Making Sense - Overcoming Business Skepticism

A number of management approaches and solutions started to appear in the 1960s or earlier. All are offered with the promise of value maximization and results that impact the bottom line favor­ably. Business process engineering, total quality management, R&D management, technology management, time-based competition, lean production/enterprise, customer-focused organiza­tion, knowledge management, and employee empowerment—the common thread among these approaches is that all of them aim to manage one form or another of IC as the means for acquir­ing and sustaining a competitive edge. Those concerned with reengineering and quality manage­ment focus on process capital. Customer-focused and network-based approaches focus on customer capital, while the rest aim to manage human capital in the innovation process. The fact that these approaches do in some cases improve an organization's competitive position proves that the management of any form of IC and to any degree of depth will result in some ben­efits. Nonetheless, the more prevalent fact is that organizations usually move in dissatisfaction from one approach to another in their struggle to make sense of a messy and rich landscape of business solutions.

Business executives are faced with many questions. Would a knowledge management solution facilitate ICM? Which approach should management implement? Which approach is needed to solve the immediate problems without limiting the organization's ability to implement other approaches in the future at a later stage of development? Does an organization have to start all over again and in some cases reinvent the wheel every time a solution seems to offer more than its predecessors? How different is innovation from IP management? Is it sufficient to establish a licensing unit to manage IC?

This messy landscape where no practical guide exists to explain the basis of these solutions (other than some consulting firms6) and how to make an informed decision between them culti­vates two problems. The first is business skepticism, and the second is what has been called the "knowing-doing" gap.7 The messy landscape and rate of failure8 generated a lot of skepticism in business managers and leaders. This is more than expected given the speed with which different management approaches or solutions appear and disappear. Who would know whether a new approach is a management fad that is yet another attempt by the consulting profession to create opportunities?

That skepticism is very serious and widespread beyond the leadership and senior executive level. It filtered down to middle management and frontline levels. Even when management is convinced of the efficacy of a certain approach, the skepticism of employees who have seen one approach come and another go is not resolved. The skepticism of employees is more serious as it results in both apathy and indifference, and hence jeopardizes the success of any approach regardless of its merit. This is more serious in organizations where employees are not empowered and hence are not part of the decision-making process. Many employees in such organizations do not feel that they own the new approach and may even believe that an approach does not deal with what they see as the more serious problems.

This widespread skepticism also accentuates the knowing-doing gap identified by Pfeffer and Sutton. The authors conducted extensive research and found that though in most cases leadership knows what needs to be done and launches the appropriate initiatives, there are certain factors that impede, and sometimes result in the failure of, effective implementation—hence the knowing-doing gap. The authors give varied reasons for this gap, the most important being the divorce of complex solutions from the business core processes, the excessive focus of knowledge management programs on IT while ignoring the human side, and the failure of remuneration systems to foster teamwork rather than internal competition. The most prevalent reason for this gap, how­ever, is that organizations implement programs that are contradictory to their culture and the business/knowledge needs of employees, and are thus doomed to failure from day one.

What seems to be lacking is a perspective that clarifies where everything fits in the big picture as well as explains the conditions that should be present for successful implementation of a cer­tain approach as opposed to another. In general, an organization should not implement any solu­tion until it is confident that the right culture (i.e., one that conforms with underlying values of any ICM program) exists. Implementing the best program when organizational culture is not ready for it jeopardizes the chance of a successful implementation at some other time in the future. If that happens, the practice will be made taboo forever, except after a strong change in perspective or leadership (see also about safe investments).

Assessing the culture and the specific situation of the organization is of particular importance, as it reveals the starting point of the organization, and hence determines its ICM needs. What is suitable for one organization may not be so for the other. The CICM model deals with this by incorporating tools for identifying and changing an organization's culture and values, as well as formulating the right vision to make it ready for the stage of evolution suitable for ICM.

In addition, the CICM model provides management with a framework on which it can determine which management approach or practice may be used, if it should be used, and how it should be used to conform to the strategic goals and objectives of the organization, business unit, or depart­ment. By defining the management objectives and goals under each stage, the CICM model guides management as to where each practice fits in the big picture, expected returns, and requisites for its implementation. This enables management not only to implement the right practice or program but to synchronize these practices with other practices across the organization as well.