Journal of Knowledge Management Practice, Vol. 8, SI 1, May 2007

Papers Selected From

Centre for Business Information, Organisation & Process Management (BIOPoM) 1st International Conference 2006

University of Westminster, London UK, June 29, 2006


Supporting Innovation: Communities Of Practice And Change
Elayne Coakes, University of Westminster, Peter A.C. Smith, The Leadership Alliance Inc

ABSTRACT:

This paper discusses the idea that Communities of Practice are the place where innovation takes place in organisations. Innovation leaders and opinion leaders, the paper argues, are to be found by analysing the trust-tagged social networks that are to be found in organisations. The trust networks support the development of this capability by building and sustaining the Social Capital necessary for innovation and opinion leaders to develop, flourish, and support their communities.

Keywords: Communities of Practice, social networks, opinion leaders, social capital, innovation


1. Introduction

The business environment is in a constant state of flux. Organisations grow and diminish, products succeed and fail, and industries develop and retract. This change happens constantly though at times it is faster or more radical than at others. Organisations need to match their external environment’s rate of change in order to maintain or develop their position. Success for organisations comes from suitable change, managed competently and consistently, that provides the organisation with the necessary competences to permit the maintenance and appropriate development of their products for their business environment.

Competitive advantage is increasingly located for organisations in intellectual resources such as the employee skills base, business systems and intellectual property. To address the challenges and opportunities presented by today’s complex, and often unpredictable, markets, an organisation must be able to combine resources in novel ways, dispose of, or reconfigure, resources that are no longer relevant, and acquire new resources. An organisation’s ability to manipulate resources continuously and rapidly becomes a competitive capability that is not easily imitated by competitors. This capability enables the development of new products and services and thus enables an organisation to maintain, or improve, its current market position. Organisations need to continually innovate – to provide new products, services or processes to match the changing environment and its requirements, Lubit arguing (2001) that this advantage comes from knowing how rather than doing, or having access to, resources or markets. Inkpen (1998) says that new knowledge provides the basis for organisational renewal and thus sustainable competitive advantage. Successful innovation comes from the use of internal and external knowledge and an understanding of the organisational environment that permits the matching of offerings to the needs. Knowledge, Inkpen continues saying that it is the key resource that managers need to appreciate and understand. The appreciation needs to cover not only the internal complexities but also the challenge of cross-border knowledge transfers in diverse settings.

2. Change And Innovation

The Xerox 2002 European survey of managers found that 87% believed that knowledge was key to developing competitive advantage. Lubit (2001) continues this argument but says that it is the ability to know how that is the crucial knowledge element – organisations need to develop knowledge that is difficult for outsiders to copy and that this special form of knowledge resides in the tacit element. Tacit knowledge development within an organisation, however, brings with it a paradox (Lubit, 2001). In order to develop knowledge successfully to achieve competitive advantage, the knowledge must be shared within the organisation rather remain as the property of individuals. Once this happens the knowledge can also leak outside of the organisation and will become industry best practice. Indeed the more common organisational change programmes such total quality management and just-in-time supply chain activities are well known in all industries and business sectors and so cannot supply any organisation with competitive advantage. Cavaleri and Seivert (2005) say that in order to manage an organisation’s knowledge for competitive advantage what is required is to be able to execute knowledge based strategies that are exceedingly difficult for business rivals to duplicate (p5). Organisations must look not conserve existing knowledge which they call Green Knowledge Management but to develop functional, adaptive, sustainable, and timely organisations through knowledge. They quote Hammer (2004) as arguing that operational innovation, the invention and development of new ways of doing work (p86) are the ways to provide better services and prices.

2.1. Change

There are many theories of change and change management available in the literature, based on practice and precept. These range from the idea that organisations act in a certain way until change management is ‘performed’ and then act in a new, ‘changed’ way - the Lewin (1951) freeze-unfreeze-freeze concept; to an idea of continuous improvement, perhaps incremental, which tunes performance, and may be anticipatory of where the business environment will next be changing its direction. Drew and Smith (1995) recommend such an incremental learning-based approach. They propose that change can best succeed if attention is first paid to overall organisation readiness, based on a “change audit”; concepts of the learning organisation can then be utilised to “change proof” the firm – to increase its capacity to withstand and exploit unexpected and rapid change. The key change levers in managing this activity (Chaffey 2004) would seem to be obtaining change in the market or business models; changing business processes; changing the organisational structure and / or culture to fit the new models and processes; and ensuring that the technology infrastructure provides the required (new) support.

In any event, it is inarguable that knowledge and understanding of the business environment are essential in order to achieve successful change for the organisation. Additionally, this paper would argue that organisational success comes not from following the ‘herd’ or best practices but through doing or producing something different or differently from other organisations in the same business sector i.e. being the initiator of generative change rather than adaptive change. This knowledge and understanding of how to perform differently is held within the Intellectual Capital (IC) of an organisation; IC being some function of the organisation’s Human Capital, Organisational Capital (sometimes called Structural Capital), Relationship Capital (Edvinsson and Malone, 1997), and Social Capital (Gabbay & Leenders, 2001; Cohen & Prusak, 2001). Such organisational knowledge, embodied in the IC, can be turned into commercially intangible assets (Hussi, 2004) and is underpinned by innovation, as it is the innovation that permits the ‘different’ action or activity.

2.2. Innovation

Innovation can be defined as the process of bringing new problem-solving ideas into use (Amabile 1988; Glynn 1996; Kanter 1983). The emphasis in this quote is on the phrase into use, for Tidd (2001) argues that just the invention of new knowledge is insufficient and Sullivan, (1998) and Teece, (1998) say that innovation has only occurred if the new knowledge has been implemented or commercialised in some way. A number of authors echo this view (Pinchot, 1985; Thornberry, 2001; Zahra, 1985) asserting that without the presence of some form of entrepreneurial activity to exploit opportunities as they arise within organisations, innovation remains little more than an aspirational destination, rather than a tangible one.

Successful organisational innovation must be based (according to innovation theory, see Glynn 1996) in co-ordination mechanisms that support the problem-solving efforts of the organisation’s Human Capital, and the dynamic processes of sense making within organisations (Drazin et al, 1999). Leonard-Barton and Sensiper (1998) argue that innovation depends upon the individual and collective expertise of employees, and innovation is characterised by an iterative process of people working together building on the creative ideas of one another. Numerous examples are provided by Hargadon (2003) based on ten years of research demonstrating that revolutionary innovations result from the creative combining of ideas, people and objects rather than flashes of brilliance by lone inventors. Stacey (2001) places self-organising human interaction, with its ability for emergent creativity, at the centre of the knowledge creating process, and suggests that organisational knowledge depends on the qualities of the relationships between people. Glynn (1996) proposes that organisational intelligence is context specific and different from the aggregation of individual intelligence (Nahapiet and Ghoshal, 1998).

3. Leading For Innovation

Authors such as Adaman and Devine (2002) suggest that entrepreneurship also is founded in social interaction occurring within and outside the organisation, indeed Churchman (1971) proposes that the knowledge sharing process may effect the creation of new potentials for action. McFadzean et al (2005; pp. 352) define such corporate entrepreneurship as The effort of promoting innovation from an internal organisational perspective, through the assessment of potential new opportunities, alignment of resources, exploitation and commercialisation of said opportunities.

Knowledge leaders according to Cavaleri and Seivert (2005) can be a combination of two world views. In their book discussing Knowledge Leadership, they point to work that was performed in 1945 by Koestler relating to leadership styles that can be seen in the world. These Koestler called the Yogi and the Commissar. According to Cavaleri and Seivert we see the main characteristics of these typologies in our organisational leaders where Yogis believe we learn from reflection to form new views on how to act in the future and that we need to change one’s own thinking or behaviour in order that systemic change can take place. The Commissar however, learns by experimenting, trial and error, and they will change the system and then force people to conform. Each of course, is an extreme, and the message is that a suitable balance should be found for the organisation and the individual. Knowledge leaders need, they would argue, to learn to balance and to master their pragmatic knowledge capabilities so that they can design, build and then lead a knowledge based organisation.

4. Innovation Champions

Glynn (1996) points to the existence of “innovation champions” who have the social, political or interpersonal knowledge to influence the acceptance of innovative change. Smith (2005a) describes the personal characteristics of these “opinion leaders” and the means by which innovations are diffused, adopted, or rejected. Some such champions find themselves isolated in their organisation. Patnaik (2006) suggests that they should look outside their organisation for advice and mentoring. But he does also mention that the most successful innovation leaders have a ‘buddy’ to assist, and that this is crucial to balance out know how and understanding. In the section below on Communities we show how such buddies can be found and developed.

The above interpretations imply that entrepreneurship and innovation both add value, and that it is the corporate entrepreneur's role to manage the innovation process such that it will lead to sustained competitive advantage and organisational viability. McFadzean et al (2005) quote Amit et al (1993; pp 816) saying that the two concepts should be linked together, and McFadzean et al (2005) and Shaw et al (2005) make a strong case for considering these concepts systemically.

Given that socialisation processes seem critical to innovation and entrepreneurship, and that it is prudent to treat these processes systemically, CoPs (Communities of Practice) would seem to offer a promising practical vehicle for their eventuation. Brown and Duguid’s (1991) study of CoPs explains how shared learning is entrenched in complex, collaborative social practices, and many current authorities propose that CoPs provide an valuable framework for inter-agent context specific knowledge sharing, sense making, and knowledge creation (Coakes & Clarke, 2005). Wenger et al (2002; p. 4) have provided a widely accepted definition of CoPs as Groups of people who share a concern, a set of problems, or a passion about a topic, and who deepen their knowledge and expertise in this area by interacting on an ongoing basis. These authors add that “These people don’t necessarily work together every day, but they meet because they find value in their interactions” (ibid; pp. 4). Indeed, one of the functions of CoPs may be the enculturation, or socialisation of its members into a community’s “approved” mindset. Successful membership of a community implies support for the culture of that community - a shared vision -, and its over-riding ethical and moral standpoint on particular activities or actions - a belief in their values above all others. Human Capital contains the intellectual capability to create and innovate through the mixing of skills with knowledge and this innovation occurs within the context of organisational culture and its shared values, beliefs, expectations and attitudes

5. Communities

Communities, it also argued, are one of the supporting organisational forms for innovation. The generation of new ideas that activates innovation is facilitated by diversity and breadth of experience, including experts who have a great deal of contact with other experts in the fields; links to users; and links to ‘outsiders’, (Moss Kanter 1988). Creativity often springs up at the boundaries of disciplines and specialities, so innovative communities will work through collaboration with other communities organisations and also communities in other organisations - inter-and intra-organisationally. Communities are the place for developing new practices, new services and new products. As Wenger (2001 p1) says: Communities of Practice are Focused on a domain of knowledge and over time accumulate expertise in this domain. They develop their shared practice by interacting around problems, solutions, and insights, and building a common store of knowledge.

Lesser and Storck (2001) also say that we must think of a CoP as an engine for the development of social capital. They argue that the social capital resident in communities of practice leads to behavioral changes, which in turn positively influence business performance. (online). Social capital, in particular, they argue decreases the learning curve, increases responsiveness to customer experiences, reduces rework and prevents reinvention, and also increases innovation.

Lubit (2001) argues that sharing and integrating knowledge brings the firm a number of benefits: firstly it will spread best practices as well as developing new ideas and innovations; secondly, it enables the understanding of the potential effects of actions and permits optimization rather than compromise; thirdly, it permits co-ordination of actions to realize synergies; and finally, it provides for an opportunity to explore the root causes of problems and assumptions.

6. The Community Challenge

The challenge is how to start a Community and from where do you draw its members? One answer would seem to be to first discover who is already learning from whom and is connected and communicating (in some fashion) to a learning network.

The notion of networks as a dominant organising principle to help explain how organisations “really work” and how knowledge sharing is effected continues to demonstrate practical promise (TLA, 2006; Cross & Parker, 2004; Kilduff & Tsai, 2003). Social networks in organisations are omnipresent and are central to knowledge sharing but often only the formal hierarchical network is acknowledged. There are innumerable social networks across an organisation but the following networks often have a significant impact on knowledge sharing: work, friendship, subject expert, management, leadership, innovation, client/customer, stakeholder, CoP, and CoI (Community of Interest). These are all examples of important intangible assets and organisational structures that contribute directly to value creation through innovation.

Leaders of a knowledge based organisation, we could argue must be well placed in these networks. Indeed we could call them connected leaders. Connected leaders, according to Gobillot (2006) do not lead the formal organisation but rather they channel the vitality of the informal organisation towards delivering the formal strategy of the organisation. Connected leaders provide an agility and responsiveness through their informal authority and create social networks that are important for their success - they are able to do this because they are trusted and the relationships are formed around a shared agenda (or community of ideas perhaps).

Identifying particular social networks, legitimately influential individuals, and visualising the complexities of their relationship patterns and communication channels, have traditionally been difficult, time consuming, and expensive. Network Visualisation and Analysis (NVA) is an important part of this effort and its application to CoPs has been described (Smith, 2005b). In NVA practice, data regarding “who relates to whom” are collected from the larger organisational community, or from other groups such as CoPs. Based on these data, NVA reveals the complexities of how people communicate and interact in networks and opens them to better management and optimisation. In particular, NVA is used to identify innovation champions and opinion leaders so that their impact on the development of new ideas may be maximised (Smith, 2005a).

7. The Case Study

7.1. Introduction

This paper demonstrates through a case study application how NVA may be used to detect networks and individuals who may then be formed into communities that will support the innovation practices discussed above for sustainable change and entrepreneurship. In this case study a major UK retail organisation with branches in a number of different cities undertook an NVA project with the primary objectives of identifying the most influential individuals from the company’s three most senior management levels across all locations and departments with regard to:

      Leadership … with the objective of forming one or more steering groups to facilitate development and introduction of a new Leadership Development Programme across the company;

      Innovation … with the objective of forming one or more groups capable of enhancing innovation and knowledge sharing across the company, and who would double as opinion leaders to facilitate introduction and adoption of new innovations; and to

      Gaining insight into the organisation-wide network of communications and trust-tagged relationships related to these themes.

Two email-delivered questions that relate to the above objectives were posed to all members (approximately 100 individuals) of the three most senior management levels across all the company’s locations and departments. Members of this target group responded by picking names from a list displayed to them on the Internet. This list contained names for all the approximately 100 individuals targeted for the study. The study community was further amended as respondents were free to write in names of individuals not identified in the original target group; questions were not posed to these “write-ins”.

The two questions were:

“In your role as a leader in our company, whom do you seek out for 'brainstorming' around dealing with complex issues in business, interpersonal or cross-functional situations? Think about people in your area and other people within the business.”

“Imagine that you are on a project to develop an innovative approach to creating "a sensational place at Head Office". Who are the 'ideas' people you want on the project team with you, from your own or other areas?”

Prior to emailing out questions, the company’s HR Director sent out a note to the target community outlining the reasoning behind the project and setting out the process. Copies of the two emails containing the questions were sent to the target community on two separate days, and a period of two weeks was allowed for all those wishing to respond to the questions to do so. The final response by the group to the questions was around 75%.

KNETMAPTM (Know Inc., 2006) was the Web-based data-gathering tool that was used in the study to pose the questions and collect group members’ responses. This software was also used to build the relationship maps based on data submitted from group members in response to the questions. It provided results that were both qualitative and quantitative. Each network map related to a given question and depicted a particular dynamic in the organisation by showing who was going to whom for specific information. After completion of the network visualisation, analysis, and interpretation, results were reported to the study sponsors for further dialog and finally for action.

7,2, Trust-tagged Social Networks

Social Networks are frequently used in organisations to analyse the relationships among employees in search of knowledge. They identify where knowledge flows to and from and show who asks questions and who they ask for the answers. Analysing these social networks identifies the people within a network and asks questions about their relationships with others within the network. Thus it can find the pivotal knowledge sharers. Usually they are analysed through Centrality; and Substructures. These knowledge actors are usually classified as below:

      Central connectors

o       Those who link most people in an informal network with one another;

o       Not formal leaders but they know who can provide expertise;

o       Learn faster, perform better and are more connected to the organisation;

      Boundary spanners

o       Connect one network with another in different parts of organisation or externally;

      Information brokers

o       Acknowledged sources of expertise – Subject Matter Experts;

      Peripheral specialists

o       Provide expertise as required; have high turnover rate.

In addition, trust forms an integral part of these networks:

Trust tagging is a natural human phenomenon that is critical to knowledge transfer and the validation of authority as well as general problem solving. Imagine that you face a difficult problem, you phone up a friend, let’s call her Gwyneth and after a short conversation about a project on which you worked together, or some social activity that you share in common you ask if the friend if they know anyone who can help. A day later, someone you do not know phones you up and says: “Gwyneth says you need some help, and any friend of Gwyneth's is a friend of mine.” You have just been trust tagged in a network linkage. Snowden, 2005 p558)

Snowden argues that such trust networks do not form spontaneously, nor can they be created artificially. They come from joint experiences that form bonds over time, and they are voluntary. Trust takes time to form but can be destroyed in seconds. Additionally, it appears that we cannot form trust-based networks that are numerically large, Snowden (2005) puts the working norm at 15, even though he admits that some anthropologists might put it higher.

Communities that form around trust networks, tend, according to Snowden to have three major elements:

      an intractable problem(s);

      a reward perhaps through patronage;

      a set of boundary conditions or rules that define how the group can form and select its members.

The nature of their formation and the trust that is fostered and engendered by joint actions within such a community enables problem solving to be undertaken in a ‘safe’ and supportive environment. However, trust can be built and sustained in a learning community, according to Snowden (ibid), where a disparate group come together and form the trust bond through participating in a shared activity.

7.3. Survey Results

The NVA provided the names, locations and management levels for a significant number of individuals demonstrating noteworthy leadership influence. Similar results were obtained with Question 2 relating to innovation. Although there were names that appeared in both lists, significant differences overall were evident, indicating that innovators form a recognisable architype. In both cases names were identified that surprised the study sponsors; this is fairly typical of such studies, and demonstrates the informal nature of much network activity, and in particular the unsystematic characteristics of  trust-tagging.

Powerful influential steering groups and knowledge sharing communities (“Trust Tagged Networks”) for the development and support of the new leadership and innovation programmes the company wished to introduce were built by linking individuals drawn from (a) within each list seperately; and also (b) by linking those drawn from the leadership list with individuals from the innovation list. NVA also provided a list of names of (a) those who seek out the most influential individuals, and (b) those who these influential individuals themselves seek out. This significantly contributed to understanding the informal communications links and influence patterns across the various organisational characteristics included in the study. This information was used to facilitate setting up the steering groups and knowledge sharing communities on already existing trust-tagged networks as well as fostering new ones. Communication and knowledge sharing was further facilitated within these get-togethers using action learning (Smith, 2005c).

8. Conclusions

This paper has shown that innovation leaders and opinion leaders are to be found by analysing the trust-tagged social networks that abound in organisations. Identifying these leaders and their relationship networks is important because innovation forms the part of Intellectual Capital that provides an organisation with the competitive capability to maintain and improve an organisation’s market position. The trust networks support the development of this capability by building and sustaining the Social Capital necessary for innovation and opinion leaders to develop, flourish, and support their communities.

To discover these leaders and their networks we have demonstrated the use of a computer supported tool - Network Visualisation Analysis, and shown that the results of such an analysis in an organisation can often provide surprising results. Thus leaders and networks may be found that management are not aware of from consideration of only the formal organisational hierarchy.

In order to maximise your possibilities for competence improvement and market position development, it is important when forming your communities for innovation development e.g. CoPs, to discover who your truly influential innovation and opinion leaders are, and to build on them and their social networks.

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Contact the Authors:

Dr. Elayne Coakes, Senior Lecturer, Westminster Business School, 35 Marleybone Road, London NW1 5LS; Tel: +44 (0)20 7911 5000 ext 3338; Email: coakese@wmin.ac.uk

Peter A.C. Smith, President, The Leadership Alliance Inc., 30 Laguna Parkway - Unit 2, Lagoon City, Ontario L0K 1B0 CANADA; Tel: +1 (905) 806-6321; Email: pasmith@tlainc.com