The Seven C's of Knowledge Leadership

The question underneath this article is a simple one that organizations answer badly: how does leadership differ when the capital that matters is human rather than financial? Not whether it differs - almost everyone concedes that - but specifically how, and what a senior leader should therefore do differently on Monday morning.

Redefining the management agenda

We live in a world of kaleidoscopic change. The difficulty is not the speed at which one variable changes, nor even the speed at which several change at once. It is the compounding effect of multiple variables changing at speed, which produces a landscape for innovation that challenges even a very capable manager.

What follows is a new value proposition. Cost, quality and time are no longer the differentiators they were for market positioning; they are entry conditions. What differentiates is a considerably more complex relationship between economics, technology and behaviour - sociological, psychological and managerial - which together constitute an organization's social capital.

The contrast between the two management styles can be drawn fairly starkly. The traditional, industrial orientation built around financial capital measures performance in tangibles, structures work in hierarchies, keeps processes inside the organization's boundary, treats information technology as a processing tool, and holds a competitive, independent posture toward the outside world. The knowledge and innovation orientation built around human capital measures performance dynamically and largely in intangibles, structures work as networks of self-managing knowledge workers, runs processes that transcend the organizational boundary to link suppliers, alliance partners, distributors, customers and even competitors into a single strategic innovation system, uses technology to monitor how ideas are generated and commercialized rather than merely to process data, and holds a collaborative, interdependent posture.

Seven domains follow, in which the implications for knowledge leadership are worth reconsidering.

1. Knowledge leadership is a matter of context

Everything above is context, and it is not decoration. An executive who accepts the knowledge orientation in principle but retains industrial performance metrics has changed nothing: the measurement system will quietly restore the old behaviour within two quarters. Structures become networked, processes cross boundaries, technology monitors the flow of knowledge rather than the flow of transactions. The context has to move as a whole.

2. Knowledge leadership is a matter of competence

Innovation has been proposed as the single competence required to manage into the future, but in practice it decomposes into a number of sub-competencies that can be identified and developed. The practice spent many years, first at a management centre and then independently, building a competency-profiling system to help leaders measure the return on their investment in residential, experiential executive programmes. By the time this article was written the instrument had been tested with several thousand executives across several hundred organizations in a range of sectors, and the resulting competency maps were used to design individual learning contracts rather than to rank people.

3. Knowledge leadership is a matter of culture

Leadership training is delivered to individuals, but leadership that changes anything has to start at the top and become part of the organizational culture. The common failure is precisely this: organizations invest heavily in developing individuals while corporate values and culture remain untouched, and are then puzzled that nothing shifts. Innovation is regularly named as the leading benefit of a knowledge programme; developing a culture in which knowledge is actually shared is just as regularly named as the greatest obstacle. Over any long period, culture does more to determine what happens than structure does.

4. Knowledge leadership is a matter of communities

Over time, separate disciplines, schools of thought and organizational functions have been converging in scope and practice, each broadening its own theory by absorbing core principles from the others. Human resource professionals seek more relevant performance measures and new uses of information technology. Chief information officers, obliged to justify their investments, find themselves arguing in the language of human performance. A common agenda emerges from that convergence, and knowledge leadership is largely the work of convening the communities in which it can be pursued.

5. Knowledge leadership is a matter of conversations and common language

What matters most here is an innovation language that transcends the paradigm and biases of any single function. Ideally it would also cross industries, sectors and regions, and be genuinely universal in scope. There have been serious attempts to build one - shared glossaries running to several hundred defined terms, maintained collaboratively. Whatever vocabulary an organization adopts, the test is whether people from different functions can use it to mean the same thing, because a conversation in which two functions use identical words for different concepts is worse than no conversation at all.

6. Knowledge leadership is a matter of communications

Given the sustained increase in the capability of computing and communications technology, organizations need an explicit strategy for how to use it, taking full advantage of both internal and external mechanisms to optimize results. But communication is not only technical, and the non-technical part is harder: keeping the organization and its stakeholders informed of priorities, changes of direction and what has actually worked is difficult, easily deprioritized, and the first thing to lapse under pressure. It is also the thing whose absence people notice most.

7. Knowledge leadership is a matter of coaching

Coaching is a guided relationship between two parties, and both carry responsibility for it. The process is forward-looking, change-oriented and developmental, and it exists to enable the other party's success. Coaching is more about being than about doing. Effective coaches work through trust, support and shared values, and the coach's principal contribution is expanding the other person's ability to see contexts rather than supplying content. The process affirms the person, clarifies the choices in front of them, and leaves the choosing to them.

A knowledge leadership test

The practical version of all seven is a short and uncomfortable audit. Draw up your own categories of intellectual capital and knowledge assets - not the generic list, yours. Then build a matrix linking each identified asset to the business impact it produces. Most organizations discover two things. First, that their most valuable assets are not on any balance sheet. Second, that nobody is accountable for maintaining them.

Leadership in a knowledge economy is not a softer version of leadership in an industrial one. It is a harder one, because the assets are invisible, the people managing them cannot be compelled, and the results arrive on a longer cycle than the reporting period. We are, as the original article put it, no longer managing a zero-sum game.

The network dimension of this argument is developed in Issue 19 on network leadership, and the coaching material in the coaching section. The full library is in the Leadership Acumen archive. For continuing work on intangible assets and organizational learning, see Harvard Business Review.