From Knowledge Stocks to Knowledge Flows:Opportunities and Challenges Ahead

John HagelCo-Chairman, Center for the Edge

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The Big Shift

Foundations Flows Exponential Learning

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The Challenge

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

4.2%

0.6%

Ret

urn

on A

sset

s (%

)

Return on Assets for the U.S. Economy (1965-2010)

Source: Deloitte Shift Index

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Where’s The Value?

Ecosystem

Enterprise

KnowledgeStocks

KnowledgeFlows

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Explicit vs. Tacit Knowledge

Explicit

Tacit

NewExperience

10 YearsLater

Percentof Total Knowledge

- 6 -

Rate of Knowledge Depreciation

High

LowStart 5 Years

Value

21st Century

20th Century

- 7 -

Challenge

Tacit Knowledge Doesn’t Flow –

It Is Sticky

- 8 -

What’s Required to Access Tacit Knowledge?

Trust Based Relationships

- 9 -

Multiple Forms of Trust

Institution

Skill

Person

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The Foundation of Personal Trust

Vulnerability

SharedPurpose

Passion

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Scaling Access to Tacit Knowledge

Individual Problem-solving

Reputation and Relationships

Team Collaboration

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Enabling Knowledge Flows

Search

Learning

Serendipity

- 13 -

Potential Implications for Knowledge Management

1) Knowledge People

2) Contribute Capture

3) Objects Environments

4) Search Serendipity

5) Transfer Create

6) Firm Beyond

7) Leverage Through Passion

8) Stock Metrics Flow Metrics

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Stay In Touchjhagel@deloitte.com – email

@jhagel - twitter