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Start-up skills and knowledge are prized by large enterprises

This article appears in the issue January 2013, [Vol 22, Issue 1]


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Innovation is a key priority not just for start-ups, but also for global product and service companies. Many large firms have "intrapreneurship" and innovation management (IM) initiatives with many of the traits of start-ups. And acquisition of product start-ups is a well-established strategy for giant firms to quickly procure new technology and expertise, but the success of such knowledge management (KM) moves requires deft cultural change exercises.

The connections between KM, IM, start-ups and product companies were discussed at the monthly meeting of the Bangalore K-Community, hosted by Honeywell (honeywell.com). Participants at the forum came from a wide variety of sectors: aerospace engineering, IT hardware, logistics, textiles, software services, airport infrastructure and BPO.

The panellists included J. Subramanya Narayanamurthy, director engineering operation, Honeywell), C.V. Swaminathan (solution consultant, Unisys), and Pavan Soni (innovation evangelist and research scholar, IIM-Bangalore). As moderator of the forum, I will list my top takeaways from the discussion:

1. Knowledge management helps product companies keep up with the rapid pace of innovation in high-growth markets, develop a range of diverse products for emerging economies and deal with the high attrition of the tech industry. KM helps reuse of components and engineering processes across product lines. KM is important not just for engineers and developers but also for sales and business development functions. It helps engage with customers and business partners as well.

2. For product companies with a global workforce, social computing takes on enterprise significance in knowledge flows. A socially enabled workforce can leverage modernized enterprise apps and participate in real-time conversational streams and knowledge flows. Benefits of social computing include productivity gains, humanized connections in a global workforce and better customer value. Social media brings meaningful dialogues and knowledge nuggets out of the "e-mail cemetery."

3. A maturity evolution path for the "social app fabric" of a company's knowledge engine can consist of the following phases: using off-the-shelf social tools, harnessing enterprise-quality social platforms, enterprise integration of social and legacy IT, and embedded social functionality in all enterprise communication. A range of social media start-ups has thus emerged to address the needs of enterprise communication.

4. Knowledge management has been effective in B2E and B2C channels; more effort will be needed to nurture and harness KM in B2B channels. KM has helped innovation management in incremental innovation, but not as much in radical innovation. KM has not helped inter-firm IM much in incremental innovation, but can enable inter-firm IM in radical innovation (e.g., industry cooperation to adopt new standards).

5. Companies should evolve clear metrics to assess the impact of social KM tools, e.g., the percentage of people moving down the adoption diffusion curve (innovators, early adopters, early majority, late majority, laggards) and the percentage of top management with active social media profiles on the intranet. A range of analytics start-ups has also emerged to help corporations grapple with the issues of big data, information visualization, digital dashboards and real-time analytics.

6. In any culture, innovative capacity lies at the intersection of psychological factors, sociological conditioning and economic drive. Nations with less recognition and protection of IP will not perform as well in international patent-driven innovation. Emerging economies have done well in service innovation; the next prize is product innovation.

7. Start-ups will eventually need to formalize KM and IM to scale up effectively. It can be a challenge for some founders to relinquish people-based approaches to knowledge communication and move to more formalized process-driven knowledge exchange.

8. Acquisition of product start-ups can be an effective way for larger product firms to get new technology and expertise, but not all parent companies and start-ups can manage the culture change effectively. 


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