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Innovation in the knowledge-based economy A process model for knowledge creation and sharing Ove R. Hjelmervik ([email protected]) Manager, Faros KM Project Statoil a.s OECD High-Level Forum on Knowledge Management February 8-9, 2001. Copenhagen

Statoil a - oecd.org · Brain's ability to convert Brain's ability to convert ... • The electronic learning environment • RPP: Rapid Prototyping Process ... for the knowledge-based

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Innovation in the knowledge-based economy

A process model for knowledge creation and sharingOve R. Hjelmervik

([email protected])

Manager, Faros KM ProjectStatoil a.s

OECD High-Level Forum onKnowledge Management

February 8-9, 2001. Copenhagen

ContentsIntroduction & Introduction &

backgroundbackground

InnovativeInnovativeevolutionevolution

The holistic The holistic KM modelKM model

Faros VisionFaros Visionand creationand creation

Conclusion Conclusion and action and action

Objectives and issues of meeting

• Objectives– Demonstrating KM in

practice– Develop Good Practice– Analyse and compare

solutions

• Key issues– Resources and competencies for

the knowledge-based economy– Internalise external knowledge

and customer need– Organisation/business challenges

when developing corecompetencies or capabilities

– Technology as an enabler foreffective KM practice

– Costs and incentives required forindividual knowledge creationand sharing

IntroductionIntroduction

The human project

• To accomplish all this we need significant:– inventions– innovations and– institutional changes

• The challenges:– The world population has doubled over the last 40 years.– In order to survive and prosper, every human being must have the

following needs satisfied:• Basic physical and security requirement• Social belonging• Recognition and respect• Learning and development• Mastering and control• Relationship and meaning

Issues belonging to KMIssues belonging to KM

BackgroundBackground

The management curses

“In every case growth“In every case growthis threatened … is threatened …

there has been a failure there has been a failure of management” (T.of management” (T.LevittLevitt))

“Less innovating “Less innovating companies are dominated companies are dominated

by tall hierarchies” by tall hierarchies” (R.M.(R.M. Kanter Kanter))

The The time cursetime curse leads to leads toaction paralysis andaction paralysis andopposition to changeopposition to change

•• Time from idea to Time from idea tomarket gets shorter formarket gets shorter foreach swing of theeach swing of thependulumpendulum

BUT:BUT:

•• Network organisations!Network organisations!SOLUTIONSOLUTION::

Management's attention toManagement's attention tochange change diminishesdiminishes

The The attention curseattention curse leads to leads toinformation anorexiainformation anorexia

18501850 19501950 20002000

00

100100

200200

300300

400400

500500

600600

Info

rmat

ion

volu

me

Info

rmat

ion

volu

me

VolumeVolume

AssumedAssumed growthgrowth:

Brain's ability to convert Brain's ability to convert information to knowledgeinformation to knowledge

AbsorptionAbsorptiongapgap

IntroductionIntroduction

Give me a fixed point in space….

• The stick was toArchimedes as ...

• The KnowledgeManagement system is tothe modern learningorganisation:

Levering your knowledgeis the essence ofknowledge management.

BackgroundBackground

The knowledge-based economy

• Cardinal capabilities :– Knowledge creation– Innovation

• Knowledge creation leads to:– change

• Change is– knowledge in motion

• The knowledge-based economyrequires of management theability to:

– have empathy– run networks organisations

without meetings– manage people on trust, not on

eye sight.• This means the ability to instil

common value and purpose.

IntroductionIntroduction

Organisational knowledge

• The challenge– How to secure

knowledge creationand sharing, and

– embedding it in theorganisation’scollective memory,resulting in

– life long learning

• Knowledge Management isconcerned with– effectively connecting those

who know with those who needto know

– the ability to convert personalknowledge into organisationalknowledge

IntroductionIntroduction

Team functioning

The energy industry’s challenge• Facts

– Volatile prices for oil– New, economically viable, hydrocarbon resources are increasingly

difficult to find.

• The industry’s business challenges:– Where will the profit be made in the future?

• Up-stream, mid-stream, down-stream– Who will be making the profit?

• The integrated energy companies, such as BP or Statoil• Service providers such as Schlumberger• Will the integrated energy companies follow the NIKE model?

– Require frontier technology development– Focus on core business and processes

BackgroundBackground

Competencies required for knowledge creation and sharing

• The birds• The Macedonians• The Vikings

Innovative Innovativeevolutionevolution

The story of innovative evolution and change

Core competencies and capabilities required for knowledge creation and sharing

• Professor Allen Wilson, UC Berkeley,– Accelerated behavioural evolution took place in species with three particular abilities:

• Innovation– Capacity to invent new behaviours.– Develop skills that allow them to exploit the environment in new ways.

• Social propagation– Being able to transmit a skill from the individual to the community

• Mobility– Ability to move around for learning and exploiting new knowledge– Collective memory

TitmouseRed robin

ResultResult

ProductProductCollective memoryCollective memoryand core competencyand core competency

•• Building community of practice Building community of practice •• Developing new core capabilities Developing new core capabilities•• Innovate from knowledge Innovate from knowledge•• Flocking when exploring Flocking when exploring•• Flat structures - little hierarchy Flat structures - little hierarchy •• Aided by new technology Aided by new technology

• The Vikings

Innovative Innovativeevolutionevolution

The model

• Demonstration

The ModelThe Model

The RealisationThe Realisation

Faros Vision Vision

• do our colleaguesworkday– simpler– and with a better

overview

• make work processes– more secure– qualitative better

…. And purpose

• effective workprocesses through JIT-JE information

• secure experiencetransfer

Faros VisionFaros Vision

The Faros navigator structureThe Knowledge roomThe Knowledge room

The value chainThe value chain

The work processesThe work processes

The operational instructionsThe operational instructions

LinksLinksConnectionsConnections

Faros VisionFaros Vision

Faros experiences on innovation• Critical success factors of Faros:

– Participation from users– Multidisciplinary, self-directing, teams– High level management support

Knowledge systemKnowledge system

KnowledgeKnowledge

Data Data

InformationInformation

Good practiseGood practise

Experience

Experience

- External- External- Internal- Internal-- Socio Socio-economic-economic- Cultural- Cultural

Change process drivers:Change process drivers:

CreatingCreatinginventioninvention

ProductProduct

EntrepreneurshipEntrepreneurship

InnovationInnovation

Faros VisionFaros Vision

Users have said ...• Simplifies understanding of work process

• Basis for continual significant improvement ofoperational processes

• Innovation

• A corroborative system

• Utilising stock of intellectual capital

• Building a more effective organisation

Faros VisionFaros Vision

Lessons learned• Creating space for KM• User involvement

– Learning takes place in the workprocess

• The electronic learning environment• RPP: Rapid Prototyping Process• Profitability

– Information and experience is beingcollected and created for developingnew good/best practice

– Assuming 10% reduction in timeused to find, treat and storeinformation for O&M employees

– 10% for 1996 = NOK 300 Mill.

Faros VisionFaros Vision

• KM is the glue which cansecure for the corporation:– Innovation– Rapid organisational change– A learning organisation– Improved profitability– Longevity

Conclusion Conclusion

Conclusion

• The Agenda for the knowledge-based economy:– People: core focus– Innovation: core competency– Organisations: Knowledge creating processes

• The essence of the knowledge economy is change• Develop a knowledge-creating business environment• Learn to manage knowledge

Objectives and issues of meeting• Objectives

✔ Demonstrating KM inpractice

✔ Develop Good Practice

• Key issues✔ Resources and competencies

for the knowledge-basedeconomy

• Develop communities of practicecapable of capture, create, deliverand use information for thepurpose of innovating asustainable future.

Conclusion Conclusion

• Key issues✔ Internalise external knowledge and

customer need• By being value driven and customer

focused.• By creating a learning organisation

✔ Organisation/business challenges:• Integrated team and sharing• This means management’s ability to instil

common value and purpose.

✔ Technology as an enabler for effectiveKM practice

• JIT-JE navigation through work processes

✔ Costs and incentives:• Not so much monetary as empathy for a

job well done.

Innovation in Europe• To what extent is Europe capable of innovation and

entrepreneurship?

1) A joint research initiative by Babson College and LondonBusiness School. Published November 14, 2000

Conclusion Conclusion

• Global Entrepreneurship Monitor 1)

– Entrepreneurship is strongly associated with economic growth– The level of entrepreneurial activity differs significantly between countries

(examples):• USA - 1 in 10 adult is currently starting a business• Australia - 1 in 12• Norway - 1 in 18• Germany - 1 in 25• Sweden - 1 in 50• Ireland - 1 in 100

– As a proportion of the adult population engaged in new firms, most Europeancountries are positioned between 0.5% (Ireland) and 3.5% (Norway). USA: 5%

Conclusion Conclusion

Thank you