Competing in the Knowledge Economy : The Knowledge Value Chain (KVC)

The Knowledge Agency has moved!  After a successful five-year run on Fifth Avenue, we’ve moved west to the Hudson River waterfront.

Effective November 1, 2007, TKA’s  address is:

The Knowledge Agency®

548 West 28^th Street

New York, NY 10001, USA

That’s in the Hudson Yards area the New York Times recently profiled as one of the fastest-developing business centers in New York.  Several major art galleries, publishing, and technology firms have already relocated from midtown to here.  Soon Ogilvy and Mather, Morgan Stanley, News Corporation, and Condé Nast are said to be moving their headquarters here.  We have some interesting neighbors!

We’re also in the process of modernizing  and upgrading our phone and Internet systems based on fiber optic T1 technology.  Phone numbers stay the same.

September 6, 2007, NEW YORK—The Knowledge Agency® (TKA) today announced the availability of The Knowledge Value Chain® (KVC) Workbook, Version 3.1.  “This marks the first time we’ve made our workbook available separately from our clinics and workshops,” said Tim Powell, TKA Managing Director and developer of the KVC model.  “In order to get the full benefits of the KVC, you need to participate in a KVC Clinic or public workshop.  However, the Workbook itself provides a good deal of value, and you can use it to begin to implement some of the KVC principles yourself.”

First introduced in 1996, the KVC model has been taught in universities, business clinics, and workshops worldwide since that time.  Version 3.1 introduces the KVC Scorecard^TM, a self-scoring evaluation system for the effectiveness of intelligence and knowledge processes and products.

The KVC Workbook is available only directly from TKA.  For a limited time, we are offering introductory pricing of US$100 plus shipping.  To reserve your copy, use the “Contact” button at the top of the page.  We’ll contact you back to complete the order.  We accept American Express and bank wires.

Also announced was an upgrade path for owners of earlier versions of the workbook.  Version 3.0 owners may upgrade to Version 3.1 for US$65.  Owners of earlier versions should contact TKA for pricing on those upgrades.

September 4, 2007, NEW YORK—The Knowledge Agency® (TKA) today announced the availability of The Knowledge Value Chain® (KVC) Clinic^TM, version 3.1.  TKA Managing Director Tim Powell said, “The KVC Clinic gives us the chance to work directly with companies to bring the benefits of the KVC model into companies to solve their intelligence and knowledge challenges.”

First introduced in 1996, the KVC model has been taught in universities, clinics, and workshops worldwide since that time.  Version 3.1 introduces the KVC Scorecard^TM, a checklist and self-scoring evaluation system for the effectiveness of intelligence and knowledge processes and products.

Contact TKA for clinic pricing and availability at +1.212.243.1200.

The Knowledge Value Chain and The Knowledge Agency are registered U.S. trademarks of the TW Powell Co. Inc.

When I started my own business in 1991, my late father showed a more keen interest in my career than he had previously. He had gone into business for himself late in his own career (as a business writer), and I always found his insights helpful. I always gave him whatever papers and books on intelligence I had written, and he always made an effort to read them, and respond “intelligently”.

But one day, he confirmed what I already suspected by asking, “Tim, I’m still not really sure what you, your company, and your colleagues do for a living. Can you explain it in ways that the rest of us can understand?”

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It is said that intelligence is the eyes and ears of the enterprise, and this is a useful analogy in some respects. In the obvious sense, through our eyes and ears we take in sensations that in effect are the “data collection” functions of the human body.

These sight and sound sensations would just be a jumbled mass of nerve cells firing without some kind of sense-making to put them into order. Studies have shown that a newborn baby takes in the same level of sensations that an adult does—but has not “learned” what the sensations mean. (One developmental psychologist called the resulting sensory chaos a “blooming, buzzing confusion.”) As a result, a baby can’t “see” clearly—but only because its sense-making capabilities are not yet developed.

The same is true in organizations. Data comes at an organization continually at a fast and furious rate. Without some kind of sense-making function, it all seems like that same “blooming, buzzing confusion”. A good intelligence function serves as that sense-making function—in addition to being eyes and ears. The KVC model can be used as a template in developing the intelligence function beyond mere data collection, beyond mere analysis—into a real-time strategic direction-finder.

Excerpt from the Introduction to The Knowledge Value Chain Workbook by T.W. Powell.

Why are some resources (in the US, at least) managed by government, while others are managed by the private sector (that is, business)?  Simply put, some resources are public by nature—roads, for example, and the armed services—and are therefore managed collectively.  Other resources—manufacturing, for example—are best run by private enterprise.

Intelligence is conducted both in the public sector (by the government), and in by private sector (by businesses and other private organizations.)  Intelligence in the public and private sectors, though similar in many respects, operates under very different sets of “value” assumptions and rules, respectively.  In the public sector, it is the case that everything has been mandated or otherwise agreed to be in the public, collective benefit.  You must do it, it’s the law.  Although fiscal responsibility is certainly important, it is not the overriding goal of government to turn a profit.

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The late Theodore Levitt, professor of marketing at Harvard Business School, was a champion of customer benefits as the benchmark for value in marketing. As he memorably put it, customers don’t really want a drill—they want a hole.

That single insight fundamentally changes the way you develop and position products.

The same could be said of intelligence. Intelligence users don’t really want more information to read (or listen to) and discuss. They want to be more competitive—to have more sales, higher margins, a higher stock price, and so on. Competitiveness is the end, intelligence is but a means to that end. Intelligence derived without concern for the value proposition that it is serving will almost necessary not be value-focused, and as a result will not achieve the returns it potentially could achieve.

Excerpt from the Introduction to The Knowledge Value Chain Workbook by T.W. Powell.

I didn’t start out to become a business researcher (though, in hindsight, that was the first professional role I was paid for).  I started out to become a physician, and completed the four year-long courses needed to enter medical school—inorganic chemistry, organic chemistry, physics, and biology.  This took much of my time, energy, and waking thoughts for two years in college.  And though I later decided not to pursue medicine as a career, it was not time wasted.  I often find myself using scientific thinking, or referring by analogy to some principle of science to understand a business problem.

Modern science is based on the scientific method—hypotheses are developed, then tested for validity in the real world.  Eventually, some become known as theories.  Others are so time-tested and reliably true that they are known as laws.  The scientific method is a specialized kind of knowledge value chain.

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I’ve been doing research for business clients for forty years.  That’s a lot of research.  (It also means I’ve made just about every mistake possible—at least once!)  When I started, each project looked very different-the details seemed to loom large.  I struggled with how to develop a unique approach for each one.

Several hundreds of projects later, my perspective had evolved.  The similarities among projects, not their differences, became most prominent.  I found that common themes ran among many of the projects, whatever their scope, methodology, or specific client benefit.  I became fascinated by the possibility that a few simple building blocks, moved around in different ways to fit the particular situation, could become the foundation of a whole way of looking at-and improving-the process of intellectual work.

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The age of modern management began with Frederick Winslow Taylor. He worked in the early years of the 20th century studying production processes in a steel factory. Taylor argued that by understanding a process “scientifically”, we could make significant improvements upon it. These improvements could be used to increase productivity, pay better wages, and generally provide a better work environment. His experiments worked, and his insights created a new level of industrial productivity that lasted through the 20^th century. As a by-product, he paved the way for a whole new profession—management consulting.

Management consultants (the best ones) are expert in analyzing a company’s or product’s value chain—the process that leads from raw materials to finished products. Using the value chain model, they find opportunities for cost reduction, revenue enhancement, strategic differentiation, and quality improvement.

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