Posted by Kees de Vos on November 01, 1999 at 19:29:42:

In Reply to: KM, IM, Why two not one? posted by Reilly Atkinson on October 31, 1999 at 12:26:21:

Reilly,

excellent question. The question has been on my minds backburner, but has popped up recently while connecting Knowledge and Information Management to the Generic Competitive Strategies of (differentiation, focus and cost leadership).

Aiming to come up with a strong link directly from business strategy, I used Generic Competitive Strategies and a free interpretation of Hansen, Nohria and Tierney's article on personalization and codification. I tend to see it this way:

Generic Competitive Strategies

COST LEADERSHIP: one sets out to become THE low-cost producer in your industry.

DIFFERENTIATION: one seeks to be unique in its industry along some dimensions that are widely valued by buyers.

FOCUS: one selects a segment or group of segments in the industry and tailors its strategy to serving them to the exclusion of others.

Cost Leadership is the clearest and most straightforward of these three (at least before the New Rules for the New Economy :)). We can also see a more customer-intimate approach in the other two.

From Porters generic strategies it's easy to see that cost leadership has efficiency as its major operational goal. As efficiency is best served by repetition of tasks and processes, the main issue for KM/IM is to prevent the wheel from having to be re-invented.
The Differentiation and Focus strategy however have the (attention of the) customer as their main operational focus. This clearly calls for a strategy that revolves around innovation. Constantly improving your products and services to serve your customer’s wishes and demands better than your competition. The main issue is to prevent NOT inventing the wheel at all (you are right in noticing I used this metaphor before).

If you look at the image I included you will see some basic findings, which I related to the framework we use. This framework was developed independent of the article of Hansen, Nohria and Tierney in the Harvard Business Review of April 1999. But those who have read it will clearly seem the similarities.

So to me Cost Leadership is best served by information management, that is:
- information is being shared on best practices;
- a common language is well established so interpretation of the information is pretty homogeneous. As services and task tend to be repetitive this might well be feasible.

Differentiation and Focus are best served by knowledge management, that is;
- connecting people in two-way communication; preferably face-to-face;
- taking learning and communication styles into account as interpretation of information might differ, as no common language will be available yet.

The approach is still pretty crude, and there are quite some things to take into account:
- you show me a sustainable competitive advantage and I will show you the knowledge its built from. And knowledge CAN (and will) be copied sooner or later;
- as Arie de Geus states correctly; the only sustainable competitive advancement is to learn faster than the competition;
- with technological advancement accelerating, the transitions from innovation to mainstream in a product's life cycle are also speeding up, blurring the borders between the phases.
- (and Hansen, Nohria and Tierney) warn for being "stuck in the middle", I tend to think however that for successful business both items need to be addressed (this is strongly linked with the life cycle issue). The speed of change is simply to high to focus on just of the two. However one should be aiming to have them well defined and more or less separated, and one should place extreme emphasis on the "linking pins" between the two.

So I feel there is still a long way to go, but do you think this approach makes sense?

Kind regards,

Kees de Vos

• De Vos Knowledge Management Articles

---

Follow Ups:

• Re: The business link to this dichotomy Daan de Koning 07:44:04 11/07/99 (6)
  • Re: The business link to this dichotomy Kees de Vos 09:33:26 11/08/99 (5)
    • Re: The business link to this dichotomy Daan de Koning 11:28:25 11/08/99 (4)
      • New Economy and strategies. Kees de Vos 10:11:49 11/09/99 (3)
        • Re: New Economy and strategies. Daan de Koning 07:22:39 11/11/99 (2)
          • MORE Re: New Economy and strategies. Daan de Koning 07:23:26 11/11/99 (1)
            • Re: MORE Re: New Economy and strategies. Kees de Vos 09:17:22 11/11/99 (0)

---

Click Here to Post Follow Up in New Forums

    Knowledge Management Think Tank (New)

  

 Subject: 

Message: