Top Challenges of Successful Enterprises

successful-enterpriseThe evidence is clear that to survive and succeed, enterprises must change their approaches to conduct successful business in the globalized economy. Whereas gradual change has always been required to adapt to new conditions, the pace is now accelerating and incremental change is no longer sufficient. There are many reasons behind the needs to change.

1. Work is becoming more complex resulting from

— Continued efforts and advances to streamline business and automate routine tasks.

— Increased demands to create and deliver better and more competitive products and services.

— Greater sophistication of management and operating practices that require new approaches. Increased work complexity necessitates that people must be better prepared and support systems that must be better suited to handle new tasks with proper competence. In particular:

— People need to possess —or have access to —work-domain knowledge and meta knowledge with higher competitive quality, thereby allowing them to deliver complex work with the necessary degree of proficiency.

— Support systems must be better integrated with business (and other systems) and must be smarter by increased application of artificial intelligence (AI) and other advanced methods. These changes will improve the quality of current information services. More importantly, they will lead to increased offloading of intellectual work for people by automating simple reasoning tasks.

It is realized that most work is increasingly knowledge intensive— requiring expertise to deliver competitive products and services. These changes make traditional work management and organization less effective in the new environment.

Business Challenges 2014

2. The nature of business has changed, and the competitive environment is more demanding as a result of changes caused by:

— Increased dependence on intellectual capital (IC) assets — that is, assets of personal competitive knowledge, expertise, understanding, and assets of structural intellectual capital

— To create and deliver competitive customized products and services. This contrasts with earlier business models that were focused on financial and physical capital.

— Pressures from globalization. Quality and highly competent suppliers from across the world are able to transcend geographical boundaries to compete nearly everywhere.

— Competitive differentiations based on product uniqueness, which are increasingly being based on product capabilities supported by related service arrangements that often are highly targeted and customized.

— Better informed customers who have an improved understanding of their needs and therefore impose greater requirements on suppliers. Today, customers also have a greater choice of suppliers than previously.

— Competitors who are increasingly becoming more sophisticated and smarter.

3. New and more complex management, operational, and technical approaches and practices are introduced to deal with the new challenges.

Many practices are based on practical experiences with what works and what doesn't. Others are based on new theoretical insights from fields ranging from information and management sciences to cognitive and social sciences. Together, they give enterprises greater competitive capabilities and an improved ability to perform and succeed. The new tools constitute a challenge by themselves since they require new understanding, initiatives, and efforts. The tools include:

— New generation knowledge management (NGKM) practices that cover modern management theories and practices, human capital management (HCM), intellectual capital management (ICM), and the dynamic facilitation, manipulation, and control to create, organize, deploy, and apply knowledge to meet enterprise objectives. Emerging KM practices are based partly on recent cognitive science understandings of human capabilities, such as conceptual blending and concepts for learning, conceptual skills transfers, decision making, problem solving, and personal motivations. The new practices are significantly based on successful experiences when applying KM in advanced enterprises.

— People-focused knowledge management that becomes more explicit based on a better understanding of the nature of intellectual, knowledge-intensive work, how situation handling and effective actions rely on knowledge such as mental reference models, and people's actions and behaviors in general. It also becomes more explicit by the realization that enterprises do not behave and respond as machines—they are social systems.

— In the proactive enterprises, intellectual asset management mentality that is becoming a cultural cornerstone caused by the widespread concern for how better knowledge is built and leveraged —through personal and company investments, collaboration, and deeply entrenched and practiced tradeoffs between short-term facilitation and long-term strength.

— Integrative management that involves proactive perspectives and integration of strategic, tactical, and operational views and activities between business units, departments, and individuals. Integrative management relies on extensive and effective communication, the introduction of incentives, and cultural changes to motivate required behaviors. It also introduces asset-based management mentality, principles, and measurement systems applied to intangible assets to maximize their value over time.

— Advanced information management and technology (IM&IT), which focuses on intangible as well as tangible asset-based management principles for information and includes a wide range of technologies such as:

— Artificial intelligence (AI) for automatic reasoning

— Collaborative and groupware environments

— Content management

— Corporate history repositories and other approaches

— Customer relations management (CRM)

— Data mining

— E-learning

— Electronic performance support systems (EPSSs)

— Enterprise resource management (ERM)

— Enterprise value creation (EVC)

— Extensive automation of routine business functions

— Interactive computer-based training (ICBT)

— Internet and intranet portals

— Knowledge management support systems (KMSSs), including knowledge capture systems and knowledge deployment systems

— Supply chain management (SCM) The introduction of new management approaches and capabilities facilitates efficient and effective work; that is, execution of individual and group activities. Some approaches also provide direct support —even offloading —of mental tasks such as summarizing and organizing information and, to some extent, reasoning.

The new management approaches are not automatically easy to adopt. For many managers, professionals, and crafts people, pursuing and implementing the new directions and practices present problems. The approaches require depths of expertise and involvement in professional disciplines that often go beyond current business practices. The ability to handle the new approaches requires learning and development of new perspectives by managers and staff —efforts that may exceed the energy and availability of the people involved. Hence, only highly motivated and proactive parties appear to adopt the new approaches.

4. The rate of change is higher than at any time before.


New technologies, new business conditions, new regulatory and legal requirements, new practices, and new demands are being introduced more quickly than ever before. These changes require proactive stances to detect future needs and very different approaches to plan, create, and implement solutions.

5. Workers demand greater involvement and are less satisfied with traditional employment situations.

Only a small fraction of enterprises treat their employees "right". Typical business–employee relationships are impersonal and provide little understanding of, involvement in, and sense of contribution to the enterprise's strategy and direction. As stated by Dawn Lepore: "Employees will work for money but will give a piece of their lives for meaning!"

6. Needs for conventional training and education often exceed allocated time.

The knowledge economy requires frequent updating of both personal and structural knowledge to adapt to new demands and conditions. However, many—perhaps most—organizations expect their employees to maintain and renew their personal knowledge on their own time. This often creates moral and family problems, and can decrease the motivation and effectiveness of the workforce. Computer-based training material —e-learning—is frequently provided but appears to be less effective than is often perceived, and many companies report bad experiences, with low knowledge retention and other problems ranging from cheating to negative attitudes.

Instead of wide separation of work from education and training, many organizations now pursue "just-in-time training" as part of regular work using sophisticated computer-based knowledge support systems, shadowing, "buddy coaching," and tailored e-learning accessible to managers, professionals, and crafts people. However, these approaches require new practices, application of new technologies, and revision of work in general. They often provide better knowledge transfer as we now start to understand it from new cognitive psychology findings.

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