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Learning Economics, Innovation and Learning Organizations:
Delivering Service Value in BiotechNovember, 2006
Services Science, Management and Engineering Lecture SeriesUC, Berkeley
Tom Hill Learning & Knowledge Management (LKM)
Corporate Information TechnologyGenentech
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Agenda Purpose: Share, enter into a dialog on trends in learning, innovation, valuation of
learning services, and seek further research on key learning services questions
• Hypothesis, My Point of View
• Corporations Create Intangible Value, Learning - Strategic Gap
• Strategic Value Frameworks (Economic, Learning as an Asset)
• Introduce Genentech
• Key Questions
• Key biotech industry drivers
• What does the business need - Learning Knowledge Management (LKM)
• Optimal LKM Services Target
• Learning, and Knowledge Management as a Processes
• Problem Solving Focus for LKM
• Value Dimensions for LKM
Next Steps - Questions for Further Research
LEG - Introduction
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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My Point of View, Hypothesis
POV: Based on my experience in IT and biotech, there is an opportunity for learning and knowledge processes to play a strategic role in the value creation center (innovation) of an enterprise
Hypothesis:
– If learning is strategic in the value creation processes of an enterprise, then this should be observable in terms of:
• Being at the initiation stages of a strategic projects, “at the table”
• Be integrated into the value creation processes of the entity, in use of technology, optimal balance with customer focus
• Be funded at a major level based on business impact, “can’t cut”
• Has identified metrics related to business value realization, which executive management finds credible
• Has a high level organizational position
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Today - Corporations Create Intangible Assets, Yet Reporting is on Tangibles
Evolution of the Global Enterprise: 80 % Are Loose Hierarchies of Virtual Groups,
Outsourcing (Malone) 70 % of Crucial Job Learning is Informal or Tacit Some Sectors See An Unraveling of Woven Fabric of
Social Capital - particularly in IT, Telecom (Hill) Shift to Services Focus 85 % of Corporate Assets are Intangible, vs. 35 % 20 yrs
ago (Kaplan & Norton) Corporate Processes, Metrics Have Not Caught Up Research in Services is In Early Stages of Development
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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The Gap in Strategic Alignment
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Strategic Value Frameworks - Key Thinking
Daniel Blair, HP, ISPI Charles Jennings, Reuters Mark Daly, Shell Tony O’Driscoll, IBM
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Daniel Blair - Balanced Scorecard
BSC is a management system to align corporate and individual actions
Benefits: Alignment Accountability Performance Driven Shareholder Value
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Daniel Blair - Balanced Scorecard
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Daniel Blair - Balanced Scorecard
Best Use:
– Where BSC is in use
– Competency Mapping, Performance Metrics in place
– Task Analysis available
– Employee performance metrics can be linked to backward looking financial measures
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Charles Jennings - Transformation
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Charles Jennings - Transformation
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Charles Jennings - Transformation
Best Use:
– Where there are disparate business units
– Alignment mapping is executive/council driven
– Business metrics, learning metrics available
– Executive management willing to support/resource the transformation - see the benefits
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Mark Daly - LVA Framework
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Mark Daly - Framework
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Mark Daly - Framework
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Mark Daly - Framework
Best Use:
– Where data exists on business processes/flows
– Good competency mapping
– Value is defined in terms of effectiveness/efficiency
– Focus on assurance, provisioning of learning
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Tony O’ Driscoll - Learning Value Framework
EnableInnovation
SpeedTransformation
ImproveProductivity
Focus- Develop Impact- Deliver
Optimize existing systems and operations
Enhance alignment around business initiatives
Create new business processes
Deliver business value
Accelerate evolution of new business models
Exceed World Class benchmarks
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Learning Investment & Validation
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Learning Value Scorecard Framework
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Tony O’Driscoll - Learning Value Framework
Best Use:
– Where innovation, transformation and productivity deliverables can be identified
– Management sees value in these terms
– Mapping of projects by these groupings is insightful
– Focus on innovation, and transformation role for learning
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Pharma/Biotech Industry - Trends
Future
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Pharma Industry - Value Network Map
Pharma/biopharma
BiotechContract
R&D
Univ. andmedicalresearch
Contractclinical
services
Governmentregulators
Contractmarketingand sales
Healthcareprovider
Patient
Pharmacy,retailer
Contractmanufacturer
Distributor,wholesaler,exchange
PortalProduct
Product
Eligibility,approval
Medication
Samples,information
DTC,Web info
Samples,information
Providerinformation,
training
Eligibility,approval
Eligibility,approval
Advice
Prescription
Intellectualproperty
Trialsresults
Targetvalidation
Product
Customer intimacy
Operational excellence
Product/service leadership
Brand mastery
Specifications
DataAggregator
Salesdata
Patientdata
Trends,information
InformationFormulary
requirements
PBM
Payer
Ads,info
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Pharma Value Map - Tangible vs. Intangible
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Biotech Industry Drivers - Next 5 years
R & D Cycle - Long Term - 7 - 10 yrs Avg. & Costly $1B Regulation - FDA Increasingly Focused on Reducing
Patient Risk Science - Discovering the right biotech solution Competition - 247 Oncology Trials in 2nd/3rd Phase Pricing - Increasing public scrutiny Channels - Access difficult for clinical trials and physicians
High Risk
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Genentech: $8B yr, DNA, P/E = 56, www.gene.com Leading biotech company focused on unmet medical
needs of patients - primary focus oncology - 2X market Corp. goals - triple revenue, and profit by 2010 10,000 employees - hiring + 5% a yr Revenue/Profit + 55 % qtr, year over year High risk development process: 7 - 10 years, $1B Competitive advantage in ‘great science’ Powerful Culture - empowerment, ‘casual intensity’
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Center of Value Creation - Innovation
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Business Needs - Learning and KM
Learning & Knowledge Development Services– Agile, Dynamic, Responsive, Transparent in Business Processes
Future Focused:– Informal - Innovation side (center of value)– Formal - Validated side
People:– Continuous development of competencies for jobs that do not
exist yet or problems yet to be defined Technology:
– Process focus, learner empowering
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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LKM - Process Based Learning
Event –based learning Process – based learning
Business Value
Low
Hi
Classroom Instructor - Led
Web Class or Lab
CD-ROMsManuals
HTML – Web Training
Learning Modules
Collaboration for Performance
Just-in-Time Learning
Learner Focused
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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LKM - Problem Solving
Prof. Nile Hatch, Marriott School of Mgmt.
New Focus
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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LKM - Business Value Role
Day to Day - OJT and Courses
StrategyLong Term : Business Planning - Product Pipeline 15 - 20 yrs
SOPs, Validated LearningTactics
Conversion of Tacit to Explicit Knowledge & Sharing ItStrategic Business Problems
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Strategic Business Problem Example - Metric Q
• How to measure the Learning and KM value impact for this problem?
• Solution involves the learning curve of scientists so what are the measurements around a steeper learning curve?
Development Time
Knowledge Retention
Std Learning Curve
New Learning Curve
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Value Questions (Map the white space): What is the role of learning in the value chain? How will learning demonstrate its value to the business for
productivity, transformation, innovation processes at individual, team and organizational levels?
How to measure business impact when we capture implicit information and convert/transmit it to the right people, right time, to become explicit knowledge?
How can learning and knowledge management have a role in the ‘center of the value creation’ processes of the company?
How can linkages between learning processes and business processes be described?
What methods should be employed to align learning processes with business objective achievement?
How do learning professionals answer value questions:– Who cares about your service and how much (customers)– Why should I care (stakeholder, economic buyer)– How much do you care (commitment, credibility, passion, investment)
Hill - LKM, CIT Copyright 2006 - Genentech, Inc.
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Next Steps - Identify Research Questions
What are key questions to select?
Partnership or joint projects?
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Contact Info & Learning Economics Group
Hill, Tom (2004) “NonStop University: Characteristics of a Global Learning Community”, International Society for Performance and Instruction Journal, Vol. 43 No.2 Feb. pg 29 -37.
LEG: www.learningeconomics.org, previous talks audios, PPTs, under the Meetings tab, 200+ members, audio conferences , research
Next: Dr. Terri Griffith “Knowledge Transfer in Virtual Environments” 8:30am Nov. 16, audio conference, PPTs downloaded phone number: 1-866-703-9405 PIN:910728
Contact: [email protected]