Critical Structural Elements for Developing a Knowledge Strategy

By Mostafa Sayyadi and Michael J. Provitera

There are unanswered questions regarding the lack of alignment of the corporate structure with the knowledge management strategy and these questions have caused initiatives to stop organizational knowledge to be effectively managed. We propose that an effective alignment between the corporate structure and the knowledge management strategy needs to be a direct connection between the upper echelon of the organization and its stakeholders. A vibrant corporate structure includes all the departments of the organization to effectively serve the objectives of the knowledge management strategy. The structure of this article will address how organizations can ensure that there is an alignment between the corporate structure and the knowledge management strategy. These findings come from our interviews with 81 senior managers in Australia and the UAE.

Introduction

When knowledge management strategy is not working effectively, one way to revive this vital concern is to redesign the corporate structure. However, redesigning the corporate structure seems overly complicated and ambiguous for many managers. ^{1, 2, 3, 4, 5} When we spoke with Jessy, the CEO of a large automobile manufacturer in Western Australia, there was a lack of an effective corporate structure. The validity of the arguments of this CEO became clear to us. We found that the root of the problem was in the implementation of the knowledge management strategy, and this came from the lack of an effective corporate structure. This caused ineffective communication among different departments of the company. These ineffective communications made Jessy unable to effectively recognize the problems as they occurred on a real-time basis. This failure to recognize the problems eventually led to solutions that were not effective and only wasted resources.

Even the best leaders are afraid of redesigning their corporate structure. They feel that they need outside expertise to guide them in this area. A lack of an effective framework for redesigning the organizational structure is the main reason that solutions to design a better corporate culture seem very vague and complicated. Challenges of today’s organizational environment seem complicated, from leading and motivating the workforce to the need to implement diversity, equity, and inclusion. ^{6, 7, 8, 9} The key to connecting the entire organization through a common language regarding leading change enables employees to navigate change. Thus, we offer practical suggestions to redesign the corporate structure to better align with the knowledge management strategy. 

Corporate structure is a vital component of knowledge management strategy. ^{11, 12, 13} In most cases, we feel that managers and employees believe that there is a complete alignment between the knowledge management strategy and the corporate structure. However, if there is a lack of this alignment then this may lead to the failure of a knowledge management strategy and may impose extensive financial losses. Thus, leaving exposure to poor risk management and pecuniary loss. Our suggestions may provide a blueprint for redesigning corporate structure for organizations across the globe.

Redesigning Corporate Structure

Many CEOs may ask the same question. “Does the structure of the organization need to be redesigned for the effective implementation of the knowledge management strategy?” An alignment between the corporate structure and the knowledge management strategy means that an effective corporate structure can facilitate the implementation of all future knowledge management strategies.

The most important objective of a knowledge management strategy is to create a competitive advantage through the development of capabilities related to the knowledge management processes and disseminate this knowledge throughout the organization in real-time. ^{14, 15} These capabilities are part of the hidden but extremely viable strategic components: Human Capital, Social Capital, and Organizational Capital. Therefore, in redesigning the corporate structure, all roles should be designed around the development of organizational capabilities to facilitate knowledge management processes to include the development of people to build social capital. When roles are defined in terms of individuals, these roles are considered important only when competent employees are talented and working in them. Then, social capital builds competence in people through training and development and building organizational capital. When incompetent employees take on these roles, the importance of these roles fades into what we have today in many organizations, inertia. Organizations need to redefine the skills required by employees, continuously develop skill-based competencies, and engage all parts of the organization in training. The cultural aspects of social capital then build upon human capital and both of these tenets lead to organizational capital. Just as an organization’s “Good Will,” from an accounting standpoint, organizational capital improves over time and this intangible value of an organization adds to its competitive advantage.

Decision-making needs to be more effectively implemented. One of the biggest problems in the effective implementation of knowledge management strategies is the lack of a meaningful relationship between social capital expertise and decision-making authority. Thus, the employees, who are on the front line, must have the necessary information regarding issues even if they lack decision-making power. In order for decisions to be implemented, communication channels must not lack practical insights for effective implementation. We advise executives to delegate more decision-making at the operational levels of the company. Redefined the roles and skills required for social capital to monitor the implementation of decisions and solve any problem as it arises instead of leaving it to fester. As Ken Blanchard once said, “Feedback is the Breakfast of Champions,” and many employees feel that they do not receive enough feedback from their managers today. In fact, when called upon, many employees feel they are either being reprimanded or fired. When left alone, employees feel they are doing an adequate job. Many employees blame their managers for their lack of time management skills and believe that managers are not effectively communicating with their subordinates, thus leading to a lack of social capital. We suggest that when a meeting is called upon the executive explains that this meeting is about an issue that does not have anything to do with their performance. In fact, we coach executives to praise people before they even enter the meeting with accolades and positive ideas of why the meeting is called upon in the first place.

Many “Silos” exist causing organizations to regret the necessary collaboration between the internal departments of the organization. Only key employees are informed to speak at meetings leaving employees feeling a sense of “destructiveness” or “incompatibility” among the managers and subordinates. The in-group/out-group complex must be shattered. Furthermore, in order to build social capital, we suggest that organizations develop teams consisting of employees from different departments. These teams also require conducting workshops for both employees and executives so that everyone is on the same page. Selecting appropriate vendors and training employees builds social capital. Social capital, if increased, builds organizational capital.

In Conclusion

The success of a knowledge management strategy is strongly dependent on a corporate structure redesign. The main problems in implementing knowledge management strategies are rooted in the corporate structures that weaken knowledge management processes. To solve these problems, we suggest executives redesign their corporate structures to create a competitive advantage. Incorporating social capital, building human capital, and expanding organizational capital is the most important solution for the successful implementation of the knowledge management strategy.

About the Authors

Mostafa Sayyadi works with senior business leaders to effectively develop innovation in companies and helps companies—from start-ups to the Fortune 100—succeed by improving the effectiveness of their leaders.

Michael J. Provitera is a senior faculty professor of Management and Leadership, in the Andreas School of Business at Barry University, Miami, Florida, USA . He is an author of Level Up Leadership: Engaging Leaders for Success, published by Business Expert Press.

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