Ready for the Island? - How a Digitized Strategy Process Optimizes Your Organization's Knowledge Management
A comment by Alexander Zimmermann,
CEO & Partner of SOLYP Informatik GmbH
In the relevant management literature, the distribution of knowledge within companies is often described with a metaphor which sounds plausible, particularly after the summer holidays: knowledge tends to form islands—in the minds of employees, that is.
What sounds like a sunny working climate actually holds some serious risks. After all, islands are not connected to the mainland; they may go under and disappear from the map. Less metaphorically speaking: the brightest minds with the most technical expertise may stay aside the communication flows of their organizations, unable or unwilling to contribute to strategy processes. In the worst case, they may even leave the company along with all their know-how.
What does the island-like distribution of knowledge mean for the strategy process of your organization? How can a uniform, communicative, and purposeful strategy process “bring on board” everyone responsible and benefit from their knowledge? These are the questions I would like to discuss in the 6th part of my blog series on the success factors of strategic planning. Because one thing is certain: the challenges of the future will be met only by those companies that are able to tap into the knowledge of their best talents.
Strategy Work as People Business
The strategy platform SOLYP3 facilitates the digital collection of hard and soft data. I have already written about this several times. However, a successful strategy process also needs to take soft factors into account: strategy relevant employees with their scattered knowledge, communication habits and needs need to get to be actively involved in strategic decision-making.
Jan Wehking, Head of Strategy Process at Deutsche Bahn AG, emphasis exactly this aspect of strategy work:
“(...) from trends, market developments, and the company’s performance, opportunities and risks need to be derived. A solid strategic planning then includes measures to avoid the risks and seize the opportunities. (...) Only when all involved in the strategic planning process have the same understanding of why and what for it needs to be carried out, something meaningful may come out of it. In any other case, it only causes frustration by all involved.”
According to Wehking, the meaningfulness of corporate strategy thus depends on a soft factor: the ability to provide those involved in the strategy process with a single justification for the key initiatives to be taken. Otherwise, “frustration,” underperformance, and refusal may be faced. Any seemingly convincing corporate strategy may fail at these hurdles.
How can such involvement and positive identification with the company’s strategy succeed? Michael Doskocz, Head of Strategic Business Development at Sto SE & Co. KGaA, names essential parameters:
“A key driver of a successful strategic planning process is the consistent and transparent linking with the mission, vision, and basic strategic framework of the company. Each planning participant needs to be able to recognize and understand his or her contribution and added value in the overall context.”
The overall corporate goals, mission, and vision create a universe of meaning which is restricted by the company’s “strategic framework.” Within this universe, according to Doskocz, it is possible to take the employee’s knowledge into account in the strategy process and assure him/her that he/she is contributing significantly to the “overall context.”
If that sound too simplistic to you, you may have read over a key condition in Doskocz’ statement: the meaningful involvement of the employee in the strategy process needs to be “consistent and transparent.”
Sure, these are two catchphrases that pretty much any HR person responsible for corporate philosophy would claim. But what do they mean for strategy work? What should a coherent und purposeful, yet transparent and integrative strategy process look like? One thing seems already clear: exclusive presentation meetings on the executive floor are not very likely to meet these requirements...
Digitally Integrating Soft Factors
In the internet era, there is an ongoing demand for transparency... which is fulfilled more or less by whistle-blowing platforms. Digital collection of data, which some may consider a violation of their privacy, has a distinct advantage: it equalizes people; it is purposeful and comprehensible. In a word: transparent.
Systematic digitization of the strategy process, therefore, meets the call for transparent participation of all those responsible for strategy in the most sustainable way. A key role in this plays the collection of strategically relevant data. With SOLYP3, this is done via a digital questionnaire, i.e. a customized template. As I have already discussed in detail on this blog, this questionnaire facilitates the collection not only of hard data, but also soft data as well as the intelligent linking of the two. Here, I'm interested in the role that such a questionnaire plays in knowledge management.
First: A SOLYP3 questionnaire treats all strategy managers alike. Due to central requirements, all data is collected in a structured and uniform manner across the organization. For the information flow within the company, this means that scattered island knowledge is not only collected, but linked to other scattered knowledge. It does not remain in the heads of a few employees, but is entered into the knowledge base of the company and remains available even after an employee leaves the organization.
However, digital data collection has another integrating effect as mentioned by Wehking and Doskocz: it assures those responsible for strategy that they are heard and can make a “contribution and added value in the overall context.” The individual’s desire for meaning is positively met.
The questionnaire looks at the strategic business areas not only from a central C-level perspective. The top-down/bottom-up data collection process reflects the perspective of the business area back to the executive floor enabling re-adjustments of a strategy when needed. The effect of feedback is traceable and can be attributed to the person in charge of business area strategy. This way, they are “brought on board,” taking on the responsibility they are entitled to, and learn by their own actions the “why and what for” of the entire strategy process.
By the way: Even though knowledge may form islands, it doesn’t need to be right. By linking hard and soft data, such as trends, assessments, and observations of competitors, a digital strategy process enables plausibility checks at any time. Are the planned sales figures in line with the general market trend? Can production costs be kept at the projected development of the commodity markets? Using causal links, for instance, discrepancies can be instantly revealed and “planning stories,” with some people responsible for strategy may want to hide their “unkowledge,” uncovered.
But even this has a tendency to form islands. With an IT-based strategy process, this form of distribution of (un)knowledge belongs to the past. With it, you not only implement a digital process culture that enables you to meet market challenges, but also ensure that your knowledge management is not “ready for the island.”