Promoting a knowledge-based economy takes more than money

Knowledge is “the new wealth of organisations; the pre-eminent economic resource . . . more important than raw material; more important, often, than money,” said Thomas A Stewart in Intellectual Capital, 1997. The world’s major economies have seen a huge shift in the sources of their wealth. While heavy industries and traditional exports once accounted for most of any nation’s GDP, these days we can expect to see a large proportion of that income derived from IT, consultancy and professional services. In this still unfamiliar and still rapidly evolving landscape there has been a corresponding change in the kind of work people are carrying out, plus a whole range of new job titles and job descriptions: chief knowledge officer, information architect, idea manager, to name a few.

In addition, a whole raft of more familiar activities increasingly fall under the umbrella term of ‘knowledge management’. Marketing activities, such as product development or customer services, are beginning to be redefined and influenced by one of knowledge management’s central ideas — the notion that any organisation has growth potential if it can tap into the expertise in the heads of its employees and the information within its databases.

Like any grand new management idea, knowledge management has spawned its gurus, IT solutions and consultants. And to an extent, a knowledge-based economy requires an IT literate workforce. With a large proportion of corporate wealth residing in customer or product databases, for instance, database programmers are in great demand and their work draws premium fees. Many organisations have a growing need for professional information managers and librarians well supported with online information sources. Those information managers might need to be well-versed in intranet management or other knowledge management technologies which assist the flow of information around their organisations.

But of increasing importance is the pressing need for a creative workforce —one which comes up with ideas and gets involved in putting those ideas into practice. Because the motivating force behind the phrase “knowledge-based economy” is the notion that such an economy finds and sustains new sources of wealth. A knowledge culture is one which focuses on generating wealth through innovation rather than cutting costs. The idea of staff generating ideas, exchanging views on current procedures or putting forward ways to solve each others’ problems is not new. For example, the suggestions box in the staff canteen has been around for a long time. In a knowledge-based economy, however, the suggestions box needs to be updated.

Some organisations now formalise idea sharing. Oil company Shell, for example, requires its staff to spend a certain amount of time helping fellow employees. Some consultancies reward staff for publishing case studies within their organisations and also appoint experts to select the best contributions. Recognition is a powerful motivator, and a strategy such as this is one way to overcome the problem of information ownership. Very often, if individuals are not recognised for their expertise within their own companies, they will move on and seek that recognition elsewhere. Many organisations are aware of the need to do something to revitalise the sharing of ideas and information in their ranks, but are unsure of how to do it. And while much of a company’s intellectual capital may be tangible — in the form of customer or contact databases, in expert or best practice databases — a lot of valuable information resides in the heads of the people in that organisation. Some types of information are readily stored and re-used in a database but many are not.

Unsurprisingly, several technology firms have sprung up in a whole new area — ideas management — which has been credited with giving new momentum to knowledge management. These new vendors concern themselves with the problem of making the personal knowledge and experience of people more tangible and more readily transferred from one person to another. Bristol-Myers Squibb in the US has used idea management technology to create an “ideas bank” — a technological suggestions box, through which employees can exchange ideas.

Many companies set up forums on a corporate intranet — chat rooms where employees can raise issues or suggest new approaches and products. Database search technology will monitor the online and database searches carried out by staff to ensure that engineers in Colorado of the United States are not trying to solve problems already overcome by their counterparts in Stuttgart, for example. There are companies which set up secure email-based exchanges — e rooms — through which individuals can exchange blueprints, discuss problems and work towards solutions remotely. The secure environment means that the individuals working together do not have to be within the same organisations — they could be joint venture partners, for example.

These technologies are trying to replicate the informal problem-solving and ideas exchange which goes on within organisations. They have come about to serve the needs of management teams which want to foster collaboration. There is another crucial element to this, however. The organisation itself, whether it is a government department, an industry group or a large corporation, needs to establish that it is a trustworthy partner in the process. Ideas cannot be forced out of people. The corporation needs to take measures to make sure that it too is a trustworthy participant in the process and does not abuse the knowledge and ideas its employees share. Companies need to strive to make sure that they create a risk-free environment where employees will naturally share their knowledge and ideas.

Fostering a good environment for knowledge and idea sharing takes time. Results frequently tend to show in a “cascading” effect — with employees testing the new system with ‘safe’ ideas, and only later, once the trust is established, do the truly out-of-the-box ideas tend to show. Companies which once only paid lip-service to the mantra “our people are our greatest asset’ now realise that, in a competitive global marketplace, the tacit knowledge that employees hold can easily all too easily walk out of the door. What’s more, employers today continually lament the fact that they can’t find “good staff” easily. As global markets continue along their unsettled course and traditional industries suffer the current lows of the economic cycle, economies and companies are becoming ever more willing to foster a climate that will help workers towards new sources of revenue — an ideas-rich culture that will mean ideas do not just fall between the cracks, but are harnessed and shared to prevent reinventing the wheel.

 e-mail: acca@wow.net www.accaglobal.com