Businesspeople often ask us what it takes to survive and profit in competitive and volatile market conditions. The common solution is to offer improved products and services. This is partially true. However, improvements are only the expected results, not
by Site Staff
June 2, 2004
Business survival is not solely based on products and services. Rather, it is dependent on the knowledge of people. Leveraging and maintaining the knowledge and competencies of your staff and transitioning from a product or service orientation to a learning organization is the first step. Other critical factors to becoming knowledge-enabled include developing an environment with an efficient infrastructure and leadership that encourages learning to take place.
Employee Competencies and Technology Working Together
Growing organizations face many challenges and opportunities. Globalization, deregulation, technology and competition empower businesses and consumers. These rapid and continuous changes are forcing all businesses to respond and meet market demands faster and with more innovative solutions.
By effectively managing operational concerns, knowledge and information flow freely within the organization and are accessible to the right people. Current technology provides “virtual” environments to get this accomplished. Virtual integration creates efficiencies in operational structures while maximizing employee knowledge and critical information. Integrating a virtual process to capture, develop and manage knowledge takes full advantage of your organization’s most valuable asset—its people.
A Holistic Approach to Organizational Learning
Change is an integral component for surviving the knowledge economy. Managing change requires that you focus on what you do best. This is why many organizations delegate non-core parts of their value chain to strategic partners. Involving strategic partners in the value chain (from suppliers through customers) creates a flexible extended enterprise with access to the most current knowledge. This is known in business as “patching” and/or “clustering.” This is important for growing companies to understand since they are in a position to virtually integrate this extended structure and harness the knowledge available to them.
At the core of the extended enterprise are the people who create its primary value. Again, this value is derived from the intellectual capital that drives product innovation and organizational flexibility and not necessarily what the company offers. Building a knowledge-economy business requires shifting your strategic focus internally while still being aware of, but not overly concerned with, external competitive environments. This is because the extended enterprise involves and integrates external partners knowledge into its fold.
Many growing organizations are beginning to make a significant effort toward creating comprehensive employee knowledge development and management processes. They focus on people and acquire the tools to facilitate the transfer of knowledge within their value chains. How employee knowledge and abilities are managed, developed and leveraged within the context of the organization’s strategic imperatives is essential.
Developing Your People’s Knowledge
Leading organizations learn early the importance of developing and managing employee knowledge. It becomes everyone’s responsibility, not just that of the human resource manager or training director. This allows managers to develop and deploy employees’ competencies in the same way they integrate other parts of their value chain. Developing your people in this manner results in:
- Quicker information and knowledge transfer throughout the value chain.
- Alignment of employee objectives and supplier needs.
- Reduction in downtime and wasted efforts.
- An increase in customer satisfaction.
- Gaining, training, retaining and motivating the right people for your organization.
- Possessing the right competencies to meet performance objectives.
As simple as this may sound, successfully deploying a learning development strategy requires a clear understanding of its impact within your value chain.
What You Need to Address
According to Harvard Business School Professor Michael Porter in “Clusters and the New Economics of Competition” (Harvard Business Review, Nov.-Dec., 1998), “Competition in today’s economy is far more dynamic… Competitive advantage rests on making more productive use of inputs, which require continual innovation.” Business strategies must continually innovate and be flexible to respond to change. According to Porter, “Companies today must forge close linkages with buyers, suppliers and other institutions.” This shared responsibility is important since your customers and competition are not only local, but also global.
The problem is that even though the business environment is changing dramatically, businesses maintain outdated business strategies and old-style HR attitudes toward training. These barriers are still prevalent. Organizations that make large investments in learning and in developing their people outpace their competition consistently as evidenced in studies conducted by the American Society for Training and Development (ASTD).
Successful knowledge-economy businesses clearly understand the dynamics involved in this environment. They avoid “commoditizing” their products and services by maintaining and fostering their people’s skills and abilities. In return, their people are capable of contributing significantly more to the objectives of the organization. Management focuses on:
- Employee empowerment: Empowerment gives employees more autonomy and power over the decision-making process within their work environment and allows them to understand how they contribute and fit into the organization’s “big picture.”
- Technology management: Knowledge-economy businesses use technology as a tool to create efficiencies and build relationships. But most importantly, they allow their people to communicate and have access to information helping them make smarter and faster decisions.
- Management leadership: Top management leads by example. They are the first to show their commitment and enthusiasm to new ideas and processes. Managers are expected to become directly involved and are the first to initiate and integrate the new values within their business environment. It is not always apparent to managers if these elements in place. To assist you in this effort please visit CentralKnowledge (www.centralknowledge.com) to obtain a complimentary learning management diagnostic to determine if your organization has the elements to become knowledge-enabled.
What’s Involved in a Learning Development Strategy?
When you include recruiting, hiring, on-the-job training and salaries, people become an organization’s greatest investment. Many businesses, however, focus their efforts on acquiring and managing traditional fixed assets rather than maximizing the most important and vested asset in their extended organization—the value and knowledge of their workers and value chain.
Through effective use of your employees’ knowledge, you maximize the value of your products or services, creating a loyal customer base. It is important to consider your customers’ insights and knowledge to capitalize on market opportunities and develop innovative solutions. This fosters beneficial and profitable relationships while reducing the effect of competitive forces on your company.
Creating a learning development strategy begins with the fundamental aspects involved in developing employee knowledge. At the most basic level, a learning development strategy involves:
- Discerning what your people know and how they use their knowledge.
- Being capable of further developing their knowledge and skills.
- Leveraging this knowledge throughout the extended organization.
- Managing and maximizing the contribution obtained from this knowledge base.
Incorporating a learning development strategy requires a clear vision and solid infrastructure. To build this strategy, your organization should reorient strategically, manage learning, manage performance and manage learning events and content.
Becoming a knowledge-economy business requires a shift in thinking. Business models that once worked have difficulty keeping up with the current volatile environment. The learning organization is flexible and promotes innovation and creativity. It also redefines how an organization is structured and fits within the value chain.
Managing learning requires matching the learning requirements of the organization to the personal learning needs of employees. It encompasses every aspect related to the learning and development of your knowledge workforce. Learning management involves determining learning needs, developing knowledge capacity, selecting appropriate and viable learning formats and producing timely management reports and evaluations.
For some global organizations, accurate reporting is becoming compulsory. Governments are increasingly looking at ways to legislate workforce development laws requiring businesses to meet strict reporting guidelines.
Technology, specifically a learning management solution, enables you to manage your employees’ knowledge and effectively administer various facets of your workforce’s learning requirements.
The primary purpose of developing a learning environment is to maximize the organization’s overall performance and value. This is attained by setting clear strategic objectives, measuring comparative benchmarks against objectives, establishing a process for continual feedback and offering opportunities to take risks.
Effective performance management offers a way for you to measure the return on your learning investments and the development of employee competencies. This is important if learning is to contribute to the profitability and viability of your knowledge-enabled organization.
Manage Learning Events and Content
Learning takes place both formally and informally in growing knowledge-economy businesses. Their strength comes from properly structuring and organizing learning tools and environments so they directly contribute to the strategic goals of the organization.
Developing, sourcing and deploying appropriate training material requires both internal and external expertise. Most learning is not neatly structured in a course format. It comes through various forms of material and communication networks within your extended enterprise. The key is ensuring that the right content gets to the right people at the right time. It is critical that you acquire the experience, expertise and technology to help you package and manage this learning content effectively.
Increasingly, employee development and management is playing a major role in the growth of the knowledge-economy enterprise displacing outdated perceptions and strategies. Successful knowledge-enabled organizations strive to harness the knowledge existing within their extended value chain. Managers are beginning to shift their focus from internal employees to a broader knowledge partnership perspective.
The impact of technology and the rise of the Internet provide new opportunities to integrate seamless learning management solutions within growing organizations. Driven by strong vision and leadership, the virtually integrated, knowledge-enabled enterprise empowers employees and brings together various elements of critical to the organization ready to capitalize on new market opportunities.
Ajay M. Pangarkar and Teresa Kirkwood (email@example.com) are partners and learning strategists at CentralKnowledge.com, a strategic learning provider that specializes in helping companies effectively manage their core learning services and develop the skills of their training teams.