Aligning Corporate Mission, Vision and Entreprise

1. KMWorld – 30th October 2001 Underpinning the Knowledge Management Approach Aligning Corporate Mission, Visionand Entreprise Françoise RossionSenior Manager

2. Today’s agenda is… Underpinning the Knowledge Management Approach • Using KM as the innovative driving force Transforming your business into a knowledge-based business • Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities • Exploring the Bottom Line • Translating the KM Strategy into operational projects • Creating the cultural acceptance • Aligning the corporate culture with the KM Strategies

3. Strategy: the missing link?! Underpinning the Knowledge Management Approach ‘Such knowledge-based strategy employs both internal competencies and external information that flows from supplier and customer relationships, exchanges with competitors and a willingness to look beyond the industry’s current food chain in order to build company foresight and vision.’ (R. Gorzynski, Strategy from the Heart, 1998)

4. The Knowledge-based business Underpinning the Knowledge Management Approach Let’s move on to the Knowledge Revolution! • Rule Maker Setting the standards • Rule Taker Following to the benchmark • Rule Breaker Setting their own benchmarks

5. Type ofValuation Economic Who focuses Physical CapitalFocus Concept on it Analog Physical Assets Stock Auditors Position Financial Income Flow Analysts Speed Intellectual Growth Acceleration Venture Acceleration Capitalists Physical Financial Intellectual Capital in the traditional sense of plants and financing is not such a big thing… Underpinning the Knowledge Management Approach (From: S. Davis, C.Meyer, BLUR, 1998 )

6. But Capital in the new forms it is taking has become more fundamental than ever… Underpinning the Knowledge Management Approach • Intellectual capital is the brain power of the organisation, codified and put into explicit, transferable form • Human Capital is the value of workers’ relationships and tacit knowledge • Structural capital is the experience and expertise of the organisation embedded in processes, policies and systems

7. Today’s agenda is… Underpinning the Knowledge Management Approach • Using KM as the innovative driving force Transforming your business into a knowledge-based business • Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities • Exploring the Bottom Line • Translating the KM Strategy into operational projects • Creating the cultural acceptance • Aligning the corporate culture with the KM Strategies

8. Relevance is critical! Underpinning the Knowledge Management Approach ‘Hence, there is more to knowledge management than just accumulated knowledge. Relevance is critical and the companies that survive from one dominant design generation to the next are those that develop capability as it is required, and before.’ (W.L. Miller and L. Morris, Fourth Generation R&D, 1998)

9. Achieving your strategic objectives… Underpinning the Knowledge Management Approach Strategic Themes are the fundaments of the articulated strategy. Each strategic theme contains its own strategic hypothesis with its own set of cause-and-effect relationships. • Strategic themes could be: • Operational Excellence • Sourcing & Distribution • Innovation • Growth • Be a Good Corporate Citizen The multiple indirect linkages required to connect improvements in an organization's intangible assets– the ultimate drivers of knowledge based strategies – to the tangible customer and financial outcomes of the strategy,will be described in each Strategic Theme through the cause and effect relationships.

10. Statement of what strategy must achieve and what’s critical to its success How success in achieving the objectives will be measured and tracked The level of performance or rate of improvement needed Key action programs required to achieve objectives Objectives Target Measurement Initiative • GlobalSourcing • 10 $ (Food)35 $ (N. Food) • 13 • Avg. Purchase Priceby product category • Number of Bulk Purchases/Month • Global Sourcing program and demonstrate the cause and effect relationships Underpinning the Knowledge Management Approach Diagram of the cause and effect relationships between strategic objectives Strategic Theme: Growth Financial MoreCustomers Objective MoreStores Cause & EffectRelations Customer SatisfiedCustomers Lowest Price BusinessProcess GlobalSourcing RealEstate Learning TrainPeople

11. Budget & Cost Mngmt Financial Results CRM Customer Benefits BP Improvement Internal Capabilities Knowledge Management Knowledge & Competencies Cause and Effect: Start at the root! Underpinning the Knowledge Management Approach ‘Fast growth in the pharmaceutical sector and in a limited number of carefully selected activities’ ‘Bring adequate responses tothe wishes of our customers’ ‘Innovation and competitiveness. Fast adaptation to the fast evolution of the world’ ‘Share knowledge throughthe whole group and with clients, create anew culture’ (From: Solvay)

12. Defining the Global KM Vision: The Executive Workshop Underpinning the Knowledge Management Approach Executive Workshops Planning Workshops Workgroups Step 1 Demonstrate KM Best Practices Step 2 Build the Strategic Linkages with KM Step 3 Determine KM Focus Step 4 Translate KM Focus into Initiatives Step 5 Prioritize KM Pilots for implementation Step 6 Build Initial Project Charters Week 8 to 12 Week 1

13. Core Competencies Know What ? Core Capabilities Know How To ? Identifying… Underpinning the Knowledge Management Approach • Expertise, skills that provide access to markets or are used to create core products • Delivers fundamental customer benefit • Difficult for competitors to imitate • Applied core competencies • business processes • infrastructure • resources • work organisation • Hard-to-duplicate business processes Capabilities provide the means to deploycompetencies to achieve competitive advantage

14. ‘Unlike physical assets ... • Which knowledge is strategic ? • Where is it located ? • What knowledge is missing? • Which knowledge should be shared ? • What knowlegde should be reapplied ? • To whom should it apply ? ... knowledge can be in two places at once’ and strategic Knowledge! Underpinning the Knowledge Management Approach

15. Today’s agenda is… Underpinning the Knowledge Management Approach • Using KM as the innovative driving force Transforming your business into a knowledge-based business • Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities • Exploring the Bottom Line • Translating the KM Strategy into operational projects • Creating the cultural acceptance • Aligning the corporate culture with the KM Strategies

16. Translating the KM Strategy… Underpinning the Knowledge Management Approach ‘If the other guy’s getting better, then you’d better be getting better faster than that other guy’s getting better… or you’re getting worse.’ (Tom Peters, The circle of Innovation, 1997)

17. into operational projects! Underpinning the Knowledge Management Approach Executive Workshops Planning Workshops Workgroups Step 1 Demonstrate KM Best Practices Step 2 Build the Strategic Linkages with KM Step 3 Determine KM Focus Step 4 Translate KM Focus into Initiatives Step 5 Prioritize KM Pilots for implementation Step 6 Build Initial Project Charters Week 8 to 12 Week 1

18. From prioritized list…. identify the different types of issues around Knowledge decide how it should be solved.. and how it will beenabled Prioritized List Knowledge Knowledge Knowledge Knowledgeavailability around the Globe Technology Culture Second phase of the KM Audit: Planning workshops Underpinning the Knowledge Management Approach

19. Criteria Organ. Impact Replicable Solutions Sponsor Benefits • Issues KM PILOTS Cost Speed 1 Documenting … Culture 2 Competitive Intelligence 3 Evaluation linked to K. sharing 4 Competency Development 5 Content Strategy 6 Knowledge Hierarchy Model Third phase of the KM Audit: Workgroups Underpinning the Knowledge Management Approach Legend : Collaboration Content

20. KM Pilot N KM Processes (replicable) Change Management (on-going) Global IT Architecture (scalable & open) Roll-out of KM Pilots Underpinning the Knowledge Management Approach Knowledge Management Programme (on-going) Capture & Apply Lessons Learned Project Management Global DG KM Vision & Strategy KM Pilot N + 1

21. Today’s agenda is… Underpinning the Knowledge Management Approach • Using KM as the innovative driving force Transforming your business into a knowledge-based business • Aligning KM with the corporate Mission, Vision and Strategy Starting at the root for identifying core competencies and capabilities • Exploring the Bottom Line • Translating the KM Strategy into operational projects • Creating the cultural acceptance • Aligning the corporate culture with the KM Strategy

22. Creating the sense of urgency Underpinning the Knowledge Management Approach ‘I wasn’t convinced that this learning stuff would work, but I knew we would never achieve our goals if we kept working the way we were working’ - Fred Simon, Ford manager (cited by: Peter Senge, The Dance of Change, 1999)

23. Changing Organizational Culture Underpinning the Knowledge Management Approach ‘Although the tools and techniques may be present and the change strategy implemented with vigor, many efforts to improve organizational performance fail because the fundamental culture of the organization remain the same; i.e., the values, the way of thinking, the managerial styles, the paradigms and approaches to problem solving (…) Culture change is a key to the successful implementation of major improvements strategies… ’ (From: K. CAMERON, Diagnosing and Changing Organizational Culture, Addison-Wesley, 1999)

24. ‘Motivation occurs when people perceive that theprice for maintaining the status quo is higher than the price of change (solving a problem or capturing an opportunity).’ Ernst & Young based on ODR, 1994 Motivation for Change Underpinning the Knowledge Management Approach ‘Change Platforms’

25. Reaching the level of commitment required for successful implementation of the strategy Underpinning the Knowledge Management Approach “I am 100% committed. This is good for XXX and good for me.” “I’ll do what is asked of me, but not much more.” Internalization “I’ll do it, but I’ll find a way around it.” Institutionalization Adoption Commitment Phase Grudging Compliance Formal Compliance Genuine Compliance Installation Installation Installation Positive Perception Acceptance Phase Understand the change Understand the change Awareness Preparation Phase Awareness Contact Awareness Time

26. Organization Design and Structure Staffing and Deployment Pay & Performance Alignment Leadership Education & Training Communication Conducting Initial assement of organizational Performance Levers (OPLs) Underpinning the Knowledge Management Approach Do current people processes and the current culture align with the future state?

27. Organizational ‘Levers’ drive Performance Underpinning the Knowledge Management Approach Performance & Pay Alignment STRATEGY Leadership Effectiveness Enterprise Education & Development Staffing & Deployment Organizational Communication Job/Role Structure Competencies

28. Rewards, Recognition, & Incentives Organizational Structure & Design Performance Management Education & Training Staffing & Deployment Communication Leadership Result = Accelerated Change – = Confusion – = Anxiety – = False Start – = Ambiguity – = Frustration – = Gradual Change – =Gradual or no Change How OPLs Impact Change Success Underpinning the Knowledge Management Approach

29. For example, in a Japanese firm: • Elevation of the Japanese Culture • Being a pioneer – not following others; • doing the impossible • Encouraging individual ability and creativity CURRENT STATE Values Practices Norms Any KM programme requires a Change Management Approach! Underpinning the Knowledge Management Approach Attempts to introduce changes that are radically different than the existing culture usually are not successful Attempts to introduce changes that are generally consistent with the current culture usually are successful

30. Buckman Labs’ K’Netix Underpinning the Knowledge Management Approach ‘Those of you who have something intelligent to say now have a forum in which to say it. Those of you who will not or cannot contribute also become obvious. If you are not willing to contribute or participate, then you should understand that the many opportunities offered to you in the past will no longer be available’ - Bob Buckman

31. Change Management • Executive and Management Committment ‘Walk the talk’ • Identify KM Values and embed into DG values • Develop Corporate KM Culture • Embed Knowledge Sharing in individual and collective objectives • Build trust accross borders and companies • Empower people in relation with KM • Embed Learning & Development in the management style • Assess KM Culture progress • KM Measures • Assessment of KM Pilots through Vitality Indicators • Develop Communication Plan (awareness, acceptance & training) • Coaching & mentorship Business Case Vision Change Leadership Align Business Change Successful Leverage Implement Mobilise Change Capability Communication Integration Stakeholder Commitment Aligned Culture Another CM approach Underpinning the Knowledge Management Approach

32. Conclusion?! Underpinning the Knowledge Management Approach ‘It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most adaptable to change.’ Charles Darwin