Monthly Archives: February 2005
(comment: As originally posted on the OUBS Blog)
Nonaka and Takeuchi put it like this: knowledge creation -> continuous innovation -> competitive advantage.
Simple. You can also say that next to creation of knowledge you have application, transformation and integration and all those functions interact.
In the 17th century Francis Bacon saw economic power in scientific knowledge and the possibility to then control the world we live in. Peter Drucker stressed the importance of knowledge as a crucial economic resource in 1969 (The Age of Discontinuity). Many companies now see themselves as knowledge based.
While knowledge creation leads to innovation it can also be argued that innovation leads to new knowledge, making this a circular process. Sometimes this process is needed to survive. Schumpeter actually pointed out that a main driver of innovation is the threat of innovation in your sector that you are missing. You need to learn to unlearn to learn again. Schumpeter’s gales of creative construction or discruptive technologies can be mentioned here. You will need to create new knowledge internally and raise your awareness to external threats. On a macro economic level variety occurs higher than at the individual level, meaning you cannot do anything against it at this level.
Definition of innovation
This is about the new, both technological and organizational. Invention is only a building block and often does not have the economic benefit needed for sustained innovation. Drucker said systemic innovation is the “purposeful and organized search for changes.” You need to understand the technical and the organizational part of innovation to really manage it successfully. While innovation is often seen as a leap to something new, this includes a lot of small steps that led you there and will take you further, with the leap actually mostly being on impact. Radical innovation is a lot more risky, especially because once undertaken, there is probably not pool of knowledge to use to build it up.
Embodied and embedded knowledge
This is based on Blackler’s list of types of knowledge. You can also say that “innovation embodies knowledge, or that innovations have knowledge embedded in them.” This is important considering worker education, especially in relation to some kinds of knowledge types only available in people, context, verbal communication or interaction.
Scientific and other knowledge
While it is often believed that technological innovation is the application of scientific knowledge, there are other types too even though. Still, the commercial application of scientific knowledge is a big field not to be underestimated, especially as it’s creation relies on the application of human and financial resources, precluding some form of commercialism in science. In terms of commercial relevance you need to also include the education and training part of science, which will lead to new, potentially commercial, advances. In the end, a lot of different types of knowledge need to be integrated for innovation to be successful. Page 25 in the book does list some types of knowledge needed there and can be really helpful, also in terms of thinking about outsourcing.
Knowledge creation and innovation
Surprisingly little has been done to research knowledge management in relation to its agreed importance and research in other core functions.
Design, something that cannot be automated or routinized, can be closely related to Gibbons’ Mode 2 knowledge or Flick’s contingent knowledge or SchÃ¶n’s reflective practitioner. SchÃ¶n actually sees design as a “reflective conversation with the materials of the situation.” Each problem is unique and handled in context. Some see it as a rational solving process but Dorst and Dijkhuis actually found out that each approaches appropriateness depends on the context.
This leads in to two perspectives on knowledge creation frameworks. In Nonaka’s SECI model new knowledge comes from the interaction of implicit and explicit knowledge. Knowledge conversion is key and different types of knowledge are created at each step. (More on Nonaka here.)
Building a new product needs interaction from a lot of different people and both socialization and externalization, individuals from the ba of the team who form the ba of the organization. (Lots of ba in SECI )
Top management needs to build a vision that shows the direction this knowledge creation should take. Then you have two dimensions of knowledge creation:
- epistomological dimensions: tacit/explicit conversion
- ontological dimension: individual to group to organization
Cook and Brown emphasize the concept of knowing, which only really works in a master and apprentice system where you learn what knowing something really means.
Important here is that you need to have variety and a deep (beyond immediate need) knowledge pool and interaction and communication between different/diverse people.
Experimentation and prototyping is another way to innovate and its actually easy to do with today’s technology in some fields. Leonard-Barton talks about it in her book Wellsprings of Knowledge in terms of “purposeful experimentation.” You need to support risk taking and allow experimentation with the option of failure. You need to put a system in place that allows all this to happen and foster learning from it. Unsuccessfully trying some things might lead to something successful in an unexpected field, something she calls “failing forward.” Rapid prototyping and an open mind is needed. Local experts, early adapter types and all the stuff from Malcolm Gladwell’s Tipping Point is needed.
Thomke has found 4 main areas of focus to exploit technology with prototyping and experimentation in mind.
- Organize for rapid experimentation
- Fail early and often, but avoid mistakes
- Anticipate and exploit early information
- Combine new and traditional technologies
Learning and Innovation
Learning and knowledge creation are un-separable. Ruggles (1997) argues knowledge management needs 4 independent activities:
- knowledge identification
- knowledge codification
- knowledge interchange
- knowledge creation
(all this seems very similar to SECI)
A lot of firms need to go to learning by doing as Arrow (1962) believed, citing as evidence increased output. Ludvall talked about learning as incremental additions and deletions from your pool of knowledge through experience and practice. Cultural, social and historical as well as your own pool of knowledge interact. Everything is context sensitive.
Knowledge Practices for Innovation
Either knowledge has its own dynamic or it is driven economically… technological push vs. market driven. Actually we are somewhere in the continuum between the two. We can actually build a matrix putting knowledge about means and about ends in categories of unknown, definable or understood.
At a firm level your knowledge will be cumulative and path dependent and you need to balance keep your core constant and keep an eye on the edges, which should be fluctuating. Creative abrasion is a term signifying that different specialists share knowledge, like designers and coders, building new knowledge based on their different knowledge and viewpoints in the process.
You need to innovate to stay competitive and therefor build up the capability to do so strategically. But rational planning processes are rarely possible, so you need a way to manage and to cope with complexity. You need to continuously link opportunities to market possibilities, within and outside the organization.
Freeman (1992) identifies 6 strategies:
- Offensive innovation strategy
- Defensive innovation strategy
- Imitative innovation strategy
- dependent strategy (subcontractors and suppliers innovate)
- traditional products
- opportunist (identify niches)
Perceptions of innovation
The extremes, found in a OUBS research by Storey (200), are routinized innovation versus more individual creative events. Most are in the middle. Different dimensions play a larger or smaller role dependent on who you ask. There is a social – individual dimension and the external – internal dimension.
Some things are noticeable in relation to this:
- innovation happens in stages, with potential reviews at each stage
- the social part emphasizes the influencing process part, or even fight for resources
- cross-functional teams are important
- skunkworks (Tom Peters), aka individual experimentation
- find and keep innovative individuals
- importance of inter-firm collaboration
- social relationships are critical (internal and external)
Internal and External Knowledge for Innovation
You need to build knowledge but also look for diversity which is sometimes found outside your organization. Make or buy is an important consideration here. Working internally has high costs and risks, while externalizing things means you need to work hard to select the right collaborators. Learning from consultants needs a real effort as they are often not there to part with their specialized knowledge. The capability you can build is choosing, communicating and taking advantage of external resources. Outsourcing can be related to more diversity and larger communities of practice, which actually makes it attractive if the right partners are chosen.
In terms of R&D it can be argued that the capability to orchestrate resources needs to be internal but the build does not need to be. Remember the transaction costs though.
Just seeing a report on the german company DEDON and I see lots of similarities to Google and Semco. First of all they are growing like crazy and the founder is by now even saying that they need to try to lower their growth a bit as it starts to be unhealthy for the company. The founder Bobby Dekeyser has been a goal keeper in football previously and is bringing some football coaching systems into the company.
First they also have an italian chef where everybody can get some very healthy food. They have a sauna, fitness center, squash court and showers in the offices. People jog to work and take a shower there. The founder has a Maserati which employees can take for a ride on the weekends. And now, they are getting their own hotel on their own island (no clue where) where employees can go for free. On top of that, he is making sure that employees can do what they want to be doing, including getting children and spending more time with them. This is what motivates people, makes them feel good, wanted and hence perform. At the same time they have a big factory in the philipines creating the base furniture where employees do morning work outs for example. All in all, a very interesting company and it shows again the balance you need to make between costs, motivation, understanding, … . Congratulations!
Seth posts about the secret army of ad clickers. I mentioned clickfraud before and said that while mathematic formulas like Fourrier Analysis might be able to calculate the level of click fraud and see unlikely changes and things, as soon as real people click in real ways all over the world, things get tricky. Another option would be a virus that installs a click application within millions of PCs. Google’s Phds do have some work cut out for them there I believe. The page Seth links to is actually a Google Search: earn rupees clicking ads
John Heilemann wrote a great piece about Google, covering their history, inner workings, finding VCs and angel investors, growing up and more entitled Jounrey to the (Revolutionary, Evil-Hating, Cash-Crazy, and possibly Self-Destructive) Center of Google. A truely great read giving you lots of insight why Google is different but not so much as you might believe.
I have a server hosted at a german hosting provider called Server4you. They give me a virtual unix system for â‚¬10 a month. I thought about moving from time to time but haven’t found anything else yet. Now they are upgrading the system and the thing is down and I needed to call their support number again… â‚¬1.89 per minute! And from what I gather from the accent, this thing is even situation somewhere in bulgaria or something, which would be efficient and boy are they likely making money with it! Congrats … to you, not me.
This made me look at Skype rates again though and you know what. I can call almost anything world wide for â‚¬0.017! That is cheaper than my ISDN installation at home via Net Cologne! FOR CALLS IN GERMANY! ‘Nuff said. Skype rocks, period, end of story. Now with the answering machine, I can pretty much ditch a real phone, just taking a mobile phone with me and have Skype. I’d love to invest in Skype, even though I still don’t know if there isn’t more power in SIP based systems. But it does make me happy with my Vodafone and Nokia investment. Why? Because people will more and more move to Mobile Phone and VoIP … they will … trust me … it is only a question of time. Kick ass!
ChangeThis just published the new manifestos and one of them is from Tom Peters 100 Ways to Help You Succeed/Make Money, Part 1. It’s actually 50 tips from his blog or elsewhere that are put together in this wonderful 65 page document. You might agree or not agree with Tom, and he might have some too loyal following, too little freaks that challenge him, but first of all he has an amazing writing style, some wonderful ideas and hell, read point #39:
Blog as if your life depended on it!
He obviously sold me there. But enough of the fun about it. Here are some other points from the material that particularly touched me.
You might have noticed (not if you only read the feed ) that I have a small map of the world on the left side of the blog with lots of red dots on it. That’s actually Hitmaps , a service by the the Knowledge Media Institue at the Open University, which is showing where my visitors are coming from. This is a great and fun tool and very easy to install but it is getting to crowded, so I am removing it again. If you want to see the wonderful dots, check out my website’s world map
We just had a discussion at work why Blink 182 is named Blink 182 (it seems the number is random and was added due to another band being named Blink). So we searched Google, found the Wikipedia page about Blink 182 and you know what? Today is the 23rd. The Wikipedia page already includes the fact (I haven’t confirmed and didn’t know) that the Band split up on the 22nd!!! Good god! Now bad, Wikipedia’s updating speed I mean.