People-focused knowledge management

The Company’s Business Results
Unless significant business results can be traced back to the way
the company is managed, the management principles, corresponding
practices, and actions will be without merit. However, for this
company the results are significant.
It is able to produce higher quality steel at lower costs than its
competitors, and it is a preferred supplier for many very large
customers.
It uses less energy and time to melt and process steel than its
competitors.
Its plants are run with fewer operators than their competitors.
The company is very profitable.
What Does It Mean That an Enterprise
Is Effective?
Fundamentally, an enterprise is effective when it is able to reach
its goals and satisfy its objectives. Its goals and objectives must be
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People-Focused Knowledge Management
realistic and reachable and in line with the enterprise’s purpose. From
more practical perspectives and in detail, for an enterprise to be effec-
tive requires that its functions be executed efficiently in close support
of its intent and desired direction. It also requires that the enterprise
innovate and renew itself from top to bottom.
1
A basic goal of any enterprise — be it public or private — is to
achieve its objectives. Ideally, this goal is best attained when all indi-
vidual and aggregated actions are in full support of the desired direc-
tion. That ideal is not easily achieved; it may not even be possible.
In reality, most actions result from decisions that are far from simple
and straightforward. Complex conditions may lead to inappropriate
choices. Conflicts between objectives require tradeoffs. Internal polit-
ical pressures result in biased decisions. Lack of understanding —
insufficient knowledge — leads to inappropriate evaluations of situ-
ations and impaired judgments of outcomes. Uncertainties from inad-
equate information must be addressed, and too often wrong actions
are pursued by mistaken expectations.
Nevertheless, in this complex environment, it is important that
each action contributes maximally to satisfy the enterprise goals.
Actions must be effective relative to the desired objectives. Small indi-
vidual actions aggregate into consolidated group and enterprise
actions. For consolidated actions to provide the desired results, such
as delivering valuable services to customers or creating high-quality
products at reasonable cost, the smaller actions need to help achieve
the desired enterprise goals. Ideally, all actions must deal appropri-
ately and effectively with the conditions of the target situation — by
making tradeoffs, avoiding undesirable biases, dealing with uncer-
tainties, and so on.
The effective enterprise is an organization that acts intelligently in
the present and is capable of dealing effectively with the challenges
of the future. It meets its objectives by implementing its visions and
strategies through the actions of individual employees and through
its systems, policies, and organizational structure. It makes tradeoffs
between short-term and long-term requirements, and it meets the
objectives of both the enterprise itself and its stakeholders. Manage-
ment teams of effective enterprises recognize that to be viable in the
longer term, they must acknowledge that they have broad responsi-
bilities. For many organizations, these responsibilities surpass con-
ventional and narrow operating perspectives to include concerns for
the environment, local and larger economies, society-at-large, and
other stakeholders that are directly or indirectly affected by the enter-
prise’s actions. The concerns also include attainment of the long-term
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The Effective Enterprise
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objectives of the enterprise — the reasons for its existence. The
breadth of responsibilities results from the understanding that the
enterprise is an integrated element in the complex societal and envi-
ronmental system and that the effects of its actions on other parts of
the system will directly influence its medium and longer term viabil-
ity. All parties are affected — owners, employees, customers, suppli-
ers, society as a whole, and its physical environment — as well as the
enterprise itself. The value of consistent effective behavior can be
large. When employees — and the enterprise overall — do the right
thing, the enterprise can tackle challenges with great effectiveness and
enjoy success and durable viability.