FoR managing intellectual capital in the new business environment Audrey L Chin 05 july 2012 Introduction Knowledge Economy The basic economic resource the means of production is no longer capital nor ID: 594272
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Slide1
The BUSINESS STRATEGY
FoR
managing intellectual capital in the new business environment
Audrey L. Chin
05
july
2012Slide2
Introduction : Knowledge Economy
"The basic economic resource - the means
of production
- is no longer capital, nor
natural resources
, nor labor. It is and will be knowledge".Slide3
PROBLEM at Strategic Level
What is the first step toward survival in a new business environment, one ruled by intellectual capital?Slide4
Strategic Problem Details
Very few individuals understand intellectual capital, and almost no one has been able, formally at least, to put a value on it .
This is very difficult because “Knowledge” is somehow intangible, so how can an organization maximize the returns on investment in knowledge?Slide5
Strategic Solution :
Knowledge Management
That’s why KNOWLEDGE MANAGEMENT (KM)–
how an organization makes use of its intellectual capital–is one of the greatest challenges facing senior managers today. Slide6
Challenges CEO
CEOs are responsible for justifying the value of knowledge constantly being developed in their organizations : from the capture, codification and dissemination of information, to the acquisition of new competencies through training and development, to the re-engineering of business processes.Slide7
Managing Intangible Assets ?
Present and future success will be more on the strategic management of knowledge assets.
This means that the capacity to manage knowledge is a critical skill, and perhaps the critical skill of this era. Slide8
REALISTIC Statistics on Knowledge ManagementSlide9
Actual Strategic Problem in new business environment
IDC, an international research organization, has reported that Fortune 500 companies wasted $12 billion by duplicating knowledge work in 2000, e.g., simultaneous search costs, parallel research projects.Slide10
Why KM is crucial in the new business environment
Recent studies conducted at the Institute for Intellectual Capital Research in
Dundas
, Ontario provide strong evidence that knowledge management programs incl. KM staff are not only becoming more prevalent but are resulting in tremendous cost savings.Slide11
Financial Benefits Knowledge Management Programs
25 per cent of Fortune 500 companies currently have CKOs;
80 per cent of Fortune 500 companies currently have KM staff;
From 1997-2000
The Ford
Motor Company saved $914 million, mainly due to effective knowledge management programs; Chevron has saved $650 million since 1991, while Texas Instruments has saved $1 billion since it launched KM programs in the mid-1990s.
in 2001
The Canadian Centre for Management Development launched a formal cross-country KM training program
for senior
federal government officials
in 2001
Health Canada administered a KM diagnostic to identify its knowledge bottlenecks
2001
95 per cent of CEOs polled at the 2001 World Economic Forum in
Davos
, Switzerland, said that KM was critical to organizational success;
2001
91 per cent of Canadian business leaders polled by
Ipsos
- Reid believed that KM practices have a direct impact on organizational effectiveness, and one-third of
Canadian organizations that have not undertaken a KM initiative expect to do so in the next 12 monthsSlide12
The emerging role of the chief knowledge officer (CKO)
A chief knowledge officer (CKO) is an organizational leader, responsible for ensuring that the organization maximizes the value it achieves through "knowledge".
CKOs can help an organization maximize the returns on investment in knowledge (people, processes and intellectual capital), exploit their intangible assets (know-how, patents, customer relationships), repeat successes, share best practices, improve innovation, and avoid knowledge loss after organizational restructuring.Slide13
Future value–and job security–of the CKO placement/position
Why the CKO will become a mainstay in the boardroom
Over half-a-million knowledge-intensive, high-tech jobs currently remain unfilled in America;
42 per cent of Fortune 500 companies anticipate appointing a CKO within the next three years
33 per cent of Fortune 1000 companies report that knowledge management activities are already under way.
Forty five per cent of 53 executive search firms in Canada and the United States were indeed familiar with the position of CKO.
72 per cent of the respondents expected CKO searches to increase significantly in the future.
Forty-seven per cent of the headhunters predicted that CKOs would have working experience in IT and be placed primarily in high-tech industries where most of the work is knowledge-intensive.Slide14
responsibilities of the CKO
Collecting relevant data that is useful for the organization as knowledge (extensive business experience needed to be able to determine which info is worth sharing )
Developing an overall framework that guides knowledge management
Actively promoting the knowledge agenda within and beyond the company
Overseeing the development of the knowledge infrastructure
Facilitating connections, coordination and communications.Slide15
Requirements for a succesful CKO
The CKOs claimed that in order to succeed in the future, they would need
more slack time for dreaming, thinking and talking,
more high-level support from CEOs and board members.Slide16
CKO Characteristics
Highly educated
Already
a seasoned organizational performer and chosen for
the knowledge management position
based on their proven performance
A
“researcher” … seeks new knowledge, likes to learn
Attracted
to “being at the forefront of something
new and exciting”
Motivated
more by a challenge than by formal
power
Receives
intrinsic rewards from helping others … some altruism and/or evangelism
A
risk-taker … sometimes a maverick
Sees
knowledge management as a way to “make a mark within the organization”.Slide17
KM PROJECT #1 WITHIN THE INDUSTRY:
APPLYING KNOWLEDGE MANAGEMENT as BUSINESS STRATEGY for DEVELOPING THE RELIABILITY CENTERED MAINTENANCE (RCM) in SURINAMESlide18
Targetgroup : Academics
Working Environment : Bureaucratic & Academic
Role : Researcher (
Interdisciplinairy
)
Conference Presentation of Research Proposal :“The Reliability Centered Maintenance Approach in Suriname” by Audrey L. Chin at the ADEKUS Research days
Business Strategy : A first step to a knowledge transfer system in technology and innovation for the academic community for commercializing their “academic research” Slide19
Targetgroup: Practitioners
Working Environment : Creative & Professional
Role : Change Manager in RCM
Change
Managers must help build new practices and communities to bring about changes that will make a constructive difference : The (learning) Community of Practice in Reliability Centered Maintenance (RCM) consisting of RCM academics & practitioners
Business Strategy : The Community of practice as a first step for structuring & improving organizational learning in RCMSlide20
In Summary
Question
:What is the first step toward survival in a new business environment, one ruled by intellectual capital?
Answer
: Communities of Practices structures the organizational learning in RCM
If well developed, Communities of Practices becomes organizational assets – (intangible) knowledge assets which then can be managed
Only then can the CEO maximize the ROI in knowledge – KNOWLEDGE MANAGEMENTSlide21
Next : Implementing the Community of Practice in RCM in an organization