Success Factors for the Knowledge-based Organisation

Success Factor	As simulated in TangoNet
Overall Strategy Related
Build a knowledge-based a strategy that fits both client and people.	We distinguish between three knowledge-based strategies: volume, niche and mass customization. The volume market strategy requires that knowledge is “packaged” in such a way that it can be sold to a large number of clients (example, generic software products). The niche market strategy requires that people with high competence tailor-make solutions (example tailor-made software). The third option is the mass customization strategy. This is also a volume market, but the products are individualized for each client. (Example: printing on demand, building unique solutions based on standard modules, etc.). In this case, tools & processes are templates and standard components.
Build and align strategies for two markets; Clients and People.	Clients and people make their choices of supplier / employer based on how they perceive the companies ability to fulfill these preferences. Some clients/people prefer a company with a high image level. Others may prefer company with a high competence value. Some put price/salary first.
Invest sufficiently in intangibles to achieve competitive advantage.	Intangible assets are competitive factors in both Client and People markets.
Follow up the value of Intangible Assets.	The TangoNet Monitor allows monitoring of Intangible Assets against different possible strategies. • image value (clients) • structure value (tools & processes) • competence value (people)
Client (Image Value) Related
Deliver quality and satisfy client requirements.	Quality is measured as the ability to handle unexpected challenges – The ability depends on the competence level and the chemistry of staff in relation to the client. If the challenge is well taken care of, additional image points are gained. If the challenge is not well handled, image points will be lost – and even the client, if the challenge is severe. The cost to solve a challenge depends on how serious the problem is.
Match client profile in terms of rapport or “chemistry”	When the client and the team members have the same chemistry, challenges are taken well care of.
Take well care of key clients or they will leave.	Clients will leave if: • They get a better option from a competitor. • Severe challenges were encountered that  people are not able to take care of. The project was not delivered in time.
Build  a high reputation (Image Value) with Clients; it is an Intangible asset., which is easy to loose.	There are two ways to increase  the company’s image: • Work for high image clients (Default image value varies between 1–5 points). • Satisfy challenging clients. A challenge well taken care of may add up to 3 image points. Extra image is gained through the way challenges are handled. The effect will last for two quarters.
Utilize the intangible revenues from Clients	Innovative Clients come up with ideas for new products and tools and processes – grows the value of Tools and Processes. Challenging Clients help people to learn – grows the competence value of People. All Clients have an Image in the market place, higher or lower – grows the value of Image.
People (Competence) Related
Build competence and avoid losing it.	Competence is what people bring to the company. It belongs to the person and if that person leaves, the corresponding competence value will disappear too. There are three ways to tap the potential of a person, each gives +0.1 competence points per month: • working with a challenging client • taking on a development project • through training
Build teams with good internal rapport	Three different generic chemistries are defined (square, round, triangle). A person with a square chemistry will relate best to people and clients with squares, etc.
Satisfy people’s career goals.	Hi-and Medium Flyers expect to grow their competence. If that doesn’t happen, the person will signal his/her disappointment and then leave if their situation does not improve.
Use ideas before they become obsolete.	Some clients and people are “innovative”; they tend to come up with ideas for new tools & processes. Ideas that are not yet used for development depreciate.
Plan resources	All people have to be assigned a job – a client assignment, development project, training or an Ad Hoc assignment.
Tools & Processes (Structure) Related
Develop structure to reduce dependence on key people.	Through development the company will: • increase  company’s structure value (if  company has any potential left) • increase peoples’ competence value (if the person has any potential left)
Maintain investments in structure or they will become obsolete.	The structure value is depreciated by 2% each month,
Financially (Tangible Assets) Related
Cash is King! Cash flow is more important than profit.	Investments in intangibles burn cash and rapidly deplete the cash reserve. Limit is four times the equity.

The Virtuous Circle in the Knowledge Market Place

Karl-Erik Sveiby 2003-11-24 www.tangonet.se www.sveiby.com