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Leveraged
Knowledge at Targeted Learning Nigel Bristow is president of Targeted Learning and he has been involved in leadership development activities for years. He comes to the states from South Africa and he spent considerable time managing a 100 member people development practice with the renowned Utah based Innovations Group. I attended a meeting of the Wasatch Front OD Network recently where he spoke on the subject of Intellectual Capital - perhaps the hottest topic in leadership circles these days. Lief Edvinson, in his book Intellectual Capital, has turned the spotlight on this idea. It is an idea critically important to any executive, in particular in today's world of talent. Dee Hock, CEO emeritus of Visa says on the cover of Edvinson's book that "the mental content of all goods and services is quickly eclipsing the value of the physical content. Yet we blindly continue to mismeasure, mismanage, and wrongly value institutions as though minds didn't matter." Nigel defines intellectual capital as "the intangible assets of an organization such as knowledge, information, experience, intellectual property, customer loyalty, etc." He points to intellectual capital as a percent of total capital at organizations like Microsoft (99%), Xerox (93%), and even in a pound of tomatoes (75%). Of greatest importance I believe is his point regarding how intellectual capital is developed, protected, and nurtured (i.e., better people practices meaning ability + direction + motivation). In general, Nigel's research involving 1,030 North American organizations employing 8.9 million employees shows a two to three times improvement in shareholder wealth as a result of practicing better people practices. He concluded, "Top performers have been employing their physical assets more effectively." Of his own leadership role he says, "We worked on building a common language in order to talk about expectations and then we were able to take people to higher leveraged activities. We took knowledge and institutionalized it - literally turning knowledge into a product. In this way we were able to develop people's self sufficiency so they did not need hand holding very long. This created a lot of vitality. Everyone began to see themselves as creating opportunities to build the business." Nigel's research has proven once again that employees in top performing organizations had more 1) direction and clearer expectations, 2) on-the-job opportunities to learn, 3) encouragement to learn 4) motivation to perform, and 5) ability to perform. Even more significant is proof that the leader's ability to coach mattered when it comes to developing a workforce, but education levels and hours in classroom training did not. Of greatest interest to me, and perhaps to you, is increasing the creation of intellectual capital. This finding is, so far as I know, quite new, at least in practice. The implications for coaches, trainers, recruiters, interviewers, and executives is clear. Many understand this intuitively, but have not been able to operationalize their thinking. He emphasizes, "We have been working through what we call a contribution continuum, five critical roles in the development and exploitation of intellectual capital roles in the development of others". In terms of performance contribution the percentage of employees perceived to be (or evaluated as) performing above average grows dramatically as employees are capable of moving across the "contribution continuum". The continuum has five distinct areas of knowledge management. First we find that those employees who take more initiative and put forth more effort at "acquiring knowledge" are infrequently viewed as being above average (15%). (Of course for new employees, or for employees in new or unfamiliar areas the acquisition of knowledge is important, but until they are competent they will seldom be able to perform at any above average level.) More contribution is perceived and thus more employees are considered above average as they "apply the knowledge" they have (26%); "create more knowledge" through experimentation, research, etc. (60%); "sharing knowledge" through mentoring, coaching, training, collaborating, etc. (70%); and most importantly those who "leverage knowledge" by aligning or influencing systems, structure, strategy, suppliers, customers, norms, systems, processes, etc (94% are considered above average performers). What are the implications for the senior executive or leader? Nigel says that it impacted his organization first when recruiting and interviewing new people, especially new executives or leaders. They asked questions about or asked for specific evidences of leveraging and sharing knowledge. "We wanted to find people who were already at the high end of the continuum in their day-to-day activities:" This is true for any level employee. To address those who do not adapt and measure up to the higher expectations he says, "Be sure your training and coaching efforts are directed toward taking people behaviorally in the direction of sharing and leveraging knowledge. Create opportunities for dialogue, remove barriers to sharing and leveraging activities. When they still do not respond we stopped up to the non-performance quickly. We could not afford pampering under performers." It occurs to me that most organizations are far too dependent on packaged training that is prepared or presented by outsiders and thus restrict the ability of the organization to leverage or to achieve the basics of what Nigel has accomplished. Nigel quotes Walter Wriston, former Chairman of Citicorp who says, "The person who figures out how to harness the collective genius of the people in his or her organization is going to blow the competition away." He is on to something important here - most importantly the transfer from theory to practical application. But then that's what leveraging knowledge and creating a learning organization is all about.
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