Thought leader: The lost art of strategic KM

By Victor Newman, member of the Inside Knowledge editorial board

All strategies are knowledge strategies in the sense that your strategy is the product of a series of conscious or unconscious knowledge-based choices. I was working at a senior level in a business where every year more money was being pumped into product development and yet the number of products getting to market was static. Reviewing the data within a variant of the Porter ‘competitive advantage’ matrix (based on price and product differentiation) was leading us into the second-best trap of minor differentiation, because low risk had become the name of the game.

I was becoming aware that, although we had a lot of data about the situation, we never discussed the firm’s emergent strategy or tested the knowledge upon which it was based. Though we talked about innovation, people seemed to think they were already doing it. We were committed to a default strategy that we had never actually discussed, and it was killing us.

No-one was willing to question the business model that involved spending so much to deliver less. I decided to take another approach, and lead a disguised strategic-conversation exercise based on the nine-dot problem: you know the one, where you are asked to connect all nine dots placed in a box arrangement of three lines of three dots, using only four continuous straight lines. Usually what happens when someone tries to solve this problem is that they get stuck until someone reveals the ‘arrowhead’ pattern that extends the lines outside of the box. In our business, working only within the existing strategy was a bit like trying to solve the nine-dot problem by staying within the box, with similar emotional frustrations.

Attendees were invited to attempt to solve the problem, and after the expected initial astonishment and disbelief, they began to ask whether they could ‘break the rules’ and in effect questioned their own constraining assumptions. We then transferred this thinking to our emergent strategy. Just what were the constraining assumptions? Did they hold true, and how did they constrain us? In every session, the same constraining assumptions would appear, and we would demolish or modify them in the light of new knowledge and market conditions. The outcome was a portfolio of strategies that defined new freedoms to innovate in the language of the organisation.

All strategies are knowledge strategies. Make sure that the knowledge you use to build your strategic choices is still current. Knowledge is like fruit: the highest value is only realised when it is ripe, and available when someone is hungry. Don’t keep selling old fruit to people who aren’t hungry. Make sure your strategy is based on fresh knowledge, and that the old knowledge within your strategy is still edible.