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Harness
the I-Capital Before it drains?
Swen Mehta
Ever wondered how capital drains? No not the tangible
capital, we are talking about the intangible part of organizations
capital that is the intellectual capital. In this era of recession
every organization is going for cost Cutting and most obvious way
for cost cutting is work force reduction which we call the
intellectual capital. This is the one area where public sector has
outperformed the private sector in
India. There has
been a mad rush to employ voluntary retirement scheme for its
employees and on intellectual capital part the public sector has
been major looser because the employees who have opted for VRS are
having s experience of more than 15 years with the organization
and they have known the functioning of the organization, processes
and most importantly dynamics of the market and so this poses a
great loss to the organization. The critics may argue that they
are not able to cope with the changes in the technology but there
has been a little technology adoption especially in
India’s
pubic sector due to its inability to invest in new technology. And
if we think from an employee’s point of view they have grabbed the
golden handshake opportunity with both hands for example SBI
received 33000 applications fort VRS scheme where as it wanted to
limit his this number to 23000 only. So why employees are opting
for VRS the reason seems to be clear because of the high
separation package and the intangible part of capital which they
have gained during the association with the organization which
will fetch them good earning outside in the market so it may be
taken as a case of transferring the capital to your competitors
and paying a price for that. This is specially true in the case of
top brass and middle management of the organization we have seen
many examples where public sector heads joined private sector and
made it a great success an example is CEO of star TV PETER
mukerjee.
So, does government of
India, the
majority stakeholder in almost all the public sector undertakings
need to take action? Yes because in this era of globalization the
intellectual capital provides the competitive advantage and also
we see that the companies which have high knowledge content in
structured form have high market valuations as well . What does
Indian public sector needs to do? There are several measure that
are to be undertaken to resolve this situation. First and foremost
as it is difficult to stop the separation process due to market
pressures , so implement a proper knowledge management strategy in
place, which is free from formalities of PSU’s and specially the
middle and top management be encouraged to contribute to this
initiative, a cue can be taken from KM implementation at Tata
steel. It is not that PSU’s don’t have knowledge sharing systems
they have suggestion schemes, compulsory requirement for person
who attended any special programme should circulate report but
these systems have turned into just formalities with mere wastages
of time and energy with no tangible benefits plus these procedures
don’t provide that hidden but highly useful knowledge as there is
limit for things to be formally written on a paper and also this
information is not in a structured format and it is lost in the
information jungle in the organization and do not reach the
person who requires it. The need of hour is to exploit potential
of new technology to gain competitive advantage. A knowledge
management system refers to focused efforts of a firm to
accumulate, acquire, develop and use knowledge; i.e., skills,
competencies, innovation and expertise that are vital for
attaining and retaining a competitive edge in business area and
the system is provided with software and services which have all
the features required for completing the formalities in PSU’s. And
it should be made mandatory for executives to refer to knowledge
pool thus created and use that knowledge in their operations and
also contribute a fixed number of suggestions from their learning
and it should be linked to their performance appraisal also.
Second step that management of PSU’s should take is to change
accounting methods that are followed by almost all the firms which
don’t take into account intellectual capital which is the most
important capital, only infosys tech assesses the intellectual
capital of organization and shows it as intangible asset which
translates into higher net assets which in turn increases the
market valuation of the organization. If this strategy is followed
by public sector undertakings then they can fetch very good market
prices for government through disinvestments programme.
The third step the PSU management should take is to implement “
return on idea” concept where the person who has floated the
idea about any aspect of business be made champion of implementing
that project in the organization and if fruits are realized they
should be shared with the champion and his team. In this way these
organization will not only be able to raise their productivity
levels but also add growth to their bottom lines.
In the last but the real challenge lies in implementing these
ideas that why we see so many organizations make little progress
even after so much of desire. One major reason for such poor
implementation may be poor understanding of real issues in
knowledge management. A sample action agenda may be
-
Asses the
potential of KM in organization
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Develop
indigenous capabilities to plan, design, implement and scale up
knowledge initiatives
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Develop issues
to be addressed in a progressive manner as the maturity of the
organization grows
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Develop
individual and collective capabilities to understand knowledge
flow and ways to detect and correct bottlenecks so that
knowledge sharing, use and creation can be strengthened.
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Motivate teams
across organizations to participate on a sustained basis
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Develop
contexts for rapid improvements in learning, knowledge sharing,
knowledge creation, reuse and shared understanding about
knowledge, KM and knowledge organizations
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Accelerate the
virtuous cycle of knowledge to enhance quantity and quality of
important knowledge
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Invest in
awareness, best practices sharing and appropriate technology
infrastructure
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Provide
interested employees access to broad array of emerging subjects
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Nurture
indigenous capabilities across the knowledge dimension from
theories and frameworks to implementation mechanisms, from
knowledge acquisitions to sharing and reuse, from people to
technological tools.
The road ahead is very challenging as we find that we need to
innovate continuously to keep pace with ever changing needs .But
we can sat that the ultimate objective of every KM system should
be to develop “ Digital nervous system” as described by
Bill gates in his book “Business @ speed of thought” which
would help organization to save resources spent on reinventing the
wheel and thus ensuring optimum utilization of resources for
benefit of organization ,share holders and as whole for society as
well.
Swen Mehta
Student of PGDIM VIII
NITIE, Vihar Lake, Mumbai, 400 087
swen_mehta@im8.nitie.edu |
