ROI through POI: Insights of a new investment

Sunday, 31 October 2010 23:09 -     - {{hitsCtrl.values.hits}}

Sri Lanka has emerged as an investor-friendly destination. Investments should ensure expected returns.

That’s why Return on Investment (ROI) becomes a critical factor. As the way we invest money, there is a growing awareness about another investment: Investing knowledge.

It was Peter Drucker who said that knowledge has become the capital rather than a capital in the ‘post-capitalistic’ era. This is an interesting way to look at how people contribute to organisations. Knowledge is generally referred to what is known. The Oxford Dictionary describes knowledge as ‘facts, information and skills acquired through experience or education; the theoretical or practical understanding of a subject.” It has become a capital that is being invested, anticipating returns.

We commonly use terms such as knowledge worker and knowledge work. According to Drucker, knowledge work is about sensing, judging, creating ideas and expert opinions, building networks of relationships, and producing value using knowledge and information. It is all about knowledge in action. Then, who is a knowledge worker? He or she is an employee who is simultaneously an investor and owner of the enterprise he/she is working for.

We see an emergence of knowledge work in Sri Lanka, in line with the global trend. Knowledge is acquired through learning. Learning is essentially an individual phenomenon. In other words, learning takes place within an individual. The individual becomes knowledgeable. That’s where the game starts. Knowledge is power.

Michel Foucault vividly illuminates us on this: “Power is exercised by virtue of things being known and people being seen.” As he further states: “The exercise of power perpetually creates knowledge and, conversely, power as knowledge.”

Since knowledge is power, then individuals have power. They unleash that power by way of contributing to their institutions. Such a phenomenon poses a key challenge for people managers, including HR professionals. That is how to harness the individual power. I would propose the term Power of Individual (POI) to represent this wide array of contributions an individual makes by way of investing his/her knowledge. When knowledge workers come up with creative ideas converting them into concrete actions, the creation of consistent processes for results has to happen. Therefore, the key challenge can be further clarified as the need to channel POI to obtain ROI. POI is a demonstration of how an employee can contribute to creative ideas to the organisation. In some Western societies, it has taken another twist, which I call POW. One POW may lead to another POW. Power Of Women (POW) may make men prisoners of war (POW). The essence is the unleashing of creativity, with growing emphasis placed on softer dimensions of management. Imagination with idea generation is what an individual does at the inception. Interactive team work should happen next in taking it into implementation.  Bartlett and Ghoshal offer interesting insights on the power of individual. According to them, instead of forcing the individual to conform to the company’s policies and practices, the overall objective is to capture and leverage the knowledge and expertise that each organisational member brings to the company.

As they further elaborate, “the notion of “organisational individual” is giving way to a concept we call “the individualised organisation” – one that capitalises on the idiosyncrasies and even the eccentricities of exceptional people by recognising, developing and applying their unique capabilities.”

The best way to understand the difference between “organisational individual” and “individualised organisation” is to take a few examples. Gone are the days where people looked alike, dressed alike, spoke alike and behaved alike. Such a uniformity demanded individuals to adjust and to adhere to their organisation, to the fullest. It reminds me of a regimental organisation or even perhaps the People’s Republic of China, in its post-revolutionary era.  Now the scenario is much different. The reality is that the organisation has to adjust itself to accommodate diverse talent, by being an “individualised organisation”. The key aspect is diversity. Flexibility is much needed to accommodate diverse employee requirements. Flexi-time, telecommuting, virtual teaming are some such work arrangements.

The key aspect here is the need of talent by the organisation, and the sure way to get it is to reach out to the talent in the market by being receptive to their needs. Software companies and advertising agencies are ready examples in this respect.

The rising power of individual by way of unleashing creativity should not be perceived as a threat to team work. In fact, it intensifies teaming. Interactive teams are the only way to bridge the gap between individuals and their institution. When creative individuals invest their ideas, the returns come in the form of innovations in the organisation. Such innovations can create new vistas in broadening the product or service offerings.

The team at Sony who worked on Walkman, the team at Google who strive for global customer reach, a local insurance team who kept the other insurers “out of the spot” are some such examples.

Hence, the equation is seemingly very simple: ROI through POI. Yet, the amount of thinking and doing needed from people managers is immense in the true spirit of achieving humane results.

(Dr. Ajantha Dharmasiri is a Senior Faculty Member and a Management Consultant attached to the Postgraduate Institute of Management, University of Sri Jayewardenepura. He also serves as an adjunct faculty in International Human Resource Management at the Price College of Business, University of Oklahoma, USA. He has over two decades of both private and public sector working experience in diverse environments including Unilever and Nestlé. He has engaged in consultancies in more than 10 countries. He is a Commonwealth AMDISA Doctoral Fellow and Fulbright Postdoctoral Fellow. He holds a Ph.D. and an MBA from the Postgraduate Institute of Management, University of Sri Jayewardenepura and a B.Sc. in Electrical Engineering from the University of Moratuwa. He is also a member of the Chartered Management Institute, UK. He can be reached via email [email protected].)

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