Carla O’Dell is the president of APQC (American Productivity & Quality Center),an internationally recognized, not-for-profit organization dedicated to process and performance improvement. She joined APQC in 1978 as an adviser and researcher. Over the years, her fields of expertise and research have included knowledge management (KM), benchmarking, total quality systems, re-engineering, organization design, team-based reward systems, and assessment and improvement using the Malcolm Baldridge National Quality Award criteria. Currently, O’Dell is a key driver in the formation of the Open Standards Benchmarking Collaborative^SM (OSBC) research, which seeks to standardize the processes and measures that global organizations use to benchmark and improve performance. O’Dell has a bachelor’s from Stanford University, a master’s from the University of Oregon, and a doctorate in organizational psychology from the University of Houston. She is co-author with APQC Chairman C. Jackson Grayson with Nilly Essaides of If Only We Knew What We Know: The Transfer of Internal Knowledge and Best Practice and previously the co-author with Grayson of American Business: A Two Minute Warning. Her latest book, The New Edge in Knowledge: How Knowledge Management Is Changing the Way We Do Business, co-authored with Cindy Hubert, has just been published by John S. Wiley & Son (2011). I am eager to read it and will soon review it for various websites, including this one.

If anything, Carla O’Dell’s observations and insights are even more valuable today than they were when I interviewed her several years ago.

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Morris: Please provide a briefing on APQC’s background, mission, and current activities.

O’Dell: In 2010, APQC is celebrating 33 years of helping organizations improve by discovering and adopting best practices.  People come to APQC for three things: data and best practices, frameworks to make sense of the world and guide future action, and the opportunity to network with others facing the same issues. APQC’s roots lie in process improvement and benchmarking. We have conducted over 150 multi-client “consortium” projects to discover best practices on hot issues, over 6,000 individual benchmarking studies, and more than 3,000 sites are participating in our Open Standard Benchmarking Collaborative^SM (OSBC), launched in 2004.  APQC is an exciting place to be; we are always innovating and working on something new.

Morris: During the years since APQC’s founding in 1977, which developments do you think have had the greatest impact on our understanding of quality and productivity?

O’Dell: There are many, but I think the three paradigm shifts—and the methodologies they spawned—that have made the greatest impact are

1) understanding that all work is a process that can be measured, benchmarked, and improved (TQM, reengineering, Six Sigma, and business process management all were possible because of this insight);

2) being able to “see” and “manage” knowledge that is both the raw material and the engine that drives innovation, productivity, and growth, leading to knowledge management, virtual collaboration, and all the Internet search and retrieval capabilities we now take for granted; and

3) that organizing around teams and communities of practice is a very productive way to work.

We take the concepts of “process management”, “knowledge management”, and team-based projects and working environments as givens now; but not so long ago, these were radical, even threatening, concepts.  Now there are robust, repeatable and scalable methodologies and best practices for all three.

Morris: Many of the best business books seem to have been written to answer an important question. Is that also true of If Only We Knew What We Know that you wrote with Jack Grayson?

O’Dell: Absolutely. Jack and I, as well as our colleagues at APQC, kept seeing the same phenomenon over and over again. A firm would contact us and say they were looking for best practice in something, for example, in the area of customer retention and the ability to predict customer-purchasing behavior. It was not uncommon to find that one of the best-practice organizations in the field was another division of the same company that had asked us to do the research.  Why didn’t they know about this already? And if they did know, why hadn’t the practices transferred? In the mid-Nineties we set to investigate why best practices didn’t transfer; why organizations didn’t learn from experience and why knowledge held in one part of a company did not flow to other divisions in the same organization. Those answers, based on eighteen major multi-client studies and dozens of individual projects became APQC’s knowledge management (KM) practice and the basis for the book.  We continue that research today.

Morris: Based on your experience, what seem to be the best ways to identify, locate, and then “mine” what you call “beds of knowledge,” “hidden reservoirs of intelligence,” that exist in almost every organization?

O’Dell: There is no question in my mind that communities of practice—groups of people in organizations linked together because they are working on similar issues or serving similar markets—are KM’s “killer app”.   These groups—linked together across time and space and organizational boundaries—can solve problems faster, draw on collective knowledge, and identify and adopt best practices faster and better than any other mechanism we have in organizations today.  They have become ubiquitous in modern global organizations.

Morris: What are the issues on the minds of executives right now?

O’Dell: In addition to making money and the price of oil, they worry about global sourcing. Executives spend their time thinking about three aspects: parts, people, and knowledge.

The most familiar is the global sourcing of parts. Companies are searching the world for the lowest-cost, highest-quality products and components.  This has been underway for decades—nothing too new here.

The second, and far more pressing opportunity is the global sourcing of people. An amazing statistic is that by 2020, 90 percent of the world’s scientists and engineers will reside in Asia. American universities used to turn out a lot of scientists and engineers, many of who were not U.S. citizens but who stayed here to work. Now, however, these graduates are either being trained in universities at home, or are returning to their exciting, fast growing countries, especially in Asia.  A recent Mercer study found that knowledge workers in India were by far the most excited and enthusiastic in the world. Thus, a big question facing many executives is where they will find their scientific and engineering talent in the years ahead.

Finally, the global sourcing of knowledge is probably the one that rocks Americans at their core. Some media pundits are making a good living (and high ratings) decrying outsourcing, but if you don’t have the people here able to do the work, what’s the option? Knowledge work is now 50 percent of the world’s GDP. Knowledge, because of the tremendous revolutions in the Internet and in education around the world, can be sourced from almost anywhere. Organizations are looking at supplier and partners around the world for their knowledge-based innovation. Chindia (China and India) are hotbeds of innovation

Morris: One final question. Looking ahead, let’s say, to the next 3-5 years, what do you expect to be the greatest opportunities for organizations to improve?

O’Dell: KM will continue to be important. It is part of the largest global transformation in the history of the world. Connectivity, collaboration, and common standards have enabled people to communicate and share knowledge and information like never before.  (Even the “bad guys”.) Getting better at it is almost a survival issue for organizations.  Who has the time or money to constantly reinvent what we already know?

Secondly, the process of how innovation is managed and measured is ripe for a breakthrough.  Innovation is still at the stage of evolution that process improvement was, thirty years ago: treating it like magic.  It’s not just about light bulbs going off or the “Great Man” myth of invention. I think commonly agreed-to definitions; measures and standards will help drive widespread innovation and productivity in the years ahead.  We saw it in software and electronics, and now it is happening in management.  In 1992, APQC created a common language for describing and measuring business processes, called the Process Classification FrameworkSM (PCF). Think of it as the Esperanto, the universal language of business process. The OSBC is built on the PCF and the benchmarking Code of Conduct, created at the same time to govern the exchange of information between firms. Both have been updated over the years and are perhaps the most widely used frameworks for benchmarking in the world. They are the basis of our Open Standards and free to anyone to use.

So we are applying this to the innovation process. We have an OSBC project underway to develop standard yardsticks for measuring the process and outcomes of innovation. The research addresses four aspects of innovation: products and services, process innovation, business model innovation (including partnering and outsourcing), and the enablers such as structure and culture.

This research should help firms predict their capability to be innovative.

o Do they have a climate for creativity?
o Is there a vision and agenda for innovation?
o What is the appropriate level of innovation in the organization?
o What is the right structure for innovation, for ideas to flow then action to occur?
o Are you spending your innovation dollars well?
o How quickly does your company turn good ideas into money?
o How does your organization’s innovative capabilities compare against your competitors’?

The third arena for improvement is the ability to collaborate across organizational boundaries. Most of the innovation and best practice can be found outside your organization, but to benefit you have to be able to collaborate across cultures, time zones, competing business models and so forth.