Class themes were Hybrids, Social Enterprise, The Rise of the 4th Sector in MGNPO and Leveraging Intellectual Capital, Enterprise 2.0 Technologies in IDSC

Table of contents

MGNPO

• Chapter 17, Managing Nonprofit Organizations, Tschirhart and Bielefeld (2012)
• The Nonprofits of 2025, Anheier (2015)
• The Rise of a Fourth Sector Skills Set, Bulloch (2014)
• Hybridity and Nonprofit Organizations: The Research Agenda, Smith (2014)

IDSC

• Collaborating With Customer Communities: Lessons From the Lego Group, Antorini, Muñiz, Jr. and Askildsen. Sloan Management Review (2002)
• When Senior Managers Won’t Collaborate, Gardner. Harvard Business Review (2015)
• Integrating the Enterprise, Ghoshal and Gratton. Sloan Management Review (2002)
• Managing Your Mission-Critical Knowledge, Ihrig and Macmillan. Harvard Business Review (2015)

MGNPO

Chapter 17, Managing Nonprofit Organizations, Tschirhart and Bielefeld (2012)

• This book ends where it started, with a focus on the mission
• mission should guide the board and executive director in setting and pursuing strategies and evaluating outcomes
• mission inspires the strongest form of commitment among volunteers, donors, and others
• When leaders and managers lose sight of the mission, and the values behind it, they lose an ethical guidepost
• When well defined, a mission gives the nonprofit’s leaders and managers a sense of the current reality, the social problem, and the organization’s approach to the problem
• inspires a sense of what is possible, leading to a vision of a better world.
• effective leaders manage the creative tension between the current reality and the vision
• The right amount of tension can create energy that can be directed toward pursuing the vision
• nonprofit leader’s job is to help others dream of what is possible and show them a path
• The challenge is how to deal with realities that are frequently shifting.
  • The pace of change is accelerating
  • Institutions are increasingly interdependent
  • The ability to access and analyze information has dramatically increased
• Even if leaders can get a firm grasp of current reality, it is hard for anyone to imagine what the future will hold
• Once it was common to have ten-year strategic plans; now organizations tend to have one-year plans or at most three-year plans
• growing sophistication and interconnectedness of those who work to evaluate nonprofits’ efforts
• Honest, authentic communication will always be critical to maintaining stakeholders’ trust
• a cautionary note is in order: more than ever nonprofits are in a world where quick and easy categorizations of the generations may lead them down faulty paths
• Leaders and managers who can treat each worker as an individual with unique motivations and abilities will have a leg up
• An orientation to continual learning will help nonprofit leaders and managers to ensure that worthwhile opportunities are not missed and that their organizations remain open to the most effective ways to forward their missions.

The Nonprofits of 2025, Anheier (2015)

• nonprofits are shaped by political frameworks, policies, and program
• For several decades, most developed market economies have seen a general increase in the economic importance of nonprofit organizations as providers of health, social, educational, and cultural services.
• new and renewed emphasis on the social and political roles of nonprofits
• driven in large measure by four broad perspectives
  • First, nonprofits are increasingly part of new public management (NPM) approaches
  • Second, nonprofits are seen as central to building and rebuilding civil society and strengthening the nexus between social capital and economic development
  • Third, nonprofits are crucial to social accountability.
  • Fourth, nonprofits are seen as a source of innovation in solving social problems.
• What do these perspectives mean for the nonprofit sector of the future?
• the following scenarios may serve as markers that nonprofit representatives may wish to consider
  • NPM Scenario
    • Nonprofits become a set of well organized, quasi-corporate entities that take on the tasks and functions that previously were the purview of the state
    • nonprofit sector could become the private extension agent of a minimalist contract regime run by government.
  • Civic Scenario
    • Nonprofits are the building blocks of a selforganizing and self-correcting community corpus
    • nonprofits coordinate their own activities and exist at arm’s length alongside a small, technocratic state
  • Accountability Scenario
    • Nonprofits are a force of and for advocacy.
    • they emerge as a countervailing force that serves as a social, cultural, and political watchdog keeping both market and state in check and accountable.
  • Innovation Scenario
    • Nonprofits are encouraged to operate in problem fields that politicians find either too costly or inopportune to tackle themselves
    • nonprofits become the “search engine” for social problem solving in modern societies.
• unlikely that any of the four scenarios will prevail exclusively; more likely, one may become dominant, especially economically.
• NPM scenario will continue to shape the evolution of service-providing nonprofits. It will enable new for-profit/nonprofit hybrids to emerge
• various scenarios outlined above not only cast the nonprofit sector in a different role, they also imply different roles for the state and business.
• the role of the state as “enabler” and “animator” of private action for public service has increased and will continue to do so. This development, in turn, will continue to push and pull nonprofits in all the four directions

The Rise of a Fourth Sector Skills Set, Bulloch (2014)

• cross-sector convergence, a situation in which the barriers between the traditional sectors (business, government, and NGOs) are not just blurring but getting redefined
• there is increasing willingness to address complex problems both pragmatically and innovatively
• define the fourth sector as that which aims to deliver specific social outcomes that are measurable, scalable, and (importantly) profitable
• its goals are so much more broadly defined than any of the other sectors, the fourth sector requires a particular type of person: one who is comfortable moving between the skillsets, language, and inherent trade-offs of the for-profit and the not-for-profit sectors.
• leaders have two things in common: 1) Their ambitions go beyond the search for profit, and 2) they can be hard-nosed about achieving their aims and in seeking out sometimes surprising partners.
• young leaders are taking this concept seriously when planning their careers
• Short-term profit is no longer the only yardstick
• We need to reframe the problem and rethink the business case

Hybridity and Nonprofit Organizations: The Research Agenda, Smith (2014)

Abstract

• The emergent research on hybrid organizations is complicated by three circumstances: (a) the assertion that every organization possesses traits of hybridity, (b) the difficulty of operationalizing sector intersections in research, and (c) the alienation of the research field from nonprofit theory
• research on hybridity would benefit from relating nonprofit theory to disciplinary approaches, such as institutional theory or organizational life cycle

Article

• Increasingly, nonprofit organizations are critical for the provision of many valued and vital public services, often in partnership with government and the for-profit sector.
• new roles, alliances, and partnerships have also led to greater complexity in organizational forms
• described by many terms:
  • social enterprise
  • collaborative governance
  • networks
  • public-private partnerships
• One other term with widespread currency is hybridity
  • generally refers to organizations with two or more sectoral characteristics
  • based in part on the common tripartite sectoral division among government, the market, and nonprofit or third-sector organizations
• Greater hybridization among nonprofit organizations also reflects the spread of the New Public Management (NPM)
• NPM strategies have tended to be market-based initiatives
• influence of NPM is also reflected in the broad enthusiasm for social entrepreneurship and social innovation
• This paper focuses on the research agenda for scholars interested in hybridity
• Early research on hybridity tended to focus on quasi-governmental organizations that typically were public agencies with features from the for-profit and/or nonprofit sector (such as Fannie May and Freddie Mac)
• Another conceptual approach is exemplified by Minkoff (2002), who argues that hybrid nonprofit organizations combine different missions—or policy fields—within one organization
• More recently, Skelcher and Smith (in press) argue that hybrid nonprofits are the sites for the contestation among competing institutional logics
• For example, a nonprofit social enterprise organization that operates a restaurant staffed by disadvantaged workers would have a nonprofit community logic, a market logic, and a government logic
• the concept of hybridity is useful at the symbolic level in conveying something of the organization
• research on hybridity as it relates to nonprofits and public agencies is challenged by the three key difficulties
  • hybridity is arguably a property of all organizations
  • hybridity is based upon a tripartite distinction between government, markets, and nonprofits
  • hybridity has generally been employed in the nonprofit sector to describe different structural configurations
• hybrid typologies have been largely disconnected from nonprofit theory
• do not allow us to understand if the governance of a nonprofit with a for-profit café is significantly different than a nonprofit reliant entirely on philanthropy
• Hybridity then, is a widely used term today but one with different meanings and interpretations.
• blended model points to the need for additional research on the relationship between innovation and hybridity
• Programmatic innovation in nonprofits can occur through several routes.
  • social entrepreneurs can create a new social innovation
  • social innovation generally refers to new solutions that simultaneously meet a social need and enhance the societal capacities and the efficient use of resources - nonprofits can innovate programmatically by adding a new program
  • nonprofits can innovate in terms of their program delivery
• social entrepreneurs interested in creating social innovations often strive to create a unique and blended form of hybridity
• challenge is to sustain the innovations over time, especially in the current, more austere era of funding
• Innovation can be considered the outcome of a hybrid organization, or alternatively, hybridity could be considered the outcome of an innovative organization
• structural innovation is more likely when other organizations in the same field are undertaking similar innovations
• Early theories of the nonprofit sector propounded in the 1970s and 1980s focused on market failure explanations for the sector.
• Salamon (1987) added a third perspective
• Nonprofits have four serious problems as a provider of public goods:
  • lack needed resources (insufficiency)
  • possess inadequate levels of professionalization (amateurism)
  • tend to focus on a narrow target constituency (particularism)
  • and can embrace a paternalistic attitude toward service users
• government can offset these “failures” of nonprofits through direct public funding and regulation.
• nonprofits cannot adequately address the demand for public goods without government support
• If all nonprofits are hybrids, then arguably the underlying assumptions of key nonprofit theories are called into question
• Hybridity in nonprofits may also be usefully studied from the perspective of organizational life cycle theory.
• one of the most central issues confronting many nonprofits today is the need to manage different institutional logics due to the increasing environmental turbulence and need to adapt their organizations
• Research on nonprofit organizational development could also help policy makers and government managers in their oversight role for nonprofits.
• Understanding hybridity in the context of organizational life cycle theory has potential implications for our understanding of leadership in nonprofit organizations.
• cross-national research has yet to be undertaken on a widespread scale
• Comparative research across countries would be especially helpful in understanding the relationship between government policy and regulations, social innovation, and hybridity.
• the work of Kerlin (2009) and others points to the importance of the institutional context as an important factor in affecting social innovation and social entrepreneurship.
• Importantly, hybridity reflects the diversification of policy tools throughout the world
• growing complexity of the financial support of nonprofits, the actual relationship between public and private funders and nonprofits is often quite elusive
• research on the diverse funding streams of nonprofit organizations could inform management practice in nonprofits
• existing work on nonprofit hybridity has tended to approach hybridity as a sectoral issue, even though research may be based upon single case studies
• possible that hybridity and its consequences for organizational governance, accountability, and service effectiveness might fundamentally differ depending upon the policy field.
• Hybridity is certainly a long-standing characteristic of nonprofit organizations
• hybridity has increased substantially within nonprofits due to shifts in the social and political environment
• These trends are likely to continue given the fiscal stress on governments; the recent growth in the number of nonprofits; and the intense interest of funders in social innovation and new models of service delivery
• Our understanding of hybridity and nonprofits could be substantially enhanced by connecting research on nonprofits to disciplinary considerations and approaches as illustrated by the institutional logics framework as well as organizational life theory
• Substantial funding is being directed to different types of hybrid organizations,
• But little research has been devoted to examining the sustainability of these enterprises
• nonprofits are encouraged to adopt more market-like behaviors, including greater reliance on earned income, but managing the complexity of different income streams and logics and norms remains an understudied aspect of nonprofit and philanthropic studies research.
• Hybridity research could also inform research on comparative public policy
• Increased hybridity raises fundamental issues regarding the governance of nonprofit organizations and the accountability of these organizations to the citizenry
• Serious, sustained research on hybridity is crucial to helping policy makers and the citizenry forge effective and appropriate governance structures for nonprofit organizations.

IDSC

Collaborating With Customer Communities: Lessons From the Lego Group, Antorini, Muñiz, Jr. and Askildsen. Sloan Management Review (2002)

• would it be like if you found that you had hundreds if not thousands of knowledgeable users of your products ready and eager to spend nights and weekends acting as extensions of your research and development department?
• In 2005, Lego created the Ambassador Program
• Through trial and error, Lego has developed a solid understanding of what it takes to build and maintain profitable and mutually beneficial collaborations with users
• user-created innovations have expanded the Lego play experience and pushed the use of Lego materials into new and virtual media
• Cumulatively, the fan activity represents a vast library of free ideas
• Historically, Lego was an extremely private company
• public position was “We don’t accept unsolicited ideas.”
• late 1990s, Lego Mindstorms contained software and hardware to create small customizable and programmable robots.
• users found ways to hack into the code and adapt the new products; they talked about their innovations on independent websites.
  • presented Lego management with a choice: either pursue legal action the hackers or invite users to collaborate on new products and applications
• new CEO, Jørgen Vig Knudstorp, in 2004 provided the opportunity for Lego to reflect on the meaning of the brand as well as the value of the company’s ties with the user community
  • “We think innovation will come from a dialogue with the community,” he told a North American user convention in 2005
• began in March 2004 by selecting an adult fan team leader, who set up a secure forum where users could share their designs
  • few short weeks later, the level of fan activity was tremendous
  • “I was overwhelmed by the quality.”
  • success of this project “sent shock waves through our development organization.”
• Based on its experience working with dedicated users, Lego management has developed an informed view on the circumstances under which collaborating closely with users works well- and on when it doesn’t.
  • When it works well
    • most successful when outside parties have a particular area of expertise, such as architecture or sensor design and manufacture, that individuals within the company don’t have
    • having innovations that can be pretested by potential customers helps eliminate bugs and reduce risk
    • Cocreating knowledge-intensive innovations with users allows Lego to obtain the skills and knowledge important to these activities
    • in recent years Lego has hired more than 20 adult fans
  • When it causes difficulties
    • less successful in cases where users seek to push the products beyond their intended limits
    • Whereas the primary end users from Lego’s perspective are children, adult fans often think about developing products for other adults
• Core principles for successful interaction with users
  • Be clear about rules and expectations
    • Lego learned that it had to be more specific about its expectations upfront, including when its projects would begin and end
    • adult users were more cooperative When they negotiated expectations with the Lego employees directly involved
  • Ensure a win-win
    • the collaborations themselves needed to be rewarding experiences for the users
    • intrinsic rewards associated with designing and building products are frequently more motivating than financial rewards
    • Lego has tended to pay outside collaborators with a combination of experience, access and Lego products
    • users who participate in long-term projects or who provide services that are more like “work” are given a choice: they can receive free products or a more conventional stipend
  • Recognize that outsiders aren’t insiders
    • relationship with other fans and the input and encouragement they offer that strongly motivate these users to keep raising the creative bar
    • User communities are not just extensions of the company - they are independent entities
  • Don’t expect one size to fit all
    • different users prefer different modes of communication, and different types of innovations call for different environments
    • Lego relies on many different collaboration platforms. The simplest are polls and electronic idea boxes
    • A more advanced platform, Lego Digital Designer allows users to design virtual Lego models and create digital building instructions
    • allows innovators with different skill levels to participate
    • Newer platform, Lego Cuusoo, allows users to upload designs (drawings, photos, etc.) to a Web page where other Lego users and consumers in general can vote on the design.
      • If a design receives 10,000 votes, Lego agrees to consider it for possible production; if the design is commercialized, innovators receive 1% of the total net sales
    • Finally, the company shapes new ideas through user panels and virtual project rooms
      • restricted forums gather input from very skilled users on complex, long-term projects
  • Be as open as possible
    • Today Lego uses NDAs more sparingly, to limit information sharing with third parties only in narrowly defined situations-thus ensuring that collaborators are able to interact with each other to the maximum extent Lego also attempts to maintain transparency in all matters related to collaboration
    • And the company supports community initiatives aimed at improving idea sharing among community members and advancing innovation
    • These lessons are applicable to other organizations. Instead of regarding collaboration as something that needs to be managed exclusively by the company, it is fruitful to think of it as an ongoing dialogue between two allies
    • Frequently, the two sets of resources complement each other and advance the conversation and collaboration

When Senior Managers Won’t Collaborate, Gardner. Harvard Business Review (2015)

• As clients have globalized and confronted more-sophisticated technological, regulatory, economic, and environmental demands, they’ve sought help on increasingly complex problems
• The only way to address clients’ most complex issues, then, is for specialists to work together across the boundaries of their expertise.
• many partners are hard-pressed to spend time and energy on cross-specialty ventures when they could be building their own practices instead
• True multidisciplinary collaboration requires people to combine their perspectives and expertise and tailor them to the client’s needs so that the outcome is more than the sum of the participating individuals’ knowledge
• research examines these tradeoffs through quantitative analyses of a decade’s worth of detailed financial and time-sheet records
• findings show how the benefits of collaboration play out.
• paint a realistic picture of the barriers that often prevent professionals from working together.
• suggest changes that both individuals and firms can make
• The benefits to the firm
  • For a firm, the financial benefits of multidisciplinary collaboration are unambiguous.
  • in part because cross-specialty work is likely to be less subject to price-based competition
  • clients view single-specialty expertise (about a basic tax issue, for instance) as a commodity that can be awarded to the lowest bidder
  • moving beyond siloed services to complex, interdependent engagements allows a professional services firm to work for more-senior executives in a client’s organization
  • multidisciplinary projects builds loyalty by creating switching barriers
  • partners’ ability to see their colleagues’ work lowers the risk of illicit rogue behavior (something that is admittedly rare but can be fatal)
• How individuals benefit
  • benefits of collaboration to individuals are equally quantifiable, if less intuitive
  • professionals who contribute to colleagues’ client work sell more services to their own clients
  • referrals are a more-efficient way to generate work than prospecting
  • On average, partners got a new client referral within a year from one in every six colleagues they teamed up with
  • likely to spread word of your expertise to colleagues who need it
  • compounded effect of word of mouth is powerful
  • Collaboration raises a partner’s profile with colleagues but also in the wider market
  • recommendations lead not only to more work but also to more-sophisticated and more-lucrative work
  • Complex projects give individuals access to high-level executives in the client organization
  • Cross-disciplinary collaboration also helps insulate professionals from economic downturns
  • Some of this benefit derives from the social cohesion
  • learned to handle a broader set of topics
• What gets in the way
  • it’s no secret that the organizational structure, compensation systems, and cultures in many, if not most, professional services firms favor individual contributors rather than team players
  • competitive values become so ingrained that the winners find it counterintuitive to collaborate when they become partners.
  • many firms value “rock stars, not the whole band.”
  • The effects of the compensation system bleed into the culture, which disparages “service partners,”
  • some of the advantages firms gain from collaboration may come at the expense of individuals
  • increased transparency, for instance, can feel from the professionals’ point of view like heightened scrutiny
  • External reward systems also play a role in encouraging professionals to develop a reputation for specialized expertise. For example in public “star ranking” systems
  • As if these financial concerns weren’t enough, learning to collaborate effectively is difficult
  • coordinating with peers across departments is significantly harder than delegating to junior staffers
• Getting to the Benefits Sooner
  • people have figured out that perseverance pays off
  • Certain strategies can help professionals reap the benefits of collaboration sooner.
    • matters whom you collaborate with
  • You might get high-status partners to work with you on the basis of your knowledge and expertise, but getting them to keep working with you hinges on their experience of you as a team player. Rules:
    • Don’t squeeze your team members
    • Deliver what you committed to on time, without reminders
    • Communicate openly
• Organizing for higher-value work
  • The leader as coach
    • begin with themselves, modeling the right behavior by contributing to others’ client work and sharing credit with those who participate
    • also take some simple steps to help partners build trusting relationships - for instance holding retreats
    • The best firms also pair lateral hires with a successful homegrown partner
    • resist the temptation to bring in high-performing but selfish partners, who might be a toxic influence
    • seek candidates who have a track record of working across boundaries
    • To gauge that, ask applicants to give several concrete examples of how they contributed to others’ client work and how they built teams
    • Candidates who brag about their ability to transfer clients to your firm should send up a red flag
    • Leaders also need to be careful about commending players for great outcomes. When a partner makes a big sale as a lone wolf, talk with them about better ways to achieve the same outcome
  • The leader as architect
    • metrics can be gamed, trying to reward them can be counterproductive
    • far better to reward the outcomes of effective collaboration, such as rising levels of client satisfaction and client retention, growth in revenue and profits, acquisition of new clients
    • include measures that capture partners’ contributions to nonbillable efforts such as mentoring, sharing knowledge, and giving advice
• Under such a deliberately cross-specialty collaboration strategy, time spent learning to work together is treated not as nonbillable overhead but as an investment in remaining competitive

Integrating the Enterprise, Ghoshal and Gratton. Sloan Management Review (2002)

• Vertical “command and control” sabotages organizations that need bottom-up innovation to be competitive. Yet organizational integration is increasingly essential
• technology is helping cutting-edge companies meet the challenge by integrating horizontally.
• One of the most fundamental and enduring tensions in all but very small companies is between subunit autonomy and empowerment on the one hand and overall organizational integration and cohesion on the other
• it is possible to balance those tensions successfully by implementing four kinds of horizontal integration for achieving cohesion without hierarchy
• empowered units improved both the speed and the quality of responsiveness to market demands — and fostered increased innovation
• also led to fragmentation and to deficiencies in internal integration.
• few incentives to share knowledge or other resources, particularly when evaluation of their performance focused primarily on how their own unit was doing, rather than on how the unit contributed to the company’s overall performance.
• The need for integration to counterbalance internal differentiation is an old chestnut.
• Information sharing has always been at the heart of integration, but now technology allows organizations to respond to integration needs in ways that were unavailable even five years ago
• networks are still a powerful tool for socializing people and building organizational cohesion, they are less common — in part because lifetime careers and on- demand mobility of employees can no longer be assumed.
• drastic pruning of middle management that many companies undertook in the 1990s deprived them of an important but often unrecognized source of organizational integration.
• perhaps the most important change is in management philosophy
• In the past, integration was managed primarily through vertical processes
• Although there has always been a recognition of the relevance of horizontal integration mechanisms, in practice they have been seen as secondary, as reinforcement to the primary vertical processes.
• the most fundamental change we have observed is the primary reliance on horizontal processes that build integration on top of subunit autonomy and empowerment
• Four Critical Components of Horizontal Integration
  • The four areas are simultaneously distinct and interrelated. The challenge is to manage the interrelationships synergistically
  • Operational Integration Through Standardized Technological Infrastructure
    • The bottleneck in rationalizing and integrating those activities lies in IT system
    • By standardizing those, we have channelled that entrepreneurship where it adds value — in serving customers.
    • Standardizing operating processes has always been a powerful integrating device, but it wasn’t possible to create centrally managed, standard IT systems until now.
    • biggest benefits flow at the extreme, not with half-measures
  • Intellectual Integration Through Shared Knowledge Base
    • user pull must supplement the technological push, effective integration of knowledge requires a clear strategic link and extensive communication
    • What made the case study system work was not only the world-class IT infrastructure nor the tremendous effort and investment that kept its information current, but also the link between the system and the company’s strategy
    • Also contributing to the system’s success were company efforts to build interpersonal relationships, or “soft bonds,” to promote knowledge sharing
    • conversation forums — Friday morning breakfast meetings, top-level “Board Away” days and other functions
    • motto that “the most important role of managers is to create friendships,”
  • Social Integration Through Collective Bonds of Performance
    • enormous advantages can result when peer-to-peer interactions are extended to traditionally vertical areas
    • “People do not learn, at least in a corporate environment, without a target
    • if you say, ‘Look, the learning is necessary in order to cut the cost of drilling a well by 10%,’ then they will learn with purpose.”
    • BP’s peer groups is their effectiveness in transferring, sharing and leveraging cumulative learning through a direct link with performance
  • Emotional Integration Through Shared Identity and Meaning
    • A shared knowledge base must translate into coordinated and aligned action across the different parts of an organization, or it is only an expensive library
    • for most companies, hierarchy is no longer as effective — not only because it destroys front-line initiative and entrepreneurship, but also because of its inability to cope with uncertainty and rapid change
    • Fluid and flexible collective action requires not only standardized infrastructure, shared knowledge and mutual trust, but also emotional integration through a common purpose and identity
    • “Quite simply, none of us is as smart as all of us.”
    • client focus provides a force for emotional integration with outsiders, pride in the quality of colleagues is an equally powerful force
    • Inherently linked to the identity shaping pride of belonging is a broader sense of purpose that emotionally connects each individual to the ethos of the firm.
• A framework for horizontal integration
  • For effective horizontal integration, managers have to connect the company’s knowledge bases, build social relationships among people and shape a shared sense of identity, all supported by a standardized technological infrastructure
• Entrepreneurial Activity and Horizontal Integration Co-Evolve
  • individual and subunit autonomy co-evolve with horizontal integration in a dynamic process.
  • Instead of smothering bottom-up initiatives, horizontal integration creates a reinforcing process through which both autonomy and integration can flourish.
  • A cautionary note: The symbiotic co-evolution of autonomy and horizontal integration takes time to mature
  • to develop people’s self-confidence and to build trust and friendship can be achieved only through persistent action and reinforcement over time
  • have to he relentless in driving the process, they also have to he patient about results
  • For those who respond well to that challenge, the ultimate benefits are durable enhancement of organizational capability and sustainable improvement of business performance.

Managing Your Mission-Critical Knowledge, Ihrig and Macmillan. Harvard Business Review (2015)

• When executives talk about “knowledge management” today, the conversation usually turns very quickly to the challenge of big data and analytics.
• proving difficult to translate into useful knowledge.
• big data is something even more important—the proper management of all their strategic knowledge assets:
  • core competencies
  • areas of expertise
  • intellectual property
  • deep pools of talent
• In the absence of a clear understanding of the knowledge drivers of an organization’s success, the real value in dig data will never materialize
• Map your knowledge assets
  • first step is to put boundaries around what you’re trying to do
  • parse out your mission-critical knowledge
  • Identifying and mapping strategic knowledge is iterative
  • generally start by assembling a multifunctional team
  • shape this conversation by giving individuals assignments in advance.
  • Your list of key assets should ultimately include some that are “hard,” such as technical proficiency, and some that are “soft,” such as a culture that supports intelligent risk taking.
  • You may also have identified knowledge that you should possess but don’t
  • next step is to map your assets on a simple grid along two dimensions: tacit versus explicit (unstructured versus structured) and proprietary versus widespread (undiffused versus diffused).
    • Unstructured versus structured
      • Unstructured (tacit) knowledge involves deep, almost intuitive understanding that is hard to articulate
        • generally rooted in great expertise
      • Structured (explicit or codified) knowledge is easier to communicate
        • common language, rules of thumb, and conceptual framework
    • Undiffused versus diffused
      • most companies have certain broadly shared competencies
      • Some knowledge, of course, is diffused far beyond the boundaries of the organization
• Interpret the map
  • Simply mapping your knowledge assets and then discussing the map with your senior team can uncover important insights and ideas for value creation
• Identify new opportunities
  • Mapping knowledge assets and discussing their implications often leads directly to strategic insights
  • also helpful to systematically explore what would happen if knowledge were moved around or different spheres of it were combined. Examples:
    • Selectively structure tacit knowledge (move it up on your map’s Y axis)
    • Disseminate knowledge within the company (move it to the right on your map’s X axis)
    • Diffuse knowledge outside the company (move it farther right on your map’s X axis)
      • Elon Musk quote: “You want to be innovating so fast that you invalidate your prior patents, in terms of what really matters. It’s the velocity of innovation that matters.”
    • Contextualize knowledge (move it down on your map’s Y axis
      • Contextualization can also come from combining structured and unstructured knowledge
      • codified information as a networking tool:
        • notice who wrote an article
        • then talk with that person directly
        • many companies build competitive advantage on just such combinations
    • Discover new knowledge (move it to the left on your map’s X axis)
      • most challenging—and highest-potential—opportunities often come from spotting connections between disparate areas of expertise
• In the pursuit of innovation, flashes of insight can come from many sources
• It’s not easy to systematize this part of the knowledge- development process, which arises to some extent from intuition, tacit knowledge, and time spent studying the map
• competitors will have access to the same kinds of data and general industry knowledge that you do. So your future success depends on developing a new kind of expertise: the ability to leverage your proprietary knowledge strategically and to make useful connections between seemingly unrelated knowledge assets or tap fallow, undeveloped knowledge
• Once you’ve mapped your mission- critical knowledge assets, the challenge is to be disciplined about which of them to develop and exploit, keeping future growth front and center.
• Remember, strategy always includes deciding what not to do