Kein Folientitel

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How Behaviour adds Value to Knowledge
René Rupert
rene.rupert_at_alumni.insead.edu
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Our Journey

• In your organisation
• Only Knowledge that is put to work has value
• Behaviour must enable the proper use of
  Knowledge. (Diagnosis)
• How can you benefit from your Knowledge ?
  (Structure the approach)
• Examples

3
Knowledge must be made explicit and be put to
work to become productive
Knowledge is like a machine If it is not put to
work, it is not productive Behaviour is what
makes knowledge become productive. Behaviour
creates (or destroys) Value.
4
Challenger
Two engineers knew that there was a flaw and that
the risk that the Shuttle would explode was
high. They reported their conclusions to their
boss. The culture of NASA was strong enough to
impose a behaviour (in this case a wrong one),
i.e. not to insist but to comply to the programme.
5
Flight 801
On August 6th 1997, a Boeing 747 of Korean
Airlines crashed against the Nimitz hill on Guam.
Both the co-pilot and the flight engineer had
been aware that they were flying too low. This
has lasted for 12 seconds, during which they
discussed how to alert the captain. Korean
culture is said to be strong enough to impose a
specific behaviour when addressing hierarchy. The
Herald Tribune, March 19th 1998
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Our Journey

• In your organisation
• Only Knowledge that is put to work has value
• Do Behaviour enable the proper use of Knowledge ?
  (Diagnosis)
• How can you benefit from your Knowledge ?
  (Structure the approach)
• Examples

7
Place current Behaviour on the Behaviour Map
Expected autonomy
4
opposition
3
E
confusion
1
Perceived autonomy
4
3
2
P
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The Behaviour Map Zones of specific Bahaviour
Violence Sabotage
Substance abuse
Expected autonomy
Substance abuse
Violence Sabotage
4
Permanent wide scope Knowledge Sharing
Promoting negative attitudes
Substance abuse
Increased Accident rates
Undermining leadership
3
Focused and Coordinated Knowledge Sharing
Strike
Stress related health disorder Chronic Tardiness
Occasional one on one Knowledge Sharing
2
Increased error rates
Absenteeism Chronic Tardiness
Stress related health disorder
Inappropriate behavior
1
Increased error rates Increased accident rates
Substance misuse and abuse
No discussion Top down Instructions
Perceived autonomy
4
3
2
1
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Define the ideal Behaviour required by the
process
Ideal Behaviour Scale
4
3
2
1
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Synthesis
Expected autonomy
Ideal Behaviour Scale
4
4
3
3
Behaviour Gap
E
2
1
1
Perceived autonomy
4
3
2
P
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Our Journey

• In your organisation
• Only Knowledge that is put to work has value
• Do Behaviour enable the proper use of Knowledge ?
  (Diagnosis)
• How can you benefit from your Knowledge ?
• (You need to install the right behaviour, to
  structure the approach)
• 4. Examples

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Means to develop and obtain specific desired
behaviour
People in roles the change leader coaches facilit
ators change agents change advocates invited
speakers
Activities future search workshop meeting
network company large scale event contests get-tog
ethers customized role plays
Tools compensation package awards internal
newsletter infoscapes cartoons company games
One can do plenty of things. What counts is
overall congruence
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Means to develop and obtain specific desired
behaviour
Diagnosis tools Organizational
agility Organizational stability Behavior
Gap Time Gap Stakeholder mapping Cultural
cluster analysis Organizational Culture
Inventory Process mapping Process
appraisal Process complexity Resistance to change
mapping
Individual assessment tools MBTI LSI-1.
LSI-2 PSI Sponsorship Herrmann CSS Management
style Negociation style Leonardo 3,4,5
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Our Journey

• In your organisation
• Only Knowledge that is put to work has value
• Do Behaviour enable the proper use of Knowledge ?
  (Diagnosis)
• How can you benefit from your Knowledge ?
  (Structure the approach)
• Examples

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A corrugated board manufacturer
The reject rate was 3.2 versus the industry
average of 1.1
We did not add any knowledge We only acted to
change behaviour The reject rate dropped from
3.2 down to 1.6 during the first year We
saved about 600000 / year
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BP
British Petroleum
 Safety is a matter of Behaviour 
Why ? Sharing Knowledge makes an installation
safer and more predictable. Sharing Knowledge is
a behaviour. Sharing Knowledge adds value.
17
Swissair
Expected autonomy
4
E
3
2
E
1
Perceived autonomy
4
3
2
1
P
P
The Management Compass (R)
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Your Journey
What do you want to do ? To measure the
potential value of your Knowledge ? To measure
the potential increment of the value of your
company ? To evaluate what needs to be done to
catch this potential ? To measure whether
Knowledge is put to work ?
rene.rupert_at_alumni.insead.edu
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You !
Thank
The Universal Management Compass
rene.rupert_at_alumni.insead.edu
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Swissair
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People - Process Alignment
With the Swissair example, we want to
demonstrate that thriving in an unstable
environment requires intense knowledge
sharing, individuals with high expectations of
autonomy perceiving much confidence from their
management.
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Requirements to thrive in an unstable environment

• Permanent knowledge sharing to best take
  advantage
• of changes going on, i.e. to best integrate new
• opportunities into the strategy
• High agility to respond changing customer demand
• High flexibility to take advantage of new
  technologies
• In 1980, Swissair enjoyed an enviable position
• After 1990, the airline business has been exposed
  to accelerated change

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Strengths of Swissair

• Excellent people
• Excellent service
• Excllent competencies
• Excellent reputation

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Weakness of Swissair Taylorized management
You will lose Your companies are based on
Taylors principles. Worse, your Heads are
Taylorized. You firmly believe that sound
management means executives on the one side and
workers on the other one, i.e. on the one side
men who think and on the other side men who only
work. Konosuke Matsushita, 1988
(abbreviated)
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Misalignment
The Knowledge Sharing Process did not enable
management to make the best decisions for the
future of Swissair. There was insufficient
Knowledge Sharing Management made inadequate
decisions.
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Swissair History -1
In early years, the market was such that Swissair
could grow by adding destinations

• Growth by Duplication
• it may work well if the process is transactional,
  i.e.
• instructions are given top-down for people to
  execute
• the management style then is directive, i.e.
  little autonomy is given to local directors
• managers reduce their expectations for autonomy
  at work or leave the company

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Growth by Duplication
Expected autonomy
Young managers start with the company and reduce
their expectations when they face a directive
management style
Process Complexity
4
Autonomy at home
3
2
C
E
1
Directive management style gives little autonomy
Transactional Process
Autonomy at work
Perceived autonomy
4
3
2
1
P
The Management Compass (R)
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Swissair History -2
More recently, the market was such that Swissair
had to grow by acquisition, a different process.
Growth by Acquisition The amount of information
needed is much higher than for Growth by
Duplication . The knowledge sharing process must
allow fast and permanent knowledge sharing. This
is the collaboration process. Managers must
have high expectations for autonomy. Directive
management does not enable such knowledge sharing.
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Growth by Acquisition
Expected autonomy
Managers must like autonomy
Process Complexity
4
E
C
3
The complexity of Growth by Acquisition
2
Top management must create a collaborative style
1
Perceived autonomy
4
3
P
2
1
The Management Compass (R)
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Where was Swissair on this map ?
Expected autonomy
Process Complexity
4
E
C
3
2
1
Perceived autonomy
4
3
P
2
1
The Management Compass (R)
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Stuck here !
Expected autonomy
Process Complexity
a huge Behavior Gap
4
C
3
Managers could not use autonomy
2
Top management had not created a collaborative
style
E
1
with a Transactional Management Process to
build the strategy
Perceived autonomy
4
3
2
1
P
The Management Compass (R)
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How did we notice the problem ?
From 1972 (our first flight with Swissair) until
1992 (at least), flight attendants, pilots and
other Swissair personnel demonstrated involvment
and satisfaction. After 1996 frustration was
visible and passed along to passengers Changes
were not explained, not managed. There was no
recognition for good past services.
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What did it mean ?
Requirements for short term results were pushed
over to personnel in the same style than it came
from the top. If such is the management style at
the top, the required knowledge sharing process
for acquiring cannot take place. Top Management
cannot see the specifics of the market and cannot
make the best decisions. In the Air Passenger
Transport business, this is now lethal.
34
The value of the Audit of Mental Disposition
The audit to reveal the Behavior Gap had cost
100000 To confirm, to double check, 300000
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What could be done ?
Create the information flow from bottom to the top
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With which outcome ?
Create a different future shared by directors,
managers and employees more realistic Please do
not ask us which one. We are not Air Line
experts. This knowledge was within the 72000
employees of Swissair. Our expertise consists of
making this knowledge become explicit.
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The Universal Management Compass
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The Cost of inappropriate Behavior
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Bad Behavior, bad Performance
With this example, we want to demonstrate the
cost for neglecting the human factor To keep
work processes aligned with the market is one
thing To keep employees aligned with their work
processes is part of success too
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SSW corrugated board manufacturer

• Modern plant
• Good raw materials quality
• Well experienced workforce, 400 employees
• Recent machinery
• Set up for in line production
• Compensation package in line with the market

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In corrugated board production, major Processes
are  Coordination 
Expected autonomy
Process Complexity
4
3
Coordination
2
Processes are formal and mostly reliant on tight
integration across functional boundaries and
consist of coordinated team work
1
Perceived autonomy
4
3
2
1
The Management Compass (R)
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At SSW, production was run as a transactional
process
Violence Sabotage
Substance abuse
Expected autonomy
Substance abuse
Violence Sabotage
4
Promoting negative attitudes
Substance abuse
Increased Accident rates
Undermining leadership
3
Strike
Stress related health disorder Chronic Tardiness
The actual Area of Functioning
2
Increased error rates
Absenteeism Chronic Tardiness
Stress related health disorder
Inappropriate behavior
1
Increased error rates Increased accident rates
Substance misuse and abuse
Perceived autonomy
4
3
2
1
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Behavior Gap
Expected autonomy
4
Current operating Process Complexity
4
Focused and coordinated permanent Knowledge Sharin
g
3
3
Stress related health disorder Chronic Tardiness
2
Increased error rates
2
Absenteeism Chronic Tardiness
True Process Complexity
Behavior Gap
Level of expectations
1
Increased error rates Increased accident rates
Perceived autonomy
1
4
3
2
Perceived Management Style
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The Cost of the Behavior Gap

• Instructions cover each one of the many operating
  steps
• Mistakes are punished
• Information goes top down only, to provide
  instructions
• There is no communication.
• Errors are done in a deliberate way where there
  is no instruction coverage.
• There is no employee turnover
• All attempts to introduce
• team work
• empowerment
• a new accounting system
• IT improvements have failed
• There is a cynical behavior at work
• The reject rate is 3.2 versus the industry
  average at 1.1

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18 years of a very directive management style had
made expectations to drop (at work)
Expected autonomy
Process Complexity
4
At home
3
2
1
At work
Perceived autonomy
4
3
2
1
The Management Compass (R)
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How to turn around ? Enable gradually

• Management
• Makes itself visible
• Engages direct communication
• Gradually moves from explaining to asking
  questions
• Listen to employees
• Demonstrates interest and involves employees
• Organizes meetings and get-togethers
• Encourages initiative, rewards failure
• Organizes team activities
• Enables, empowers

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Enabling gradually moves Perceptions up
Expected autonomy
Process Complexity
4
3
Coordination
2
1
New Perception of Management by Employees
Perceived autonomy
4
3
2
1
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and Expectations follow
Expected autonomy
Process Complexity
4
New Expectations of Employees
3
Coordination
2
1
Perceived autonomy
4
3
2
1
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New Point of Functioning
Expected autonomy
Process Complexity
4
New Expectations of Employees
3
Coordination
2
1
New Perception of Management by Employees
Perceived autonomy
4
3
2
1
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Impact on the Business

• No cynicism but team spirit
• Quality improved 2.6 vs 3.2 after four
  months
• (reject rate) 1.1 in the second year
• no technical training performed
• the problem was behavior only
• Employees are helpful to eachother
• There are less complaints
• Change is easier
• About 2.0 M savings on rejects only
• Company Sales 100 M

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The audit accelerates spotting key issues

• We classify processes according to cash flow
  and business risk
• We audit the alignment of Behavior (Perception
  and Expectations) with Task (Complexity)
• We place each major process on the map
• We reveal the high cost Behavior Gaps
• If required
• We build the action plan to improve
  performance
• We implement recommendations
• We train managers and transfer our methods

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The Universal Management Compass
rene.rupert_at_alumni.insead.edu
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The Time Gap
E
C

Expectations
Knowledge Sharing Process
Dealing with the complexity of processes
Success of the operation
Mental Disposition
Behavior
Perception
at the end of the process
P
but not with
E, P and C are simultaneous
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The time of impact of Mental Disposition on
Performance depends of the business
Restaurant one week Biochemicals Research 10
years
Mental Disposition
Time Gap

Time
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Combining both gaps enables to anticipate
performance
Reality
Process
Expected
c
omplexity
The organizetion operates here
autonomy
C
Gap
Desire
E
It should operate here !
Perceived
autonomy
P
The Management Compass (R)
bound to Human Capital only