How do knowledge, power, and influence affect customer experience?

 This post was written in conjunction with Carl Lyon for The QoE and was first published on The QoE blog

Our first topic of 2016 explored knowledge, power and influence in organisations. Or to be more specific, where is the knowledge, who has the power, and how is this affecting the ability to influence behaviour?

Searching for trust
 
To understand this topic, it’s useful to use the metaphor of going to the doctor. In the
industrial age, we went to the doctor to seek their professional opinion on a particular
ailment. The doctor was the ultimate source of knowledge about our issue. We had
little alternative than to have blind trust in him/her, and as such they held almost
all the power to influence our behaviour.
 
Fast forward to the information age. What do the majority of us now do before going
to the doctor? We Google our symptoms. The ability to search online has dramatically
shifted power away from the doctor to such an extent that the best question a doctor
can now ask us is ‘what have you Googled?’
 
This has a dramatic effect on trust. If the doctor fails to address our concerns arising
from our Google search, our trust in them falls to a new low. But if the doctor asks
us if we have any concerns, listens to the knowledge we have obtained from our Google
search into account, addresses our issues, our trust in the doctor then increases
to an all time high.

The power of context
 
Search has significantly shifted power away from organisations by putting information
and opinion in the hands of the customer. It is highly likely that customers will Google
a problem before calling a call centre. And in some cases, it is likely that the information
they find online will be more up-to-date than the information available inside the
organisation itself.
 
This is why many call centre employees increasingly resort to Google searching in order
to resolve customer queries. The most up-to-date information lies within the customer
community, not within the official knowledge management system. The knowledge of
the community is being updated in real time, whereas it can take weeks (if not months)
for official sources of information to be updated.
 
But more importantly, the knowledge of the community is contextual. Whether customers
realise it or not, their query will arise from their specific context. Answering their query
effectively will therefore require an understanding of this context.
 
We instinctively seek answers to our questions from people who understand our
context, whether this be our friends, work colleagues, or our online network. And we
are more likely to trust the answers we receive from people who understand that
context. So how can organisations tap into the deep ocean of contextual information
that surrounds its customers, and use it to improve customer experience?

Organisations as dynamic, omni-channel communities
 
To tackle this growing problem, we need to re-imagine the organisation as a dynamic,
omni-channel community made up of both customers and employees. The community
has the knowledge and power to influence the behaviour of the organisation and help
it adapt to the rapidly changing demands of its customers. And the community may
well be made up of both customers, employees, and general observers.
 
This transformation has been given many names, including open innovation, bringing the
outside in, or even simply customer/employee engagement. The music service Spotify
is a great example, as is the Chinese Telecom giant Xiaomi who release a new version
of their operating system every week in response to user feedback.
 
The ability to listen and adapt has been key to the success of these information age
organisations. By minimising the effort required to engage with their community,
organisations can gain access to a wealth of untapped insight that can be used to
improve the business. And crucially, making the pockets of specialist information held
by customers, employees and departments more searchable by the community,
allows this contextual knowledge to be shared and leveraged in new and valuable ways.
 
Organisations that can listen, think, adapt and act in response to their community are
those that will successfully evolve and ride the wave of digital transformation. But while
a community can be grown inside any organisation, a common barrier is the tendency
for the organisation to act without listening, or worse, continue to believe that
‘it knows best’.
 
Many businesses still behave like an industrial age doctor by assuming that customers
haven’t searched online before calling. But if a business is engaging with the contextual
knowledge being co-created by its community, it will be perpetually evolving in response
to customer needs.
 
And that, surely, is just what the doctor ordered.

The real difficulty...is in escaping from old ideas

Or to give you the full quote: “The real difficulty in changing any enterprise lies not in developing new ideas, but in escaping from the old ones” (John Maynard Keynes)

If you have twenty minutes, make a cup of tea and take a peek into the future. In this short video, John Seely-Brown (JSB) - a futurist, formerly of the XEROC-PARC research centre – highlights the many ways in which the intersection of people, information and technology is transforming how we understand knowledge.

In the video, JSB begins with the above quote from J.M. Keynes to illustrate how we struggle to move away from old, trusted ideas and into new, uncertain times. Although delivered at a conference on the future of Libraries JSB goes far beyond this to grapple with knowledge management and innovation, highlighting that progress in the 21st century now follows a rapid series of 18-month s-curves driven by exponential advances in computation. The implication of this is that we no longer have the time that we had in the 20th century to reinvent social practices and adapt to change – today, change is rapid and unrelenting.

I’ll do my best to provide a summary of the key points (please note that although I wish I was as smart as John-Seely Brown, almost all the ideas that follow are his...)

We are moving from knowledge ‘stocks’ to knowledge ‘flows’

As change speeds up, we are moving from a paradigm where we ‘stored’ knowledge to one in which we participate in ‘knowledge flows’. Perhaps the most important implication of this is the difficulty in storing the tacit knowledge created by these flows – we no longer have the time to identify this knowledge, make it explicit, and store it. This poses significant implications for organisations who are investing significant capital in trying to capture and store knowledge (an example of how we have difficulty escaping from old ideas).

The half-life of our skills is shrinking to about 5 years

The speed of change potentially renders our skills obsolete every 5 years. This highlights the major problems this poses for formal schooling and the need to move away from education that is based around learning content. Instead, we need to learn the critical skills that enable us to dip into relevant knowledge flows in order to find and apply relevant content to a given problem. We also have to learn how to participate effectively in the vast, complex networks in which we increasingly find ourselves.

Homo Sapiens is becoming Homo Faber
Or rather, ‘Man who Knows’ is becoming ‘Man who Makes’. The default mode of operation in networked societies increasingly involves making and sharing knowledge, not simply consuming it. But rather than just building content and things, we are now able to build contexts as much as content. JSB highlights how maker culture, blogging and remixing enables us to change the context of a message or a piece of content. Millenials with increasingly sophisticated devices now expect to be able to remix and adapt content, and the implication of this is that we have to learn how to read ‘context’ as well as simply ‘content’. Maybe ‘context marketing’ will soon be on the horizon…

‘Effective play’ is needed to help us un-learn

If our skills will become obsolete every 5 years, JSB points out that ‘unlearning’ will become just as important as ‘learning’. He argues that our ability to learn through play is integral to helping us unlearn and develop a new, flexible and creative mindset. At the heart of the triangle of knowing, making and playing, are ‘imagination’, ‘curiosity’ and ‘agency’. This need for millenials to learn through doing, playing, and making should be shaping how we conceive of the future of work.

How imagination, curiosity and agency are shaping how we work (adapted from John Seely-Brown)

Reverse mentorship is a source of innovation

We may have instructed those young graduates we just employed to make the tea and hang out on social media. But instead we should be creating opportunities for them to mentor us so that we can learn about how they see and understand the world. If ‘yesterday’s cutting edge is today’s dust bin’, as JSB argues, then we need to be embracing the mindset, energy and inquisitiveness of those new to the workplace in order to stay as close as we can to the s-curve.

We need to ‘leverage the edge’ in the exponential age

Echoing the practice and language of lean startups and entre/intrepreneurship, JSB highlights the need to create now and seek forgiveness later. Leveraging the exponential power of social media, easy access to computing power and micro-financing and crowd-funding, JSB argues that the aim should be to excel on the edge and use this success to draw the core towards us. This is another way of escaping old ideas and making sure we are at the start of the new s-curve rather than on the tail of the old one.

So there you have it, a whistle-stop tour of some of the concepts and ideas that will shape – and are already shaping – our future. It’s scary to think that my skills are already slightly more out of date than they were when I began typing this article…

How reputation and ownership affect knowledge sharing

Here's the thing: I regularly share information on LinkedIn with a network of contacts, most of whom I've never met. And unless one of these people offers me a job, none of them are in a position to give me any financial reward for sharing. So why do I share?

And here's the other thing: I don't share this information internally in my organisation, with people whom I have met, some of which are at least in a position to reward me financially for sharing. 

So if money isn't an incentive for sharing, what is?

Dan Pink has demonstrated that money only can only motivate to a certain point, and that beyond this point financial reward actually de-motivates people. Even if a company would offer such an incentive for sharing, the promise of a promotion or a pay rise can only be delivered infrequently. So what else might be going on?

Reputation

Why do we share information on LinkedIn? Or Facebook? For example, why am I sharing this post on LinkedIn rather than on my company's intranet? If we don't share for financial gain, one incentive may be to do with enhancing our reputation - and our influence - in our personal/professional network. If someone shares a cat video on Facebook it is usually to make people laugh, but the flip side of this is that it increases their reputation in their network as someone who has a sense of humour.

But why doesn't this compulsion to share extend to sharing work-related knowledge on a company intranet? Perhaps we don't consider this kind of knowledge to be sufficiently interesting and therefore not worth sharing. Extending this logic suggests that we don't think that this knowledge will enhance our reputation or influence in our network, or - worse still - that my internal reputation may even be damaged by sharing what others might perceive to be 'boring' information.

So 'what people think of me' is potentially more valuable that financial reward. In other words, I share on LinkedIn so that other people in my network think that I am informed, insightful and useful. It is their perception of me that is valuable, as it increases my reputation, influence and social capital. And that's not to say that reputation is without financial value; reputation is increasingly becoming as important as profitability as a key strategic driver, hence the growth of the reputation economy.

But why are people more inclined to try and increase their social capital and reputation externally and not internally? Why are we inclined to share information outside of our organisation than within it? Is it because there are no official 'structures' in our personal network? Harold Jarche notes that structure drives behaviour in large organisations, but perhaps in our personal networks it is a lack of structure that drives behaviour. What is different about sharing our knowledge and expertise on social media, but not within our own organisation? One important reason is because our personal network 'self-organises' - I.e. the lack of hierarchy means that knowledge is free to travel between any individual in the network and does so based on factors including how interesting/topical/humorous/insightful it is.

Ownership

Alongside reputation, 'ownership' also plays an important role in driving sharing behaviour. When I am sharing on my own social media channels I 'own' my communication, and I alone reap all benefits gained from my increased visibility. But within the walls or an organisation it is primarily the organisation that benefits from employees sharing their work, not the employees themselves.

An example of this could be the resentment generated from organisations not sharing revenue and profits fairly amongst employees. Although this would appear to run contrary to the above argument against financial incentives driving behaviour, it is actually 'resentment of inequality' that brings disengagement. And few things reinforce the sense of inequality than an overly hierarchical structure.

A good example of this can be heard in the HBR podcast 'Are robots really coming for our jobs?' which tells the story of weavers in 19th Century America. As technology developed, the weavers were able to use their skill to bring about a significant increase in profitability for their organisations, but the weavers' wages remained stagnant for some 30 years. This highlights the problem of the 'them and us' mentality, a problem which can drive employees to feel disengaged and disconnected from both their work and their organisation.

If employees feel a greater sense of ownership over their work, it is likely that they will be more engaged and feel more invested in the success of the company. And this greater sense of ownership may make them feel more inclined to share their work in order to help colleagues.

If the goal is to increase knowledge-sharing, the challenge is to move away from an 'us and them' mentality. A greater sense of ownership and clearer reputational benefits to an individual's social capital are two key factors that are likely to drive greater participation and engagement in internal networks.

Knowledge + knowing = innovation

I've just finished reading a dense yet highly insightful article by Cook and Brown (1999) about the nature of knowledge and its relationship to organisational innovation. Although the article was written in a pre-social media age (hard to imagine now), like any great research it contains powerful insights that are highly relevant in today's world where use of social tools by businesses is growing exponentially. This post is an attempt to interpret aspects of their article and apply it to social business, but I would highly recommend reading the original research (reference at the end of the post).

Cook and Brown argue that there are four different types of knowledge: explicit, tacit, individual and group. Each type of knowledge is distinctly different and each fulfills a function that the others cannot.

• Explicit knowledge can be understood as "knowledge that can be spelled out or formalised"
• Tacit knowledge is associated with skills or know-how
• Individual knowledge is that stored in the minds of individuals
• Group knowledge constitutes the 'body of knowledge' possessed by a specialist group or community of practice

 
'Knowledge' and 'Knowing' are also understood as two separate concepts, with each enabling the other. Knowledge can be viewed as something that individuals or groups possess, and Knowing constitutes the application of this knowledge in a form of action by groups and individuals interacting with each other and the physical world. In this sense, Knowledge is positioned as a tool of Knowing with each enabling the other.

The key aspect of this interpretation is Cook and Brown's belief that the interaction between knowledge and knowing constitutes a powerful driver of innovation in organisations. Of particular significance is their argument that "harnessing this innovation calls for organisational and technological infrastructures that support the interplay of knowledge and knowing" (1999: 381).

Why is this relevant in the age of social media?

The use of social media tools in organizations can be seen as constituting precisely this sort of infrastructure, as these tools enable employees and managers to access, manage and make use of the "intellectual capital" of the organisation. Implementing a means to access the tacit and explicit knowledge that resides in both individuals and groups enables managers to tap into the creative potential of the workforce. This rich knowledge can then be applied to help the organization generate innovative ideas, products or solutions. The ease with which organisations are able to tap into this creative potential is likely to increase their competitive advantage and ultimately render them more innovative.

The recent report by the Altimeter Group about the Evolution of Social Business suggests that there is a distinct gap between businesses that are implementing a social media strategy and those that are 'deeply integrating social media and social methodologies throughout the company to drive real business impact' (full report below). The research indicated a truly social business has an approach to social which:

1. is clearly aligned with strategic business goals of an ogranisation
2. has organisational alignment and support that enables the execution of that strategy.

After surveying nearly 700 social media professionals and executives the research also found that only 34% of businesses believed that their approach to social media was connected to the goals and objectives of the business. And more worryingly, the report uncovered that 'half of all executives are not informed, engaged or aligned with their company's social media strategies in any capacity'.

There is a clear need for senior executives in businesses and organisations to understand the competitive advantage that social tools can leverage. The alignment of social tools with strategic objectives can significantly increase the potential for an organisation to harness the rich creative potential of its workforce. Using social tools, organisations can access the 'knowledge' residing in individuals and groups and turn it into the 'knowing' that can bring real innovation.


References

Cook, S. D. N. and Brown, J.S. (1999) Bridging Epistemologies: The Generative Dance Between Organizational Knowledge and Organizational Knowing. Organisation Science, Jul/Aug 1999, Vol. 10, No. 4. pp.381-400.

Li, C. and Solis, B. (2013) The Evolution of Social Business; Six Stages of Social Business Transformation. Altimeter Group 

The Evolution of Social Business: Six Stages of Social Media Transformation, by Charlene Li and Brian Solis from Altimeter Group Network on SlideShare