February 19, 2007	Monday	Safar 1, 1428

VISION-2030, finalised by a committee of the Planning Commission, calls for the development of competitive export-oriented industry that should be geared to export of value-added quality products. The critical success factors (CSFs) identified by the committee include quality, R&D, technology, and knowledge-based industrialisation. Generally, by knowledge-based is understood knowledge based on high-technology. If this be the case, the CSFs need to be beefed up considerably to realise the goals that the Commission is aiming at.

The current high-tech based knowledge fad is not new. There was a time way back in the heady 1970s when high-tech based industry was contemplated and high-tech NC and CNC (computerised numerically controlled) machines were viewed as a sure route to success. Consequently, PMTF, many units of PACO and HEC, and heavy industry in Taxila were furnished with these high-tech machines and equipment.

Unfortunately, most of these could not be turned over into revenues and growth. For, machines were installed first and feasibility sought later. Feasibilities were prepared initially to show feasibility so as to get approvals and credit that they did. But, most of the projects were not feasible at that time as this technology was not backed up by what should be called management technology and insights. Due to absence of policy direction, return on these huge investments could not be realised soon enough. And, these turned out to be examples of cart before the horse.

Another example was the computer fad introduced in early 1980s. Acquisition of mainframes became an end in itself instead of mainframes being a means to an end. So, mainframes were acquired first and their utilisation contemplated later for which purpose some firms would even hire expensive consultants.

After going through the learning curve of managing technology, firms were advised by consultants to first determine their information needs in line with company goals and objectives. Information needs would then determine their software and hardware requirements. That is, the idea of managing information systems strategically (SIMS) was introduced.

Similarly, technology is to be managed strategically which it was not in the 1970s and even now under the new jargon of “knowledge-management.” The current emphasis on technology is nothing new but a revival of an old fad under a new name. This is just like the old fashion in garments that keeps coming back and the old is considered new every time the old fashion wear is revived. The emphasis on technology may, however, remain as flawed as it was in the 1970s unless managed strategically.

Strategic management of technology (SMT) calls for determining a firm’s technology requirements in line with the company goals and mission. That is, it must be very clear to the firm what needs it is going to serve and in which part of the market place. Choice of technology should then be made appropriately. Unless the firm generates the volumes required to have the investment paid back, technology can become burdensome instead of being an asset.

Choice of appropriate technology is necessary but not a sufficient condition for organisational growth. For, technology interacts with a host of other variables before it proves to be fruitful. First and foremost, the company must be given a definite direction by a top management that is committed to the organisation’s future and not just to their own that may sometimes happen at the expense of the organisation’s long-term growth.

The entrepreneurs must be steering the organisation with a sense of purpose and mission to satisfy some consumer needs. In our environment, business is considered to be existing for making profits. If profit-making becomes the reason for being, it is done not just at the expense of the interest of the stakeholders but also at the expense of long-term growth.

If the interests of stakeholders are not served, then the stakeholders will not provide the very best to the organization. The upshot will be that neither will the real reason of existence to serve consumer needs be fulfilled nor will the profits be made sustainable. Stakeholders are customers, employees, shareholders, creditors, suppliers, competitors, government, community, society at large, and the earth.

Organisations are open-systems and they take inputs from each one of the above stakeholders. The quality of the inputs will be as good as the output the firm gives to these stakeholders. It is either a win-win situation or a zero-sum game. If profit is the reason for being, organisations enter into a zero-sum game with the stakeholders and are unable to profit on a sustained basis. It is only when they enter into a win-win situation can they strike mutually beneficial relationships for a long period of time and continue to reverse the organistional lifecycle to live on for periods even longer than a century.

It is this mindset that the commission must instil in the private sector failing which they will keep asking for protection. That is why Peter Drucker said that it is an average economist and an average businessman that views business firms’ reason for being as making profits.

No matter how high-tech a firm may become, unless the founders demonstrate the kind of vision demonstrated by the Habibs and Adamjees, their operations will be short-lived gasping for breath that a resource poor third world government cannot resuscitate for too long. So, knowledge-management is not to just go high-tech but to have comprehensive knowledge about the internal and external environments of the knowledge economy in which the firm operates.

That is, the firm should be managing strategically with a clear sense of mission, objectives, and strategic direction that it should be able to steer in dynamic external environments. This will, however, be possible only if the entire organisation works as a cohesive whole around a set of shared values with systems that are able to tap into the knowledge base of its human resource regardless of the level at which they operate.

The Commission’s critical success factors (CSFs) seem to be revolving more around physical capital and technology. Emphasis on human capital may be implicit in their CSF of quality when actually it should be articulated specifically and emphasised upfront. After physical and human capital comes intellectual capital, ala Mohan Thite, that needs to be leveraged for organisations’ successful performance over the long haul. According to a quote in Thite, biggest drawback is when an organisation does not know what it knows.

It is this internal knowledge-management along with external knowledge- management that alone can lead to the “knowledge-based industrialisation” being contemplated in Vision-2030 but which needs to be fleshed beyond what is ordinarily understood by knowledge-based, that is, high-tech. This caveat needs to be guarded against so that our history of the 1970s is not repeated.