Knowledge Management:: Why Management Consulting Will Be Disrupted: Part 1


A lot more than Management Consultants NEED to learn from “interactions” and interdependencies IF their particular skill-set is to remain relevant. The world is better understood when viewed, as it can be in the Digital Age, as an infinite series of inter-connected systems.

Complexity (of the 'system' - business model, or corporation, etc.) x Uncertainty (of the environment, market, economy) = Fragility (of the situation) Evidently, U cannot be managed but C can. Measuring, monitoring and managing 'current complexity' is more effective than conventional means of assessing, rating, managing and modelling risk. And why it is better that a system be less complex [Occam's Razor].  The best way to impact C is by starting from the top of the Complexity profile. Because the profile is computed based on a model-free method, there are no subjective 'weights' to adjust. Basically, this guarantees that you hit the most important parameters first, i.e the hubs. A system CANNOT perform functions for which it was intended without, first, possessing and maintaining the minimum amount of complexity to do so. Therefore, by monitoring current complexity, the potential risks associated with loss of function(s) due to endogenous events, are preceded by 'fluctuations' in the complexity measure

Complexity (of the ‘system’ – business model, or corporation, etc.)
x
Uncertainty (of the environment, market, economy)
= Fragility (of the situation)
Evidently, U cannot be managed but C can.
Measuring, monitoring and managing ‘current complexity’ is more effective than conventional means of assessing, rating, managing and modelling risk. And why it is better that a system be less complex [Occam’s Razor].
The best way to impact C is by starting from the top of the Complexity profile. Because the profile is computed based on a model-free method, there are no subjective ‘weights’ to adjust. Basically, this guarantees that you hit the most important parameters first, i.e the hubs.
A system CANNOT perform functions for which it was intended without, first, possessing and maintaining the minimum amount of complexity to do so. Therefore, by monitoring current complexity, the potential risks associated with loss of function(s) due to endogenous events, are preceded by ‘fluctuations’ in the complexity measure

The core message is that both THREAT & OPPORTUNITY lie within such (inter) connectedness but the winners of the current, turbulent and competitive marketplaces are those who understand the real power of creating RESILIENCE by developing TRUST & INTERDEPENDENCE (the collaboration that the author highlights).

But you cannot buy trust. It has to be earned and, in times of such ambiguity and uncertainty, competition without differentiation (beyond pricing) is not sufficient.

As Clay Shirky famously(?) said “It is easier to understand that you face competition than obsolescence”

The ‘Risk Leaders’ of the future need to recognise that to accelerate the process of understanding they require to trade TRANSPARENCY – demonstrable, shared, principles – for INFORMATION. Otherwise the (oft overlooked) frictional costs associated with transforming data into information remain. Along with the unidentified sources of excessive complexity and ‘manageable’ risk that, unmanaged, add to volatility, increased uncertainty and – when spread through interactions – can lead to contagion (or ‘systemic risk’)!

We are living in a knowledge driven economy that is 

data-to-wisdom1heavily influenced by collaborative forces sharing intangible and tangible assets to create new value.  The internet has accelerated collaboration and people are learning from the interactions.

Why Management Consulting Will Be Disrupted: Part 1.

Knowledge Management [video]


A punchy 3 minute video that, not before time, reminds us how much we take for granted.

David Griffiths with more a notable influence from Dave (Cynefin) Snowden

I would highly recommend some related reading but then mine is hardly an objective viewpoint…as I wrote it! HOWEVER, I can certainly recommend David’s blog for some very interesting reading.

General ignorance:: accident or design?

Just because you haven’t identified that “the problem is the solution” doesn’t mean that others, within your business sector, haven’t developed or imported [exaptation] a strategy from another sector to help them seize invaluable competitive advantage….firms that don’t evolve or adapt to a changed environment are easy targets for new entrants to a market!

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Beyond Data Mining:: knowledge mining


We live in the digital age. The flow of data is truly impressive. Statistics inform us that each year we generate more data than the past generations did in decades. But the problem is that Information Technology (IT) has concentrated on simply automating old ways of thinking, creating bottlenecks and problems we didn’t even imagine, and not really inventing new processes or approaches. There is little innovation going on in the IT arena. But one thing is certain, we are drowning in data and we’re thirsty for knowledge…

Turn data into structure

Structure is the overture to knowledge. But what is knowledge? What is a “body of knowledge”? Setting aside ontological hair-splitting  we could say that a body of knowledge is equivalent to a structured and dynamic set of inter-related rules. The rules can be crisp or fuzzy or both. But the key here is structure. Structure is the skeleton upon which a certain body of knowledge can be further expanded, refined, modified (this is why we say “dynamic”). One could say that structure forms the basis of a model or of a theory. Today there exist many ways of extracting structure from data. Statistics is one way. Building models based on data is another. But because building models and mis-handling of statistics has contributed to the destruction of a big chunk of our economy, we have invented a new method of identifying structure in data – a model-free method, which if free of statistics and building models. A method which is “natural” and un-biased.

via Ontonix – Complex Systems Management, Business Risk Management.

The certainty of uncertainty


When the business of a business is pretty predictable, as it was in the Industrial era, there is less need to focus on resilience or responsiveness. In the old days, business could undertake planning exercises and be reasonably safe in the knowledge that the functioning of the business would be able to successfully execute its plans and that the environment would not impinge too greatly on those plans. In the modern era where knowledge is “a core commodity and the rapid production of knowledge and innovation is critical to organisational survival” (Bettis and Hitt, 1995, ‘The new competitive landscape’), business needs to get to grips with the reality of uncertainty and decreasing forecastability. Businesses also need to remember that they are living systems within wider living systems. Global environmental, political, economic and financial challenges all impact on a business’s ability to succeed.

quantum shifting

Sometimes you read something that really strikes a chord.  I recently saw this quote from Kurt Vonnegut:  “We have to continually be jumping off cliffs and developing our wings on the way down.”  In other times, I would read this and it would simply seem like a poetic truism, but I’m currently experiencing a number of shifts in my personal situation which made me read that quote as if it was written just for me.  These shifts are creating a fair amount of uncertainty and bringing up all the associated emotions that go with it.  In times like this, it is useful for me to remember that trying to control what is going on in my world will not lead to the best outcomes and in fact, that I need to call on the kind of resources that will best keep me going in times of uncertainty.  These resources, in…

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The Nature of Business:: achieving through leading


That stats below merit some thought or discussion I would have thought!?

This is a Knowledge Economy of willing Risk Leaders, being starved of the liquidity of an Innovation Economy, by the discredited policies of political and financial institutions.

Unless we STOP constraining living business systems, with the structures, philosophies and values of a past era, we will fail to adapt to the complexity of systemic information-flow.

With the ability, for any firm, to measure and monitor business resilience on-line comes the capacity to better understand and build, measurably resilient; interdependent; sustainable; communities of dynamic networks and systems of sub-systems, with shared values, risks and rewards as the basis for an adaptable, sustainable and equitable platform for Responsible Capitalism.

In 1986 the average knowledge worker carried in their heads 75% of the knowledge they needed to do their job. By 2006 the average had dropped to 8%, today it’s around 5%, and within 10 years the average will be 1%. (ref. Carnegie-Mellon rolling study by Robert Kelley).

This is a paradigm shift. To succeed as a 1% knowledge worker requires learning different capabilities to before, not just trying harder. This is hitting leadership roles hardest, soonest. Leadership today requires much that leadership used to require; and a lot more that is part of a different paradigm.

As Peter Drucker said:

in times of turmoil, the danger lies not in the turmoil, but in facing it with yesterday’s logic.

via Leading with Love « The Nature of Business.