20 ~ 20 CIO Challenges Simplify #warontalent

CIOcareer

Leadership

Top CIO issues persist because they aren’t CIO issues at all.   They are business and People issues that involve every business area.

  1. Talent Issues
  2. Innovation
  3. Speed to Market
  4. Security
  5. Automation
  6. Productivity and Experience
  7. Cost Reduction / Controls  (IT related and Business Related)
  8. Agility & Flexibility
  9. Culture
  10. Brand

A few ideas here to share..

Trust your team

If you knew everything you think you know, you wouldn’t be in the role you are in right now.  You would be somewhere else doing something else living the life of legacy.    Many leaders in these roles are hard to approach.  They don’t trust people inside their organization and they look for technical and business competency in other organizations or consultants.   They also think they are smarter and know more than they actually do.

Take the toilet as an example. As a thought experiment, would you be able to explain to someone else how a toilet works?  Most people can’t.   Oh, I know toilets aren’t IT systems.  Right they are just simple toilets.   There is a good chance as a reader that you actually don’t know how the toilet that you use every day works.    Point here is..   A business is run on collective organizational intelligence.   You are as smart as those that inform you and keep you up on knowledge and “in the know.”

If you trust your team, there is a very good change that they will tell you about the real problems in the organization.  They will tell you when they don’t know how to do something instead of doing all the guess work.

 

Stop Looking Outside

Hey, I get it..  you need IA, AI, RPA, RPA(I), Social, Mobile, Analytics, Cloud,  smarter systems, faster, faster, faster.  The board wants…  The CEO says..  The market is ..

All of that is bologna.

Sure,  we need to bring in outside expertise to do work.  Every company needs help and trusted partners.   The difference is that many leaders are always looking for answers outside.  They aren’t taking the time to learn about what they know inside.  They discount what they have in their own organizational intelligence.  They don’t listen.  Just think, in many cases you trust a stranger to tell you something that you wouldn’t trust a person that you vetted and hired to tell you.

 

Become Aware and Be Available

I get frustrated when leaders tell me they “can’t find the talent” or there is a “war for talent” and the market is so empty of people that have the right skills we need.  We have to pay so much to get help and these people are so rare.   Then when we find them, we lose them..

Yeah.. BOLOGNA.   Here is your problem.   You don’t know who you have in your company.  Your expert location system is broken ..  mostly because you don’t actually have an expert location system.  You may have profiles but they aren’t up to date.  Job descriptions aren’t up to date.  There is a very good chance that you have very little idea on what people inside your org can do.   On top of that, due to cost cutting, you had to “let people go.”   You could have just let go the best data scientist you had go but didn’t know it.  Many times,  companies cut people and it costs 3x to get someone in to do the job.   This is what happens.   HR doesn’t help because they really don’t know.   They are just pushing around the excel sheets with the names on them.   They can tell you about legal risks but they can’t tell you about the people individually.  They can tell you what to say and what rules to follow but they don’t tell you or encourage you to take the time to understand what the heck is really going on.

The answer is “Show Up” and I don’t mean that you personally have to show up every time but start teaching your team what that means.   You have to lead by example.  The reason people leave is because of their leadership.    The reason people leave is because they are frustrated.    Money doesn’t fix that.    Learn about being available and learn about finding ways to both technically and organizationally instill practices to discover the people in your organization.  Many tools available don’t cost a penny.   (Ask me how)

Introduce Change Management and Knowledge Management

Awareness in knowing that we don’t know is the first step.  The Dunning-Kruger effect: the unskilled just don’t know what they don’t know. This matters, because all of us are unskilled in most domains of our lives.

We need to learn and practice Knowledge Management.    If you want to learn more about KM (Here is a book by one of the best KM folks around) https://lucidea.com/get-your-copy-of-proven-practices/

The book doesn’t cost anything.. but .. if that is too much ..   You can learn somethings from http://www.nancydixonblog.com/2017/07/the-cko-of-microsoft-services-has-a-surprising-perspective-on-knowledge-management.html

The underlying idea and premise is that we all should be able to discover (FIND) the best information and knowledge when we need it and where we need it to do what we need to do.   “The right information, at the right time, in the right context.”

Change Management..

If you don’t make the time to learn about these things, they will happen to you as opposed to you making them happen.    There are plenty of free change management resources out there.  There are practices that are proven as well.   Frankly,  the first step is realizing that you need bring these concepts into your life.  You need to learn about them and what they mean.   If you don’t.. then you will continue to go the conferences with the same problems year after year.  Listening to vendors, contractors and consultants advise you in 3 slides how they have solved all these problems for your competition and that YOU are behind.

Simplify by Allowing for Complication

Your child is getting ready for a heart transplant and you ask the doctor about the procedure.    How long will it take?  What do I need to worry about?  What are the risks? Many questions.   What if the doctor says “Don’t worry, I just read 3 slides and brought in a sub to take care of it.”   They have a process call prime, pull, press and progress.  They will come in and do some things that are really complicated and then the person (insert name here) will be ready for shipment.. or recovery.

You wouldn’t tolerate that.   You would be outraged but in business, this is what folks do.  We simplify very complicated concepts and we don’t seek to learn.   Let me be clear, I am not saying that you should know all the math involved with Alexa but I am saying you should understand what the heck is really going on and/or have advocates on your behalf that do.   How do you deal with this?  How do you solve for x?   Invest in training.  Allow for people to admit they don’t know and accept that they don’t know.   Allow for people to address complicated issues and concepts with more than 3 slides.   Allow for people to teach and encourage organizational learning and education.    Have people train each other and upskill.   Invest in current employee cross training.

 

I Wrote Too Much

If you are here now, statistically speaking you are a rarity.  Why because I wrote too much and I bored the heck out of people by the third sentence.  This is why there is a problem.   If people aren’t fed snippets of information in micro-transactions, they get frustrated and move on.  Unless of course it is caustic or negative or something we should argue about.    If we are going to solve the top challenges for a CIO or other leaders, we really need straight talk on these issues.  If not,  the people that “get it” will “have it” all!

 

 

 

 

 

 

 

Categories KM

Schrödinger’s Manager

From the desk of Mr. John Benfield

schroedingerequation

In the early 20th century, physicist Erwin Schrödinger proposed a thought experiment involving an unlucky cat in a box, a vial of poison and a device which would watch for a random particle decay. When the decay is detected, the poison is released and the cat dies. Rather than being a simple way to piss off PETA and other cat lovers, it was meant to illustrate what he saw as a logical flaw in the Copenhagen interpretation of quantum mechanics. The particle exists only as a probability, simultaneously in states of “decayed/not decayed” (superposition) until observed. Similarly, the entire contents of the box, the detector, poison vial and cat are tied to that observation and exist in superposition. The cat is simultaneously both dead and alive. As soon as the contents of the box are subject to observation (able to interact with the system outside of the box), the wave function collapses into one of the possible states and animal rights activists are immediately notified.

 

While the Copenhagen interpretation has been supplanted by newer interpretations, these “cat states” are very real and have been demonstrated at macroscopic levels, though at very small scales and without the assistance of willing or unwilling felines.

However, I believe that I’ve uncovered a practical macroscopic example that’s occurring every day in Corporate America.

Let me provide you with one of many real life dialogs that started me down this path:

SM (Schrödinger’s Manager): “Maybe we should look at moving everything into the cloud”

Me: “We’d love to see that as an option. It would reduce our infrastructure costs and help simplify the environment”

SM: “We’re not moving to the cloud.”

Me: “But you just suggested…”

SM: “We’re not doing that. Why are we talking about this?”

What I would have attributed to simple cognitive dissonance, I’m now starting to see as a brilliant management strategy. Like our Cat-in-the-box, Schrödinger’s Manager exists in a continual state of superposition until observed by someone outside of the system (their boss). This allows them to exist in all possible states and, by extension, keeps all downstream decisions and activities both “aligned”/”not aligned”. Everything contained within the organizational “box” can be temporarily protected from observation and, therefore, from accidental collapse of the wave function into a decision.

When an observer (generally someone above the level of SM) comes along, the interaction causes the collapse of all of the possibilities into a consistent system of aligned or not-aligned decisions and fired, not-fired, punished and not-punished conditions. SM, however, appears to the outside observer to have always been in the state that’s observed when “opening the box”. They’re perceived as brilliantly insightful for having perfectly anticipated the observer.

While this is great for SM, the individuals sharing the box with him are left trying to function within a system of continual uncertainty. While it leaves possibilities open, that also means that both failure and success exist in superposition and there is no outside observation or interaction to help guide behaviors. If anything, feedback is specifically designed to maintain that delicate entanglement and ensure that there are no accidental decisions that will collapse those possibilities.

So how do we mitigate this phenomenon?

It’s really quite simple; Trust.

When an Observer (senior leader) trusts an underling like Schrödinger’s Manager with a decision and implicitly agrees to support those decisions, they shift the role of Observer to that person.

By trusting people “in the box” to make decisions and communicate openly with others outside of the box, the trusted take on the observer role and they become empowered to collapse probabilities into realities.

Trusting people does mean that you have to relinquish some control and power. But a good manager will have prepared their people to handle that responsibility and accountability…. and doesn’t that beat being a dead cat in a box?

 

 

No TED Talks @ Work

@Work Entertainment

TED (standing for Technology, Entertainment, Design) is a nonprofit organization dedicated to “ideas worth spreading.”

I enjoy TED talks..

I love listening to TED talks.  I enjoy the stories and the style.   I have good recall on many of the talks and in some cases,  it changes my life or perspective.    In most cases these talks are designed to make us think and feel.  People remember the talk because there is emotion wrapped into the story.    This is a far cry from the HR videos designed to deter us from making mistakes in harassment or hostile work environment in the office.

If you don’t know what a TED talk is.. take a look at this

That was a great one..

Not @ Work

A few years ago as part of a change management activity I suggested we do “TED talks” for our employees.   As a result, nothing good happened.  TED talks are written and spoken with passion and purpose.   There is something organic feeling about a TED talk.  It is something that is honest or at least feels honest.  There are plenty of lack luster TED talks out there but there is a style here that is almost like making music or a play.

TED talks

Use Anecdotes: If you can’t connect the anecdote to the current content and it isn’t emotionally connected, it is a waste of effort.

Rotate:  Weaving in entertainment and content and consistently looping it back in. 

Share New Info:  The information has to be new and fresh, even if it is a fresh take on an old thing.  It has to be new!

Have Passion:  HAVE PASSION

The ideas are “ideas worth spreading”  This is the kind of thing that drives a person to share the video or discussion with others.   It becomes personal and it is new even if it is old.

Corporate La La

When watching a TED, there is a good chance that you were introduced to the talk by someone sharing it with you.   A few months ago,  someone shared an Apple video from 1987 that was fascinating to watch today.

This video is TED worthy almost by itself.

The reason is that it is new, compelling and it emotionally touches some part of you.  It came from a source that was not “approved by corporate communications.”

There is a level of authenticity involved, even if you don’t agree with the content.  I believe that the person speaking is authentic.   In a corporate situation,  it is much more complicated.    If you come to listen or watch a TED talk with a closed mind from the beginning, there isn’t anything that can be said to pull you in a different direction because we need proof.  Most TED talks address some kind of research.

If your CEO is talking about how he researched that all figs have wasps in them and so we all need to understand the concept of “mutualism.”     You would potentially walk away scratching your head.   (Yes, figs can have wasps in them.)

These talks have to be authentic and if this is the first time you are ever hearing someone from the C-level come out to speak with you in the TED format, there is a reason or driver for this that is questionable to anyone.   Corporate leaders should speak often to employees but this format is made for a purpose and people will need to believe before they receive information that these are “ideas worth receiving and sharing.”

 

 

Testing You ..

Name 3 CEO’s or any C-level people that you believe should do a TED talk or have possibly done TED talks.   Were any of them your CEO or C-level person?   If not,  why?

There are many ways to communicate with employees, start by writing and showing up more.  Become present in the lives of your employees.   TED is for ideas not for companies to build relationships with their employees…  think about it.

 

Categories KM

Change Leaders |

imageforchange

“Change is easy for those driving it and hard for those being driven by it.” – Anyone but me

 

Change Leaders …

  • Understand change from strategic and tactical perspectives.
  • Accept short term failures as part of long term success.
  • Communicate through any and every channel.
  • Embed themselves into the fabric of the organization and become an active member of multiple communities.
  • Learn and Share.
  • Know when to stop.
  • Know when to push.
  • Understand the differences between collective intelligence and individual intelligence.

Change leaders can only be successful if the structure and culture of the organization is engaged in a change practice.

Structure being – Functions and organization in management hierarchy and responsibilities.

Culture being-  Interaction between people in peer to peer and/or relationships between manager / leader and staff.   Culture deals with human factors of cognitive, physical and social relations.


Jim says “You have to come to the realization that there are times, we must self-amputate.”    Organizational cuts are painful and sometimes needed but they become important when other options have been exhausted.  – Jim Knight

Change is hard.  

changes went well.jpeg

Change isn’t a program which can be handled by basic high level steps and initiatives. Change is much more fluid and adaptive.  Change leaders have to sense and respond to events constantly adjusting activities and behavior.   That isn’t to say that we don’t make plans.

Imagine for a moment that you are planning a road trip across the country,  you may decide on places to stop for fuel, food and rest.   While you are on the road, that 64 ounce bottle of water really got to you and you may have to alter your plans adjust and pull over for a bio break.   It is the same kind of idea.   Planning and goal setting is important but you have to be flexible.

 

In consideration of the same road trip,  it is possible that some family members didn’t want to go.   What would you do to help them accept and possibly even enjoy the trip?

Clarity and communication is a basic constant.   Clearly discussing and sharing the mission, vision, scope and objective of change.   Why is change needed?  What are the costs of keeping things the same?

 

What happens when you refuse to change?  What happens to the company if we refuse to change?

Change leaders work across an organization to connect ideas and people as part of a community.   Change leaders have to constantly change, learn, grow and adapt themselves.

commonchange

The Real

The average time spent at a job is now 4 years.   Depending on your frame of mind and tolerance for risk,  this could be a good thing.   If we consider the personal benefits in our individual time to competency or time to mastery,  change or shifting roles / job in 3-5 years will increase our overall knowledge, skills and ability.  Staying in a job (may) decrease our ability.   In the chart below, educators are normally on the B curve.

curve

Change Reaction

If you are reading this in Sept 2017,  you will note that Donald Trump is president,  we are on the brink of war with a few radical countries,  “Cash me outside” is a thing that is making millions of dollars by being rude and disrespectful,  massive hurricanes are becoming normal, earthquakes, volcano erupting, and a super planet was prophesized to hit the earth and cause the rapture a few days ago.

Wow..  seriously.. wow..  especially that “Cash me outside” nonsense.

So, the issue is  | change at a higher level whether it be organizational or other becomes personal.   When it impacts “me” is when change is an issue.

People deal with change (generally) in three ways.

1. Victims

  • Perceive themselves as independent of the facts.
  • Feel threatened with hostile situations they can’t handle.
  • Panic and respond with “fight or flight.”
  • Become fatalistic.
  • Oversimplify the world into good or bad, limiting their alternatives.
  • Are never happy and complain about everything.
  • Become pessimistic and cynical about management’s intentions.
  • React by waiting for change to overtake and crush them.

2. Survivors

  • Believe they are at the mercy of circumstances they cannot change.
  • Believe they can survive the change if they simply “hold on” or become competitive with other employees.
  • Convince themselves that “grasping” and “clinging” are necessary for self protection.
  • Respond with anticipation to what is coming and behave accordingly.

3. Navigators

  • Face the pain of change and take a proactive approach.
  • Create a vision of the desired future.
  • Gather pertinent information and assertively pursue the vision.
  • Manage the stress of change well by cultivating a belief in their own ability to deal competently with the situation.
  • Believe in being the cause and influences of events rather than the victim.

Point Being..  change sucks..  changesucks

Going through change and dealing with it or leveraging it may be difficult, there is a good chance things will be better at the end of the change story.   That being said,  I don’t want Niribu to hit the earth right now, that just wouldn’t be cool.

New or Different?

All the cartoons and quotes won’t make any of this better.    It is hard work to go through a change practice and more often change initiatives fail.   The catch is that there really shouldn’t be a change campaign.  Change happens and should be communicated so that individuals have a higher level of awareness.   Companies hire people today on long term contracts.   This means that people for the most part are all contractors.   It is always a temp job.  The catch is how long can we as individuals maintain our relevance.   It is also important for the organization to maintain, grow and raise (organizational intelligence / competency).

It feels like a one way relationship to people because something is “happening to me” but really it is a multi-dimensional relationship.   Something is happening to the company and to all the people in it.  Something is happening to senior leaders.   Something is happening to managers at the mid-level and something is happening to subject matter experts.   The difference is “awareness.”

If I were to add anything to the ADKAR model, it would be “Transparency” because people simply want to be respected and informed.   In general, people just want to understand what the heck is going on and why.   Even if it is bad news, they can be better prepared to help as opposed to being in the dark.

Prosci-Adkar

 

We don’t know..

Change management and knowledge management go hand in hand.    Many companies survive change and many do not.   Even large companies fail to deal with change and wind up dying.   When going through change, everyone has to be open to possibilities and realize that a fixed destination is not a specific target as much as it is a range of possibilities.    Operational awareness, organizational transparency and clear relevant communication are the factors for success.   We can’t know what the end of the story will look like as it has yet to have been written.

 

 

 

Show Me Candy #WhenVendorsAttack

l1001849_tonemappedVendor Demo

As a leader in IT, I have the benefit and the curse of 1,000+ vendors contacting me on a weekly basis.   Here are some challenges, issues, concerns and solutions for those selling warez.

Challenges for Vendors

Solving problems I don’t have or that I have nothing to do with..

Dear Howie,  As the IT leader for Knowledge Management I am pretty sure you need our UI / UX, AI, IA, RPAi, RPA, Workflow, Branding, Cloud SaaS,  CRM, Service Now, Crayola digital art kit.   How’s next Tuesday?  or Hey Howard (Howie) How-ster.. How-dog…  My SVP Fred Mcpuffinstuff asked me to setup a meeting with you to go over your needs in feeding puppies.   We are experts in puppies and we know that we can serve all your needs.   In fact, we will actually bring you a puppy when we see you and we will serve you puppy for dinner when we go out in town.

Honestly,  this is a very annoying at best and creates a situation where it impacts my productivity at worst.   You don’t know anything about me or what I do but you never know.. you may get lucky?   It isn’t likely..

Talking vs Demonstrating  | Demonstrating vs Talking

Tools.. tools… tools..   First they want to talk about the tools but then quickly realize things aren’t simple in the big enterprise environment.   Next we may talk about doing a demonstration but because there is a lack of understanding of the environment there isn’t an understanding of limitations.   The problem here is that vendors assume that we have 100% access to all of our resources.  They don’t take into consideration to ask about controls.  They also don’t know who they are speaking with relative to the demonstration. “This is the best bacon your Synagogue orthodox congregation will ever have.”  A real world example of this would be security vendors looking to sell me network solutions and wanting to demonstrate intrusion detection software.   That’s nice, but it really has nothing to do with me.    On the other end of the spectrum, some companies want to sell something that they can’t demonstrate beyond a wire-frame.  The reason is that they have the “talent” to build something custom or they have an “engine” to do whatever it is I can imagine.   My bologna has a first name.. ♪♫♬

Transparency

Many companies are just trying to get their feet on the ground.  I understand that and in my opinion, there isn’t anything wrong with becoming an entrepreneur.   It takes a lot of courage to go out on your own and start a business.    The issue is about risk.

A few years ago, I was working for a very large oil and gas company as a consultant.   The company had decided to buy software from a very small company.  The software worked well but the small company couldn’t keep up with the demand from the large company.  At the end of the day, the large company had to buy the small company.     This happened because the company was understaffed and the licensing costs didn’t cover the operational and capital expenses.   They were successful in their sale but they could not afford to scale and they didn’t understand the scope of business relative to expense in operations vs sales.

Going with a startup or Small, Medium Business (SMB) is fine but we need to work with the companies to understand the risk / reward.  If the risk outweighs the reward, it simply isn’t worth it. Many companies try to hide information about themselves but they wind up having to answer these questions with the vendor management groups of large companies.  Lack of transparency up front will cost you a sale, even if someone like me loves you.

Issues for Vendors

Misrepresentation of intention

For simplicity sake,  I am friendly but not your friend.   Many people contact me like we are old friends and served in the armed forces together.   Hey man,  could you do me a solid and connect me with your CIO?   Sure, I will get right on that brother.   I don’t mind helping out or talking to people, but if you intention is to simply use a relationship with me that you didn’t have in the first place,  it isn’t working out well for your endeavor.

Poor listening skills

Understanding words like (yes or no).   Sometimes, people call me and I say “no” because I can’t or it is not comfortable for me.  Maybe I say “no” because I don’t want to do it.   In many cases, vendors are so persistent and aggressive that they literally can’t understand the word “no.”   This doesn’t work out well in the long run because if you had accepted what I had to say,  I would be happy to refer you to other people who might say “yes.”

If you can’t listen in the beginning, there is a good change that you can’t listen at all.

Asking for favors

This is one of my favorites.  I don’t mind helping people and I do go out of my way to help people.  Anyone who knows me, knows that I am willing to help.    Often times the vendor equivalent of Wimpy comes and knocks on my door asking for a bunch of hamburgers today that they will gladly pay me back for on Tuesday.    Over time, I have learned that they (mostly) take the burger and run.    Don’t ask a prospect that you don’t know for favors.   

Concerns for Vendors

  1. Loss of trust
  2. Loss of sale
  3. Loss of opportunity for the future

Solutions for Vendors

  1. Research the company (not the people individually)
  2. Do your homework.
  3. Contact the right people in the company.

The secret in successful engagement is to build a trusted relationship up front.  Listen carefully to the prospect.   Don’t run us over with the pitch.  Be honest, open and transparent.   If you are dealing with a large organization, understand that you will be putting skin in the game and that an engagement will cost you money.   It is an investment for you as much as it is for them.

There are so many stories about vendorzilla situations, that we could probably write a book on it.

What’s yours?

 

Digital Workplace Knowledge Capital

Paul Strassman wrote in 1999 “Indiscriminate discarding of knowledge assets, whether in the form of accumulated employee training or legacy software, has origins in ideas proposed over a century ago about the value of capital and labor. These theories claim that only capital assets increased the productivity of labor.

Consequently, the productivity of an enterprise is measured only in terms of the
productivity of its capital, such as Return-on-Assets or Return-on-Investment. The
providers of capital are then entitled to the surplus, called profit or rent. If
knowledge happens to be necessary for labor to make better uses of capital, that
becomes the justification for a higher wage rate for labor. By this reasoning, those
performing the actual labor are not entitled to collect rent from the knowledge they
have accumulated. Labor can receive only fair compensation for the time worked.
The most they are allowed to claim is to be awarded premium wages and a bonus
here or there.
The above reasoning is not only misleading, but results in judging the value of
employees on the basis of their wages, rather than how fast they accumulate useful
knowledge. The productivity of labor is not only a matter of wages. Productivity
comes from knowledge capital aggregated in the employee’s head in the form of
useful training and company-relevant experience.”

 

Understanding Knowledge Capital and Digital

Coca-cola talks about “Collective genius” in their values.  Fidelity says ” Expertise

 

Amazon built an internal Knowledge Management practice that applies personalization and advanced KM to their workforce in similar way that it does customers.

Practically every company refers to its own ability to “know” how to do something.  They talk about it in their mission statements,  their vision, values and as they describe who they are.

In some cases companies talk about their heritage which represents a record of delivery. This organizational history or heritage represents culture but it is also meant to prove an organizational body of knowledge.  An example could be https://www.jnj.com/about-jnj or http://corporate.exxonmobil.com/en/company/about-us/history/overview

In other cases, new younger companies may disrupt the market with new ideas and knowledge.   In the case of Lemonade insurance, they have new ideas to bring to market but they recognize industry knowledge as part of their plan for success ”

A Big Deal: Our Reinsurance Partners Believe In Lemonade

You may ask – will these partners always be around to support us? The good news is they take the really long-term perspective, and we are developing exactly as expected. I’m happy to report that we signed a new reinsurance contract a month ago, and many of the leading insurance and reinsurance companies from across the globe joined in. This includes two of the top three global reinsurers; expert specialists that reinsure and even write homeowners themselves. From New York, Bermuda, and London, these partners are in the hubs of insurance knowledge and capital.”

Tell you something new?

Well..  alright..  sort of..

I am going to go back to an old idea that Paul brought up way back in 1999.

 Organizations should report knowledge capital on their balance sheets. 

“It seems to me that if companies were allowed to record their knowledge capital in
the valuation of their shareholder equity as a matter of accounting routine, many of
the inconsistencies which currently show up in accounting and tax treatment of
company valuation would vanish. > >Pricing Knowledge Capital
It is the risk-adjusted interest in future earnings, in excess of the cost of capital,
which an investor is willing to pay for as the value of any intangible assets. Since
investors cannot differentiate between the price of capital for financial or knowledge
investments because they are intermingled, I use the identical price for all capital as
a first approximation. This yields a simple equation:
Knowledge Capital = Economic Value-Added / Price of Capital
This relation makes it possible to prepare a revised Balance Sheet for any firm, by
adding a line item Knowledge Capital on the Asset side of the ledger, and by
increasing (or decreasing) the reported valuation of Shareholder Equity by the
identical amount.” – Strassman

If knowledge were recognized as an asset of value with potential revenue as opposed to cost or savings, this would literally flip the model.   Currently knowledge assets are looked at as overhead which is charged against the cost center as either single or recurring costs.  Single cost with maintenance labor overhead costs don’t show actual value.  This is a cost model vs a productivity model.   The assertion is information or knowledge in action (productivity) is an investment in knowledge capital.  It moves knowledge management from operational to strategic.

 

Operational to Strategic

Strassman may have been 20 years ahead of his time for Digital.  He defined Knowledge Capital as “Knowledge Capital is the value that a customer assigns on top of the cost of sales and cost of capital. It’s the surplus value on top of the traditional value. The people who possess the accumulated knowledge about a company are the carriers of Knowledge Capital. They are the people who leave the workplace every night and may never return. They possess something for which they have spent untold hours listening and talking while delivering nothing of tangible value to paying customers. Their brains have the been the repositories of an accumulation of insights about how “things work here” — something that is often labeled with the vague expression “company culture.” Their heads carry a share of the company’s Knowledge Capital, which makes them a shareholder of the most important asset a firm owns — even though it never shows up on any financial reports. Every such shareholder of knowledge assets in fact becomes a manager, because information acquisition and utilization are the essence of all managerial activities.”

When a company loses a lot of talent how are shareholders to learn of this unless it was an M&A or top of the line news? What are the implications to the company? How are we to understand what it means?  (Google and Car AI )  I understand that Google has a lot of other assets but the implication is that they lose first mover advantage.   How does this show up in the shareholder report?   “Hey shareholders,  we umm lost the only person that knows how to make cars drive on their own, but don’t worry as the rest of the car team leaves, we will find someone better and be first in the industry.”    #lostknowledge

Knowledge strategies can’t be effective unless they are tied to strategic efforts and financial indicators.  Digital Workplace efforts to enable employee productivity and experience from anywhere at anytime are not efforts in cost, they are efforts in investment and strategy.

The only way to see the value of knowledge is to link it to performance.  Interestingly enough, this is looked at through M&A.

Dr. Thomas Blumer brings this up through this illustration (look at business outcomes)

thomasb

 

The problem is that companies may only look at something like this ONE TIME and they don’t report on it.   If we consider the value of lost knowledge and the knowledge capital of an organization (prior to the outcome of losing the knowledge) we can see on-going relative value.   Not cost, not loss, but value today and in the future.  Think about it this way..

NASA loses the knowledge to get to the moon

NASA Manager confesses – “If we want to go to the moon again, we’ll be starting from scratch because all of that knowledge has disappeared.”

NASA Officials Warn of Aging Workforce, Washington Post, March 7, 2003

BP Loss of Knowledge Contributes to Massive Oil-Pipeline spill

BP learned the hard way why capturing key knowledge from subject matter experts before they leave is critical. When Senior Corrosion Engineer Richard C. Woollam left, BP lost valuable intellectual capital, namely his knowledge, experience, and expertise.

BP realized just how valuable Woollam’s knowledge was on February 25, 2006, when corrosion in the Prudhoe Bay pipeline caused a “small leak” in a quarter-inch hole in the pipe. BP discovered the leak five days later on March 2, after 250,000 gallons of crude oil spilled across 1.93 acres. The spill, the largest ever on Alaska’s North Slope, forced BP to shut down the pipeline and the Prudhoe Bay oilfield, the largest U.S. oilfield. Overnight, 8% of domestic oil production was shut down due to “extensive corrosion”.

Audits showed that by the time this massive oil-pipeline spill was discovered, the job of BP’s senior corrosion engineer had been left unfilled for more than a year.  This vacancy, and others, hindered BP’s ability to maintain a ‘strategic view’ of its corrosion prevention activities, the audit found. A BP spokesman said Friday that a replacement for the senior corrosion engineer has yet to be found…”

Analysis: Congress probes BP corrosion –Donna Borak, UPI Energy Correspondent Sep 6, 2006

BP audit: Key job vacant before spill – Brad Foss, AP Business Writer, Fri Sep 8, 2006

Congress Investigates Alaska BP Pipeline Leak –  Scott Horsley, NPR Morning Edition, Sep 7, 2006 (source http://www.knowledgecats.aboutpeople.com/KnowledgeLossFactsandFigures.htm)

This is what happens if .. as an outcome.  We can’t predict these events but we certainly can prevent them if we understand the current value of knowledge in an organization and assign it a value.  This value should be reported to stakeholders as part of corporate and organizational health. 

Alright.. enough?  I will give you one more …  Consider the DoD and the “cost cutting” efforts.  In a report concerning the USS Fitzgerald we can say two things at a high level.

  1. Knowledge and training saved the ship.
  2. Reduction in crew, knowledge, training and the value of KM contributed to the cause of this disaster.

Why?  Because knowledge is a strategic asset but viewed as a cost.  When you cut cost you cut knowledge flow.  It is that simple.

Summary

Companies that use knowledge as a strategic asset and investment perform better.  There should be no squabbles about the value of knowledge management or having to explain it to executives.   Knowledge capital through digital channels feeding the base of organizational knowledge and competencies should be reported on the balance sheet to shareholders.  Corporate leaders should be held accountable for talent management and knowledge management.   Even if we consider AI, IA and workforce reduction through robots,  where will the automated systems learn from?   How will shareholders react to companies telling them “we automated everything we knew about and nothing works, but don’t worry, we are on target.”

 

 

 

 

 

 

Categories KM

Digital Transformation ~ Conflict

imageedit_5_2836955823Don’t Ignore Conflict

Conflict is all around us everywhere.  Most of us deal with conflict of some form on a daily basis.   It is uncomfortable to talk about conflict and it is challenging for us to find ways to deal with it.   Conflict is primary, it is what I consider a fundamental function of our humanity.   Conflict rips and tears at people internally, externally, in small groups and large alike.   We are faced with it at every turn and it is hovers over us like a ghost.

It is something we deal with all the time but many people still seek to avoid it at all costs.

What is Conflict?

Conflicts are generally defined as relational disputes between two or more parties.
“The clashing of opposed principles” Oxford Dictionary

“Conflict is inevitable in organisational life but it need not have destructive consequences for the organisation (or work group). Depending on how the conflict is managed, the negative effects may be minimized, and positive effects may result from the conflict. Effective conflict management is based, in part, on a solid understanding of the different ways conflict emerges and can be resolved”. Organisational Behavior Hellreigel, Slocum and Woodman, 2001 Ninth Edition, South Western Thomson Learning, Singapore

Conflict in DT

Dion Hinchcliff is very effective at communicating important topics of digital today.   I enjoy learning though his perspective.  There is a very subtle arrow in the image below that I believe should be red, flashing and exploding.   It should have alarm bells going off and it should send you texts and emails, automatically set up doctors appointments, buy you lunch and set up a vacation for you.   Do you see it?

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Dion Hinchcliffe CIOCMO

If you guessed this arrow,  you got it right.  Why is this the most important aspect of the picture?

This arrow represents an issue that will keep a CIO, CMO, their staff, husbands, wives, friends, children, cousins, best friends, etc engaged in all sorts of conflict management activities.    In the digital age, we take work with us everywhere we go.  We are on and connected and this arrow represents an internal conflict that is happening across companies globally.

This reminds me of a discussion I had with a C-Level coach concerning the challenges of a Global CIO.


A little bit of the secret sauce,  or as Guy Fieri calls it “Donkey Sauce.”
The CIO held at least one meeting a month with all of his directs and their staff.   This meant coordination of staff,  calendaring,  and essentially getting over 100+ people into a room.    He took care to make sure people were virtually dialed in as well but it was well known in the ranks to “show up.”   There wasn’t a head count but if there was a missing person,  he would see it.
…….
The job of a CIO is to have a seat at the table beyond (OPEX)Operational Expense but this takes guts and it means taking on a lot of risk.    It is the “falling backwards” test and having belief and faith that your team will be there to catch you.   More often than not, your team is more than just these folks that are following but the leaders that prove they understand “servant leadership” from the top.   I don’t know what the C-level team did in terms of support but it always seemed to me that the CIO was blocking and tackling from both sides and being squeezed in the middle.    What made a difference from my view was active conversations that took place from what was known as the IT Senior Leadership Team and Business Partner Leads (from a strategic operations and IT team) and constant communication activities.   It certainly didn’t mean that everyone was in agreement, in fact there were a lot of disagreements (conflict) but these were always wrapped in passion in practice.  In other words,  people could disagree, work it out and get things done.   One thing was for sure, it didn’t matter who we made promises to,  we had to honor them and get them done.  Their expectations exceeded and commitments delivered.   I can attest to where the business would be without these efforts.   At this company I have had the opportunity to see the best behaviors and the worst.     What is true today for IT is that change has happened and will continue to happen for enterprise IT.   CIO’s are brokers and agents for the companies vs delivering technologies.   What this means is that companies will be forced to place the cost around OPEX / CAPEX on the business areas and groups.   KPI’s will show and are showing a lack of organizational balance.    The new CIO if they even call them that any longer will be an expert in talent management,  vendor management and communications expert including but not limited to conflict management.
The current shift in how companies are getting IT resources is seemingly based on individual unit KPI’s which are not a good organizational indicator.   The benefit of a business unit self prescribing a solution is essentially a short term fix for long term problems.   The business units exacerbate the problem by extracting dollars or limiting cash flow to enterprise services they perceive they no longer need because they have substitute technologies.  Unfortunately, the reality is that medium to large companies literally bleed out cash due to a lack of knowledge in enterprise cross cutting.    One example is cyber security,  there is a recent cartoon of the cyber person getting a seat at the table.
Inline image 1
You may wonder why..  The answer is that single point cyber solutions may create more organizational and operational risk on their own.     If I am a CMO or a CDO,  I would have very little knowledge of these things because generally these folks have grown up in corporate communications with a very different focus.    It is easy today to use a credit card to buy a service but this purchase can within itself cause millions in damages (think compliance alone).
So.. the main issues today are
  • illusion of choice (people believe they have more options than they really do)
  • misunderstanding of the differences between IT services and IT talent (services a generally highly focused without many variable options while talent allows for more organizational and operational flexibility and resilience)
  • illusion of cost (business groups look at individual costs and don’t have insight to organizational factors or costs,  this can be found when someone buys something they want to integrate or use x509 or directory services for)
  • illusion of communication (business groups substitute active dialogue and communication with posts or broadcasts,  they believe that since they shared information in a public forum that some receiver is there to read it and that it is now known)
The value of IT is specific in that,  there is a very clear understanding of requirements, cost, risk, and underlying operational benefits with long term implications including talent management.   All of this requires two types of partnership
  1. Services Partnership – HR, Corporate Communications,  IT, Vendor Management etc (anyone who doesn’t generally create or generate direct revenue)
  2. Business Partnership – Any business groups / teams that are revenue generation
Companies are struggling with this across the board because of their lack of tacit organizational knowledge.  When they figure out they have a problem, they go to other services or consulting and this creates more on the cost side.   These costs then start to come out of the strategic targeted budget and it creates a new level of overhead.   Now these business units get taxed multiple times…

 


Pulling it Together

If the C-level seeks to avoid conflict or create internal war conditions,  it is costly to everyone in the company.  In previous blog posts, I talk about having courage and taking risks around communication.  This is exactly the place where having courage matters.   Avoiding conflict makes organizations and people sick.  It causes micro-aggression and internal silo wars.     There should be strategic and operational investments in conflict management as part of Digital Transformation.   Digital Workplace, Employee Experience and Productivity are very important but beyond the user experience there are human factors that are cognitive, physical and social.   Addressing these as part of change management activities and transformation will create healthier and more successful companies.

 

 

 

Categories KM