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What's Your Knowledge IQ?Even if your organization scores high on collective intelligence, its ability to leverage that knowledge may need some workEvery senior manager knows that the pulses of certain life lines must be monitored. Ask any CEO how profitable his or her organization is, how productive the organization is, or what percentage of the market his or her organization commands, and chances are an answer will be forthcoming. But ask how intelligent the organization is, and you are likely to get only a blank stare. Some managers may feel they instinctively know how intelligent their enterprise is, but a quantifiable assured answer is difficult to render. And yet most would agree that, in today's Web-paced e-conomy, enterprise intelligence (in other words, intellectual capital and innovation) is paramount to both short- and long-term success. So then, why do so few managers know how to answer to the question "Is Your Enterprise Intelligent?" For many, the inability to answer likely lies in the fact that no metric or methodology for measuring an enterprise's intelligence exists -- at least to the best of their knowledge. The fact is, such methodologies do exist. Enterprises that utilize these methodologies become in tune with not only how intelligent the enterprise is, but also gain an appreciation for how to increase the enterprise's intelligence, and how to leverage that intelligence to effect greater profit, market mind share, rapid product innovation, and shorter times to market. Imagine being able to create a roadmap of where your organization's best practices exist, and a system for emulating these across your enterprise. What if you could pinpoint the inherent strengths and the weak links in your organization's intellect? Imagine being able to show a return on intelligence, similar to showing a return on investment. Measuring the intelligence of the organization is, for most managers, a completely new and different environment. It is a difficult proposition, because structure and control needs to be imposed on that which is typically without boundaries (namely, the creative intelligence of the organization). There is little precedent upon which to establish a return on intelligence. Measuring your enterprise's intelligence implores a look at informal networks and protocols, any and all approaches to sharing experiences and know-how, as well as any and all cultural, technological, and personal elements that spur creativity and innovation.
By undergoing a knowledge audit, your organization can determine not just how intelligent it is, but gain an overview of the strengths and weaknesses of the organization; obtain a scientific analysis of your organization's potential for competitive advantage; and uncover the benchmarks of successful leveraging of intelligence within the organization. Effective knowledge audits also identify potential areas for improvement and opportunities to leverage knowledge. Knowing What You Know and What You Don't KnowNo matter the methodology used, there are several factors which reflect, augment, and/or hinder enterprise intelligence that should be measured. First, among these is an inventory of the knowledge base of your organization - from paper system to that which is stored in the heads of employees. Enterprise intelligence should be categorized into the Known by Unknown table pictured in Figure 1. Here, your enterprise can take inventory of not only what it knows, but also what is not known and needs to be discovered. Figure 1 Categorizing enterprise intelligence in a Known-Unknown matrix.
Obviously, enterprises hope to find that they are heavy in the top left corner - we know that we know. This represents intelligence resources that are known and used by your enterprise. When there is evidence of your enterprise knowing there are areas of interest it does not know about, as in the top right quadrant in Figure 1, that is an indication of lower intelligence, and of a need to perhaps seek out means for acquiring this intelligence. Where there is evidence that intelligence resources are known to your enterprise but not to your users (the lower left quadrant), you have cause for concern. In these situations your organization is not fully leveraging - if at all - potential intellectual capital. Efforts should be undertaken to raise awareness of these resources and to make them more accessible and utilized. Obviously, the hardest to measure is the lower right quadrant, that which you do not know that you do not know. If there is any indication that this exists, it would be in the form of a enterprise that does not utilize or encourage discovery or agent-based technology, or one that does not encourage exploration and skunk works, loosely structured R&D groups that foster innovation. While conducting such an inventory and assembling it into a construct similar to the one depicted here is no easy task, it is just the first step in determining how intelligent the enterprise is. The Return on Innovation and the Knowledge ChainIn answering the question, "Is yours an intelligent enterprise," your organization must also take a critical look at its abilities within the constructs of the knowledge chain. As depicted in Figure 2, the knowledge chain is a structure that forces your organization to look not only at what it knows (and does not know), but how it effectively uses that knowledge. The chain is a series of interactions that constitute your enterprise's cycle of innovation. An intelligent organization is one that can easily permeate the four cells of the knowledge chain and thus rapidly move through cycles of innovation. Formulas exist that would allow your company to measure how effectively it can go through this cycle of innovation and provide a return on time or return on innovation calculation. But you should not do this until you have applied measurements of your enterprise's performance in each of the four quadrants of the chain. Figure 2 The knowledge chain depicts your enterprise's cycle of innovation.
Internal and external awareness are much related to the knowledge inventory introduced above. Internal awareness, simply put, is the ability of your enterprise to assess its skills, core competencies, products, and other critical factors. External awareness is your enterprise's ability to know how the market perceives its company and products, market trends, customers, competitive forces, government regulations, and the like - issues that are relevant but not internally generated. But, enterprise intelligence must also be assessed with regards to action as well. Internal responsiveness is an assessment of your enterprise's speed at leveraging internal competencies and resources to bring a product/service/action to market or respond to a customer need. It is the ability to react quickly in order to seize an opportunity. External responsiveness is the speed and effectiveness with which your enterprise reacts to and interacts with its customers, partners, suppliers, and regulators. The knowledge chain illustration in Figure 2 also depicts the use of technology. Technology has its place in augmenting the intelligence of your enterprise. Though many technologies could be positioned in this structure, the illustration focuses on the use of portals. Portals, with regards to enterprise intelligence, are seen as an overriding technology that can encompass the functionality of other technology components. You can use portals to simplify effective internal communication (corporate portals), and also to establish e-business practices (e-business portals). However, while it is important to point out the role of portal technology in an intelligent enterprise, it is perhaps even more important to point out that the portal is not a panacea. The portal does not make an intelligent enterprise. It is a toolset that, if applied correctly, could augment intelligence and expedite its usage. But a portal's effectiveness is still dependent on the underlying basic intelligence of your enterprise, and in the portal being deployed to meet the specific intelligence needs of your enterprise. The portal does not obviate the need for a knowledge audit, but rather makes obvious the need for the type of measurement and planning that a knowledge audit should provide. It must also be understood that we are not proposing technology here as a means to creating an intelligent enterprise, even if properly applied to the needs of the enterprise knowledge chain and intelligence inventory. Culture, Team Structure, Leadership, and PracticesEnterprise intelligence, unlike individual intelligence, is not based just on know-how and ability, but on the ability of your enterprise (or community) to leverage the combined intelligence of its members. Therefore, a knowledge audit which seeks to completely answer the question of how intelligent an enterprise is must also measure these factors. These include:
Establishing the Benchmark/Measuring the IntelligenceUp until this point we have focused on what should be measured, but not how it can be measured. The measurement itself is the outcome of the knowledge audit. By assessing an organization's undocumented relationships between people and processes, it is possible to identify areas were an organization can emulate its own best practices. In many cases, these best practices lurk below the surface, yet represent role models for enterprise intelligence. Since these best practices are also in a constant state of flux, you can use the knowledge audit on an ongoing basis to continuously profile the changing competencies of the organization and remapping these to the rest of the enterprise. Think of this as continuous improvement of intelligence.
How do you conduct a knowledge audit? There are a handful of approaches available, ranging from anthropological studies of the enterprise to survey vehicles. What we have highlighted here is a hybrid approach of Web-based surveying and interpersonal interviews, an approach that has been successfully deployed in enterprises in sectors ranging from pharmaceutical to government; manufacturing to engineering. This methodology is known as KM2. KM2 begins with a survey which you administer throughout your enterprise, or as much of your enterprise as wants to take part in the assessment. This is an important component of your knowledge audit. By soliciting responses from the full range of staff, it is possible to for you garner points of view which are frequently overlooked but which are critical success factors in the management of enterprise intelligence. For example, the R&D department of a petrochemical company had embarked on several knowledge-based initiatives, which had full support from senior management. Despite this, the organization's ability to reuse acquired intelligence and expertise had not been improved! The knowledge audit uncovered obstacles that the efforts to date had ignored. These included cultural differences across various geographic locations, discrepancies in "management speak" versus "management action," and process realities that flew in the face of knowledge-sharing practices. KM2 also uncovered an underlying cultural approach to team building that was virtually untapped by the current initiatives. Identification of these strengths and weaknesses facilitated minor modifications to existing systems, which resulted in a quantifiable ROI. More importantly, the concurrent involvement of your entire enterprise ensures the validity of findings. It also removes the ability for any one group's perspective to impose prejudice on your overall direction. Further, since the analysis of findings assesses major trends in opinions across your enterprise, it uncovers how the perceptions of your users and owners of intelligence shape your enterprise. In the end, it may not matter what management thinks is the enterprise's intelligence potential. The reality is what is revealed in the experiences and attitudes of the constituents. The insights gained through the survey, and a cross-correlation analysis of the results make it possible for you to arrange targeted, time-effective interviews to gather qualitative insight into intelligence issues. This is the second important component of KM2. KM2 identifies anomalies among the enterprise-wide findings, uncovering groups within your enterprise that exhibit exemplary opinion, intelligence, and behavior. Members of such groups may exhibit extreme positive or negative variances in each of the factors measured. When you know where these variations are, you can apply targeted interviewing techniques. The "whys" behind the "whats" uncovered by your survey can lend critical insight into positive and negative influences on intelligence in your enterprise. At one manufacturing company, for example, the knowledge audit revealed that, despite a high achievement in internal and external awareness levels, bodies of intelligence were treated as isolated silos. Thus, despite the levels of intelligence acquired, overall, the enterprise reacted lethargically to changes in stimuli, and required extensive corporate review and approval. In this way, the enterprise gained valuable insight into specific formal and informal groups and practices that became examples of what works within the organization to promote intelligence and intelligent action, or, what should be avoided. Because the interviews were preceded by the survey, the interview time and cost was dramatically slashed.
While it can be argued that a knowledge audit, which focuses heavily on the people in an organization, merely measures perceptions; this is clearly a case where perception is reality. Intelligence is, after all, mostly about human, cultural, and organizational issues; and is not simply a technology problem. The perceptions of users and owners of intelligence shape reality, since there is frequently a direct and essential relationship between perceptions and reality when it comes to the proposition of managing the resource of greatest personal value to any individual - their intelligence. In the end, it may not matter what management thinks is the enterprise's intelligence potential. The reality is what you discover during the audit, that which manifests as the experiences and attitudes of your organization's constituents.
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