Organizations that expect to compete in today’s fast paced market place need to master innovation as a necessary skill. Innovation plays a key role in how organizations develop new ideas, new products and new processes and the pace at which they do so. One of the key ingredients in the quest of such innovation is the effective usage of resources, information and knowledge within the enterprise. (Dye, 2008) Knowledge as a key resource entails the creation, the assimilation, its usage and its dispersion; Markets with their emphasis on collaboration and short term informal relationship see a relatively different impact as distinct from what firms would experience. By very virtue of their structure markets do not have a centralized method of accumulating nor using knowledge. The dispersion of such knowledge as is available in markets is seen as a natural outcome of the very informal environments that markets operate under. Firms on the other hand strive towards creating such centralized structures. Dispersed knowledge within firms causes structural anxiety (Hayek, 1948).
In most cases, availability of knowledge and information is largely dispersed and frequently unavailable at the point of usage and not with the person who needs this information for effective decision making. (Senge, 1990)
The challenge that most business face lies in the dispersion of knowledge and the lack of its codification. As business imperatives change, so does the knowledge required to handle and tackle such changes (Dawson, 1986). In competitive economies, where the margin of success and failure is a sum total of the inherent knowledge capability of organizations , dispersed knowledge scenarios lead to poor sluggish response reaction times. The centralizing of knowledge is seen as a possible method where inherent knowledge can be processed. However codification of such knowledge remains an essential challenge.
Thus it can be seen that organizations in today’s competitive economies see two inherent challenges with respect to knowledge and its effective usage as a key competitive resource. Both challenges are to do with the availability of this knowledge or lack thereof (Ellig,1996) . Knowledge which is dispersed across the enterprise , given the structure and design of many current organizations which essentially operate in a 21ST century knowledge economy but continue to carry post industrialization functional centric , command and control design structures. Secondly individuals have seen knowledge as the currency of their own individual competence and position. This means, such individuals have little incentive to part with knowledge that lies within their own heads and codify this knowledge for usage by others across the enterprise. These twin challenges render most organizations sluggish in response to fast paced changes that happen in external environments that have the capability to impact the enterprise (Senge, 1999).#p#分页标题#e#
Organizations seek multiple methods to harness information and knowledge within the enterprise. Thus organizations seek mechanisms to aggregate information across the enterprise. The challenges in the devising of such information are many. First and foremost is to determine, what types of systems would work in which type of organizations. Once this is done, the deployment and effective implementation of such a mechanism has to be designed. Individual decision biases are to be accounted for and in addition incentive methods and systems are to be designed. Individuals need to be aware of the purpose for which knowledge dissemination is sought and how they would benefit from such optimum usage of information across the enterprise. The other challenges are in determining who are these individuals whose knowledge is of relevance to a problem that needs resolution and indeed the validity of the relevance of the available knowledge to a given problem and situation. Technology plays a key role in the efficient and effective usage of information and resources within the enterprise, designing such underlying systems is also a challenge that needs attention by the management of an organization that seeks to aggregate knowledge and resources and deploy them at the most effective point of usage (Chen&Plott, 2002).
A method that supports open innovation and the dissemination of information and knowledge is a practice known as knowledge brokering. (Billington & Davidson, 2010) Knowledge brokering is a systematic methodology that seeks out ideas and knowledge from a variety of possible sources. The quest is to find answers that are best in class and global for the problems that the organization seeks to address. Organizations that adopt the practice of knowledge brokering seek to combine the knowledge available within the enterprise with such global knowledge in order to improve their business processes.
Not all organizational challenges can be solved by this approach. If the problem for which solutions are sought are extremely complex in nature or in too narrow a specialization, then it follows that the number of possible experts who are in a position to provide answers to such complex problems are also too few in number. A possible solution to this would be to break down complex problems into their constituent components and then seek knowledge through knowledge brokering. An important aspect of such knowledge brokering would be seek sources outside one’s own industry as within the same industry diffusion of knowledge is rapid and therefore break through solutions could perhaps arise from seeking knowledge outside of the same industry((Billington& Davidson,2010)
There are many possible sources for knowledge brokering. Of these sources, there are business school, consulting organizations, think tanks that are a source. There are experts in many fields who do not necessarily charge for their knowledge or advice. The second source would be existing suppliers. Suppliers, in addition to being a substantial repository of knowledge, also have a stake in providing such knowledge to organizations in the interests of relationships. If suppliers are a motivated source of knowledge, potential suppliers as a possible source are even more so. Most potential suppliers see such sharing of knowledge as the most optimum method of establishing relationships with their potential customers. (Billington & Davidson, 2010)#p#分页标题#e#
Customers are the third possible source of knowledge for organizations. Customers are happy to share knowledge and process insights to organizations as they are vested in the success of their suppliers. Communities, interest groups and functional business bodies and networks are a source of knowledge for organizations. Such bodies have a sharp focus, for example in the area of supply chain, accounting or design and provide an excellent basis for knowledge. The final possible source would be professionals such as lawyers, architects, certified accountants. There is the possibility though such professionals usually seek compensation for their time. (Billington & Davidson, 2010)
One of the key drivers of knowledge sharing through the formal practice of knowledge brokering is a shared moral value of both parties, where it is felt that sharing knowledge enhances the furthering of a larger cause, such as women empowerment, diversity or the environment. Such shared moral environments accelerate the possibility of knowledge brokering.
Knowledge brokering is most effective when an organization has process and systems in place to optimally absorb external knowledge, synthesise this with available internal knowledge and then implement the outcomes of such knowledge and make available the synthesised knowledge to the person/s in the organization that needs it the most at the most opportune time. Technology plays an important part in implementing such systems to harness the power of this knowledge. (Billington & Davidson, 2010)
If knowledge brokering is a possible approach that fosters open innovation and the synthesis of outside specialized and expert knowledge the other approach would be the creation of prediction markets. The basic premise of prediction markets is that at given the right environment and circumstances, judgement applied collectively by a large group of individuals will be a better predictor of future course of actions as opposed to what one or a smaller group of experts can forecast or indicate. (Dye, 2008)
The challenge with most organizations as indicated above is that the accumulated knowledge in an organization is embedded either with a small select group of individuals or in systems that are not accessible to the larger group. Individuals within the organization are usually unaware of how to access key information and how to access the individuals who have access to such key information (Senge, 1990) .Prediction markets seek to circumvent this challenge. They seek to aggregate such knowledge and information that lie embedded and dispersed within the organization. Prediction markets in addition to seeking access of information from a larger set of individuals also allow these individuals to incorporate feedback that comes in from updated information into their future responses. Therefore a continuous feedback loop is set in place that allows participating individuals to fine tune their responses. The prediction market does not recommend that views from experts from within the enterprise not be sought. The fundamental premise is that the accumulated knowledge of a larger group or crowd of individuals has a higher probability in predicting a future outcome as opposed to the view of a single individual expert. Early signs of the usage of prediction markets are encouraging and have provided interesting insights. One such insight that information is available with individuals who traditionally decision makers do not approach. These are individuals under normal circumstances, who would not participate in the transfer or release of knowledge because either there is no incentive for them to do so, or they do not have the means to participate in such knowledge transfer. (Dye 2008)#p#分页标题#e#
There are challenges with the prediction market. Firstly the concept of prediction markets is not easily understood by internal organizational teams. This not being an intuitive approach, individuals tend to hesitate in participating, thereby limiting the size of individuals participating in prediction markets. One area where there is still insufficient knowledge on the efficacy of prediction markets is in the area of forecasting discontinuous innovations where the possible future is undefined and uncharted. The other challenge is that prediction markets are far easier to organize for internal participants as opposed to external ones. This could lead to a smaller pool of participants in the prediction market thereby moving away from the original construct of prediction markets. Individuals within the organization need training in multiple areas, of how prediction markets are organized and conducted and how the forecasts from such prediction markets are to be factored in towards effective decision making. Experts within the enterprise who are hitherto focused on answering the questions posed to them have to now train themselves on asking the right questions in the prediction market. Employees will need motivation to participate in prediction markets (Dye 2008)
The fundamental premise of prediction markets is based on how markets operate and respond to a central influence as opposed to a participatory one. Information and knowledge that is centrally accessed and utilized for decision making is inherently flawed. This assumes that such central authority is the repository of all the accumulated knowledge in the enterprise and this can lead to severely erroneous decision making. (Hayek, 1948) By ensuring a larger participation from a wider set of individuals across the system, it is possible that prediction markets make a far better alternative.
It is also clearly understood that knowledge is a resource that clearly defines the competitive edge an organization in today’s innovation centric market place. Therefore, ensuring that there exists a wide access to such information and knowledge and that this critical resource is utilized effectively is key to the success of the organization (Ellig,1996). However merely accumulation and centralization of knowledge does not bring the competitive edge or the ability of the firm to respond to external stimuli promptly, effectively and efficiently. That is also dependent upon how such knowledge is used effectively by competent individuals in the firm (Senge, 1990).
Organizations increasingly believe that the path to increased access to information and knowledge is possible when a larger pool of such knowledge is accessed (Chen & Plott, 2002). There are two possible models how this can be achieved. One is the method of knowledge brokering where multiple external sources of expert knowledge are accessed by the organization in a sustained and systematic manner to solve complex problems and the other is the area of prediction markets where a large talent pool of knowledge givers are accessed to predict the future impact of current actions. This is done on the assumption that the probability of a larger pool of individuals are better suited to offer a more accurate insight as opposed to single or a couple of experts from within the organization.#p#分页标题#e#
Both methods need the organization to create systems, processes, technology interventions and motivational techniques to get the larger individual pool to participate. It is noted that should organizations succeed in creating the systems to harness this information and knowledge, the rewards to the organization are significant. Individuals who hitherto did not have the wherewithal or the motivation to share knowledge and information find it easier to do so. This in effect creates an effective system towards efficient utilization of the organizations information and resources.