2. Innovation and Technology Management
2.10.2. Plans have an Important Function in the Organisation, but not more
The relationship of plans in organisations and the continuous necessary actions to adapt plans constantly are summarized by [Randall2011] referring to [Dant1998]:
1. “Plans provide a context for treating together different types of organisational activity” 2. „Plans can articulate local priorities and policies for the organisation”
3. „Plans situate the organisations within its larger organisational context”. It is essential to have means to coordinate activities between different units of an organisation (teams, departments, groups, etc.)
4. „Plans provide a resource for linking the activities of related organisations”, thus enabling a synchronization of the work performed.
5. „Plans provide a means for managing the public relations or “face” of the organisation”. See also [Harper2000], which describes that just the existence of rules, procedures, documents, etc., are a resource for the presentation of competent working.
6. „Plans provide an occasion for articulating values”. Organisations have to react to external expectations of owners, share-holders, supervisory boards and public opinions such as vision statements, formal expressions of the values of the organisation, etc.
The Necessity of Linear Processes within Corporations
2.11.
2.11.1. Linear Processes to Complement Creative Processes
As mentioned already above, innovation processes have a highly dynamic nature and can be characterized by ongoing interactions among numerous players. Therefore innovation processes cannot be described as strictly linear procedures following a sequential pattern from initial brainstorming to final market launch. The dynamic processes of the real world, which lead to product decisions within corporations, cannot be classified using simple linear models. However, as discussed above the definition of (linear) plans fulfil important functions within an organisational environment. Leitner [Leitner2009, page 2, last paragraph] criticizes Cooper [Cooper2002] for his focus on product portfolio management based on linear models, as he does not consider it effective for an innovation- prone company. Leitner, however, oversees one important aspect in this regard, namely that i) the complexity of a company has to be kept manageable; and ii) the rationale behind business processes and structures has to be duly considered and preserved.
It is important to note that companies are principally embedded into strict, linear organisational processes. A company is by definition a linear system. Infrastructure investments, human resource management, reporting, and the financial system, usually require a linear operating mode. Business processes such as strategy communication, mid-term budget planning, yearly budget planning, personnel resource planning, room planning, project planning, regular reporting, indicator-driven business reporting, etc., tend to follow strictly linear mechanisms and a predominantly top-down approach.
Effective decision-making processes depend on their ability to provide the necessary information to the management at the right time and in the most appropriate manner. Budget, personnel and strategy plans have to be reported on an ongoing basis using linear temporal structures. The same applies to the fulfilment of certain commercial responsibilities (duty of care), which must be documented on a permanent basis. Besides, operational units within companies are organised in rigid structures to comply with specific management standards. An example in this regard is provided by the fact that companies generally have the legal obligation to hire personnel on a permanent basis rather than on a project-by-project basis and to implement long-term personnel development plans even in the case of short-term work assignments.
In addition, the presentation of a company’s economic development must follow a strictly linear chronological order. Companies have to fulfil certain strict requirements towards their shareholders with regard to reporting, controllability, comparability and clearly understandable communication patterns. State-owned companies in particular have to comply with high reporting standards. And finally there is no budget planning approval in organisations, without linear development plans. Thus, linear business processes have to be implemented within a company in any case. It is, however, important to note that these linear processes should by no means be in contrast with non-linear mechanisms such as bottom-up creative processes, market interventions and R&D projects. The linear processes of the business logic need to be harmonized with innovation-friendly framework conditions such as liquid networks, adjacent possible, noise and error, and serendipity. A company
must always be in a position to safeguard innovation processes, while at the same time adjusting to ever-changing market situations and supporting other vital business processes. It is worth noticing at this point that innovations do not originate from sterile lab environments and do not follow linear and clearly predictable development processes [Quinn1985].
Consequently, in order to be able to manage an organisation in a complex economic environment, dynamic economic processes have to be presented in a predictable manner to allow better traceability of the achieved targets and the implemented corporate guidelines. Such targets and guidelines cannot be easily changed and follow the special logic of economic systems. This also gives rise to the representation of a company’s success and system conformity based on specific indicators, using linear systems that have to be communicated on an ongoing basis, regardless of the dynamic processes underway within companies. This is based on the assumption that the applied indicators reflect reality. Organisation usually cannot directly change such framework conditions and therefore, mechanisms have to be found to help the management achieve the set targets and guidelines.
Thus, such linear models do not explain the processes that take place in the real world, but we need them to be able to work in conformity with the economic systems, while complying with its set of rules.
Effective Use of Company Resources and Attention
2.12.
Economy
85A wide-ranging product portfolio is difficult to manage for a company because coordination between the technical, sales, marketing, production, communication and customer service department poses considerable challenges. This is why an effective portfolio management process is absolutely indispensable which is based on a comprehensive effective information exchange within the organisation.
This goes in line with the “attention economy” [Davenport2001, Ferscha2014]. In rural economies and the factories of the industrial revolution, human labour was the central driving source. Then, in the information society, know-how was the most important resource. Today, in a world of overwhelming and often unnecessary information, we can see the increased value of "attention". This theory goes back to the Harvard professor William James86. He postulated that “attention” is the
result of turning away from things in order to focus to others. In addition to this view, Herbert Simon87 brought the aspect of economy into the discussion of attention. He discussed already very
early the tension between the richness of amount of available information, and the limited available attention to single information pieces. Thus, Simon could be seen as the father of the term “attention economy”. The German philosopher, architect and computer scientist Georg Frank
85 A discussion of this subject has been published by the author of this study as OVE GIT Newsletter, “Die
Währung des neuen Jahrhunderts heißt Aufmerksamkeit (The currency of the new century is Attention)”, OVE society for information and communication technology (GIT), October 2013, Online Newsletter, OVE e&i elektrotechnik und informationstechnik Journal, Springer Verlag, 2013 [Leopold2013b].
86 William James (1842-1910) was a New Yorker professor for psychology and philosophy at the Harvard
University.
published several papers in the nineties discussing "attention economy" and Davenport and Beck formulated a definition for attention [Davenport2001]:
“Attention is focused mental engagement on a particular piece of information. Information objects become aware to us by their focus on them and then we decide whether we act or not. Attention arises between a relatively unconscious phase in which the sensory input from the environment is analysed and the decision phase, in which we act based on the basis of the information which generated the attention. Without these two phases, there is no attention.” Attention spans have shrunk dramatically over the past decade. According to [Ferscha2014b] the attention spans of human beings decreased from 12 minutes in 1998 down to 5 minutes in 2008. In a management position, a manager is always confronted with limited time and a non exhaustive information landscape for any decision making process. Thus “management attention” has to be considered as one of the essential drivers for an effective management of organisations. Thus, information preparation, offering and selection of information are crucial functions for a successful decision making process. The different factors for such an effective information exchange will be further discussed during this PhD.
3. Knowledge Management - From Data to Expertise
“The most important contribution management needs to make in the 21st Century is to increase the productivity of the knowledge work and the knowledge worker.”
Peter Drucker, 199988
Knowledge work89 in the narrow sense describes all actions aimed not only at applying knowledge
but also at revising and renewing knowledge by combining the information currently available in order to solve problems. This application of combined knowledge is the basis for successful innovation processes.
Ever since ancient times, philosophers have addressed the question what knowledge is and when is knowledge really true. Before we elaborate “knowledge” and knowledge management within an organisational context in more detail we discuss “knowledge” on a more principle philosophical level.
Knowledge – What do we Know?
3.1.
“There are known knowns; there are things we know that we know. There are known unknowns; that is to say there are things that, we now know we don't know. But there are also unknown unknowns – there are things we do not know we don't know.” Donald Rumsfeld, United States Secretary of Defence,
Press Conference, February 12, 200290
3.1.1.
The Philosophic Theory of Knowledge
The philosophic theory of knowledge is referred to as epistemology91 in discussing the nature and
scope of knowledge. It is about what knowledge is, how it is acquired and how can we know what we know. It is also covering which statements about reality are to be deemed true and for which reasons, whether knowledge about reality can be attained at all and which forms of knowledge do exist.
In addition to epistemology, philosophers like Aristoteles introduced the term “techne” in order to highlight that it is most useful when the knowledge is practically applied; i.e. “techne” considers the creation of impact due to knowledge opposed to the disinterested understanding objective only. Thus, in the context of “techne”, the application of knowledge has a practical result.
A further area in the philosophical discourse is the area of “phronesis”. Phronesis is used since the ancient Greeks in philosophy to distinguish from episteme and techne the area of “practical wisdom”. Phronesis is considering knowledge which cannot be based on scientific knowledge nor to technical know-how alone, but on practical knowledge; i.e. to have knowledge about how to achieve an objective without a scientific basement.
88 [Drucker1999, p. 135]
89 The idea of “knowledge workers” was already described by Peter Drucker 1959 in his book “The Landmarks
of Tomorrow”. “Knowledge workers” are staff members responsible for the generation, management and dissemination of knowledge in different areas relevant for a firm.
90https://de.wikipedia.org/wiki/There_are_known_knowns (last access: 24.4.2017). 91 From the Greek word “epistimi (ἐπιστήμη)” which means „science“.
Very basically we can distinct between different kinds of knowledge based on the information provided. In this regard, we can differentiate for instance between analytical and synthetic statements. Analytical propositions do not add any information; e.g. “a square has four right angles” is an analytical sentence since the predicate concept is contained in the subject concept. In contrast, the mathematical operation “6 + 3 = 9” is a synthetic proposition since the final outcome is not contained in any element of the operation. Another distinction between different knowledge contents is based on the way knowledge is attained. A priori knowledge can be attained independently from our perceptions and the empirical experience of the outside world. Typically a priori knowledge includes logical, mathematical or semantic knowledge (= concept-based, relating to the meaning). A posteriori knowledge also referred to as “empirical knowledge”, can be attained only based on the perception and empirical experience of the outside world.
This gives rise to the development of two different fundamental philosophical perspectives: empiricism and rationalism. Empiricism asserts that all our knowledge is ultimately based on a posteriori knowledge. Vice versa, “rationalism” states that all our knowledge is based upon a priori knowledge. Thus, especially with regard to the theory of knowledge, rationalists such as Descartes and empiricists such as Locke and Hume were worlds apart.
John Locke (1632-1704) asserted that “nothing is in the intellect that was not first in the senses” [Locke1872, Georgen2010]92. This theory is based on the assumption that our consciousness is
shaped by the idea of the qualities of an object, which in turn is derived from sense perception [Gaarder1993]. The qualities of an object can be broken down into primary and secondary qualities. Primary qualities are essential for an object as they are perceived by our sense organs and give rise to ideas that reflect the main features of this object such as form, scope, impenetrability, quantity. Secondary qualities include features such as color, smell, taste and are the sensory information we can perceive from primary qualities, they arise as a combination of primary qualities in our consciousness. This combination is no longer the result of experience but a product of the intellect. Here Locke turns away from his empirical concept. Thus, Descartes proposition of a systematic and methodological doubt is more consistent in this regard.
With similar arguments as Locke, David Hume (1711-1776) refers to the contents of our consciousness as perceptions and he divides perceptions between impressions and ideas. Ideas are the perceptions we have when we are dealing with an object or a sensation that are not currently present. Ideas are therefore derived from impressions.
Hume rejects, however, the notion of total rationality. He distinguishes between three types of beliefs: i) rational beliefs, which correspond, on the one hand, to logical truths and, on the other, to perspectives supported by experience; ii) natural beliefs, which cannot be justified rationally but simply reflect a fundamental need of our practical orientation; and iii) non-rational beliefs (faith), which are based on assumptions that cannot be justified through experience or are even in contradiction with experience. In this way, this Scottish epistemologist became a critic of both metaphysics and religion. In fact, Hume’s ethics are based on experience and not on religion or reason.
92 This proposition dates back to Thomas of Aquino, who in turn attributes it to Aristotle, https://en.wikipedia.org/wiki/Peripatetic_axiom (last access: 24.4.2017).