Nortel Company - Article Example

Summary In 1994, two Nortel executives, anxious over the possibility of the company’s having an empty “war chest” of novel and innovative product ideas, instigated a restructuring of the company’s business processes. The aim of the stated was the facilitation of the process by which internally generated new product ideas could be evaluated and implemented. Within a span of just over 5 years, Nortel had successfully designed a process-oriented knowledge management strategic paradigm (KM) for its New Product Development (NPD) process. The above-mentioned restructuring was a complex process, involving a umber of clearly defined steps. The first of these steps was aimed towards the testing of the empty war-chest hypothesis through an in-house survey targeting all of Sales and Support, Global Service Planning, and Marketing and Development. An excess of 100 new product ideas were submitted within three weeks. The results, thus, proved that Nortel had the potential for a very rich war chest but, the absence of a process for the capitalization upon internally-generated ideas, constrained this potential. It was imperative, therefore, that the company design and develop a paradigm for the exploitation of its internal innovative capabilities. To leverage its knowledge base, Nortel formed a cross-departmental task force, Project Galileo, whose primary objective was the design of system for the facilitation of the new idea submission, evaluation and product development processes. The process-oriented KM strategy subsequently designed, focused on processes, people, and technology. The first emphasized the development of a front-end process for the facilitation of idea to development process. It subsequently development a paradigm comprised of “(1) idea qualification; (2) concept development; (3) concept rating and (3) concept assessment” (274). It further focused on the identification of the types of knowledge which employees require in order to execute this stage and the optimal strategy for knowledge sharing, acquisition and communication. The second, people, identified the optimal means by which employee knowledge may be constructively utilized. Three types of groups were identified: (1) idea generators, or the engineers which submitted ideas for new products; (2) decision makers, as in those who evaluated the submitted ideas and decided on those which withstand development and (3) process owners, or those which management the development stage of the product. The third, technology, instigated by the belief that technological applications aided in the organization, codification and dissemination of knowledge, focused on the development of that technology. The outcome was an Electronic Performance Support system whose primary function was the storage and codification of knowledge in order to allow relevant groups access to the required knowledge when needed. Nortel further developed a customized KM tool, Virtual Mentor, which, apart from extending employees learning opportunities, catalogued all pertinent information on submitted innovative ideas for copyright purposes and, ultimately allowed idea generators to operate in an iterative, as opposed to sequential manner. In brief, apart from substantially cutting down on the administrative costs associate with the overseeing of such types of operations, Virtual Mentor provided all of knowledge-based support, decision-based support and productivity based support to all of the three mentioned people groups. The outcome was that by 2000, Nortel had established as one of the undisputed leaders in the telecommunications industry and had, successfully made the transition from a technology focused operation to a people and opportunity focused one. The successful reengineering of its business processes was further reflected on its profit sheets. The successful design and implementation of Nortel’s KM strategy, primarily evidenced in its outcomes, was consequent to a number of factors. The most important of these are the KM enabling conditions which management, through leadership, coordination, control and measurement, established; the strategic use of financial, human and knowledge resources and, Nortel’s understanding of its external environment, shifting trends therein and capacity to respond. Success was, thus, determined by organizational commitment and focus. Critique The authors’ writing style and presentation substantially contributed to the readability of the article and hence, to appreciation of it. From the onset of the article, the authors clearly outline their focus, state their research questions, strategy for responding to them and, most importantly, define their key terms from a variety of sources. This last is especially important for, while many of the readers may be aware of the meaning of knowledge management, the authors’ clarification of definitional components, as used in their study, invaluably contributes to their readership’s understanding of their particular usage of the term. Beyond that, the argument is clearly laid out and concise. While writing style and presentation are important criteria for evaluating an article, they are undoubtedly secondary to content. Consequently, the critique will now aim towards the assessment of content through a review of how the authors handled all of IT management issues and challenges; a changing business/ IT environment; IT strategic planning; Business Process Reengineering; Organizational/ IT transformations; and IT and Change Management. The authors, justifiably, devote great space to the identification of the problems which existed within the company’s business processes and the challenges involved in overcoming them and, hence, facilitating the idea to project development process. As outlined, ideas existed within the company but, paradoxically, given the absence of a mechanism for their articulation and subsequent evaluation, Nortel was left in a situation wherein its war chest was empty. Re-engineering this particular business process was, without doubt, a complex undertaking because its success hinged upon bringing together various groups within the company into a single cooperative unit. The overview the authors provided on Nortel’s re-engineering process is very valuable. Its value does not simply stem from the fact that it substantially contributes to their establishing their argument but because it provides a paradigm for the design and implementation of knowledge management in organisations. Through their discussion on the difficulties which diverse groups of employees might experience in their cross-departmental communications, primarily because they speak from the perspective of different types of knowledge and skills, they contribute to our understanding of how this particular problem may be overcome, thereby facilitating the flow and exchange of knowledge on the intra-organisational level. In addition to the above stated, the authors further provide an excellent and comprehensible overview of the way in which Nortel successfully reformulated its internal IT environment and exploited IT tools for the purpose of strategic planning. This is amply evident in their discussion on technology and the manner in which the company successfully designed and implemented an organisation-wide knowledge management system whose purpose, beyond categorising new ideas and facilitating their assessment, formed the basis of an effective and efficient project management paradigm. Similarly, their discussion on the extent to which the use of IT facilitated change management and the IT transformations which occurred within the company, substantially contributed to the readership’s understanding of the manner in which Nortel confronted the identified challenges. Beyond that, this particular section of the article clarifies the imperatives of designing and utilizing IT tools and systems which would address corporate needs, as in the more effective exploitation of corporate resources, efficient project management and idea/project evaluation, not to mention performance/progress measurement. In other words, the discussion on technology, as argued and presented by the authors, contains management and organizational development lessons whose implications and utility extend beyond Nortel. As may be inferred from the preceding paragraphs, the reviewed article is, indeed, a very strong one whose authors both explain the importance of their topic and validate their argument regarding the factors which motivated Nortel’s successful implementation and utilization of knowledge management paradigms, strategies and tools. From a personal perspective, however, the authors did not adequately clarify the extent to which extra environmental factors influenced Nortel’s decision to undertake the reengineering of its business and IT processes or how environmental factors contributed to success. Both are mentioned in the passing, as when they clarified that competition and shifting market trends contributed to the fears over the empty war chest, or when they mention that environmental influences factored into the company’s success. In neither instances, however, do they provide an explanation regarding the nature of the changing market trends or the nature of the environmental factors which contributed to success and how. Even though the foregoing critique highlighted a weakness identified in the article, it need be noted that this does not weaken the effectiveness of the authors’ argument nor does it reduce from the value of their article. The value of the article does not simply hinge on the fact that they proved their argument but on the fact that their analysis of the Nortel case contains lessons which can be implemented in other organizations. In brief, therefore, the value extends beyond the case study discussed and contains important lessons or business managers and leaders concerning the benefits of knowledge management and how it may be integrated into a corporation’s business and IT processes. Read More