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90 The Conductive Organization Over time, we became much better at having productive conversations that helped us create a deeper understanding of our clients and our marketplaces and improved our capability of strategy making. In both Armstrong and Clarica, our strategy-making approaches evolved over time and our capabilities increased with each new development. As well, individual strategy-making capabilities became widely spread as we engaged more people in continuous strategy-making activities. Strategy is no longer the property of a select few. Through the strategy-making process, the strategic intent at the highest level cascades to individual plans that create a more cohesive organization, resulting in a higher level of conductivity. A Closer Look at the Knowledge Strategy We move from the strategy-making process (strategy as verb) to talking in further detail about a key strategy in a highly conductive organization—the knowledge strategy. The knowledge strategy puts in place the mechanisms that provide for accessing and exchanging knowledge. It also enables the development of generative capabilities (e.g., learning, collaborating, and strategy making). By providing for greater connectivity across the organization, a well-formulated and -implemented knowledge strategy builds coherence and increases speed and the overall agility of the organization. The knowledge strategy, which is an inherent part of the overall business strategy, becomes the basis for constant renewal and alignment with the reality of the marketplace. Purpose The goal of a knowledge strategy is to accelerate the development of individual and organizational capability—to increase the level of conductivity. The unimpeded flow of knowledge ensures that the core elements of organizational capability (i.e., strategy, culture, structure, systems) are dynamically adjusted to meet the challenges The Strategy-Making Perspective 91 of the marketplace. And leadership can easily be rapidly exercised to constantly synchronize the organization to what needs to happen in order to meet the needs of customers and the challenges presented by the external environment. A highly conductive organization is one that successfully applies a higher level of quality and broad-based engagement of its resources in pursuit of unimpeded knowledge flows. It leverages and expands the organization’s general or overarching business strategy, creating opportunities for its strategic horizon that could not have been articulated without insights gained from its new knowledge. With elevated conductivity comes the opportunity for greater customer impact and breakthrough performance. The purpose of the knowledge strategy is to provide direction for learning with the customer, utilizing the knowledge held by people throughout the organization, and leveraging the organization’s substantial investment in technology. The knowledge strategy builds into the organization the mechanisms to learn as people and teams encounter issues and challenges. Learning is no longer a discrete process. It’s fully embedded in the way the organization functions. As we used to say at Clarica, “Working is learning and learning is working.” Components The knowledge strategy outlines a systematic approach to creating and harvesting the organization’s knowledge to reach a higher level of conductivity. The intent is to place the organization’s best knowledge (the quality dimension of knowledge flow) at the fingertips of everyone in the organization (the speed dimension of knowledge flow). It has to have a broad base and be embedded in how the organization works and creates value for its stakeholders and customers. Three main components constitute a knowledge strategy: culture as the foundation, knowledge architecture as the blueprint of approaches, and technology as the enabler. 92 The Conductive Organization Culture. The strategy’s foundation is formed by a culture and set of leadership principles. A culture that embraces self-initiation and values partnerships and interdependence supports a knowledge strategy where people are convinced that their own success is tied to the success of the organization as a whole. The alignment of individual and organizational values is essential to ensure that individual learning contributes to building organizational capability. Nurturing the level of trust and establishing quality relationships necessary to create and exchange knowledge across boundaries are key to achieving the level of conductivity required in this type of culture. Knowledge Architecture: The blueprint for achieving the strategy’s goals is explicitly outlined. Knowledge access, the ability to codify, store, retrieve, and display relevant knowledge in the course of doing work, brings the wealth of the organization’s knowledge stocks to all employees and customers. Knowledge exchange facilitates sharing tacit knowledge, often in real time within virtual meeting spaces. Tapping into the organization’s intangible assets exponentially increases the organization’s capability to form relevant strategy, make the right decisions, and stay with the customer instead of lagging behind. Technology infrastructure: Technology functions as the conduit for the knowledge network. To achieve the goal of having the organization’s knowledge at the fingertips of all employees, as well as extended to the customer, requires the support of technology. Technology’s key role is to convey information in a manner that allows individuals and teams to translate it into knowledge to take effective action. They do this by interacting with one another, internalizing the meaning, and gearing their tactics accordingly. Knowledge strategy requirements must be coordinated with the design of the technology infrastructure and the acquisition or development of new applications. The technology platform supports applications that harvest and store knowledge. It provides access to knowledge at the lowest possible transaction cost in terms of user time and effort. And finally, it enhances efficiencies by allowing for the reuse of knowledge objects. The Strategy-Making Perspective 93 Within the knowledge strategy, the knowledge architecture produces a blueprint of tools and approaches for creating, storing, and exchanging knowledge that is made available to the organization, utilized by a self-initiated culture, and enabled by an integrated technology platform. Creating Knowledge Strategies We’ve used a variety of approaches to create knowledge strategies in our organizations, but the place we typically start is looking at the strategic drivers of the business. It’s a good place to start your thinking because it already has the customer view embedded and starts to create alignment right from the beginning. Looking at the strategic drivers, we can then see what outcomes are desired—the ends directly related to the heart of the organization’s purpose. From the outcomes, we can identify the objectives and the tactics or activities needed to accomplish those objectives. Mapping the strategy’s elements assures that it’s comprehensive in its coverage, congruent in its approach, and aligned with the overarching business strategy (see Table 5.1). What’s missing in this table is the network of lines that connect the components across the columns. There’s not a one-on-one, linear correlation between elements. Instead, there are linkages throughout that deepen the interdependence that facilitates maximum connectivity. Conclusion Strategy development has been the subject of countless books, articles, seminars, workshops, and courses. It’s not our intention to write the definitive guide on how to create strategy in the knowledge era. Rather, our purpose is to emphasize that strategy making, as a comprehensive process that cycles between the organization and the customer, is a foundational organizational capability in a highly conductive organization. It’s a conduit to the customer, a touch point for conversations that bring an outside-in perspective to planning. 94 Table 5.1 Mapping of Strategic Goals in a Knowledge Strategy Outcomes Objectives Activities —Build leadership in product development —Build first-mover advantage in key segments —Foster a culture that demands excellence —Provide the platform for focused integration (across sites and functions) —Provide the ability to rapidly respond to emerging opportunities —Enhance capability to partner internally and externally —Accelerate capability development in strategic areas —Accelerate work flows and decision making —Enhance innovation —Improve cost efficiency —Provide ready access to the organization’s knowledge —Build memory and knowledge continuity —Enhance retention levels —Reduce the number of “push” emails —Reduce the amount of time searching for information —Build readiness in the culture for greater conductivity —Develop communities of practice for strategic competencies —Provide tools and processes for virtual collaboration —Develop an intranet with extensive search capabilities —Systematically develop and make accessible lessons learned —Put in place a new definition of the manager role The Conductive Organization Strategic Drivers The Strategy-Making Perspective 95 Strategy making has an intimate connection with the other three key organizational capabilities that generate a high level of conductivity. While there is coherence among the four, there also needs to be a slight disequilibrium. There needs to be a dynamic that triggers the recalibration. Leadership plays this role by requiring constant strategy review and renewal. We want to limit the use of strategy as a noun and focus on it as a verb—as strategy making. With this new perspective, we have the foundation in place on which to shape culture, create structures, and design systems that tie strategy to the customer and put into practice the capabilities that leverage our collective customer and employee knowledge. Emerging Principles  It doesn’t matter how solid the other organizational capabilities are—performance will falter if the organization’s strategy is not relevant to the customer.  The weight of all other capabilities combined can’t fill the void of a misguided strategy.  A strategy is an objective, something you arrive at, a conclusion. Strategy making is an action, a process that you follow, a capability.  Generating capabilities to realize recalibrated strategies is a new constant that keeps the customer at the center of a highly conductive organization.  The quality of knowledge flow in the organization can be improved by engaging people in conversations geared to develop a better understanding of the business’s strategic context.  People can increase the quality of knowledge flow in the organization by understanding the strategic context of the business. 96 The Conductive Organization  Developing any capability begins with the customer, and strategy is no exception.  A high level of conductivity in the organization makes real-time, customer-calibrated strategy making possible and first-mover advantage an outcome.  The multiphased strategy making process is in itself a generative capability.  The constant cycle of learning and taking effective action is key to strategy making in the conductive organization.  What is seen as failure in strategy implementation may in fact be a failure in formulating the strategy in the first place.  Building strategy making as a capability will elevate the organization’s strategic horizon.  Strategic symmetry ensures that all strategies are aligned and that the required organizational and individual capabilities to realize these strategies are also aligned.  Without strategic symmetry, leadership remains concentrated in a few, delegation of responsibility is inconsistently applied, and conductivity is severely inhibited.  By aligning employee and customer mindsets, the strategy-making process can align organizational capabilities with marketplace requirements.  Working is learning and learning is working in a conductive organization. 6 External and Internal Branding: The Character of the Conductive Organization Introduction One of our central propositions is that it is critically important to forge deep and mutually beneficial relationships between the organization and the customers it serves. These relationships should be based on new types of conversations. By permeating these relationships with conversation, a conductive organization creates the environment in which customer calibration is routinely practiced. This chapter describes our experiences of permeating the customer-employee relationship with a textural, experiential, and aspirational congruence so that deep, trusting, and lasting relationships can be formed. Forging these relationships requires the overlay of a well-defined corporate brand—a brand that has meaning to customers and employees alike. The brand becomes a mechanism for facilitating new conversations among the conductive organization, its employees, and its customers. In many markets today, customers do not just buy a product. They are more interested in purchasing a solution that creates an experience that is congruent with the values they hold. We see this behavior in buying decisions ranging from an organization sourcing complex IT solutions from a supplier who claims a relaxed and open culture similar to their own, to a consumer buying products from a 97 98 The Conductive Organization supermarket that emphasizes its commitment to environmental causes. Although in both cases the quality of the offering is still extremely important (the environment-friendly products must still be fitfor-purpose and the IT solution still has to address a business imperative), in a world where choice is abundant, such experientialaspirational alignment is increasingly becoming a competitive differentiator. Consider the Body Shop example in Chapter 2. Realizing this alignment is much more than a problem for the marketing department. A supermarket chain proclaiming environmental sensitivities will quickly be discredited if customers do not see the stores practicing conservation efforts. As well as annoying and alienating customers, such dishonesty will irritate an organization’s employees. Job-seeking individuals are increasingly gravitating towards corporations that share their own values and aspirations. Continuing with the supermarket example, if employees are lured by the ‘environmental’ stance of the employer and then find it is not actually practiced, their likely response is to either disengage from the company (i.e., continue working for the organization but with little or no enthusiasm or interest) or leave the corporation (probably to join a competitor) at the first opportunity. This type of misalignment derails any attempt to build conductivity. The Brand Promise In short, an organization should take care to brand itself in ways that are honest and accurate and that resonate with the values and desired experiences of customers and employees alike. The brand represents no less than a promise of how both groups will experience the organization. Within the brand promise, the aspirations of the organization itself converge and coalesce with those of its customers and employees. The brand promise is the area where the external customer experience and internal employee experience coalesce, where employee-customer relationships, organizational capital, and customer capital are created or destroyed. External and Internal Branding 99 At Clarica, a brand promise of clarity through dialogue was developed after a great deal of research was conducted to understand the values and aspirations of both employees and customers. This tagline was a promise that Clarica would provide clear, uncomplicated information and would be accessible to talk with its customers. The brand promise is supported internally with dedicated resources—people who champion the use of plain language in all forms of communication based in a consulting practice and the opportunity for all employees to increase their written and verbal communication skills using e-learning modules residing on the intranet. In simple terms, Clarica has fulfilled its brand promise by putting into practice the most important principle of corporate branding— an organization can only apply externally to its customers and partners what it practices internally with its employees. Like customers, employees who see a disconnect between the brand promise and the brand experience lose trust in the organization. Without this congruence, the brand will be unsustainable, relationships will atrophy, and the organization’s customer and human capital will be eroded if not destroyed. The Character of the Organization In this approach to branding, the brand promise along with the employee and customer experiences that correspond to that brand can collectively be described as the character of the firm (see Figure 6.1). This figure is largely based on the work of Jasper Kunde. (1) We find this a useful description as it suggests that how we define an organization in the knowledge era has to be as much about the values of the customer as about those of the organization. This idea resonates with the requirement to take an outside-in/inside-out view of the organization—the requirement to learn at the customer interface and bring that new knowledge for interpretation and action. The brand promise represents the link between the employee experience and customer experience. It’s based on the premise that employees can’t possibly provide a customer experience that is con-