CSAE caught up with Dr. Nick Bontis from his office in Hamilton, Ontario. Nick is a professional speaker and an award-winning professor of strategy at the DeGroote School of Business, McMaster University. He was recently elected President of the Canadian Soccer Association. He is a former KPMG accountant and is considered a leading expert on intellectual capital and its impact on business performance. In addition to being a sought-after keynote speaker, he is also the author of the best-selling book Information Bombardment: Rising above the digital onslaught.
Website: www.NickBontis.com Email: [email protected] Twitter: @NickBontis
CSAE: How can association executives facilitate collaboration?
NB: We really need to spend more time devoting resources to all four processes in the SECI model as opposed to just one. SECI is a model of how organizational knowledge is created and it stands for socialization, externalization, combination and internalization.
Socialization is the first process. Technology stops us from doing the simple things when we socialize, such as looking into someone’s eyes when we’re speaking with them. Really, the only people that are often socializing in most organizations are the smokers outside. It’s very important to re-emphasize socialization opportunities within our associations. It becomes too easy to not put a face to someone’s e-mail request and ignore it. When we communicate in person, we use so many varying degrees of emotion. This is even more important in a pandemic world where face-to-face contact is restricted.
The second step, externalization, means we have to automate processes to codify them into organizational memory. This is a problem I see more in smaller associations where one or two people are doing all the management functions and they don’t have the technological infrastructure available to them. A huge amount of the knowledge is resident in that person’s brain and the risk is that when they depart, that knowledge is gone. So what we have to concentrate on is getting association executives to codify what they know.
The next process is combination. This is where knowledge starts coming together. There is room for improvement here because people often don’t get called into meetings they should be in. Let’s use the development of the association’s intranet as an example. The intranet is typically the domain of the IT folks. What they might do is bring in someone from finance to talk about expenditures and someone from compliance to talk about legalities, but they rarely bring in someone from accounting to discuss what is the financial motivation behind trying to accelerate collaboration with technology. The answer is simple … by investing in such platforms, the “left hand” of the organization knows what the “right hand” is doing more readily. This leads to less search and duplication costs. That’s why association executives must put up their hand and say we need to make sure that all critical stakeholders are a part of this conversation.
The final step is internalization. Association executives play a significant role in the dichotomy of the learning and unlearning that goes on in an organization. During the annual strategic planning process, we should be articulating the things that didn’t work in the previous fiscal cycle. Very rarely do I come across an association that has formalized the idea of finding out what didn’t work so they don’t do it again.
CSAE: Out of these four processes, you said that socialization is the hardest. Why?
NB: It just takes a lot of effort. If you think of externalization and combination, we all have the technological tools available for us to use. Internalization is easy because we do it naturally—people will always talk and we constantly internalize their feedback. Socialization, on the other hand, takes effort because you have to take your bum out of your seat and engage with someone face-to-face. We have to get back to the old school way of talking to each other in person. It would clear up a lot of issues. In a pandemic world, we can use video conferencing technology to assist in this process. But we definitely need to get back to seeing each other in real life.
CSAE: If association executives are to be the catalyst for innovation, do we have to institutionalize more face-to-face time?
NB: Absolutely. We can manifest this in many ways such as through choice of office furniture and design, employee social events and annual conferences—all three of which got shut down because of the pandemic. But it’s those three things that impact collaboration, socialization and rapport, which are all critical for innovation. We have to appreciate that in today’s turbulent business environment, we have not invested heavily in the social fabric of our organizations and our role is to get out the needle and start weaving that fabric together.
CSAE: You mentioned the concept of unlearning. What is it exactly and why is it critical?
NB: When I was growing up, in school we learned that the one thing on earth you could see from space was the Great Wall of China. When a Chinese astronaut finally got to go up into space, he tested the hypothesis but when he looked down at earth, he couldn’t see it. Why? It turns out it’s not true and that hypothesis has finally been invalidated.
The problem with associations is that some of us don’t test these hypotheses, and, more importantly, are so wedded to them because of some associated cost—financial, reputational, historical and emotional—they don’t want to let them go. But at some point, association executives have to step up and say this method or theory has been invalidated, it does not work anymore, let’s unlearn it.
CSAE: How do you go about measuring what your organization needs to unlearn?
NB: That’s the million dollar question. I am asked this question constantly by my EMBA students and my consulting clients. I frame the answer in terms of the strategic planning process. During that process, organizations use templates for the strategic plan and accompanying SWOT (strengths, weaknesses, opportunities, threats) analysis. They incorporate budgeting, variance and competitive analysis into that plan. I’d like to make a new supplemental section of that plan: to list what we did last year that didn’t work, so we don’t repeat those same mistakes.
CSAE: In your book, you talk about knowledge obsolescence, can you explain what it is?
NB: Knowledge obsolescence is directly correlated to the rate of change in an industry. In some industries, software for example, the rate of obsolescence is huge. In others, such as construction, the change is not as quick.
When there is a fast rate of obsolescence, association executives must ensure that they are adjusting their training and development budget to reflect that rate. For example, if you are in a business that is going to be fundamentally changed by an upcoming regulatory change, you need to do some extra training to compensate for the increase in the knowledge obsolescence rate and adjust the budget accordingly.
CSAE: Associations like numbers, what’s your favourite number to share with them?
NB: The average organization in Canada has an annual human capital investment rate of $720 per FTE per year. Make sure that in the year 2021 and beyond, you significantly invest in professional training at a rate much higher than the average.