The Strategy-Innovation-Knowledge Forum

Definition: Knowledge Work (or ‘Thinking’ Work)

Knowledge Work is a pattern of activity that can continue over time before producing an outcome. It is a stream of activity and/or interactions between individuals which generates (or supports the generation of) a high value outcome in the eyes of the organization.

Seven Characteristics of Knowledge Work

1 - Higher Value, Often Complex, Outcomes
There is a strategic nature to knowledge work. The intent behind knowledge work is fundamental to the organization’s mission and success, whether it is patient safety and satisfaction, guest satisfaction, or technology, market, product or service development.

2 - Future Focused – Building the Future State
Because the intent is strategic, the time horizon is often future-focused, and knowledge work serves to enhance the capability of the enterprise to survive and prosper over a number of years. Whether it is creating a patient who will be inclined to contribute financially to the hospital, or a guest who will remain loyal for a lifetime, or a product or service which can represent years of higher margins (and secure employment), knowledge work builds up an organization.

3 - Observable Activities and Interactions
Knowledge work it is composed of activities and interactions between individuals – and can be observed over time. Here are a few examples: responding well to a customer, mentoring a junior manager for a few minutes a month, washing hands prior to starting to work on a new patient, responding positively to an employee’s new idea, or resolving issues with a technology/ product development team. The difference between a typical nurse and an outstanding one normally doesn’t involve seeing three times the number of patients per shift, but rather the way the nurse treats each patient. Like a coach, who can see players’ level of effort, managers can see these interactions occurring and see knowledge work’s impact over time.

4 - Less Measurable - Lack of Transactions
Each of the above examples of knowledge work would be difficult to numerically measure throughout a work day without some additional recording effort. In fact, by adding superfluous recording tasks, management can extinguish or fatigue the target behavior (it’s what Peter Drucker was referring to above). This is the ‘soft’, culture side of business which is ignored as brokers buy and sell stock but absolutely contributes to business performance. This ultimately leads to a management choice – expend effort trying to measure these interactions or devote resources to encouraging these interactions.

5 - Less Decision Structure
The activities and interactions are usually not set out in great detail by management because of the spontaneous nature of the interchanges and/ or the expertise involved resides with the employees’ (in the case of experienced specialists). SMG research found unstructured activities and interactions to be responsible for the majority of future business revenue (e.g. leadership, development, customer service, innovation, etc.).

6 - More Personal Judgment
As there is less structure provided by the corporation when compared with other activities, knowledge work is dependent on the personal judgment of employees as they navigate daily activities and interactions. Again, this forces an elemental management choice: to trust employee decision-making (and all that entails) or to trust management and prescribe every possible interaction. The cultural and performance implication of this decision echoes for years within an organization.

7 - Sensitive to Work Environment (Culture, Leadership)
Since personal judgment is so important to knowledge work, it is extremely sensitive to the work environment. The prevailing culture involves what behaviors are encouraged or tolerated (there is little difference) and what behaviors are discouraged. Knowledge work involves people investing their creativity, passion, and intellect in daily interactions. If an organization lets individuals (really, leaders) treat these investments as trivial by allowing political manipulation, then the most promising innovators and service providers de-subscribe and purpose to do only what’s required. The result is a mediocre, hollowed-out workplace.

Implication: Knowledge Work Requires a New Approach
Not surprisingly, knowledge work doesn’t respond well to traditional management tools, which originated in manufacturing. While the productivity of earlier production functions could be evaluated by looking at quantity and quality, complex development roles can juggle 15 or more competing factors in an effort to produce a satisfactory outcome. Industry leaders are surprised that techniques from a less-complex and less-competitive time are still applied to sophisticated knowledge work environments. Doug Cooper, Canada Country Leader for Intel observed, "There is still an industrial-age, widgets per hour approach to managing knowledge workers that is prevalent in many organizations."

A new approach is needed – more about this in future articles.

(c) Streamlined Management Group Inc. 2007 - All rights reserved

Knowledge Work Productivity

Why is Knowledge Work Critical?
Businesses who could previously survive by merely being competent, now need a defendable distinctive – the ability to do (and continue to do) something other organizations can not easily replicate. Newspapers now increasingly carry notices of investors holding back further investment until they see evidence of a unique capability.
With future growth and financial survivability at stake, companies are reevaluating the basis of their distinctive, whether by innovation, strong service culture, or combination of factors. Their executives are finding, firstly, thinking employees are building future revenue potential, and secondly, management knows very little about how to drive or evaluate the activities of these knowledge workers.

Knowledge Work Productivity = Strip Away Everything
Peter F. Drucker commented, “Knowledge workers don't believe they are paid to work 9 to 5; they believe they're paid to be effective. Organizations that understand this -- and strip away everything that gets in their knowledge workers' way -- will be able to attract, hold, and motivate the best performers. That will be the single biggest factor for competitive advantage in the next 25 years.”*
Drucker points out the critical importance of knowledge work and that smart organizations shouldn’t weigh down ‘thinking’ roles with superfluous procedures and measures, but also states, conversely, that much within organizations is detrimental to the productivity of those building future value.

Knowledge Work Productivity = Actions not Speeches
Consider innovation initiatives within more established organizations. Senior leadership recognizes the need, communicates “innovation is now our strategy” to subordinates, and sets numeric, measurable targets. The executives think they’re done while deeper down in the organization, managers respond as negatively, dismissively and defensively to employee suggestions as they have for years.

Knowledge Work Productivity = People not Policies
Other organizations compete on service and would like to re-make their culture, looking to outstanding examples of customer service as models (e.g. Ritz-Carlton, Disney, Southwest airlines, WestJet airlines, or Ascension Health - depending on the industry). The service culture models allow and support employees as they make service-based decisions as situations arise, but organizations wishing to emulate these businesses often create problems for their employees. Management presents the ‘new’ service-empowerment model in speeches, but leave untouched policies which actively discourage employee risk-taking (and reflect the previous management philosophy). Brave employees want to believe, rush forward to use their judgment and creativity, and find themselves jarred back to reality as the old policies are again enforced. Sadly, they learn quickly.

Knowledge Work Productivity = Survival
Whether an employee is delivering breakthrough technology, revolutionary software, or exemplary service – it is ‘thinking’ work, or knowledge work. Fundamentally different from the work most organizations are designed to reinforce, it is the ultimate competitive advantage as Drucker claimed. Aligning and motivating those performing ‘thinking’ or knowledge work is absolutely essential to building a defendable market position and, ultimately, surviving as a business.

*Drucker, Peter F. "Managing Knowledge Means Managing Oneself" Leader to Leader. 16 (Spring 2000): 8-10.
http://leadertoleader.org/leaderbooks/L2L/spring2000/drucker.html.

Implementing Innovation: When Metrics Don't Equal Accountability

A senior executive from a technology company was frustrated. Prior to expressing his frustration he was describing the design engineers and how well they were working with the sales engineers. To win contracts in their exacting industry, the teams collaborated for 18-24 months to win design approval from a client. This approval was a signature on a document, a promise to produce the designed component for inclusion in a larger product scheduled for future production. The dollars involved were substantial and all participants were professional and passionate about their business.
The Frustration
The frustration he expressed concerned the CFO, who was asking for a way to make this lengthy, expensive, and critically important interaction accountable. Apparently unwilling to wait for up to 3 years for something to count (it took at least that amount of time for an approved design to be incorporated into the final product and for that product to begin production, start shipping and generate sales), he demanded daily and weekly numbers to ensure these teams of valuable employees were working and being effective.
The Real Frustration
The trouble was that even with sales-engineering teams working diligently and responding well to clients' design requests there was virtually nothing to record on a spreadsheet, except expenses, and those mounted quickly as projects progressed. The CFO wanted numbers to represent movement, to provide accountability to this extended design-build sequence.
To make him happy the teams created numbers. The trouble was that they had little relationship to the vitality or potential of the design projects. The teams were disappointed to realize that the CFO didn't understand their business - he only understood numbers. "He thinks we're a production floor," was the comment.
Interaction is Hard to Measure
He wanted to provide objective (from his perspective) proof to the senior management team that these projects were progressing. It didn't work. The numbers offered represented a distortion of the complex design environment. Rather than make the design area more productive, it became more resentful. Bringing ideas into reality always means those involved actively trade off competing priorities to produce an optimum solution from a number of perspectives. As a result, selecting a metric with a bearing on only one aspect of a complex, knowledge-based environment may not be realistic or helpful.
A New Tool is Needed
The CFO mentioned and those overseeing innovation efforts should understand development is comprised mostly of observable interactions between talented people and very few numerically measurable activities. We call this knowledge work, since the work appears as a stream of activity which eventually results in a benefit or outcome but doesn't produce spreadsheet-style transactions while work progresses.
We shouldn't be quick to judge the CFO - bringing accountability to a business is their responsibility. The tool was the problem. The CFO requires the ability to align and drive the knowledge work interactions between employees and groups of employees. We understand this requirement as it is our area of expertise.
In North America, we must move quickly to bring accountability to crucial innovation activities, but not with previous generation, manufacturing-style methods. Innovation is the art of describing the context required to produce outstanding outcomes and using new accountability tools to ensure this positive context continues.

Implementing Innovation: an Organization-Wide, Cultural Intervention

Early in the innovation journey, leaders discover that moving an organization toward innovation is a more comprehensive endeavor than the mainstream projects and programs may have handled easily during their career. Innovation requires a number of complimentary elements.
Structural Support
Rosabeth Moss Kanter overviews the typical innovation pyramid structure made up of many teams with differing levels of involvement and support. The base of the pyramid represents the many small teams, with part-time involvement, doing initial reviews and preliminary investigations on many new ideas. The top of the pyramid represents the one or two dedicated teams toiling for a year or more to commercialize the organization’s most promising ideas. Configuring these teams to effectively cooperate is a substantial achievement.
Idea Generation
Leaders look for ways to quickly fill their pyramids with ideas as a way to assure the future of the enterprise. Melanie Haiken highlighted one trend called ‘crowd-casting’, where sizeable organizations create mechanisms to engage large numbers of individuals to deliver promising new ideas to their innovation teams.
Cultural Impact
But here the fundamental difference between innovation and other programs begins to be seen. While looking outside their existing workforce for ideas carries the promise of fresh, “outside the box” insights to help lift an organization to new sustained growth, it can also communicate unintended information to the existing workforce.
Think about how you would feel if your organization decided to go outside the organization to generate new ideas for products and services – to either business schools, expertise communities, or to the public. How would you feel? You might say, "Does our management team think that we're incapable of delivering new ideas and new thoughts? Are they saying that we don't have what it takes to compete in the future? Then why am I required to do the work to implement someone else's idea? I thought people were our organization’s most important asset?" A few might be a little ticked off.
And let's take this thinking a little farther. Do you think an employee who felt this way would do whatever is necessary to bring into reality an idea whose genesis was outside the organization? I don't think so. I think they would do what is required, what is acceptable.
Cultural Interaction
Creating an innovation engine within an existing organization is such a dramatic shift from typical programs and projects because it involves a cultural element; it involves how employees interact around ideas, concepts and each other.
When an employee generates a new idea and tells her boss about the new idea, the boss's reaction is crucial to the future potential of that idea for the organization. If the boss acts dismissively toward the employee, if they discount the potential of the idea, or if they disrespect the person offering the idea, then it will extremely challenging to generate the positive climate necessary to nurture new ideas.
Petri-Style Nourishment
Organizations need to see themselves as Petri dishes, supportive entities where new ideas should easily grow into something visible. The growth medium equivalent within our organizations is the observable interaction between individuals and between departments – the positive culture Kanter sees as essential. We need to change the pH level of our organizations’ cultures. Many organizations are so risk averse and so toxic to new ideas that they never grow to a size where their potential is visible.
Interaction Management
Organizations need to be able to bring direct accountability to the observable reactions of managers to ideas. They need to drive observable co-operation between business units.
Much of our organization’s research in the last number of years has been in the area of knowledge work. Knowledge work is fundamentally different than transaction and process activities because it is a pattern of activity that eventually produces an outcome. A software engineer designing a new application may work for one or two years before producing an outcome. The effort is a stream of activity with rare, if any, representative transactions to list on a spreadsheet.
Observable Interaction Management
SMG has found tremendous interconnection between knowledge work, this observable pattern of activity that eventually produces an outcome, and the interactions required between employees to enable innovation. The reaction of a boss to a new idea is an observable reaction and never creates a transaction to record on a spreadsheet. Our efforts to bring accountability and alignment to this level of interaction are within the context of executing strategy by bring accountability to daily observable activities. Our experience has shown us that innovation requires an organization to reach down to this level of interaction – either through direct or indirect means.
Top-Level Leadership Required
As a result, innovation will continue to demand outstanding leadership since it requires a very-broad, almost cultural re-alignment not called for when implementing typical projects and programs.

Guiding the knowledge-oriented enterprise: blog dedication

This blog is dedicated to those doing the real work of changing knowledge-based organizations. Those leading established organizations, who are trying to introduce new skills and teach their organizations to do new things – to “dance” in the words of Rosabeth Moss Kanter. Their organizations depend on their success.

There are too few RIM's, 3M’s, and Proctor & Gamble’s in the world. Enterprises so engaged in innovating and leading their industries that employees focus their collective attention on delivering value for customers rather than surviving the next round of cuts.

Let's explore new approaches and new tools to help organizations adopt, tip toward innovation, toward supporting a brand, toward supporting employment. The economy of the future will belong to countries where enough organizations lead the market and create successive generations of new and compelling products and services. No one country, no one area, no one enterprise can retain its lead in this flat world without aligning work in a new way.

Innovation leaders know their enterprise must be as skilled in aligning the interaction between employees as manufacturing companies were skilled in aligning machined components decades ago. The new enterprise, the knowledge-based enterprise requires overt, but gentle, direction on how employees work together, how they interact around new ideas, and how they support new groups as they seek to innovate and build the future.

This is a forum to discuss, debate, and dissect new ideas and new management techniques for knowledge-oriented enterprises. Above all – a home for practical thoughts. For many can present a strategic plan with compelling graphics and promising projections, here, we few will dialogue on the genuine challenges of guiding the creation and executing the strategy of the future enterprise.