I am now taking a Management Strategy class and had my first class tonight. One of the last topics discussed by Professor Marciano was the three layers of firm performance which she describes as:
Positional Value: when the value of the firm can be retained despite the total replacement of all of its resources. An example given was Krispy Kreme (sp? I hate donuts). Positional Value is derived from assets owned by the firm's shareholders.
Resource Value: when the value of the firm is tied to specific resources within the firm and then those resources are matched to opportunities pursued by the firm. Examples given included Law Firms and Consulting Firms.
Structural Value: which is when the value of the firm is equally divisible between he owners assets and the specific resources.
This "layering" of firm performance got me wondering how one would go about designing a knowledge management tool for each type of firm. If you exam each type of firm, the motives for the employees are vastly different between an employee of a positional firm and that of a resources firm. Therefore, in order to design an effective knowledge management system, one would first have to identify the type of firm that the system was being designed for and then identify the best way to encourage the employees to use that system.
For example, take the Piper Rudnick team, they were trying to design a system for a resource firm. By definition, the partners of the firm are the resources which add the incremental value to the firm. As such, to encourage the sharing of knowledge, the management team should incent the partners based upon each lawyer's willingness to share their knowledge with the rest of the firm. There should also be an educational component to the system so the partners understand how their sharing of knowledge will benefit them by educating others (especially the associates who generate the revenue) and making the others more efficient.
ABN/AMRO may be in a different situation because many of the divisions are positional in nature and the resources are more of commodities that can be replaced. As such, the employees should be incented more along the lines of how well the company does as a whole (profit sharing, stock options, etc.) because no one employee can have that great of an impact on the overall profitability. However, if the sharing of information across the company makes that company more profitable then everyone benefits.
What do ya think?
11:32:29 PM 
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