A Global Network of Systems Thinkers, newsletter #13, by Kent Myers

KM meeting in Washington

The Knowledge Management Roundtable is a group of about 200 people from 100 organizations in the Washington region. Their latest meeting on "Justifying the KM Investment" was held at the World Bank on 30 November. For those who want to read more than my selective notes, check the presentation slides at http://www.icasit.org/km/kmrt/index.htm.

Bill Halal (GWU) presented a four-part typology of ways to evaluate KM activities. 1) Indicator - A balanced scorecard or similar set of measures. 2) Analytic - A cost-benefit or similar evaluation study. 3) Enterprise - Where KM services are on a business basis, selling into internal or external markets. He listed SAIC (my company) as an exemplar, and said that Ackoff is the best source on internal markets. (Bill named me as the Ackoff contact person in the room, but nobody rushed up afterward.) 4) Organizational - Where KM is a self-organized, embedded practice. It is done as a consequence of structure and culture. No executive decides -- there may not even be an executive. Bill's book on the subject is The Infinite Resource: Creating and Leading the Knowledge Enterprise.

Cynthia Small (MITRE) presented an exceptionally good indicator approach. I asked whether the indicators tended to lose significance since, in my experience, executives forget or can't hold the elaborate structure and justification in their heads. To some extent that was confirmed: MITRE's executives are repeatedly shown the structure and rarely get around to the data, and decisions on KM budgets are made without reference to any of it.

There were several suggestions on what works to convince executives. Everyone agreed that stories work, both in selling and in doing KM. Stephen Denning said that stories were instrumental in changing World Bank culture. Clients are now telling bank officials how things work, reversing the old one-way flow. Bank-client "thematic groups" (about 114 of them) are much more open, engaged, collegial, and effective than meetings of 5 years ago. Often it is not clear who is chairing, and curiosity and learning tend to overcome old conflicts. (Denning has a good book and an interaction site: www.stevedenning.com.)

Susan Hanley (www.plural.com) set a $250 bounty for knowledge stories that had a financially favorable punch line. She wrote up 18 stories claiming $20m for her employer, AMS. This had powerful effects on many levels while measurement and reporting came later. At a budget crunch, nobody looked at the stories or the measures, and the program was cut along with Sue.

A man from Redstone Arsenal in Alabama said that his KM presentation made no sense to the Army colonel he gave it to, but he gave the same presentation to high school students who fully understood it and asked how they could get involved. He and others felt that young people -- especially those who keep instant messaging on all day -- accomplish things on the basis of extensive group sharing and learning all the time. What young people don't quite grasp are the adult workplace problems that KM is designed to fix.

It may be that a generation has to pass before KM takes hold, but a person from Marriott Corp. said that even the old guard can be reached. He said that he became frustrated and his passion took over. He blurted out, "Do you believe that we are in a knowledge economy? If you say no, them maybe we live on different planets and have nothing to say to each other." After that, it took just 3 minutes to gain approval for a program.

He and others went on to say that it was helpful to relate the KM program and its measures to specific problems that executives care about. Executives say that finding and keeping technology workers is a problem. A research study found that a significant influence on tech worker interest in a firm was the quality of the infrastructure and the ability to get what they need. KM can address that problem. It is also hard to assimilate senior people these days due to high turnover and people not knowing each other or what each knows. One of the AMS stories was of an elaborate search inside and outside the company for special expertise needed for winning a job. The marketers discovered that a top expert had joined the company. The irony was that he was in the marketers' own division and was 5 doors away. At Marriott, KM hit an executive hot button with the claim that manager time could be shifted to customer contact. A simple, classic appeal is to point out that the organization will fall behind the competition if it doesn't do it now.

A man who helps the CIO of the Navy said that he tells people that, at the level of knowledge, phenomena are necessarily subjective and general. You simply aren't able to deal with knowledge sensibly if you reject subjective evidence. But all agreed that all parts of the argument are needed: KM logic and rhetoric with both indicators and stories to back it up.

Thomas Beckman, leader of IRS's effort and co-author of Knowledge Organizations: What Every Manager Should Know, reported some data on the value of knowledge that tends to impress people. When Cap Gemini bought Ernst and Young consulting, they paid the equivalent of $1.5m per consultant. Presumably the combined knowledge in tacit skills, explicit practice knowledge, and customer relationships was worth a premium over simply having that many bodies. The IDC KM Factbook ( free at http://www.idc.com/Data/Software/content/offer/Knowledge/default.htm ) puts a dollar value on KM by claiming an average "deficit" of $5,000 per knowledge worker. This is the cost of rework, substandard performance, and inability to find knowledge resources that KM would presumably remove. One can also argue that 70% of the assets in many companies are its employees, and that it is apparent that employee assets are being squandered when their treatment is compared to that of other assets.

KM should not be presented or perceived as a new burden. In the Navy, KM actions have "low insertion costs," such as by reshaping existing efforts and dividing the work into small pieces. But KM should also avoid being perceived as a single-shot project, and for that reason should be institutionalized, for example by its inclusion in performance reviews.

While it is hard to convince people about KM based on all the rational justifications (documentation, evaluation, measurement), once they are convinced, they tend to ask for all of this anyway. Denning suggested a KM paradox: the more you integrate KM and succeed, the less of it you are able to trace and measure.

Hanley asked whether KM's day may already have passed, since negative stories are circulating and it is no longer new. (Washington is paced by the federal government which is always a few years behind.) In a recent poll, however, IT executives put KM at the top of their list for expected emphasis in the near future. Even if it eventually goes away as an explicit theme, it may continue as an assimilated habit.

Many people feel that KM either has or should have a huge overlap with systems thinking. Several members of our network attended this meeting, including Jay Chatzkel (whose e-book of KM interviews is forthcoming -- see samples at http://www.progressivepractices.com/publications.htm), Bob Mason (who has a video story-capture project brewing at www.managementwisdom.com), Stuart Umpleby, Bill Halal, and myself. Good showing! [If any of you are attending interesting meetings and want to share notes with this network, I can either include your notes in the newsletter or include a link to them.]

New program, new book

Bill Roth is organizing a new doctoral program in systems management, to be administered through DeSales University. I didn't say "located" at DeSales, because the plan is to fully incorporate off-campus students and faculty. Bill has attracted a strong list of faculty who have agreed to contribute in some manner, with the mechanics to be worked out later. Bill has a description of the curriculum and expects to gain approval to begin next Fall. He invites anyone who is interested in joining the faculty to contact him and find out more: wwroth@...

William Roth, The Roots and Future of Management Theory: A Systems Perspective, 1999. (See at Amazon.) 

Bill has prepared a textbook that will serve his new program well by putting systems management in historical context. He ably surveys history for problems to which 'management' became an answer. Yet as I was reading I thought it sounded like Hobsbawm and wondered whether it might be better for students to read Hobsbawm. Indeed, that was one of Bill's sources. But for students who can't take the time to read history, the next best thing is to be confronted with it in more career-oriented courses, and that's what we have here. Bill goes on to sketch the major management theories, from the Adam Smith-Robert Owen-Frederick Taylor triple to the Drucker-Ackoff-Demming triple.

Bill has more ambitious aims as well. His persistent thread is the tension between Christian humanism and Machiavellian humanism. He has his finger on the right problem at the right level, illuminating and explaining much of what happens in management. Yet our awareness of this tension is so submerged that we hardly recognize what the terms refer to. Bill gives a more than adequate account of Christian humanism, but the Machiavellian variety is more difficult to explain, specifically the meaning of virtue. Bill's readers may not fully grasp Machiavellian humanism or why its followers are generally considered admirable, not evil, in today's workplace. For students who have the ability and interest to go further, I would direct them to two sources. Alasdair MacIntyre's After Virtue explains how we have lost the capacity for moral reasoning and how virtues, rightly understood, once made sense -- "...the tradition of the virtues is at variance with central features of the modern economic order and more especially of individualism, its acquisitiveness and its elevation of the values of the market to a central social place." For a review of the many ways that Machiavelli is connected and misconnected to modern management, see: http://michael.harvey.washcoll.edu/works/HarveyAPSA2000.doc

Follow-up on A-CASA conference

Nancy Rourke had some thoughts on 'natural laboratories' within which one can infuse systems thinking. I mentioned engineering projects in the last newsletter, and she comments on the legal community. She had some discussions with Iraj Zandi, who has a written version of his points from the conference. Check Nancy's memo at http://www.egroups.com/files/systems-all/rourkelet.htm and write to her directly to continue the dialogue. [If others of you have material that you want to discuss, I will put an item like this in the newsletter with a link to your document.]

UK meeting

From Gerald Midgley: "Wendy Gregory and I are writing to invite you to the 43rd Annual Conference of the Operational Research Society (OR43 for short), which is taking place on 4-6 September 2001 at the University of Bath, England. We are organising two streams for this conference: one on "Systems Thinking" (encompassing all systems approaches which have been, or could be, applied to intervention) and the other on "Operational Research for Social Improvement" (encompassing community OR, environmental planning and management, OR for development, the ethics of OR practice, etc.). It seems to us that we are experiencing an international resurgence of interest in systems thinking, and attention is also being turned in countries all over the world to the question of how to address both global and local issues of environmental degradation, social exclusion, poverty, inequality and community fragmentation. It is therefore vitally important that we share our insights and build a community of practitioners that can take the research agenda forward. Our aim is therefore to bring together as many people as possible who are engaging with these themes, with the intention of promoting an intense and lively debate with real implications for systems and OR practice in the service of social improvement. You may ask why we are organising two streams when we are obviously viewing systems thinking and social improvement as connected. There are two very practical reasons for this. The first is that there are OR practitioners working in the areas of community development and environmental planning who are not explicitly working with systems ideas, and we do not want to exclude these people. The second reason for running two streams is that we want more people to get involved than we could accommodate in just one, and therefore it makes sense to run two with slightly different emphases. You are free to submit to just one of the streams, or if you like you can do presentations in both (as long as they are different). Your paper(s) can focus on theory, practice or a combination of the two. OR43 will provide a great opportunity to meet others with similar interests and to communicate with a wider audience, so we really want to encourage you to participate. Please note that there will be no conference proceedings, but abstracts will be published in the conference agenda. We are aware that, with the time pressures people are under nowadays, writing a conference paper can be a disincentive for participating in a conference ‹ but there is no such problem with this one, so give it a go! If you would like to submit a paper, we need to receive a title, an indication of which stream you want to be in, plus your name and address, by 15 January 2001. However, if you can provide this information sooner it will be helpful. You will need to have booked for the conference and paid the conference fee by 31 May 2001. The fee has not yet been set, but to give you an indication, last year it was £329 for OR Society members and £376 for non-members. Also, accommodation tends to be priced between £45 and £65 per night. The exact costs should be set by the conference organisers in March 2001. Abstracts of approximately 200 words will be required in June. A sheet giving further information (e.g., about the timing of presentations and equipment available) is enclosed with this letter. You can contact either of us by post at the address listed at the bottom of this e-mail. The rest of our contact details are given below: "Systems Thinking" "OR for Social Improvement" Gerald Midgley Wendy Gregory g.r.midgley@... w.j.gregory@... +(0)1482 466632 (phone) +(0)1482 465960 (pnone) +(0)1482 466644 (fax) +(0)1482 466644 (fax) We very much hope that you will be able to present at this conference, and look forward to an exciting and intellectually stimulating debate with real consequences for OR practice. Best wishes, Dr. Gerald Midgley Dr. Wendy Gregory -- Dr. Gerald Midgley Director Centre for Systems Studies Business School University of Hull Hull, HU6 7RX, UK Tel: +(0)1482 466632 Fax: +(0)1482 466644 G.R.Midgley@... (work) GR.Midgley@... (home)

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