Knowledge Creation, Culture, and Strategy

Balanced scorecards have been used as a measurement of knowledge creation. Knowledge creation, especially in technology, has signifi- cant meaning, specifically in the relationship between data and infor- mation. Understanding the sequence between these two is interesting. We know that organizations, through their utilization of software applications, inevitably store data in file systems called databases.

The information stored in these databases can be accessed by many different software applications across the organization. Accessing multiple databases and integrating them across business units creates further valuable information. Indeed, the definition of information is “organized data.” These organized data are usually stored in data infrastructures called data warehouses or data marts, where the infor- mation can be queried and reported on to assist managers in their decision-making processes. We see, in the Ravell balanced scorecard, that decision-support systems were actually one of the strategic objec- tives for the process perspective.

Unfortunately, information does not ensure new knowledge cre- ation. New knowledge can only be created by individuals who evolve in their roles and responsibilities. Individuals, by participating in groups and communities of practice, can foster the creation of new organizational knowledge. However, to change or evolve one’s behav- ior, there must be individual or organizational transformation. This means that knowledge is linked to organizational transformation. The process to institutionalize organizational transformation is dependent on management interventions at various levels. Management needs to concentrate on knowledge management and change management and to act as a catalyst and advocate for the successful implementation of organizational learning techniques. These techniques are necessary to address the unique needs of ROD.

Ultimately, the process must be linked to business strategy. ROD changes the culture of an organization, through the process of cul- tural assimilation. Thus, there is an ongoing need to reestablish align- ment between culture and strategy, with culture altered to fit new strategy, or strategy first, then culture (Pietersen, 2002). We see this as a recurring theme, particularly from the case studies, that busi- ness strategy must drive organizational behavior, even when technol- ogy acts as a dynamic variable. Pietersen identifies what he called six myths of corporate culture:

1. Corporate culture is vague and mysterious.

2. Corporate culture and strategy are separate and distinct

things.

3. The first step in reducing our company should be defining our

values.

4. Culture cannot be measured or rewarded.

5. Our leaders must communicate what our culture is.

6. Our culture is the one constant that never changes.

Resulting from these myths, Pietersen (2002) establishes four basic rules of success for creating a starting point for the balance between culture and strategy:

1. Company values should directly support strategic priorities. 2. They should be described as behaviors.3. They should be simple and specific.

4. They should be arrived at through a process of enrollment

(motivation).

Once business synergy is created, sustaining the relationship becomes an ongoing challenge. According to Pietersen (2002), this must be accomplished by continual alignment, measurement, set- ting examples, and a reward system for desired behaviors. To lead change, organizations must create compelling statements of the case for change, communicate constantly and honestly with their employ- ees, maximize participation, remove ongoing resistance in the ranks, and generate some wins. The balanced scorecard system provides the mechanism to address the culture–strategy relationship while main- taining an important link to organizational learning and ROD. These linkages are critical because of the behavior of technology. Sustaining the relationship between culture and strategy is simply more critical with technology as the variable of change.

Ultimately, the importance of the balanced scorecard is that it forces an understanding that everything in an organization is con- nected to some form of business strategy. Strategy calls for change, which requires organizational transformation.

Mission: To accelerate investment in technology during the reloca- tion of the company for reasons of economies of scale and competitive advantage.