Inflection point

In the first of a series of articles on organisational intelligence, Robin Smith explains why many organisations are being forced to reevaluate their KM strategies

This series will review the state of play for the management of intelligence within organisations. Each article will examine a key perspective in terms of business intelligence management, providing new case studies for information and knowledge professionals to draw key lessons from, to help deliver high-performance knowledge services.

The intelligent edge: Is your organisation reaching a knowledge inflection point?
There is a spectre haunting every major organisation. With every new e-mail saved and every new duplicated business record, the organisational knowledge system nears a point of fundamental change. The next year will see the next step towards a major information overload crisis for a number of ill-prepared organisations. Some will respond to the challenge; others will be taken down by it. This point could be a revelation or a collapse – this is the inflection point.

Andy Grove, former CEO of Intel, states that, “An inflection point is an event that changes the way we think and act”.1 For example, the fall of the Berlin Wall was an inflection point in global politics and the commercialisation of the internet was an inflection point in technology. It is simply a turning point. When a company makes a major strategic change it is said to be at an inflection point. This profound change could be positive or negative.

For knowledge professionals, a number of inflection points have affected the information universe in the last 30 years. These include:

The birth of Microsoft – while Apple scoops up the plaudits for its new generation of tablets it is the dawn of personal computing under the aegis of Bill Gates that changed IT for the benefit of mass consumers;
The commercial web – organisations meeting consumer demand during the first dot-com boom influenced a major change that has led to the integration of the web into mainstream living;
New information rights – the construction of information rights across Europe and the publicity given to stories including MPs’ expenses in the UK, a direct result of freedom of information statutes, has seen citizen activism blossom in line with new social movements.

While we can question the impact of these points, information and knowledge professionals can no longer ignore the scale of the threat to the organisation’s information estate, which aggregates the paper and electronic records that proliferate across services unchecked and at a sizeable cost to individual organistions.

The problem for organisations
For individual organisations, change is constant. This is recognised and accepted for the most part. But the continued neglect of the information estate, with millions of digital records stashed in poorly organised online archives, brings a range of threats that have to be identified and controlled.

This is a major internal risk to the success of an organisation. However internal threats do not exist in isolation. The external environment can interact with internal operations to catalyse change in a profound way. For example, the crisis in UK retail banking was directly linked to global debt management risks, which moved around the world at speed.

The current threat horizon
Without risk there is no reward. Mapping the internal and external threats that could lead to an inflection point is the best initial approach to adopt. By scanning for business intelligence using an array of techniques it is possible to deal with information and knowledge risks on an ongoing basis. In contrast, if an organisation can benefit from a strategic inflection point, regular scanning and assessment provides the elements for transformation.

External threats

The collapsing digital universe
Research by IDC revealed that the digital universe was growing exponentially, prompting researchers in the UK to review how organisations were mapping the ‘internal universe’2. This growth cannot continue for ever, so there is a real possibility that organisations will be facing major problems with the digital information estate.

A recent survey of information professionals in the UK also highlighted that:

Sixty per cent of organisations who have adopted e-records management have failed to yield significant benefits for knowledge sharing;
Only 26 per cent have identified knowledge officers to implement information standards; and
Nine per cent are planning to increase investment in information programmes during 2011/20123.

The ‘event horizon’ for organisations can occur when knowledge sharing becomes impossible due to poorly implemented technologies. While many knowledge capture tools can ensnare information and date it, it is estimable that this capture is an end in itself.

Like an ‘event horizon’ these tools do not actually promote sharing and access becomes limited to the point where it becomes impossible to be confident in any knowledge sharing within services.

The end of Moore’s law
In 1965 Gordon Moore, the co-founder of Intel, predicted that the number of transistors on a silicon chip would double every year for ten years – a prediction that became known as Moore’s law4, and has become one of the seemingly immutable laws of IT development.

However, there has been fierce debate over the likely falsification of this law, with computing development slowing over the past 40 years. The implications for the IT environment are substantial.

The movement towards cloud computing is also affected by this potential inflection point, as services can no longer be predicated on continuous improvement in performance and speed.

The devaluation of intellectual capital
Information must be seen as intellectual capital. It must form part of the assets of an organisation and be managed to a high standard in order to retain value.

However, fewer organisations are failing to capture this value, with documents and records containing the following intellectual capital ineffectively stored or not risk assessed:

Solutions and ideas – people are able to contribute to problem solving and creative thinking across e-mail conversations;
Expertise and knowledge – existence of key individuals can be identified in email directories; and
Capability – suppliers can be contacted and monitored for full effectiveness.

Failure to assess the value of intellectual capital means that it cannot be managed or sustained effectively, which ultimately leads to its loss.

Internal threats

Loss of knowledge workers
Laying off staff obviously reduces costs, but the knowledge loss as experienced, skilled workers leave for new opportunities has seen many knowledge-based organisations suffer. In 2002, there was a major restructuring of services at a large software design company in London, which saw 200 staff leave the organisation. Within three years the market valuation of the firm had declined by 13 per cent and the outgoing CEO was noted to rue his haste in axing knowledge workers, who had been responsible for the organisation’s high performance during 1990s.

Knowledge scarcity during a recession
Less knowledge means fewer interactions and reduced problem resolution. Knowledge scarcity is becoming a reality for organisations that have lost workers during the global recession.

Jim Pinto notes that, “Over the years, people always have felt that scarcity will ultimately prevail over abundance. However, Necessity (the mother of invention) turns scarcity into abundance. This is as true for food production as it is for producing knowledge within an organization… Abundances and scarcities play out in a spiral of reciprocity, with each producing its opposite in the cycles of economic advance. A scarcity finds meaning and value in the future abundance that it causes – and that is the inflection point where significant growth and wealth is generated for leaders who utilizes knowledge and creativity to manipulate the future abundance while it is still a scarcity”.5

The creation and management of organisational knowledge is interrupted during a recession. This threat might be subterranean, but the reality can have a profound impact.

Threats within the intelligent organisation
Information risk management has never been more important. The need for a clear approach to managing information and knowledge services is growing. Too many information and knowledge professionals are addressing the threats and risks in an ad hoc fashion. To date there have been few tools for the management of threats across knowledge services.

Two new complementary approaches have emerged. First, the information risk and intelligence model provides a suite of tools and techniques to manage all major knowledge and information threats and importantly opportunities. Viet-hai Phung, co-author of the model, notes that, “the management of threats facing an organisation must be integrated into information and knowledge planning…the model allows the complete capture of external and internal threats”. Its aim is to provide a scanning and analysis service that can establish early warning systems for knowledge professionals.

In addition Bernard Marr, in his new book The Intelligent Company, has formulated a critical model to transform intelligence products into effective actions, to build and sustain the intelligent company. The model focuses on all information and knowledge services to track and improve processes to avoid or quicken the meeting of the inflection point.

Marr’s evidence-based management model provides a clear pathway for improving the processing of intelligence, which requires the following actions:

Identify objectives – clarifying organisational objectives seems like common sense but doesn’t always happen. A distilled vision and implementation pathway can help navigate threats and risks, while maintaining focus on strategic outcomes. This will help define knowledge needs and link to the next step;
Collect the right data – “How poor are they that have not patience,” said the villainous Iago, in Shakespeare’s Othello. The ready availability of data does not mean that it should be grabbed by senior management intent on proving the decisiveness of leadership. The right data might take time to be compiled but can deliver richer insights when contextualised and presented by information professionals. Marr notes that the use of strategic performance questions can uncover gaps in knowledge, which can then be addressed to aid decision making. Good research skills are vital at this stage but too many organisations treat research as an add-on when it should be integrated into management reviews across the business;
Analyse data and gain insights – quality data analysis is a value-adding stage within Marr’s model. By building a rich research picture, insightful analysis and decision making can be conducted;
Present and communicate information – this is a critical step as information is a currency and should not be traded without a clear understanding of its value within the decision-making process. A number of communication methods should be considered when delivering information to decision makers to ensure that there is a clear hierarchy of ideas outlined and understood by the key audiences;
Turn information into knowledge – seemingly simple, often mismanaged completely. Marr notes that good senior managers understand that information requires consideration and testing, using rigorous methods before knowledge can be generated and deployed.

Looking ahead
Grove, author of Only the Paranoid Survive has been quoted saying: “Let’s not mince words: A strategic inflection point can be deadly when unattended to. Companies that begin a decline as a result of its changes rarely recover their previous greatness.”

Inflection points exist and should not be dismissed. Adopting practices to avoid disaster can support improvement across services. In addition, managing threats and risks ultimately helps establish a learning organisation. Responding to new information risks within a challenging environment will also provide vital intelligence about the state of markets or forthcoming regulatory requirements.

The threat environment is dynamic and needs to be managed as such by staff who are prepared to learn, evolve and adapt to risks and issues. By continually scanning and managing risks the potential to avoid damaging inflection points can sustain your organisation during these difficult economic times.

Robin Smith is head of information governance at the Northampton General Hospital NHS Trust. He can be contacted at robin.smith@ngh.nhs.uk

References

http://www.intel.com/pressroom/kits/bios/grove/paranoid.htm
The Exploding Digitlal Universe, IDC, 2007.
Phung & Smith, Information management review, 2010.
http://news.bbc.co.uk/1/hi/technology/7080646.stm
http://www.jimpinto.com/writings/inflection.html