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manyworlds

thought leadership for the new economy

SM

The New Economy:


Business Strategy is Knowledge Management (and vice versa)

Steve Flinn ManyWorlds Consulting, Inc. s.flinn@manyworlds.com www.manyworlds.com


ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 1

The Emergence of the New Economy


Key directions and implications

The information technology revolution is the dominant feature of this era The IT revolution is acting to dramatically reduce the costs of economic interactions Markets are growing ever more pervasive and efficient Value of intangible assets increasingly surpass the value of tangible assets Industry, value chain and company boundaries are blurring and reforming Superior business models capture a disproportionate amount of the value

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 2

A Visual Map of the New Economy


Shareholder value creation growth since year-end 1997
Source: www.smartmoney.com

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 3

The New Strategic Agenda


Key business model-enabling solution areas
Transformational Focus Level
ExtrapriseSM
New Economy Commerce

2000s
Enterprise

Business ArchitectureSM

1990s 1980s
TQM

Learning and Knowledge Processes

Process Reengineering

Process Low Degree of Business Transformation High

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 4

Extraprise Structure Fundamentals


Value maximization trade-offs

High

Total Potential Value


Operational Synergy Value

Max.

Total Value

Low Hierarchy

Recombinant Option Value

Organization Interactions

Market

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 5

Extraprise Management Techniques


Opportunity to dramatically shift the value curves

Key Extraprise Process Management Areas Learning culture/processes Knowledge processes IT Infrastructure Business network development & management

High

New Max. Total Value

Total Potential Value


Operational Synergy Value

Old Max.

Low Hierarchy

Recombinant Option Value

Organization Interactions

Market

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 6

But What is Learning and Knowledge, etc.?


Part I: The math of knowledge and learning

1) knowledge = f(information,models)

2) learning
3) wisdom

= knowledge (where K >0!)


= max(knowledge)

4) learning to learn better = learning = knowledge = sustainable competitive advantage = business strategy! QED

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 7

But What is Learning and Knowledge, etc.?


Part II: The accounting of knowledge and learning

Knowledge is a stock Learning is a flow

Knowledge is to a balance sheet as learning is to an income statement


Both balance sheets and income statements are important The balance sheet and income statement in this case measure an overall learning process . . .

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 8

The Generalized Learning Process

Models
(Wetware and Software)

Predict/Decide/Act Environment

Update Filters
(simple models)

Evaluate (learn)
(models)
Information

Events
(data)

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 9

Standard Learning Process Focus Areas


Models
(Wetware and Software)

Predict/Decide/Act Environment

Organizational Learning

Update Filters
(simple models)

Evaluate
(models) Information

(learn)

Events
(data)

Web/Software Tools

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 10

Focus Must be the End-End Process


Model and Application Development Strategic Decision Analysis

Models
(Wetware and Software)

Predict/Decide/Act Environment

Organizational Learning

Update Filters
(simple models) Collaboration Tools Evaluate (models) Information (learn)

Events
(data) Transaction Processes, Apps., IT Infrastructure

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 11

Strategic Learning/Knowledge Value Creation


Top down and bottom up approaches concurrently

Top Down:
Drive From the Few Decisions with the Greatest Value Implications

and Bottom Up:


Build Infrastructure & Organizational Capabilities

Superior Value Creation

ManyWorlds Consulting, Inc.

www.manyworlds.com

6-Oct-13 Slide 12