Knowledge centres

“Form follows function”

 

Successful organizational dynamics

Record keeping

Thin

Flexible

Empowered

Focus on short medium long term plan inputs and outputs

Focus on cost management

Focus on quality

Skills

Team based

Project based

Succession planning

Formal/ rules based

Risk management

Knowledgeable

Responsive

Motivated

Diverse

Permanent

Innovative

Supportive working conditions

Record keeping. Without the ability to collect, organize and use information the organization cannot function in the medium and long term. Designing an organization that has the right systems to collect data, focuses on the right data, and uses it constructively will significantly enhance performance.

Thin. Hierarchies within organisations will impact policy development, speed and quality of decision making, cost, productivity, creativity and problem solving. Designing an organisation that is as thin as possible within the constraints of cost, risk, the Dunbar number and the rule of eight will significantly enhance performance.

Flexible. The ability of the organization to embrace change is a vital element in successful enterprises. Designing an organization that emphasizes flexibility will significantly enhance performance.

Empowered. Transferring authority and responsibility to levels within the organisation that are involved in implementation will speed decisions, responses, tend to cut costs, and will significantly enhance motivation. Designing an organisation that permits the greatest transfer of responsibility within the constraints of risk will significantly enhance performance.

Focus on short, medium and long term plan inputs and outputs. Employees that contribute, and agree to the analysis of where the organization is, where it wants to be, and how it is going to get there create successful enterprises. Designing a planning system that incorporates this bottom up approach will significantly enhance performance.

Focus on cost management.  Cash is king. Retaining cash within the organization is essential for survival and longer term prosperity. Designing an organization that focuses at an operational level on cash management will significantly enhance performance.

Focus on quality. Higher quality improves repeat purchase, improves pricing, and drives down costs in many areas of the enterprise. Designing an organization that emphasizes quality will significantly enhance performance.

Skills. Skills levels will have impacts on flexibility, quality, productivity, creativity and problem solving, speed, and quality of output. Designing an organisation that enhances skills and the retaining of skills will enhance overall performance.

Team based. The existence of teams will influence the quality of decision making, project management ability, the level of shared values, the breadth and depth of communication, creativity and problem solving. Designing an organisation which is based around teams will enhance overall performance.

Project based. Converting implementation into projects involves the understanding of tasks, timelines, budget, specification and risk. Focusing on projects provides greater control for the organization and greater understanding of the problems faced. Designing an organization with a focus on projects will enhance overall performance.

Succession planning. Clear and steady progress of individuals within the organization to levels of higher and higher responsibility is an essential part of the development of human capital. Designing an organisation that is able to deliver this will enhance overall performance.

Formal/ rules based. A formal/ rules based organisation will tend to be far more transparent than one operating on informal systems without clearly defined rules, improving decision making, responses. Designing an organization which emphasizes rule based approaches (including corporate governance) will enhance overall performance.

Risk management. Most risks are small and easily contained if failure is acted upon quickly and decisively; few are systemic and organization wide. Designing an organization that can manage the majority of risk immediately and comprehensively will enhance overall performance.

Knowledgeable. An outward looking organization is more effective than an inward. Designing an organization that incorporates the need to review context will enhance overall performance.

Responsive. Time based competition (TBC) is the outcome of better responsiveness. Designing an organization that is more responsive will enhance overall performance.

Motivated. A motivated organization will perform better than one that is demoralized. Designing a better motivated organization will enhance overall performance.

Diverse. Diverse groups tend to have broader experience and greater expertise, producing better decisions and creativity/ problem solving. Designing an organization that is more diverse will enhance overall performance.

Permanent. Two extreme organizational responses to workload demands exist; a preponderance of part time employees or an emphasis on permanent employees with temporary staff as a short term fix to demand problems. Higher proportions of permanent staff require organizations to continually monitor their cost base, thereby becoming more productive; there is no such incentive with higher proportions of temporary staff. Designing an organization with a higher proportion of permanent staff should enhance overall performance providing cost management initiatives are continually monitored and initiated.

Innovative. Organizations with high rates of new product/service development grow faster than those with lower rates. Designing an organization that drives innovation will enhance performance.

Working conditions. Working conditions that support organizational goals and the delivery of products and services are essential for high levels of productivity. Designing organizational practices which deliver productive working conditions will enhance performance.

 

SBU and the knowledge centre

Ensuring that the strategic business unit is autonomous typically requires the creation of seven knowledge centres:

Administration

Finance

Sales and marketing

Information technology

Personnel

New product/service development

Production/service delivery

Members of each knowledge centre provide the expertise for the creation of a bottom up business plan, and serve to incorporate the majority of best practice organizational dynamics.

 

Bottom up planning via knowledge centres

The use of the knowledge centre as the central resource for the creation of the plan and plan review involves the members in identifying a range of issues specific to their area of expertise.

Strategy & plan. Each knowledge centre within the planning horizon develops an overview long term strategy and a short term detailed plan.

Risk profile. Each knowledge centre identifies the key risk components in their area of expertise.

Legacy. Each knowledge centre reviews the impact of previous decisions and actions on their future development.

Key performance indicators. Each knowledge centre identifies the key performance indicators relevant for their business area.

Benchmarks. Each knowledge centre identifies external benchmarks for their key performance indicators.

Targets. Each knowledge centre identifies realistic targets for change within their business area.

MIS. Each knowledge centre reviews the management information system and changes that may be required to improve productivity.

Reference material. Each knowledge centre identifies research and/background support material that contribute to decision making and changes required to improve productivity within their business area.

Software. Each knowledge centre reviews use of software systems and how alternative options could improve productivity including digitization of specific functions.

Action plan. Each knowledge centre defines the action plan for major projects in their business area.

Budget. Each knowledge centre budgets for fixed costs within their business area.

Cost base. Each knowledge centre reviews returns on investment for projects which will improve their cost base.

Trade-offs. Each knowledge centre reviews trade-offs within their business area.

Standard operating procedures. Knowledge centres review standard operating procedures in their business areas and develop new initiatives.

Quality circles. Each knowledge centre reports on projects generated from quality circle review.

Creativity. Each knowledge centre reports on the use of creativity and problem solving techniques.

Design for operational efficiency. Each knowledge centre reviews design requirements for products/ services and working environment.

Complaints. Each knowledge centre reviews complaints to identify corrections that need to be made within the delivery of goods and services.

Contingency plan. Each knowledge centre produces a contingency plan for business area specific risks.

Training. Each knowledge centre develops a training plan to meet the specific needs of the business area.

Stakeholder relations. Each knowledge analyses joint planning requirements with key stakeholders.

KISS & SCORE. Each knowledge centre reviews operations to improve simplicity.

 

Knowledge centres as a partial solution to successful organizational dynamics

Many of the initiatives associated with the development and maintenance of knowledge centres do much to improve the overall performance of the enterprise.

Organizational requirement

KC support

Record keeping

Software, planning, SOP, complaints, MIS development

Thin

KC and SBU organization design creates thin structures

Flexible

Semi-autonomous SBU and KC structures provide maximum flexibility

Empowered

Decentralized planning, investment authority

Focus on plan inputs/outputs

Central to planning function

Cost management

Budget measurement, trade-offs, fixed cost review, KISS & SCORE

Quality

Quality circle, stakeholder relations, complaints review

Skills

Training requirements devolved, quality circle, SOP development, complaints analysis, action planning, project based management

Team based

KC based around teams delivering plans and projects

Project based

KC focused on project management

Succession planning

KC entrepreneurial and responsible for delivery, provides clear identification of future leaders

Formal/rules based

KC focus on SOP, contingency plan development

Risk management

Risk profile and contingency plan development by KC as part of plan and implementation for small scale risk management, plan monitoring, project management

Knowledgeable

Skills development fundamental, software, SOP, KPI, benchmarks, monitoring via MIS and MIS development, involvement in plan development

Responsive

Complaint review, stakeholder relations

Motivated

Team central to KC, devolved authority, potential to link bonus system to SBU achievement

Diverse

KC can be responsible for team recruitment

Permanent

KC team structure encourages high levels of permanent staff

Innovative

New product/ service KC, stakeholder relations, quality circles, trade-offs,

Working conditions

Design for operating efficiency as part of plan development

Building a knowledge centre base

Devolving planning to teams based around expertise is the first initial step in the creation of a knowledge centre based system. Once this has been completed, the involvement of knowledge centre teams in monthly monitoring, and quarterly updates then further emphasizes the role. Building in the quality circle as a means of review should then follow. Specific workshops on items such as creativity, software applications, and standard operating procedure development will continue to enhance skills and motivation.