Our development concepts may be THE problem

My previous two blog posts (F13- KM is for value creation: WHOSE value? and F14- Monitoring and evaluation of KM for development) point to a key criterion in KM for development: What do community members truly value?

In 2003, CCLFI.Philippines implemented a project on “Leveraging Best Practices” for UNDP. We documented best practices into manuals, and tried to capture the qualities of best practioners through vignettes and video interviews. We invited community leaders who were recipients of UNDP grants in lessons-capture workshops. Near the end of the project, we conducted a “Wisdom and Knowledge Sharing Workshop.”

One of the workshop exercises tried to probe what the community members value by asking the question: “What is a successful community project?” The workshop groups were asked to draw their answers and explain their drawing to the rest of the participants. Continue reading

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3- KM is for Value Creation

In the private sector, value is measured in terms of how much consumers are willing to pay for a product or service, or how much stock market buyers are willing to pay for stocks of a corporation. The key element is how much a consumer is willing to pay, which in turn depends on her/his satisfaction. KM starts with recognizing what internal and external customers WANT. On these criteria hinge management decisions, including KM.

There is an ugly fly in this ointment: most consumers make decisions with almost zero knowledge of the human, social, environmental and cultural costs inflicted elsewhere while producing what she/he buys. Do you agree that most corporate KM contribute to perpetuating this situation?

In the public and civil society sectors, the mainstream development value is sustainable development — which can be restated in KM language as: development of social, natural and economic capital in ways that are not at the expense of each other. The World Bank proposed a four-pillar model of the Knowledge-Based Economy (KBE). They then developed a widely-used KAM or Knowledge Assessment Methodology for measuring the progress of national economies along the four pillars. The limitation of KBE is that the four pillars pertain only to the economic dimension. The Asian Development Bank subsequently proposed a broader framework, marrying KM with sustainable development, and came up with Knowledge-Based Development (KBD). However, it has not come up with similarly practical indicators.

Communities and social groups are the primary actors in development. KM for development starts with recognition of the needs and values of a community. You will surely agree with me that KM starts with what a community truly WANTS.

There is a messy fly in this ointment: results valued by a social group may be harmful to another social group. Al Qaeda and the US Government want valuable (to each of them) results extremely at odds with each other — and each uses KM along their own definitions of what to them is effective action (both use manuals, mentoring, technology, learning-by-doing, websites, networks, etc. — all KM tools). More, milder situations exist, where the KM framework of the more powerful group prevails (sometimes unwittingly) over that of the less powerful.

In many places in our planet, development can hardly proceed because of conflict — a sign of eroded or damaged social capital. In fact social capital can be double-edged: some social groups achieve unity among insiders (improving “bonding” social capital or exclusive social capital) by cultivating greater enmity against outsiders or enemies (worsening “bridging” social capital or inclusive social capital -from Putnam, Woolcock, Bourdieu,etc.).

It is utterly urgent to, using KM language, cultivate bridging social capital to heal the differences between warring nations, religions and ethnic groups — and failure can be in the form of a global or regional nuclear war that can destroy all other forms of capital in the planet.

This morning, I received an invitation to help the Center for Bridging Societal Divides of the Asian Institute of Management formulate their KM framework. One of their missions is to provide training on Bridging Leadership. I keep experiencing these interesting and seemingly random “connections” in my KM work. Jung called this synchronicity.

2- Intangibles: More Essential for Value Creation

Let us “connect the dots”:

  • Starting in the 1980’s book values of corporations around the world constitute an increasingly smaller percentage of market values.
  • Corporations which excel in managing their intellectual capital (MAKE winners) grow twice faster than Fortune 500 corporations (Teleos).
  • The world economy is now creating more wealth from services than from industry or agriculture; global service trade has been growing faster than global commodity trade.
  • Human capital of a knowledge worker is what generates his regular income.
  • Remittances from overseas workers now constitute more and more of wealth creation in many developing countries.
  • Most successful anti-poverty projects are those which leverage on existing intangible assets of communities (Knowledge for Poverty Alleviation model).
  • Fukuyama observed a pattern, namely, that high-income economies are often also high-social trust societies.
  • Sustainability of CBRM projects hinges on intangible factors: sense of ownership, transparent and accountable managers, cohesiveness of the community, self-confidence and hope.
  • High trust (Covey) and low/managed ego (Marcum and Smith) reduce business costs.
  • High social capital was found (U.K. Office for National Statistics) to be correlated with better health, improved longevity, better educational achievement, lower rates of child abuse and less corruption in government.

What do we see here?

It seems to be happening across many sectors: intangibles have become more essential in creating value!

Do you agree? Is the inference correct? Or is it correctly worded?

We saw from my previous post (“KM is Not Enough”) that intangibles largely overlap with knowledge assets. Managing intangibles has become the “the name of the game”. In fact, knowledge has become the prime creator and repository of value (see first six bullet points above).

We can now assert that the proper goal of KM should be to create value. The causal model is:

From the previous post, we saw that “knowledge” is capacity for effective action, which includes information for effective action. The model defines what is “effective”: a decision or action is effective if it produces the result desired or valued by the actor. Knowledge is “what works” for a user.

The next issue is more knotty: what precisely is “creating value”? See you in my next blog post.

(By the way, you may be wondering why I am posting this series of blogs. I am writing a paper on M&E of KM for Development, and I would like to test my ideas with you and other colleagues/peers in KM practice. It always happens that others see important things I do not see, and so I will be most grateful for your comments, suggestions and criticisms.)