Economic intelligence and knowledge management

Economic Intelligence and
Knowledge Management
Competitiveness is based on knowledge.
The way companies acquire knowledge from their environment
and apply it, will determine their ability to survive into the
21st century volatile, complexe and uncertain world.
david.vallat@univ-lyon1.fr
@DavidVALLAT
https://www.researchgate.net/profile/David_Vallat
https://univ-lyon1.academia.edu/DVALLAT

Competitive Intelligence: what for?
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Competitive Intelligence
(more seriously)
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So, is this Competitive
Intelligence?
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Competitive Intelligence, a
definition
« Competitive intelligence is the action
of defining, gathering, analyzing, and
distributing intelligence about
products, customers, competitors, and
any aspect of the environment needed
to support executives and managers
making strategic decisions for an
organization »http://en.wikipedia.org/
wiki/Competitive_intelligence
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To sum up Competitive
Intelligence
It’s about understanding the context…
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Competitive Intelligence
supports DECISION MAKING
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Why Competitive Intelligence?
Creating
knowledge
Understanding
the context
Making
decisions
Organizing this = Knowledge Management
SURVIVAL
@DavidVALLAT
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Creating
knowledge
Understanding
the context
Making
decisions
SURVIVAL
@DavidVALLAT
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HOW TO SURVIVE?
SURVIVAL
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Some species evolved to perfectly
match their environment…
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We learn to
adapt.
Trial & Error (Tim HARFORD): https://www.youtube.com/watch?v=K5wCfYujRdE
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EMBRACING
CHANGE
SURVIVAL
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For adapting ourselves, we first
need to accept the idea of
change.
A video of the book:
https://www.youtube.com/wa
tch?v=16hxCB1Dvd4
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How to conduct change?
https://en.wikipedia.org/wiki/John_Kotter
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Creating
knowledge
Understanding
the context
Making
decisions
SURVIVAL
@DavidVALLAT
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Understanding
the Context
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WHAT CONTEXT?
Understanding the context
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We live in a
hyperconnected world…
Hyperconnected
world:http://www3.weforum.org/docs/Global_IT_Report_
2012.pdf
Knowledge IS a competitive advantage:
- http://www3.weforum.org/docs/WEF_GCR_Report_201
1-12.pdf
- http://reports.weforum.org/global-competitiveness-
report-2012-2013/
@DavidVALLAT
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The Network Society
 « Our societies are increasingly structured around the
bipolar opposition of the Net and the Self » Castells, M. (1996,
second edition, 2000). The Rise of the Network Society, The Information Age: Economy, Society and Culture
Vol. I. Cambridge, MA; Oxford, UK: Blackwell, p. 3.
 « The promise of the Information Age is the unleashing
of unprecedented productive capacity by the power of
the mind ». (ibid. p. 390)
To go further:
http://globetrotter.be
rkeley.edu/people/Cas
tells/castells-
con4.html
@DavidVALLAT
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Digital World
« Thus, in the historical record, networks were the
domain of the private life, while the world of
production, power, and war was occupied by large,
vertical organizations, such as states, churches, armies,
and corporations that could marshall vast pools of
resources around the purpose defined by a central
authority. Digital networking technologies enable networks
to overcome their historical limits »
Castells, Manuel and Cardoso, Gustavo, eds., The Network Society: From
Knowledge to Policy. Washington, DC: Johns Hopkins Center for Transatlantic
Relations, 2005, p. 4)
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Knowledge Economy
« Researchers have found that productivity growth in this
period has been largely associated to three processes, all
of which are necessary conditions for productivity growth
to take place: generation and diffusion of new
microlectronics/digital technologies of information and
communication, on the basis of scientific research and
technological innovation; transformation of labor, with the
growth of highly educated, autonomous labor that is able
to innovate and adapt to a constantly changing global and
local economy; diffusion of a new form of organization
around networking. »
Castells, M. and Cardoso, G., eds., The Network Society: From Knowledge to Policy.
Washington, DC: Johns Hopkins Center for Transatlantic Relations, 2005, p. 8)
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Knowledge Worker
« Knowledge work can be differentiated from other forms of work by its
emphasis on "non-routine" problem solving that requires a combination of
convergent, divergent, and creative thinking. But despite the amount of
research and literature on knowledge work, there is no succinct
definition of the term » (Wikipedia, Knowledge Worker).
« Knowledge workers have high degrees of expertise,
education, or experience, and the primary purpose of their
jobs involves the creation, distribution or application of
knowledge » (Thomas Davenport, Thinking for a Living,
2005).
« To make knowledge work productive will be the great
management task of this century, just as to make manual
work productive was the great management task of the
last century » (Peter Drucker, Age of Discontinuity, 1969).
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CONTEXT IS MOVING
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A little world…
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https://www.bcgperspectives.com/content/articles/corporate_strategy
_portfolio_management_future_of_strategy_most_adaptive_companies_
2012/
Full of Turbulences…
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A V.U.C.A. WORLD
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It’s a V.U.C.A. World
 What is it? http://www.youtube.com/watch?v=72AzCY45fKU
 An US Army concept
http://www.carlisle.army.mil/usawc/dclm/slp2ndEd.pdf
 Complex and systemic problems:
 Example 1. http://youtu.be/zexit7Tk1GA
 Example 2. http://www.youtube.com/watch?v=9hXmyD9a4zg
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V.U.C.A.
http://hbr.org/2014/01/what-vuca-really-means-for-you/ar/1
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C.I. TOOLS TO GRASP
THE CONTEXT
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A reminder about C.I.
 The basic starting point for competitive
intelligence is to define the problem.
 Competitive intelligence should be a value-added
service to managers who are facing critical
strategic decisions.
 What are the Key Intelligence Topics?
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How to grasp the context?
 More People/Method than Tools…
 SWOT Analysis => to understand your own
competitive advantages in relation to the
marketplace
 PESTEL analysis => to examine the external
macro-environment
 Porter’s Five Forces Model => industry analysis
 Porter’s Four Corners Analysis => to understand the
position of a competitor
 System thinking! & Key Intelligence Topics
@DavidVALLAT
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SWOT
 A method used to evaluate the strengths,
weaknesses, opportunities, and threats involved in
a project or in a business venture.
 http://en.wikipedia.org/wiki/SWOT_analysis
 SWOT Online: http://i-swot.com
@DavidVALLAT
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PESTEL Analysis
 Identifying "Big Picture"
Opportunities and Threats
 Objective: developping an
objective view of the
environment
 PESTEL & SWOT are often
linked
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PESTEL Analysis Examples
 Identifying "Big Picture" Opportunities and Threats
 Objectives
 PESTEL & SWOT
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Porter’s 5 forces (1)
Porter’s Five Forces analysis, developed by Michael E.
Porter of Harvard Business School, is a framework for
assessing and evaluating the competitive strength
and position of a business organization.
There are five forces which determine the
competitive intensity and attractiveness of a market:
supplier power, buyer power, competitive rivalry,
threat of substitute products/technology change, and
threat of new market entrants.
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 Threat of New Entrants: an industry with low
barriers of entry will have intense competition as
opposed to an industry with major barriers of
entry.
 Suppliers tend to have strong influence within an
industry when they are few/acting together.
 Power of Buyers: customers often dictate pricing
and they demand certain levels of quality.
 Substitute Products: new or emerging substitutes
for a product will change competitive forces
 Rivalry: this competitive rivalry may decline when
times are good and everyone can grow.
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http://www.cosxo.com/analysis/
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Porter's four corners model (1)
 « Porter’s four corners model is a predictive tool
designed by Michael Porter that helps in determining a
competitor’s course of action. Unlike other predictive
models which predominantly rely on a firm’s current
strategy and capabilities to determine future strategy,
Porter’s model additionally calls for an understanding of
what motivates the competitor. This added dimension of
understanding a competitor's internal culture, value
system, mindset, and assumptions helps in determining
a much more accurate and realistic reading of a
competitor’s possible reactions in a given situation »
http://en.wikipedia.org/wiki/Porter's_four_corners_mo
del
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Porter's four corners model (2)
http://www.cosxo.com/analysis/
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Key Intelligence Topics
 What are the Key Intelligence Topics (KIT)?
 What impact will bitechnology / internet have on our high
volume product line?
 How is our competitor able to retain major government
contracts year after year
 When these contracts come open for bid?
 What is the timeline for when our competitor will launch
their new US service?
 Should we expand our Saigon facility or build a new
facility in Hanoi?
 Who are the key customers of our competitor?
 How does this new regulation impact our business?
 How well does this supplier perform with other companies?
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Wargaming: a fun way to
implement these tools…
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Wargaming: what is it?
 Human-based simulations. These are intelligence-driven,
analytically and behaviorally modeled role-playing exercises
http://www.bengilad.com
 Simple - over-sophisticated, long and large scale games cost a lot
more but do not produce better results.
 Transparent - if you don't understand the exotic algorithm, how likely
are you to trust the strategy?
 Empowering - computer games don't understand internal politics, but
you have to.
 Fun - teams that learn how to role-play competitors with real market
intelligence and character-building techniques maintain enthusiastic
external focus for years.
 Inexpensive - there is no good reason for games to cost hundred of
thousands or even millions of dollars. If you know a good reason,
write us.
 Accessible - to truly improve the bottom line, managers at all levels
of the organization should be able to use this amazing tool, not just
few senior execs at the top.
 Realistic - intelligence-based, human games are magnitudes more
realistic than even the most sophisticated mathematical modeling.
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Wargaming: an example
 http://www.mckinsey.com/insights/strategy/playing_war_ga
mes_to_win
 « As the global downturn kicked in, a high-tech company’s
senior executives decided to run a war game to prepare
themselves for the uncertainties of the post-crisis landscape.
After two days of simulations—when teams representing
competitors and stakeholders role-played against a
“company” team—the executives understood that a strong
competitor on the sidelines was likely to enter the market
aggressively. The executives also realized that the low end of
the product range would face more price pressure than they
had been anticipating. Moreover, while there would probably
be industry mergers and acquisitions, as the company had
expected, the deals were unlikely to kick off a wave of M&A
or to have a material impact on the company’s share of any
market. »
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Wargaming: further readings
 http://www.mckinsey.com/insights/innovation/battle-
test_your_innovation_strategy
 http://www.mckinsey.com/insights/strategy/playing_w
ar_games_to_win
 Ben Gilad’s book: http://www.amazon.com/Business-
War-Games-Outmaneuver-Competition
 http://www.bengilad.com
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What you don’t need in a
VUCA World (1)
 A « God Complex »
http://www.ted.com/talks/tim_harford.html
 Scientific
managementhttp://en.wikipedia.org/wiki/Frederick_Wi
nslow_Taylor
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What you don’t need in a
VUCA World (2)
AND WHAT WE NEED?
 We need trial and error (and humility) => simulations
 We need to share, discuss, collaborate
 We need to manage Knowledge
http://www.ibicity.fr/blog/public/Leadership_Agility_--
_HRPS_Reprint_Permission__revised_.pdf
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Creating
knowledge
Understanding
the context
Making
decisions
SURVIVAL
@DavidVALLAT
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Creating
Knowledge
@DavidVALLAT
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Why Knowledge Creation?
 Knowledge is the basis for innovation
 Innovation is the driving force behind long term
competitive advantage
 Competitive advantage ensures corporate
longevity
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WHAT IS
KNOWLEDGE?
Creating Knowledge
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Data/Information/Knowledge
(1)
 DATA is a set of objective facts about events
 Data as an abstract concept can be viewed as the lowest level
of abstraction, from which information and then knowledge are
derived.
 INFORMATION is a message
 As with any message, it has a sender and a receiver. Information
is meant to change the way the receiver perceives something,
to have an impact on his judgment and behavior. It is data that
makes a difference.
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Data/Information/Knowledge
(2)
 Information becomes knowledge, through:
 Comparison
 Consequences
 Connections
 Conversation
 Knowledge is meant for action
 A strong link between knowledge and
experience
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But what Knowledge
really is…? (1)
• Knowledge is what you see/feel?
• Knowledge is what you believe?
• Knowledge is what is true?
@DavidVALLAT
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But what Knowledge
really is…? (2)
• « Justified true belief » (notion derived from Plato’s
dialogue Theaetetus – IVth century BC ).
• « belief » = doxa = acceptance
• « true »: a false belief is not considered to be knowledge
(e.g. flat earth theory)
• « justified »: justification for believing it is true
The relationship between belief and knowledge is that a belief is
knowledge if the belief is true, and if the believer has a justification
(reasonable and necessarily plausible assertions/evidence) for
believing it is true.
@DavidVALLAT
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But what Knowledge
really is…? (3)
• The primary problem in epistemology
(study of knowledge) is to understand
exactly what is needed in order for us to
have knowledge.
• We need knowledge to take action…
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But what Knowledge
really is…? (4)
• Karl POPPER (1902-1994) took falsifiability as
his criterion of demarcation between what is,
and is not, genuinely scientific (The Logic of
Scientific Discovery, 1934). => « justified »
• So, science/knowledge is open to discussion.
• « justified »: with proofs that can be discussed
(falsifiability)
• « true »: reproducibility
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How to gather knowledge?
• a method of inquiry must be based on gathering
observable and measurable evidence subject to specific
principles of reasoning and experimentation. The
scientific method consists of the collection of data
through observation and experimentation, and the
formulation and testing of hypotheses (Wikipedia,
Knowledge)
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Knowledge Creation
=> By trial and error and collaboration
MOON CRASH…
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Moon Crash:
Lesson Learned Workshop (1)
 LLW: a simple method to discuss and transfer
experience
 What did we learn?
 In order to create real knowledge (Justified true
belief), we have to answer the question with a
scientific method:
 gathering observable and measurable evidences
 formulation and testing of hypotheses (+ reproducibility)
 All this is open to discussion (falsifiability)
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Moon Crash:
Lesson Learned Workshop (2)
 (Normally) a group creativity is more than the
added creativity of each member.
 Discussion and sometimes conflicts foster creativity
 What is the starting point of the decision-making
process? (KIT)
 What was your decision-making process (consensus,
vote)?
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The power of discussion
(in KM)
 Don’t try to impose your opinion. Expose your point of view
as logically as possible (with evidences when possible).
Listen carefully to the responses of other participants (they
may be right!) ≠ God complex
 If the discussion is in a dead end don’t try to adopt
majority’s point of view. Try to find the most acceptable
solution for all participants. = motivation
 Beware of superficial agreements reached too quickly and
too easily. Take your time to reach a consensus.
 Differences of opinion are normal and inevitable. They
often are a guarantee of success for the final decision.
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TACIT & EXPLICIT
KNOWLEDGE
Creating Knowledge
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Types of Knowledge:
Tacit vs Explicit (1)
Michael POLANYI, The Tacit Dimension, University of Chicago
Press, 1966.
“we can know more than we can tell.”
Tacit knowledge can be distinguished from explicit knowledge in
three major areas
 Transferring knowledge
 Methods for acquisition
 Potential of aggregation and modes of appropriation
@DavidVALLAT
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Types of Knowledge:
Tacit vs Explicit (2)
 Ikujiro NONAKA (1991): The
Knowledge Creating Company,
Harvard Business Review
http://hbr.org/2007/07/the-
knowledge-creating-company/es
http://en.wikipedia.org/wiki/Tacit_kn
owledge
His research suggested that a successful KM
effort needs to convert internalized tacit
knowledge into explicit knowledge to share it.
@DavidVALLAT
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The SECI Model
@DavidVALLAT
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meetings
brainstorming
quality circles
CoP
LLW
training programs
training manual
consolidated
annual financial
performance
report

Ikujiro NONAKA (1991), ’’The Knowledge
Creating Company’’, Harvard Business Review
 First read the article (explicit knowledge) from I. Nonaka:
http://hbr.org/2007/07/the-knowledge-creating-company/es
 2) Try to sum up / sort out the main ideas (explicit => tacit =
internalization)
 3) Try to use the SECI model to analyse your organization (tacit
knowledge creation)
 A) For each stage of the SECI model try to find precise examples in
your organization => write them (to learn you have to act)
 B) Then try to organize your ideas, try to prioritize questions to build
proposals to help knowledge creation in your organization (tacit =>
explicit = externalization) => write individually your proposals
 4) When you have finished share your ideas in a team of 3 to 5
(tacit=>tacit = socialization) => each in turn explains what he has
done (Community of Practice)
@DavidVALLAT
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’’The Knowledge Creating
Company’’ (1)
 P.2« In an economy where the only certainty is uncertainty,the one sure
source of lasting competitive advantage is knowledge. »
 P.3 Westernway≠Eastern way of thinking about knowledge (epistmology)
 P.3 Successful japenese companies => «These companies have become
famous for their ability to respond quickly to customers, create new
markets, rapidly develop new products, and dominate emergent
technologies. »
 P.3 The success comes from «their unique approach to managing the
creation of new knowledge. »
 P.3 How? => by «managing that serendipity to the benefit of the
company, its employees, and its customers. » (creativity)
 P3 « A company is not a machine but a living organism ». (learning
organization)
@DavidVALLAT
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 P.3 « The centerpiece of the Japanese approach is the
recognition that creating new knowledge is not simply a
matter of “processing” objective information. Rather, it
depends on tapping the tacit and often highly subjective
insights, intuitions, and hunches of individual employees
and making those insights available for testing and use by
the company as a whole. »
 P.3 It’s possible with a shared vision => «The key to this
process is personal commitment, the employees’ sense of
identity with the enterprise and its mission. » ; « a shared
understanding of what the company stand for, where it is
going, what kind of world it wants to live in, and, most
important, how to make that world a reality.» (pragmatism)
@DavidVALLAT
Company’’ (2)
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 P.4 « New knowledge always begins with the individual. A
brilliant researcher has an insight that leads to a new patent. A
middle manager’s intuitive sense of market trends becomes the
catalyst for an important new product concept. A shop-floor
worker draws on years of experience to come up with a new
process innovation. In each case, an individual’s personal
knowledge is transformed into organizational knowledge valuable
to the company as a whole. »
 P.4 and « Making personal knowledge available to others is the
central activity of the knowledge- creating company. »
 P.4/5 How to use the SECI Model
 P.6 Why it’s easy for japanese people to convert tacit knowledge
into explicit knowledge? Because they are able to use «figurative
language and symbolism that managers can draw from to
articulate their intuitions and insights.»
@DavidVALLAT
Company’’ (3)
82

 P.6 Use of metaphor: « Through metaphors, people put
together what they know in new ways and begin to express
what they know but cannot yet say. »
 P.7 « Often, metaphoric images have multiple meanings and
appear logically contradictory or even irrational. But far
from being a weakness, this is in fact an enormous
strength. For it is the very conflict that metaphors embody
that jump-starts the creative process. »
 P.7 « But while metaphor triggers the knowledge-creation
process, it alone is not enough to complete it. The next
step is analogy. »
 P.7 Last step: TRIAL (and error) «Finally, the last step in the
knowledge-creation process is to create an actual model. »
@DavidVALLAT
Company’’ (4)
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 a Metaphor is a figure of speech which makes an implicit,
implied or hidden comparison between two things that are
unrelated but share some common characteristics. In other
words, a resemblance of two contradictory or different
objects is made based on a single or some common
characteristics. Two ideas in one expression ; a connection
between two things distantly related: THEORY OF
AUTOMOBILE EVOLUTION
 Metaphor triggers the knowledge creation process because it
spurs creativity.
 Analogy: it’s more strutured than metaphor. A comparison
between two things, typically on the basis of their structure
and for the purpose of explanation or clarification. (computer
and brain ; aluminium beer can / aluminium copier drum).
@DavidVALLAT
Metaphor & Analogy
84

 P.7 Converting tacit knowldege into explicit: « first, by linking
contradictory things and ideas through metaphor; then, by
resolving these contradictions through analogy; and, finally,
by crystallizing the created concepts and embodying them in a
model, which makes the knowledge available to the rest of
the company. »
 P.7 Redundancy (to foster agility): « The fundamental principle
of organizational design at the Japanese companies I have
studied is redundancy—the conscious overlapping of company
information, business activities, and managerial responsibilities.
»
 P.8 With Redundancy you have dialogue. « This helps create a
“common cognitive ground” among employees and thus
facilitates the transfer of tacit knowledge. »
@DavidVALLAT
Company’’ (5)
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 P.8 « The organizational logic of redundancy helps
explain why Japanese companies manage product
development as an overlapping process where
different functional divisions work together in a
shared division of labor. »
 P.8 This is a collaborative organization (which needs
transparency): « Free access to company information
also helps build redundancy. When information
differentials exist, members of an organization can no
longer interact on equal terms, which hinders the
search for different interpretations of new knowledge. »
@DavidVALLAT
Company’’ (6)
86

 P.9 In a VUCA world « Senior managers give voice to a company’s
future by articulating metaphors, symbols, and concepts that
orient the knowledge-creating activities of employees. They do
this by asking the questions, What are we trying to learn? What
do we need to know? Where should we be going? Who are we? If
the job of frontline employees is to know “what is,” then the job
of senior executives is to know “what ought to be.” »
 P.10 Managers give a vision:«Umbrella concepts and qualitative
criteria for justification are crucial to giving a company’s
knowledge-creating activities a sense of direction. »
 P.11 To end as we started:«middlemanagers synthesized the tacit
knowledge of both frontline employees and senior executives,
made it explicit, and incorporated it into new technologies and
products. In this respect, they are the true “knowledge
engineers” of the knowledge-creating company. » (middle-up-
down management: https://ai.wu.ac.at/~kaiser/birgit/Nonaka-
Papers/Toward-middle-up-down-mgmt-1988.pdf )
@DavidVALLAT
Company’’ (7)
87

To Sum up Nonaka’s approach
 « In an economy where the only certainty is uncertainty,the one
sure source of lasting competitive advantage is knowledge. »
 > «These companies have become famous for their ability to
respond quickly to customers, create new markets, rapidly
develop new products, and dominate emergent technologies. »
 HOW:
 « …by giving a company’s knowledge-creating activities a sense
of direction »
 « Making personal knowledge available to others is the central
activity of the knowledge- creating company. » (SECI process)
 «middlemanagers synthesized the tacit knowledge of both
frontline employees and senior executives, made it explicit, and
incorporated it into new technologies and products. In this
respect, they are the true “knowledge engineers” of the
knowledge-creating company. »
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Further Readings
89
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Experimentation of the SECI Model
90
3) Try to use the SECI model to
analyse your organization (tacit
knowledge creation)
A) For each stage of the SECI
model try to find precise
examples in your
organization => write them
(to learn you have to act)
B) Then try to organize your
ideas, try to prioritize
questions to build proposals
to help knowledge creation
in your organization (tacit =>
explicit = externalization) =>
write individually your
proposals
4) When you have finished share
your ideas in a team of 3 to 5
(tacit=>tacit = socialization) =>
each in turn explains what he has
done (Community of Practice)
5) Share with me…

KNOWLEDGE
CREATION TOOLS
Creating Knowledge
@DavidVALLAT
91

Classical Knowledge Creation
Tools (= creativity)
 Outsourcing Knowledge Creation…
 Other methods to spur creativity:
 Brainstorming
 Mind Mapping http://www.mindomo.com
 6-3-5 Method (Brainwriting)
 6 participants. Each participant thinks up 3 ideas every 5
minutes. The ideas are written down on a worksheet and
passed on to the next participant. The participant reads the
ideas and uses them as inspiration for more ideas… After 6
rounds in 30 minutes the group has thought up a total of
108 ideas.
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@DavidVALLAT

Brainstorming

Creative Environment (1)
95
 To be creative, it helps to live in a creative
environment.
 What is a creative environment?
@DavidVALLAT

Creative Environment (2)
98
A pleaseant physical environment (calm, furnishings, light)
is not enough…
 No distraction (telephone, mail, other interruptions)
 Sufficient time
 Technical equipment (flipchart, projector, paper, sticky
notes, games, etc.)
 Creative skills
 Constructive communication culture
 Top management supports ceativity
@DavidVALLAT
LEADERSHIP

Less classical Tools
In a creative environment you can experience less
classical tools:
 Metaphor/Analogy/Symbol (Nonaka)
 Storytelling (in business):
https://en.wikipedia.org/wiki/Storytelling
 Wargaming
 Gamestorming:
http://www.youtube.com/watch?v=3mrtu4MmthE
http://en.wikipedia.org/wiki/Gamestorming
99
@DavidVALLAT

100
Transfer of Experience (1)
 The transfer of experience is a special form of
knowledge transfer.
 This type of transfer should serve to broaden the
spectrum of decision-making possibilities open to
employees and avoid unnecessary repeated learning
through trial and error.
 The transfer of experience can be through
INTERNALIZATION (tacit=>explicit) or SOCIALIZATION
(tacit=>tacit)
 INTERNALIZATION = LLW and CoP
 SOCIALIZATION = meetings (and ‘BA’)
@DavidVALLAT

101
Transfer of Experience
through :
Personalization Codification
Organisational level Human Network (expert
database, social
network)
Repository and
distribution source for
documented learning
experiences (Intranet)
Team level Support: Communities
of Practice
Support: Lessons
Learned Workshops
Individual level Transfer of experience
through processes of
communication and
mutual observation
Transfer of experience
through information and
documentation
@DavidVALLAT

102
Advantages and disadvantages
of a Codification strategy (Externalization)
+
+ knowledge is always available
+ particularly suitable for frequent re-use
+ can be passed on quickly and easily; high degree of distribution
-
- codification is complex and time-consuming
- documented knowledge can quickly become obsolete
- complicated wording or terminology makes knowledge difficult to
absorb
- context cannot be fully described/provided
- some knowledge cannot be made explicit
- different "mental models" prevent direct use of documented
knowledge
@DavidVALLAT

103
Advantages and disadvantages
of a Personalization strategy (Socialization)
+
+ knowledge is always up-to-date
+ complexity of knowledge transfer can be adapted to the situation
+ creative innovation possible during transfer
-
- complicated search for the right person
- the right person is not available
- personal aversion
@DavidVALLAT

104
Tools for Transfering
Experience (Internalization)
 Community of Practice (Personalization /
Team level) ≠ project
 Lessons Learned Workshop (Codification /
Team level) => project
@DavidVALLAT

105
Community of Practice (1)
« A community of practice (CoP) is a group of
people who share a craft and/or a profession.
The group can evolve naturally because of the
members' common interest in a particular
domain or area, or it can be created specifically
with the goal of gaining knowledge related to
their field.
It is through the process of sharing information
and experiences with the group that the
members learn from each other, and have an
opportunity to develop themselves personally
and professionally » (Wikipedia)
@DavidVALLAT

106
 Real / Virtual / Mobile CoP
 Origin: LAVE, Jean; WENGER, Etienne (1991).
Situated Learning: Legitimate Peripheral
Participation. Cambridge: Cambridge University
Press
 Example: Xerox customer service representatives
(Eureka
database)http://www.kmworld.com/Articles/Edito
rial/Features/Best-Practices-Eureka!-Xerox-
discovers-way-to-grow-community-knowledge.-.-
And-customer-satisfaction-9140.aspx
 CoP ≠ Project team
@DavidVALLAT

107
 CoP and KM => how to transfer tacit knowledge?
 CoPs bridge the gap between knowing what and
knowing how (sensemaking): while organizations
tend to provide manuals to meet the training needs
of their employees, CoPs help foster the process of
storytelling among colleagues which, in turn, helps
them strengthen their skills on the job.
 Motivation to share knowledge is critical to success
in communities of practice. Studies show that
members are motivated to become active
participants in a CoP when they view knowledge as
meant for the public good, a moral obligation
and/or as a community interest.
@DavidVALLAT

108
Cultivating CoP by:
 Design the community to evolve naturally
 Create opportunities for open dialog within and
outside
 Allow different levels of participation
 Develop both public and private exchanges
 CoPs should create opportunities for participants
to explicitly discuss the value and productivity of
their participation in the group
 Combine familiarity and novelty
 Find a regular rhythm for the community
@DavidVALLAT

Lessons Learned Workshop (1)
• Why closing a project with a LLW?
• A simple method to discuss and transfer
experience:
• What was done well in the project?
• What could have been improved?
• What would be the ideal situation for points that could have
been improved?
• What would I personally do differently in the next project?
• What should the organisation do differently in the next project?
@DavidVALLAT

Defining the
relevant issues
Lessons Learned
Workshop
Processing and
applying the
results
@DavidVALLAT

• How to manage a Lessons Learned Workshop?
• Background (detailed presentations of the
project - from start to finish)
• Cluster building (brainstorming)
• Lessons learned (these are summarised to
produce a list of recommendations for the
organisation)
• After the workshop (initiate organisational
learning to implement changes).
@DavidVALLAT

Socialization: the ‘BA’ concept
 You have meetings…
 Knowledge is relational (SECI) ≠ Western epistemology has
traditionally viewed knowledge as explicit.
 Knowledge needs a context to be created.
 The context is a time and place (physical, virtual, mental) =
‘BA’ (Nonaka)
 TIME: when it’s the moment…
 PLACE:
- Physical = an office,
- Virtual = a social network
- Mental = shared culture and objectives
 It’s where/when people can interact to create situated
knowlegde (like a CoP with an objective).
112
@DavidVALLAT

Creating
knowledge
Understanding
the context
Making
decisions
SURVIVAL
@DavidVALLAT
113

HOW TO MAKE
GOOD DECISIONS?
Making Decisions
@DavidVALLAT
115

Decision-making and
organization
 The decision-making process is an organizational
process.
116
@DavidVALLAT

A little game…
 Group of 4 or 5 people
 Try to solve the puzzle as fast as possible
 How do you learned to solve the problem?
117

HOW TO MAKE
GOOD DECISIONS?
1. ROUTINES
Making Decisions
@DavidVALLAT
118

Organizational Routines
 What is a routine?
 a sequence of actions regularly
followed; a fixed program.
 organisational routines are described as
the relatively mindless repetition of
actions that have been well-established
via evolution or voluntary design
119
@DavidVALLAT
 Why a routine?
 The right way to do things…
An organizational memory.
 A routine may be a trap…

Organizational Traps
 Competency Trap: The Innovator’s Dilemma (C.
Christensen)
http://www.forbes.com/sites/stevedenning/2012/
04/05/clayton-christensen-and-the-innovators-
smackdown/
http://www.youtube.com/watch?v=35z03U3wugs
 Surpersticious Learning
http://blogs.hbr.org/2011/07/superstitious-learning/
 A little God in his quiet realm= GOD
COMPLEXhttp://www.youtube.com/watch?v=K5wCfYujR
dE
120
@DavidVALLAT

The Innovator’s Dilemma
(C. Christensen) - 1
 The Innovator’s Dilemma (C. Christensen, 1997)
http://www.forbes.com/sites/stevedenning/2012/04/
05/clayton-christensen-and-the-innovators-
smackdown/
 “That book documents how market-leading companies have
missed game-changing transformations in industry after
industry—computers (mainframes to PCs), telephony (landline
to mobile), photography (film to digital), stock markets (floor
to online)—not because of ‘bad’ management, but because
they followed the dictates of ‘good’ management. They
listened closely to their customers. They carefully studied
market trends. They allocated capital to the innovations that
promised the largest returns. And in the process, they missed
disruptive innovations that opened up new customers and
markets for lower-margin, blockbuster products.”
@DavidVALLAT

The Innovator’s Dilemma
(C. Christensen) - 2
 Examples:
 Example: “When Toyota was making rusty little subcompacts, it
made no sense for General Motors to go after the subcompact market,
when the profits they could get on bigger SUVs and pickup trucks made
all the sense in the world. Toyota just made their products better and
better, until eventually customers who used to bigger General Motors
cars could now buy cheaper ones. Now Toyota is making the best in
the world, while at the bottom, the Koreans, Kia and Hyundai, have
stolen the low end of the market. It’s not because Toyota is asleep at
the switch. They have to decide, ‘Should we go down and compete
against Kia? Or should we go up and compete against Mercedes?’”
@DavidVALLAT

Surpersticious Learning
 Surpersticious Learning
http://blogs.hbr.org/2011/07/superstitious-learning/
 « Superstitious learning takes place when the
connection between the cause of an action and the
outcomes experienced aren’t clear, or are
misattributed. »
 « For instance, a major retailer prided itself on the
steady, profitable growth of its music CD business over a
long period of time. […] The real story was not one of
success. Rather, it was one of grabbing share from a
market that was in deep decline. »
@DavidVALLAT

Avoiding Organizational
Traps (routines)
 A lot of traps…
 How to avoid them?
 Meet Chris ARGYRIS
http://en.wikipedia.org/wiki/Chris_Argyris
 Organizations need to learn to adapt
 Argyris, C., & Schön, D. (1974) Theory in practice: Increasing
professional effectiveness. San Francisco: Jossey Bass.
 Espoused theory and Theory-in-use
@DavidVALLAT

Espoused theory and
Theory-in-use
 Espoused theory: values people believe their behaviour is
based on - what individuals believe is how they would behave
in a particular circumstance.
 Theory-in-use: values implied by their behaviour, or the maps
they use to take action - how individuals actually behave in
that circumstance.
When someone is asked how he would behave under certain circumstances,
the answer he usually gives is his espoused theory of action for that
situation. This is the theory of action to which he gives allegiance and
which, upon request, he communicates to others. However, the theory
that actually governs his actions is his theory-in-use; furthermore, the
individual may or may not be aware of the incompatibility of the two
theories (Argyris and Schön, Theory in Practice, Jossey-Bass, 1974, p 11.)

A Loop Story…(i)
 Organizational learning is about detecting
and correcting error
Source: http://www.afs.org/blog/icl/?p=2653

A Loop Story…(ii)
 C. Argyris, “Double-Loop Learning in Organisations“, Harvard
Business Review Vol 55, No 5, 1977, pp 115–125.
 C. Argyris & D. Schön, Organizational Learning: A Theory of Action
Perspective, Addison-Wesley, 1978.
 Single-Loop learning => Model I (Theory-in-
use)
 Double-Loop learning => Model II (Espoused
theory)

Model I (i)
 The governing Values of Model I are:
 Achieve the purpose as the actor defines it
 Win, do not lose
 Suppress negative feelings
 Emphasise rationality
 Primary Strategies are:
 Control environment and task unilaterally
 Protect self and others unilaterally

Model I (ii)
 Usually operationalised by:
 Unillustrated attributions and evaluations eg. "You seem
unmotivated"
 Advocating courses of action which discourage inquiry
eg. "Lets not talk about the past, that's over."
 Treating ones' own views as obviously correct (God complex)
 Making covert attributions and evaluations ("he has no
strategic vision »)
 Face-saving moves such as leaving potentially embarrassing
facts unstated
 Consequences include:
 Defensive relationships
 Low freedom of choice
 Reduced production of valid information
 Little public testing of ideas

Model I (iii)
Source:
http://www.reallylearning.com/Free_Resources/Organisational_
Learning/organisational_learning.html
@DavidVALLAT

Model I (iv)
 « Skilled Incompetence »
 Organizational Defensive Routines (ODR)
 Organizational Defensive Pattern (ODP)
Defensive
Reasoning
≠
Productive
Reasoning

Model II (i)
 The governing values of Model II include:
 Valid information
 Free and informed choice
 Internal commitment
 Strategies include:
 Sharing control
 Participation in design and
implementation of action

Model II (ii)
 Operationalised by:
 Attribution and evaluation illustrated with
relatively directly observable data
 Conflicting views allowed
 Encouraging public testing of evaluations
 Consequences should include:
 Minimally defensive relationships
 High freedom of choice
 Increased likelihood of double-loop learning

Model II (c)
Source:
http://www.reallylearning.com/Free_Resources/Organisational_
Learning/organisational_learning.html

Model I Observed
 C. Argyris, “Teaching Smart People How to Learn“,
Harvard Business Review, 1991.
 Learning behaviours in US consultancies
 Inability to learn from failure (because of the God
complex)

Does Organizational
Development is Possible?
 From Organizational I (O-I) learning systems to
Organizational II (O-II) learning system
 Intervention strategy in 6 phases
 Phase 1 Mapping the problem as clients see it
 Phase 2 Internalization of the map by clients
 Phase 3 Test the model
 Phase 4 Invent solutions
 Phase 5 Produce the intervention
 Phase 6 Study the impact

Summary (1)
http://instep.net.nz/Communication-and-relationships/Models-and-theories/Model-I-
and-Model-II
@DavidVALLAT

Summary (2)
 Organizational learning is about detecting
and correcting error
Source: http://www.afs.org/blog/icl/?p=2653

An exercise
 Try to identify and describe a case of single-loop
learning in your company. Why people are acting like
this?
 Try to identify and describe a case of double-loop
learning in your company. What are the levers for
learning in this environment?
 Share with others in your group.
139

An exercise: Left hand
column
 Think of a work situation you are concerned about
 Divide a piece of paper into two columns
 Ladder of inference

Ladder of inference
http://gwynteatro.wordpress.com/2011/03/13/climbing-the-ladder-of-inference/

HOW TO MAKE
GOOD DECISIONS?
2. WE ARE BLIND
Making Decisions
@DavidVALLAT
142

A triple blindness
 1) Because we don’t understand probabilities
 Black Swan
 Two brains
 2) We don’t see weak signals
 3) We are not aware of consequences (system thinking)
143

Black Swan Theory
144
 Rare and improbable events do occur
much more than we dare to think:
these events are black swans.

Why Black Swans?
 Because of the Ludic Fallacy (too much faith in statistics)
 statistics is applicable only in some domains, for instance
Casinos.
 It is impossible to be in possession of the entirety of available
information.
 Small unknown variations in the data could have a huge
impact.
 Because of the Narrative Fallacy
 the narrative fallacy addresses our limited ability to look at
sequences of facts without weaving an explanation into them,
or, equivalently, forcing a logical link, an arrow of relationship
upon them. We like to find stories…
145

We don’t understand statistics…
146
Two brains:
ONE FAST (system 1) to take every day decisions but also
quick decisions => fast, instinctive and emotional
ONE SLOW (system 2) to solve difficult problems => Slow,
effortful, infrequent, logical, calculating, conscious.
 Selective attention test
https://www.youtube.com/watch?v=vJG698U2Mvo
‘halo effect’
https://en.wiki
pedia.org/wiki
/Thinking,_Fast
_and_Slow

Don’t forget weak signals

Weak signals - Definition
 Weak Signals are past or current developments/issues
with ambiguous interpretations of their origin, meaning
and/or implications. They are unclear observables
warning us about the probability of future events.

Some weak signals…
 New unmet consumer or customer needs
 The entry of new competitors and new suppliers
 The advent of new breakthrough technologies
 Changes in your organization’s core performance
metrics
 Unfulfilled business and other potential opportunities
 Broad disruptive events
 Premonitions, anxieties, and/or intuitions
http://www.forbes.com/sites/martinzwilling/2013/12/14/how-good-is-your-business-at-reading-weak-s

Bad ideas for sorting out
weak signals
 Remember the God complex?
 Relying (only) on Tools (SWOT Analysis,
etc.)
 Denial (=> Kodak)

What to do then?
 People + Tools
 Understand the context (VUCA)
 SWOT Analysis => to understand your own competitive
advantages in relation to the marketplace.
 Porter’s Five Forces Model => industry analysis
 Porter’s Four Corners Analysis => to understand the
position of a competitor.
 Key Intelligence Topics
 Wargame
 KNOWLEDGE CREATION
 System thinking!

SYSTEM THINKING
Making Decisions
@DavidVALLAT
152

From O.L. to the L.O.
 Peter SENGE and the concept of the ‘learning
organization’ in The Fifth Discipline (1990)
 An ‘idealistic pragmatist’:
 He wants to transform the workplace, bringing human values
in it.
 He wants to decentralize the role of leadership in
organizations (to enhance the capacity of all people to work
productively toward common goals)
 Society for Organizational Learning
(SoL)http://www.solonline.org
 System thinking:
http://www.youtube.com/watch?v=iLFCrv7-
XlIhttps://www.youtube.com/watch?v=rDxOyJxgJeA

Toward the LO (1)
 What is a LO?
 « …organizations where people continually expand their
capacity to create the results they truly desire, where new and
expansive patterns of thinking are nurtured, where collective
aspiration is set free, and where people are continually
learning to see the whole together. » (P. Senge, The Fifth
Discipline: The art and practice of the learning organization,
London: Random House. 424 + viii pages, 1990, p.3).
 Learning organizations are possible because we are all
learners:http://www.ted.com/talks/sugata_mitra_shows_how_kids
_teach_themselves.html
 J. Medina, Brain Rules: http://brainrules.net

Toward the LO (2)
 Benefits of a LO:
- Maintaining levels of innovation and remaining competitive
- Being better placed to respond to external pressures
- Having the knowledge to better link resources to customer
needs
- Improving quality of outputs at all levels
- Improving Corporate image by becoming more people oriented
- Increasing the pace of change within the organization

Five Disciplines
A shift of mind from seeing parts to seeing wholes

The Fifth Discipline
 Systems thinking – the cornerstone of the learning
organization
An famous example of system thinking:
M. Porter’s 5 forces
http://www.youtube.com/watch?v=mY
F2_FBCvXw
interview with P. Senge:
http://www.mutualresponsib
ility.org/science/what-is-
systems-thinking-peter-
senge-explains-systems-
thinking-approach-and-
principles

These are not systems…
 Systems are complexe ≠ complicated
 This is complicated:
 Dominos http://www.youtube.com/watch?v=vDy2xWpZWVc
 Chain Reaction
http://www.youtube.com/watch?v=qybUFnY7Y8w

Systems thinking (1)
 What Is Systems Thinking?
 « Whenever I’m trying to help people understand what this
word ‘system’ means, I usually start by asking: ‘Are you a
part of a family?’ Everybody is a part of a family. ‘Have you
ever seen in a family, people producing consequences in
the family, how people act, how people feel, that aren’t
what anybody intends?’ Yes. ‘How does that happen?’
Well… then people tell their stories and think about it. But
that then grounds people in not the jargon of ‘system’ or
‘systems thinking’ but the reality – that we live in webs of
interdependence.” (=> VUCA)
http://www.mutualresponsibility.org/science/what-is-systems-thinking-peter-senge-
explains-systems-thinking-approach-and-principles

 3 Characteristics Of A Systems Thinking Approach
 ”A very deep and persistent commitment to ‘real learning.’
 I have to be prepared to be wrong. If it was pretty obvious
what we ought to be doing, then we’d be already doing it.
So I’m part of the problem, my own way of seeing things,
my own sense of where there’s leverage, is probably part
of the problem. This is the domain we’ve always called
‘mental models.’ If I’m not prepared to challenge my own
mental models, then the likelihood of finding non-obvious
areas of leverage are very low.
 The need to triangulate. You need to get different people,
from different points of view, who are seeing different
parts of the system to come together and collectively start
to see something that individually none of them see.”

 A Fundamental Principle Of Systems Thinking: Smart
Individuals Are No Longer Needed, Collective Intelligence Is
 « We all have probably spent too much time thinking about
‘smart individuals.’ That’s one of the problems with schools.
They are very individualistic, very much about ‘the smart kids
and the dumb kids.’ That’s not the kind of smartness we need.
 The smartness we need is collective. We need cities that work
differently. We need industrial sectors that work differently.
We need value change and supply change that are managed
from the beginning until the end to purely produce social,
ecological and economic well-being. That is the concept of
intelligence we need, and it will never be achieved by a
handful of smart individuals.
 It’s not about ‘the smartest guys in the room.’ It’s about what
we can do collectively. So the intelligence that matters is
collective intelligence, and that’s the concept of ‘smart’ that
I think will really tell the tale. »

 In management, rather simplistic frameworks are applied to what are complex
systems (scientific management)
 Focus on the parts rather than seeing the whole (scientific management)
 Fail to see organization as a dynamic process (=> knowledge creation)
 Learning from experience? (=AMBIGUITY)
 Delays and the decline in visibility
 Short-term improvements often involve very significant long-term costs.
 Emergence: From the mutual interaction of the parts of a system there arise
characteristics which can not be found as characteristic of any of the
individual parts.
 Systems maps: diagrams that show the key elements of systems and how they
connect

Systems maps…

How does it work? (1)
Page 1 sur 4htm
Figure 2: Subtract Relationship
The alternative is that thing 1 can subtract from thing 2, as
indicated by the "-" sign in Figure 2, thus decreasing thing 2.
All this thingness may a bit difficult to connect with so let's
consider a couple specific examples.
Figure 3: Sales Increases Revenue
Figure 3 indicates that sales adds to revenue. Even if sales
decrease it will still add to revenue, just not quite as rapidly as
before. On the other hand, if sales increases it will add even more
readily to revenue.
To practice system thinking: http://www.systems-thinking.org/intst/int.htm
07/ 03/ 14 04:27o Systems Thinking
Figure 4: Product Sales and Inventory
Figure 4 indicates that product sales subtracts from finished
goods inventory. If product sales increase it will subtract even
more from finished goods inventory. On the other hand, if
product sales decrease it will still subtract from finished goods
inventory, just not quite so much.
Within systems diagrams there are often items that are held
constant within the context of what is being considered. These
07/ 03/ 14 04Introduction to Systems Thinking
Introduction to
Systems Thinking
The Way of
Systems
Figure 4: Product Sales and Inventory
Figure 4 indicates that product sales subtracts from finished
goods inventory. If product sales increase it will subtract even
more from finished goods inventory. On the other hand, if
product sales decrease it will still subtract from finished goods
inventory, just not quite so much.
Within systems diagrams there are often items that are held
constant within the context of what is being considered. These
items will have neither a "+" nor a "-" attached to them.
Figure 5: Constant Contribution
Figure 5 indicates that resources interact with productivity in

Page 2 sur 4
omplete to form loops. There are only two types of loops,
einforcing and balancing.
Reinforcing Loop
A reinforcing loop is one in which the interactions are such that
ach action adds to the other. Any situation where action produces
result which promotes more of the same action is representative
f a reinforcing loop.
Figure 6: Reinforcing Loop
and adds to the interest. Note that interest rate is considere
a constant in this example. Interest then adds to the princip
This reinforcing action happens every so many months depe
on the period over which the institution computes the intere
snowball rolling down hill is your signal that the loop is a
reinforcing loop. The small graph to the right of principle
indicates that the growth of principal is exponential.
Typical examples of reinforcing loops are population growt
decline, uncontrolled nuclear reactions, snow balls rolling d
hill of course, runs on banks, wall street market crashes, etc
Balancing Loop
A balancing loop is one in which action attempts to bring tw
things to agreement. Any situation where one attempts to so
problem or achieve a goal or objective is representative of a
balancing loop.
Figure 7: Balancing Loop

Figure 6
re you let yourself become overwhelmed by the complexity of this
ram you had best fasten your seat belt as we're only about half way there.
rtime has this real nasty habit of costing more than regular time so there
ome implications of increasing Overtime.
Figure 7
ncrease in Overtime brings with it an increase in Overtime Cost. As
rtime Cost increases there is an increased emphasis on cost which shows
s Cost Pressure. The Cost Pressure is interpreted by the management of
ect in such a way that it shows up as additional Schedule Pressure. This
eased Schedule Pressure then leads to even more Overtime. Here we
but one more viscous reinforcing loop in which actions influence the
all effect to be just the opposite of what is desired.
rtime and Overtime Cost have a couple more influences.
Project Systems
Figure 8
Prolonged Overtime has a tendency to lead to Burnout which means H

To practice system thinking: http://www.systems-thinking.org/intst/int.htm07/ 03/ 14 04:50tems
Figure 12
Schedule Pressure has a couple additional influences that should be

When using system thinking?
 The following are some of the signs that indicate a
systems thinking approach is most likely warranted.
 There are multiple perspectives on just what the situation
is, and how to deal with it
 A previously applied fix has created problems elsewhere
 After a fix is applied the problem returns in time
 The same fix is used repeatedly
 Growth slows over time
 Partners for growth become adversaries
 Limitations experienced are believed to result from
insufficient capacity
 There is more than one limit to growth
 Limited resources are shared by others
 Growth leads to decline elsewhere

The four other disciplines
 The 5 core disciplines are :
 System thinking
 Personal mastery
 Mental models
 Building shared vision
 Team learning

Personal mastery
 « Organizations learn only through individuals who learn.
Individual learning does not guarantee organizational
learning. But without it no organizational learning occurs »
(Senge 1990: 139).
 « People with a high level of personal mastery live in a
continual learning mode. They never ‘arrive’. Sometimes,
language, such as the term ‘personal mastery’ creates a
misleading sense of definiteness, of black and white. But
personal mastery is not something you possess. It is a process.
It is a lifelong discipline. People with a high level of personal
mastery are acutely aware of their ignorance, their
incompetence, their growth areas. And they are deeply self-
confident. Paradoxical? Only for those who do not see the
‘journey is the reward’» (Senge 1990: 142).

Mental models
 These are « deeply ingrained assumptions,
generalizations, or even pictures and images that
influence how we understand the world and how we
take action » (Senge 1990: 8).
 « The discipline of mental models starts with turning
the mirror inward; learning to unearth our internal
pictures of the world, to bring them to the surface and
hold them rigorously to scrutiny. It also includes the
ability to carry on ‘learningful’ conversations that
balance inquiry and advocacy, where people expose
their own thinking effectively and make that thinking
open to the influence of others » (Senge 1990: 9).

Building shared vision
 « When there is a genuine vision (as opposed to the all-to-
familiar ‘vision statement’), people excel and learn, not
because they are told to, but because they want to. But many
leaders have personal visions that never get translated into
shared visions that galvanize an organization… What has been
lacking is a discipline for translating vision into shared vision –
not a ‘cookbook’ but a set of principles and guiding practices.
The practice of shared vision involves the skills of unearthing
shared ‘pictures of the future’ that foster genuine
commitment and enrolment rather than compliance. In
mastering this discipline, leaders learn the counter-
productiveness of trying to dictate a vision, no matter how
heartfelt » (Senge 1990: 9).

Team learning
 Such learning is viewed as « the process of aligning and
developing the capacities of a team to create the
results its members truly desire » (Senge 1990: 236).
 « The discipline of team learning starts with ‘dialogue’,
the capacity of members of a team to suspend
assumptions and enter into a genuine ‘thinking
together’. To the Greeks dia-logos meant a free-flowing
if meaning through a group, allowing the group to
discover insights not attainable individually…. [It] also
involves learning how to recognize the patterns of
interaction in teams that undermine learning » (Senge
1990: 10). (group as a commons=> E. Ostrom)

Issues with
 Companies’ priorities are overwhelmingly financial
BUT: « Productivity and competitiveness are, by and large, a
function of knowledge generation and information processing:
firms and territories are organized in networks of production,
management and distribution; the core economic activities are
global – that is they have the capacity to work as a unit in real
time, or chosen time, on a planetary scale » - Castells, M.
(2001), « Information technology and global capitalism » in W.
Hutton and A. Giddens (eds.) On the Edge. Living with global
capitalism, London: Vintage, p. 52.
 Problem of competencies: the approach entails
significant effort on the part of the practitioner

WHO MAKES
DECISIONS?
Making Decisions
@DavidVALLAT
175

Leading the learning
organization (1)
 A new view of leadership…
 Traditional leaders: set the direction, make key
decisions and energize the troops
 The traditional view of leadership, « is based on
assumptions of people’s powerlessness, their lack of
personal vision and inability to master the forces of
change, deficits which can be remedied only by a few
great leaders » (Senge 1990: 340).

Leading the learning
organization (2)
 In a learning organization, leaders are designers, stewards and
teachers.
 Leader as designer: « the leader’s task is designing the learning
processes whereby people throughout the organization can deal
productively with the critical issues they face, and develop their
mastery in the learning disciplines » (Senge 1990: 345).
 Leader as steward: « the leader develops a unique relationship
to his or her own personal vision. He or she becomes a steward
of the vision » (Senge 1990: 346). (=> Nonaka)
 Leader as teacher: « much of the leverage leaders can actually
exert lies in helping people achieve more accurate, more
insightful and more empowering views of reality » (Senge 1990:
353).

Phronetic leaders (Nonaka)
 Phronetic leaders : https://hbr.org/2011/05/the-big-idea-the-wise-leader
 “Phronesis” is a capability of finding the “right answer” for the overall good
(common good) in an individual specific context, and a phronetic leader is a
leader who has this capability. The capability of a phronetic leader has six factors:
 1) Ability to make a judgment on “goodness” (ethics)
 2) Ability to share contexts with others to create the Ba (and shared sense in a
timely manner)
 3) Ability to grasp the essence of particular situations/things (context)
 4) Ability to reconstruct the particulars into universals using
language/concepts/narratives (system thinking)
 5) Ability to use any necessary political means well to realize concepts for the
common good
 6) Ability to foster practical wisdom in others to build a resilient organization
178

The leader, a person and a
method (1)
 1. Wise Leaders Can Judge Goodness. Phronetic leaders
practice moral discernment about what’s good and act
on it in every situation.
 VISION (≠VOLATILITY), BENEVOLENCE (CULTURE of
creativity)
 2. Wise Leaders Can Grasp the Essence. Before making
judgment calls, wise leaders quickly sense what lies
behind a situation, project a vision of the future or the
consequences, and decide on the action needed to
realize that vision.
 CLARITY, SYSTEM THINKING (≠COMPLEXITY), AGILITY
(≠ROUTINE, AMBIGUITY)
179

method (2)
 3. Wise Leaders Create Shared Contexts. Phronetic leaders
constantly create opportunities for senior executives and
employees to learn from one another. In Japan a ba (place,
space, or field) refers to the context in which relationships
are forged and interactions occur.
 KNOWLEDGE CREATION (INNOVATION) => UNDERSTANDING
(≠UNCERTAINTY)
 4. Wise Leaders Communicate the Essence. Phronetic leaders
must be able to communicate in a way that everyone can
understand. The essence of a situation is often hard to
express, so they must use stories, metaphors, and other
figurative language.
 KEY INTELLIGENCE TOPICS, SENSEMAKING, STORYTELLING,
SYSTEM THINKING => VISION (≠VOLATILITY)
180

 5. Wise Leaders Exercise Political Power. It isn’t enough to
identify the essence or communicate it; phronetic leaders
must bring people together and spur them to act, combining
and synthesizing everyone’s knowledge and efforts in the
single-minded pursuit of their goals.
 CREATIVE CULTURE, BENEVOLENCE => UNDERSTANDING
(≠UNCERTAINTY)
 6. Wise Leaders Foster Practical Wisdom in Others. Practical
wisdom should never be treated as if it were the preserve of
the company’s chief executive or top management team. It
must be distributed as much as possible through the
organization, and employees at all levels can be trained in its
use.
 CREATIVE CULTURE, BENEVOLENCE => UNDERSTANDING
(≠UNCERTAINTY)
181
method (3)

Benevolence and Business Agility
 All about people…
 Theory X and Y (D. McGregor):
http://en.wikipedia.org/wiki/Theor
y_X_and_Theory_Y
 Freedom Inc (Getz & Carney).
http://www.amazon.com/Freedom-
Inc-Employees-Business-
Productivity/dp/0307409384
 SEMCO:
http://en.wikipedia.org/wiki/Maveric
k_(book)
 GORE:
http://en.wikipedia.org/wiki/W._L._
Gore_and_Associates
 IDEO:
http://en.wikipedia.org/wiki/IDEO

Motivation
 Strong link between knowledge worker motivation and
benevolence in management (≠ scientific management)
183
The book in a video:
https://www.youtube.com/watch?v=u6XAPnuFjJc
The book in a TED conference:
http://www.ted.com/talks/dan_pink_on_motivatio
n?language=en
We are motivated when we can be creative…

Business Agility (vucA)
 An imperative for survival in a VUCA world.
 Business agility is the ability of a business to adapt
rapidly and cost efficiently in response to changes in the
business environment. => LO
 History: http://agilemanifesto.org

Business Agility (definition)
 Business agility is the ability of a business to adapt
rapidly and cost efficiently in response to changes in the
business environment. Business agility can be
maintained by maintaining and adapting goods and
services to meet customer demands, adjusting to the
changes in a business environment and taking advantage
of human resources.
 Agility is a concept that incorporates the ideas of
flexibility, balance, adaptability, and coordination under
one umbrella. In a business context, agility typically
refers to the ability of an organization to rapidly adapt
to market and environmental changes in productive and
cost-effective ways.
 http://www.cise.ufl.edu/~manuel/Agile-for-Dummies
185

Creating
knowledge
Understanding
the context
Making
decisions
SURVIVAL (Innovation)
@DavidVALLAT
187

@DavidVALLAT
188
SURVIVAL (Innovation)
V.U.C.A.
C.I. Tools (swot, etc.)
Knowledge Creation

@DavidVALLAT
189
Knowledge Creation
PEOPLE (collaboration)
Tacit & Explicit Knowledge
(SECI Model)
Knowledge Creation Tools (LLW,
CoP, Ba)

@DavidVALLAT
190
Knowledge Creation to make decisions
Struggle against routines and
blindness…
… and finally adopt system thinking in order
to foster a learning organization

@DavidVALLAT
191
A learning organization...
… relies upon a phronetic leader...
… that everyone can be
PEOPLE (collaboration = motivation)

What to do next?
 Drivers/Vision/Sensemaking for yourself
 Learning and continuous improvement (MOOC, TED,
etc.)
 Implementation of knowledge creation (Ba, LLW,
CoP)
 Train to be a phronetic leader
 Train others
 Measure results (BSC) => feebacks
192
@DavidVALLAT

Recommended Readings (1)
 Fun and useful for business:
 S. Johnson et al., The One Minute Manager (in the Google
doc files)
 S. Johnson, Where is my cheese? (in the Google doc files)
193
@DavidVALLAT

 Less fun but very useful for business:
194
@DavidVALLAT

 Less fun but very useful for business:
195
@DavidVALLAT

Economic intelligence and knowledge management

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