘continuous mainstreamed innovation’.

This is the real challenge in our organizations today. This is hard to copy.

Effective Knowledge Management is a catalyst for Innovation. I believe that mainstreaming knowledge management and innovation, together, and going beyond the organizational left and right hemispheres, working together as one, is the key to designing high-value goods and services and advanced business practices.

This is moving from Knowledge to Innovation.

I hope I have given you some new ideas, and maybe a few new insights. Thank you for allowing me to share my thoughts and experiences with you in developing knowledge management and innovation strategies.

I look forward to your feedback, your experiences, and even better ways to ensure that knowledge management and innovation, in all its dimensions, is achieved.

Thank you for your attention.

Ron Young