The problem with knowledge economy : it does not exist !

Summary : Enterprise 2.0 or social business initiatives aim at crafting organizations that fit what we call the knowledge economy. And that’s quite hard…for one reason. The knowledge economy does not exist. Knowledge work and workers do. Not the economy. What’s missing ? A global environment that would help its blooming, its take-off rather than forcing enterprises to make industrial decisions on matters that are not industrial. Education, law, tax system, accounting has to be rethought from a new angle. In the meantime, anything undertaken by organizations will be bricolage : it will need lots of efforts for marginal or even futile results regarding to the deep transformation challenges that are at stake.

When we talk about new organization or management approach, about the tools that support new ways to communicate or collaborate we often use the knowledge economy as a justification. Moving from an industrial to a knowledge economy means a deep change of context and responses of a new kind from businesses. That’s an obvious fact and none of the current social business or enterprise 2.0 expert has coined anything new : there already was an abundant literacy on these new forms of organization while most of os where still learning writing and counting at school. If we take the technology side apart, any old book from Peter Drucker could be a best seller if published today with the same texts and a socially fashionable title.

So knowledge economy is there and both organizations and people have to deal with it. But what do they do it so slow, with so much reluctance, fears and doubts ? Why can’t we see this draught, this collective march that happened when the world faced its last similar evolution ? The answer is easy : because the knowledge economy does not exist. Not because it’s a dream kept alive buy a few passionate and lunatic people but because it’s not a concrete reality, foundations on which we’ll be able to craft the future.

A field was not enough to craft the agrarian economy. A factory and some steam or electricity did not found the industrial economy. There were organization models designed for the factory. Labor laws evolved to lead the change. Financial mechanisms were set up to make the requires investment possible, what made industrial economy grow. A factory did not made the industrial economy but a set of rules, practices, mechanisms did. They turned a need and an opportunity into reality.

So, what’s about knowledge economy ?

One swallow doesn’t make a summer and a knowledge worker does not make a knowledge economy. Knowledge work exists. Knowledge workers too and they represent each day a bigger part of the working population. They are the resources that may help to build a sustainable growth for the future. But that won’t happen unless some requirements are met.

As a matter of fact, even if the potential exists it’s poorly exploited. First because businesses don’t do everything possible to make the most of it…but that’s an easy pretext. Businesses  also are  looking for sense, for reasons to do things. They don’t find these reasons because they are operating in an environment that did not change that much during the last 50 years. Consequence : they struggle to reinvent their model, to reinvent themselves. Evidence  is those that success, that find the way of a new durable growth, are those who made choices that were both “obvious” regarding to where the world is heading and crazy according to the current environment in which they operate.

What’s missing to craft the appropriate environment ? [Read more...]

Borrowing profitability from the future ?

Summary : in the knowledge economy economy era, investing on human capital development is key but stays marginal because of short term profitability logics. But does this vision actually creates value ? Locally, for the enterprise, it seems so. But globally speaking the question is worth being asked because the related costs does not disappear but are shifted to the society or the future of the enterprise what, in fine, backfires in a long term perspective since it’s becoming harder to pay the debt caused by decisions made in the past. As cycles shorten, it may lead to a dead-end.

A couple of days ago, a started reading again The New Capitalist Manifesto: Building a Disruptively Better Business by Umair Haque.This book was already brilliant when it was issued even if it more comfortable to think that the author was exaggerating too much, that his predictions would never happen. Less than one year after, the least we can say is that he was right.

Many concepts and ideas developed in the book look innovating, disruptive…too much according to some even if the news tell us the contrary. A better explanation would be to say theiy’re thought-provoking. Among these ideas, there’s the one according to which enterprises have been borrowing  their benefits while shifting costs to others for decades and that, one day, the debt becomes so big that the whole system jams.

Practically speaking it means that profitability is often overestimated because enterprises don’t assume all their costs that are shifted to the society of the future of the organization. Environmental costs, training costs…many of these things are known under the name of corporate social responsibility. If the whole costs was taken into account we would see that lots of enterprises are not socially profitable. Le system works until the day when shifted costs became so big that society can’t deal with them. And it backfires on the enterprise.

Social Business and triple bottom line experts (not the social business used to rebrand enterprise 2.0, the real  Social Business) will find here some concepts they know quite well and that I’ll sum up using the words of Antoine Riboud when he was leading Danone : enterprise responsibility does not stop at the enterprise’s doors and making one’s ecosystem poorer to become oneself richer will cause one’s failure because it kills future markets.

I don’t claim I’m able to have such a deep thinking as Haque but, by thinking about these things again and again to assess how relevant they were, I ended asking myself a couple of questions.

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What challenges for HR in 2012 ?

Summary : At the dawn of a year that’s expected to be rather difficult, businesses face conflictual choices. On the one hand there are the traditional formula to get prepared for the impact, on the other hand there’s the feeling that anticipating the shock won’t be enough and preparing to get beyond may be a better solution. Withe the same causes producing the same effects, keeping the same structures and functioning models while cycles are getting shorter and the need to adapt to fast transitions may be a dangerous option and rethinking the organizational whole a tempting one. What options will CHROs chose in 2012 ? A recent survey shows that indecision and even contradictory choices prevail. But, beyond the words, vital choices will have to be made. Jack Welsh once said :”When the rate of change outside exceeds the rate of change inside, the end is in sight”. Will he be heard ?

Businesses are facing a paradoxical and challenging equation for 2012. On the one hand the crisis make them wonder about the future and how to have as little exposure as possible to what looks like a major threat. This usually make them freeze their projects and get rid of anything that may load them down when the shock will happen. But, in the other hand, there’s the feeling that this time things will be different. That the old formulas won’t work anymore. That if they content themselves with absorbing the shock, saying to themselves they’ll restart and recover after…they may not restart at all. That, beyond the economic crisis, there’s a crisis of management and organization models that caused the eratic behaviors that lead us to the point we’re now.

So there’s at the same time the reflex of keeping quiet, still and the feeling that a new way to recovery has to be found. Even the idea that there may be other ways to anticipate the shock. So the question is to know how businesses in general and HR in particular will manage this apparent contradiction. I found some pieces of answer in a survey made by TNS-Sofres for CSC in 8 countries.

Four main points

• Attracting and retaining talents is less important than one year ago (76% vs 80%)

• Training and education budgets will be downsized by 34% respondents

• Organization transformation is the new priority (80%)

• Less hirings and more downsizing.

In addition, 78% of CHROs think that CEOs expect them to focus on management effectiveness, 59% on the role of middle managers. The importance of a good social context and strengthening connections between people is mentioned by 64% of respondents.

So, what does it mean ?

[Read more...]

Moving toward business models of a new kind : the example of “Danone Supporting Life”

One thing is sure : the “after the crisis world” will be very different from what it was before. It may seem obvious, but if we have a closer look at what happened in the past, we have to admit many upturns consisted of the rebuilding of what used to exist as it was. This time it seems that both economy and society learned things.

• growth is not and endless spiral. Especially if you want it to be strong.

• whoever creates value for onself while destroying value for the others will be impacted by the economical consequences of his behaviors one day or the orther.

• Companies are parts of an ecosystem (customers, suppliers, employess…). If a part of this ecosystem collapses, the company will soon follow because when value is destroyed at its periphery, it destroyes its own potential markets.

• Growing by developping new markets is healthier than using financial lever to balance the fact its current markets are finite.

• People, at the same time employees, clients, and member of the society, now want to fully play their part and judge corporate behaviors according to these lessons.

All this things are worth because management and work models will be impacted by these societal facts and, in the same way, being successful in this new context will imply new internal practices. This teaches us, once again, that the current crisis is not as economic as it may seem.

This can lead to predict the advent of business models of a new kind, close to Umair Haque’s smart Growth Manifesto d’Umair Haque. But many people wonder when it will happen and how it may look like. A first example is coming from France with “Danone Supporting Life”.

[Read more...]

Digital natives, e-culture, e-students

Everybody focuses on the digital natives, the e-culture, and how those who are coming after us will deeply transform organizations.

Another point is the underlying question of the use of new tools in the educational process. Because Digital Natives are Digital Learners, what perhaps count much more than anything else, if they can’t learn, their difference may of very few use.

It points at important issues regarding to the way the eductional system and their professors are interacting with them.

What consequences can be drawn from these quotes :

  • my parents use e-mail … I text instant message
  • 76% of my teachers never used wikis, blogs, podcats
  • once a weekn 14% of my teachers let me create something using new technologies ; 63% never…

Humm…aren’t they the 21th century students and the future of our workforce, those we’ll have to rely on to face dramatically new business challenges ?

Archivists : a new performance lever

Everything started with this note about Lille Business school and some talks with an archivist, a job I didn’t know at all, or, as a lot of people, a job I thought I knew things about. It gave me the idea to make a little poll around me about how this function was considered within their companies.

I think the result won’t be a surprise for anybody. I’ve been talked about “temple keepers”, the people who know “were information is”. With a strong “achive” connotation. It’s like people were talking about old relicts for those who want to learn about the past but without any use in the day to day job, noboday talking about topicality, intelligence, digital information (as if archivists only knew paper).

Nothing to do with the talks I had with the above mentioned person. Nothing to do with what is made in Lille. A the time when information is  becoming more and more strategic, when it’s the basis on collaboration between people, when 75% of the companies’ value is made of intangible assets, it’s somehow a worrying situation.

What do companies need ? Funneling and organizing information that’s pouring into an always increasing numbers of channels. Of course, there’s still “paper information” that’s about both topicality and content. But there are also feeds coming from business/competitive monitoring on the web, since more and more companies try to take the most of each employee as a point of contact with their ecosystem. Of course the number of sources can be reduced but it’s more about closing our eyes to reality than trying to face it. [Read more...]