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A better knowledge-driven leader

The international knowledge-driven leadership survey 2020


In 2020, Innolink´s knowledge-driven leadership survey covered an international territory for the first time, aiming to explore the different approaches used in Northern and Central Europe and in the US. The results were sometimes surprising, very often eyeopening, and in various cases good lessons to learn from. As the main result we found out that knowledge-driven leadership related projects and investments are in place or pending in the vast majority of organisations, often of course called differently but sharing the same target in the end. It is common sense that continuous collection, aggregation, intelligent analysis, and interpretation of data are a means of understanding the customers better, matching product and service development regarding customers‘ needs, helping to steer operations and internal processes, and managing teams and projects more efficiently. But the study also unveiled major differences regarding the approaches and the stages where the countries presently are in this process. We want to thank all respondents for their answers and their time, they were of great help in achieving our goal to gain insights in an area that proves to be of highest importance for almost all organisations in all covered countries. To quote a respondent from Switzerland at this occasion: Too many decisions are still taken on assumptions only! In case you require any help to overcome a similar situation, please remember you are always welcome to reach out to us. Thank you for reading! Yours sincerely, Arndt Polifke Managing Director Knowledge-Driven management Innolink Germany GmbH 29 October 2020, Nuremberg

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INNOLINK – International knowledge-driven leadership survey 2020


1.

What is knowledge? How are the different dimensions of knowledge seen in decision-making.

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2.

What is knowledge-driven leadership? How is knowledge-driven leadership currently seen and defined.

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3. The current state and significance of knowledge-driven leadership How is the role and added value of knowledge-driven leadership seen in the day-to-day activities of organisations. 4.

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INNOLINK – International knowledge-driven leadership survey 2020

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The focal points of knowledge-driven leadership How does knowledge drive operations currently and what are the central development and investment targets in the future.

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Afterword

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1.

What is knowledge? Knowledge – a highly important piece in the development chain from data to wisdom. A piece that is fundamental for the existence of insights. Knowledge is built on information, which requires data as a basis.

Data

Information

Knowledge

Insight

Wisdom

© David Somerville, Hugh McLeod

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INNOLINK – International knowledge-driven leadership survey 2020


With efficient leadership and smart utilisation, knowledge helps in making wise decisions. LEADERSHIP How do we get there? Tacit knowledge

We will help you find the means to reach your goals, develop the utilisation of knowledge, and react to changes. We will identify the central areas for investing in the future. We will position your organisation’s situation in relation to your industry or sector.

Where do we want to go? SHARED INSIGHTS

Where are we?

Operational Data

KNOWLEDGE IS ONLY VALUABLE WHEN IT LEADS INTO ACTION.

Survey Data

We will optimise regular data collection methods in order to gain reliable, meaningful, and comparable information with super-indicators.

The different forms of knowledge can be roughly divided into three different dimensions according to their character: Hard data, experience-based knowledge, and tacit knowledge as shown in the adjacent figure.

KNOWLEDGE To set the basis for the digestion of this survey, we explain how the three elements • operational data (hard data) • survey data (soft data) • and tacit knowledge act together and create the fundament for knowledge-driven leadership: The idea here is that, first, knowledge is at its best when it consists of information coming in from various sources that supplement each other. When the information is combined, the connections between the various data can be recognised and the issue better explained. Most often, the combined information is related precisely to data indicating a quantity or an event, explanatory information observing change or some experience related to change, and human knowledge which sets the information into context and understands what it means or how to act according to it. From the perspective of leadership, it is essential to understand how knowledge-based decisions are made on the basis of available information, the operational environment and its impact factors, and the dialogue or shared insight of the people involved in the decisionmaking process.

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INNOLINK – International knowledge-driven leadership survey 2020

„As a result of today’s knowledge and innovationoriented communication age, the knowledge capital available in the company is increasingly becoming a decisive production factor. Knowledge within a company is thus understood as a production factor that occurs alongside capital, labor and land.“ (respondent from Germany)


In this survey, we wanted our respondents to prioritise the kind of information they thought was the most important for their decision-making process.

If you were asked to choose one of these types, which one would you think is the most important one regarding aiding leadership in your organisation? Operational data (e.g. billing data, information obtained through CRM, production data, etc.)

44%

Survey data (e.g. information obtained through personnel and customer surveys or other market research surveys)

27%

Tacit knowledge (e.g. an understanding of the state of affairs that has developed in certain circumstances, historical contexts, or business environments.)

28%

40% 34%

0%

10% Average total

USA

20% UK

Germany

Austria

30% Switzerland

44% 44%

38%

72%

40%

Finland

Almost every second respondent (44%) prioritised hard data, while survey data and tacit knowledge were equally considered by slightly more than a quarter of the respondents to be the most important source of support for the leadership. So, almost three quarters of the respondents take the position to prioritize hard data collected during the operations and soft data obtained by e.g. market research vs their tacit knowledge. Vice versa, for one out of four managers their tacit knowledge is still the source of information they mostly rely on. When looking at the top management level (CEO & owner of the company), tacit knowledge proves to be less important (20%), while hard data gains importance (51%), so it seems that the higher the responsibility of a person is, the more likely it is to take advantage of hard data available to them. In fact, there are noticable variations between the six countries. However five countries have pretty similar results regarding this question, while results for one country put it in a very peculiar position: Finland Comparing Finland with the other five countries, it is obvious that the way it prioritizes hard data (72% in FI) sets Finland very much apart from the remaining countries where the results are in a range of 34% to 44%.

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INNOLINK – International knowledge-driven leadership survey 2020

„Customer opinions are essential for making good decisions.” (respondent from Germany)

„Knowing what customers think and how the market is reacting compared to operational data is very important.“ (respondent from Germany)


Some answers to open-ended questions: Which of these information sources do you think is the most important for your leadership?

Tacit knowledge

SHARED INSIGHTS Operational Data

Survey Data

Operational data: ”The database should be evaluated comprehensively in order to have the most comprehensive and extensive database possible, so that the essential relationships provide a better basis for decision-making.” ”The data is today’s gold.” ”Operational data is the most important because it’s focused on the inner workings of the organization.” ”Operational data is always useful as it represents true past experience.” ”The process can only be improved by analyzing the operating data.” ”Per operational needs certain data must be organized in each department and aligned as they are all interconnected to one another.”

Tacit knowledge: ”Tacit knowledge because it is the baggage of experiences, learnings and learned habits that we accumulate throughout life. It is highly personal, difficult to formalize and communicate to others .” Tacit knowledge combined with hard data or experiencebased knowledge: ”It should actually be a symbiosis of ”Only an understanding of everything. I.e. Operational data, connections and events can lead survey data and implied knowledge. to the development of forwardBut the implied knowledge comes looking strategies.” first.” ”We live in a state of flux. ”As a result of today’s knowledge Conclusive and fast information and innovation-oriented and forecasts are important.” communication age, the knowledge ”It can’t be any one of these by capital available in the company is itself, but customer experience increasingly becoming a decisive has to be a priority.” production factor. Knowledge within a company is thus understood as ”It is a blend but operational data a production factor that occurs should be the primary driver of alongside capital, labor and basis.” decisions and building strategy.”

”Though the first two categories are very important the tacit knowledge contains a wealth of information not easily accessible to researchers and for decision making. Much of what is innate and assumed exerts great influence on our decisions, even if frequently in ways which are hard to articulate.” ”Knowledge gained from personal experience.”

Experience-based knowledge: ”Survey data is important to us in order to develop continuously.” ”Customer opinions are essential for making good decisions.” ”The customer is always decisive, if the customer is satisfied, we are satisfied too.” ”Because survey data is best system. People shear there opinion and easily collect result.”

”Operational data gives my organization a solid reference point.” Combination of hard data and experience-based knowledge: ”Improvement of internal optimization ”Knowing what customers think and through external feedback.” how the market is reacting compared to operational data is very important.”

”Tacit knowledge on top of the other two is what drives good decisions.”

”It’s a more rounded perspective. Operational data doesn’t always tell the full story.”

”It is important to know the pulses of the masses and prospective customers.” ”Without knowing the client no reasonable marketing.” ”All data sources are important but survey data is valuable.”

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INNOLINK – International knowledge-driven leadership survey 2020


In order to support the decision-making, have you tried, failed, or succeeded in combining these different types of information? Yes, we have succeeded in it, and we employ it systematically and efficiently

30% 27%

Yes, we have tried it, but there is still room for improvement

50%

35%

42%

42% 40%

(respondent from Switzerland)

43%

We have considered it, but we have not employed it yet

9%

We have not considered it thoroughly yet, but we are interested in it in the future

5%

We have not, and we are not interested in it in the future

1% 0%

10% Average total

USA

20% UK

Germany

Austria

30% Switzerland

40%

Finland

The vast majority (85%) of enterprises represented by the respondents already work on integration of information from different sources. This includes those saying‚ it´s been a great success‘ and those seeing room for improvement being on the same level (42% vs 43%). Adding the 9 percent that are yet in the pre-roll out phase, it means 94 percent have realized the relevance of data integration. Only 6 percent of respondents say their companies don´t run any kind of data integration, i.e. only a very small portion of entities is left, which don´t see this as essential for their operations and management at present. Regarding this question the result expresses the different stages the countries are in, but might also reflect cultural peculiarities: Depending on the country when comparing all six countries, between 70 and 89 percent of respondents say they have tried out data integration with different levels of success. However, 50 percent of the US respondents confirm that they have reached the best possible results, while only 27 percent of Finnish respondents share this opinion. The other countries are in a range from 30 to 42 percent.

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„Too many decisions are still taken on assumptions only”

INNOLINK – International knowledge-driven leadership survey 2020

4%

Looking at Finland in detail, the trend regarding the companies that are still hesitant is moving to the right direction. Last year up to 6 percent of respondents said that they do not work on data integration, but in 2020 the portion is shrinking to 4 percent.


2. What is knowledgedriven leadership? Knowledge, knowledge management, and knowledge-driven leadership have been defined in many ways, which creates unclarity and makes it more difficult to utilise knowledge in leadership. For example, the terminology includes such concepts as knowledge management, business intelligence, data science, information management, and also knowledge leadership. For this reason, we wanted to carry out the survey to find out how and from what perspective the issue is seen in organisations in Finland and accross the Western world.

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INNOLINK – International knowledge-driven leadership survey 2020


Which of the following best describes knowledge-driven leadership in your opinion? Business intelligence

Information management

Knowledge management

Knowledge leadership

Data science

Artificial intelligence

Something else

„Knowledge is one thing, but applied knowledge is the decisive factor in success or failure.”

26% 25%

(respondent from Germany)

19%

„Knowledge-driven leadership involves having the right tools for present and future business trends and the ability to implement them seamlessly without disruption to existing processes.”

15% 9% 4%

(respondent from the US)

2% 0%

5%

10%

15%

20%

25%

Business Intelligence and information management – this is the best answer when asked about the meaning of ‚knowledge-driven-leadership‘ according to the respondents. It´s noteworthy that, unlike with other questions, the results regarding the definition of knowledge-driven leadership vary significantly depending on the country and the local business philosophy. Six countries – the four most rated distinct definitions: • Finland, Austria and US: Business intelligence • Germany: Information management • Switzerland: Knowledge management • United Kingdom: Knowledge leadership Knowledge-driven leadership reflects several facettes: Leading people, which is represented by both business intelligence and especially by knowledge management. Whereas knowledge management emphasises the enabling of circumstances that facilitate the creation and sharing of information, knowledge-driven leadership is integrally related to the management of people and organisations as well as to introducing issues into the daily aspects

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INNOLINK – International knowledge-driven leadership survey 2020

„It is a summarizing term for all strategic and operational activities and management tasks that aim at the best possible use of knowledge.” (respondent from Austria)


As with Finland in the survey last year, the share for ‚Artificial intelligence‘ is very low on the international level, too. This proves that knowledge and leadership are considered to be controlled by human beings in the end.

of corporate culture and employee activities. This is better described by the term knowledge leadership, which seems to be emerging in the terminology of knowledge-driven leadership as well. On the other hand, the result could be seen as a maturing of knowledge-driven leadership. While the direction has been shifting from information management gradually towards the management of business intelligence and thereby towards actual knowledge-driven leadership, the main focus is still very much on getting information into visually tight and easily usable forms, which is what the management of business intelligence mainly is. In the future, it will be interesting to see how the difference between business intelligence and knowledge leadership in particular will develop from this perspective. Another interesting detail is that none of the respondents chose artificial intelligence as the best definition of knowledgedriven leadership!

Knowledge-driven leadership connects and facilitates the efforts by organisations to keep developing continuously and to remain competitive by producing insights and perspectives into the exchange of ideas and by clarifying the direction of the dialogue towards a main objective.

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INNOLINK – International knowledge-driven leadership survey 2020

(respondent from UK)

„The core is the effective collection of relevant information and its meaningful evaluation for implementation in all business-relevant decisions.“ (respondent from Germany)

Know­ledge- Intellectual driven leader- colliding ship

THE DEFINITION OF KNOWLEDGE-DRIVEN LEADERSHIP: (Definition is from Innolink’s Guide for better knowledge-driven leadership.)

„An outward facing approach which takes evidence, both empirical and qualitative, to inform strategic and operational decision making.“

Shared insights

Renewal and competitiveness

”Knowledge-driven leadership connects and facilitates the efforts by organisations to keep developing continuously and to remain competitive by activating dialogue based on smart data, giving it insights and perspectives, and by clarifying the direction of the dialogue towards a main objective. On the other hand, knowledge is only valuable when it leads into action.”


3.

The current state and significance of knowledge-driven leadership What then is the current state of knowledge-driven leadership in organisations, when viewed from the perspective of decision-makers, and what kind of additional values are sought for by utilising it?

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INNOLINK – International knowledge-driven leadership survey 2020


THE ADDITIONAL VALUE AND STRATEGIC ROLE OF KNOWLEDGE-DRIVEN LEADERSHIP Has knowledge-driven leadership been set as one of the strategic objectives of your organisation Yes, it is one of the central objectives of the strategy

35%

Yes, it is one of the objectives of the strategy

46%

Not yet, but we have considered including it in our strategy

15%

No, it is not a strategic objective and it is not likely to be in the near future

4%

3% 3% 3% 4%

8% 18%

0%

10% Average total

USA

UK

20% Germany

Austria

30% Switzerland

40%

Finland

As a consequence of having reflected the high value it might bring to the organisations, knowledge-driven leadership is not only practised by a majority of companies – for as long as 3 to 5 years in most cases – but it is also considered being a part of their strategy: 80 percent of respondents claim that knowledge-driven leadership is just one or even the central objective of their company´s strategy, with yet a different picture in the US compared to the Europeans: The US – not lightyears ahead of Europe but at least a bit: While all five European countries see knowledge-driven leadership as one but not the central piece of their enterprises strategy, respondents from the US confirm that knowledge-driven leadership is more than that: For every other respondent from the US it is the central pillar of their organisation‘s strategy, and thus the basis for their success. At the other side of the scale, Finnish results reflect some room to catch up: Finland takes a unique position with 18 percent stating knowledge-driven leadership is not and will not be part of their organisation‘s strategy, while the other countries are in a range of 3 to 8 percent with their answers.

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INNOLINK – International knowledge-driven leadership survey 2020

81%

4 out of 5 (81%) think that knowledge-driven leadership is already a strategic objective among others. 35% think that knowledge-driven leadership is a central strategic objective. In almost all organisations (96%) knowledge-driven leadership has already been incorporated into strategy or is being considered for incorporation.


For how long has knowledge-driven leadership been a strategic objective in your organisation? 0-2 years

3-5 years

6-8 years

Over 9 years

15% 46% 19% 19% 0%

10%

20%

30%

The ‚room to develop’ that is reflected in the answers of Finnish respondents is underlined by the fact that every other organisation has put focus on this topic only for maximum of two years, while for the other countries more than 80 percent of respondents say that they have put knowledge-driven leadership at the forefront of their activities already 3 years ago. In 3 out of 10 organisations this happened over 6 years ago, i.e. in many cases we can expect it is strongly anchored in the organisations’ profile, incl. their strategy, processes, and their culture.

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INNOLINK – International knowledge-driven leadership survey 2020

40%

3/10

In 3 out of 10 organisations they have put knowledgedriven leadership at the forefront of their activities and this happened over 6 years ago.


Do you think that knowledge-driven leadership can create significant added value to your organisation in the future? Significant added value

Some added value

Not much added value

No added value

52% 44% 3% 1% 0% 10% 20% 30% 40% 50%

It is likewise noteworthy that almost all (96%) of the respondents think that knowledge-driven leadership will create additional value for their organisation in the future, and as many as 52% think that the additional value will be very high. This is not surprising as such, given how knowledge-driven leadership undeniably makes it possible to improve the efficiency of operations in many ways; by recognising factors and their interconnected relations which can be affected to do things differently and better, and while at the same time bringing issues up in dialogue, you can facilitate their practical implementation by creating shared insights. On the other hand, knowledge makes it possible to direct (business) operations and strategy by generating new information about and insight into the markets. It also allows you to crystallise strategic objectives into concrete goals and indicators, which both point the direction for strategy as well as explain it when using knowledge-driven leadership in a systematic manner. In other words, knowledge-driven leadership makes it possible to see the often abstract and distant strategic focuses in operations, and ties doing and having a vision together in a concrete way.

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INNOLINK – International knowledge-driven leadership survey 2020

„The motivation of our employees has a significant influence on the strengthening and effectiveness of all internal processes and will also be able to improve the customer experience by expanding the programs.“ (respondent from Germany)

96%

Respondents from Finland, the US and UK see highest value in knowledge-driven leadership, while those from the DACH region prefer to say it would add ‚some value‘. In almost all organisations (96%) knowledge-driven leadership will create additional value for their organisation in the future and 52% think that its impact will be very positive.


What kind of added value your organisation is pursuing by knowledge-driven leadership? „It is always important to renew yourself in order to be able to keep up with the times and not miss the developments.“

Developing completely new products / services / business activities

30%

Defining/developing the strategy and the direction of the (business) activities

29%

Renewing and improving current product/service range

18%

(respondent from Germany)

Developing customer or personnel experience

12%

„By improving the customer experience, we receive more positive feedback from our customers and thus also improve the motivation of our employees, since such measures increase both the reputation of our company and the order situation.“

Enhancing operational activities (e.g. supporting sales activities)

9%

Something else

2% 0%

5%

10%

15%

20%

25%

30%

In general, activities related to knowledge-driven leadership are unfolded with a clear expectation: It is supposed to help with the development of brand new products or services (most often mentioned by the UK, Germany and Switzerland) or should help to define and assess the general strategy of the organisation (most favorite answer by respondents from the US). Improving and renewing the current product and service range is mentioned as the spark for releasing respective projects by every fifth respondent, while in Austria it is considered the most important stimulus. The statements of the respondents reflect the deep trust that exists in many organisations in the value of knowledge-driven leadership: for their operations, for the employees‘ motivation, for enabling the creation of new products and services, in line with the expectations of their clients, for staying ahead of the competition, for just surviving. And it is well understood that the required knowledge needs to be updated constantly in realtime – to say it in very simple words.

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INNOLINK – International knowledge-driven leadership survey 2020

(respondent from Germany)

„By including employees in processes (CIP), we become even more productive.“ (respondent from Germany)


THE DAY-TO-DAY VISIBILITY OF KNOWLEDGE-DRIVEN LEADERSHIP The international picture shows the relevance of knowledge-driven leadership: Not only has it become one of the most important components of strategy, linked with the expectation to generate value for the organisation, and to support the definition and assessment of their strategies as well as the development of the products and services they are offering. But on top of this, as a consequence, almost two thirds of interviewed organisations have already appointed a person in charge of co-ordination of knowledge-driven leadership for their entity.

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INNOLINK – International knowledge-driven leadership survey 2020


Does your organisation have an appointed person in charge of the knowledge-driven leadership? Yes

No

63% 37% 0% 10% 20% 30% 40% 50% 60%

Driven by the US (71% US), but with UK (67% UK) and Germany (65% DE) almost on the same level the average share of organisations that already have appointed a person in charge of knowledge-driven leadership is impressively high ≥ 63%. It´s highly important to notice that preparing relevant capacities on this topic correlates with the ambitions of the company: among those which describe themselves as being a ‚forerunner for their industry‘ 77% have already a person responsible for knowledge-driven leadership projects. Therefore we are far away of calling a dedicated person for knowledge-driven leadership being ‚luxury‘ or ‚ a further inflation of the overhead‘: on the opposite, it is a helpful position enabling all or many others in the same organisation to work more efficient, with better results and on a higher motivation level.

United States 71% United Kingdom 67% Germany 65% Austria 62% Switzerland 55% United States

Yes

18

USA

Finland 19%

UK

INNOLINK – International knowledge-driven leadership survey 2020

Germany

Austria

Switzerland

Finland

While the other five countries are close together, Finland remains conservative regarding the actual consequent action. Only 19 percent of Finnish respondents are aware of a person in their organisation that is appointed to centrally manage tasks related to knowledge-driven leadership. In the light of the high expectation that comes along with the implementation of cross-sectoral data and information exchange as a prerequisite for smarter business decsions and ’wisdom’, the logical next step for 80 percent of Finnish organisations is close at hand!

77% Among those which describe themselves as being a forerunner for their industry 77% have already a person responsible for knowledge-driven leagership projects.


4.

Focus points for knowledge-driven leadership While there is a common sense about the relevance of knowledge, the important questions related to implementing knowledge-driven leadership are: Are good results a natural given, or are there any traps in the process of roll-out and implementation of knowledge-driven leadership in an organisation? Is there anything we can learn from enterprises that are more advanced in this area? What are the best practises? What is needed to achieve the most positive outcome and which are the critical areas we need to put specific focus on?

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INNOLINK – International knowledge-driven leadership survey 2020


Do you think that the knowledge available to you is currently leading the operations in an optimal manner? Yes, fully agree

„Knowledge alone is not sufficient – implementation is the purpose.”

39%

Yes, somewhat agree

(respondent from Austria)

45%

Neither agree nor disagree

„Existing knowledge must be integrated better into decisionmaking process.“

9%

No, somewhat disagree

13%

5%

No, fully disagree

13%

(respondent from Germany)

14% 20%

14%

41%

1%

(respondent from Germany)

0%

10% Average total

USA

UK

20% Germany

Austria

30% Switzerland

40%

Finland

A positive view on things and situations may be more a typical in the US than in any other country. So it may be a result of usually calling basic results ‚great‘ and ‚amazing‘, but on the background of various groundbreaking digital innovations made in the US and a in general innovation-friendly environment it might just be reality: The US business is ahead of their European counterparts. 50% of respondents from the US couldn´t imagine to benefit more from available knowledge than they actually do today. No other country reaches a comparably high result, but just partly agree to this statement.

Finnish respondents once again shed light on their situation, which could shine brighter: More than 40 percent cannot agree to the statement, i.e. a portion that is three times as high compared to Switzerland see quite a lot of room for adopting knowledge-driven leadership in the structure and culture of their organisation.

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„It needs a culture of change”

INNOLINK – International knowledge-driven leadership survey 2020

40%

More than 40 percent Finnish respondents cannot agree to the statement, i.e. a portion that is three times as high compared to Switzerland see quite a lot of room for adopting knowledgedriven leadership in the structure and culture of their organisation.


THE BUILDING BLOCKS OF A KNOWLEDGE-DRIVEN ORGANISATION Where are the future developmental focal points for knowledge-driven leadership and how can they be approached? The basic assumption in knowledgedriven leadership is that the goal is clear. Without a clear goal, one that is often clarified by strategic work, there can be no systematic knowledge-driven leadership. Once the goal is clear, the current state of knowledge-driven leadership is evaluated. The mindset is structured towards knowledge-driven leadership of the future. On this basis, a roadmap is made for goaloriented knowledge-driven leadership.

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INNOLINK – International knowledge-driven leadership survey 2020


The building blocks of a knowledge-driven organisation are: building the architecture, creating the process, reinforcing the culture, and developing competence. The knowledge-driven leadership architecture defines and focuses the activities that achieve results and reach goals, as well as answers the questions where, how, when, and from whom measurements should be taken, and by which indicators, to allow them to direct operations in the optimal way. Then, a process is created where the right information reaches the right people at the right time, and the discussions and actions the information impulses cause at various levels are defined together with the appropriate reactions. When the architecture for knowledge-driven leadership has been created and the utilisation process modelled, it needs to be ensured that knowledge can be used in management. This means putting the model into practice so that knowledge and the process direct operations and serve the management of activities. Once it has been confirmed by the previous stages that knowledge is available – at the right time, by the right indicators, and to the right people – in support of management, the development of competence is used in an effort to understand and visualise what the knowledge means, and what kinds of choices and decisions can be made based on it. Furthermore, there is an effort to learn and develop agile ways of moving things towards the set goals or visualised change in a concrete way.

MARKET

SALES

CUSTOMER

PERSONNEL

BUILDING THE ARCHITECTURE

What knowledge is required to support leadership, where does the knowledge come from, which indicators are used to track the knowledge

CREATING THE PROCESS

What kind of a process, when and by whom is the knowledge utilised

REINFORCING THE CULTURE

How is a culture of knowledge-driven leadership created and reinforced as providing direction for the organisation’s operations

DEVELOPING THE COMPETENCE

What does knowledge mean and how should it be acted on

In the Knowledge-driven Leader 2020 survey, the goal was to map out the ways in which decision-makers see the strengths or developmental needs of their organisations in relation to these four aspects.

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INNOLINK – International knowledge-driven leadership survey 2020

„Knowledge is one thing, but applied knowledge is the decisive factor in success or failure.” (respondent from Germany)


In which of these stages does your organisation have its major strengths? Architecture (A clear description and vision about what kind of information is needed in aiding the leadership, which sources are used for gathering information, and which indicators are employed in monitoring the information.)

25%

Creating the process (Shared operating model, how, when, and by whom the information is utilised and in what type of process.)

32%

Reinforcing the culture (The willingness, inclination, and encouragement of the organisation and its personnel to receive information and share, discuss, and utilise it in the leadership and development of the operations.)

24%

Developing the competence (Competence in utilising the information: What the information indicates and what should be done and developed based on it in order to achieve the objectives.)

19%

25% 18% 8%

0%

10% Average total

USA

UK

20% Germany

Austria

35%

20% 20%

Switzerland

30% Finland

Germany and Switzerland are the masters of designing and steering processes – in contrast to the other countries those two clearly see the major strength of their organisation in this area when it comes to preparing and implementing knowledge-driven leadership. ’Reinforcing the culture’ is part of the British DNA – opposite to Finland where less than 10% of respondents would see this as a major capability of their entity, whereas building the architecture and creating the process are considered as major strengths by an equal portion of respondents.

”As with most companies, getting all employees to buy into an idea is the most challenging. Once we got everyone on board and working towards a common goal, we haven’t experienced any of our knowledge-driven programs that hasn’t worked.” (respondent from US)

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INNOLINK – International knowledge-driven leadership survey 2020


”The beginning of the change.” ”At the beginning it didn’t really work with our current method.”

In which of these stages does your organisation have the most room for improvement?

Architecture (A clear description and vision about what kind of information is needed in aiding the leadership, which sources are used for gathering information, and which indicators are employed in monitoring the information.)

22%

Creating the process (Shared operating model, how, when, and by whom the information is utilised and in what type of process.)

31%

Reinforcing the culture (The willingness, inclination, and encouragement of the organisation and its personnel to receive information and share, discuss, and utilise it in the leadership and development of the operations.)

29%

Developing the competence (Competence in utilising the information: What the information indicates and what should be done and developed based on it in order to achieve the objectives.)

17% 10%

20%

30%

Mirroring the results of the question before, the ’reinforcement of company culture’ is mentioned most often by Finnish respondents when asked about their organisation´s weakest areas. We have already seen before that the thing that is missing to leverage the potential is a dedicated person. This means that the solution is close at hand. ”The cultural resistance to innovate and experiment.”

”Talk, talk, talk.”

24

“The greatest difficulty was overcoming resistance on the part of the top management.” (respondent from Germany)

0%

”Participation of employees.”

”Coordinate internal and external information in optimal way.”

INNOLINK – International knowledge-driven leadership survey 2020

Ii is interesting to see that it´s the ’process’ related side of ”To create the knowledge-driven leadership, where German and Swiss respondents mindset.” see most room for improvement. Together with the fact that another strong group of respondents see ’process’ as the strongest area of their organisation in the knowledge-driven leadership development, it seems that in those two countries the specific focus lies on that part – independent from a very positive or extraordinarly poor performance that is noted.

”Workforce resistance to automation.”

”Cooperation between the different areas.”

“Establishing secure scalable platforms that support artificial intelligence has been the most challenging situation in our organization.” (respondent from US)

“Inability to ”let-go” of inherited, outdated platforms and thought processes.” (respondent from UK)

”There are great difficulties in applying the customer data and their buying behavior gained through analysis processes in a practical manner and in reacting quickly to changes.” (respondent from Germany)


From the maturity perspective of knowledge-driven leadership, it could be said that most organisations are only creating their systematic knowledgedriven leadership operations, because architecture creates the foundation for knowledge-driven leadership. On the other hand, many organisations have implemented good knowledgedriven leadership practices before, although perhaps not in a very systematic or controlled manner, let alone managing it in an objective-oriented way. Insight, competence, and the development of knowledge management will make it possible to develop even more systematic processes of knowledgedriven leadership. This interpretation is supported by the results concerning the definition of knowledge-driven leadership, where knowledge-driven leadership was seen first as the management of business intelligence, and also by the results concerning the challenges of the architecture of knowledge-driven leadership, which in light of the open-ended questions

Knowledge-driven cycle of success

reflect the volume of knowledge, its dispersed character, and its combinability. The solution to this is probably found in the stage and perspective of the construction of a knowledge-driven organisation. In practice, the business intelligence management stage should be preceded by a specification stage, during which the knowledge and indicators that an organisation needs to be able to lead operations based on knowledge towards its goals are clarified. This is usually followed by a stage of business intelligence management where the knowledge specified for management is structured and unified for reporting in a data modelling tool. The technical implementation usually requires a dedicated information management project which is executed by using data storage tools and technologies. A knowledge-driven leader should however be aware that the total development of knowledge-driven leadership is not a passive one-time project, but rather a continuous and always developing process.

Modelling knowledge-driven leadership Supporting indicator Explanatory indicator: Subjective

Evaluation

Strategic objectives

Information management

Supporting indicator

2,44

Pointing indicator

Supporting indicator

Explanatory indicator: Objektive

39% Supporting indicator

Tuning knowledge-driven leadership

Strategic objectives

Systematic monitoring and reacting

Reporting of results

86

Knowledge implementation support Knowledge utilisation

Developing operating models and competence Impact Renewal

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INNOLINK – International knowledge-driven leadership survey 2020

Need for change


The “Knowledge-driven cycle of success” in the figure on the previous page depicts the process of continuous development that results in the knowledge-driven success of an organisation. The premise for this model is the crystallisation of strategic objectives into measurable indicators by the modelling of knowledge-driven leadership, which are being actively directed into practical activity and which by means of renewal, systematic monitoring, and reacting will result in the achievement of the strategic objectives. The difference compared to knowledge-driven leadership approached from the premises and perspective of information management is that the modelling of knowledge-driven leadership derived from strategy in some sense forces and directs the organisation to choose the knowledge that is most significant for its objectives in support of leadership.

Knowledgedriven leadership is intended to make day-to-day management easier, not more difficult.

Knowledge-driven leadership originating from strategic goals and management needs requires planned modelling of knowledge-driven leadership in order to work. This requires insight, making choices, and courage. Correspondingly, it will make knowledge-driven leadership clearer at best, as the knowledge used for leading is more specific, easier to manage, and less demanding in terms of time needed. According to a critical interpretation, actual knowledge-driven leadership begins only when the knowledge has been made visible by reporting and is used for decision-making and the management of operations. This requires an organisation with both a strong culture of knowledge-driven leadership and competence for it to work. It will be interesting to see how the situation develops over the coming years and whether the focal points of knowledgedriven leadership will shift from the specification and management of knowledge to actual knowledge-driven leadership and development through competence and culture both. When the emphasis is placed on actual knowledge-driven leadership, the goal is to genuinely understand the relevance of knowledge and to use it to achieve the necessary changes. Dialogue forms the basis of shared insight, which is what knowledge-driven leadership is largely about. Theory and practice go hand in hand, statistics and averages become the new day-to-day mode of operation. At best, knowledge-driven leadership moves towards bold, novel, and agile experiments seeking continuous improvement – knowledge signals then encourage keeping up the experiments or returning them into dialogue where they are provided with a new sense of direction by which to find new competitive advantages.

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INNOLINK – International knowledge-driven leadership survey 2020

“Knowledge-driven leadership is knowledge of your business, your current and future status, that of your competitors, and the markets.” (respondent from the US)


The premise for knowledge-driven leadership is the crystallisation of strategic objectives into measurable indicators which are being actively directed into practical activity and which by means of renewal, systematic monitoring, and reacting will result in the achievement of strategic objectives.

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INNOLINK – International knowledge-driven leadership survey 2020


And are organisations ready to invest into knowledge-driven leadership now or in the future?

In your organisation, are there currently any projects or investments regarding knowledgedriven leadership and its development?

“Development of Digital Competence Centers (DCC)” (respondent from Switzerland)

“Greater inclusion of market data and trend analysis” (respondent from Switzerland) “AI-based market research that automatically evaluates the accumulation of market data and makes recommendations based on the conditions we have defined.” (respondent from Germany)

Yes, major projects or investments

26%

Yes, some projects or investments

40%

Not currently, but we have had projects or investments previously

10%

Not currently, but we are planning to have projects or investments in the future

16%

No, and there will be no projects or investments in the future

8%

16%

6%

“Restructuring of the organisation because of the better coordination of knowledge” (respondent from Austria)

“We invest in a data warehouse and automated tools to generate reports on most operational data and the staff to review the results weekly” (respondent from the US)

“In house training and developing KPI’s” (respondent from the US) 28

INNOLINK – International knowledge-driven leadership survey 2020

(respondent from the UK)

“ERP systems, BI tools”

38%

20%

(respondent from the US)

24%

“Helping employees connect and share knowledge and intelligence with each other so as to improve company’s output” (respondent from the UK)

0% Average total

19%

“Investing in professional services to help support our decision making”

10% USA

UK

20% Germany

Austria

30% Switzerland

40%

Finland

That knowledge is not a free given is widely understood – three quarters of organisations covered by this year‘s survey confirm that they are or were allocating budgets to respective projects, one out of four respondents consider them as ‚major investments‘. Once again, the US has the highest share of respondents talking about significant projects or investments related to knowledge-driven leadership. This is true for 38 percent of respondents from the US, whereas only 6% to 24% of respondents from other countries report about significant projects being in place. This comes along with the previously learned fact that the share of companies with a dedicated person in charge of knowledge-driven leadership among the six countries is also highest in the US. But no matter whether investments are high or low, the range of respondents working in companies that haven´t made investments so far is almost equally low, in a range of 22% (US) to 32% (Austria).

26% Over one quarter (26%) are currently investing heavily and two thirds are currently investing or have previously invested in knowledge-driven leadership or its development. An additional 16% are planning investments in the future.


And are organisations ready to implement the knowledge-driven leadership possibilities in the future?

From your personal point of view, would it be beneficial for your organisation to implement the knowledgedriven leadership possibilities in the future? Yes, very beneficial

Yes, somewhat beneficial

No, not very beneficial

No, not at all beneficial

26% 54%

(respondent from the UK)

12% 8% 0%

20%

40%

Obviously knowledge-driven leadership is perceived as being highly beneficial for a company, even in companies which don´t run such activities today. The vast majority of respondents working in such companies would expect a positive impact from starting respective activities: Four out of five (80%) of all respondents say it would be beneficial for their enterprise to implement knowledge-driven leadership solutions, and every fourth even consider it would be ‚very beneficial‘. It might be just a matter of time, before activities related to knowledge-driven leadership will be rolled out in such organisations as well. In the US and in Switzerland the share of those who would see highest benefit in knowledge-driven leadership eventhough their organisation is not pushing it at present is more than 40 percent and higher than in any other covered country (based on the people working in companies that are presently not active). In Germany, UK, Austria and Finland those who are not directly in touch with knowledge-driven leadership are more sceptical, so ’somewhat beneficial’ is the answer that´s chosen most often.

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“We are looking for management to be trained to 1) encourage employees to create, share and apply knowledge; 2) possess knowledge and 3) provide employees with their time whenever the employees need it”

INNOLINK – International knowledge-driven leadership survey 2020

40%

In the US and in Switzerland the share of those who would see highest benefit in knowledgedriven leadership eventhough their organisation is not pushing it at present is more than 40 percent and higher than in any other covered country (based on the people working in companies that are presently not active).


It is a widely shared view that one major reward of investments in knowledge-driven leadership projects is a higher motivation of all employees. Another one is that it is a must-have requirement for a sustainable success of the organisation. The survey uncovered that the status of the roll-out and implementation of knowledge-driven leadership projects varies significantly between the countries. Organisations in the US are obviously advanced regarding the implementation, and respondents from the US rate the value generated by supporting systems much higher than respondents from any other country. Europeans often still see some room for improvement, and in particular Finnish organisations consider the reinforcement of their culture, as the area with the highest need to focus on and to take more efforts. This is mirrored by the fact that one thing is seen as the major hurdle for the implementation of a knowledge-driven leadership related backbone in an organisation: the fact that the new approach and culture has to be supported and shared by the employees. So it´s the communication with the employees and all teams that is a decisive factor for the success of a knowledge-driven leadership project and the extend of the value it generates for an organisation. Having in mind the major differences between the countries regarding business cultures, with a strong top-down decision pattern being more common in the US for instance, compared to Central Europe and in particular Nordic countries where decisions are often an outcome of a democratic process within a team, it is obvious that in Finland and Germany the factors time and efforts for communication need to be reflected and planned in detail beforehand. Thank you for reading! Yours sincerely Arndt Polifke Managing Director Knowledge-Driven management Innolink Germany GmbH

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INNOLINK – International knowledge-driven leadership survey 2020


Specialist in knowledge-driven leadership

Innolink.fi/en Innolink.fi/de innolink.fi #innolink

Profile for Innolink

International KDL study 2020 Innolink  

In 2020, Innolink´s Knowledge-driven leadership survey covered for the first time an international territory, aiming to explore the differen...

International KDL study 2020 Innolink  

In 2020, Innolink´s Knowledge-driven leadership survey covered for the first time an international territory, aiming to explore the differen...

Profile for innolink