Be at the forefront of the value generation

Knowledge
management and value creation are always hot topics for debate among senior HR
directors. At a recent human resources forum at Henley Management College these
subjects were raised again. After much discussion the consensus was that
companies increasingly create profit and value in non-traditional ways, outside
normal organisation structures. It occurs across complex relationship-based and
emotional networks.

Boards
are slowly waking up to the fact that knowledge assets can be valued on the
balance sheet like any other asset and HR can take a lead with this before our
friends in finance and audit do it for us.

Knowledge
– simply a business’ store of information about its people, customers,
marketplace and competitors – is a fundamental asset, but it is frightening how
much companies do not know. They often cannot access the knowledge available to
them. They reinvent plans and activities and do not learn from life out in the
marketplace. Organisations like this are flying in the dark. Data, experience
and knowledge resides in the company, but if it isn’t shared then it may as
well not exist.

This
is where knowledge managers or learning directors come in. Really good HR
people can also help – they know where seams of activity are and they can tap into
and read the pulse of these new networks. It is here that value gets created;
that loyalty, commitment and retention gets built or – if not managed
effectively and pro-actively – gets destroyed.

Recent
research suggests that far from organisations being held together from the top,
they are actually held together across the middle – first-line and middle-level
people managers are critical to the formation and development of social capital
and they are the leaders of communities up, across and throughout the business.

Given
this, we have to be very careful when the call comes to downsize. Typically,
done by taking out middle managers in departments or by extracting whole
departments, this would damage the cross-functional communities within the new
structure.  

This
is an example of how traditional ways of working mitigate against sharing
knowledge. A new HR acronym was created at the forum – MOTOC (Managing Outside
The Organisation Chart) and this has major implications for the effectiveness
of HR. Managers increasingly have to manage in the space outside of normal
reporting relationships and we need to help them do this.

I
am not a huge fan of outsourcing HR, but if it frees up personnel professionals
to get to grips with their new role then I support it, as I believe this is
where HR can make a huge difference in this value generation.

By
Chris Matchan, Vice-president, consumer practice at Korn/Ferry International

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