…deserves another,” goes the saying about beneficial reciprocity.
By Dr. Joel Orr
The idea of increasing the number of turns, or cycles, of a process as a way of deriving more good is now being applied to engineering knowledge.
Why? We want to increase sales, maximize profitability and shareholder value, serve customers, make better products, improve employee conditions, and always Do the Right Thing. But faced with the myriad decisions that confront them daily, how do managers know what’s most important? Of all the dials and gauges on the enterprise dashboard, which are critical? Knowing the answer to that question is the key to management success.
We are increasingly overwhelmed by complexity. It is very easy to be swept away by what time managers call, “the tyranny of the urgent,” and forget to focus on what is more important but not screaming for attention.
At the project level, matters are fairly clear: there are budgetary and scheduling goals and constraints, and we work within the latter to meet the former. But at the higher level of “the business”—the enterprise, if you prefer—things are not as clear.
However, one area that is attracting more and more attention is knowledge. Yes, the stuff that is in your head. Can knowledge be in a computer database? Sure. It’s just a variety of information, characterized by its source: it’s what someone knows.
Why distinguish knowledge from other forms of computer-stored information? Because it brings the focus back to where it belongs: people. Knowledge is the residue of experience. Experience is a human phenomenon.
Arie de Geus’s famous remark, made when he worked for Royal Dutch Shell, still holds: “The only long-term sustainable competitive advantage is to learn faster than your competitors.” To have a “learning organization,” you must have people who practice learning, and become better and better at it.
To transfer an individual’s knowledge to the organization is no mean task. Computers can help. But there are many obstacles and complexities.
First of all, if building a “knowledge base” means that the professional practitioner must do extra work, it won’t happen. Few organizations are sufficiently enlightened to encourage knowledge recording, so there is no perceived payoff for the individual who tries to cooperate with the knowledge gathering process—and a significant “downside,” in terms of the additional effort.
Second, we pay people to be bottlenecks. Bottlenecks rise in importance in the organization. They are generally reluctant to lose that status. Since it is clear to them that knowledge-sharing eliminates bottlenecks, they are unlikely to cooperate with the process.
Third, knowing isn’t enough. It’s the translation of knowledge into better products and services that counts.
In a 1997 essay, de Geus wrote:
"In a knowledge-dependent company, leaders must be thinking about creating space and freedom in their organizations—the antithesis of control and predetermined outcomes. They must be thinking about developing the potential of the individual members of their organization. In such companies, it is well-understood that the ultimate potential of the organization is directly related to the extent that the individual members are encouraged to develop their own potential."
So bridging the gap between “what’s good for me” and “what’s good for the organization” has long been understood to be a major barrier to the organizational exploitation of knowledge. We must learn to manage the enabling aspects and suppress the disabling aspects of knowledge generation, sharing, utilization and application.
My friend and colleague Peter Marks has written about “knowledge turns” as a measure of engineering business strength. One knowledge turn corresponds to a single trial-and-error cycle by a professional in a focused area of knowledge, and includes the learning generated by the experience.
Peter points out that the first time you do something, you generally do it poorly; you do much better the second time. Typically, after three or four such cycles, you have become competent; if you keep going, you reach mastery. The steps to competence are relatively few; from competence to mastery, they are many.
Consultant Jack Ring says, “Comparing knowledge turns to inventory turns presents an apparent contraction: In manufacturing, we increase inventory turns by reducing cycle time while minimizing idle inventory. It may seem that KT involve reducing cycle times while increasing the store of knowledge. But such is not the case. Any one person or one organization cannot know everything and those that try only become tired and confused.
“The secret to KT is to maximize its value (velocity through sharing) while minimizing its volume by weeding and pruning. Weeding means to proactively discern and purge knowledge that is no longer valid or useful. Pruning means to generate higher order abstractions such as models, rules, and principles. Humans are uniquely good at that and these competencies can be purposefully developed even further.”
So a competent professional has experienced no more than a few knowledge turns, while a master has certainly experienced many.
Peter makes numerous illuminating points in his columns on this topic in his sparse and Spartan style, including:
- Maximizing inventory turns has been viewed as an important business goal for product producers; Dell Computer has excelled at this, and consequently grew more quickly, and rapidly became more profitable, than its competitors.
- While Dell used the Web to compress its supply chain, minimize its inventory, maximize its inventory turns, and provide superior customer service, the recent softness of its share price demonstrates that these successes do not compensate for other weaknesses.
- Design leverages manufacturing profitability even more than production. The ability of a company to produce new designs reliably and rapidly hinges on the rate at which it can acquire new knowledge.
- Knowledge comes through experimentation. We seldom “get it right the first time”; it usually takes three or more attempts to get it—whatever it is—right.
- New knowledge is acquired through new experiences. So the more product cycles you can work through in a year, the greater your experience base.
- So if we call the knowledge you acquire and exercise in the course of one complete product implementation cycle a “knowledge turn,” we’ll find that maximizing knowledge turns per unit of time can be a corollary of profitable manufacturing—and incidentally, of happy and successful engineers.
Peter acknowledges earlier use of “knowledge turns” by respected consultant Charles Savage, but points out that Savage’s keen insight into knowledge turns as a ratio of trust and distrust within an organization may be too intangible for action by manufacturing professionals. (But it is nonetheless fascinating; read about it, and measure your own KTs, at http://www.kee-inc.com/kturns.htm.) Rather, Peter suggests that we count as one “turn” the full cycle of specialized contribution by a professional, from problem analysis and solution to product realization.
What do these insights reveal? Peter says, “Increasing knowledge turns in the new economy is as good a goal as increasing inventory turns was in the past.” His initial research suggests that:
- Companies with high knowledge turns (KTs) are squeezing out competitors with low knowledge turns.
- The outsourcing trend will be both accelerated and limited by organizational structures that maximize knowledge turns.
- High-KT-suppliers are in the best position to offer the lowest prices, the best offerings, and the shortest times to market.
- OEMs will benefit by cooperatively investing with their suppliers in increasing KTs.
Smaller suppliers with clear core competencies can beat larger suppliers, if they maximize knowledge turns internally and partner with high-KT suppliers.
- Knowledge workers should gravitate toward jobs with the highest KTs, since those jobs will offer higher compensation than others.
- KTs can serve as a good measure of Web-based collaboration effectiveness.
I agree with Peter’s observations and recommendations. His CAEnet articles offer additional suggestions, such as a focus on KT critical-to-customer areas and the impact on corporate valuations. I think this is an area that will benefit from the focus that giving it a name (“knowledge turns”) will bring.
We at Cyon Research plan to help Peter continue to explore this measure and its usefulness. And of course, we invite your input; what do you think about the prospects and benefits of increasing knowledge turns in your work? Contact us today.