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Feature

posted 1 Oct 1997 in Volume 1 Issue 2

Increasing Organisational Capacity through Knowledge-Based Work Design

Francois U. Escher and Catalina Bajenaru , Learning & Development, AT&T unravel the entangling paradoxes of knowledge management.

In the complex and dynamic reality of today's organisational life, the burning question for knowledge management becomes how it will help to improve the organisational capability of the enterprise as a whole. The challenge however, is that management expects this to happen within the tightly set performance boundaries companies have to live in.

There seems to be an unresolveable paradox between creating more choices based on better access to, and use of knowledge as a means to improve the organisation's capability on one hand, and short-lived decisions aimed at meeting performance goals or metrics today, this month, this year, with, and even despite of an underperforming organisation on the other. 

'Knowledge management', as unquestioned and undifferentiated as it presents itself today, may not be the magic answer to meeting the transformation companies will be facing in the future. Instead, work design centred on knowledge, could be a more viable path.

AT&T's 'Workforce 21' Initiative

Realising this paradox (and many more on the definition of knowledge itself), there are many compromises to be made. One would be to work on parallel timelines. While acknowledging that the deeper transformations required in the future are not going to happen next year, that all change is evolutionary, and that a sound learning process needs its trials and errors before giving up established patterns, one could, nonetheless, start today to lay out the foundations of the transformation. In brief, give the time some time, but work hard on the future now.

It is in that spirit that AT&T, under the leadership of Mary Anne Walk, Vice President Labour Relations and HR Business Management, has launched an initiative called ' Workforce 21' (workforce for the 21st century). Just as in any other service company, at AT&T, the preponderance of work is that which is called 'knowledge work'. Workforce 21 is a new initiative aimed at developing the human assets and assessing knowledge requirements in support of AT&T's strategic directions. It is spearheading an innovative approach to leverage its organisational capabilities. Two major assumptions come to play here:

Given the ever increasing competitive communications services market, the Workforce 21 program it is making the assumption that the primary differential in the marketplace will be the efficient and effective deployment of individual and organisational knowledge.

Efficiency and effectiveness assume new types of social contracts between employer and employees to give the company the flexibility it needs. This means a new methodology and structure for workforce planning and sourcing, and a new definition of the employment relationship.

A new methodology for human asset valuation

Both assumptions are complementing each other: the first one establishes the idea, that knowledge in an organisation, i.e. the superior capability embedded in its processes and collective work, represents a value which is real although intangible: it can be perceived by customers and partners (image, brand, loyalty, relationships), and even materialise - beyond a company's book value - if it were to be sold. This is what is commonly referred to when knowledge management attempts to valuate and to measure what constitutes the so-called ' knowledge assets' or the 'intellectual capital'.

Understandably therefore, if the value assumption is correct, this becomes a major motivation to manage 'it' through better access to, and retrieval, storage, dissemination, deployment of information and data. Hence the many valuation approaches we observe knowledge management to be embarking on. But have we really questioned the logic of it, or are we satisfying ourselves with just a new auditing fashion?

In the framework of the Workforce 21 Program we are working on a new methodology for human asset valuation which attempts a more prospective approach by setting normative objectives to generate incremental value of the company's knowledge assets and achieve higher organisational capability. In analogy with the classic financial shareholder value approach, we are developing a framework whose focus is on dynamic value creation rather than on static performance (capital) accounting. We see this to better take into account the dynamic of ongoing change than methodologies based on indefinite and heterogeneous lists of indicators assessing past data. (Fig. 1)

In our experience we found this new valuation approach to potentially represent a powerful tool for aligning new strategic initiatives with the organisation's capability and bridging the gap between strategy and resources management. At the same time it points to what it strategically takes for the organisation as a whole (and not just the business portfolio) to become different from competition.

Design choices building on the 'work' of the organisation

The second assumption of the Workforce 21 Program, i.e. increased flexibility, asserts the need to explore fundamentally different alternatives in the way our organisations are structured. Here, it appears, that it is the distinction between the workforce, i.e. the sum of the individuals, and the work, i.e. the collective performance achieved by the organisation as a social system, which drives the design choices.

So far, 'knowledge management' has centred its attention almost exclusively on the individual as the repository of (explicit) knowledge, skills, competencies, and, even then, pays only lip service to a person's implicit knowledge.

The corollary of that view is the to define work as the job, and workforce as the jobholders. Skills and competency modelling struggles with that issue a lot. And knowledge management, by borrowing mechanical flow metaphors like 'knowledge sharing', 'transferring competencies', building 'communication channels' from pre-systems-theory communication science can't help but treat knowledge as a 'thing' or a 'good' people send and receive.

The reality of organisations and their works is, however, an other one. For an external observer capable of making abstraction of the physical appearance of people (whether twos, tens or thousands) and space (locations, offices) an organisation would probably appear like an indescribable happening made up of ongoing simultaneous and concurrent expressions, informations, and understandings - hence meanings - in any kind of media, continuously regenerating themselves apparently without a plan and yet according to some discernible patterns or rules and within recognised boundaries.¹

Such is the reality of a social system, of which any organisation is a subset. The observed happening is called communication, the rules which communication follows in an organisation are called decisions, the boundaries within which communication is remunerated are called membership. It is communication only which constitutes a social system. Knowledge only exists in a social context: knowledge has to be communicated to be known as knowledge.

While in general the way communication happens seems to escape any 'management', organisations make an exception as their communication takes place as a special type of communication: as communication of, and about decisions which are followed by the members who have a contract with that organisations. Under this view of an organisation the definition of work is not the job but the (highly implicit) organisational knowledge embedded in the way decisions are executed.

A new approach to workforce planning and sourcing

What design choices for increased deployment of knowledge and more rational flexibility does that leave us with? Basically two:

the different ways in which work is performed in an organisation and the decisions made and executed, may get rallied around the type or the nature of knowledge, expertise, ' savoir faire', the company requires on one hand;

and the different ways in which workforce is offered membership and terms & conditions are stipulated in that organisation may be configured into entities based on their contribution to the company's business objectives.

from the current 'matrix' to improved 'alignment' of support functions to the lines of business;

from improved 'alignment' to functional 'support/service excellence';

from 'support/service excellence' to increased ' core work' focus;

Directions for further exploration

We are still far from being able to predict the outcome of this exploration. The overall governance model of such an organisation and the accountabilities of all its entities have not been written yet. Nor has the economic viability and sustainability of 'knowledge trading' within enterprises been explored. However, the dilemma of increased rationalisation while leveraging the knowledge differential for superior organisational capability will become contingent enough to break established rules and structures of today's enterprise model.

Aligning the organisation for effective knowledge deployment is a tremendous undertaking and cannot be approached in a superficial or half-way manner. We expect that an approach to knowledge management embracing knowledge-based work design aimed at the creation of a more flexible organisation, will bring about a more radical change in the way we look at:

Workforce planning - move away from an 'individual jobs' perspective and shift the focus on the 'work' to be able to better articulate workforce requirements for fulfilling the business purpose thus enhancing the potential of the workforce to meet the dynamic needs of the organisation.

Organisational configuration - move away from all business encompassing organisation ownership models to explore alternative expertise trading arrangements based on a 'client/server', 'supply and demand' model for human asset sourcing, thereby making a dramatic shift from the human asset being seen as a central 'brain warehouse' to multiple interacting 'expertise powerhouses'.

Learning in organisations - move away from a static knowledge acquisition mode to a dynamic renewal and regeneration of individual and organisation competencies, thereby continuously transforming knowledge to replenish the corporation's competitive strength.