posted 5 Apr 2004 in Volume 7 Issue 7
Plus GSM in Poland has successfully harnessed the power of knowledge management by linking it to innovation. The network operator launched a competition called Visionaries Wanted!, which encouraged employees and the public to share their ideas and knowledge in exchange for the ultimate prize: to see their idea become a reality. Adam Kowalik discusses the development of the competition and its direct relation to knowledge management.
“Investment in knowledge always pays the best interest,” Benjamin Franklin
As knowledge management becomes an established practice, it is slowly gaining the attention of Polish managers who are beginning to understand the potential value that lies in consciously managing knowledge. Companies such as KPMG, Motorola, HP and Dow Chemical, to name a few, are already taking advantage of the benefits generated by knowledge management and are harnessing this potential around the world.
When will KM be the norm in Poland?
Over the past few years, Poland has joined the knowledge-management wave that is spreading around the world. But why have relatively few firms tried to harness knowledge as a strategic resource that can guarantee a business runs efficiently? Some people say that it is because in practice, knowledge management is simultaneously straightforward and complicated, while others say that it is because Poland lacks examples of knowledge management providing real business results.
Today’s business scene
Businesses today face the challenge of implementing innovations. However, this is only half the challenge. If they are to remain successful they must introduce innovations regularly, quickly and efficiently. Fortune magazine advises firms that if they want to appear in its list of most admired companies they must innovate, innovate, innovate.
The sagacity of this advice becomes even clearer if we compare the 56 per cent rate of return on investments from innovations with the ‘mere’ 16 per cent rate return from normal projects.
This article aims to show that a business’ ability to implement innovations can be treated as a distinguishing feature of its competitiveness.
Getting into knowledge management
Introducing innovations involves a process of creating and using knowledge. Some people believe this process lies at the very heart of knowledge management. According to Dave Snowden of IBM’s Cynefin Center, “Knowledge management involves supporting the decision-making processes and creating a context for innovation. Nothing else matters.” Indeed, in the context of innovation, knowledge management:
• Encourages employees to be creative by making it easy to share and access ideas,
• Stimulates new ideas and innovative solutions;
• Leads to a more efficient and quicker introduction of innovations.
We can observe the connection between knowledge management and innovation by examining the Visionaries Wanted! project at Plus GSM, a Polish mobile network operator. First, however, it is useful to address the link between knowledge and innovation.
Knowledge and innovation
We often use the knowledge in our possession to solve problems we encounter. The greater our knowledge in a given area, the easier the problem is to solve. Our knowledge can also be used to seek out problems and predict future ones.
Plus GSM’s Visionaries Wanted! project was a competition for new ideas, with IBM Poland as partners. The project featured two versions, one internal for the firm’s employees, and an external competition promoted across Poland. The following four assumptions formed the basis of the competition:
• Support for talented people;
• The joint creation of the future;
• Promotion of valuable ideas;
• Help in realising visions or dreams.
The brief for the external version of the competition’s was to invent a new use for GSM technology and create a plan to implement the idea. Internally, the competition asked participants to invent, describe and send Polkomtel SA, the telecom company behind Plus GSM, their ideas to its competitive edge or efficiency. Prizes were provided for both versions of the competition in the form of:
• Monetary prizes – For example, the first place winner received a prize of 50,000PLN, approximately €11,700;
• Material prizes – Like laptops, palmtops, telephone handsets and subscriptions;
• Other prizes – Which included the opportunity to participate in the idea’s implementation.
Without knowledge there is no innovation
Previously, innovations were generated by separate business functions such as R&D. It was their task to create possible solutions, assemble requirements, test and validate ideas before they were implemented.
‘Light bulb’ ideas, however, originate from other sources, which was one of the drivers behind the Visionaries Wanted! competition: an idea could come from any employee or person external to the firm.
The competition was a way of releasing creativity that could be found within previously untapped sources. Increasing the number of these sources is extremely important to innovation as it generates more ideas and a greater degree of variation among them. The relationship is simple: the more ideas are generated, the more potential there is for innovation.
It is important to remember that every employee is an expert in his or her own task area and is the one with the greatest knowledge on how to best improve it. These are often niche ideas that are waiting for favourable circumstances, all we needed to do was reach out for the knowledge and know-how, and take advantage of it. Bob Buckman, former head of Buckman Laboratories and a recognised leader in implementing KM practices, says that knowledge only generates value for business when it moves across the organisation. In addition, research shows that only one in eleven ideas materialises on the market as a product and only one in seven products becomes a market success. It is clear that there is a need to stimulate creativity from new sources and exploit the results.
The Visionaries Wanted! competition released creativity from various areas within and outside of the firm. The knowledge held by these authors was expressed through the ideas they submitted and was then transferred and used when the idea was implemented.
From creation to innovation
Albert Einstein said that imagination is more important than knowledge. It is our imagination that brings us the creative new ideas that we pass through the filters of our knowledge and finally implement the best ones. However, creativity does not equal innovation, after all, we did not implement every idea submitted. Ideas alone are not worth much, what makes them valuable is their realisation – which then become innovations. However, the road from creating the initial idea to innovation is often a long one. Businesses can lose out here as ideas are resources that diminish in value when not used.
Configuring an organisation so that it can obtain, develop, apply and use the knowledge that generates value is a huge challenge. It is therefore essential to have a mechanism that allows us to efficiently ‘forge’ creativity into innovation, which is exactly what the Visionaries Wanted! project did. The competition’s mechanism was based on two pillars. First, the competition generated a context for creativity for people to articulate their ideas. Second, the competition guaranteed that the most promising ideas would be implemented; we had the power to breathe life into them.
The competition was a vehicle for ideas and created a framework for efficiently identifying, evaluating and possibly implementing them. By allowing us to shorten the cycle that takes the idea from knowledge to innovation this framework is a good example of how knowledge management can strengthen a company’s competitiveness.
Practicing knowledge management
Knowledge management can be seen as the transformation of an enterprise’s knowledge resources and its environment into a permanent form of value for its customers, employees and shareholders, and of course the organisation itself. Visionaries Wanted! was an example of this definition. By breaking down the competition into its primary factors, we can see that it addressed three of the five main areas of KM:
- Locating knowledge;
- Transferring knowledge;
- Using and creating knowledge.
The two remaining areas of the five are obtaining and retaining knowledge. The order in which these are listed is not accidental. In the case of the competition, using knowledge is impossible without its transfer and, in turn, the transfer of knowledge is not possible without it having been previously located. Figure 2 illustrates these connections and the process under discussion.
We have applied a number of knowledge-management rules for each of these areas.
At this stage, the main aim was to reach out to those people that had the knowledge to answer the competition’s questions. These questions were very specific as they were only meant to reach people who had thought about the particular areas of IT and telecommunications. This was like directing the light from a lighthouse onto specific areas where we wanted to see something, which was cheaper and more efficient than trying to illuminate our whole field of vision. In addition, our PR and media campaigns were focused by addressing information to groups of people who potentially possessed knowledge here.
Locating people with this desired knowledge was responsive in nature because it depended on them participating in the competition to share their knowledge. On its own, this would not ensure that we would be able to use the knowledge we located. To guarantee the efficient transfer of knowledge, it became necessary to actively encourage the potentially interested people to submit their ideas to the competition. Five main elements had to work together here.
First, the most important thing was to find a suitable way of delivering information about the competition. For the external version, this task was carried out via media publications, such as the newspaper Gazeta Wyborcza, a media campaign, a public-relations campaign, a website and a series of presentations about the competition in various cities all over Poland. Internally we sent e-mails to all employees, set up an intranet page and published information on it in our printed company magazine, Pulse of Plus.
The second element was ensuring we offered valuable prizes. Externally, this was mostly in the form of sizable cash prizes. For the internal version, we offered employees the chance to win the trip of their dreams, as well as top-quality laptops, palmtops, telephones and telephone subscriptions.
The third method we used to encourage people to enter was by ensuring the winning visionaries won prestige and acknowledgement. People are not motivated to share knowledge for simple financial or material prizes. Prestige and acknowledgement also play extremely important roles. To achieve this with the competition, we organised special galas for announcing the results and presenting the prizes. Additionally, profiles of the winning entrants were published in the press, on the web and on our intranet.
The fourth element was to allow winners to take part in implementing and turning their ideas into reality. For many people the opportunity to actually take part in the process that brought their ideas to life was the principle factor that induced them to share their knowledge and participate in the competition.
Physically implementing the best ideas was the fifth element. The competition was one thing, implementing the ideas was another entirely. We clearly stated that the best ideas would become a reality. This was a huge motivating factor for many people as they were encouraged to take action, enter the competition and share their knowledge as they knew that there existed a real possibility that their ideas would be developed.
Using and creating knowledge
This final stage crowns the knowledge-management efforts made so far. At this stage there are two key issues: generating value from the located and transferred knowledge, and the production of new knowledge from this.
By implementing the best ideas, we generated value from the knowledge shared. Here I must digress a moment. Large corporations often fail to exploit superb ideas and they are then forgotten as they did not receive the necessary attention. The aim of Visionaries Wanted! was the opposite. We wanted to analyse and make positive decisions towards their implementation. Key to achieving this was the work of the competition’s judging panel, which was composed of representatives from middle and top management. The panel’s collective business experience made it possible to select the entries that were most suitable for development.
Creating new knowledge concerns the future more than the present. Namely, descriptions of the winning ideas were published on the intranet and internet, among other places. Publishing these descriptions is like the snowball effect. These ideas offer inspiration to other people, who can refer to their own knowledge in another context, and come up with new and no less valuable ideas.
The results of the venture are certainly worth mentioning. The external version bore over 1,500 ideas that fulfilled the requirements of the competition’s regulations. From these, the jury selected the best 20 ideas and awarded them prizes. From this bank of 20 ideas, some will be implemented and will become innovations for Plus GSM. The results and benefit of the competition are easily measured and offers proof that focused knowledge-management initiatives can generate value to business. Figure 3 shows how we applied the rules governing knowledge management.
Each of the three KM areas we focused on was indispensable. Ignoring any of them when designing the competition would have drastically reduced its effectiveness.
Inspiration instead of recapitulation?
We often come across the assumption that knowledge management and innovation are closely related, which implies that as long as you occupy yourself with KM, you will innovate. It turns out, however, that most organisations undertake knowledge management in a way that only contributes a small degree towards releasing the innovative instinct.
Knowledge management only makes sense when it creates value for the business. The Visionaries Wanted! project is a practical example of how KM can release innovation and shows how it is possible to generate value through knowledge management.
Galileo said that perhaps in time we will see things, which as yet we cannot even imagine. There remains no doubt that he was right. To demonstrate this, it is worth quoting several curious statements:
• “Electric light may be good enough for our transatlantic friends, but it is unworthy of the attention of practical men,” British Parliamentary report;
• “This ‘telephone’ has too many shortcomings to be considered seriously as a means of communication,” Western Union;
• “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” David Sarnoff;
• “640K ought to be enough for anybody,”
Today, through our efforts with innovation we know that the world has changed and Galileo’s maxim still is and will remain topical. Knowledge management is worthwhile.
Adam Kowalik is a knowledge management specialist at Polkomtel S.A., the Plus GSM mobile telephony network operator. He can be contacted at email@example.com
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- I owe a debt to Richard Cross for allowing me to use these statements that he quoted during his presentation at KM Europe 2002 in London