Entovation International
7 C’s of Knowledge Leadership: Innovating our Future
by Debra M. Amidon and Doug Macnamara

“Few of the inventors responsible for the astonishing wave of innovation between 1750 and 1860 were scientists; most were artisans or engineers with little or no scientific training. They were men of common sense, curiosity, energy and a vast ingenuity, standing on the shoulders not of scholars but of similar practical types.”
- Special Millennium Edition of The Economist

A new economic world order is emerging - one based upon the flow of intellectual, not financial capital. Every function, every industry and every region of the world - developing and industrialized nations alike - is experiencing profound changes in the way we manage our most precious resource - human talent. Modern management concepts are evolving from practitioners - not the theoretical academic research base. Leading (and being led) is more a function navigation and networking than the traditional command-and-control systems with which we are familiar.

Most astute executive managers have seen beyond the limitations of an information society, technology-enamoured strategies and the dot.com phenomenon. Modern leaders do not fear the speed of change; they embrace an agenda of learning. They know that effective management is not a matter of having the most knowledge; it is knowing how to use it. It is not enough to know modern management concepts. How they get implemented (i.e., put into action)? Leadership is more an art than a science, but that doesn’t excuse us for searching for appropriate metrics for a return-on-leadership (ROL). We must develop an innovation competence and how to measure the performance thereof.

At the heart of the current transformation is the human being within whom knowledge resides. And the path to a sustainable future is an ability to innovate - create knowledge, convert it into viable products and services, and apply it for the profitable growth of an enterprise, the vitality of a nation’s economy and the advancement of society. It is that simple and that complex.

There is certainly nothing new about the link of knowledge and progress. Since man began to interact with his environment, what he knew was essential for survival. What is different about the Knowledge Economy is our ability to focus upon and manage knowledge - individual and collective - more explicitly. Because of the multiplier effect of knowledge - the more it is shared, the more it grows - we are now evolving a view of executive development demanding a new style of leadership behavior.

The agricultural, industrial and short-lived information age utilized linear, competitive, market-share oriented management models. The new economy is far more a function of a system dynamic based upon more intangible variables - intellectual capital, alliances/partnering, and global communications - both human and technical. Strategic plans - although essential - are not enough to command sustained market positioning. Progress is more a function of strategy; and strategy is the art of effective leadership.

How does leadership differ in a Knowledge Economy?

Gone are the days when one measures the effectiveness of employee training and professional development based upon the number of days or hours spent on courses. Most business resources are considered in a cost-valuation framework. Leadership must have an impact on the individual and the organization. Real value is created when connections are made between seemingly isolated elements. Margaret J. Wheatley suggests:

“The literature on organizational innovation is rich in lessons…describes processes that are also prevalent in the natural universe. Innovation is fostered by information gathered from new connections; form insights gained from journeys into other disciplines or places; from active, collegial networks and fluid, open boundaries. Innovation arises from circles of exchange, where information is not just accumulated or stored, but created. Knowledge is generated anew from connections that weren’t there before.”

21st Century leadership demands more vision and visibility. It is not only a function of learned behaviors, but also how those behaviors demonstrate impact. With global communications, there will be a perceived leveling of competence. Knowledge obsolesce will accelerate. The ‘Digital Divide’ could exacerbate the gap between the haves and have nots; but the human (vs. the information or technology) agenda will place the emphasis on all people and all cultures - where it belongs! Real-time learning will become the critical success factor for prosperity in both the public and private sectors. Leaders used to focus on ‘leading’ the organization. Tomorrow’s leaders will be perceived more of local, national, regional and international statesmen (and women) who are able to effectively balance economics, education and the environment.

Redefining the Management Agenda

We live in a world of kaleidoscopic change. It is not the speed of change of a variable, or the speed of change of multiple variables. It is the compounding effect of the speed of change of multiple variables creating a landscape for innovation that challenges even the most adept manager. There is a new Knowledge Value Proposition. Cost, quality and time are no longer the differentiators for market positioning. It is a far more complex relationship between economics, technology and behavior - sociological, psychological, managerial - that constitutes the “social capital” of an organization.

Below we identify seven domains where we might (re) consider the implications for knowledge leadership.

1. Knowledge Leadership is a matter of Context.

In the new Human Capital orientation [See Figure 1], performance metrics are dynamic and based upon measuring the intangibles. Organizational structures are networked with self-managing knowledge workers. The processes transcend organization boundaries, linking all stakeholders (e.g., suppliers, alliance partners, distributors, customers and even competitors) into a strategic innovation system. Information technology is used for knowledge processing - monitoring the flow of knowledge (i.e., how ideas are generated and commercialized).

Figure 1: Contrast in Management Styles

 

Traditional/Industrial (Financial Capital)

Knowledge/Innovation (Human Capital)

Performance Measures

· Financial
· Static
· $$$ as assets

· Comprehensive 
· Dynamic 
· Relationships as assets

Structure/Culture

· Competitive 
· Market share 
· Distrust of borders

· Collaborative 
· Sets of alliances 
· Value-adding

People/Leadership

· Cost/expense 
· Profitability

· Revenue/investment 
· Sustained growth

Process

· Independence 
· Cause-effect

· Interdependence 
· Value system

Technology

· Information processing 
· Data/information 
· Things/warehouse

· Knowledge processing 
· Tacit/explicit knowledge 
· Flow/process

Most important, it is not one orientation - Financial or Human - at the expense of another. Both are necessary to ensure optimal flexibility, adaptability and agility.

Effective Knowledge Leadership is also a function of vision - and will increasingly be more so. Yet, according to Albert Hochleitner, Director General, Siemens Österrich, “Less than 2% of our time is spent on the future perspective. Some companies are even lower than 1%! Although the urgent business of everyday life is important, it is not as important as the future.” The reality is that executives know that visioning is important; but they haven’t a clue how to effectively implement given such accelerating uncertainty.

It may not be that the ‘Knowledge Leader’ is the one to create the vision - far from it. He/she must, however, create the frame within which the vision can be created by a critical mass of organization stakeholders. The leader manages the innovation infrastructure within which ideas are generated and applied. It is a function of listening, guiding thought and cross-leveraging insights. Once created, the vision can/must be articulated broadly both inside and outside the firm.

Today’s leaders must inspire passion for the work. They need to ensure that teams are stable enough to meet the high frequency burst of information and complex demands on decision-making. They must have an ability to help others maintain focus and balanced as they establish priorities. They lead by example, walk-the-talk, and understand fundamentally the ‘whole.’ They are able to convey context and meaning in ways that enable others to leverage their own talents.

2. Knowledge Leadership is a matter of Competence.

Although Peter F. Drucker does suggest that innovation is the one competence needed to manage into the future, we know there are several sub-competencies that come into play. For the last seven years, The Banff Centre for Management has been researching and developing a competency-profiling system to assist managers in measuring the impact of their investment in the residential, experiential executive programs. So far, it has been tested with 5,000 executives from 500 organizations. 70% of organization competencies are generic and 30% are specific to the organization, its industry and regional presence. Through customization, an organization can tailor and monitor its desired proficiency.

A Competency Map is an assessment tool that outlines the skills and behaviors required to successfully undertake a position or role. There are 35 identified competencies organized with the following categories: Direction Setting; Change Leadership; Critical Thinking; Organizational Development and Diversity; Personal/Organization Balance; Quality, Knowledge and Innovation. Each includes four levels of aptitude - an example of which is illustrated below [See Figure 2].

Figure 2: Sample Competency Map

UNDERPINNING

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 4

A Sales/marketing customer service

-“Pushes Product” - provides information in format they use

- listens for needs 
- provides solution options

- builds relationships 
- proactive idea/solution generation

- builds partnerships
- focuses on customer’s customer or strategic goals

B Personal/Team Leadership

- personally competent

- able to get immediate team functioning competently

- works effectively inter departmentally 
- can successfully lead an inter-departmental team

- works effectively inter-organizationally
- often seen as an industry leader

C Adult Development

- focused on “what’s in it for me:”

- works well in defined parameters 
- employs cause & effect thinking/analysis
- traditional approaches

-‘Systems’ thinker analyzer 
- initiates new ideas, projects 
- takes responsibility for own career/activities

- self-directed 
- multi-systems thinker/analyzer 
- systematizes external/internal input and creative processes

Through the profiles and learning contract, the process provides for a. Evaluation of a leader’s competencies against researched standards, b. Agreement between the participant, their supervisor and the instructor (i.e., the learning triad) and c. Measurement of successful changes in behavior.

It is almost impossible to be taught leadership. You have to learn it, experience it and be supported in the process. Too often, we sign-up for courses and expect to become a better leader. The truth is that the process can hardly be left to serendipity. The Banff Centre outlines a five-step learning process:

Step One - The Competency Profile: Assess the learner’s competence in several aspects related to their role. Peers and colleagues can offer observation and feedback. Some organizations, such as Royal Bank, Stentor, Canadian Occidental Petroleum, CP Rail and Alberta Agriculture Food and Rural Development have created such Maps as a basis for performance management. The more specific and discrete you can be, the more relevance you can create with a prospective learner.

Step Two - The Learning Contract: Identify what is of most importance for the learner and focus. Capable individuals can generally only work on 4-5 major attributes at a time. By bringing together the learner, supervisor and instructor, priorities can be established - identifying strengths, particular areas of focus, and strategies for testing learned competencies.

Step Three - The Learning Process: Whether pre-course, on-course or post-course, the Profile and Learning Contract provide focus. However, if the learning environment is simply academic or knowledge-transfer in design, results are sub-optimal. Learning must be hands-on. It must provide participants with opportunities to experiment with new behaviors, receive feedback, and (re) focus their learning. The learning environment must support creativity, critical inquiry, and practical application - the same criteria necessary for successful implementation of new concepts.

Step Four - Re-entry Planning: Careful consideration of the return to the workplace is essential. Individuals who have experienced intense remote learning environments cannot be expected to return to their organizations and ‘teach’ others. Re-entry is far more of a listening exercise - identifying language, motivation and talent in others ready to be nurtured.

Step Five - Measurement of Impact: Successful demonstration of desired skills and learning competencies is essential. You cannot learn about management and leadership by ‘talking’ about it. These knowledge concepts seem new at first. The good news is that they are intuitively obvious and clarify many ‘fuzzy, soft’ management concepts by illustrating how they contribute to the bottom line when put into practice.

Of course, there are new competencies emerging as we write. Research into 33 case study examples of knowledge leadership in practice identified new roles and skills for the Knowledge Age. There are now position titles as knowledge architect, knowledge engineer, knowledge editor, knowledge analyst, knowledge navigator, knowledge gatekeeper, and knowledge brokers. There is considerable debate among knowledge professionals as to the relative merit of having a Chief Knowledge officer (CKO). Regardless of your adoption of the knowledge nomenclature, it is essential that someone be designated to oversee the innovation process - how knowledge is created, exchanged and applied in your organization for future sustainability.

3. Knowledge Leadership is a matter of Culture.

Leadership training may be vested in the individual; but impactful leadership must start at the top and become an integral part of the organizational culture. Oftentimes, we see organizations investing in leadership development at he individual level while the corporation values and culture remain unchanged.

Although in a survey administered in 1997, innovation was defined as the number one advantage of a knowledge program, developing a culture of knowledge-sharing is unquestionably the greatest obstacle.

Over the long-term, culture does more to influence the impact of corporate leadership than any other factor. It determines how individuals react and perform on a daily basis. Culture includes years of history - including successes and failures, good and bad decisions, individual and collective stories. All of these create a set of values - explicit and implicit - that constitute the underpinnings of the enterprise culture. The culture is what determines how leadership is or isn’t manifested in an organization.

The two greatest obstacles to successful knowledge leadership are a lack of trust and inadequate communications - specifically regarding values, mission and critical success factors. These two elements, combined with a lack of vision, appear to be at the root of leadership duress.

Trust is a multi-faceted and elusive concept that pervades everything we do. It includes other attributes, such as accountability, integrity, honesty and ethics. Nothing erodes or destroys corporate leadership than mis-trust. Distrustful leaders may achieve mediocre improvements, but they will never effectively harness the passion for outstanding business results.

Poor communications - both human and technical - may be the greatest leadership weakness. It leads to the ineffective performance, poor morale and internal confusion. With the continuous downsizing, constructive knowledge-sharing ceased. Worse, organizations became paralyzed with a lack of responsible risk-taking - an essential criteria for innovation.

Without vision, the organization and its constituency - are at a loss for a sense of direction. Usually visions are actually only missions. They do not provide an articulation of organization uniqueness, or its aspirations. They do not articulate stretch goals that fire the imagination of employees and customers.

Creating and sustaining a culture where knowledge is valued is one of the most difficult challenges in practice. Appropriate cultures are those that engender change, innovation, openness and trust. People are recognized and rewarded for their knowledge contribution. Conditions for effective knowledge creation and sharing require more flexible, networked organizational structures, multiple teams, and a climate of intensive and purposeful networking.

Several factors help create the conditions that encourage knowledge-sharing - systems for moving people (e.g., job rotation), appropriate learning events, effective teaming and a comprehensive technology infrastructure.

4. Knowledge Leadership is a matter of Communities.

Over the years, various disciplines or schools of thought - and even functions - have begun to converge in scope of responsibility and practice. Each area has been broadening its theories and integrating core principles from the domains of others. There is a convergence of functional perspectives and a common agenda is emerging.

For instance, human resource professionals seek to develop more relevant performance measures as well as new ways to use information technology. Chief Information Officers, in order to justify investments in technology, are having to understand the organization structure, motivations of people and cross-boundary processes. Quality experts are building training infrastructures for the transfer of knowledge and best practices. R&D managers are taking on new responsibilities for business development and reducing cycle time with increased customer interaction. Finance professionals are exploring ways to expand their audit capabilities to influence the business strategy of their clients. All are relying upon emerging computer and communications technology advancements to do so.

There is a realization of - and respect for - alternative paradigms that did not exist a decade ago. Value is being created in the organization interfaces - the white space - the connections between individuals, organizations, companies I the same industries and nations within regions of the world.

This notion of Communities of Practice originated with Etienne Wenger, Institute for Research on Learning, and John Seely Brown, Vice President of Xerox PARC (Palo Alto, California). Likely an outgrowth of quality circles and networked organizations, this is a concept - when made explicit - helps harness the creativity and promote cross-fertilization of ideas necessary for prosperous innovation.

“At the simplest level, they are a small group of people who’ve worked together over a period of time…not a team, not a task force, not necessarily an authorized or identified group…perform the same tasks…or collaborate on a shared task…or work together on a product. They are peers in the execution of real work. What holds them together is a common sense of purpose and a real need to know what each other knows.”

Even the best strategic planning process often does not provide for an understanding of such natural connections. However, modern managers must take notice of these streams of activity to optimize the innovation process. This is where knowledge leadership resides - where ideas originate, are exchanged, and eventually result in marketable products and services. Observing this convergence of competencies provides insights into how the entire operation may be effectively led.

Innovation becomes the glue that bonds together diverse constituencies. Knowledge and intellectual capital become the mechanisms to build synergy. Such a redefined focus on knowledge and innovation is not the latest consulting fad. It is the essence of sustainable organizations an economies of the future. Instead of operating from the pure perspective of competition, leaders will learn to collaborate and contribute to the success of one another. We are no longer managing a zero-sum game!

5. Knowledge Leadership is a matter of Conversations and Common Language.

Of primary importance is the innovation language - a language that transcends the paradigm and biases of one particular function. Ideally, such a language would also encompass industries, sectors, and regions of the world and, therefore, be universal in scope.

There are several attempts to define the knowledge language with a glossary of terms - one such effort initiated by Skandia and Ericsson in Sweden - includes an on-line capability to add to the existing 400 terms. Of course, whatever terms or language is adopted must apply to the heritage, purpose, mission and strategy of the enterprise. Such language must pervade all operations and planning efforts.

Once connections are made among internal and external constituencies - with an explicit understanding of potential spheres of influence - attention should be given to purposeful conversations. Mastering the art of structured conversation and dialogue has been the focus of many academic consultants (e.g., Peter Senge, Fernando Flores, and Dan Kim).

Furthermore, there are many successful CEOs beginning to manage according to the quality and level of conversations. One case in point is Ray Stata, Chairman of Analog Devices (Norwood, Massachusetts). In his quest for improvement, Stata began a quest for a common language and shared vision. In the process, he discovered that learning and improvement are really two sides of the same coin. Through a weeklong course for his senior executive team, he realized the value of conversations - the flow of meaning, if you will - among and between his senior management. The common bond was the quest for highly effective learning.

Stata’s style is to encourage his employees to become a community of inquirer’s, not advocates. With such a mindset, managers are encouraged to understand and leverage the diversity of knowledge, skills, experiences of one another. His organization is described as a ‘network of conversations’ - a theme he elaborates both internally and externally.

6. Knowledge Leadership is a matter of Communications.

Given the dramatic increases in the functionality of computer and communications technology - including the explosion of the world-wide web and e-commerce - companies must develop a strategy of how best to leverage the technology. There must take full advantage of both internal and external mechanisms (e.g., groupware, multi-media and cyberspace) to optimize results. Further, communications is not always technical. Keeping the organization and stakeholders apprised of priorities, changes in direction, success stories, and more is not only difficult, it is essential.

“As they say, “You do not get a second chance to make a first impression.” These days, with companies being managed by chaos theory and the degree of complexity, simple but not simplistic communications should be the order of the day. A communication strategy must be fully integrated with any plans to leverage human capital - more specifically knowledge - of all stakeholders in the innovation process.

External messages must be consistent with internal culture, values and vision. How companies are perceived in the marketplace - branding, ethics, direction, success stories, etc. - must be conveyed skillfully and on a regular basis. More and more companies around the world are using the platform of knowledge-type advertizing campaigns:

“Knowledge is powerful medicine.” - Eli Lilly (Fortune, July 1995)
“Understanding comes with Time.”- Time Magazine (Fortune, July 1995)
“Prepare to have that idea shattered.” - Hewlett-Packard (Fortune July 1995)
“A brilliant deduction.” - Gifts in Kind America (Fortune, June 1995)
“Knowledge of the world on-line.” - Oracle (CNN ad, November 28, 1995)
“Old tradition, new thinking.” - Harvard Funds (Fortune, June 1995)
“Your dog is smart” - Purina Dog Chow (CNN ad, February 26, 1996)
“Travel provides the power of knowledge.” - American Express (CNN ad, Feb.1996)

In the Knowledge Economy, taglines have taken on a deeper significance. Not only are they designed for marketing products and services, they serve as a concise vehicle to present a timely image to external stakeholders and a motivational tool for employees. Consider all the Federal Express communicated with “The World on Time.” It was as close to a stretch vision toward which all could relate. It was simple, memorable, substantive and visceral. Sometimes, we forget how important might be the right words in the right context.

Communication strategy may be as much of a learning process as a dissemination tool - perhaps even more so. We need to envision the innovation activity as a value-system, not a value-chain of events. For example, we may have more to gain from tapping into customer knowledge (i.e., what customers know) that approaching them as the end of a delivery chain. Communications may be more a function of operating a distributed learning network of expertise. It can be the score of an intelligence service as well as a business development function. Leadership is a function of listening - and acting upon insights - not merely a receptacle doe stakeholder contact.

7. Knowledge Leadership is a matter of Coaching.

Coaching is a guided relationship process established between two parties. Both are responsible. The process is forward looking, change-oriented and developmental. It is a tool to enable client success, productivity, revenue growth and stakeholder value. Coaching is more about ‘being’ than ‘doing.’ Effective coaches engage in a process that involves trust, support and shared values.

The coach’s main role deals with expanding the ability to see contexts, rather than supplying content. The coaching process affirms the person, seeks to clarify choices, and acts as a catalyst for achieving both individual and organizational purposes. The coaching task connects the inner person (e.g., confidence, values, purpose) with the external manifestation of leadership (e.g., articulating vision, reaching targets, and achieving goals).

Coaching is the opposite of judging and the need for control. This is why its essence is congruent with the fundamental precepts of the Knowledge Economy. The coaching relationship enables people to work out issues and find answers through their own effective discovery process.

Effective leaders know they have not the answers. However, they do generally have a healthy curiosity, sense of direction, standards of excellence and a track record of success. They genuinely value others and have a need to ‘know what the others know.’ They are constantly learning, not afraid to experiment with new ideas nor afraid to make mistakes. They know that facilitating a process is almost always preferable to claiming answers and dictating action. Knowledge leaders will coach as well as be coached. They will navigate through uncharted territory with full confidence in the value of mutual talent.

With the shift to on-the-job learning, it is important to have others - not necessarily managers - guide them through their own innovation process. British Petroleum discovered that personal coaching was an important success factor when they introduced their video-conferencing for virtual learning.

Leadership in Measurement

Although many of these principles may have been around for decades, few organizations have implemented them in a major way. Fewer have discovered a systematic way to measure the results. Measurement in the management development field is uncomfortable and time-consuming. Now, with the significant research being done with the Brookings Institute and a variety of accounting/finance academic research centers and professional societies, we are beginning to comprehend the power behind the intangible value of the enterprise.

Today, we measure what we can measure, rather than ask the difficult questions. Courageous leaders such a Leif Edvinsson, notably the first Chief Knowledge Officer in the World and now a professor of Knowledge Economics at the University of Lund (Copenhagen, Denmark) said, “I’d rather be roughly right than precisely wrong!”

The good news is that considerable progress has been made. There is a major research project affiliated with the Brookings Institute providing guidance. Accounting Boards and professional organizations world-wide have placed the intangibles agenda as a priority. Best Practice Guidelines - even in this emerging field - are surfacing:

Draw up your own categories of intellectual capital and knowledge assets.

Estimate (‘guesstimate’) for each their overall value. And future revenue-generating potential.

Develop some form of balanced scorecard reporting.

Explore, as an experiment, some of the newer methodologies, such as the Economic Value-added of M’Pherson.

Create a matrix linking the assets you have identified with business impact.

Initiate pilot measurement and investment appraisal systems.

Develop the value proposition.

Don’t despair if you cannot ‘prove’ bottom-line business benefit. Take the leap of faith, as are others.

Measurement is the area in this new knowledge field that shows largest gap between management expectations and actual achievement of results. It may be the least understood and the most critical for future success. However, traditional accounting mechanisms developed over hundreds of years do not provide much light on measuring intangibles. They are very effective in counting the past, showing where a company has been. They are not very effective in pointing the direction for future results and impact - precisely what is required by investing executives.

A Knowledge Leadership Litmus Test

In the Knowledge Innovation® Assessment, one of the ten dimensions of innovation strategy is leadership. Check your own capability:

Can you define a map of your sphere of influence within your industry, across sectors and around the world?

Do you have an effective strategy to disseminate your knowledge and competencies to the marketplace?

Name the multiple methods of positioning your own intellectual leadership (e.g., articles, books, videos, professional visibility, and participation on committees/commissions)?

How are the learnings from your participation fed back into the organization and used to develop new business strategies?

Is there an internal mechanism to capture, codify and feed forward expertise in ways that might enhance the business performance of the organization as-a-whole?

Does your organization perceive external leadership activities as integral to the business> How are they leveraged?

Are there any formal mechanisms to legitimize, encourage and reward people who impart knowl4edge and expertise to others?

Use this sample diagnostic as a way to explore with others in your organization how effectively you are developing and leveraging your own leadership talent. Remember that leadership - in all of its facets - is a learning process. True leaders are learners first.

Conclusion/Summary

We are at the dawn of a new millennium. The leadership required to carry us forward may not resemble what was necessary in the past. Oh yes, we will always admire those who are now considered of innovation genius; but this is hindsight. What may be required for future leadership includes a novel skill-set.

Leaders will understand the nature of complex context - how to make sense of it and how to convey it (with magnetic vision) to others.

Leaders will know that competencies are based in experience and are more dynamic than static attributes.

Leaders will know the relationship between the motivation (Psychology) of an individual and the culture (Sociology) of an organization. They will value heritage (Anthropology) and know that more than 2% of manager time need be dedicated to visioning - the lifeblood of a future generation business.

Leaders will understand the value of the collective - the teams and communities within whom work gets done and visions are realized.

Leaders will know how to evolve a common language and that there is more power in the dialogue than what gets documented in a particular planning process.

Leaders will value the communications process - both technical and human - but not as much for what gets conveyed as what might be learned.

Leaders will coach and be coached by people of similar values and vision. Trust will be placed in those able to care more about leveraging the competencies of one another.

Millennium leadership will not avoid the issues of measurement. They will embrace innovative mechanisms, tools and methodologies to navigate into the future. We will not avoid the issue of results on investment in building leadership capability. We will discover the human and humane methods to document progress. Our generations to come deserve nothing less.

[This article was originally published in the 2001 Handbook of Business Strategy, Faulkner & Grey.]

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