23 03/12

Suspicious Results from Six Sigma

Companies have invested billions in Six Sigma and Lean programs, but have those investments really changed the system?  Fortune in fact published an article with the statement that “of the 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since.” The statement is attributed to “an analysis by Charles Holland of consulting firm Qualpro (which espouses a competing quality-improvement process).” The gist of the article is that Six Sigma is effective at what it is intended to do, but that it is “narrowly designed to fix an existing process” and does not help in “coming up with new products or disruptive technologies.”

Economist Tor Dahl researched and compared two sets of business units, those that are considered quality-focused (six-sigma), and those that are considered performance-oriented (stable and consistent). What he found was that corporations that focused on quality encountered lower changes in productivity and lower net income. The net profit rate dropped by 7.65 percent per year.

The revelation of Dahl’s study is that over the same period, the performance-oriented corporations that focused on productivity are also associated with high quality. That is, those companies that primarily focused on increases in productivity produced high quality products and services to boot. Exceptional Performers differed from the Six Sigma companies in dramatic fashion. Productivity and net profit rate were extraordinarily higher.

23 03/12

Picasso by numbers

Knowledge Management (KM) represents an opportunity to incorporate the human element into performance management, something that has been sorely lacking in the exhaustive progression of management tools that have attempted to sterilize the human art of business into bytes of ones and zeros. Touted as the cure, each new tool begs the attention of heart broken executives on the rebound–from TQM to Six Sigma to Lean–when in reality, it’s just a repackaging of predecessors with a few new bells and whistles. The opportunity to incorporate the human element, however, will be spoiled by the misdirected resources and technologies being sunk into KM that threaten to define it as nothing more than an a demented Alex Trebek who seems to know everything and nothing at the same time.

In response to Bain & Company’s latest Management Tools and Trends survey, which reflected the responses of 960 global executives, Darrell Rigby, senior partner and founder of the survey, said that the results showed that “technology’s influence on management tools is maturing”. Rigby found that nine in ten executives felt that information technology created significant competitive advantages. Surely KM was one of the management tools on the mind of executives when expressing the significant impact of technology. Yet, the IT advantages seem elusive; while the survey reflected substantial gains in the usage of KM (now nearing 55%), its satisfaction score ranked near the bottom of the group (fourth lowest). If the disparity between use and satisfaction widens, as the trend seems to suggest, this critical management tool is likely to experience the same fate as the many forgotten tools littering the PI landscape.

For years companies have deployed KM technologies focused on building repositories of knowledge. These dumping grounds have proven difficult to populate primarily due to the unnatural activity of recording for others what one already knows. Bain & Company, for example, created a system in the late 1980s, asking consultants to write one-page summaries of their projects. Yet, after 20 years it was only able to achieve 40% compliance in this initiative. Not until Bain hired and unleashed 20 knowledge “brokers”, charged with the task of encouraging and aiding consultants to write summaries, did a user base begin to establish itself. Raytheon and Xerox have encountered similar hurdles trying to extricate knowledge from their technicians. Raytheon used knowledge “coaches” to help guide input from its technicians’ experiences. Xerox seeded their Eureka system with ideas from management and gave rewards to those technicians that submitted tips.

In an attempt to circumvent the resources required to “broker” knowledge, organizations rely upon technology (the genie in the bottle) to effectively cloud the complicated human issues in learning and teaching. Big players, like Microsoft, which is rumored to be adding “expertise location” as future feature in its office suite (utilizing contextual interpretation of documents and the interconnectivity between people to locate expertise) are poised to create obscure oracles. AskMe Corp. has been engaged by the Commerce Department to create an expertise database. To navigate around the human “broker”, AskMe “simply” asks end users to build a profile by uploading their resume, a list of frequently asked questions, and other documents. The final component of AskMe’s database is an interface that allows knowledge seekers to request information from a list of individuals the system has defined as experts. Furthermore, it records all interaction–further refining expertise based on the participation rate of knowledge providers.

I have no doubt that this approach has “allowed experts to flourish and shine” as the Commerce Department claims. But what does it really buy an organization if those who ultimately engage the knowledge provider, the knowledge seeker, lacks the judgment to distinguish a true expert within a sea of Alex Trebeks? What defines an “expert”? Is it someone who is passionate and prolific? Is it someone who has an impeccable resume?

There is a place for the current pursuits in building KM repositories, but we need to be careful in setting our expectations for the returns on the knowledge found within them. Xerox estimates its Eureka database, with over 70,000 suggestions, cuts costs by 10%, saving millions in repairs. Technical repositories like Eureka effectively use technologies to simplify and distill activities often too complex to fit in a standard set of instructions but are repeated, with variations, again and again. Instructional KM systems like Eureka often meet expectations because the technical knowledge they hold is bite size, contextual, and well defined, requiring less effort to adopt. For the most ardent users of KM, however, many interrelated factors are at play. From subject-area expertise to tactical organizational intelligence, this complex kaleidoscope of knowledge cannot be simply replicated onto the paint-by-number canvas which current technological pursuits provide.

The underlying misalignment between the huge investments in KM technology and their required return is that it is ultimately not about refined expert and knowledge search technologies, save instructional knowledge; it’s about translating the universe of ideas into the adaptable folk taxonomy of the knowledge seeker. The gap between use and usefulness of KM will not only remain but will likely widen as technological answers by Microsoft and others pander to the notion that knowledge only needs to be searchable and accessible to be useful. Latching onto these initial technological answers will only bring disappointment to management and delay progress until a new sexier rendition builds enough momentum to woo the broken hearts of executives once again.

23 03/12

No time to talk

The Wall Street Journal announced that Wal-Mart would be moving many of its 1.3 million employees from predictable schedules to flex based shifts early this year. The world’s largest retailer will join the company of K-Mart, Target, and RadioShack who are already on their way to transforming their workforces into lean, variable costs by using systems from companies like Kronos, Workbrain, and Cybershift to predict the peeks and troughs of customer activities. A culture of flex staffing, requiring employees to take up odd shift durations and rotations at the big-box stores, will likely have a broader impact on the expectations of the American service worker.

Though this seems certain to improve productivity standards, there are costs that should be considered that could offset any gains, the least of which is impact on the informal knowledge sharing that occurs during the “unproductive” hours of a shift.   Consider what happened in the early 1990’s when executives at London’s water supplier sought to improve productivity by providing its inspectors with hand-held computers and eliminating the central dispatching station. It turned out that the use of the technology to eliminate the time spent by inspectors changing cloths, having a cup of morning coffee, and picking up their trucks at the dispatch center eliminated much more. The depot played a key role in facilitating the informal exchange of vital tricks of the trade among inspectors. The need for this knowledge exchange was so great that Dave Snowden, then a knowledge-management consultant for IBM, found that the inspectors were meeting on their own time at a local restaurant to jot down tips.

While the idea of employees sitting around a table to exchange ideas is quaint, the sure disruption from the mix and churning of staff in and out the door with each ebb-and-flow of customer demand is certain to breakdown the informal conversations that naturally occur during traditional shift hours. Furthermore, there will likely be erosion in relationships and familiarity among employees who could expect to be among new faces at any given time during working hours. According to Thomas Davenport, a professor of information management at Babson College, “employees rarely learn from colleagues they don’t already know”. Working among strangers would be detrimental.

The extent to which Wal-Mart is able to transform labor into a truly variable cost will be interesting to watch, especially as productivity factors such as the employees’ knowledgebase, low turnover, and employee loyalty stand to diminish. We could see the net effect of such productivity systems having a null or even negative impact on the bottom-line.

23 03/12


The blogosphere today was ablaze with streaming news about the iPhone, Apple’s long awaited convergence of its revolutionary iPod and mobile phone technology. Today’s unveiling at the annual Macworld conference did not disappoint. From a technological standpoint it is a new revolution and will inflict a heavy blow to the likes of Microsoft, which just launched its own “iPod”, the Zune, as well as Yahoo, Rhapsody, and Napster who are looking to gain ground on iTunes’ market share by offering exclusive music downloads to mobile phones, which, prior to today, represented an alternative to the iPod.

The iPhone, however, represents a much larger revolution. Playing music and acting as a video player, chat room, photo lab, email client, web browser, and phone, it represents a technological convergence that will empower knowledge sharing in a unique and powerful way. You may be thinking that this is nothing new with the popular use of Treos, Sidekicks, and BlackBerrys, but the iPhone stands alone. When combined, its simple interface, large screen resolution, and powerful OS orchestrate seemingly separate applications into one seamless, mobile, intuitive, sensory tool for expression.

Because of the search technologies of today, the libraries of yesterday are at our fingertips. Now with the unique web-browning feature offered in the iPhone, which allows full sized web pages to be viewed and navigated with ease on its a small mobile interface, the world’s information has the potential to be at one’s figure tips at anytime from anywhere—flattening our world and our connection with it in a dramatic way.

The ability to find information is only one part of the knowledge-sphere. Information does not become knowledge until it is adopted or adapted. Adoption is rarely successful outside of the instructional realm, which includes technical and or encyclopedic information. Adaption is where the true economies of knowledge bring the returns in our ability to evolve and innovate. Yet, adapting posses much greater hurdles than adopting. Adapting requires the translation of information and ideas into a language that is practically unique to each individual. Adaption requires the recognition of patterns that create an adaptable story that fits one’s own paradigm; success requires the ability to communicate in multiple mediums to paint a picture that can be cast under different lights as circumstances warrant.

A picture is worth a thousand words. Cave drawings in ancient times were used to tell stories, today they continue to tell their stories and are relied upon to unveil the intricacies of the human dialogue from times long past. iPhone’s ability to bring picture text, sound , and even video to the dialogue’s of today go a long way to unveiling the stories behind the fury of information that is constantly inundating our ears and eyes.

Apple’s latest offering represents the birth of a new design mindset. The iPhone does not simply extend our accessibility and exposure to busy information, but rather it is a tool that extends our accessibility and exposure to stories. This makes the iPhone a launching pad to having not only information at one’s figure tips but knowledge as well.

23 03/12

Clicks of knowledge

Adam Sandler’s most recent adventure on the big screen, Click, was slain by critic after critic, making one wonder why anyone would invest a night on such entertainment.  Last week the people overturned the critics’ voice, awarding Click the People’s Choice Award for best film comedy. Click is an example of a product that seems to defy convention with mass appeal.  Tapping into the social preferences that can oppose the critical eye is what Proctor & Gamble’s People’s Choice Awards, launched a decade ago by the giant consumer goods producer, is all about.  In the spirit of the awards show, P&G has launched two social-networking efforts in an attempt to better understand what best resonates with its consumer audience.

The first networking effort is an extension of the annual awards show.  The People’s Choice Community site (launched last Wednesday, a day after the show) is celebrity and fan club driven.  The second networking effort, Capessa, was launched last month.  Designed for Yahoo’s health section, Capessa is a forum for women to discuss subjects such as parenting, pregnancy, and weight loss.  According to a recent WSJ article, the marketing on Capessa will be subtle. P&G will not run ads for its products, but will occasionally offer some links to P&G experts offering tips about specific issues such as parenting or offer a P&G newsletter on a particular subject. Indeed, the only mention of P&G on the Capessa site is a line at the bottom of Web pages that identifies Capessa as being produced by P&G Productions.

These two efforts, particularly Capessa, are not about marketing to the communities, but rather learning from them.  According to the article, both new sites will act as continuing focus-group-type environments where P&G–by monitoring consumer discussions on the sites–can learn more about its target audience’s likes and dislikes and what consumers in different stages of life care about; “It’s going to be one giant living dynamic learning experience about consumers,” according to Jim Stengel, P&G’s global marketing officer.

Not only does P&G stand to gain knowledge from the discussions and patterns of its users, but the communities themselves will likely benefit from the resources P&G brings.  Both sites will be produced by P&G Productions, a unit that is best known for producing popular soap operas such as “As the World Turns” and “Guiding Light”, and will be used to capture on film the stories of select community members.  Utilizing these resources, the stories will likely be choreographed in a way that better communicates the experiences and knowledge they hold.

The resources and informative approach taken by the worlds largest marketer will allow the company to better understand the consumer preferences that can often run contrary to the beliefs and conventions of product developers’ critical eyes.  P&G’s efforts stand a greater success of succeeding where others have failed (including Wal-Mart’s failed teen targeted social-networking effort, “The Hub”); the choreography and purpose they bring to the chaos that typically surrounds online communities ensures that ideas and knowledge are exchanged with the appropriate lighting.

The success of P&G in fostering online exchanges of knowledge will likely pave the way for other corporate sponsored, social-networking vehicles.  Their success will rest squarely on their ability to not only interpret what’s hot and what’s not, but to provide the structure and resources to the knowledge they contain in order to set them apart from the garbage bins of MySpace, Facebook,YouTube…

23 03/12

Neuroplasticity nirvana

English, Spanish, French, Mandarin, Russian–you may be fortunate enough to be fluent in more than one of these languages, however, your ability to learn all of them would certainly seem a daunting task.  Yet studies have shown that babies born into multilingual families, some bombarded with more than two languages including those of parents, grandparents and others, are able to easily shape and compartmentalize their minds to distinguish one language from the next–setting a natural course to understanding and speaking many languages with ease.

A decade ago, soon after the results from such linguistic studies were published, parents, with the urge to capitalize on this seeming unique putty like quality of an infant’s brain, ran out to purchase language tapes in the hopes of producing born savants.  New research, by Patricia Kuhl, a professor at the University of Washington and a leading expert on early language development, demonstrates why this technique failed the enthusiastic parents.  Kuhl’s research strongly suggests that emotional connections are required to shape the pliable minds of infants.

Her study put nine month olds in a room with Mandarin speaking adults who showed them toys while talking to them.  After 12 sessions, she found that the babies were able to detect subtle Manderine phonetic sounds that could not be heard by a separate group of babies who were exposed only to English.  Kuhl found a more revealing contrast when comparing the initial group with a group of infants exposed to Mandarin solely through the use of sound recordings and videos, without emotional interactions.  This group, like those exposed to only English, failed to pickup the subtle phonetic sounds of the language. It has become clear based on this and other research that emotional interaction is required in early intellectual development; so, while an infant may seem stimulated watching Blue’s Clues, it may not have much more of an effect on their cognitive growth than running a vacuum for thirty minutes.

In a broader sense, these studies suggest that our ability to adapt our brain to the environment around us is not contingent upon the environment itself, but rather, our emotional connection to it.  This is particularly important given that it is now widely accepted that our ability to shape our brain is not limited to our first few years of devolvement but in fact continues throughout our life.  The challenge as we get older is finding new emotional learning experiences, which often become fewer and farther between as our world begins to shrink under the weight of past experiences and cynicism–so don’t bother with the crossword puzzles and Sudoku, they’re not going to help.

Our quest to keep our brains responsive to the changing world around us may not be bound to the world and our experience in it.  A piece in Friday’s Wall Street Journal explored the mind’s ability to actively shape one’s brain. The ability to adapt to the changing world and ideas around us, without having to wait for an external emotional source, looks to be a real possibility given the latest studies surrounding the emerging science of neuroplasticity.  The article explores a question the Dalai Lama asked while observing a brain surgery at an American medical school: Can the mind shape brain matter? That is, in addition to the brain’s giving rise to the thoughts, hopes, and beliefs that incarnate the human mind, the mind may create physical, manipulative changes to the very matter that created it.  Mind over matter…what a thought! The question, however, is not that outrageous when you consider that the Buddhist tradition honors the transcendental happiness which Siddhartha Gautama achieved in becoming Buddha; he reshaped his state of being and unlocked the true nature of reality through a deep state of meditation.

When the Dalai Lama posed this question ten years ago, it was met with a quick and firm rejection: only physical states can give rise to mental states, and a causation from the mental to the physical is impossible.  Indeed, it has been found that the brain can physically alter itself based on input from the outside world; for example intensely practiced movements can alter the motor cortex of stroke patients, allowing them to move once paralyzed appendages.  Today, however, it seems that the Dalai Lama was on to something.

In an attempt to see how meditation alters activities in the brain, the Dalai Lama allowed neuroscientists to observe whether the internal act of meditation leaves an enduring impact on the brain in Buddhist monks.  The study conducted by the University of Wisconsin included eight adept monks (those with over 10,000 hours of meditation experience) and ten volunteers who had a crash course in meditation.  The results were astonishing.  Not only did the monks have a surge in gamma rays that far surpassed the novas volunteers, but the surge did not subside, even between meditation sessions.  Moreover, the more meditation training a monk had, the stronger and more enduring the gamma signal.  These gamma rays are believed to be responsible for weaving together far flung, neural activates used to differentiate features of objects such as look, feel, and sound.  The study indicated that mental act of meditation, void of environmental stimulation, can leave a lasting alteration on the brains structure and abilities.

The potential for our state of consciousness to physically alter our brain’s composition is great news for all those fearing that it is too late to learn new tricks.  It appears as though our ability to adapt is not restricted to our external environment and the shrinking number of novice emotional learning experiences we encounter as we age, but it is unbound by the limitless potential of ourselves.

As we design approaches for sharing and adapting knowledge, it is important that we do not underestimate our seemingly limitless potential to mold our minds to new ways of thinking, not only in a metaphorical sense but a real physical sense as well.  It is also important to recognize the importance of emotional connections, whether generated from our interactions with others or internally generated through experiences like meditation.

23 03/12

Cheating knowledge

I get to witness OZ behind the curtain each evening from a student’s perspective as my wife, Kelly, works her magic correcting an endless cascade of term papers—all needing attention during this time of year before the semester’s end. This year I was enlisted to be OZ’s assistant, inheriting the task of scouring the Internet to find plagiaristic accomplishments. While it’s true that a thesaurus can easily imbue a high school student with scholarly tone, it cannot disguise the pubescent voice beneath it; so plagiarism is usually a fairly glaring offense. Kelly’s school, unfortunately, does not enforce great disciplinary rigor, so plagiarism has become prevalent, especially with the cut and paste ease of the Internet.

Checking for plagiarism has been a disturbing exercise for me. It’s surprisingly easy to find, if given enough time, yet somehow still eludes the judgment of proof. I have observed that the amateurs typically attempt to escape notice by stealthily working their way well past the 7th “o” in Goooooooooogle often using book reviews on Amazon or pulling thoughts from obscure sites that have a cozy feel to them, some with lovely repetitions of cat clipart nestled around the page borders. The professional pirates, however, find their booty by trolling the red-light district of intellect, visiting online shops, peddling college essays for as low as $5. These sites flash just enough of their wares to appear in search results, yet evade proof of a disingenuous student submission by requiring the purchase of the paper that appears to be that in hand—a trump card that any paying student can obtain. There are thousands of such sites and most provide justifications for plagiarism with contorted rationales that would make Freud blush.

Kelly’s Expository Writing class had the most plagiaristic feats. A class that’s purpose is to expose students’ ideas–reshaping the contextual ideas found in authors’ literary works to the uniquely individual perspective of each student—somehow reverted into a class concerned with stealing the ideas of others. Laziness may be the easiest diagnosis of the problem, but the culture of measurable outcomes that now seems deeply rooted in our leaning environments also shares some of the blame. Measurable standards are beneficial in setting benchmarks to ensure a level of proficiency, however, they have quickly overshadowed the ultimate goal of fostering independent, thoughtful, progressive, and knowing minds. As a result, the measure of an education has been further defined by raw outcomes and has in many ways transformed our learning institutions into production shops focused on efficiencies and end products rather than the rich process of self-realization.

Business is rightly rooted in value and efficiencies. But, like education, stands to suffer if measures and outcomes are permitted to overshadow innovation. The art of business is similar to expository writing; the success in reshaping ideas from multiple contexts to meet each unique, competitive environment is essential. Kelly’s bout with plagiarism illustrates the power and challenges of the hive mind. The Internet and other knowledge repositories impose on our ability to differentiate ourselves, our ideas, and our business strategies. Although the effortless accessibility of information has significantly shortened the knowledge cycle, it has also eased the ability to adopt ideas—stunting adaptive solutions and emboldening adoptive mindsets.

An HBR article by Al Jacobson, of Hartwell Associates, illustrates the impact search technologies have had on shortening the knowledge cycle and warns of the low returns organizations can expect if “knowledge management” continues to be seen as synonymous with “knowledge searching”. The article cites a study by Babson College’s Working Knowledge Center that asked more than 200 knowledge workers in four different organizations, each from a different industry, to keep a daily log over a ten-day period. The logs recorded over 3,000 knowledge interactions, which were organized into four categories:
• time spent searching for knowledge
• scheduling meetings with experts
• eliciting expertise
• interpreting knowledge

The distribution of time between the four categories was startling and ran against the tide of resources being sunk into knowledge repositories. The study found that employees were spending less than 17% of their time searching and scheduling (a surprisingly low percent) and more than 80% eliciting, interpreting, and applying (adapting the knowledge gained). Expertise location technologies along with global search portals like Google have matured and now effectively aggregate once dispersed information. The networks of information have been so effective that further investments in improving their ability will impact an increasingly insignificant piece of the knowledge-value continuum. The emphasis now needs to shift towards the knowledge adaptation side of the equation for the momentum in knowledge efficiency to continue. Ignoring this and failing to address the tendencies to cut short, or worse, avoid the required adapting of knowledge gained, threaten to undercut the efficiencies obtained thus far.

Kelly’s Expository Writing class dramatically cut short the knowledge cycle. Many of the students clearly benefited from knowledge efficiencies but rather than continuing the task at hand—adapting their thoughts to the literary context of the class—they adopted the knowledge they found as their own. The focus on business outcomes and measures particularly in the deployment of PI strategies such as Lean, which utilize techniques like the Kaizen method, often measure the number of ideas employees generate as a component of success. While the intent to reduce waste through small ideas from frontline employees is a noble concept, the emphasis on idea quotas as outcomes fosters a knowledge climate of “search and record”. This climate encourages the use of the search efficiencies, but does not address the needed task of shaping the found ideas to the unique competitive needs of an organization. The emphasis on idea generation for idea generation sake threatens to congest decision makers with hollow, plagiaristic ideas harvested from a fully deployed but misdirected workforce.

Misaligned expectations of the available information resources can backfire if not addressed. Knowledge management systems and global networks will never have all the answers let alone “the answer”, yet the ease of information often coddles those wishing to avoid the hard work of making the creative leaps to the adaptive answers required in success. These individuals exhaust their time and knowledge resources searching for the “silver bullet”, which may be the next mouse click away. Many confuse the Internet and knowledge management systems as answer banks rather than catalysts for progressive, self-generated solutions. Knowledge resources are coy mistresses for these “answer seekers” rather than the Muses they are intended to be.

Plagiarism is a temptation in any environment that gauges success by the number, completeness, and acceptability of ideas and information. Focus on such outcomes will define an organization’s most valuable asset (its employees) as an adoptable rather than adaptable resource. This cheats the organization from innovations gained through the learning process. In a competitive environment, the present is the past. Those seeking to adopt today’s knowledgebase will fail in the world of tomorrow and find the same grade on their strategic scorecards as Kelly’s plagiaristic students found on their report cards.

23 03/12

The blind leading the deaf

Platitudes like “Be the most competitive enterprise”, “Provide customers with the best information to make the buying decisions!”, and “Unlock shareholder value!” are numbing to the ears. Yet sweeping strategy statements like these are often swiftly attached to an organization’s cultural facade–deploying “graffiti artists” to tag everything from interoffice memos to employee’s marquee screensavers–often with the expectation that if touted loud enough, an organization will realize the embodiment of the slogans.

These bumper sticker goals leave employees directionless or even cynical. Why then are executives swept off their feet, glowing with more passion than on their wedding night, when proclaiming these found keys to success? It’s primarily because the messenger has been immersed in the logic and conversations underlining the message for so long that when they speak abstractly, they are simply summarizing the wealth of knowledge in their minds. Frontline employees, however, are not privy to the underlining meaning and consequently hear only slick, opaque phrases that slide in one ear and out the other.

Ultimately, executives touting such messages are blinded, cursed by their knowledge, while the audience is deaf to the passion and depth of the message given. As a result, statements meant to ignite a strategic path all too often fall on deaf ears, only to become meaningless slogans.

A recent Harvard Business Review article (December 2006) addresses the curse of knowledge and the difficulties it poses in uniting employees behind an organization’s goals. The article points to a study conducted by Elizabeth Newton, a graduate student at Stanford University. The study was comprised of a game that assigned people one of two roles: “tapper” or “listener”. The goal was to see if the listener could determine what well-known song the tapper was rhythmically playing on a table. By the end of the experiment, 120 songs were tapped out, but surprisingly only three (2.5%) were guessed correctly.

I tried this experiment with my colleague, John Whittlesey, who, I should note, is a talented opera singer with very well tuned ear. I first tried the “Happy Birthday” song thinking for sure John would pick it up right away. I quickly arrived at the end of my composition and found a confused face staring back at me…hmmm maybe he wasn’t familiar with that one. So I tried another familiar tune and started to jam to the “Flintstones” theme song. Well, it didn’t take more than a glance to see this wasn’t going to work either. It didn’t take any encouragement on my part to find that the tables had turned. John quickly started to orchestrate, with gusto, a wonderful melody of noise. After its completion, I came to find out that it was the “Flintstones” theme song. Why on earth didn’t I recognize a song my ears should have been turned to, having just attempted it myself?

The article uses the study to illustrate what it calls the curse of knowledge; that is, it is impossible for the knowledge base (the tapper) to avoid understanding all of the underlining meaning supporting the knowledge shared (to avoid hearing the tune he’s performing). While the learner (the listener), struggles to decipher the knowledge that seems to be presented with such ease (witnesses a bizarre ritual set to a cacophony of noise that seems to effortlessly entertain the musician) and risks not internalizing the message, but instead relegating it in their mind as a noble-sounding plaque to hang in the organizations lobby.

Though the study means to demonstrate the deafening effect of information imbalance, I don’t believe it completely explains why I was not able to recognize John’s rendition of the “Flintstones” theme song. There was little information imbalance other than perhaps the difference in musical ability; I was familiar with the song, still in my mind from tapping it out moments prior, and familiar with the rules of the game, yet I missed the distinguishing notes all together. There was clearly a disconnect between my external and internal ear. Had I been given the task to orchestrate the “Flintstones” theme song, I would have no problem forming the song accurately in my mind. But if it were necessary to be taken to task to experience first hand, any knowledge shared (which success in the experiment seems to require), then we would still be running around in the buck, ducking from the thunder gods in the sky. So how have we been able skirt the information imbalances that exist between any two people and share knowledge over the millennium? It has been through the use of stories, analogies, anecdotes, and visual cues that have provided the concrete patterns on which to adapt one reality to the next.

In his book “Winning“, Jack Welch states that mission statements should be so real that “they smack you in the face with their concreteness” (Welch 14). He reminds the reader that despite Ben & Jerry’s crunchy granola, hippy, save the world persona, it still has “profitable growth” and “increasing value for stakeholders” as prominent elements in its mission statement. I agree with Jack that too often the reality escapes mission statements, however, no matter how “real” a strategy statement is, it still runs a great risk of becoming trite in the minds of the organization’s employees, who are permitted to escape the knowledge underlining each thought-provoked word.

The HBR article (cited above) used Trader Joes, a specialty food chain, as an example of a company that employs a visual description to bring concreteness to an abstract mission statement.  Trader Joes describes its target customer as an “unemployed, college professor who drives a very, very used Volvo”. It’s a simple and exaggerated image, but its use provides the definition needed to bring its employees in tune with its goals. If you’ve been in a Trader Joes, you’ve witnessed customer service and product selection that would seem to fit the preferences of such a fictional customer.

Knowledge, whether conveyed in concise but ultimately complex strategy statements or solicited through an investigation of best practices, requires tangible and concrete stories, analogies, or visuals to ensure an effective translation and adoption. Current knowledge management resources are being invested in efforts focused almost exclusively on capturing knowledge bits from a network of internal or external experts. These efforts are creating repositories of “tappers” blindly dancing to their cacophonies and are cursed to fail.

23 03/12

Bookmarking inspirations

Oprah, with a simple reference, can propel a book onto the NY Times bestseller list. Paris Hilton, with no traditional talent to speak of, can install into the common dialect of generation the phrase “that’s hot”. There is no doubt that these and others who are plugged into traditional media outlets strongly influence what’s hot and what’s not.

There are, however, many hot trends that strongly and stealthfully establish themselves without the aid of traditional media sources. Malcolm Gladwell begins his book, The Tipping Point, with a recount of the resurgence of Hush Puppies, a popular shoe brand of the late ‘50s. In the mid ‘90s, a small group of no-name, club-going kids in Soho began sporting Hush Puppies and somehowstarted a “social epidemic” with the classic $30 shoe quickly making frequent appearances in hip Manhattan bars and fashion runways. Within a year, the once forgotten shoe was sold in department stores nationwide, becoming a staple in wardrobes across the country once again. Throughout his book, Gladwell explores a number of contagious trends that seem to stem from small, unusually informed, and faceless groups of people who are influential through interpersonal means. Gladwell contends that finding and gaining insights from these “influentials” can quickly drive and maintain a brand’s “cool factor”. Airwalk, for example, was extremely successful at tapping influentials in the skateboard community to transform what was counterculturally “rad” to what was mainstreamly cool.

The ability for underground ideas or trends to take hold may not be the product of influentials themselves, as Gladwell asserts, but, rather, the interconnectivity of those looking to be influenced. Recently Duncan Watts, a professor of sociology at Columbia University, conducted experiments in social contagion by performing thousands of computer simulations of fictitious populations. In the simulations he and his colleague, Peter Dodds, manipulated variables related to one’s ability to influence others and one’s tendency to be influenced. The simulations showed that influential characteristics had far less impact than had been believed and, in fact, didn’t seem to be required at all. The widespread transmission of influence through networks was not reliant on a few influential people but, rather, a critical mass of influenced people. In contrast to the belief that there is a small, uniquely influential group of people responsible for creating pandemic trends, Watts and Dodds’s research suggests that influence is not driven by the influentials, but by the influenced–turning the focus away from recruiting those with influential traits to helping ordinary people reach and influence others just like them.

This outreach is happening right now on social bookmarking sites like Digg, Del.icio.us, and Newsvine. These in addition to others allow anyone to troll the online universe for ideas, news, and commentary and attach tags and catchy descriptions to their online finds. As bookmarked pages receive votes of approval by fellow community members, their influence rises to the front page of the social networks. It is these front pages that propagate a global cascade as viral word of mouth spreads beyond the bookmarking sites to mainstream outlets. The next time you are made aware of a “buzzy” website, an unusual take on the news, or a funny video clip, chances are you owe your awareness to communities of diversely ordinary people interested in influencing and, more importantly, being influenced.

A recent Wall Street Journal article revealed just how powerfully influential these communities have become. The WSJ found that the substantial number of bookmarking submissions originate from a low percent of users. For example, of Digg’s 900,000 registered users, 30 were responsible for nearly one-third of the posts that made it to the front page of the site. This small group of users has become influentially popular by consistently finding interesting and relevant content. Consequently, their bookmarks are monitored by a large number of community members and are more likely to receive the numerous votes of approval needed to catapult their finds to the front page. As Gladwell proposes in his book, the influentials are faceless and small in number, but as Watts and Dodds suggest, the network effects of those influenced drives the influence, rather than the personal characteristics of those influencing. In fact, this small group of influentials is surprisingly ordinary. Some of the most influential people cited in the WSJ article include:

• Pamela Drew – a mother of three in New York
• Henry Wang – a high-school senior and varsity tennis player outside Chicago
• Cliff Worthington – a 45-year-old English Teacher in Osaka Japan
• Jeff Hoard – a 25-year-old worker in a shipping warehouse in British Columbia
• Adam Fuhrer – a 12-year-old hockey fan in Toronto
• Elise Bauer – A marketing consultant in California

Companies have long struggled to harness the knowledge found within their walls. Their pursuit is to ultimately gain a competitive advantage by bringing awareness to expertise and influential ideas. Excluding technical knowledge banks, like Xerox’s Eureka system, which has had great success, efforts in this area have lead to clumsy, often unpopulated repositories with disappointing returns.With each passing day, our world becomes flatter as the universe of knowledge and ideas becomes evermore entwined.

If the struggle is to stay on the wave of innovation through knowledge management, why do we so often limit our efforts to harvesting an internal landscape? The vast majority of our workforce is being defined as knowledge workers as the information age continues to mature. Productive time is increasingly used to troll for new ideas, and surely workers are looking beyond internally limiting and disappointing knowledge management systems for inspiration.

It’s time to open the shutters and leverage each worker’s knowledge collection effort by utilizing social bookmark technologies–allowing employees to bookmark both internet and intranetinspirations. We should limit our tireless efforts of formally wrestling knowledge from the minds of employees and, rather, provide them tools to tag and catalogue the world of found anecdotes and ideas, allowing their influences to percolate to the top of an organization’s strategic list–separating what’s hot from what’s not.

23 03/12

The Return on Knowledge

In an innovation marketplace it can be wasteful and even harmful to follow common advice and well-established “best practices”. A June Harvard Business Review article entitled “The Innovation Value Chain” speaks to the pivotal need for organizations to look outside their walls, industry, and traditional knowledge reserves in order to out-perform competition. A section of the article is dedicated to addressing two different types of external networks – solution and discovery networks. This section concludes by stating that “whether managers are developing solution or discovery networks, the key metric for them to keep in mind is diversity, not number, of contacts”. Perhaps success in building innovation and knowledge management resources should not be gauged by the number, but by the diversity of ideas – not by the amount, but the range of knowledge and information.

But what does diversity mean in this context? It’s not necessarily cultural diversity, which is often initially thought of when hearing this term. Rather, in this context, diversity is the multitude of differing inputs, viewpoints and perspectives permitted to influence inventive outcomes. Like any subjective variable, diversity, though vital, is extremely difficult to measure and therefore often left out of the equation.

A potential measure for diversity may be “dynamism”, a word used by Edmund Phelps, the Nobel Prize winning economist, to mean “the fertility of an economy in coming up with innovative ideas that are technologically feasible and profitable”. Over the past year, Phelps has written a number of commentaries in The Wall Street Journal that explore dynamism within the dichotomy of two economic systems – the economic system found in the West and the economic system found in Western Continental Europe.

Though both are systems of ownership, the economic system in the West (including US, Canada, and the UK) is marked by great openness to the implementation of novel ideas from all directions. The economic system in Western Continental Europe (including Germany, France, and Italy), on the other hand, is marked by large social institutions, including employer confederations, unions, and monopolistic banks. These and other institutions are aimed at protecting the interests of local stakeholders, sheltering the procurement of ideas from external forces, by essentially wrapping markets in a conformist cocoon of high entry barriers.

Phelps has found a striking difference between the amounts of dynamism present in the two economic systems. According to Phelps, the free enterprise system of the West – bearing the diversity of experience among managers, consumers, and financers on the selection of which innovations to undertake – facilitates and stimulates dynamism. In contrast, the Continental system – supported by measures to protect ideas from differing viewpoints and fluid market conditions – impedes and discourages dynamism.

Phelps believes that it is the broader education and wider equality of opportunity that encourage the emergence of progressive implementations. The openness to implement new ideas from diverse sources is what ensures the equal opportunity Phelps refers to. Diversity, in this sense, is the foundation of innovation and implementation.

Because the Continental system aims to efficiently focus and insulate a nation’s inventive pursuits, it is often associated with economies with comparatively small populations and/or resources. One could argue that a lack of dynamism, in a general sense, has more to do with the population size (the number of minds) and amount of available resources than it does with diversity, which often accompanies larger populations. Therefore, size might be the appropriate metric for innovation.

In the article “Innovation and Growth: Size Matters“, Geoffrey West refers to a study he and his colleagues conducted that created an analogue between the laws governing organisms and the laws governing innovation. Like biological organisms, social organisms consume resources and rely on networks for the flow of information and materials.

In this study West and his team gathered data from a range of urban centers from around the world. The team measured characteristics including energy consumption, economic activity, infrastructure, intellectual innovation, and employment of “supercreative” people. Like the economy-of-scale relationships found in biological systems, these urban systems showed very similar scaling – a doubling in population requires less than a doubling in resources. To the team’s surprise, however, the study revealed that characteristics with no natural analogue – intellectual innovation and employment of creative people – had an exceptionally linear scaling – a doubling of population has a more than doubling effect on the amount of creative and economic output.

Yet, while this study seems to support population size as the determinant of innovation, one cannot overlook the fact that with the flattening of our world, the importance of a location’s scale has nearly disappeared. Small economies that once relied on the Continental economic system have found it no longer necessary to fly in the slipstream of the few large economies that do the majority of the innovating. In today’s knowledge-based economy, ideas no longer need to percolate up through companies’ R&D labs but rather can be offered from a researcher at home or a lone entrepreneur in Timbuktu. This is exemplified in solution-oriented networks like innocentive.com. Borders and distance no longer restrict the number of participating minds; small geographic populations are no longer hamstrung. We are all playing in the same sandbox.

Denmark, a small country with relatively few resources, is clearly unable to win the R&D game. Despite its size and resources, however, Denmark’s government has made innovation a top national priority. According to professor Eric von Hippel’s article “An Emerging Hotbed of User-Centered Innovation“, Denmark’s dedication is focused specifically on “user-centered” innovation. Its government supported “Danish User-Centered Innovation Lab”, which is hosted by the Copenhagen Business School and modeled after an approach pioneered at the Massachusetts Institute of Technology (MIT), exemplifies this commitment. The lab is charged with harnessing new innovation methods from educators and consumers that can be tested at partner companies such as Bang & Olufsen and Lego among others.

In contrast to producer-centered innovation, user-centered innovation places consumers, those who have many points of view and familiarities, at the helm of idea development. Rather than pushing innovation through traditional, homogeneous (internal) producer pathways, this new paradigm pulls innovation from the more diverse (external) pool of consumers. The shift from producer to user-centered innovation certainly increases the size of the Danish sandbox. More importantly, this paradigm leverages the diversity found among its customers, allowing the country to compete in the global economy. Denmark has set its sights on markets in the US and the EU, markets it traditionally would not be able to out-innovate.

As our world flattens locational attributes like size and distance become less and less of a competitive advantage. This is not to say, however, that proximity is not important. In fact, physical location may be more important than ever.

The adage that organizations should “think globally and act locally”, that is, adapting a global strategy to a particular location, has been turned on its head. As Yoko Ishikura wrote in his article “Act Globally, Think Locally“, companies must harvest knowledge from diverse locations and use it to shape global strategies. Diversity is the key here. If one can gain diversity through flat connections with people from all over the world, is physical location critical?

Because access to decentralized information only requires a computer and internet access, organizations need to incorporate good ideas quicker than ever as access advantages have been greatly marginalized. Incorporating ideas faster than the competition requires an efficiency advantage in the transfer of knowledge and ideas.

Unlike explicit knowledge, which can be neatly packaged and transmitted over long distances with high fidelity, tacit knowledge is much harder to codify, and therefore much more valuable. Tacit knowledge transfer often requires multiple face-to-face interactions; this type of knowledge is transmitted most effectively through anecdotes. Proximity allows for the efficient transfer of tacit knowledge, thus becoming an important advantage.

The proximity advantage, however, does not correlate with the concentration of the number of people in a location, but rather the concentration of diverse and informal social networks. When we think of the largest urban centers, Silicon Valley and Cambridge Massachusetts do not immediately come to mind; however, if we think of the most fertile seedbeds for innovation, these locations would be at the top of our list. The tangential and decentralized interaction in both of these locations is what encourages competition and cooperation – the result: an extraordinarily creative environment.

Google is a company that must evolve as fast as the Web, and thus far the company has been successful in doing so. Much of Google’s innovation success is attributed to its culture. Google, like the climate outside its door, is known to be radically decentralized; the company is comprised of small, self-managing teams that have been given the freedom to take a ”just try it” attitude. Its freewheeling culture creates big interest in little ideas. Here many ideas are given consideration — this is diversity.

The magic of Google is the informality among its teams. Decentralization should not be confused with autonomy. The free flow of information and ideas between decentralized activities is necessary for success. This again points to the critical role diversity plays. Free connections and corporate campus proximity facilitates Google’s use of its own diversity — all groups are allowed to impact inventive pursuits.

In contrast, Harvard University has a long tradition fostering autonomous departments that work in isolation. Yet, the university has recognized the importance of breaking down its autonomous culture to stay competitive. Earlier this year Harvard announced that it would devote $50 million to encourage a more collaborative approach to science research. The goal of the effort is to leverage the proximity of its own diversity to remain competitive within its innovation marketplace. The funds will be directed towards cross-departmental research and lab equipment and space, which is intended to not only break down the physical but also the mental walls that separate the university’s human capital. Harvard has already taken steps to create a new department focused on stem cell biology. The “Department of Developmental and Reproductive Biology”, will, for the first time, bring together researchers from the medical school and the faculty of arts and sciences under one university-wide department. Clearly, Harvard views diversity found among its departments as a competitive attribute worth leveraging to stay on the cutting edge.

As senior leaders or department managers, how often do we fail to utilize the diversity within our own organization? How often do we compartmentalize tasks, know-how, and ideas? How often to we shelter ourselves from our inherent diversity with high entry barriers?

If we acknowledge that we are, regardless of our industry, competing on an innovation landscape, we must then seek out diversity: diversity from around the world, from our backyard, and from within. Our flat world no longer affords us the time to rely on finding the “best practices” others have implemented or the patients for business theory to become mainstream before considering it actionable. We should not seek our twin when searching for improvement opportunities; we should seek out diverse inspirations for change and for a view of our future environment. Innovation success comes from looking beyond today and beyond our walls, looking farther a field than our competitors.

Likewise, our knowledge repositories and networks should not be measured on the basis of the number of contacts but by the connections found within them.

To Innovation, diversity is everything.