Understanding 'The New Knowledge Management' LO30392

From: chris macrae (wcbn007@easynet.co.uk)
Date: 07/22/03

Replying to LO30375 --

Yes in my view the connectivity of a whole system is such that all human
value creation/destruction multiplies, and more compounds! (Add is the
operand that assumes separability; a fatal assumption for Andersen and
anyone who supports The Number (as its biographer Berenson has proven to
most any independent jurist))

Openly networked in understanding humanity as we are becoming today, we
can see organisational systems as dynamic and most valuable when mapping
around 5 productivity multipliers (as well as 5 communal stakeholder
value demand multipliers mentioned elsewhere). The Productivity

1) That which is attributable to the service energies, learning focus,
trustworthy decision-making and innovation of the individual

2) One level up the individual's access to productive networks, teams,

3) Only then the organisation, its purpose, patterning

4) Above the organisation: webs or networks of organisations which need
top be working constructively/collaboratively if we are to see the
world's best services marketed in local contexts

5) Around the organisation, the infrastructure, education, environment
that a country or region brings to those industries that its relatively
best at

We need also to see that under current accounting - the obsession which
assumes that only the organisation contributes to productivity and
social-economic health - is not just complex but naturally destructive.

Instead of these being multipliers that flow positively, the explicit
model says people are costs to extract knowhow from and then cut out.
(This is at best a model that will compound depression and as it
interacts across the system of systems of world powers, it should be
assumed those who rule with it will induce terrifying reactions as they
compound their inhuman view that destroys the human beings right to
productivity freedoms and happiness and assumption of open relationship
reciprocity across peoples)

Instead of modelling how to be openly valued by whole communities of
stakeholders, analysis often puts the gain of the speculative owner as
paramount even if this conflicts with every other stakeholder. It is
particularly important to look at the mathematics in use whenever
someone utters the words Shareholder Value Analysis, because its often
Speculator Value Analysis where the long-term owners such as pension
investors are the biggest loser

If -as perhaps the industrial age did - you want organisations to rule
tangible production where most people are deskilled as work-slaves
standing in lines between dumb machines, then perhaps current accounting
conventions are sufficient to monopolise governance and economic
decision-making by.

Once you analyse how current accounting and all the administrative
assumptions of performance consultancy are transactional, separating
people knowledge rather than multiplying, backward looking, opaque in
terms of need to know, one-fits all diluting context specific metrics,
conflict compounding etc THEN transparency/intangibles/human system
advocates conclude we must end monopoly governance by these measures and
require our largest organisations (global corporates, governments too)
introduce shared governance with a mathematics of trust-flow that
connects all the above multipliers sustaining them dynamically, and
beginning each audit cycle with detecting of emerging value conflicts.
Leaders should be those who resolve alternative signals form the 2
measurement systems and their experiential pattern logics. For example,
here are 3 pattern rules of transparency that are counter-intuitive to
current accounting:

-relationship value is so interconnected that if you destroy the trust
of even one trust stakeholder, all your value can disappear; note the
multiply rules in the case of Andersen who assumed that billions of
business value and zero social value = billions plus zero, where our
mathematics say billions times zero = zero

-if during some audit cycle, a particular group comes back with
staggering strong numbers, go double-check they're not destroying the
integrity of the system before commanding everyone else learns their

-whilst it is costly to owners if a company runs out of cashflow, if it
retains huge trust-flow it can be refinanced; conversely if an
organisation runs out of trust-flow it is worth less then nothing (the
less being measurable in all the conflicts its disease of lost trust
multiplies elsewhere; those who claim Enron didn't do much damage, do
not have the geo-historical system knowledge to see it was one of the
tributary root causes of Al Qaeda's network's growth)

I don't know how long it will take before living system mapping of value
-and the idea that knowledge age organisation revolves round open human
relationship infrastructure - becomes popular in the USA. It is already
the majority business expert view in Nordica, and incidentally parts of
Canada- and it is specifically being adopted as the strategy for making
Europe an advanced economy and these quotes from experts summarising
intangibles learning from the last 4 years of research sponsored by
European Union indicate:

"the story of the e-Economy is complex, but it is one we need to
understand since the prosperity of the EU Citizens depends on it"
Romano Prodi,
President of the European Commission
at e-Economy Conference in Brussels, 1 & 2 March, 2003

Research Coordinating Board: Intangibles issues are all-encompassing,
growing, but are poorly defined and understood. Intangibles do not
conform to the logic of current statistical and accounting models which
have not kept pace with economic realities

Measuring intangibles is not a specialist niche: it is central to a
holistic understanding of wealth creation and the evaluation of risk

The rise of intangibles challenges the existing policy/regulatory
conventions and has exposed the weakness of governing today's
knowledge-based economy with tools of the industrial era

FP6 (Europe's next funding round) is not business as usual:
ERA- a new context for EU supported ResearchToDeliver
Moving to a European level Research policy
- Strengthen co-operation between National and EU Activities
- Improve links between National and EU policies and schemes
- Take into account enlargement
- Development of a "shared vision" on European RTD
- Potential for co-funding arrangements
Realising ERA will require
- New thinking: more strategic and goal oriented
- New approach: integration, concentration, critical mass and
- New scope: taking account of the international dimension of RTD
.greater awareness of who's doing what greater awareness
- New instruments: Integrated Projects (IPs) & Networks of Excellence
(NoEs), Integrated Infrastructure Initiatives (I3)

Jargon-Watch: From 2004, the EU is putting millions of Euros into
funding networks of several hundred KM experts charged with convening
integration meetings all round Europe, and sharing benchmarks across
other parts of the world wherever there is open demand. Of course, this
is a gamble because you may well ask will experts behave as such an open
network, but we intend from 2004 to publish openly every observation of
this work at the EU's www.knowledgeboard.com which will be revamped as a
meta-community after 4 years of trials of how you get a hundred people
to co-content edit in one web space. You can se the messy section I
contribute to on Emotional Intelligence at:

Multiplying my personal energies, as a simple mathematician and
researcher of cultural networks virtually and at the grassroots in over
30 countries, as well as being a member of an economic circle that has
studied human system networks and globalisation since 1984 - those like
me will ensure that the simplest pattern of transparency mapping is open
sourced in all its multiplier glory, and that accountants continue with
their metrics but don't pollute our systemic ones. You cannot average
addition and multiplication - and if balanced scorecard people say you
can then they are certainly not modelling the dynamic valuation of
intangibles. Where there is conflict in judgement leaders (defined as
those charged with the biggest system investment decisions) must make,
it was reported in year 2000 by Brookings and the EU that over 80% of
value judgement should go to intangible metrics if you want to sustain
win-win societies and economics.

I have previously offered a sample chapter written by a professional
journalist because I'm not that great with words given that the common
assumptions of business leadership today are systemising the opposite of
simple and transparent human connectivity in organisation. I will send
the chapter by parallel post to Richard in case he wants to put it
anywhere. And if anyone has a context, they want to map, we can usually
get over the blindnesses caused by conventional accounting in under 1
hour of email exercises.

Chris Macrae

>Behind the frustration in your message, I sense deep thoughts on the
>forces of relationships. I have the impression that you work with some
>sort of formula of 'knowledge generation', where 5 factors are involved:


"chris macrae" <wcbn007@easynet.co.uk>

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