ROI through POI: Insights to a new investment

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.

Like investing 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 of looking 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.

Knowledge worker

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 or 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 a person. The person 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."

Power

He said, "The exercise of power perpetually creates knowledge and conversely, power as knowledge".

Since knowledge is power, people have power.

They unleash that power by contributing to their institutions. Such a phenomenon poses a key challenge for people managers, including HR professionals.

That is, how to harness individual power.

I propose the term, Power of Individual (POI) to represent the wide array of contributions a person makes by investing his or 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.

POW

POI demonstrates how an employee can contribute 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 a person does at the inception. There should be interactive team work.

Bartlett and Ghoshal offer interesting insights on the power of the individual. According to them, instead of forcing a person 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.

They said, "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 abilities."

The best way to understand the difference between 'organisational individual' and 'individualised organisation' is to look at a few examples. Gone are the days where people looked, dressed, spoke and behaved alike. Such a uniformity demanded people to adjust and to adhere to their organisation, to the fullest.

Different

It reminds me of a regimental organisation or even perhaps the People's Republic of China, in its post-revolutionary era.

Today, the scenario is very different. The reality is that the organisation has to adjust itself to accommodate diverse talent, by being a 'personalised organisation'.

The key aspect is diversity. Flexibility is needed to accommodate diverse employee needs. Flexi-time, telecommuting, virtual teaming are some such work arrangements.

The key aspect here is the need for talent by the organisation, and the best 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 people by 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 people and their institution.

When creative people 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 simple: ROI through POI. Yet, the amount of thinking and doing needed from people managers is immense in the true spirit of achieving sustained results.