11 talking points on knowledge, leadership and management

On Friday 8 September 2017, Dr Antti Lönnqvist, Dean of the Faculty of Management, gave a lecture entitled “Knowledge, leadership and management” at the University of Tampere. Dr Lönnqvist’s lecture was the first key concept lecture in the introductory course of the Master’s Degree Programme in Leadership for Change (LFC). We are publishing 11 short memoranda written by the LFC students on the basis of the lecture.

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The dual role of knowledge is a concern for any modern-day leader. The first role is knowledge as a valuable resource and value driver for organizations, regions and nations. As to the second role of knowledge as a basis for decision-making, leaders should be able to do well-informed and well-considerate decisions from multiple perspectives. Since a leader must consider decisions from multiple aspects, the complexity of a decision-making situation is usually quite high.

  1. Knowledge

The importance of knowledge has changed through time: From the industrial era to knowledge society. From physical labor and capital to unique skills and innovative mindsets. The transformation of the society has created a new type of leadership and management style, which is based on knowledge and utilization of knowledge. Results are mainly based on knowledge assets, and knowledge is used to make decisions to improve the organization as such, its results and efficiency.

The goal is to make well-informed decisions. However, decisions always involve uncertainty. Since the development of the ICT, information has been easily available. On the other hand, the development of ICT has also created a so-called information flood with challenges to find the relevant and accurate information. However, the problem has been partially fixed with new tools to help sort through the information, like analytics, big data, artificial intelligence, business intelligence etc.

  1. Complexity

When making decisions, there are multiple issues to consider. Firstly, there are many stakeholders with different opinions that need to be taken account. Secondly, in most cases there is no one decision-maker. The regulatory environment and funding support are also issues to be considered. Fourthly, there are millions of details and unpredictable events, and some of them might cause practical problems from a different stakeholder’s aspect even though the decision might have looked well thought and planned for from another stakeholder’s perspective. And finally, there must be a notion that emotional reactions are involved in most complex decision processes.

International security problems, environmental challenges, sustainable public welfare services and unemployment and inequality are examples of such complex processes. Their common trait is complexity: They are hard to make sense of, there is no single owner of the issue but multiple stakeholders and they have an influence on many globally and locally. These problems can be called “wicked problems” and analysed through the “VUCA environment”. Leni Koskinen

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The term “wicked problem” refers to the complex, confusing and multifaceted problems in social systems that are difficult, or even impossible to solve in a clear cut manner. The concept was popularised by a German design theorist Horts Rittel in the mid 1960s. Examples of these problems could be found in the areas of politics and environmental issues: How to integrate tens of thousands of refugees to the Nordic society? How to motivate the natives to accept and embrace the newcomers? Or, how to tackle the climate change as a nation?

Wicked problems consist of issues that affect multiple networks and there is no single authority who could find solutions to them. Weber and Khademian argue that to tackle these wicked problems in our societies we need to build networks with “long-term collaborative problem solving capacity”. These are issues requiring a multidisciplinary approach and actors from different areas of society.

Weber and Khamedian have divided the dimensions of “wicked” problems to unstructured, cross-cutting  and relentless. Unstructured refers to the qualities that do not follow the patterns of cause and effect and to the fact that each solution might change the understand of the problem all together. The term cross-cutting points out the nature of the problems that has multiple stakeholders, has diverse perspectives and high potential for conflicts. Relentless means that the problems doesn’t have clear finish lines. So that that it is difficult to say when a problem ends and new one emerges.

The wicked problems our globalised societies face highlight the challenges of knowledge management. People and networks dealing with these complex issues have to be able to use knowledge bases from various sources. To sort out out data, to leave out corrupt information and to develop new ways to gather multidisciplinary data to enable us to understand and solve the wicked problems. Tero Penttilä

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In Western countries, the days of physical labor have changed into a society of knowledge. In this intellectual era, information is what brings companies competitiveness. Competitive edge can now be reached by hiring innovative people. On the other hand, knowledge is the basis of any decision-making that is not based on a simple ”gut feeling”.

As decisions in the present moment always include uncertainty about the future, information is the core of making well-formed choices. Knowledge is more and more accessible due to the development of ICT tools but on the other hand, the same development has given anyone — however unreliable as a source — the opportunity to share information. This has led to fake news and propaganda that the audience must separate from the reliable information to their best abilities.

In the Tampere3 project, for example, the two universities and one university of applied sciences in Tampere will be merged into one university with more resources and prestige than the schools alone would have. However, the plan has been on hold and dragging due to its many challenges. All three organizations are autonomous, have their own leaders and systems, and have distinct legal and administrative systems. There is no one single leader that could make decisions for all and move things forward. This is why the merging has been so complicated. Perhaps as a result of all of this, there is uncertainty in regards to people’s future roles in the new organization and different power structures related to the change. The merging is also a political question due to the traditional dual system in Finland.

Knowledge management faces multiple issues such as ”wicked problems” of social systems, and the two-folded issue of first gaining knowledge and on the other hand acting on it. Among the characteristics of a leader that might be able to tackle these issues are, for example, ambition, ability to change, interaction skills, and ability to create trust and to negotiate. Iida Jokinen

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The knowledge problems that managers and leaders face are often related to change processes that are systemic and complex. The problems are interconnected with many facets, stakeholders and actors. Yet one needs to remember that these facets will not necessarily work towards the same direction.

Examples of these kinds of problems include international security issues, environmental challenges and sustainable welfare services.

The two main challenges for managers and leaders boil down to two questions: How can we better understand the complex decision making situation? And, how do we utilize information and knowledge in order to influence other’s decision-making? The managerial tasks related to knowledge and decision-making are analytical and systematic including planning, scheduling, communicating, sharing responsibility, being professional, financial planning, legislation and ICT. Whereas the leadership related issues include agency, initiative, participation, networked way of operating, negotiating, developing trust, joint vision creation, showing commitment and resilience.

Knowledge, leadership and management can be further discussed from the perspective of three key points: the meaning of knowledge, the complexity of decision-making and knowledge related to management and leadership challenges.

In the current ’knowledge society’, knowledge is viewed as one of the most vital assets and resources within organizations, companies, institutions and governments. The most wanted employees hold knowledge, information, expertise and have the ability to co-operate and network. Since every company has its own purpose to produce outputs and outcomes, it can be concluded that knowledge assets are a vital part of result creation. In order to gain and maintain good employees with expertise the managers and leaders ought to create motivating and versatile job tasks within organizations.

To make well-informed decisions with planned outcomes, one is better off to utilize available information in order to achieve these planned outcomes. However, decision-making is a complex process since no one can predict the future or foresee whether the planned outcomes will be meaningful in the future. Hence there are many alternatives that can occur. The ICT development (information and communication technology) has brought the information easily available to the end user. However one of the biggest problems is to navigate through the huge amount of information available and find the reliable, valid and useful information related to the decision-making. Karoliina Ruohonen

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In the past, during the industrial era, most of the work was manual and required physical strength. This scenario has gradually changed though; knowledge has become an asset for any organization.  In order to keep an organization competitive it is essential to have capable people to use a variety of resources. Profits, betterment of services and improvement of people’s life are some outcomes when knowledge based on scientific sources is used as the basis for decision-making. On the other hand, decisions based on guessing and emotion are not effective. So that it is fundamental to know how things works.

The unknown future offers a considerable extension of issues (wicked problems), consequently future decisions are complex challenges and require the maximum usage of knowledge. An important resource to tackle the unknown future is trustworthy information and data, which positively have become more accessible. Moreover, a variety of useful tools, such as big data and artificial intelligence, can assist in decision-making. However, it is important to bear in mind that a significant amount of information is unreliable (fake news).

A concrete example of a complex decision is the merger of the three distinct institutions of higher education in Tampere. This complex change process has started three years ago and involved many different complications, such as limited funding and separate legislation for each institution. This merger was chosen to create a better university and maximize efficiency and effectiveness. It has been a challenge that demands important skills necessary to manage a complex change. Making sense of complex phenomena, guiding actions within the change process and knowing the details are crucial leader’s characteristics in this process or any other complex change.

Decisions made today affect the future and the world is desperately in need of leaders able to deal with complex change and tackle wicked problems. Knowing better what to do and how to put the knowledge into practice are two main challenges for visionary leaders. In addition, people who want to become leaders and work towards a fairer society must constantly seek certain qualities such as ambition, responsibility, multidisciplinary thinking, desire to change and so on. Gabriel Esber Elias

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It’s a cliché to proclaim that we live and work in knowledge society. Nevertheless, knowledge is one of the key resources and assets to create value and achieve organizational goals in complex and unpredictable environment.

Undoubtedly, knowledge – and knowledge-management in particular – is one of the most essential element of leadership and management. But getting and sharing existing knowledge is not enough for leaders nowadays. J. Hagel III and J. S. Brown argue in Harvard Business Review that “the focus should shift to creating new knowledge… Organizations are increasingly being confronted with new and unexpected situations that go beyond the textbooks and operating manuals and require leaders to improvise on the spot, coming up with new approaches that haven’t been tried before”. For what purpose? To do their job – to solve the problems and achieve sustainable organizational success.

Knowledge has two key roles: it is an organizational value driver and a basis for decision-making process for managers and leaders. These roles can be compared to farmers who grow up their products from the precious seeds of knowledge. However, the business operating environment and projects are getting much more complicated and complex. Numerous goals, many stakeholders and competitors, discordant information, political circumstances, uncertain future… many leaders and managers are in trouble with complex change process.

As a result, leaders and managers face two main challenges: how to understand the complex decision-making situation more completely and how to utilize knowledge effectively to influence other’s decision-making process and behavior. In other words, to gain knowledge and act on that knowledge, manage it. As Lisa Quast argues in Forbes, “actively managing knowledge can help companies increase their chances of success by facilitating decision-making, building learning environments… and stimulating cultural change and innovation”. Mariia Kangasmiaki.

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In the post-industrial era, knowledge is becoming a more and more valuable resource. It is harder to acquire unique skills and good people than capital and assets. Organisations have different goals as to why they exist: are they providing services, creating profit, or creating customer value to name a few. Knowledge can be viewed as an asset. The ability of organisations to pursue their goals and operate has roots in how well educated its personnel and managers are and what capabilities, namely knowledge, they have.

As future is uncertain and no one has exact knowledge about it, decision-making is difficult and the risk of uncertainty is always present. There are two main knowledge challenges: how to better understand the complex decision-making scenery (referred as ‘knowing’) and how to influence decision-making utilizing the knowledge and information leaders have (referred to as ‘acting on knowledge’) in a complex environment. Leaders’ knowledge-related challenges therefore include uncertainty of decision making, with key tasks of gaining information and utilizing it in decision-making.

These issues can be further explored through the notion of wicked problems. Wicked problems are complex public problems, which are hard to solve. As Weber and Khademian argue, they are unstructured and the causes and effects are difficult to identify and predict (p.336).  Wicked problems spread across different government levels and policy domains and can therefore connected to many fields of interest (environment, safety, social fields) and stakeholders (ibid., p.336). Fundamental challenge to effectively managing any public problem in a networked setting is the transfer, receipt and integration of knowledge across participants (ibid., p.334).

The current leadership environment has also been described as VUCA. It is Volatile, Uncertain, Complex, and Ambiguous – an environment that poses challenges for the management and current leaders. Perhaps, current leaders and managers are not equipped with the knowledge they need to have to solve complex challenges? One aspect of this is that, the leadership principles have historically been develop to answer to the needs of industrial problems and are not as suitable for use in wicked/complex problems. Eveliina Siukola

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“Knowledge is power” is a commonly used phrase which we use to highlight how important and significant tool information has become in our society. Now that we are moving from industrial society towards society that is more based on information technology and services the phrase is perhaps even more true than ever.

For example, Internet companies such as Apple, Google and Facebook have become the most valuable brands in the world. Their value is heavily based on the data they get from their users who post pictures, share news and publish other content via their applications. Knowledge is something that can be turned into money and data has become a more important resource than oil.

Because of the world-wide web, we now have almost unlimited access to databases and sources of information despite our location or time zone. However, this overflow of free information has caused another problem: knowledge is often divided and fragmented. Traditional institutions such as media, university scholars and healthcare professionals have lost a part of their authority when people are trying to find and present alternative facts.

Nowadays even a member of the Finnish parliament refuses to believe in evolution theory and global warming. Among people with a low level of education, vaccination is considered dangerous because of the potential side-effects although it is scientifically proofed that vaccination in fact saves thousands of lives. The politicians and celebrities no longer need the traditional media to contact their audiences which makes it easier for them to spread false information that suits their own purposes.

My point is that we definitely need better data and information to tackle the wicked problems that we are facing together nationally and internationally. However, the mere information is not enough if it cannot convince people to act in a correct way. That is why we need better tools and practices to communicate and share information so that everyone can understand and absorb the facts so that it transforms into actual knowledge. Knowledge-based management requires better practices for communication. Markus Mäki

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Knowledge is commonly perceived as a valuable resource regardless of time. The diversity of knowledge types has boosted dramatically from practical-oriented to multidisciplinary. Therefore, the concept of ‘managing with knowledge’ has became more and more popular.

Knowledge can serve as 1) the driving value of all types of organizations, 2) a crucial determining factor of decision-making. Precisely, individuals with a broader knowledge base can create and set more ambitious and influential targets, and, in terms of decision-making, they can usually make decisions which are positive to the operation and outcome. The thirst for knowledge significantly increases.

The channels to gain knowledge are expanding. The internet, articles, analytics and other forms of knowledge exchanging methods are developing, which leads to another problem – information overflow.

From my personal perspective, the importance of managing knowledge is underestimated as managing with numerous knowledge might bring temporary benefits. Inaccurate and irrelevant information may be a barrier to identifying and utilizing effective information. As a result, value creation and decision making are completely based on wrong knowledge. Therefore, managing and screening knowledge is just as vital as selecting and applying the appropriate ones.

The Tampere3 project illustrates the complexity of change leadership and management environments. The three higher education institutions in Tampere have agreed to merge in 2019, but dilemmas have occurred during the process.  Legislation, organizational culture, organizational features, managerial and operational differences, finances and uncertainty – they all exert an influence on the process. But difficulties have been overcome to a certain extent, which also indicates the importance of knowledge and information exchange. The leadership role, on the other hand, can be complicated. Avoiding acquisitions would be a crucial key to a successful merger. Instead of dominating the three institutions, a jointly agreed leadership style should be cultivated.

In my opinion, a change agent could effectively address the problem. A professional external individual should be able to provide objective suggestions and every institution might feel more comfortable to speak with someone without profit conflicts.  The Tampere3 project aroused my awareness of the complexity of change processes, and as the project goes on, with more information provided, the solutions to the dilemmas could serve perfectly as a beneficial example regardless of its outcome. Zheng Zhao

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Knowledge is one of the main resources, if not the most valuable one, for any modern organization. Nowadays, knowledge can be acquired easily through different platforms. However, it is important to distinguish valuable information from groundless materials. Therefore, knowledge-based management thinking is the key to success.

It is not only relevant to acquire knowledge based on scientific resources, but also to manage it in order to make good decisions. However, operating environments are often difficult and complex. For instance, uniting the three universities in Tampere under one name (Tampere3) is strenuous and challenging at the same time. Many details need to be considered, for example the fact that all of them are different organizations, or that many stakeholders are influencing the unification process.

In the same way, measures to improve efficiently the public welfare services or to manage the environmental challenges are not easy to find. These are complex structures, which can be difficult to grasp in the first place. Moreover, current leaders may be incapable to deeply understand the changes which are happening. There are ‘wicked problems’ which derive from confused information or from many information coming from different stakeholders. The world VUCA has been developed to describe the modern changes. It stands for volatility, uncertainty, complexity and ambiguity.

Under such circumstances, skilled leaders with appropriate knowledge are needed to handle transformations. Future leaders should face complex changes through a deep comprehension with valuable and grounded information and to make choices based on their knowledge. In addition, being able to communicate well and to collaborate with others are also required abilities. It is more and more important to acquire knowledge based on valuable resources which enables making efficient decisions and solving societal problems together with good leadership skills. Yesselin Hermano

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Today’s society is a complex knot shaped by several small parts that are interconnected to each other. Complex operating environments are boosted by a network. Weber and Khademian describe network as an ‘enduring exchange relations established between organisations, individuals and groups’ (p. 334). Network is essential in these operating environments as it provides ‘flexible, efficient and innovative organizing hybrids that enable participants to accomplish something collectively that could not be accomplished individually’ (ibid).

Social systems present problems that involve all the parts of the net. Problems are complex by nature and their causes and consequences influence all the parts of the system. These are called wicked problems.  Finding a solution to such challenges requires solutions that take into account the knowledge of all the stakeholders of the system.  Following the description of Weber and Khademian wicked problems are unstructured, which means that the causes and effects are difficult to define. Secondly, they overlap with subsets of problems that happen across all the parts of the system.  Thirdly, they are endless challenges whose effects will be always present in other areas of the system.

The systemic problems (i.e. wicked problems) have inspired actors in the entrepreneurial arena to develop a concrete term to define the environment in which actual businesses operate. This term is VUCA and it is an acronym of the words volatility, uncertainty, complexity and ambiguity. According to Bennet and James, volatility refers to ‘an unstable or unpredictable situation’; uncertainty ‘describes the lack of knowledge we have from the situation’; complexity is ‘characterized by the many interconnected parts that shape the system’; and ambiguity defines the situation ‘where there is doubt about the nature of cause-and-effect relationships’ (p. 314–316). Reyver Serna

 

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