Thursday, 20 December 2012

Jack Welch on KM

jack welch Jack Welch, the famous CEO of General Electric, did an excellent job of summarising the business vision for Knowledge Management, when he made this statement in the GE 1996 annual report.
“Our behaviour is driven by a fundamental core belief; the desire and the ability of an organisation to continuously learn from any source, and to rapidly convert this learning into action, is it’s ultimate competitive advantage”
That's a really clear description of Knowledge Management (continuously learning from any source, and rapidly converting this learning into action), and a great link with the business driver  (ultimate competitive advantage).

Is "Ultimate competitive advantage" a bit strong? Are there other advantages, such as market strength, or brand leadership?

Probably not - even organisations that have been in uniquely competitive positions still need to focus on knowledge management. Knowledge management is big at Microsoft, despite their near monopoly in the business software and operating environment market. De Beers have had a near monopoly of the world diamond market, but have also invested in knowledge management. You need to manage knowledge to be competitive, and to remain competitive, and to keep your monopoly in a rapidly changing world.

So if you are asked about the value Knowledge Management brings, then remember Jack Welch. KM is not about better taxonomies, or  new portal, or about "getting people to be more social". It's about building a company that continuously learns, from any source, and turns that knowledge rapidly into action.

Learning - actionable learning - is the only continuously renewable business resource, and therein lies the ultimate competitive advantage that Jack Welch was talking about.


MyPetiteDiet said...

Nick, can't say that I agree with the statement that KM is big at Microsoft. I don't see any significant evidence that it is the case. I've done a KM project for Microsoft and interviewed their current KM leaders. They have a ways to go before I consider them a good example of a knowledge seeking and knowledge sharing organization.

Nick Milton said...

That's interesting Lisa, thanks. I have no direct knowledge of KM at Microsoft, and was going by rumour and reputation, which can always be trumped by inside knowledge (as in this case).

Would you say they NEED knowledge management?

Jeff said...

I would agree that KM is really about driving business performance. If that's not your goal, you're probably doing it for the wrong reasons.

I recently read a great quote from Henry Ford, who said "The only real security that a person will have in this world is a reserve of knowledge, experience and ability."

At the core, KM is about understanding what "...knowledge, experience and ability..." we have and how to effectively leverage it.

Peter Cauwelier said...


Good post and a great quote from Jack Welsch. Learning is definitely close to KM. But what about action ? I think there's very little focus in KM about the actual action that is happening with the knowledge. That's why I am becoming a big fan of action learning. In fact, I would argue that the quote is more about action learning than KM ...


Nick Milton said...

Hi Peter

certainly when I am working with KM, action is a primary focus. For me, KM should be to the organisation what action learning is to the individual

Jurgen Egges said...

Hi Nick,

Nice thought about the connection between KM & Learning. Most of the work we did, working for the Business School of a large bank, was just about that. Connecting the two separate worlds of KM and learning. We called it the Connect-3 strategy: connect people with information (in particularly: the issues & themes that are most relevant for the organization), connect people with people and communities with communities.

The action was in there as well. We organized an open enrollment program, called Challenging Minds. Open for everyone, not only for (excusez-le-mot) the elite within the organization: top managers and the talents, but really for everybody interested in taking part.

The first thing we did was to confront people with some challenging and thought-provoking stuff. Things like complexity, the importance of diversity of thinking, risk, unpredictable events (Black Swan's), motivation and rewards, ethics, systems thinking, management innovation and so on.

Then we introduced and used methods like the Knowledge Cafe and CoachingOurselves, a peer-to-peer development method, initiated by Henry Mintzberg and Phil LeNir. That simulated the conversations, enabled people to connect with each other, intensively exchange their stories, experiences and knowledge. And it build the thing that every organizations so dearly needs: trust. Without trust, knowledge will not flow, real collaboration is utopian.

Because Challenging Minds was a 3 day program, over a period of 2 months, we stimulated people to take what they had learned to the workfloor. On the second and third day, we always started the morning with a reflection cafe, to let people talk about what they did in the past weeks.

I also want to add that we left the responsability for learning and taking up action in the hands of the participants. They are the people, the professionals with the intrinsic motivation to improve their work, to collaborate with peers, across silo's and slabs. Management shoulsd be there to facilitate, not to steer, command & control.

There is more to tell about this, but I just want to say that action learning, in our opinion, should be closely connected to the issues, challenges and collective ambition of the organization and the people in it.

The last thing: I have nothing to say about the Jack Welch's quote, except that I would like to add that mr. Welch is regarded as one of the biggest exponents of the Superhero CEO (I lead, the rest must follow!), focusing on maximizing shareholder value as the most important driver for the organization. After the current crisis started, Welch admitted that it was "the dumbest idea in the world". I would argue that a focus on shareholder value hinders and obstructs the knowledge management & learning ecology, for lots of reasons. But that's for another time! ;-)


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