Knowledge For a New Economic World
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Globalization has created new markets and spawned new operating models for work forces, creating huge challenges for businesses that must remain productive, efficient and competitive to survive.
The source of value for businesses has changed. In the Industrial Age a company used to have most of its market value based on tangible assets like machinery and facilities. In the Information Age, value has shifted dramatically to intangibles like the knowledge of production, service, and delivery methods, market knowledge, relationships with customers and suppliers.
The world is changing at a bewildering pace. Everywhere new markets are opening up, new work forces are emerging, and new ways of working are challenging our thinking. We are in a new stage of globalization where knowledge and brainpower are becoming the predominant currency.
The traditional management model that focused on productivity and efficiency was designed for the Industrial Age economy. Enabled by technology and process engineering, the model was derived from the need to obtain high productivity from a work force whose costs were rising.
This narrow focus made sense for the world’s developed economies at a time when more than half the world was effectively excluded from the global marketplace. In the past two decades, politics and technology have changed the world beyond recognition. With an estimated world population of over 6.4 billion, fewer than 100 million are excluded from the new global economy.
For organizations to succeed today they must be knowledge-based. In other words they must be organizations that invest in increasing the education of their employees to produce extraordinary results for the organization. Knowledge-based organizations are adept at defining organizational needs, finding the right employees, and deploying people in ways that engage and align them around a compelling set of objectives.
When these management capabilities are highly integrated, aligned with the organization’s business strategy and embedded in its operations, they constitute a distinctive organizational capability and a source of lasting competitive advantage.
Knowledge-based organizations nurture this distinctive capability in a management style that supports continued education and encourages new ideas that underpin the organization’s formula for success, allowing its employees to propel the organization to high performance.
Organizations such as Best Buy, Starbucks, Microsoft and Google have figured out how to build and leverage employees to achieve extraordinary success. Every organization can put in the system necessary for success in the new economic world.
Here are five knowledge imperatives that can help you navigate your way to success and become a truly high performance organization:
1. Knowledge is a strategic issue, and a human capital strategy that is an intrinsic part of any business strategy. This means understanding the value of knowledgeable employees, and recognizing the critical components of business strategy that require us to think through the organizational implications and options.
2. Diversity is your organization’s biggest asset. Your ability to attract and work with a diverse group of employees is a critical competitive advantage.
3. Learning and skills development are now the most important capability for business success. They need to be focused and built around a clear understanding of the specific skills and competencies your organization needs to succeed.
4. Engagement is the mystery ingredient that can transform business performance. Aligning and motivating people will enable you to leverage your personnel and improve its performance.
5. Continued education is everyone’s job in your organization. The HR function is a key enabler, but the best practices and a knowledge-based mindset must be embedded and sustained throughout your entire business.
Your organization’s survival depends on the ability to discover, develop and continually educate your employees. This is the new competitive business model, and the challenge is different from anything your organization has faced before.
It demands a new mindset, inspired by new leadership, informed by new strategy, supported by new expertise. We are in the Information Age, and just saying, “People are our most important asset” is not good enough, we have to mean it and do something about it.
