Intangible Assets: How A Smartly Made Small Move Can Set Much Bigger Things In Motion…

Michael D. Moberly   April 15, 2011

One of the arguments being put forth here is that conventional models for delivering corporate training may well be outdated. That may come as no particular surprise to many!
The persistent and increasingly asymmetric nature and shear number of uncertainties, challenges, and problems that companies and organizations, and their employees, routinely face today are not always reflected in conventional (training) models that tend to ‘push out pre-built training’. The fact may well be, they’re simply less useful, if not obsolete. Exacerbating and dramatizing this of course, is that for a growing number of companies, the norm is operating in an aggressive, globally competitive, widely predatorial, and always winner-take-all business (transaction, operating) environment.

Conventional training programs are simply less relevant, John Hagel believes, particularly when considered in the context of their anticipatory nature, i.e., someone trying to anticipate in advance, what training – information people (employees) are going to need and when they’re going to need it. In that context, Hagel argues, most training tends to focus on (the presentation – acquisition of) knowledge that may well already be explicit and even codified, in other words, the training is well behind the need curve. And, when presented in this manner, as I’m confident most will agree, little, if any benefit will emerge.

Hagel, as most readers know, is an author and business consultant as are the co-authors of The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion, John Seely Brown and Land Davison. ‘The Power of Pull’ is the type of book which I categorize as requiring significant amounts of reflection after reading. That is, the book conveys the on-going and very real shift in power, of which we’re in the midst, from institutions (organizations, companies, etc.) to individuals. This shift in my view, is, at least in part due to the evolution of the knowledge (intangible asset) based global (business) economy wherein today, it is an economic fact that 65+% of most company’s value and sources of revenue lie in – directly evolve from intangible assets.

The concept of ‘pull’, as Hagel, Brown, and Davison describe it in their book, is a mechanism that allows people (employees) to readily and quickly find and be able to access relevant resources (information, knowledge, etc.) precisely when they need it, somewhat akin, Hagel analogizes, to the Google and Bing search engines. But, one problem is, Hagel notes, is that the primary (training) model many organizations (companies) still use today is one that pushes, rather than pulls.

Instead, the authors advocate, companies should be thinking about building – using ‘pull platforms’ as the mechanism for (employee) knowledge acquisition, i.e., training. The pull approach essentially creates circumstances, preferably, in my view, like a ‘company culture’, in which the right people and the right resources and/or knowledge, wherever and whenever they’re needed, can be pulled in or drawn out and put to use proactively to quickly and effectively meet the need or demand.

A not so flattering reality is, according to Hagel, that most organizations (companies) operate on a model wherein the initial challenge is being able correctly anticipate – predict the when and the how demand for new knowledge (i.e., training) will evolve. Then, being able to quickly organize to make sure, again, the right people and the right knowledge and the right resources are in the right place to accommodate that (anticipated/predicated) demand, anyone, or all of which are often subject to miscalculation, according to Hagel.

The conventional (training) model of course, requires an integrated system, one that we know is increasingly difficult to sustain, especially in the rapidly changing business operating environment in which more companies each day, acknowledge they are a part, and ultimately come to operate.

So, Hagel et al, suggest, for a variety of reasons, many having to do with open source business trends many of which are literally playing out in the world before our very eyes, e.g., the ability to accurately predict and/or forecast the need and demand for knowledge. The timeliness and accuracy of such predictions has become more challenging and subject to miscalculation as we have already suggested. Thus, there is a genuine need for companies to think about those ‘pull platforms’ which can allow them to (again) draw-pull out the right people and the right resources wherever and wherever they’re needed, but quickly, to reflect-accommodate, not solely the need, but the rapid pace that indeed has become the norm for a significant percentage of companies.

In a ‘pull platform’, as articulated by Hagel and his colleagues, the internal development of talent, knowledge, and expertise emphasizes, or perhaps depends upon…
• on-the-job learning and informal (learning) structures
• rather than, a conventionally produced (pre-built) and delivered (formal) training program.

Once again, ‘pull learning’ provides people (employees) with the ability to confront the challenges-problems they’re experiencing rapidly through their ability to draw – pull out the resources needed to design/develop solutions whenever and wherever they’re needed.

Actually then, employee learning is a by-product of (employees) facing unexpected challenges and ever increasing performance requirements, Hagel says. As companies really begin to take the pull strategy seriously, Hagel expresses confidence they will begin re-thinking many of their conventional aspects/elements of operation, e.g., (a.) how the organization is designed, (b.) what kind of business strategy should be pursued, and certainly (c.) what kind of technology platforms are necessary to support the company and their employees in their particular work environment.

In addition to developing learning platforms that enable – facilitate more timely, accommodating, and flexible (employee) learning, moving to a pull mindset requires redefining leadership. In a push world, leadership means developing a program and enlisting others to follow it.

Whereas, in a world of pull world, Hagel claims, it’s about helping people (employees) develop the capabilities to become leaders in their own context, so when they’re confronting an ‘unexpected’ challenge or problem in need of a solution, they possess the initiative and inquisitive disposition that encourages them to embrace that challenge and find creative solutions to overcome it and, in the process learn from that experience.

Hagel said two factors are largely responsible for enabling and supporting the evolution of pull world, (1.) digital technology, and (2.) economic liberalization, i.e., global competition. As is obvious, the continued advancement of technology shows no sign of slowing down, which coincidentally drive more capability but, uncertainty as well, in the process.

Everything accelerates in terms of the pace of change, Hagel points out, while uncertainty (risk) increases, because new participants (players) have more opportunity to literally enter a market space and build scale very quickly, hence a more challenging (business) environment because the basis and intensity of competition can change rapidly.

For further proof of the shift from push to pull, Hagel points to the long-term decline of return on (physical – tangible) assets for public companies in the U.S. Since 1965, return has gone down significantly and there are absolutely no signs this trend will reverse itself in the foreseeable future, a housing bubble it is not! Replacing that of course, as previously stated, is the economic fact that today, increasing percentages (65+%) of most company’s value and sources of revenue evolve directly from intangible (non-physical) assets. For Hagel, this represents ‘a huge red flag’ and all the more reason that the conventional push strategy should be challenged more frequently. But, companies continue to hold on to the practices and institutions associated with the push world even though it’s yielding diminishing performance.

Cultivating (creating) a proprietary library – stock of knowledge in companies today, for example, is bound for failure some argue, including Hagel, because they represent out-of-step practices that essentially keep companies, and their employee’s knowledge and expertise (intangible assets) in a holding pattern, if not a downward trajectory that does not recognize most company’s value and revenue evolve from such intangible assets.

Instead, Hagel asserts, companies should focus on creating effective and efficient knowledge ‘flows’ (the pull world) that allows people/employees not only learn faster as the need arises, but also continually replenish the knowledge stocks, i.e., a company’s internal intellectual – intangible asset libraries.

A glaring reality today, is that many things we come to know, at any point in time, tend to become less useful or perhaps obsolete, given the rapidity of change in both (business) circumstances and conditions, Hagel says. Hagel also claims, if all one does is hold on to what they already know and try to defend that and extract value from it, it’s going to be a losing proposition!
In this kind of environment in which more companies are operating and transacting business, it’s essential, if not critical, to continually seek and find ways to participate in a more diverse and expanding array of knowledge flows. Hagel believes this, and so do I!

Hagel also believes, and so do I, that some of the most profound learning opportunities may not actually occur within a company, rather at the edges of company operations and transactions, e.g., the structural capital found through relationships with partners, stakeholders, distribution channels, and supply chains, etc. In other words, external relationships and structural capital may well be the keys to value, profitability, and sustainability.

So, it may not be solely about (developing) talent within an organization, but, in addition, how a company can connect ‘talent with talent’ wherever it is, and build the relationships (structural capital) where those talented employees are likely to learn faster and better together.

And, I can’t agree more.

This post was dually inspired by the work of Mike Prokopeak in his article in Chief Learning Officer magazine (August 18, 2010) and John Hagel, John Seely Brown, and Land Davison’s book ‘The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things In Motion’.


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