Another great guest post by John Maloney … thank you!
My old boss at HP, Lew Platt, like to say, concerning innovation, you need to eat-your-children. HP is famous for consistently having 80% of profits originate from products two years old or less. That requires the courage to kill (eat) products (your children) to allow innovation to flourish. As in nature, this optimizes the ecosystems. It drives profitability, growth and well-being.
Incredibly, in almost 2009, enterprise KM people are still talking about the obsolete notions of sharing, best practices and continuous improvement. (?) Ridiculous. Shameful.
Continuous improvement was important in the 80s as a temporal artifact of the quality revolution. It originated the notion of ‘best practices.’ Both are now 100% obsolete.
BTW, know who is a recognized master of both best practices and continuous improvement? Yep, General Motors, GM. Today, right now, turn on the news and watch the GM CEO grovel and plead for tax money to fix the mess of US auto manufacturing caused specifically by excellence in sharing, best practice and continuous improvement. It’d be funny if it wasn’t so pathetic. If you hear these terms in your organization, run, don’t walk, for the exits to escape (and to save your life/career).
Today organizations must achieve perpetual innovation (PI). The new Big Three, Toyota, Nissan and Honda get it (and 54% of the US auto market to boot).
Perpetual innovation inhabits value networks. To achieve mastery, do not focus on information distribution (?) and incremental improvements like KM & quality circa 1990. That is a waste of time and resources. You MUST focus knowledge efforts on value network structures and patterns: roles, links, exchanges and OUTCOMES. Information, practices and improvements take care of themselves in well-configured value networks. See:
Also, please forget about sharing. It too is 100% obsolete. There is NO time to share anymore. Rather, focus on collective intelligence. Accept and lead knowledge-based organizations as markets; as the complex adaptive systems all organizations are. Embrace collective intelligence networks and markets to achieve perpetual innovation. See:
Sadly, KM people and orgs are nostalgic. They struggle badly to let go and to focus on the future. They are on the same slippery slope as corporate IT – preserve the past at all cost. (Fully 80% of today’s IT budget goes to supporting legacy apps. Disgraceful.)
KM, IT and organizations fight hard to keep the past and sabotage innovation. Newsflash: They are very good at it! However, sooner-or-later they always lose, to be subsumed by the natural order of value networks and collective intelligence. (It is happening in Detroit as you read this post…)
To move forward, KM and their kissing-cousin, corporate IT, need to heed Lew’s advice, and kill their sacred children of sharing, best practices and continuous improvement.
Post Script from Michael:
In an era where inputs (including financial capital), technology, IP and brand become commodities in very short cycles, I think the problem must be addressed in very practical terms and it is concerning far beyond GM.
In this context, human resources become the source of competitive advantage more than ever. So is it a race to the bottom or the top? Ultimately comparative advantage from cheaper labour is a no win, so we can probably agree that innovation is the key. John is bang on.
Is there anyone reading this that does not recognize that the new consideration is that broadband connectivity is scaling up and making visible the value networks in corporations that Verna Allee & Valdis Krebs have been drawing attention to for years?
Here are a couple of blog posts with additional thoughts:
SCVA, unlike brand valuation, is not linked to particular lines of revenue. This is a model that attributes value to the sources of innovation and growth in a corporation rather than, for example, a commodity like tobacco or cars.
I think a model like this give the corporation the incentive to “eat its children” or switch revenue lines.
It is a happy economic coincidence that optimizing social networks requires hope & empowerment over fear & ignorance because in a hopeful environment informed individuals take risks. Publishing distinguishes emitters. When they discover better ways, their peers emulate across the network. If fear & ignorance reins, productivity suffers.