1 Leadership and Management in the Knowledge Era Dr. Charles M. Savage Knowledge Era Enterprises, Inc. Co-Creating the Organizations of the21st Century

1

Leadership and Leadership and Management in the Management in the Knowledge EraKnowledge Era

Dr. Charles M. SavageKnowledge Era Enterprises, Inc.

Co-Creating the Organizations of the21st Century

BMW BildungszentrumGut Schwaerzenbach

February 6, 1998

2Copyright (c) 1998 KEE, Inc.

These slides are being make available to the participants of the “Inventing the Organizations

of the 21st Century” conference held February 6 and 7, 1998 in Gmund am Tegernsee. Please

feel free to use any or all of these slide in your internal presentations. All I ask is that you keep

the KEE, Inc. logo and the copyright sign on the slides. I would like to hear from you as to

your efforts and your vision to move us more rapidly into the Knowledge Era. And if I can be

of help in any other way, please do not hesitate to contact me.

Dr. Charles M. Savage, President & Mentor

Knowledge Era Enterprises, Inc.1500 Worcester Road, Suite 428

Framingham, MA 01702

Phone: 508-620-5051, Fax: 508-620-0557

E-Mail: [email protected]

Web: KEE-Inc.com

Copyright (c) 1998 KEE, Inc. 4

New Vortex of Understanding about New Vortex of Understanding about Knowledge EraKnowledge Era

Organizational Learning& Self-Organizing

The Web

Intellectual CapitalCore Competencies

Innovation

Knowledge Management

Emotional Intelligence


Knowledge DynamicsKnowledge Dynamics

KnowledgeManagement

Explicit

Tacit

Intellectual Capital• Human• Structural• Customer/Supplier

Learning Communities

Innovating with customers

Context

Process: VerbObject: Noun

Vision/Values/Fractals

Competencies

Teaming & Networking

Control

Intellectual Assets


Knowledge DynamicsKnowledge Dynamics

Explicit

Tacit

Context

Process: VerbObject: Noun

Knowledging

Knowers

Known

Unknown


Historical ErasHistorical Eras

Agricultural Industrial Knowledge


Capabilities and AspirationsCapabilities and Aspirations

StoryStory StoryStory

Capabilities Capabilities

Aspirations Aspirations

• • • • • •

• • • • • •


Sources of Wealth:Sources of Wealth:

Agricultural EraAgricultural Era

LaborHands

KnowledgeHeads

Capital: Money & Machines

Land & Resources



Industrial EraIndustrial Era

LaborHands

KnowledgeHeads


Land & Resources



Knowledge EraKnowledge Era

LaborHands

KnowledgeHeads


Land & Resources



LaborHands

KnowledgeHeads


Land & Resources


Inventory Turns = Cost of Goods Sold for YearAverage Inventory for Year

Knowledge Turns =Ability to Build Upon other’s Capabilities*

Level of Distrust

*Other’s Capabilities = Individuals, Functions, Lines of Business (LOBs), Suppliers, Customers and Customers’ Customers

Knowledge TurnsKnowledge Turns


0.1 0.5 1 5 10

Finding Faults Finding Strengths

Trust Distrust

==

==

=

=

=

Individuals:

Functions/Departments:

Lines ofBusiness:

=

=

Suppliers/Partners:

Customers:

Customers’Customers:

5

0.510

Knowledge Turns Knowledge Turns (2)(2)


Knowledge Turns: ResultsKnowledge Turns: Results

012345678

Indiv

idual

Funct

ion

LO

B

Supplier

Cust

om

er

C o

f C


Knowledge Turns: ResultsKnowledge Turns: Results

0102030405060708090

100

Indiv

idual

Funct

ion

LO

B

Supplier

Cust

om

er

C o

f C

Poss

ible


Knowledge Era - The Knowledge Era - The Dilemma!Dilemma!

LaborHands

KnowledgeHeads

Land & Resources

Knowledge Assets: 10 x +Trust: Very LowCompetencyLeveraging: Very Low



LaborHands

KnowledgeHeads


Land & Resources

Economy ofScarcity

Economy ofAbundance


Competitive Power of ICCompetitive Power of IC Intelligence and knowledge with unique

insights your competitor can’t envision Innovative products with superlative value

your competitor can’t create Innovative processes with extraordinary speed

and efficiency your competitor can’t match High integrity relationships with superior

collaboration and loyalty your competitor can’t achieve

Global Creativity


Financial Focus

ProcessFocus

CustomerFocus Human Focus

Renewal & Development Focus

IC Framework at SkandiaIC Framework at Skandia

Copyright (c) 1998 KEE, Inc.

Value in waiting

Value creation resultant

Value creation interactionHuman

Customer Structural

Dynamics of Knowledge Dynamics of Knowledge CapitalCapital

Charles Armstrong, Toronto


Wealth and OrganizationsWealth and Organizations

Land Labor Capital KnowledgeLand Labor Capital Knowledge

Feudal Proprietor- Steep KnowledgeFeudal Proprietor- Steep Knowledge ships Hierarchies Network-ships Hierarchies Network- inging

Source ofWealth

Types ofOrganizations

LateAgricultural

EarlyIndustrial

LateIndustrial

EarlyKnowledge





Source ofWealth


LateAgricultural

EarlyIndustrial

LateIndustrial

EarlyKnowledge





Source ofWealth


LateAgricultural

EarlyIndustrial

LateIndustrial

EarlyKnowledge



Human Human Studies Studies

Theory Theory X & Y X & Y

B P R B P R



Complexity: Break Apart (Abteilung)Complexity: Break Apart (Abteilung)

Industrial Era: ManagementIndustrial Era: Management


Pay: What you do, not what you Pay: What you do, not what you knowknowOrganization: One person, one bossOrganization: One person, one boss

Values: DistrustValues: Distrust

Resources: ScarcityResources: Scarcity




Knowledge Era: LeadershipKnowledge Era: Leadership

Complexity: Discover patterns (Synergy)Complexity: Discover patterns (Synergy)

Pay: What you do AND knowPay: What you do AND know

Organization: Community of leadersOrganization: Community of leaders

Values: Trust and valuing Values: Trust and valuing competenciescompetenciesResources: Scarcity AND abundanceResources: Scarcity AND abundance

Theater: Role Theater: Role PlayingPlaying



Drama: Authentic Drama: Authentic InteractionInteraction

Theater: Role Theater: Role PlayingPlaying



Drama: Authentic Drama: Authentic InteractionInteraction

Uncertainties of Uncertainties of ““where do I fit”where do I fit”


Supply ChainSupply Chain

Supplier Company Customer


Supply Chain - extendedSupply Chain - extended

Customers’Customers

Supplier Company Customers


Customers’ Needs and Customers’ Needs and AspirationsAspirations

Problems & Needs

Aspirations & Opportunities


Supply Chain: Needs & Supply Chain: Needs & AspirationsAspirations

Supplier Company CustomersCustomers’Customers

Needs Aspirations

Transactions Opportunities


Valuing Cluster: Interactive Valuing Cluster: Interactive ViewView

Supplier Company CustomersCustomers’Customers

Company Customers

Suppliers/Partners

Customers’ Customers


Opportunities Grow Opportunities Grow RevenuesRevenues

Company

Customers’ Customers

Suppliers/Partners

Customers

Opportunities

Capabilities

Aspirations


Skandia AFS Skandia AFS

Working the Whole SystemWorking the Whole System

Skandia

End Users

Funds Managers

BrokersWholesaleAnnuities

ManageFunds

SellAnnuities

Invest inFuture

Select Events

UncertainFuture

Study


84

Skandia AFS Skandia AFS

Working the Whole SystemWorking the Whole System

Skandia

End Users

Funds Managers

Brokers2200 75,000

1.5 Million


Transactions

Product Solutions

Business SolutionsMass Customization

PartneringDynamic Teaming,

Virtual Enterprising &Knowledge Networking

StructuralCapital

Human Capital

Customer/SupplierCapital

Evolving Business ModelEvolving Business Model


The Values ShiftThe Values Shift

Survival TraditionalHierarchy

Partnering Global

FunctionalSkills

InterpersonalSkills

ImaginativeSkills

CommunitySkills

Industrial Era Knowledge Era

Brian Hall, Values Shift


Enduring CompaniesEnduring Companies

It’s not what youmake, it’s what you

stand forJim Collins


Summary: Leading & Summary: Leading & Managing in Knowledge EraManaging in Knowledge Era

Seize opportunities through strategic dialogue with suppliers & customers

Build upon strengths and energy in culture of trust

Entrepreneurially, team capabilities and aspirations to grow revenue

Support community of authentic leadersLeverage power of the web


Enable Knowledge Era Enable Knowledge Era EnterprisingEnterprising

Knowledging

The Key:The Culture of Valuing

makes Knowledging Possible

Documents

1 Leadership and Management in the Knowledge Era Dr. Charles M. Savage Knowledge Era Enterprises, Inc. Co-Creating the Organizations of the21st Century