A better knowledge-driven leader Guide to facilitating day-to-day leadership
PUBLISHER Innolink GRAPHICS Innolink
PICTURES Jirina Studio Sami Helenius
This guidebook is aimed at anyone who is interested in knowledge-driven leadership and utilising knowledge to increase business performance. innolink.eu #innolink
Our goal is to provide a practical introduction to well-functioning methods and models of knowledge-driven leadership, all the way from goal setting to continuous organisational renewal. Our focus is especially in leading organisations and people with knowledge and in incorporating knowledge into the business culture and work life. We hope that this guide will contribute to facilitating your everyday tasks as a leader.
Jani Listenmaa Business Director, Knowledge-Driven Leadership Consulting Innolink
Contents Foreword 2 What is knowledge-driven leadership? General information about knowledge-driven leadership Definition of knowledge-driven leadership
4 4 4
Treasure hunt of knowledge-driven leadership
Building the architecture
Clarify the goal Set the indicators Ask how, where and why? Creating the process Determine the annual plan and responsibilities Define measures to the nature of the knowledge Make the knowledge visible and understandable Reinforcing the culture Agile development of the culture Reinforce interaction and dialogue Be active and positive Offer support Improving competence Toward a shared understanding Conscious knowledge-driven leadership Coaching-based leadership React and build the future Whatâ&#x20AC;&#x2122;s next?
11 11 12 14 14 14 17 18 18 18 20 20 21 21 22 24 25 26
What is knowledge-driven leadership? General information about knowledge-driven leadership
knowledge-driven leadership one of the core factors in enabling organisational success stories in the future.
In the recent years, the different methods and possibilities of collecting data have increased exponentially the information overflow. At the same time, advanced information systems and technological development have enabled significant improvements to be made in the storing, management, computing, versatile analysing, visualisation and intelligence of data.
With efficient leadership and smart utilisation, knowledge can have a significant impact on the success of organisational (business) activities â&#x20AC;&#x201C; whether it be increasing market visibility and improving the position in the market, studying buying behaviour, conducting concrete product or solution sales, researching customer experiences, improving customer loyalty, or managing the motivation, expertise and efficiency of employees.
Then again, insight has also become increasingly important because, instead of managing skills related to using machinery, organisational leadership of today is more and more focused on competence and on a relationship-based mutual understanding aimed at generating new mindsets, added value and innovations. Competence has become an essential competitive advantage that, when utilised correctly, gives an organisation the possibility to continuous organisational renewal and achieve a business forerunner status. Consequently, the increasing amount of available information, the development of different ways of processing data and the increasing importance of competence as an organisational success factor have made 4
Definition of knowledge-driven leadership There are many definitions of knowledge, knowledge management and knowledge-driven leadership â&#x20AC;&#x201C; all of which are accurate depending on the perspective. At present, all of these terms are used without any clear distinction between them, which causes confusion and undermines the use of knowledge in leadership. For this reason, we want to clarify how and from which angle we view knowledge-driven leadership, and how we are going to address it in this publication.
The terminology of knowledge-related leadership includes terms like knowledge management, business intelligence, data science and information management. On the other hand, the development of the recent years has introduced to public debate concepts such as big data, artificial intelligence and robotics, which have indisputable possibilities for knowledge management. Moreover, they are likely to change our current reality and increase the significance and impact of knowledge even further.
entity of knowledge-driven leadership is inseparably connected in leading organisations and people with knowledge and in incorporating knowledge into the business culture and work life. Knowledge-driven leadership essentially means utilising information in decision-making.
Embedded here is the idea that, first and foremost, information is at its best when it consists of data coming from different complementary sources. When the pieces of knowledge are put together, Without discussing the termithe inter-joining connections Knowledge-driven leadership nology or definitions in more are identified, and they help essentially means utilising detail, it can be said in general to better explain the matter at that, in knowledge manageinformation in decision-making. hand. Most often, the combinment, knowledge itself has ed pieces of knowledge are rebeen primarily viewed as either lated specifically to (1) data that existing or produced performance-based quantitative indicates a certain quantity or situation, (2) descriptive data, with focus on organisational information manageknowledge that observes a change or a related expement, meaning the management and development of rience, and (3) human insight that sets the knowledge the applied information systems and software to promo- in context and understands what the knowledge means te (business) objectives. or how it should be used. Below, we have used a classic example to show how data is refined through informatiIn essence, knowledge management emphasises the on into knowledge and finally to wisdom (Figure 1). importance of creating a suitable environment for producing and distributing information, whereas the
The weather may change quickly at this time of year and it often rains. I will bring along an umbrella.
I must wear warm clothes.
Surprisingly, the temperature has dropped 10 degrees overnight. It is 15 degrees Celsius outside.
Figure 1. Refining data to wisdom
How we achieve our goals?
INFORMATION Figure 2. A knowledge based decision is made through shared insights
From the point of view of leadership, it is essential to understand that a knowledge based decision is made in dialogue through collective understanding – a shared insight – between the available information, the operating environment, the factors currently impacting it, and the people involved in the decision-making process (Figure 2). We cannot lead results and goals as such, but we can lead activities and emotions. The way to achieve the goals and results is to implement the right activities at the right time. The purpose of knowledge-driven leadership is to challenge and help operators to see which activities they should focus on to achieve a certain end result. In contrast, the above-mentioned issues also highlight an important observation. A knowledge-driven leader must remember that no matter how intelligent the knowledge is, it is always in some way imperfect. In the
end, leadership means managing people, and decisions, in turn, are made by people, which means that they always include emotions, intuition and experience. Therefore, knowledge aspires to steer activities in the right direction, and knowledge-driven leadership helps to make better decisions. A decision is hardly ever perfect, but a decision based on knowledge-driven leadership is undoubtedly better than a decision made without knowledge. Finally, the goal of knowledge-driven leadership is to give organisations a competitive advantage and better chances of success. However, it is essential to clarify the goals. The realisation of goals is monitored and assessed and, thus, incorporated into the everyday life of the organisation – as part of strategic and operational management. The response to knowledge is action. Ultimately, knowledge is only valuable when it leads to action.
â&#x20AC;?For us at Innolink, knowledge means data and analytics, experience-based research data, real-time assessments, human knowledge capital, competence and instincts. The established goals must be clarified, and the realisation of those goals is monitored and assessed. Decision-making is based on a shared understanding and insight, so that we can make more profitable decisions through dialogue. This is what knowledge-driven leadership is all about.â&#x20AC;?
Treasure hunt of knowledge-driven leadership The journey to successful knowledge-driven leadership in an organisation can be viewed as a process resembling a treasure hunt. But unlike a traditional treasure hunt, knowledge-driven leadership constitutes an endless bounty of treasure, provided that we find the right path of knowledge-driven leadership and stay on that path, or that we update that path as changes take
place in the operating environment. Furthermore, the path is not rocky, but smooth and aimed at facilitating the challenges of everyday leadership. The figure below shows the central areas of the â&#x20AC;&#x153;treasure huntâ&#x20AC;? of knowledge-driven leadership, step by step.
RESULT WILL TACTICS
Responsibilities Annual plan Reporting
Objectives Current situation Future goals
Figure 3. Treasure hunt of knowledge-driven leadership 8
Action Renewal Competitiveness
Activating Sparring Support
Monitoring Reacting Decision
Indicators Information sources Methods
BUILDING THE ARCHITECTURE
CREATING THE PROCESS
REINFORCING THE CULTURE
DEVELOPING THE COMPETENCE
Figure 4. The steps of the knowledge-driven leadership process
The concrete work stages of the knowledge-driven leadership process can be summarised into the following steps (Figure 4): 1. Building the architecture During the building of the architecture, we analyse the current situation of knowledge-driven leadership in the organisation and the will to implement knowledge-driven leadership in the future. In addition, we define and clarify the activities that lead to results and achieved goals, and establish where, how, when and from whom these activities shall be measured to ensure that they steer the operations in an optimal way. The conscious building of a knowledge-driven leadership culture starts already at this stage, with emphasis on joint discussions and a shared understanding of the future goals. 2. Creating the process The next step is to create a process where the right information reaches the right people at the right time, and to determine the discussions and actions that shall result from different information impulses and what responses these require. With the help of the Proof of Concept (POC), the knowledge-driven leadership model is tested in practice through a pilot project, on the basis of which we then move on to comprehensive execution either directly or via a re-evaluation process.
3. Reinforcing the culture When the architecture of knowledge-driven leadership has been created, the utilisation process modelled and the implementation tested in practice, we must ensure that the knowledge is made available for leadership purposes and that the model is put to use in practice. It becomes a part of the everyday life of the organisation. In this phase, we promote the strengthening of the knowledge-driven leadership culture in the organisation both with concrete measures, competence and human resources, so that the knowledge and the process can lead to action and they can be harnessed to serve the management of activities. 4. Developing the competence When the above-listed stages have been completed to ensure that we support leadership by conveying knowledge at the right time and with the right indicators to the right persons, we will then strive to utilise and develop the competence to understand and grasp what all the collected knowledge means and what kind of choices and decisions can be made on the basis of said knowledge. In addition, we aim to learn and develop agile ways of making actual progress towards the set objectives or desired change.
Firstly, the model described above is structured so that it can be utilised in different substances. Most often these substances are divided into four sectors, namely the market, sales, customer and personnel. • • • •
In the market section, we focus mainly on improving the position in the market, increasing market visibility and standing out in the market. The sales section, on the other hand, focuses on examining the quantity, performance and efficiency of sales. The customer section focuses on customer structures, customer relations development and customer experiences The key features of the personnel section are the efficiency of work, cooperation, motivation and performance.
Secondly, the knowledge-driven leadership model can be utilised in processes of very different sizes;
the applications range from adopting a knowledge-driven leadership model for the entire organisation to creating knowledge-driven leadership models for individual sectors and organs – for example, applying knowledge-driven leadership to the customer experience of a certain unit. On the other hand, the different stages of the model can be separated from each other, so that we can focus solely on the stages that require specific investments while the other stages are already completed and functional. If the architecture and the process have already been finalised, but the goal of incorporating knowledge into steering operations has not been adequately achieved, we will continue by focusing especially on strengthening the knowledge-driven leadership culture. The next chapters will delve into the different stages of knowledge-driven leadership in more detail, through both theory and practical examples.
Building the architecture The architecture lays the foundation for knowledge-driven leadership. The architecture clarifies the activities that lead to goals and results. The architecture defines the following issues: • • •
What is the objective of knowledge-driven leadership? What kind of indicators can we use to measure the realisation of our objectives? What are the actual measuring points and from which information sources can we draw data for utilisation?
Clarify the goal The building of the architecture starts with an analysis of the current state of knowledge-driven leadership in the organisation. The process of evaluating the current state clarifies the goal, i.e. serves as an analysis of the organisation’s will to adopt knowledge-driven leadership in the future and determines the concrete steps that are required to achieve this objective (Figure 5). The purpose of evaluating the current state is to determine what knowledge the organisation already has and what new information is needed. Furthermore, we can check if there is something unnecessary in the existing information that can be put aside. The clarification of goals can even lead to in-depth self-analyses and, finally, redefining the organisation’s strategy. If the goal is not clear in mind, it is impossible to carry out systematic knowledge-driven activities. However, the path of soul-searching may still be worth the trouble, and it is always possible to come across
CLARIFY THE GOAL
Define the measures
the “treasure” by accident. Indeed, many innovations and success stories have come about by coincidence, but managing coincidence is, however, quite challenging. Instead of pushing one’s luck, knowledge-driven leadership minimizes the risks and leads you toward the established goal with the best possible insight. To build the architecture of knowledge-driven leadership, you must, at the very least, be clear on the following matters. Firstly, we must keep in mind the organisation’s vision, mission and values that guide the daily activities. Secondly, we must define the goals that are needed to achieve the vision. Finally, we must determine the most important issues, the must win battles, that we will invest in to achieve the goals. When making these definitions, extensive inclusion of the different members of the organisation, aimed at utilising the existing knowhow and competence and establishing a mutual understanding, is a significant factor in the creation of a knowledge-driven leadership culture.
Set the indicators Individual goals are turned into concrete indicators. The indicators are divided into indicative indicators that show how the goal is achieved, and descriptive indicators that describe the direction of the indicative indicator. The descriptive indicators can be further divided into objective indicators that primarily measure data-based performance, and subjective indicators that measure the human experience and quality. From a leadership viewpoint, a descriptive indicator is managed actively which constitutes operative
Determine concrete steps to achieve the objective
ANALYZE THE CURRENT STATE
Figure 5. Evaluating the current state 11
management, whereas an indicative indicator is generally more static, and the related leadership mainly consist of strategic decision-making. The objective is to derive the indicators from the organisationâ&#x20AC;&#x2122;s strategy, values and vision. Such indicators cut across the different activities of the organisation, which means that the combined knowledge provided by the different perspectives can be easily understood in the management group, for example. Moreover, indicators derived from the strategy will steer the activities in the desired direction. To avoid confusion, it is also advisable to apply the same scale and similar settings to all indicators. For example, the most often-used scale for experience-based indicators is the Likert scale (1â&#x20AC;&#x201C;5), running from 1=negative result to 5=positive result. Furthermore, we must choose the final Key Performance Indicator (KPI) and the supporting indicators. Some pieces of knowledge can be combined to construct sum parameters or combination indicators (or super indicators as we call them at Innolink).
Ask how, where and why? When the indicators are being set, it is advisable to keep the relevant context and operating environment in mind, so that the indicators are suitable for measuring the observed target and, on the other hand, that the measuring point is timed correctly so that it measures the right target. As a case in point: if we strive to improve the customer experience of a debt collection agency, even positive customer experience indicators such as recommendation rate (subjective) or repurchase rate (objective) do not serve their purpose in this context. Very few collection service customers are likely to recommend the service
Market leadership as goal Hypothesis: As a company becomes more well-known, the number of leads increases, which will lead to an increase in sales and, in a stable market, to a stronger market position. We choose market position in relation to rivals (ranking) as the indicative indicator, with number 1 demonstrating market leadership. Market share means the companyâ&#x20AC;&#x2122;s turnover in relation to the total turnover of the market. Consequently, the figure indicates the share of the total market and, on the other hand, the yet available share in that market. As indicators explaining the market position and changes in that position, we choose the number of outbound/inbound leads (objective descriptive indicator) and spontaneous familiarity (top-of-mind) among the decision-makers of the potential market (subjective descriptive indicator). With the help of temporal monitoring, we can identify the relationship and intensity between the indicators: we can discover how much the development of familiarity affects the number of leads, and to what extent they explain the strengthening of the market position. On the other hand, frequent monitoring of the descriptive indicators also enables active leadership, when we can assess and predict the impact that measures aimed at increasing and boosting familiarity have on the number of leads and, eventually, on the market position. In a broader sense, the architecture of knowledge-driven leadership must be a cohesive entity, where the indicators of different segments are sometimes cross-checked, thus ensuring the reliability of the indicators. In this case, different variations in staff performance, such as changes in the motivation, competence or resources of the employees, may have a significant influence on whether or not the leads turn into sales as efficiently as expected.
Indicative indicator Market position Goal (KPI)
Number of leads Descriptive indicators Subjective indicator Top-of-Mind
Kuvio 6. Example of the indicator structure 12
to their friends or neighbours, and it is doubtful that a positive customer experience would drive them back to using the service. Furthermore, we choose the best method and agree on the volume and sample to ensure that the gathered information will be reliable enough to steer the operations of the organisation. We also determine which information sources can be used to produce the needed data. Usually, the information comes from customer management (CRM), enterprise resource planning (ERP), human resources management, financial management, research or quality systems, or from separate reports. It is essential for the performance of knowledge-driven leadership that all management levels and the entire work community are considered in the defining of both goals and indicators. The management levels are formed in accordance with the organisation’s management system, and at least the following levels can usually be identified: top management (directors), performance and area coordinators (managers), unit or team leaders (immediate supervisors) and other parties assigned with special responsibilities. The objective is to utilise the management system to efficiently produce knowledge for the most important asset of the organisation – the employees – who can then use that knowledge to promote the objectives of the organisation even better than before. It is a besetting sin of the field that certain indicators are defined only from the perspective of the top management, and all the knowledge is solely at their disposal. What follows is a situation where the management, leaning on the knowledge that they possess, requires the lower management system levels and the entire work community to take action.
However, the work community has no understanding of the goals or principles behind the indicator, nor do they have the knowledge that is intended to steer the activities. All they have is an expressed will and mindset, which causes a conflict between responsibility and choice – action is required, but nobody knows why or how. When a certain goal has been turned into a concrete indicator adopted by the entire organisation, it must be divided among the different organisational levels by goals. The same goals do not have to apply to all levels; instead, the initial situation or the importance and influence of the specific organ on achieving the goal and, consequently, the desired indicator result are taken into account. Secondly, the indicator must be divided by contents. All organs do not need to have the same indicators in terms of content, either; the indicator can be chopped into sub-entities that together form the so-called sum parameter, and individual organs are then put in charge of specific areas. The very essence of operational knowledge-driven leadership consists of leading activities, emotions and knowledge and affecting situations proactively, so that the people and organisations can perform in the best possible way. From the viewpoint of leadership, this does not necessarily involve questions such as who leads whom, or who trusts whom and how much. Some people are more self-directed than others – but what we all have in common is that everyone needs trust, leadership and shared guidance, as well as sparring and support. The situations, customs and needs, however, may vary. The most important thing is to learn and understand. Knowledge is a great tool for all these purposes.
Number of customer contacts
Kuvio 7. The architecture of knowledge-driven leadership 13
Creating the process To make sure that knowledge is utilised properly, the architecture must be paired with a clear process aimed at ensuring that the right information reaches the right people at the right time. At the same time, we must define the actions that result from different-level information impulses and what responses these require. Especially the following issues are defined in the process: • • •
Who utilises the knowledge and in what time frame? What kind of responses are necessitated by the knowledge? How can we make the knowledge visible and understandable?
Determine the annual plan and responsibilities
Define measures to the nature of the knowledge
In terms of grasping the entity of knowledge-driven leadership, it is important to determine a time frame for reporting and utilising the knowledge, to establish who uses it, and to proportion the knowledge to the other processes of the organisation. Based on this process, the core of the annual plan of knowledge-driven leadership starts to take shape (Figure 8).
In the utilisation of knowledge gained from a recurring process, the common characteristics include debate over the significance of the knowledge and turning the development needs into projects and concrete measures built on three key principles:
At this stage, there are three levels to consider:
1. What information is ongoing and supports daily leadership? 2. What information is cross-cutting or recurrent, produced over a longer time period to support long-term planning? 3. Who are the persons in charge and what are the knowledge-driven leadership action frameworks defined for them, both timewise and in terms of activities? The annual plan provides a big picture of what is going on in the organisation or in its parts in terms of knowledge-driven leadership, and what themes the persons in charge have on their desk over different time periods. The big picture is then divided into smaller portions, so that it functions as a concrete entity that steers the organisation’s activities, apportioned to the other practices of the organisation (e.g. meeting practices, board work, action plans and budgeting).
Regarding the distribution of responsibilities, the key factors are the nature and substance of knowledge. The nature of the knowledge defines the utilisation level, so that ongoing operational knowledge and the responsibility for utilising said knowledge are usually incorporated into the entire organisation according to the management system, because, due to its nature, the knowledge serves the daily activities of the organisation. In contrast, recurring knowledge that is mostly utilised in strategic decision-making remains the responsibility of the organisational management and/or parties responsible for certain substances (such as marketing, sales, customer relations and HR), and it may be conveyed more broadly to the organisation as separate customised development processes.
The goals are set in a concrete and measurable form The measures, responsibilities and schedules are defined as precisely as possible The progress of development is monitored and guided, and the development process is completed.
Such development of the strategic level consists of longterm processes. The measures are often implemented on the different organisational levels over several months or even years, which emphasises the importance of long-term utilisation. On the other hand, such cases also highlight the paradox of knowledge-driven leadership. For example, a common phenomenon in the utilisation of personnel surveys is that the study has yielded knowledge that has sparked a development process. The change has been completed but because it has taken six months, the respondents of the annual follow-up survey no longer remember that a) something has changed, or that b) the process was initiated as a result of an inclusive personnel survey. It is paradoxical that the knowledge
• • • •
• • • Figure 8. The annual plan of knowledge-driven leadership
has yielded the desired change, but those who requested the change have forgotten all about it and are now questioning the feasibility of knowledge-driven leadership. Furthermore, they neglect to reply to the follow-up survey because, in their mind, the original survey never led to any significant changes. Therefore, it is important to keep the concrete development processes initiated by knowledge-driven leadership, as well as the factors that triggered the processes, visible even in longer development processes. Reacting to recurring strategic knowledge is a process which tends to include more massive and substantial one-time measures, where the process itself is usually longer, and the impacts more long-spanning than in the utilisation of operational ongoing knowledge. When utilising operational ongoing knowledge, responding to the knowledge usually takes place immediately either on a weekly or monthly basis. For this reason, the processing of said knowledge also requires more detailed planning in advance. •
• • •
support the activities of individual persons in charge. The process must be appropriate, so that it only includes elements that have significance for the success of (business) activities. The process must be practical, so that it considers the available ways of reporting the knowledge and the applicability of the process to other existing practices and responsibilities.
On the other hand, the nature of each piece of knowledge must be considered in accordance with the kind of (sub)information the knowledge produces and how the usability of said knowledge changes over different time frames. • • •
How often can we get knowledge for utilisation? How often is it advisable to utilise the knowledge? Even if we receive knowledge on a daily basis, do we have enough to rely on it and is it so significant that it can be used as a basis for the daily development of activities?
The process must be accurate and ambitious enough to serve its purpose and to guide and 15
Let us examine the knowledge-driven leadership process from the viewpoint of an individual piece of information as a type of travel journal, without a closer analysis of the type of knowledge involved: When an individual piece of information arrives, it either causes or does not cause â&#x20AC;&#x201C; depending on its nature â&#x20AC;&#x201C; immediate reactions. Immediate responding is required if the piece of knowledge can, on the whole, be identified (this is not always possible due to anonymity, for example) and the knowledge is of sufficient significance for the (business) activities. If this is the case and the knowledge exceeds or falls below an established limit, there must be a concrete process in place determining who acts how and over which time period, once the feedback is received. Subsequently, the individual piece of information moves on in the knowledge-driven leadership process. When it is combined in the data basket with other similar pieces of knowledge, it starts to be handled quantitatively as different temporal entities, respondent group specific segments and more and more versatile variations. The different ways of responding to the knowledge become more dexterous over time as the knowledge becomes more reliable. Depending on the amount of information and the reacting possibilities, the minimum weekly-level response is recommended to consist of going over the information. If the results have improved or declined, the person in charge becomes active and starts sparring and encouraging those who can affect the results in their area of responsibility. If the results improve or decline continuously for a longer time period, there may, depending on the nature of the knowledge, be a need for more intensive reacting, such as involving the supervisor of the person in charge or a party responsible for the substance entity. As the amount of information accumulates and the share of coincidence grows smaller, the monthly-level response should, in addition to performance monitoring, include an examination of the results in relation to the reference group; in other words, it should be determined whether the results are weaker or better than the target levels. A preferable operating method is to go over the established key performance indicators and results per each area of responsibility, hear and discuss the causes and consequences together, and, in particular, think about what can be done differently and even better. This way, we can keep the organisational KPIs visible to all, commit to the indicators and include all relevant parties in continuous, joint development work. At the quarterly level, the results and comparisons between different segments are also handled in the higher responsibility organ, where practical action plans are initiated to accomplish the necessary changes. A more extensive (business) analysis is performed quarterly, bi-annually or at least annually (and when needed), with focus on analysing the different data lines in relation to one another and the temporal development of the results. The purpose of the analysis is to address the core reasons in detail and to view the factors that affect the whole system and the relationships among them from different perspectives â&#x20AC;&#x201C; for example, how the specifying substance indicators affect the descriptive key indicators, how the descriptive indicators influence one another, and how they affect the indicative indicator. Furthermore, we can examine the influence relations between indicators constructed based on different goals. Based on the specifying analyses, we will define annual development points that are then put into practice in the entire organisation. At the same time, we can compare the established objectives to the achieved results and set new goals.
Make the knowledge visible and understandable For the knowledge-driven leadership process to work, the knowledge must be visible in a way that is as informative as possible, yet easy to understand. There are three distinguishable levels in reporting knowledge, defined by the nature and purpose of utilising the knowledge. At the first level, the organisation’s person in charge has the opportunity to utilise the knowledge to support daily leadership activities. In such case, the knowledge must be quickly and easily available for reporting purposes, as it is essential to crystallise said information into key points. With a view to the reporting structure related to ongoing knowledge, a good rule of thumb is that “you see the results you lead”, which means that, first and foremost, you are interested in the results on which you can have particular impact. This does not remove the need to obtain extensive knowledge, but in this current era of information overflow it is increasingly important to use our time in an optimised way. In terms of the reported contents, the knowledge should demonstrate in a clear and understandable way the key results, their development in relation to the goal and reference group, and changes that have taken place over a set time period. One efficient procedure is to crystallise the key figures into a single view (dashboard), where the information coming from different sources, as well as the related development, can be easily viewed.
More and more often it is the requirement of “knowledge-driven leaders” to have all the knowledge available on their mobile phones and, thus, to have it with them at all times. The second level consists of long-term utilisation of knowledge in development work, where the focus is, instead of speed, on the possibility of performing comprehensive and in-depth analyses. This may entail a more detailed analysis of knowledge-related to an individual goal or studying knowledge received from multiple information sources, so that the different pieces of information interact with each other and produce “smarter” knowledge about the influence relations between the issues and, consequently, promote the development efforts. At the third level, the knowledge is made openly visible in the entire organisation, both internally and to stakeholders and customers. The more extensively and openly the knowledge is made visible, the better it supports the creation of a knowledge-driven leadership culture. To enable such a reporting entity, careful planning, technical data modelling and system integrations must be included in the building of the knowledge-driven leadership culture and the creation of the related processes. On the other hand, the development of data modelling tools has made – and continues to make – data modelling, management and visualisation even more efficient, and it also contributes significantly to the utilisation of knowledge and to the creation of knowledge-driven leadership culture.
PERSON IN CHARGE
NATURE OF KNOWLEDGE
One positive/ negative feedback
Contact by the person in charge
Result better/ weaker
Feedback discussion and direction of operations
Week Maija Meikäläinen
Figure 9. The process of utilizing ongoing knowledge 17
Reinforcing the culture The purpose of defining and clarifying the architecture and process of knowledge-driven leadership is to convey knowledge to the right persons at the right time with the right indicators, so that they can utilise the knowledge and react to it in accordance with the established operating models. However, the reality is that even the most distinct process in itself cannot generate action, if the persons utilising the knowledge do not have the will, inclination or skills to utilise it properly.
Agile development of the culture
leadership contribute to the creation and development of self-direction and independence. Thanks to the knowledge-driven leadership culture, the knowledge and the process are more efficient in generating action, and they can be harnessed to serve the management of activities which, in keeping with its purpose, produces added value to the parties utilising the knowledge.
Reinforce interaction and dialogue
The culture of knowledge-driven leadership is closely linked to the interaction and common practices within Although it is important to have in place a carefully dethe organisation. It is important to use genuine dialogue fined knowledge-driven leadership process along with to utilise existing competence and experience-based established and calibrated goals, it is ultimately more knowledge, which can help to interpret and understand important to possess an agile mindset and will to pursue the significance of collected information. This shared continuous development. No process is completely understanding can help the organisation to make fool proof â&#x20AC;&#x201C; at least not without choices and decisions in relation including a significant amount to the required measures. The biggest challenge of of bureaucratic administration In a dialogue, it is important to knowledge-driven leadership costs where the drawbacks are allow space for both constructilikely to outweigh the advantais to incorporate the ve challenging and for the free ges. Organisations always have knowledge into everyday generating of different operapossibilities for development, ting possibilities. Moreover, it is decision-making. and, in fact, improvement and equally important to recognise renewal are usually compulsory and emphasise the successes in order to keep the organisatiand strengths that the obtained knowledge and the on vibrant. Agile continuous development is primarily indicators in their part highlight. Such openness is a a question of a common mindset, stemming from the pathway to strengthening the experience of success, corporate culture. making the results visible, and improving the sense of In the broader sense, organisational culture covers the work engagement and motivation of both individuals values and norms, leadership, operating practices and and of the entire community. interaction that are common across the entire organisaThere is a variety of different ways to participate in a tion. Knowledge-driven leadership must also penetrate dialogue: the choices range from a face-to-face discusthe organisational activities at all these levels, so that we sion to different alternatives that utilise digital methods can talk about a knowledge-driven leadership culture. and opportunities. In the modern world, it is becoming When knowledge-driven leadership is incorporated more and more common to have multiple workplaces. into the organisational culture, it becomes a habit and, Consequently, cooperation through digital channels â&#x20AC;&#x201C; furthermore, an integrated part of the everyday activities independent of time and place â&#x20AC;&#x201C; increases the selection and the DNA of the organisation. The culture is not of opportunities for sharing thoughts, experiences, opichanged in a day; instead, the building of a culture nions and ideas. Such diversity of interaction is perfectly is more of an ongoing long-term process. Creating, suited to promote a culture where the possibilities and maintaining and developing a desired culture takes importance of knowledge and sharing that knowledge constant work, but, in contrast, the achieved successes are genuinely identified. and experiences of the usefulness of knowledge-driven
LEADERSHIP Leader VALUES
WE NORMS Team
Manager PRACTICES Figure 10. Knowledge-driven leadership culture
The organisation’s existing philosophies and perceptions have an impact on the creation of a knowledge-driven leadership culture:
experiences of individuals yield stories that, in their part, affect the organisational culture and the image people have of the organisation.
Cooperation – specifically its contents, procedures and participants – adds a very important perspective to knowledge-driven leadership. When we view knowledge as the work community’s collective capital, we open the door for joint debate, the sharing and refining of thoughts and knowledge, and, through this interaction, for joint efforts to develop something new. If we promote collaboration and joint thinking with appropriate operating models, we open up a possibility for using the existing potential more efficiently to support decision-making and generating new innovations. As new forms and methods of work and network-based working are developing constantly, collaboration with the organisation’s customers and other outside stakeholders also becomes increasingly important. Moreover, an understanding of these issues and the improvement and management of collaborative competence constitute an important development target.
For example, how are the different forms and ways of knowledge, working and leadership viewed in relation to the organisation’s goals? What is the prevailing view of human beings, that is, what is the perception of what human beings are, how they work and how they learn? What is the significance of cooperation and a knowledge-based shared understanding in the everyday tasks of the organisation and in the achievement of goals?
By examining these philosophies and perceptions, we can also broaden our views regarding the creation of a knowledge-driven leadership culture, the development of competence, and the achievement of a shared understanding. Appropriate, functional structures and processes are an essential foundation for all leadership. Knowledge is refined in the structures into everyday activities, and, on the other hand, these structures produce knowledge that helps to steer the activities onward. Moreover, these structures and the everyday
Without these organisation-wide ways and mindsets of doing and sharing, it is quite difficult to create a culture of knowledge-driven leadership.
Be active and positive When there is a joint mindset in an organisation to pursue knowledge-driven leadership, there is high potential for creating a functional culture. In the early stages of building the culture, it is important to continue with the utilisation of knowledge and to keep it visible, as in all launch efforts. This is highlighted especially in operational knowledge-driven leadership related to daily management, where simply the efforts to intervene in matters and to activate and encourage the operators often enable the culture to be established and contribute to achieving the desired change. From the viewpoint of coaching-based leadership, it is recommended to spar people by using encouraging positive feedback. Positive feedback has on several occasions been found to be linked to work engagement, which manifests itself in the everyday work as enthusiasm. Enthusiastic and successful people are happy to come to work and they do their best to promote the common goals. Moreover, they work in a more self-directed way and, at best, inspire others in the process. This in turn provides the organisation with more far-reaching benefits and reinforces the above-mentioned ways of joint working and sharing.
Offer support Different support functions play a significant part in verifying the development of the knowledge-driven leadership culture, in terms of both individual knowledge users and the entire organisation. In the following, we will present some examples and observations of different-level support functions.
2. Furthermore, the persons in charge shall also be backed by a support and monitoring mechanism based on the management system, which supports their decisions in terms of powers and responsibilities and, for its part, activates and also demands action. •
On the one hand, it is a question of the role of the responsible person’s supervisor in monitoring the development of knowledge in their area of responsibility and supporting the necessary development measures. On the other hand, this may mean the supervisor’s responsibility to intervene in activities, if the obtained knowledge is critical and requires action.
3. One productive support form for knowledge-driven leadership is based on peer support, where a network either within or outside the organisation provides peer support for work on the utilisation of knowledge. Different peer forums can be built, or they may construct themselves based on a certain interest, substance or position, such as the role of a supervisor. These forums serve as platforms for different forms and procedures of sharing contents, and, as such, they both reflect and back up the development and improvement.
1. It is important that the organisation has appointed support persons that others can contact if needed and who are tasked with activating, encouraging and sparring others in issues related to knowledge-driven leadership.
4. From the viewpoint of the whole organisation, one of the most essential factors in creating a knowledge-driven leadership culture is making the knowledge visible, so that it is available to all as easily as possible and also actively visible as a reminder of the mindset, goal and the purpose of knowledge.
measures in the organisation is quite scattered, and the right hand does not even know what the left is up to. For these situations, the organisation should appoint a knowledge-driven leadership coordinator who manages the essential information related to knowledge-driven leadership, is aware of the ongoing projects and processes, pulls the strings, and provides more detailed status information when needed.
The so-called knowledge-driven leadership ambassadors are either internal employees who are committed to and trained in the matter, or external knowledge-driven leadership professionals who work internally as ambassadors for knowledge-driven leadership or for a related theme such as customer or employee experiences. The ambassadors’ work can take many forms, but it often includes both physical presence and communication-based encouragement toward utilising knowledge; support and sparring in terms of reacting to knowledge, as well as technical support. Often the information of completed, ongoing or upcoming knowledge-driven leadership
On the one hand, it is useful to make the knowledge visible in accordance with the operating models of the management system (such as through team, unit or board meetings). In this case, it is appropriate that the knowledge pertains specifically to the relevant target group and its area of responsibility, as it simultaneously provides a possibility for joint development and sharing. On the other hand, presenting more general knowledge pertaining, for example, to the entire organisation as openly as possible keeps the common goal clear for the personnel as well as for customers and other stakeholders.
Improving competence It is important to learn what kind of knowledge provides the best possible – and also adequate – foundation for decision-making in different situations and in different-level decisions. It is even more important to have a genuine understanding of the significance of knowledge and to use that understanding to achieve the necessary changes.
levels is a prerequisite for joining together and utilising the knowledge related to different areas.
Toward a shared understanding Competence in knowledge-driven leadership is linked to the report “Toward a shared understanding of the future of work”, published by the Prime Minister’s Office in the spring of 2017, which summarises the future competence needs into three areas:
Knowledge-driven leadership can be viewed as continuous interaction between the operating environment, organisation, team/unit and individual. By improving the competence, responsibility, enthusiasm and • In terms of individual comcommitment of an individual petence needs, the required employee, either in general Dialogue is the foundation for skills linked to acting based on or particularly in relation to knowledge and an examination a shared understanding, which of that knowledge are reflexiviknowledge-driven leadership, we can support the internal is what knowledge-driven ty, critical thinking, self-manageactivities of the teams and units, ment, flexibility and creativity. leadership is ultimately as well. In this cooperation, the • In turn, the competence all about. sharing of competence and knoneeds related to operating in a wledge, as well as the resulting community comprise of collamutual support, innovations boration, interaction, negotiation and networking and joint development work, are used to promote the skills, which are imperative for obtaining and interlearning operating culture, decision-making abilities, preting knowledge and making decisions based on efficiency and well-being of the organisation. An that knowledge. ongoing and functional dialogue between the different
Knowledge-driven leadership links together and promotes the continuous renewal and competitiveness of organisations by providing a fresh vision and perspective on the mutual exchange of thoughts and by clarifying the direction and purpose of the dialogue.
Renewal and competitiveness
Figure 11. The layers of knowledge-driven leadership 21
10 % Formal learning
20 % Learning from others
70 % On-the-job learning
Figure 12. 70/20/10 learning model
The third area consists of competence needs related to understanding the operating environment. These include innovations and business activities, technology and digitalisation, environment and safety, internationality, entities and a systemic approach. Even here, understanding the knowledge and linking it to the view and perception of the operating environment and the inherent connections is a key issue, known, for example, as semantic skills, implementation skills, and the ability to build entities and generate new innovations.
In terms of knowledge-driven leadership, the necessary skills include, for example, the abilities to stop, consider different viewpoints, engage in self-reflection, include others and collaborate, without forgetting the ever-important basic interpersonal skills such as listening and asking.
Conscious knowledge-driven leadership The skills and competence needed in knowledge-driven leadership are not developed, and definitely not improved, simply through training; instead, most of the development takes place via some other route. The conscious, organised and systematic management of this other development increases the possibilities of improvement exponentially (Figure 12). Traditionally, efforts aimed at developing employees have been viewed as a training task or as coordination of training. However, only 10 % of development is 22
based on this formal learning model, which comprises of training days, specialist seminars and other similar information-related incentives received from elsewhere. Of the other possibilities of improvement and development, the first area is related to learning from others, which covers approximately 20 % of all the potential of the different development methods. This area is closely linked to the idea of interaction and learning from others through discussions, peer support, mentoring, coaching, or even group assignments or study group debates related to the formal training. The key feature is collaboration in different groups to share experiences, skills and different viewpoints, based on both hard data and humane experience-based knowledge. All this helps to broaden oneâ&#x20AC;&#x2122;s own insight and reinforce the shared understanding and the sense of shared significance within the work community, thus promoting not only the development of individuals or the participants, but of the whole organisation as well. The vast majority, namely 70 %, of all development is gained by learning on the job. And, after all, this is something we all do in our daily work through the process of trial and error. However, if that is as far as we go â&#x20AC;&#x201C; we try, make a mistake, and try again, without giving a second thought to the causes, consequences or possibilities, the available knowledge is easily left untapped, and the next person to tackle the same issue ends up once again using time, energy and perhaps even money to the same process of trial, error and correcting the mistake.
In on-the-job learning, the possibilities of knowledthe new knowledge and to try out new things in their everyday life, or to reflect on new viewpoints in relation ge-driven leadership are linked to stopping to examine to their own operating environment. This concreteness the knowledge, observing the situation, contemplating the importance of the situation through self-analysis and and the experience-oriented approach generate the joint reflection, and, as a result, to learning. This process best aha-experiences, as the connection with reality and the existing challenge or problem adds a whole requires a willingness to be open and honest, or in other words, a readiness new level of meaning to identify and admit to learning. Theory and mistakes. It also poses It is important to be bold and ready to take practice go hand in massive demands on hand, and statistics and action based on knowledge, because the the operating culture: averages become new knowledge is of no concrete use if it does how do we address a standard procedures. mistake, how do we not lead to some form of action. One of the trends give feedback and how of our age – agile can we discuss issues experiments – are also together in a way that does not create an atmosphere of linked to on-the-job learning and conscious knowledblaming or punishing individuals but, instead, where “a ge-driven leadership. Courage to try different ways of mistake is a genuine opportunity” from which the entire working and the ability to stop to assess the success and work community can draw knowledge for the future? feasibility of the experiments, combined with requesOn-the-job learning can also be promoted systematiting feedback, generate a lot of new knowledge. By cally by offering and creating different situations where subjecting this knowledge to individual and joint anathe individual and the community are exposed to new lysis, and, consequently, making choices and decisions experiences, new perspectives and different ways on possible smaller or larger adjustments to policies, of operating. Traditional classroom training can be operating models and so on, the organisation gains complemented with an individual development task new opportunities for further development. that challenges the individual in a concrete way to apply
different methods or striving to find one solution that would fit all.
When we consider the different ways of improving competence, it is important to acknowledge the changes in the methods of learning and leadership. At the same time, we must consider the changes in the factors that define competitive advantages. From a leadership point of view, the competitive advantages of organisations used to stem primarily from obedience and diligence, whereas today they spring more and more from creativity and enthusiasm.
The change in the factors related to competitive advantages challenges our understanding of learning and managing competence, and, consequently, leading organisations:
The keys to successful learning are active participation and intrinsic motivation. Learning is not achieved by pouring in knowledge through a funnel; instead, it is enabled and boosted through activity, reflection, own interest and the experience of relevance, by utilising self-direction and taking responsibility for oneâ&#x20AC;&#x2122;s own learning process. Applied learning is also a part of todayâ&#x20AC;&#x2122;s learning ideology; learning refers, above all, to understanding and applying knowledge and having good problem-solving abilities. The distinctiveness of individuals is still reflected on learning; there is a wide variety of learning methods as well as procedures and study forms that promote learning at our disposal, and it would be preferable to identify the best combinations for each situation and individual â&#x20AC;&#x201C; without ranking the
1. Improving competence no longer means unilateral distribution of information. Instead, it is more of an interrelationship that supports and guides learning, promoted by the ideology and operating model of coaching-based leadership. 2. The tasks of directors/supervisors consist more and more of guiding and supporting the actual work and development in that work, with consideration for individual learning styles and starting points. 3. The purpose of guidance is to create situations that support the individual development processes, so that the improvement of competence is made possible. 4. Managing different relationships is important, which means that supervisors must create suitable settings for diverse interaction and collaboration, so that it is possible to experiment and improve together.
The focus in organisational management is moving adjustments. At its best, the feedback culture within an toward coaching-based leadership, where the aim is to organisation promotes successful development and activate and motivate the experts so that they will find improvement by offering corrective feedback given in their jobs meaningful and have the possibility to reform an encouraging and constructive manner. The openness and create new competitive and transparency of feedback advantages for their operating data also promote broader deFrom a leadership point of view, environment. Coaching-based velopment in the organisation, leadership, self-knowledge as others can learn from the the competitive advantages of and self-direction, openness individual accomplishments as organisations used to stem and a flexible operating cultuwell as mistakes. primarily from obedience and re create a good foundation While knowledge and responfor the successful managing of diligence, whereas today they ding to that knowledge facilicompetence. tate the making of individual spring more and more from decisions that steer daily macreativity and enthusiasm. React and build the nagement, knowledge must future also be viewed as a long-term resource, not just as a tool related to decision-making Even competence, actions or development efforts will here and now. not make a difference without active monitoring and Knowledge-driven leadership links together and prowithout assessing whether or not the measures have motes the continuous renewal and competitiveness of the desired impact when compared to the strategy organisations by providing a fresh vision and perspectiand the derived goals. We need support, guidance ve on the mutual exchange of thoughts and by clarifying and different forms of systematic stopping in order to the direction and purpose of the dialogue. observe the development of knowledge-driven leadership and, once again, to specify the possibly needed
Whatâ&#x20AC;&#x2122;s next? Knowledge-driven leadership is developing non-stop, and the speed is staggering at the moment. The trends of knowledge-driven leadership are steered by the various new technological solutions that enable new ways of utilising and generating knowledge. At this very moment, augmented reality, artificial intelligence and robotics are changing the ways of visualising data and producing and utilising knowledge by enriching our traditional experiences, challenging our views and creating new ways to interact independently of time and place. In the future, virtual reality will also become a significant platform for knowledge-driven leadership, and it will facilitate the distribution and understanding of knowledge in a completely unique virtual environment. Let us be actively involved in trying and doing and enjoy the benefits this development brings for knowledge-driven leadership. Thanks to â&#x20AC;&#x201C; or because of â&#x20AC;&#x201C; this development, managing individual competence as part of everyday leadership activities has become an increasingly important success factor for organisations. Let us lead with knowledge, not with luck! Jani Listenmaa Business Director, Knowledge-Driven Leadership Consulting Innolink
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