Empirical results show that is reasonable to require them to deliver double-digit growth on an annual rate: Management matters more than industry. Management matters more than size.
Both revenue and earnings growth required to deliver true sustainable valuable creation.
Once growth stalls, companies find it nearly impossible to restart it and get brutally punished by the capital market. How do we incorporate new sources of value creation in a systematic manner? 1. Governance and management of growth in New Markets 2. Governance and management of growth in existing markets
3 kinds of companies
1. Companies that lead the customer where they don’t want to go.
2. Companies that listen to their customers and then respond to their needs
3. Companies that lead the customer where they want to go but don’t know it yet
Knowledge creation- A process in which individuals and groups generate explicit and tacit (practical intuitive) knowledge
3 types of knowledge processes
1. Capturing and Locating- Locating and capturing existing knowledge Developing a knowledge map to create an inventory of existing knowledge
Make tacit knowledge accessible by ensuring its identification
2. Transferring or exchanging explicit and tacit knowledge between individuals and groups
Transfer explicit knowledge from one person, group, department, unit, or company to an other
Two-way sharing- exchanging explicit and tacit (implicit) knowledge within a group of people through “face to face” interaction and intensive dialogue
Explicit knowledge- specific knowledge that has been articulated and can be transferred to others, such as an encyclopedia
Implicit knowledge- practical knowledge gained from intuition. Not explicitly stated. intuitively learned from experience.
3. Creating- generating new explicit and tacit knowledge by individuals and groups
Why do we manage knowledge- to manage risk, efficiency in operations, and innovation
Knowledge conversion process (?): Internalization (take all implicit and explicit info from inside firm), socialization (take the implicit info and test explore it in the real world), externalization (begin to change implicit to explicit to prepare for commercialization), combination (use new wealth of explicit info in the market)
Knowledge enablers- the overall set of organizational activities that positively affect knowledge creation. Their roles are:
1. stimulate individual knowledge development
2. protect knowledge development in organizations
3. Facilitate the sharing of individual knowledge and experience among organizational members
They can do this by instilling a knowledge vision, managing conversations, mobilizing knowledge activists, creating the right context, and globalizing local knowledge
Instilling a vision
1. Lays out the basis for future competitive advantages and performance
2. Inspires the company to search out knowledge in certain areas and to build up a stock of knowledge
3. Emphasizes knowledge creation as an activity , putting it on top management’s agenda
Summarized: It gives a mental map of three related domains: present (mental map of the wolrd organizational members live in), future (mental map of the world organizational members ought to live in), road map (indicates how to move from the present to the future).
This creates meaning, acts motivational, and is directional.
Example- Netscape. Was good at instilling a knowledge vision until it missed a shift that AOL picked up on (web-site products and services) and was overtaken by AOL
How to instill a vision:
1. identify and gather participants, and organize the process
2. Build a common understanding among the participants of what a knowledge vision is and how to evaluate one
3. Write up and use narratives (mental maps) of the future as platforms for the vision process
4. Allow ample time for instilling a vision
5. Consider the process as a