I was watching Gary Hamel’s video on innovation yesterday on Management Innovation Exchange. I must say that I was very impressed by the show. I wonder how Gary can so perfectly synchronize his words and the presentation on the screen behind him. I haven’t figured out whether technology is involved or just countless hours of rehearsal.
Anyway, that is not the point of my post. After viewing this video I was struck by a « blinding flash of the obvious » with respect to the business model of knowledge management.
We all know that, by and large, executives have been disappointed by the various past KM initiatives launched in their company. KM programs usually fall short behind expectations, and it is a strange paradox, considering that companies are increasingly concerned about creating, sharing and leveraging knowledge. In my company, although I have been proclaiming since years that I would support all initiatives aiming at retaining the knowledge of a retiring technical expert, the corporate crime of dumping the knowledge base of retiring people is still perpetrated on a large scale. I have been struggling with this nagging question since years now: why is it that managers keep on proclaiming the strategic value of cultivating knowledge, and yet keep on behaving like predators of existing knowledge? It’s like global warming: the vast majority of people on Earth believe climate control is a question of survival of mankind, and yet it is on nobody’s priority list.
We all know that we lack meaningful metrics that we can focus on. As long as managers’ incentives are focused on revenues and costs, intangible assets will remain outside the radar screen, by and large unmanaged at best, and predated at worst. What we did in the 80’s as managers was to hand out the corporate scorecard to the company’s shareholders, and they have told us what indicators we should focus on. They are all about productivity. If a CEO wants to be popular with financial analysts, it is fine for her to emphasize how seriously knowledge is managed in the company, but it is also good to pay lip service to the issue and refrain from spending money on this, because there is no compelling ROI. A selfish financial controller will always consider purchasing a washing machine much more compelling than sending her kids to a private school.
What I realized today is that it’s not so much about indicators than about who is holding the scorecard. Nothing serious can be done regarding climate change without handing the scorecard to our children. Similarly, nothing serious can be done in knowledge management if we don’t hand the scorecard to employees. Only the front line employees can tell us, the managers, if we are doing a good job with our KM program, because they are the ones who most need to harness the company’s knowledge to better serve customers and to innovate. Analogy: our children are the best source of information to tell us, their parents, if we have placed them in the right school. We have to trust their opinion, and hopefully there will be some evidence in the distant future that we have been right after all. Employees are indeed accountable to the management with respect to performance, because this is what they are paid for, but managers are accountable to employees with respect to knowledge, because that is what employees need to perform. The principle of « reverse accountability » presented in Gary Hamel’s presentation applies completely to knowledge management and collaboration.
Employee surveys have often be used in this respect. But I still haven’t found a company where employee surveys are actually used to evaluate managers. Also, customer surveys are likely to become obsolete. With a good collaborative intranet, it is actually quite easy for employees to cross-evaluate each other on an ongoing basis. That’s called reputation, and that is what E 2.0 is about in the first place.
Hence my conclusion: one day, personal careers in large organizations will be made on the basis of 360 degrees accountability, and then the knowledge management and innovation questions will be definitely solved. Indeed, a great deal of trust in employees will be needed to achieve this, but that is the leap of faith that 21st century managers will have to take if they want their company to survive. They must empower employees and stop considering them like emotional robots.
Knowledge sharing, and thus innovation is only possible in companies where managers actually respect – and I should say love – their employees.