Hack:
A Basic Approach to Idea- and Knowledge Management for Decision Making
By Erwin Pfuhler Erwin Pfuhler - Transformation Wizard at Erwin Pfuhler Consulting Innovation & Organization
July 29, 2021 at 9:29pm
Moonshots
Summary
Decisions to be made have to be put on a platform (IT-based) in order that everyone can access them and enter his/her knowledge or point of view. Even for big decisions like the acquisition of another company the executives will get a broader picture of all the circumstances, possible issues to consider and problems to be solved.
Problem
In traditional organizations decisions are made top-down. The perspective is limited to the level of the manager, who makes the decision. It is human to have an individual perspective on the world. Information selection is biased, information will be filtered and so only a fraction of the potentially available information will be taken into account. This leads to poor decisions. Either not making use of all options, or harmful decisions are the result. This could be decisions as prominent as the Daimler-Chrysler marriage, which turned out at the end to be a 10bn $ endeavor of sunk costs or those in new product development and many others.
Knowledge, which is often affluent available in an organization and even beyond it, is too often neglected. This narrows unnecessarily the scope of perceived options and limits the knowledge base for decisions and therefore deteriorates the quality of the decision.
One assumption is, the higher the level (in management), the better the knowledge.
Big data provides a vast amount of data, but only put into a context then transformed into information and combined with an deeper understanding, knowledge can arise.
There is still a segregation between data, information and knowledge and people.
Tacit knowledge is a hidden treasure in today’s organizations.
Another assumption is, that having participation in the process of information gathering and decision making creates chaos.
According to Ashby’s law of requisite variety we need in our system at least the same variety as in the greater system surrounding us. Our environment is highly complex, therefore we need a high complexity in our organization as well. Limiting the information base violates Ashby’s law.
At first glance a complex and even a chaotic information gathering and decision making process does not seem to contribute to smart decisions. Traditionally one prefers structured information, well dosed, so that it is easy to distinguish the good from the bad. This is especially valid in times of information overload. Bunches of emails, reports, articles and so on flood our desks day by day. This information is at best loosely connected to the issues we target, but most of it is useless for our work. Nevertheless it has to be handled in one way or the other this is a dramatic waste of time and therefore of money.
The need for internal complexity on one hand and the desire for simplicity and structure on the other hand are not so far away from each other, when we try to connect both of them.
It is one of the biggest challenges in a world of growing complexity and accelerating pace of change to advance to higher levels of understanding the world. Technology is ambivalent. Used in the wrong way it can create a fog of data or used in the right way it can rise the curtain and let us see a glimpse of the future.
Solution
Since ages we handle information basically in the same way. Letters turned into emails, libraries with books turned into data warehouses. Retrieval time has improved drastically. Also the information which is available to us. What still remains the same is, that we need to know what to look for. And beyond information there is knowledge on an individual level (tacit knowledge). This creates the bond between different pieces of information. It tells us how they are related to each other. Organizations need to get access to this knowledge and the information overload will turn into a treasure beyond one’s imagination.
The scope of information, which is taken into account, can be seen as a multidimensional approach. A 1-dimension approach is, when a person only takes his or her own knowledge into account. 2-dimensional is to gather information from your peers and the same level of management, a 3-dimensional approach extends information gathering to other levels in the organization as well, in a 4-dimensional approach knowledge from stakeholders will be employed and finally in a 5-dimensional approach one reaches out to persons, who have not been connected to the enterprise so far.
To tackle the information gathering and processing, it needs a two fold solution.
First there has to be a software based idea- and knowledge management platform
Second thinking about contributing ideas, insights and knowledge as well as the way decisions are made has to change.
Software
The platform should be web-based and accessible for everyone from everywhere. It is essential that the inputs are connected to each other and to the issues for decision making. Information entered will be visualized to show how it is related to the current issues. This will make it easier to see what is closely related and what is loosely related. This could be achieved by a tagging system and by peer evaluation. A peer evaluation means that other persons, who are dealing with this piece of knowledge or with an issue can give marks.
At this point the system is static. As the environment is dynamic, people must be able to enter their perception how things change over time. What factors are main influencers to other factors, how strong is the influence and is it a short term or does it develop over a long time span. These values should be entered into the system. In this way it will create a dynamic picture and shows what has the biggest impact on the proposed decision in the course of time.
Everything what is entered will be connected to the existing base and evaluated by (potentially) everyone. The more people give input to a contribution, the better the quality. It does not help, if only a view people praise the input, it is useful to have as many as possible.
Furthermore it is not the sheer amount of people, who contribute, what also matters is their diverse background. Different roles in the organizations, different experiences, from different counties and cultures and so on. This will also influence the ranking.
The difference to traditional information gathering is, that this is a push versus a pull approach. In the traditional pull approach management selects people to get information. They decide which sources they choose and what from those sources. Often management has an idea what the outcome has to look like. Consider an organization, which wants to grow in Russia. They will choose only that information, which supports their case. Maybe the wife of the CEO is Russian ...
In the push approach, management can not influence the base of the information. They put only a question on the agenda. What would it mean to us to go to Russia? Then the system will be filled with information. Existing information will be used and connected to new inputs. Anything can be entered, but is is essential that hard facts are separated from gut feeling. Sources have to be cited.
Change Process
Introducing this idea- and knowledge management system is a change process.
It needs comprehensive information and commitment from senior management.
People must see, how their input influences decision making. This requires a strong commitment from the C-level management.
Information gathering becomes kind of crowd sourcing. It is also a two-way process. The way management uses the information, makes decisions upon it and results are made public, the way potential contributors will be influenced, maybe to dig deeper in the future and elaborate more thoroughly their input.
Practical Impact
The decision making process will no longer be the same.
Information will cover a broader perspective. Together wit the metadata which are created by the contributors, which make it easy to identify relevant information. Not only strategic decisions from senior management will benefit, but also those of lower levels of management. With the appropriate information at hand it will be possible to empower even the ordinary employee to make decisions regarding her workplace. The mechanic, who has to decide whether to have a broken tool repaired or replaced, will have easily access to the information, what repairing does cost, which other tools might do an even better job or to change the process slightly and use another tool which is already in the company available. This way it helps to reduce bureaucracy.
Management as well as everyone, who makes decisions will have to explain in which way they used the input and how it influenced their decision. As management is responsible for the decisions it makes, it can use this information, but it must not use it. What it has to do, is explain and make its doing transparent. Management can not ignore the results from the system. This is the fundamental change for management. Not that there is another fancy tool, but that they have to report and discuss the decision making process. This will also be new to most organizations, to have open discussions. There is still no need to have decisions solely based on hard facts, gut feeling still matters. The difference is transparency to reveal the process.
Contributing to decision making will change the culture. It will help people to feel more like members of a big family than as employees. It will strengthen their sense of accountability for the organization. The organization will stand closer together. Giving the employees and adequate room for decision making in their own sphere they will feel and be more accountable and higher motivated. Time for decision making will decrease and therefore increase agility, which makes it easier to react to changes in the environment.
Having better decisions and a higher motivated team, the bottom line will improve.
Highest available information quality
The result will be an information quality, no one could have imagined up to now.
It is not only the smart combination of raw data, what makes the difference, it is the individual insights of all the contributors. Just imagine thousands or even tens of thousands of employees, let’s say of Siemens, or Toyota, or McDonald’s contribute their knowledge about mechanisms to a giant pool of corporate wisdom. The mechanisms describe the functions that connect raw data. It is, as already described, how factors interact over time, how strong their connection is and what kind / mathematical function the connection is.
Challenges
People are (as always?) the biggest challenge.
Everyone
Everyone must understand how it works and must have an idea of the algorithms under the hood. It may not become a mystery. This would only create gossip.
A big challenge for everyone is trust. Most organizations lack trust. Creating a really collaborative culture will restate trust. That is what would help to make this approach a success.
Trust is be the main inhibitor to contributing. Trust building needs time and a positive experience. To create this everyone can and should contribute.
In an environment, in which people fear to loose their job, keeping knowledge private is their fight to try to make themselves indispensable.
Management
They have to give up the control about the information gathering process. In this scenario they are only contributors to the information and knowledge pool.
There will be a tendency to resist, as they loose a bit of their power. Having to explain one’s own decision making process will also not help to feel them enthusiastic. Finally they have to acknowledge the better outcome, after having introduced the new system.
Employees
They present their tacit knowledge. They also give up something which has been private beforehand.
In on hierarchy and central power based organizations they feel helpless. That is why empowerment is needed.
Time
In a fast paced world, decisions have also to be agile. This is the challenge for the whole organizations, to react, nearly without delay. A first knowledge snapshot should be available within 24 hours, because then all the time zones have been covered.
Therefore what might seem in the beginning as an inhibitor to quick responses, could turn out as the contrary, as an accelerator for high quality decision making.
Education
To become able to contribute all of one’s own knowledge their has to be training. Most of us are not aware what they know, how to access it and how to contribute it adequately.
General Public
Will we go one big step beyond and open (a part of it) for the general public? Thus could help engage customers in the process as well. It must be tailored to the general public, because there can not be provided any training, only some simple instructions. Maybe this could be achieved via already established social media channels.
The Change Process
Once everyone is on board, the change process is ready for take off, but it must be ensured that everybody stays on board. You need communication of vision and mission to get everyone on board and an ongoing communication to keep everyone on board. It is key that everyone understands how it works and what the benefits are. There is no guarantee that all the people stay happy all along the way. There will be setbacks. Motivation has to recover then. The process itself is a learning experience.
First Steps
Steps to be taken
The application is the technological foundation, which makes it possible to give everyone the opportunity to contribute.
Inviting people to contribute and sharing knowledge has to become a part of the culture and corporate DNA.
First Steps:
Start small with one group or one department.
Make every information transparent to everyone in the team.
Invite them to contribute to the decision making process (still decisions will be made by those who are in charge / are responsible and have to bear negative consequences for bad decisions.
A kind of reward / gamification system could help to encourage people to contribute.
Use failures as a chance to learn.
You need a supportive appreciating atmosphere to keep the process going.
In the future there might be chances to share responsibility and thus include more people in the final decision making and not only in preparing decisions.
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