The Tribal Knowledge Paradigm - TPNI Engagemedia.instantcustomer.com/23859/0/169_tk-paradigm-- … · · 2014-11-303.’’’WHAT’IS’THE’TRIBAL’KNOWLEDGE’PARADIGM?’

The Tribal Knowledge

Paradigm

Management Simplified

by

Leonard Bertain & George Sibbald

L BERTAIN & G SIBBALD

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Additional copies of this book may be obtained CreateSpace.com or Amazon.com

For more information on the concepts and processes

described in this book please contact: Bertain Consulting Group

3758 Grand Avenue, Suite 25 Oakland, CA 94610 Tel: (510) 520-8011

[email protected] [email protected]

©Copyright 2012

Leonard Bertain & George Sibbald

No Blame is a registered trademark of Len Bertain

All rights reserved. Except for the usual review purposes, no part of this work

may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy,

recording, or any information retrieval system, without the permission of the authors.

Manufactured in the United States of America

ISBN-13: 978-1481024327

ISBN-10: 1481024329

THE TRIBAL KNOWLEDGE PARADIGM

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We hope you find the contents of this

book insightful. It is output from our years in the trenches of American business. We have tried to extract the best practices of the best CEOs. This collection of the best from the best was then pulled together into a management paradigm. It was then field-tested in more than 150 companies over 25 years.

We think we challenge management to create a truly innovative culture. Its goal is to maximize internal growth.

Enjoy! Len & George

December, 2012


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Table of Contents

MANAGEMENT SIMPLIFIED VII

1. DO WE NEED ANOTHER PARADIGM? 1

2. ADDRESSING THE FATAL FLAW 11

3. WHAT IS THE TRIBAL KNOWLEDGE PARADIGM? 44

4. MISSION RELEVANCE 55

5. IMPROVING “KNOW HOW” 61

6. STRATEGY & OPERATIONS ALIGNMENT 67

7. ORGANIZATION, STRUCTURE AND PROCESS 77

8. LEADERSHIP 85

9. TRIBAL KNOWLEDGE COUNCIL 92

10. TRIBAL KNOWLEDGE PARADIGM TOOLS 97

11. QUICK START 136

12. CONCLUSION 145


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Management Simplified Introduction

This book evolved from our 30 years of work as consultants. We learned a lot. We did field research about best business practices. We then used the insights from this research to create a “mash-up,” a hybrid of the best. We found out how you get everyone involved to change a culture. We also made some major discoveries that we will report in this book. And we found out something that surprised us.

Quite frankly, it is obvious but we were not aware of how big it really was. It was this. All people love to help improve their work. They love it even more when they get good feedback for their successful actions. We found that people really like “earned respect.” This is the respect that you get from a leader and co-workers. The respect that we note here is a two way street.

It comes from the leader down to the employee. And it goes up from the employee to the leader. It goes both ways. It is “earned respect.” This is best achieved from a successfully completed action that advances a shared sense of purpose. Publicly acknowledged, “earned respect” is by far the strongest motivator. It is the premium.

The surprise here was how this came about. As you read this book, you will see that the basis of

our work was the War on Waste. We will talk about that throughout the book. Suffice it to say, it was an approach to change that puts people in teams. These


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were teams with a very strong purpose. They were charted to find problems and boy were they good at it. These teams made over 10,000 rock solid proposals to the CEOs and their executive teams. The result was we were able to observe major increases of profits in just about all of our 150 engagements. And we were able to see employees getting respect as they got involved in innovation. This was pretty exciting stuff.

As time went on, we witnessed the intense release of energy when “Know How” was unleashed. This all happened during the War on Waste. It was surprising on one hand. But it was frightening on another.

It was a surprise because all that energy was dormant just waiting to be tapped. We were merely the teachers or catalysts to this process. The employees were the source of urgent focused action.

It was a fright because this was clearly a great under-used source of profits and internal growth that was off management’s radar. And we didn’t have a great solution to get it on their radar and keep the momentum going once it started.

We tried but nothing seemed to work. We knew that if we were able to sustain the momentum, this would be a big deal for our CEO clients and their shareholders.

We have spent the last 25 years trying to get management to understand.

How would we convert these experiences from every one of our clients into long-term profits? How could they be sustained?


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To begin, we looked at our results as massive energy input. We jumped on energy as an analogy from our science backgrounds. To that end, we have invoked the Second Law of Thermodynamics. It provides a powerful business guide.

The Second Law teaches that there is a mysterious balance between energy and chaos in the universe. When applied to a business, it provides a wonderful Yin and Yang type clarity to why things work as they do.

If you increase energy, you decrease entropy or chaos. And vice versa. It is the conservation of energy in business.

We have observed a number of successful CEOs who have used this concept with great success. Jack Welch is the most obvious with his early Work Out Program. It was a type of lean manufacturing approach. It looked at wastes in a business and put “Tiger Teams” to work getting rid of them.

When the energy ran out of the Work Out Program, he had TQM (Total Quality Management). He followed that with a series of other initiatives every 3 to 4 years. It took that long for the energy of an initiative to dissipate. After that, the Chaos returned and demanded a new energy initiative. He managed energy as an initiative-based driver. To quote him, “…the ability to energize is the ingredient (of a leader) that counts.”1

Herb Kelleher of Southwest Airlines used initiatives as well. But he had a different form of energy input. He

1 Slater, Robert Jack Welch and the GE Way: Management Insights and Leadership Secrets of the Legendary CEO, McGraw Hill Professional P. 263


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made working at Southwest fun and he had what we call, “The Wing Ding.” They were small initiatives that encouraged employees to make the customer’s experience at Southwest Airlines lots of fun. It showed in the profit results.

In another market, Steve Jobs took the chaos of the hand held music player market as an opportunity. He launched a revolutionary new product called the iPod. It did two things. It simplified the interface of the user to the player. And it changed the way media was delivered. In both cases, as a result of the energy input created by the iPod, market chaos was addressed. Huge profits were extracted for Apple.

This energy model of business gave us a range of insights. For instance, we learned why some approaches to management worked better than others.

It also gave rise to the central thesis of this book. It emerged from our attempts to help CEOs look for new energy opportunities. The model worked but flaws were observed. For instance, the continued requirement of the CEO to search for a new initiative to keep the energy up was one major issue. Each initiative required tremendous energy expenditure on the part of the CEO. Most CEOs tired of this responsibility.

But as we noted the problem, the solution emerged. It is the subject of this book.

This solution is a management approach. It is a new paradigm that we call the “Tribal Knowledge Paradigm.”

It plays off our experiences over the last 25 years.


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We learned that there is a simple way to extract huge value from the chaos in today’s organizations and markets. We believe that we can do this by showing CEOs and managers what to do. Very simply, they need to amplify innovation and unleash “Know How”. They need to engage everyone to do it. The CEOs cannot bear the job alone. Nor should they select just a few managers. No matter how competent they are, it is a company-wide activity.

The CEO and management have to organize to maximize “Know How” in daily action. By doing so, they are able to align Tribal Knowledge with strategy, organization, structure, and process. This thinking serves as the founding philosophy of a new management paradigm.

That is what this book is about. Len & George


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The Tribal Knowledge

Paradigm


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Do We Need Another Paradigm?

Yes! And absolutely, yes! We think that if a CEO wants to create a culture of

innovation and maximize internal growth change is not just needed. It is demanded.

And we think that the reason that change is needed is that there is a big flaw. The system is based on a faulty assumption for today’s market. And that faulty assumption is this: “an inner core of highly competent managers can deliver maximum value to shareholders and customers.”

Let us explain. Why is it a flaw to think that highly educated

managers are unable to do the job alone? How can we say that? Aren’t they trained specifically to deal with highly reactive markets? Aren’t these managers capable of seeing what is going on in the market and deal with these issues? Why would these managers need help? After all, they are paid the big bucks and they know the strategy. It is their job to make it happen.


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This runs counter to what we saw at Apple. Didn’t Steve Jobs take a core group of executives and create the company with the greatest market capitalization in the history of the stock market? So how can we say that centralized decision-making is a fatal flaw? The Apple example demonstrates the most centralized form of management around.

The flaw here isn’t that the average executives are incompetent. They are usually very competent. We came to the conclusion that the traditional management approach could not keep up with the speed of market changes. In fact, the slow rate of new innovation hitting the streets from Apple may be an indication that the centralized model doesn’t work without a strong leader, like Steve Jobs. This speed is directly tied to the innovation going on at a company. But we didn’t come to this conclusion by spending time with these executives.

In fact, we started at the other end of management. We started by noting the success that we had when we did what we call “War on Waste” projects. We saw the enthusiasm that we got from all employees when they were allowed to flourish. They implemented their ideas and were excited to do more. In most cases, they innovated with incremental innovation. These are the small improvements in process that managers ignore. They just aren’t exciting. But when low-level employees get one of those ideas into play, good things happen!

What we observed was these employees being able to learn about and see the big picture. They were not


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stupid and managers were not ignorant. Together they could expand the scope of the response to market changes.

There is no way that a low level employee without an MBA is going to have the same level of understanding as one so trained. But they can help. And they will. They see things that add to the depth of understanding of issues. And they can be trained to look for problems and market opportunities. We’ll explain this later.

Think about it. The speed of change requires a company to move a large number of minds to a new stage of value delivery. To do this requires that they tap into the total Tribal Knowledge that exists in the company. And that is not easy. It is like trying to get an ocean liner to turn on a dime. It just isn’t possible.

Our point here is that a different paradigm is needed to make this change transition work. It requires the whole organization to work together. It needs a management structure that involves a good deal of teamwork. And the traditional paradigm doesn’t do that very well. We are talking about “creating a culture of innovation and maximizing internal growth.” And that is a stretch for the traditional paradigm.

We were asked whether we addressed the acquisition-based organization? In other words, does the fatal flaw apply for any of those companies? And of course our answer is “Absolutely!” Here’s why.

Whether you grow with internal Know How or acquisition of Know How, you ultimately end up at the


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same point. You end up with a company or division that needs to focus on internal growth. After an acquisition, a company is absorbed by its parent and is challenged to grow its profits. It will do this by focusing on maximizing internal growth.

Our point here is that the flaw follows both growth strategies.

It is our contention that the current market does not allow management the luxury of going it alone. In other words, the fatal flaw is exposed. An exclusive club of competent managers cannot compete alone. They need the help of everyone in the organization. There are just too many moving parts for the few brilliant executives to cover the proverbial “holes in the dyke.” The market is just moving too fast.

But what is a company to do? Well, that is what this book is about. It is a proposed

solution to help with this dilemma. There are a number of issues that follow the fatal

flaw. Too slow

This problem starts with a simple observation. And that is that we are dealing in rapidly changing markets. s Bill Gates put it, “business is performing at the speed of light.”

In the flawed logic of a top down managed business, the managers are chartered to look for problems and opportunities. They decide the actions to be taken. And


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everything just grinds along at a snails pace as ideas fight to get on the radar of decision makers. In other words, innovation is stifled in this structure. Employees with ideas find it hard to maintain excitement with their jobs. Underutilized Know How

Know How is a strategic resource. But in most businesses, Know How is not managed as if it were. We expect managers to pay attention to it. But they don’t. To improve, it needs to be managed. And it will with a little effort. But it could grow dramatically if it was managed with the same care and attention as all parts of the business. Know How growth or improvement needs to be attended to.

Let’s get clear about what we mean by Know How or Tribal Knowledge. We treat them interchangeably. They are equivalent.

In our definition, Tribal Knowledge or Know-How is the collective wisdom of the organization. It is the sum of all the knowledge and capabilities. It is the knowledge used to deliver, to support, or to develop value for customers. But it is also all the knowledge that is wrong, imprecise, and useless. It is knowledge of the informal power structure and process or how things really work and how they ought to. It is knowledge of who constrains the process and who facilitates it. It is the knowledge that is squirreled away by employees who feel a need to protect their jobs by not sharing the information needed to do a job. This is part of the total of the Tribal Knowledge.


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For instance, it is the knowledge and the experience of the worker who won’t tell others how he can put those two casings together (when no one else can). That knowledge is his job security. But more importantly, it is the untapped knowledge that remains unused or abused.

As we will point out in the book, there are many ways to improve the utilization of Know How. Innovation is the foundation for improving Know How. It happens in several stages of a business. A start-up demands both innovation and customers. The fully developed business needs both innovation of new ideas and innovation of both process and product improvements. The declining business needs the innovation from War on Waste or similar programs to recover once held glory.

Perhaps the most important part of this issue is recognizing that it is under utilized. Once that happens, then the problem can be addressed. Stifles Innovation

In the traditional work world, ideas for process improvement or new product ideas have nowhere to go. They go up to a manager and they die. The way that the process works is that employees suggest ideas to a manager or a supervisor. Then if it is worthy of attention, it gets a hearing and maybe approval. One employee at a company where we had an engagement noted that his definition of management was “where ideas go to die.” He was being facetious but his point was made.


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In many companies, employees know through the Tribal Knowledge network which managers are receptive to new ideas. And they migrate to them. Ideas explode out of these groups. Human beings love to play or tinker with ideas. Managers who encourage this make their employees work lives better. When employees are encouraged to innovate, good things happen. Too Costly to Innovate

Every investment has a cost. Even an idea that just improves a process with minor tweaks requires some investment in training and documentation. That costs time, therefore money. Bottom line, ideas cost time, money and resources.

We are not saying that there is no innovation going on in many companies. What we are saying is that the innovation process is limited to an “in crowd” with control over a limited budget.

There are ways to approach ideation with an eye on high ROI and we will discuss those at length in this book.

When we originally started our work, we continually heard from clients that our ideas were too costly. What that really meant was this: the ideas pull people away from their work. It meant that production would slow and revenue targets could not be achieved. Those costs were expensive.

But they are only expensive when there is no noticeable benefit. In fact, we found that even though we took employees away from their jobs for 20% of their


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workweek, our clients didn’t see any measurable loss of output. Guess why? Too complex

Ask the following question about your company: “what percentage of people in the business add value?” To answer it, you first need to know the value that is delivered by your company. In Henry Ford’s definition of Waste, it is every job that doesn’t deliver value. Starting there, if you list the people in the company who add value, you can easily answer the above question.

I don’t care what business you are in, you will look at the number and be aghast. Think about it. What do all those other people do? If only a small percent of your employees add value, why are so many people supporting them?

When we do this exercise for companies, it almost always gets nasty. The people who don’t add value get incensed that we would begin this discussion. It can only lead to people getting fired. In most cases, it never did because we ended up increasing production and found ways to redefine jobs and make more people value-adders.

But this all begs the original question, why are there all those non-value-adding jobs?

We think it is because business has become overly complex. Over time, most business adds a legacy of unnecessary, inappropriate, or obsolete systems and procedures. This legacy often called “the way we do it


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here” or “company myth” is both waste and a barrier to innovation. Complexity drives up the overhead.

Elimination of the overly complex system quick starts the innovation culture by engaging everyone in house cleaning. It also speeds business processes, and throws off cash. Too Risk Averse

Managers, in today’s company, are often not encouraged to take risks. They are like the Admirals and the Generals who never get the next star if they make a mistake or take a risk that fails. Managers don’t get their next star, or promotion, with any failures.

On this subject, one of the authors often refers to his mentor from graduate school, Don McCaskill. He was a former CEO at Warner Lambert. This CEO had an expression that it was counter-intuitive. He said that he knew that as a CEO he was doing a good job when 50% of his projects were successful.

His methodology was lots of action. Start on the smallest scale, and then, if it is working broaden the scope. If it is not working fix it or kill it before any serious damage is incurred. Learning from failures as well as successes builds know how.

We agree with Mr. McCaskill because progress never occurs without some failures. And managers who never take risk never really learn. Thomas Edison said it best, “I have not failed. I've just found 10,000 ways that won't work.”


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Thomas Edison has a concluding thought on this subject, “We often miss opportunity because it's dressed in overalls and looks like work” Summary Thoughts

Do all of these reasons behind the fatal flaw offer enough of a reason to change? They are an indicator that today’s markets require a different look. What does a successful management paradigm look like? How do you manage in these conditions? How do you get the bang for the buck that investors demand? How do you do so with minor disruption of your organization?

First, we should be clear on a definition for “paradigm.” In the simplest usage, a “paradigm” is a set of rules. In our context, it is the set of rules used to manage the people in a business. The CEO defines those rules. They are the rules on how he wants to lead the troops. Most often, the paradigm is not written down in any one place. It becomes the culture of the company.

Ask the questions! What does a good “management paradigm” look like? Can it be achieved?

We think that there is a very subtle yet strong way to achieve this goal with a minor change in how we manage. It is not based upon a feeling or a gut-check. It is based on hard data from over 150 programs. All of our ideas about this paradigm were tested. They were tested in field research that gave us great insights.

We will explore our approach to figuring out the required characteristics of this paradigm in the next chapter.


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The Tribal Knowledge Paradigm - TPNI Engagemedia.instantcustomer.com/23859/0/169_tk-paradigm-- … · · 2014-11-303.’’’WHAT’IS’THE’TRIBAL’KNOWLEDGE’PARADIGM?’

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