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How Behaviour adds Value to Knowledge

How Behaviour adds Value to Knowledge. René Rupert. rene.rupert@alumni.insead.edu. Our Journey. In your organisation … Only Knowledge that is put to work has value Behaviour must enable the proper use of Knowledge. (Diagnosis)

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How Behaviour adds Value to Knowledge

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  1. How Behaviour adds Value to Knowledge René Rupert rene.rupert@alumni.insead.edu

  2. Our Journey • In your organisation … • Only Knowledge that is put to work has value • Behaviour must enable the proper use of Knowledge. (Diagnosis) • How can you benefit from your Knowledge ? (Structure the approach) • Examples

  3. Knowledge must be made explicit and be put to work to become productive Knowledge is like a machine: If it is not put to work, it is not productive Behaviour is what makes knowledge become productive. Behaviour creates (or destroys) Value.

  4. Challenger Two engineers knew that there was a flaw and that the risk that the Shuttle would explode was high. They reported their conclusions to their boss. The culture of NASA was strong enough to impose a behaviour (in this case a wrong one), i.e. not to insist but to comply to the programme.

  5. Flight 801 On August 6th 1997, a Boeing 747 of Korean Airlines crashed against the Nimitz hill on Guam. Both the co-pilot and the flight engineer had been aware that they were flying too low. This has lasted for 12 seconds, during which they discussed how to alert the captain. Korean culture is said to be strong enough to impose a specific behaviour when addressing hierarchy. The Herald Tribune, March 19th 1998

  6. Our Journey • In your organisation … • Only Knowledge that is put to work has value • Do Behaviour enable the proper use of Knowledge ? (Diagnosis) • How can you benefit from your Knowledge ? (Structure the approach) • Examples

  7. Place current Behaviour on the Behaviour Map Expected autonomy 4 opposition 3 E confusion 1 Perceived autonomy 3 4 2 P

  8. The Behaviour Map: Zones of specific Bahaviour Violence Sabotage Substance abuse Expected autonomy Substance abuse Violence Sabotage 4 Permanent wide scope Knowledge Sharing Promoting negative attitudes Substance abuse Increased Accident rates Undermining leadership 3 Focused and Coordinated Knowledge Sharing Strike Stress related health disorder Chronic Tardiness Occasional one on one Knowledge Sharing 2 Increased error rates Absenteeism Chronic Tardiness Stress related health disorder Inappropriate behavior 1 Increased error rates Increased accident rates Substance misuse and abuse No discussion Top down Instructions Perceived autonomy 3 4 2 1

  9. Define the ideal Behaviour required by the process Ideal Behaviour Scale 4 3 2 1

  10. Synthesis Expected autonomy Ideal Behaviour Scale 4 4 3 3 Behaviour Gap E 2 1 1 Perceived autonomy 3 4 2 P

  11. Our Journey • In your organisation … • Only Knowledge that is put to work has value • Do Behaviour enable the proper use of Knowledge ? (Diagnosis) • How can you benefit from your Knowledge ? • (You need to install the right behaviour, to structure the approach) • 4. Examples

  12. Means to develop and obtain specific desired behaviour People in roles the change leader coaches facilitators change agents change advocates invited speakers Activities future search workshop meeting network company large scale event contests get-togethers customized role plays Tools: compensation package awards internal newsletter infoscapes cartoons company games One can do plenty of things. What counts is overall congruence

  13. Means to develop and obtain specific desired behaviour Diagnosis tools Organizational agility Organizational stability Behavior Gap Time Gap Stakeholder mapping Cultural cluster analysis Organizational Culture Inventory Process mapping Process appraisal Process complexity Resistance to change mapping • Individual assessment tools • MBTI • LSI-1. LSI-2 • PSI • Sponsorship • Herrmann • CSS • Management style • Negociation style • Leonardo 3,4,5 • …

  14. Our Journey • In your organisation … • Only Knowledge that is put to work has value • Do Behaviour enable the proper use of Knowledge ? (Diagnosis) • How can you benefit from your Knowledge ? (Structure the approach) • Examples

  15. A corrugated board manufacturer The reject rate was 3.2 % versus the industry average of 1.1 % We did not add any knowledge We only acted to change behaviour The reject rate dropped from 3.2 % down to 1.6 % during the first year We saved about £ 600’000 / year

  16. BP British Petroleum « Safety is a matter of Behaviour » Why ? Sharing Knowledge makes an installation safer and more predictable. Sharing Knowledge is a behaviour. Sharing Knowledge adds value.

  17. Swissair Expected autonomy 4 E 3 2 E 1 Perceived autonomy 3 4 2 1 P P The Management Compass (R)

  18. Your Journey What do you want to do ? To measure the potential value of your Knowledge ? To measure the potential increment of the value of your company ? To evaluate what needs to be done to catch this potential ? To measure whether Knowledge is put to work ? rene.rupert@alumni.insead.edu

  19. The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass You ! Thank The Universal Management Compass rene.rupert@alumni.insead.edu

  20. Swissair

  21. People - Process Alignment With the Swissair example, we want to demonstrate that thriving in an unstable environment requires intense knowledge sharing, individuals with high expectations of autonomy perceiving much confidence from their management.

  22. Requirements to thrive in an unstable environment • Permanent knowledge sharing to best take advantage • of changes going on, i.e. to best integrate new • opportunities into the strategy • High agility to respond changing customer demand • High flexibility to take advantage of new technologies • In 1980, Swissair enjoyed an enviable position • After 1990, the airline business has been exposed to accelerated change

  23. Strengths of Swissair • Excellent people • Excellent service • Excllent competencies • Excellent reputation

  24. Weakness of Swissair: Taylorized management „You will lose… … Your companies are based on Taylor’s principles. Worse, your Heads are Taylorized. You firmly believe that sound management means executives on the one side and workers on the other one, i.e. on the one side men who think and on the other side men who only work.” Konosuke Matsushita, 1988 (abbreviated)

  25. Misalignment The Knowledge Sharing Process did not enable management to make the best decisions for the future of Swissair. There was insufficient Knowledge Sharing Management made inadequate decisions.

  26. Swissair History -1 In early years, the market was such that Swissair could grow by adding destinations • Growth by Duplication: • it may work well if the process is transactional, i.e. • instructions are given top-down for people to execute • the management style then is directive, i.e. little autonomy is given to local directors • managersreduce their expectations for autonomy at work or leave the company

  27. Growth by Duplication Expected autonomy Young managers start with the company and reduce their expectations when they face a directive management style Process Complexity 4 Autonomy at home 3 2 C E 1 Directive management style gives little autonomy Transactional Process Autonomy at work Perceived autonomy 3 4 2 1 P The Management Compass (R)

  28. Swissair History -2 More recently, the market was such that Swissair had to grow by acquisition, a different process. Growth by Acquisition: The amount of information needed is much higher than for « Growth by Duplication ». The knowledge sharing process must allow fast and permanent knowledge sharing. This is the « collaboration » process. Managers must have high expectations for autonomy. Directive management does not enable such knowledge sharing.

  29. Growth by Acquisition Expected autonomy Managers must like autonomy Process Complexity 4 E C 3 The complexity of Growth by Acquisition 2 Top management must create a collaborative style 1 Perceived autonomy 3 4 P 2 1 The Management Compass (R)

  30. Where was Swissair on this map ? Expected autonomy Process Complexity 4 E C 3 2 1 Perceived autonomy 3 4 P 2 1 The Management Compass (R)

  31. Stuck here ! Expected autonomy Process Complexity a huge Behavior Gap 4 C 3 Managers could not use autonomy 2 Top management had not created a collaborative style E 1 … with a Transactional Management Process to build the strategy Perceived autonomy 3 4 2 P 1 The Management Compass (R)

  32. How did we notice the problem ? From 1972 (our first flight with Swissair) until 1992 (at least), flight attendants, pilots and other Swissair personnel demonstrated involvment and satisfaction. After 1996 frustration was visible and passed along to passengers Changes were not explained, not managed. There was no recognition for good past services.

  33. What did it mean ? Requirements for short term results were pushed over to personnel in the same style than it came from the top. If such is the management style at the top, the required knowledge sharing process for acquiring cannot take place. Top Management cannot see the specifics of the market and cannot make the best decisions. In the Air Passenger Transport business, this is now lethal.

  34. The value of the Audit of Mental Disposition The audit to reveal the Behavior Gap had cost $ 100’000 To confirm, to double check, $ 300’000

  35. What could be done ? Create the information flow from bottom to the top

  36. With which outcome ? Create a different future shared by directors, managers and employees more realistic Please do not ask us which one. We are not Air Line experts. This knowledge was within the 72’000 employees of Swissair. Our expertise consists of making this knowledge become explicit.

  37. The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Management Compass The Universal Management Compass

  38. The Cost of inappropriate Behavior

  39. Bad Behavior, bad Performance With this example, we want to demonstrate the cost for neglecting the human factor: To keep work processes aligned with the market is one thing; To keep employees aligned with their work processes is part of success too

  40. SSW corrugated board manufacturer • Modern plant • Good raw materials quality • Well experienced workforce, ~ 400 employees • Recent machinery • Set up for in line production • Compensation package in line with the market

  41. In corrugated board production, major Processes are « Coordination » Expected autonomy Process Complexity 4 3 Coordination 2 Processes are formal and mostly reliant on tight integration across functional boundaries and consist of coordinated team work 1 Perceived autonomy 3 4 2 1 The Management Compass (R)

  42. At SSW, production was run as a transactional process Violence Sabotage Substance abuse Expected autonomy Substance abuse Violence Sabotage 4 Promoting negative attitudes Substance abuse Increased Accident rates Undermining leadership 3 Strike Stress related health disorder Chronic Tardiness The actual Area of Functioning 2 Increased error rates Absenteeism Chronic Tardiness Stress related health disorder Inappropriate behavior 1 Increased error rates Increased accident rates Substance misuse and abuse Perceived autonomy 3 4 2 1 The Management Compass (R)

  43. Behavior Gap Expected autonomy 4 Current operating Process Complexity 4 Focused and coordinated permanent Knowledge Sharing 3 3 Stress related health disorder Chronic Tardiness Increased error rates 2 Absenteeism Chronic Tardiness 2 True Process Complexity Behavior Gap Level of expectations 1 Increased error rates Increased accident rates Perceived autonomy 1 3 4 2 Perceived Management Style The Management Compass (R)

  44. The Cost of the Behavior Gap Instructions cover each one of the many operating steps Mistakes are punished Information goes top down only, to provide instructions There is no communication. Errors are done in a deliberate way where there is no instruction coverage. There is no employee turnover All attempts to introduce team work empowerment a new accounting system IT improvements have failed There is a cynical behavior at work: The reject rate is 3.2 % versus the industry average at 1.1 %

  45. 18 years of a very directive management style had made expectations to drop (at work) Expected autonomy Process Complexity 4 At home 3 2 1 At work Perceived autonomy 3 4 2 1 The Management Compass (R)

  46. How to turn around ? Enable gradually • Management … • Makes itself visible • Engages direct communication • Gradually moves from explaining to asking questions • Listen to employees • Demonstrates interest and involves employees • Organizes meetings and get-togethers • Encourages initiative, rewards failure • Organizes team activities • Enables, empowers

  47. Enabling gradually moves Perceptions up … Expected autonomy Process Complexity 4 3 Coordination 2 1 New Perception of Management by Employees Perceived autonomy 3 4 2 1 The Management Compass (R)

  48. … and Expectations follow Expected autonomy Process Complexity 4 New Expectations of Employees 3 Coordination 2 1 Perceived autonomy 3 4 2 1 The Management Compass (R)

  49. New Point of Functioning Expected autonomy Process Complexity 4 New Expectations of Employees 3 Coordination 2 1 New Perception of Management by Employees Perceived autonomy 3 4 2 1 The Management Compass (R)

  50. Impact on the Business • No cynicism but team spirit • Quality improved2.6 % vs 3.2 % after four months (reject rate) 1.1 % in the second year no technical training performed the problem was behavior only • Employees are helpful to eachother • There are less complaints • Change is easier • About 2.0 M$ savings on rejects only Company Sales: 100 M$

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