The lost art of strategic KM

By Victor Newman, former chief learning officer of pharmaceuticals giant Pfizer and a member of the Inside Knowledge editorial board.

All business strategies are knowledge strategies in the sense that they are the product of a series of conscious or unconscious knowledge choices. Not all of them are necessarily grounded in logic or common sense.

I was consulting at a senior level in a company where every year more money was being pumped into product development. Yet the number of new products getting to market remained the same. The problem? Reviewing the data, we found that we had fallen into the trap of pursuing minor product differentiation because low risk had become the name of the game at the company.

In this company’s industry, only a tiny number of laboratory prototypes ever make it to market. But this had led to the widely held assumption that the company required a large base of prototype projects running in order to grow the business.

Indeed, the low survival rate of successful prototypes provided another example of how groups within any organisation can exploit and corrupt measurement systems over time, turning them on their head. In other words, if you want to pay for lots of prototypes that don’t work, you will get them. So ingrained were attitudes, that it required a subtle, indirect approach to tackle the causes of the corporate malaise – the knowledge the company’s business strategy was tacitly based upon, which was clearly not working.

I was becoming aware of the fact that although we had a lot of data about the situation, we never discussed the emergent strategy or tested the knowledge it was based upon. Although we talked about innovation, people seemed to think they were already doing it.

Furthermore, no one was willing to question the business model. I decided to take another approach and led a disguised strategic conversation exercise through metaphor, based upon the old nine-dot problem. That’s the one where you are asked to connect nine dots in a box arrangement of three lines of three dots, using only four continuous straight lines. Usually what happens is someone tries to solve this problem, but gives up frustrated. It’s only when someone shows them the ‘arrowhead’ pattern that extends the lines outside of the box that they realise that they sometimes have to step outside the box to understand the problem and see a solution.

Working within the current strategy was like trying to solve the problem by staying within the box, with similar emotional frustrations in the sense that it didn’t matter what you did with your resources, you still couldn’t solve the problem with your existing thinking. Having made the connection with, the next step was to invite people to connect the nine dots using just three consecutive straight lines. After initial astonishment, people would ask whether they could break the rules and began to question their own constraining assumptions. We then transferred this thinking to our emergent strategy.

Just what were the constraining assumptions? We then applied ‘reality checks’. Were these constraining assumptions still true, did they still constrain us?

In every session, with a bit of preparation, the same six constraining assumptions that made up the organisation’s success formula would appear and we would try to demolish or modify them in the light of new knowledge and market changes.

The outcome was a populated matrix or portfolio of new strategies that defined new freedoms to innovate in the language of the organisation. The scariest moment, for me, was when I presented this to the head of new product development: “You know, I only ever get to think like this on my own, late at night,” he said.

There is a big difference between being efficient and being effective. All strategies are ultimately knowledge strategies. Make sure that the knowledge you use to build your strategic choices is still current.

Thinking outside the box involves being a stranger to the familiarity of your own organisation. Make sure your organisation’s strategy is based on fresh knowledge and that any old knowledge that remains within your emergent strategy is still ‘edible’ and not past its sell-by date.