Overcoming Managerial Challenges in the Knowledge

EconomyRamesh Vemuganti, B.Tech, MBA

Outline of the talk

A. Bird’s eye view of Knowledge Economy

B. Texture and Challenges of Knowledge Economy

C. Overcoming Managerial challenges in Knowledge Economy

• Learning is what Adults do for a Living in the 21st century .

• Perchman

A. Information Society and Knowledge

Economy -- An overview

Inundation of Data

Information Age and Information Society

Knowledge Economy

Technology Revolution

1970-2000

• Quantum of Knowledge which came into the world in last 30 years is millions of times of what was generated in previous 5000 years

2000 to 2007

• Millions of times prior to that

2007 to 2008 • Millions of times of earlier period

The Exponential increase in Information , Knowledge and Technologies is one of the key factors behind the Uncertainty and Chaos confronting

Individuals , Organizations and Countries TODAY

• An information society is a society in which the creation, distribution, diffusion, use, and manipulation of information is a significant economic, political, and cultural activity.

• The knowledge economy is its economic counterpart whereby wealth is created through the economic exploitation of understanding

• Information society is seen as the successor to industrial society.

• Closely related concepts

• Knowledge society Telematic Society,

• Information Revolution

• Networked society

• A knowledge society needs infrastructure like

• Physical: meeting places, notice boards ...

• Technological: local language content sharing, mailing lists, web portals, wikis, chat rooms, video conferencing, virtual meetings, collaborative development environments, distance education ...

Present Knowledge Society differs from earlier Knowledge Society in : • What is new is that

• Geographic proximity not a constraint

• Much more possibilities for sharing, archiving and retrieving knowledge

• Knowledge has become the most important capital in the present age, and hence the success of any society lies in harnessing and exploiting it

• All enabled by Technology and Technology Management

• The difference between a job and a career is the difference between forty and sixty hours a week- Robert Frost

B. Knowledge Economy -- Texture and Challenges

Economy-Wide Characteristics:

Behavior of Markets Stable Dynamic

Nature & Range of Competition

National Global

Organization Structure Hierarchical,

BureaucraticNetworked

Staff & Workers

Company Policy Full EmploymentHigher Real Wages and

Incomes

Desirable Skills Job-Specific SkillsBroad Skills and

Cross-Training

Requisite Education A Skill or Degree Lifelong Learning

Labor-Management Relations

Adversarial Collaborative

Nature of Employment StableMarked by Risk and

Opportunity

Regulatory Authorities

Business-Government Relations

Impose RequirementsEncourage Growth

Opportunities

Regulation Command and ControlMarket Tools,

Flexibility, Cooperation

IndustryFactory Production Mass Production Flexible Production

Key Drivers of Growth Capital/Labor Innovation/Knowledge

Key Technology Driver

MechanizationDigitization-PC,

internet, web, software, tools

Source of Competitive Advantage

Lowering Cost Through Economies of Scale

Innovation, Quality, Time-To-Market, and Cost

Significance of Research and Innovation

Low-Moderate High

Relations With Other Firms

IndependentAlliances And

Collaboration

As a general rule the most successful man in life

is the man

who has the best Information

- Benjamin Disraeli

• Digitization :

• It that magic process by which words , data , music , films , files , and pictures are turned into bits and bytes -- -- --

• that can be manipulated on a Computer screen , stored on a Microprocessor , or transmitted over satellites or fiber optic lines .

• “ The World is Flat “ by Thomas L Friedman

• In the Knowledge economy , there is not necessarily a correlation between Formal Education and Success.

Knowledge Revolution

• The ability to Create, Access and Apply Knowledge is thus becoming a fundamental determinant of Global Competitiveness

• Intensified globalization and competition have all characterized the “Knowledge Revolution

World GDP/capita and Population – Role of Knowledge

World GDP/capita and Population A Two Millennium Perspective

0

1000

2000

3000

4000

5000

6000

0

12

0

20

0

28

0

36

0

44

0

52

0

60

0

68

0

76

0

84

0

92

0

10

00

10

80

11

60

12

40

13

20

14

00

14

80

15

60

16

40

17

20

18

00

18

70

19

50

19

98

0

1000

2000

3000

4000

5000

6000

7000

World GDP per capita (1990 international $) World Population (Million)

GDP per capita

World Population (mill)

©Knowledge for Development, WBI©Knowledge for Development, WBI

Characteristics of a Globalized Knowledge Economy

• Rapid and continuous change : Technology , Markets , Competition

• Function of Global trading agreements Knowledge of international trade.• Quality as important as Price• Sudden Organizational changes • Short job tenures• Fundamentals of macro stability, openness,

competition, good governance

• Emergence of the Global Indian

• “Even if you’re on the right track, you’ll get run over if you just sit there.” Will Rogers

• “For fast acting relief, try s-l-o-w-i-n-g d-o-w-n.” Lily Tomlin

• “He who laughs, lasts.” Mary Poole

Key Competencies in KE have Multiple Dimensions

• Complexity and uncertainty of modern life requires People

to apply more than one type of competency to tackle tasks

and issues that they face.

• Multi Dimensional and Multi tasking skills

• Cognitive, motivational, ethical, and social components and they are interrelated.

• .

Source: Shapiro et al., 1998

Workplace Competencies: The World Bank view

In the United Kingdom, employers reported In the United Kingdom, employers reported that that

Communication skillsCommunication skills Learning ability, Learning ability,

Problem-solving skills, Problem-solving skills, Team work Team work

and the and the Capacity for Self-Management Capacity for Self-Management

were more important than were more important than

Technical, Technical, ICT ICT

Numeracy skillsNumeracy skills

as criteria in the recruitment of graduatesas criteria in the recruitment of graduates..

Learning in Knowledge Economy

Then

Information basedRote learningAll learners do same thingTeacher directedJust in case Formal education onlyDirective based Learn at a given ageTest given to prevent progressTerminal education

Now

Knowledge creation/applicationAnalysis and synthesisIndividual learning plansCollaborative learningJust in timeVariety of learning modes Initiative basedIncentives, motivation to learnAssessments are given to guide learningLifelong learning

Workers with Better Literacy Skills Receive More Training

Source: IALS 2000. Note: Data refer to employed persons aged 26-65 years. Training refers to employer-sponsored VET.

• The world is full of willing people. Some willing to work and the rest to let them.

• Robert Frost.

The Opportunity

• Knowledge hoarding impossible – disintermediation of channels

• Economic viability of knowledge power– ICT revolution – Internet– Venture Capital

• Knowledge power dictating immigration rules• Virtual communities will become more

powerful than national boundaries

The Opportunity

• Tremendous churn creates opportunities for newcomers

• The American example– 90% of American companies have < 50 employees– 50% of US exports by companies with < 20

employees

• GKP will replace GDP

–Geography is history

Case Study - India

• Software industry :– USD 100 mill to USD 70 bill. in 20 years – 2nd. largest provider of IT / ITES services globally

• 7% of GDP, 30% of exports, 4 million jobs• Provided framework for growth of other

knowledge industries– R&D, Engineering, BPO, Biotech , Media &

Entertainment , Animation , – World leader in quality and processes– Benefits just beginning to flow directly to Indian

industry / government

The Lessons

• Excellence in industrial age was not prerequisite for success in knowledge age

• Success in one part of knowledge economy drove development and success in other parts

• Creating right environment for a new industry was easier than dismantling / rebuilding for existing industries.

C. How can a Manager overcome the Challenges of Knowledge Economy

• When Love ad Skill work together , expect a Masterpiece - John Ruskin

• Interdependence , not Independence!!

80 : 20 principle

• "80 percent of output is produced by 20 percent of input."

• "80 percent of outcomes are from 20 percent of causes"

80 : 20 principle contd..

• 80 percent of the difficulty in achieving something lies in 20 percent of the challenge.

• 80 percent of revenue comes from 20 percent of customers

80 20 principle contd..

• 80 percent of complaints come from 20 percent of customers

• 80 percent of Sales will come from 20 percent of Sales people

• 80 percent of your time spent on this website will be spent on 20 percent of this website

Do Effective Technology Mgt :

• Technology Forecasting• Acquisition• Transfer• Absorption• Diffusion• Implementation

• USA , Singapore , Japan , Taiwan became advanced economies thru Effective Management of Technology

• India , China , Russia and Brazil are on the same path.

4. If you are not on the table , you are on the menu :

• Seize opportunities to be on the committee for Administration, HR, Cultural, Social gatherings, Games, Fitness/Health related activities!

Get noticed at work, Be in the limelight!

• Publicize your achievements!

• Use technology tools!

• Committee keeps minutes , wastes hours.

• Mostly by design , in organizations.

• Take it in the stride.

5. Build committed teams

• HANDLING KNOWLEDGE WORKERS• EQ AND SQ MORE IMPORTANT THAN IQ. • Charging team members• Clear job description , expectations , monitoring , guiding , empowering , not fearing effective staff

members.prompt appraisals• Keeping up commitments , backing up subordinates• Lead by example• Ownership for slips/mistakes of subordinates/colleagues

• LISTEN TO SUBORDINATES , LISTEN , LISTEN.

6. Communicate, Communicate , Communicate!!

with Bosses, Colleagues Subordinates • Thru Technology• Email and SMS are the best tolls for

communicating with anyone , for avoiding personal interaction

• Change of assignment , boss , task , dept , division

• Clarity of Expression in resolving conflicts Never answer a mail or letter while you are

angry.

7. Networking : Technique for Survival .

• Colleagues in other divisions , branches , regional offices.• Ex- colleagues is a must ; ex : Indotronix , ARKSN Sharma job. Friends• Classmates , Batchmates , Acquaintances , Yahoo groups , Blogs ,

Rediff letters , mailers , opinions• Professional bodies / Associations• If one is not Online , he could be out of line• Hectic jobs not an excuse. Can manage.

These are the days of Connecting people , not Correcting people!

• Situational Management

• Daily Plan , Constant changes , Go by priority .• Do not think logic , most of the times , answers

will not be there.• KEEP MOVING • DO WHAT THE ORGANIZATION WANTS

AND EXPECTED OF YOU. NOT YOUR LOGIC , IQ OR PRIORITIES.

8. Undercommit and Overperform :

• Do not yield to pressures• Earlier: Sales , HR , Production , R & D , IT Purchase , other Managers. • NOW: Directors of Institutions Consultants Government officers . Bureaucrats, CEO, MD, HOD,

NGO, Charity, SpiritualityUpdate yourself on how to manage your boss!!• .

Nothing motivates a man more than to see his boss putting in an honest day's work.

9. Develop an Innovative nature

• Think out of the Box , right brain thinking

• Talk to the wrong person – Finance for Sales , Purchase for HR

• Provide/Receive unbiased suggestions & advise

• Every Job , even in Finance, Admin,

Outsourcing services

10. Listen to the Customer.

• Package the solution accordingly• Tailor made Solutions to Customer e.g PSI

data systems & Wipro, B’glore• IT , Biotech, Pharma, Entertainment• started this practice• Managers in others to focus –• Infrastructure, Retail, Telecom, Insurance,

Banking, Media, Animation, Education, Health ca.

11. Indepth Knowledge of Work , domain , field , area , job , profession , business

• Use Internet and its power to update the knowledge

• Constant updating of technology, practices, systems, products & concepts

• Attend training programs

• Convince your employer for updation

• Be a student for ever!

12. Intensely involved

• Always enthusiastic

• Like your work, job, profession, organization

• Be interested, Not emotionally attached!!

13. Learn from Past mistakes :

• Not live in the past nor lean on past

• Achievements – Sales in new economy is different from earlier, decade ago. So

also other functional areas.

14. Be Techno Savvy , but control the

Technology Gizmos :

• Fax, e-mail, voice-mail, pager, in-box, photocopier, meetings, PC , video conferences, conference calls , MIS reports, cell phones -- STOP!

• Imagine if Shakespeare or Freud or Mozart or Jefferson had all our modern time-saving gizmos.

• They never would have accomplished anything."

• When all else fails, read the instructions.

15. Work Fulfillment and Happiness :

• Display job satisfaction

• Have a contented look always.

• Take charge , Solve all issues , job related

• Avoid work place criticism- organization, bosses, colleagues, management

• Vincent Van Gogh :

• Your profession is not what brings home your paycheck.

• Your profession is what you were put on earth to do.

With such passion and such intensity , that it becomes spiritual in calling.

True for Old and Knowledge Economy.

• OFFICE ARITHMETIC :

• Smart boss + smart employee = profit Smart boss + dumb employee = production Dumb boss + smart employee = promotion Dumb boss + dumb employee = overtime