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Learning Economics, Innovation and Learning Organizations:

Delivering Service Value in BiotechNovember, 2006

Services Science, Management and Engineering Lecture SeriesUC, Berkeley

Tom Hill Learning & Knowledge Management (LKM)

Corporate Information TechnologyGenentech

Hill - LKM, CIT Copyright 2006 - Genentech, Inc.

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Agenda Purpose: Share, enter into a dialog on trends in learning, innovation, valuation of

learning services, and seek further research on key learning services questions

• Hypothesis, My Point of View

• Corporations Create Intangible Value, Learning - Strategic Gap

• Strategic Value Frameworks (Economic, Learning as an Asset)

• Introduce Genentech

• Key Questions

• Key biotech industry drivers

• What does the business need - Learning Knowledge Management (LKM)

• Optimal LKM Services Target

• Learning, and Knowledge Management as a Processes

• Problem Solving Focus for LKM

• Value Dimensions for LKM

Next Steps - Questions for Further Research

LEG - Introduction


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My Point of View, Hypothesis

POV: Based on my experience in IT and biotech, there is an opportunity for learning and knowledge processes to play a strategic role in the value creation center (innovation) of an enterprise

Hypothesis:

– If learning is strategic in the value creation processes of an enterprise, then this should be observable in terms of:

• Being at the initiation stages of a strategic projects, “at the table”

• Be integrated into the value creation processes of the entity, in use of technology, optimal balance with customer focus

• Be funded at a major level based on business impact, “can’t cut”

• Has identified metrics related to business value realization, which executive management finds credible

• Has a high level organizational position


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Today - Corporations Create Intangible Assets, Yet Reporting is on Tangibles

Evolution of the Global Enterprise: 80 % Are Loose Hierarchies of Virtual Groups,

Outsourcing (Malone) 70 % of Crucial Job Learning is Informal or Tacit Some Sectors See An Unraveling of Woven Fabric of

Social Capital - particularly in IT, Telecom (Hill) Shift to Services Focus 85 % of Corporate Assets are Intangible, vs. 35 % 20 yrs

ago (Kaplan & Norton) Corporate Processes, Metrics Have Not Caught Up Research in Services is In Early Stages of Development


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The Gap in Strategic Alignment


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Strategic Value Frameworks - Key Thinking

Daniel Blair, HP, ISPI Charles Jennings, Reuters Mark Daly, Shell Tony O’Driscoll, IBM


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Daniel Blair - Balanced Scorecard

BSC is a management system to align corporate and individual actions

Benefits: Alignment Accountability Performance Driven Shareholder Value


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Best Use:

– Where BSC is in use

– Competency Mapping, Performance Metrics in place

– Task Analysis available

– Employee performance metrics can be linked to backward looking financial measures


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Charles Jennings - Transformation


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Best Use:

– Where there are disparate business units

– Alignment mapping is executive/council driven

– Business metrics, learning metrics available

– Executive management willing to support/resource the transformation - see the benefits


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Mark Daly - LVA Framework


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Mark Daly - Framework


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Best Use:

– Where data exists on business processes/flows

– Good competency mapping

– Value is defined in terms of effectiveness/efficiency

– Focus on assurance, provisioning of learning


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Tony O’ Driscoll - Learning Value Framework

EnableInnovation

SpeedTransformation

ImproveProductivity

Focus- Develop Impact- Deliver

Optimize existing systems and operations

Enhance alignment around business initiatives

Create new business processes

Deliver business value

Accelerate evolution of new business models

Exceed World Class benchmarks


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Learning Investment & Validation


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Learning Value Scorecard Framework


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Tony O’Driscoll - Learning Value Framework

Best Use:

– Where innovation, transformation and productivity deliverables can be identified

– Management sees value in these terms

– Mapping of projects by these groupings is insightful

– Focus on innovation, and transformation role for learning


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Pharma/Biotech Industry - Trends

Future


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Pharma Industry - Value Network Map

Pharma/biopharma

BiotechContract

R&D

Univ. andmedicalresearch

Contractclinical

services

Governmentregulators

Contractmarketingand sales

Healthcareprovider

Patient

Pharmacy,retailer

Contractmanufacturer

Distributor,wholesaler,exchange

PortalProduct

Product

Eligibility,approval

Medication

Samples,information

DTC,Web info

Samples,information

Providerinformation,

training



Advice

Prescription

Intellectualproperty

Trialsresults

Targetvalidation

Product

Customer intimacy

Operational excellence

Product/service leadership

Brand mastery

Specifications

DataAggregator

Salesdata

Patientdata

Trends,information

InformationFormulary

requirements

PBM

Payer

Ads,info


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Pharma Value Map - Tangible vs. Intangible


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Biotech Industry Drivers - Next 5 years

R & D Cycle - Long Term - 7 - 10 yrs Avg. & Costly $1B Regulation - FDA Increasingly Focused on Reducing

Patient Risk Science - Discovering the right biotech solution Competition - 247 Oncology Trials in 2nd/3rd Phase Pricing - Increasing public scrutiny Channels - Access difficult for clinical trials and physicians

High Risk


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Genentech: $8B yr, DNA, P/E = 56, www.gene.com Leading biotech company focused on unmet medical

needs of patients - primary focus oncology - 2X market Corp. goals - triple revenue, and profit by 2010 10,000 employees - hiring + 5% a yr Revenue/Profit + 55 % qtr, year over year High risk development process: 7 - 10 years, $1B Competitive advantage in ‘great science’ Powerful Culture - empowerment, ‘casual intensity’


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Center of Value Creation - Innovation


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Business Needs - Learning and KM

Learning & Knowledge Development Services– Agile, Dynamic, Responsive, Transparent in Business Processes

Future Focused:– Informal - Innovation side (center of value)– Formal - Validated side

People:– Continuous development of competencies for jobs that do not

exist yet or problems yet to be defined Technology:

– Process focus, learner empowering


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LKM - Process Based Learning

Event –based learning Process – based learning

Business Value

Low

Hi

Classroom Instructor - Led

Web Class or Lab

CD-ROMsManuals

HTML – Web Training

Learning Modules

Collaboration for Performance

Just-in-Time Learning

Learner Focused


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LKM - Problem Solving

Prof. Nile Hatch, Marriott School of Mgmt.

New Focus


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LKM - Business Value Role

Day to Day - OJT and Courses

StrategyLong Term : Business Planning - Product Pipeline 15 - 20 yrs

SOPs, Validated LearningTactics

Conversion of Tacit to Explicit Knowledge & Sharing ItStrategic Business Problems


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Strategic Business Problem Example - Metric Q

• How to measure the Learning and KM value impact for this problem?

• Solution involves the learning curve of scientists so what are the measurements around a steeper learning curve?

Development Time

Knowledge Retention

Std Learning Curve

New Learning Curve


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Value Questions (Map the white space): What is the role of learning in the value chain? How will learning demonstrate its value to the business for

productivity, transformation, innovation processes at individual, team and organizational levels?

How to measure business impact when we capture implicit information and convert/transmit it to the right people, right time, to become explicit knowledge?

How can learning and knowledge management have a role in the ‘center of the value creation’ processes of the company?

How can linkages between learning processes and business processes be described?

What methods should be employed to align learning processes with business objective achievement?

How do learning professionals answer value questions:– Who cares about your service and how much (customers)– Why should I care (stakeholder, economic buyer)– How much do you care (commitment, credibility, passion, investment)


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Next Steps - Identify Research Questions

What are key questions to select?

Partnership or joint projects?


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Contact Info & Learning Economics Group

Hill, Tom (2004) “NonStop University: Characteristics of a Global Learning Community”, International Society for Performance and Instruction Journal, Vol. 43 No.2 Feb. pg 29 -37.

LEG: www.learningeconomics.org, previous talks audios, PPTs, under the Meetings tab, 200+ members, audio conferences , research

Next: Dr. Terri Griffith “Knowledge Transfer in Virtual Environments” 8:30am Nov. 16, audio conference, PPTs downloaded phone number: 1-866-703-9405 PIN:910728

Contact: [email protected]

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Documents

intangible value

learning organizations

provisioning of learning

learning economics

business value realization

service value

value creation processes

valuation of learning