Introduction: The Knowledge Economy

Today with the advent and mass usage of computers and the internet, the parameters that dictate business and economies is fast changing and the global economy is transitioning into what is called the Knowledge Economy.This new economy is more simply, the new Information Society. It maybe more relevant to call this the "Informed Society", where societies, consumers and businesses base decisions on information, which is being continuously shared and is continuously growing. Today, the consumer is making informed buying decisions, business is growing more and more dependent on available information to make their business decisions and societies are growing ever hungrier for information to feed their constituents.

Thus, today, information based resources are getting more critical in comparison to traditional economic resources.

Three global occurrences are responsible for this transitioning. They are Networking and Connectivity (Internet technologies) Information and knowledge intensity - over 70% of the workforce in developed countries are Information Workers (IWs) Globalization of business and consumers

Characteristics and practices of the Knowledge Economy

There are a few key characteristics to this new economy and in the way it differs from the traditional economy. These are It is an economy of abundance. Locations and boundaries have no meaning Products and services which embed "knowledge" can command premiums over others Perceived value of products and services are always in context.

The interpretation of the above points is that, as long as the producer or seller can keep ahead of the buyer, on the knowledge curve, he can command premiums and profits through a higher perceived value for his products and services, which means he should be able to interpret, predict and integrate usage and applicability of his products in context of the buyers ecosystems.

On the consumer side, it means more choices, more information about what they want to buy and why they want to buy. Above all, if a consumer needs to buy a product p for his use u, what more can he accomplish with the same products and at what additional costs. The equation below explains this

p = u + a

where p = Product

u = basic purpose or need intended for the product

a = additional applications served by the products

The whole concept of perceived valueplays around "a" where the producer of the product needs to innovate and add to "u" , the basic usage of the product. The more he innovates and adds knowledge to "a" the higher will be the perceived value, provided the innovation can make sense to the buyers life style.

To be able to do value based innovation, the producer relies on market knowledge, segment knowledge, partners, collaborators etc etc. The premium commanded, then, necessarily depends on "a"

Furthermore, innovation will need to be a continuous process so that he maybe able to keep ahead of the buyers learning curve.

This then is how the new economy works, based on Knowledge and its application, adding value to all the participants of a economic system, where the rising knowledge intensity of the world economy and our increasing ability to distribute that knowledge has increased its value to all participants in the economic system. The implications of this are profound, not only for the strategies of firms and for the policies of government but also for the institutions and systems used to regulate economic behavior.

Finally we need to understand how a knowledge economy is practiced. Knowledge needs to be imbibed by humans to be able to grow and spread.

Thus there needs to be constant learning. If this were not the case, knowledge would be static and not dynamic as we know it today. Newton's law was understood and practiced into its application for new inventions to have happened.

Learning, therefore, has become a key - to - success for any organization existing in the Knowledge Economy.

"Learning": The New Qualifier for the Knowledge Economy

In an organization, learning is not only about training. More importantly, it is a culture, a way of life, where organization members continuously strive to achieve goals, bettering their methods and creating results, using their collective knowledge and experience.

A learning organization, therefore, is a collaborative group of individuals, who individually contribute to the intellectual wealth of the company and collectively grow that wealth to create and achieve.

Expanding on the above, the following characteristics stand out:

Individuals

Need to be cooperative and collaborative
Use learning to reach their goals Interact with their eco systems and are aware of it

Organizations

Need to foster and reward learning
Encourage Team performance Encourage Organizational performance

In essence, we can view this as a new management practice - essential for survival in the Knowledge Economy.

In this writer's opinion, Management through Learning or MTL as we may call it, and which may take other names and forms of practice in years to come, will finally emerge as the all powerful management tool in the knowledge economy.

Role of a Learning organization in the knowledge economy

In the new economy, change is the only constant, and the true Learning Organization will be the change master, heralding innovation and creating life style change for it's consumers. It will capture knowledge and skill, and use it as a true resource.

Therefore, the role of the Learning Organization will be to convert knowledge into intellectual capital and use it for creating competitive advantage and achieving its business purposes.

It will also serve a secondary role; that of a change agent influencing the society it exists in. This will be an equally important activity which will be the outcome of application of the knowledge base of the organization

The Learning organization will therefore influence
Consumers Allied producers and Societies

Consumer influence and change

Let us analyze two questions:
Why does a consumer buy and How does he buy

A consumer buys because he has to satisfy a current need or to achieve a life style aspiration. My question is, who created that need and who designed that life style?

If we look at how innovations and inventions happen, they are usually borne out of a need or an aspiration. Innovations which disrupt the market and create competitive advantage for their owners do so in terms of either their price or their usage or features.

The role of a learning organization in this context is to create, socialize the possible uses of the creation and the needs it can satisfy and thus create demand; and lastly mobilize resources and learning to satisfy that demand in the most effective way.

This then takes the organization into a process of marketing and dissemination of the market disruptive features (or USP) of the product.

If the USP is in terms of features then - The organization needs to teach the consumer on the uses and benefits of that usage Draw on its reservoir of customer knowledge and market knowledge to position the features which maybe needs based or aspiration based In any case, the organization will need to share its learning with the consumers to educate them and inspire them for adoption, which means they will need to bring in the change required in the consumers, and the market, to create acceptance and demand.

The second important factor is "how does a consumer buy?" The normal buying process is

Search , Negotiate, Order, Invoice and Pay.

If the organization has keen insights and knowledge into their customers and their markets, they should be able to draw on that knowledge and apply it to this process, by making it easier and easier for the consumer to know about their product ( Search) , Discuss or have access to fair pricing (Negotiate) and then complete the buying cycle with safety and ease.

Influencing the eco-system (allied producers)

Every organization has a set of ancillaries or partners who produce and sell them the raw material required for their business. These partners indirectly depend on the markets and consumers that the principle organization serves. So, if the organization designs a product which creates and caters to a new kind of demand, the partner organization is called upon to produce the required raw material, at costs which are market driven and find efficient. Thus, when an organization innovates, it also influences its partners to produce the new raw material it needs.

Thus, the organization , while innovating for itself, also finds new business and a market for its partners, thereby helping them to grow and succeed.

Influencing society.

Next will come society. For any innovation to succeed, it is important that not only the consumer accepts the concept of the product but also does the society in which the producer and the consumer exist. This "societal" acceptance gives birth to "aspiration" in the general consumers. This further adds to the demand and coupled with the "need" factor, snowballs that demand.

In conclusion, it is relevant to note that the change that a Learning organization brings about in consumers, partners and society, also fuels growth for the organization by fueling the demand for its products.

"Learning" to be great : Creating organizational and societal change

In the context of an organization's achievements, one can categorize them as follows:
A successful organization

A Good organization and A Great organization

We must keep in mind that an organization consists of members, of people. So, in effect we are saying that we are looking at people who are successful, good or great.

To understand this we need to recall that "raison de etre" or the reason for being of any organization. What is an organization supposed to do?

Any organization must do the following -
Create wealth for its shareholders Create a positive impact on its society with its products and services
Wealth creation is easily understood and practised by everyone within an organization, as a short term goal. However in the long term one needs to create an impact on the societies the organization serves or operates in by creating a "positive influence" on it. There can be two levels of such influencing
Non participatory influencing where the products or services create an impact on society or part of it and are conceived in isolation of feedback from external sources.

Participatory influencing

where products and services are conceived according to the organizations skills and strengths but are also in line with external feedback and stated needs. Also where the organization communicates to the users or potential users, new and innovative ways of using its products, get feedback on usage, get suggestions on changes etc.

When an organization is exerting "participatory influence" or PI, is when it is creating a positive impact on society.

Theory of Participatory Influence

Participatory Influence can happen when there is a communication mechanism between the organization and the society it seeks to service and that it allows the feedback from this mechanism to influence its plans to help achieve its objectives. This means that the growth of the products and services of such an organization will always be "market driven" rather than based on perceptions of the market by their leaders.

This is important because at the end, the organization has to survive by satisfying the needs of the markets it operates in and further it needs to be able to gain acceptance of these services in the same market.

So step one is that there needs to be a error free, non interpretation based mechanism to be able to gauge market needs, and

Step two is to be able to influence the market to choose your products and services over competition.

Participatory influencing involves the customer and society in the planning process of the organization, by allowing the response or feedback from them to influence planning, there by instituting objectives which are tailored for the market.

Most importantly, the active involvement of the market in this planning process, creates an ownership within that market for the successful performance of that organization and its products.

In this context, we can say that a "great organization", is one which achieves its goals, has a positive impact on its national economy as well as the society is operates in, practices participatory influence and is therefore market driven.

It actively involves its customers and the societies it serves into its operation by allowing them a mechanism to influence its plans.

Every member of society or the relevant market can thus become a stakeholder in the evolution of the company, even though he has no legal relationship. The advantage of this is, being a stakeholder, he or she also becomes a champion for the cause of the organization, a Brand Ambassador .

Participatory Influence therefore, can become a core tool for the management of any organization to help it transition to being "Great".

The practice of participatory Influencing is well summed up by Soren Kaplan, Managing Director, iCohere and Peter Bartlett, e-Community Organizer, Hewlett-Packard in their paper titled "Creating Communities for Collaborative Learning" where they say

"Affinity networks are groups of people who are drawn together based on one or more shared personal attributes. Their activities are highly relationship oriented, and typically include networking, mentoring, and representing a collective voice in both organizational and external community affairs. While some organizations formally acknowledge and sponsor these groups'activities, when they don't, these networks often emerge on their own. Employee clubs are notable examples. Other examples include "employee associations", like at Pacific Gas and Electric Company (PG&E), which sponsors five employee groups including the Asian, Black, Filipino, Hispanic associations. As a strategy to strengthen communications among and between employees and customers, PG&E supports these groups as they volunteer as translators in crises, raise scholarship money for women and minorities, participate in community outreach, and contribute to PG&E's diversity programs."

Thus, in an organization which practices participatory influence or PI, the learning and its outcomes influence three important areas which are Strategy Branding Customer Value Operationally looking like the diagram below:

Participatory Influence not only serves society but also builds the organizations business in terms of products and revenues.

Furthermore, it builds a Sustainable Competitive Advantage for the organization keeping it ahead of competition and creating and serving the needs of its society.

Role of "Learning" in management

Management: A term so familiar to the world, a term which influences the fate of an organization and a term which is so used today, it has started to lose meaning.

SO why is "management" so important to our lives today ?

Realize this: Our society as we know it today is a society of managers. We need managers to run our economies, our organizations and our countries. Each one of these entities is an integral part of our society. Societies could neither exist nor survive without management of its organizations.

Peter Druker rightly pointed out that effective management is probably the main resource of developed countries and the most needed resource of developing ones.

So let us get back to basics and understand what management is, as a basic and simple definition.

Management is the science of Planning, Organizing, Influencing and practicing Control.

The key words are highlighted in color. In order to understand how "Learning" effects management, one needs to analyze the relationship and effects under the following heads:
Planning
Organizing
Influencing
Control

As a precursor, it should be kept in mind that the singular objective of management is to

Achieve the Organizations goals by combining and using the available resources.

"Learning" as a tool for Planning
According to Samuel and Trevis Certo, "Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed and indicating when they should be performed."
So, planning as a function means "Choices". Choices which are intelligent, informed and scientific. Choices which are based on truths and not on notions.
The key word here is "informed". Choices which are based on information, and reflect realities, will necessarily be good choices.
This is where Learning becomes important. In order to be informed, one has to learn. Learning needs to be inculcated at every level of our organizations and societies, to produce effective managers and management. However, non organized learning can be disastrous and prove counter effective. Therefore, an organization must not only build a "learning culture" but also guide the learning so that it remains relevant.
In application of the above, take the example of a manager, who needs to make a choice of whether his organization should address a certain region. He therefore needs to decide
Does the move integrate with the organizations goals Which products or services are relevant to that region What is the local competition What market share can he expect in year 1,2,3 What is the effect of the three A's (Affordability, Applicability and Availability) Who are the people who will execute on the ground When is the right time to enter.

The effectiveness of all these choices is based on how well the manager knows or has learned about the new region. The quality of the data and information will also reflect in the quality of the decision.

All planning decisions, will formally or informally, be based on certain knowledge. The depth and quality of such knowledge will decide the efficacy of the planning exercise. Remember, planning is an exercise in simulation. You simulate a proposed situation, visualize the risks and advantages and finally lay out a plan which is actually a visualization of certain decisions based on facts as well as perceptions. The less the perception and more the fact, the better is the planning.

Learning as a tool for organizing
According to Samuel and Trevis Certo, "Organizing creates a mechanism to put plans into action."
Therefore, organizing can be thought of as assigning tasks created under the plan, to individuals within an organization for the purpose of action on that plan.
Now consider a situation: would a manager assign a task which requires skill A to a employee who has skill B ? Obviously not. But then, how does the manager Ascertain skill - specially when it is new to the organization Know if that skill exists within that organization With whom does the skill exist

When an organization has adopted a framework of Knowledge and learning as a practice, these questions are easily answered and best alternatives know.

Learning as a tool for Influencing
Influencing is guiding the activities of the organization members to attain the goals. According to Certo, the ultimate purpose of influencing is to increase productivity.
So how does influencing actually happen?
Influencing can happen through any or all of the following

Coaching
Counseling
Delegating
Employee Performance Management
Mentoring
Motivating
Rewarding Performance

In an organized Learning environment, coaching, counseling and mentoring form and integral part of the system. As can be seen in the design and architecture of the knowledge base in previous chapters, these are inherent to the process of learning.
In addition, effective "Delegation" to an individual can happen only if the delegating authority knows of the proven skills and knowledge of the individual. And this happens through the process of sharing and collaboration on the knowledge base and among the employees of the organization.
Lastly, performance management and rewards are a function of operations management and are the result of the other factors given above.

Learning as a tool for control.
Controlling is a management function where managers compare recent and past performances and then plan necessary corrective or other action. However one can add to this definition, which maybe a little inward looking.
Controlling is not only about comparing performances, present and past, but also about comparing internal performance with what is happening outside the organization.
This is important because every organization operates in a certain social and economic environment which is continuously undergoing a change. And changes can effect decision making and plans.
The importance of learning to be able to exercise control is such that organizations will be well advised to form learning engines to be able to garner information from internal as well as external sources.
When we talk about a world class organization, we are in effect comparing with organizations external to us. In my opinion, to become "good" one must be able to identify strengths within the organization and leverage them to attain productivity and quality.
However, to become "great" one must be not only inward looking but also look and compare outside the organization, calibrate and compete. One must be able to innovate to create markets. And all this can happen when "Learning " becomes a way of life for any organization.

Creating a Learning Organization

A learning Organization does not evolve on its own. It has to be consciously created, based on parameters and processes which are sustainable on a long term basis.

To start with, we need to understand the broad heads under which a framework can be evolved. These are
Building a Knowledge base
Creation of intellectual capital
Transferring Intellectual Capital into Intellectual property
Encouraging the use of IP to innovate
Sustaining and maintaining the organization.

Conclusion : Benefits of a Learning Organization

A learning organization creates certain benefits for itself.

The key benefits that are created are

Intellectual Capital
Intellectual property
Sustained competitive advantage

These factors are completely interlinked to create Competitive Advantage for the organization.

Intellectual property in application generates creativity and innovation leading to the creation of a Sustained Competitive Advantage for the organization.

The relationship is much like the house shown below where it is built on a

strong foundation of Knowledge, Intellectual capital and intellectual property with some added benefits like Consumer influence, Partner innovation, and Socio - economic change.