An Intelligent Organization: Integrating Performance, Competance, and Knowledge Management

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April 2003

An Intelligent Organization: Integrating Performance, Competance, and Knowledge Management

CIDMIconNewsletter Rhonda Perez, Manager, Program Information Management Solutions, Nokia Mobile Phones

We are all in the midst of continuous economic, organizational, and technological change. Along with these changes comes an ever-increasing challenge to develop new competences, implement new tools, and maintain the performance and health of our organizations. The competences, tools, and methodologies in the field of content creation and management have evolved. As leaders in our respective organizations, we face the daily challenges of successfully identifying, developing, and implementing cost-effective business solutions, tools, and services. In addition, we have the challenge of managing the continuous change in business requirements, organizational structures, and technology. At the 2002 CIDM Best Practices conference held in Galveston, Texas, managers discussed best practices and methods to improve the processes for defining and measuring performance, developing and transferring competence, and maximizing knowledge management.

Organizational learning, change management, competence development, performance management, and knowledge management are terms that have become part of our standard management vernacular. But as managers, we are quickly experiencing the realities of walking the walk, not just talking the talk.

An Intelligent Organization (Wiley 2002) by Pentti Sydänmaanlakka brings clarity to the management strategies of the day and a focused approach to developing the organization of the future. Sydänmaanlakka says the purpose of his book is to provide answers about developing the ideal organization for the future, one that is efficient, capable of learning, and sensitive to the well-being of its personnel all at the same time. He begins by asking the following questions:

  • How can we improve the organization’s capacity to learn?
  • How can we manage and systematically develop the competence needed in the organization?
  • How can we improve the performance of the personnel and the entire organization?
  • How can we achieve better business results?
  • How will we manage in the ever more competitive global business environment?
  • How can we achieve all these objectives at the same time we are thinking about the viewpoint of individuals?

Organizational Learning

In Chapter 1, Sydänmaanlakka defines learning, describes the learning process, and maps the essential components of learning. “Organizational learning,” says Sydänmaanlakka, “is the ability of the organization to renew itself by changing its values, practices, and processes.” This renewal is a continuous challenge. He points out that to maintain a competitive edge, we must learn faster than our competitors. We can see the truth in these statements when we look at how the addition of reuse and single-sourcing strategies to our business requirements have in turn created changes in our quality values, writing practices, and creation processes. The renewal does not happen simply by changing the organization of information; we have to change the behavior of the organization to information.

Sydänmaanlakka confirms this fact by defining learning as “a process in which the individual gathers new knowledge, skills, attitudes, experiences, and contacts that produce changes in his/her behaviour.” He really wants us to have a good understanding of the learning process (page 20) and its impact on individual, team, and organizational levels. An example of how new learning can flow through the organization would be when the technical writers learn and implement modular writing; the distributed writing team learns and implements simplified English practices, unification guidelines, and collaborative writing processes; and the organization learns and adopts an enterprise content-management system. These new competences require new skills, a greater capacity to address the synergies in our business processes, and planning solutions that cover the whole enterprise.

He goes on to define the different types of learning, learning styles, and the various obstacles of learning. Learning is not unfamiliar territory in technical communication when it comes to our study of end users and business customers. But, managers may find it a bit daunting when attempting to apply these principles to their own area. The methodologies of our craft have remained fairly consistent and it is only recently that we are experiencing a great deal of change. We now have to ask ourselves how we will train technical writers to create information modules and create a harmonized information set. We have to build an understanding about information architecture and we have to ensure that people are competent to support their responsibilities in a new authoring environment? Sydänmaanlakka’s answer is to create a learning organization. Taking five components of a learning organization from The Fifth Discipline by Peter Senge (Doubleday/Currency 1990), a sixth from Michael Marquardt’s book, Building the Learning Organization (McGraw-Hill 1996), and adding four of his own, he summarizes the organization’s most important learning skills as

  • system thinking-identifies the interaction between different entities within the organization, recognizing that everything affects everything else
  • mental models-steers operations and determines how we see the world and how we act in certain situations
  • strategic learning-checks that the organization’s strategy is on target and the organization is able to respond quickly to change
  • feedback systems-promote problem solving and allow for growth and development
  • self-management-allows individuals to influence their own development and learning
  • team learning-helps us find insights that individuals would not have found by themselves
  • a shared vision-ensures we are going in the same direction
  • active dialogue-promotes finding the best possible solution together
  • information systems-enable organizational learning by making totally new working methods possible and providing innovative solutions
  • sharing-unlocks a great deal of power within the organization

Sydänmaanlakka acknowledges that integrating enough time for learning and renewal can be difficult, especially given the demands of meeting our milestones and deadlines. But still, he emphasizes that we must create a favorable environment for learning in the organization. With that thought established, he adds some additional cornerstones to our understanding of learning: an emphasis on feedback systems, change management, and a basic model for turning our daily work routines into learning experiences. And finally, he wraps up the chapter with an introduction to the processes that support organizational learning:

  • performance management-which he names as one of the most important processes in a well-run organization
  • competence management-the key to a competitive edge
  • knowledge management-the continuous and effective application of information throughout the whole organization

Performance Management

He builds the foundation of the performance management model in Chapter 2. We begin to see a blueprint as he defines the key elements and clarifies their priority and purpose. Sydänmaanlakka defines performance management as linking objective setting, reviewing and coaching, and evaluation and development as integrated elements in an on-going process. He places performance management as the most important of the human resource management processes with clear synergies between training and development, recognition and reward, and career planning.

The purpose and desired result is that everyone knows their tasks and individual objectives and what kind of competence is expected of them. The proper implementation of performance management should assure individuals in the organization that they will get enough coaching and feedback to be successful. Anyone who has experienced the positive benefits of a solid performance plan knows this to be true. Clear and measurable performance goals can motivate the individual, keep project teams on target, and net the result the organization is working to achieve. These plans can also help to establish priority during the critical paths and weed out activities where we might have a tendency to lose sight of the goal.

So how do we get there? Sydänmaanlakka says we should aim to first define the vision of the organization and the objectives of our own unit. As an example, the organization’s vision may be to deliver world-class content to the customer. The objectives of the unit may be to reduce product creation costs and improve time to market. Now, the question many managers may ask is, How do we bring that down to the day-to-day operational level? How do we reach the performance level required to realize the vision and achieve the objectives? Sydänmaanlakka’s counsel is to implement a performance management system that promotes short-term and long-term development. Development plans should help everyone in the organization understand the key tasks expected of them and they should help management in defining what skills are needed to complete them. Short-term development is mainly task based and long-term development focuses on an individual’s career plans.

To make this process more concrete, Sydänmaanlakka offers us the contents of Nokia’s highly successful planning and development process, as well as some templates for documenting the process. The performance management process begins with confidential discussions held twice a year between the employees and their managers. He emphasizes the accountability of both the employee and the manager as a success factor with some of the core objectives of the discussion as follows:

  • to ensure the individual’s actions are consistent with the company objectives
  • to reach mutual understanding about job content, focus areas, and the criteria for evaluating results
  • to view performance between review periods
  • to identify lessons learned and improve future development planning

For those who may not be quite sure where to go from there, Sydänmaanlakka provides a comprehensive outline for managing the performance discussion, as well as an extensive list of the topics that should be covered. When implemented successfully, these discussions should promote open communication and help improve performance. However, he realistically adds that these discussions do not always succeed and suggests that management establish a control system, such as a manager’s audit, after each round of discussions. Control systems will protect the integrity of the implementation and facilitate continual improvement to the process.

To better prepare you for the discussion, Sydänmaanlakka shares some of factors that contribute to the success or failure of the system. The root cause of the most common problems in planning and development discussions is giving and receiving feedback. He attributes feedback issues to insufficient interpersonal skills and poor definition of the desired targets. Luckily, there is a solution: training, instruction, and consultation of both the employee and the manager. Training on the performance management process helps all parties involved understand the purpose of the discussions, builds accountability, and provides the framework on how to properly prepare for performance discussions. Instruction takes the theory of the process and puts it into action. Sydänmaanlakka shares that walking through the process with managers and having them role play has been extremely helpful in forming best practices, and having human resource consultation available provides the support necessary for successful implementation. He ends the chapter with a 10-point summary of the most critical success factors, a checklist to review the basic practices, a questionnaire to assess the performance management of your own organization, and a reminder that good performance management is built on good daily leadership.

Competence Management

The competence management process is presented in Chapter 3. Sydänmaanlakka begins this chapter with a quote by Peter Koestenbaum from Leadership: The Inner Side of Greatness (Jossey-Bass Publishers 1991) that says, “Some people are more talented than others. Some are more educationally privileged than others. But we all have the capacity to be great. Greatness comes with recognizing that your potential is limited only by how you choose.”

Competence is the end result of learning. The competence management process aims at defining core competences and other skills that may be necessary to achieve the vision, strategy, and objectives of the organization. Once identified, the process is all about developing these competence areas systematically. Sydänmaanlakka counsels us to assess the needs by looking at what competences we have, what we should have, and what we should let go according to the organization’s vision, strategies, and objectives. The findings should then be forecasted out at least three years and documented in a competence development action plan. The plan will reveal the gaps between the competence within the organization and the desired competence targets. And from there, the plan should document how the organization intends to develop these competences. Management should then take the competence development plans and link them to individual performance plans.

When it comes to competence management, Sydänmaanlakka credits Competing for the Future (Harvard Business School Press 1994) by Gary Hamel and C.K. Prahalad as the most influential book because it introduced a framework for the core competence concept and explained how to develop core competences. He defines core competences as a combination of competences, technologies, and information systems that make the company competitive. Noting that there are plenty of other contributing factors to corporate competitiveness, Sydänmaanlakka does believe core competences lie at the very heart of its success.

Hamel and Prahalad offer these three questions to test whether a competence really is core:

  • Does it have any significant influence on the value added for the customer?
  • Can it be used to increase the company’s competitiveness?
  • Can it be applied in other business transactions?

After a thorough explanation of competence mapping, managing, and development, Sydänmaanlakka shows us the competence model Nokia defined in 1995 and some of the key business practices in their development planning. He cautions, though, that this approach requires a thorough and long-term knowledge of the organization. The approach should be clearly tied to strategy and performance management processes, and he adds that the most important task of management in an organization is to acquire, maintain, and develop organizational competence.

Knowledge Management

Chapter 4 takes us into the knowledge-management process. Knowledge management defines how we create, capture, store, share, and apply knowledge. We all want the solution for how we can manage a huge amount of knowledge and make it available to everyone. And better yet, how we can control the rapid flow of information and analyze the content for effective decision-making. Sydänmaanlakka credits the introduction of these ten factors to the business environment as the drivers behind what he calls the knowledge management fad:

  • knowledge as the basis for competition
  • core competences and competence management
  • management sciences: re-engineering, Total Quality Management (TQM), and so on
  • information technology revolution: the Internet, Groupware, and so on
  • network/virtual organizations
  • tacit and explicit knowledge
  • sharing best practices
  • learning organizations
  • intellectual capital
  • globalization

Fad or not, he presents a hierarchy of knowledge (page 143) with the warning that the theory of knowledge has been studied for centuries and appears to be no closer to an agreed solution. Knowledge management is about turning individual knowledge into organizational knowledge and tacit (undocumented) knowledge into explicit (objective and formal) knowledge. The key to remember is that everyone is a storehouse of knowledge and the object is to turn as much knowledge as possible into explicit organizational knowledge. Sydänmaanlakka’s suggestion in this chapter is that for us to understand how knowledge can be managed and controlled, we would do best to simply describe knowledge from a practical perspective.

Organizational Intelligence

Sydänmaanlakka discusses organizational intelligence in Chapter 5. He paints a picture of the ideal organization of the future and says that this organization not only has knowledge but also insight into opportunities for innovation. From Sydänmaanlakka’s perspective, this kind of organization will need to have the ability to renew itself continuously, anticipate change, and learn fast. With that said, he presents us with some concrete steps and a framework to evaluate the current state of our own organization and maps the key features (page 168) and organizational structure of such an organization.


In conclusion, Sydänmaanlakka describes the desired state of an intelligent organization as one where the profits of the organization continuously improve and the organization can attribute its success to the performance of the organization and its personnel improving at the same rate. An Intelligent Organization is a balanced blend of theory and practice and offers us insight through Sydänmaanlakka’s experience in all areas of human resource management, as well as a guided tour into the practices of a world-class organization such as Nokia. CIDMIconNewsletter

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