| Participants in the 2007 CKO Summit reviewed the ‘mega trends’ that are currently impacting on all businesses, assessed the affects of emerging developments, and indulged in a little horizon scanning. Within this context they considered how KM is evolving, how it helps organisations deal with and benefit from changes in work and market environments, and how KM can enable inevitable change to become competitive advantage. The outcomes included as many questions as answers or suggestions but participants remain convinced that KM is a key management process which can help organisations to embrace and lead change, maximise the benefits of global trends, and build the capability to adapt and grow. Innovation The development of globalisation is moving all economies along a curve of ruthless efficiency and price cutting as the silent hand of the economy acts as an activity arbitrage moving factory work to the low cost emerging economies. The organisational response has been to ‘ride the waves’ of globalisation and exploit the advantages of emerging labour markets and of outsourced production. However as the gain curve starts to flatten organisations are once again thinking through their strategy and the opportunities for sustained growth. Efficiency improves margins and strengthens organisations but it does not, itself, provide for lasting advantage. The economic method can be copied and cost reduction is always a zero sum game – it does not open new markets and any growth dynamics are due to consolidation. The efficiency improvement techniques, such as six sigma, promote the monoculture within organisations which squeeze out variation and often prevent the serendipitous activity or observation which stimulates breakthrough (remember that Flemming’s discovery of penicillin was an accident). Innovation and regulation are the two great responses to a sustainable future – innovation moves the organisation clear of competition and regulation protects the organisation from competition. The Innovation Strategy is intimately linked to the Knowledge Strategy of the organisation. In thinking of knowledge as a ‘stock’ the knowledge strategy can audit existing capabilities and identify gaps, in thinking of knowledge as a ‘flow’ the knowledge strategy can direct knowledge sharing and learning into new productive fields and partnerships. In the field of innovation open innovation offers new possibilities - the possibility of using the Internet as a massive source of production. Equally the ease with which companies can signal, market and share ideas is changing rapidly in the Internet era. But with opportunity also comes threat. The Encyclopedia Britannica is an interesting example. In the mid-1990s, believing that Microsoft was in the software business and they were in the content distribution business, they spurned advances to work on a CD encyclopaedia: result Microsoft Encarta became the market leader. In the current decade, believing they were in the expert business, they ignored Wikipedia: result Wikipedia is the source of choice. They first lost pole position in the production activities and later the creation activities.
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