THE GROWING IMPORTANCE OF HR IN THE NEW KNOWLEDGE ECONOMY

THE GROWING IMPORTANCE OF HR IN THE NEW KNOWLEDGE ECONOMY
Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

ABSTRACT: WHY GROWING IMPORTANCE OF HR ?

WHY GROWING IMPORTANCE ?
In the industrial economy, capital and technolgy are really crucial. Human resources (HR) are important, but it works also and better with robots. HR is not really crucial. HR is squeezed between 2 logics : Caring for the human Cutting the costs = less employment ! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

In the post industrial « knowledge economy » in which we are entering full speed, HR becomes totally central. Because, the NEW value creation process is appication of knowledge to knowledge in order to create new knowledge. But this can be done only by humans. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Hence in the «knowledge economy » humans become of crucial importance. This is the reason why companies begin to speak about « human capital ». Indeed Human capital is the new « Tool of production». Hence the new importance of HR because it cares for the new tool of production !! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

HR IN INDUSTRIAL & KNOWLEDGE ECONOMIES
INDUSTRIAL Econ. Tool of production = capital + technology Humans are second, AFTER machines & robots HR is second and squeezed KNOWLEDGE Econ. Tool of production is Human person= able to create new Knowl. Humans are before machine & robots HR is central. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

This means that any HR manager has to have sense of humour… Because on one side (S)he has to manage an industrial role. (Squeezed). And on the other side it has to become a leader in the new « knowledge economy » And (S)he has to explain this to the General Manager!! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CHAPTER 1: BUSINESS IN A TIME OF DEEP TRANSFORMATION

P. Drucker: Transformation
Every few hundred years in Western History there occurs a sharp transformation. Within a few short decades, society rearranges itself : its worldview (paradigm), its basic values, its social and political structures, its arts, its key institutions. Fifty years later there is a new world.” Peter DRUCKER: “Post Capitalist Society”. Butterworth Heinemann, 1993, 2001, p.1. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

One of the most fundamental shifts
“We are living through one of the most fundamental shifts in History: a change in the actual belief structure of Western Society. No economics, political or military power can compare with the power of a change of mind. By deliberately changing their images of reality, people are changing the world.” Willis HARMAN Stanford Research Institute (+1997), Founder of the “World Business Academy” Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Transition to Transmodern
Death ? Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

KNOWLEDGE SOCIETY: FIVE LEVELS OF CHANGE

Transformation’s five levels
Humanity is in danger of collective death Knowledge society is the End of the Patriarchal values (CCC) Knowledge Society is the end of modernity. It is tansmodern. (post secular, flat, tolerant, new level of responsibility and consciousness). Knowledge society is also a new economic logic. Knowledge society is potentially a new political concept of non violence between States. (like EU) Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

The Iceberg of TRANSMODERNITY
Level 5 : Credibility gap of all Institutions is increasing dramatically… Level 4 : The knowledge society : post-capitalist society (Drucker) Level 3: End of Modernity: REASON Only Truth, Science, Violence, Pyramids, Control Level 2 : End of Patriarchal myths, sacred and values Level 1 : Danger of Collective Death Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

LEVEL 1: HUMANITY IS IN DANGER OF COLLAPSE

WorldWatch Institute Washington
“Our global economy is outgrowing the capacity of the earth to support it, moving us ever closer to decline and possible collapse…. “We have the technologies needed to build the new economy…” Lester BROWN: “Plan B 2.0” Norton NY, London 2006. Presentation text on the cover. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

UNESCO : War against nature
Koichiro MATSUURA, Director of UNESCO in Paris has declared that “we must end this war against nature, which is in fact a war against ourselves, and against the future generations.” “We must conclude an armistice, a new “natural pact” of co-development with nature.” (“Le Figaro” Jan 11, 2007.) Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Marc Luyckx Ghisi CBA Dean, expert European Commission
WHY? It is a question of Survival for HUMANIY. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Level 2: KNOWLEDGE SOCIETY = END OF PATRIARCHAL VALUES

From Matrilinear to Patriarchal
Woman= Goddess, snake = her power SACRED = LIFE tree, blood, birth… Sexuality + Pleasure Power = life giving Beauty + art Creativity PATRIARCHAL God the Father women infer + sin. SACRED= Violent DEATH, blood, cross… Sex pleasure impure Power = to kill Ascetism is better Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

KNOWLEDGE SOCIETY = END OF COMMAND AND CONTROL
Every LEADER will have to shift his approach, and the political structures towards post patriarchal values: respect for the environment, Importance of human relations Fostering the joy of creation, contact with nature, link with the cosmos, Interiority, spiritual dimension Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

A NEW WOMAN-MAN RELATION
In every couple around the world, we see a hidden transformation of the relation. Hence... some new conflicts! This means that women and men are obliged to redefine their roles and behaviours. Few structures are able to help couples in this unexplained transition. SILENCE. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

LEVEL 3: KNWOLEDGE SOCIETY = END OF MODERNITY

Multi level changes... Structures: From pyramids to void circle Status of rational thinking Status of Spiritual aspiration (religion) in public. Status of truth: real tolerance. Status of Science and tech. Status of political violence: beyond war Status of body, intuition, ethics, esthetics... Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

0. Pre-Modern to Modern : Pyramid to Pyramid
GOD REASON Clergy Economist Government Government Men Men Women Women COSMOS = sacred COSMOS = object Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

1. From Modern to Transmodern: From Pyramid to void cercle
Men part of COSMOS Men ‘above’ the COSMOS REASON Economist Government Men Women Cultures Centre is empty Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

2. STATUS OF RATIONAL THINKING
“Modern” rational thinking has been a liberation struggle against medieval obscurantism. It has become now, like a mental prison. Rationality is loosing its divine status given by “modernity”. And it is only one way to think. Other ways of thinking like intuition, connection to the cosmos, gain credibility, because we need them, to create knowledge !! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

3. STATUS OF SPIRITUAL ASPIRATION IN PUBLIC
For evident reasons modernity has taken distance from religions. But in doing this, it has progressively marginalized religions and spiritual aspiration as outdated. This negation of such an important human dimension is in crisis. We go probably towards : distinction but not anymore separation. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

4. STATUS OF TRUTH MODERN Pyramidal Intolerant Rational = truth Secular (France) Disenchanted NOT Responsible No conscious of whole TRANSMODERN Round table + Hole Radical tolerance Truth exist=“void” Post secular Re-enchanted Collective responsibility New level of consciousness Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. NEW ROLE OF SCIENCE & TEC.
Science & Technology had received in “modern” times a “divine” status, because they were rational thus true. Now they have to be at the service of our survival in a sustainable future. Science was above ethics, value free ! Now ethics is back and citizens ask questions to science. Science was functioning in a offer economy (please consume what we invent !). Now science HAS to function in a demand economy (please be part of the solution !). Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. SCIENCE And science is reinventing itself at full speed. And this happens through hard paradigm conflicts (Thomas Kuhn, Harvard) Back to a “poetic” approach to nature... (Ilya Prigogine, Nobel prize 1977). Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

6. STATUS OF POLITICAL VIOLENCE
Modernity has created the State as zone of internal NON-violence inside. But outside the borders, citizens are obliged to kill. Transmodernity has invented structures of non-violence between States: The EU is the first success. But European Governments “sell” the EU as a market... They should sell EU as the first political avantgarde of the Knowledge society ! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

7. STATUS OF INTUITION, ETHICS, BODY, SACRED, DEATH...
Many things are changing We see that intuition, ethics, esthetics, are really becoming important again in the knowledge society. The very concept of sacred has transformed more in 40 years than in 2000 years! The way we see death and life after death is also changing completely... We see a reconnexion of body, mind, soul, intelligence...Towards Reenchantment ? Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CONSEQUENCE: POLITICAL CHOICES (I)
EU should be presented as the First political structure of the Knowledge Society in the XXI° century. Politicians should dear to say that we are like at the beginning of a new Renaissance... They should call people to reflect worldwide on the new sustainable structures of the future Knowledge Society. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CONSEQUENCE: ECONOMIC CHOICES (I)
Politicians and economist should have the courage to say that we are not anymore in the industrial capitalist period. We are already in the knowledge economy/society which is post capitalist (Drucker). But nobody dears to say the truth to the citizens. And they know it .... subconsciously. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

WHAT IS LISBON STRATEGY ?
In March 2000, the Head of the 15 States, which are Members of the European Union, met in Lisbon for one of their official meetings called « European Council ». They decided that « the EU should become the most competitive world actor in the Knowledge society before 2010, and this in full respect of sustainability and social inclusion. » Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CONSEQUENCE: ECONOMIC CHOICES (II)
And this “knowledege Society” (Lisbon Strategy of the EU ), has to be oriented towards full sustainability and social inclusion. It IS Possible. A debate is urgent and needed. But this presupposes that the economists and politicians admit that we are - for 60%- not anymore in the industrial “free trade” economy, which is unable to lead to a sustainable world. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

THE DINOSAUR SYNDROM ! We are in a time of rapid change. Many structures will become dinosaurs, if they are unable to transform... Better create new structures without fighting the old ones. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Conclusion Where are you personally? Are you feeling this transition? Where are Macedonian young business leaders? In which paradigm are they ? What is the future of Macedonia? Knowledge economy? Macedonia could perhaps leapfrog the industrial phase and perform in the new economy? Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CHAPTER 2: WHAT IS KNOWLEDGE ECONOMICS? (Level 4! )

DEFINITIONS Data: what is on the web, unorganised Information: is already sorted by « Google ». Overabundance. Knowledge: is digested by human brain. Less Human brain and networks are the NEW TOOLS of PRODUCTION Wisdom, Knowledge are rare. Not enough. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

A new world... New tool of production : human brain New CEO: Enabling creativity and sharing, Caring for humans = new human-centered management New value creation process : adding K to K. New Trade: from Free Trade to Free Sharing New measurements = qualitative “intangibles” New strategy: beyond war: win-win not win-loose New definition of Progress = qualitative Beyond patenting towards “Open Source” Beyond pyramids towards networks Capitalizing on cultural capital + gender capital Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

1. NEW TOOL OF PRODUCTION The tool of production is not anymore machine + technol.+ capital (€). New tool of production is human brain + sharing knowledge in Networks in order to create new K. This new tool of production is more important than capital and technol. Humans are ABOVE machines and Capital. Hence Post capitalist society! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

2. NEW CEO FUNCTION Old CEO: command, control, conquer New CEO: Enables the creativity of his “human capital”= tool of Production Enables and creates networks around his team. Because (S)He cannot control networks! Cares for the intangible assets = brand Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

2. HR AND NEW MANAGEMENT Human capital and HR become central because they are caring for the tool of production: Please come back tomorrow! Thus Management : shifts 180° towards human centeredness = more creativity-centred, gender & culture – centred. HR Becomes absolutely central. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

HR AND NEW MANAGEMENT The EU economy is at least 50% in this new knowledge economy. Thus HR is really becoming more important everyday. But many enterprises are not understanding the change. And keep HR devalued ! Most CEO’s do not understand... It is too quick! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

HR AND NEW MANAGEMENT And so the HR managers have a difficult task to convince their top managers. Meanwhile people under them push for change, because they feel the need. It is important for HR managers to understand that their problems are worldwide the same. The transformation is too quick! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

3. NEW VALUE CREATION PROCES
INDUSTRIAL SOC. Add value to object From steel to car ! Tool is Machine Humans are cost Management is machine-centered Machine is central KNOWLEDGE SOC. Create new K From data, info to K Tool is Human brain in Networks Humans are capital Management is Human-centered Machine is at service Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

4. BEYOND TRADE : win-win(I)
If I exchange an object against money, I loose the object. This is “trade”: I win and I loose. “Win-Loose” logic If I exchange knowledge, I do not loose my knowledge. I win and you win. I am not trading anymore. I share. This is a “win-win logic” of sharing. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

4. BEYOND TRADE (II) INDUSTRIAL SOC. Free trade of objects Industrial structure Pyramids Unemployment Pollution Quantitative growth KNOWLEDGE SOC. Free sharing of knowl. Post-industrial-capitalist. Network =value creation Self-creation of my job Immaterialization of prod. Qualitative growth Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

A NEW SYSTEM OF MEASUREMENTS
« Intangible assets » is a new concept invented by Karl Erik SVEIBY (Sweden) They are becoming more and more important in the knowledge society Because the knowledge society is about knowledge which is immaterial, intangible and qualitative. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. A NEW SYSTEM OF MEASUREMENT: INTANGIBLE ASSETS (I)
Intangibles assets = Know how, Reputation, Trust in the company, Structure of the company, and Strategy (balanced scorecards) Relations with personnel, Relations with clients, Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. A NEW SYSTEM OF MEASURE. INTANGIBLE ASSETS (II)
Relation with civil society Relation to environment Relation to our collective Future and sustainability But also quality of the Networks Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. INTANGIBLE ASSETS IN STOCK MARKETS
Stock exchange measurements are still looking at financial “tangible” assets (quantitative) but they increasingly look at “intangible” assets (qualitative). Today a company is measured more and more by its intangible assets : Minimum 50% . Example: “Men’s Wear” USA. & “World Business Academy”, “Spirit in Business”. See also Neskey: Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. Intangible indicators grow
Transparency ICT Proliferation Financial indicators remain important Non-financial indicators grow in importance Potential for greater participation and wider accountability 1990 2006 2015 Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

5. GROWING IMPORTANCE OF INTANGIBLE ASSETS (II)

6. NEW BUSINESS STRATEGY WIN-WIN
Old business strategy is warlike. Battlefield images are frequent. Patriarchal values dominate: “win-loose” strategies. New business strategy: much less violent, “competition through collaboration” is the new motto (post patriarchal). Knowledge behaves like love! Chocking idea for the industrial capitalist economy. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

7. NEW DEFINTION OF PROGRESS
The industrial & modern definition of progress is quantitative. More is better. This definition is UNSUSTAINABLE The knowledge society implies a qualitative definition of progress. Good news: this allows a reorientation of our societies towards sustainability!! Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

8. BEYOND PATENTING The whole of the industrial production system is based on secrecy and patenting. I have this technology and you have not. So I win! “Information and knowledge always leak” In the knowledge economy we will NOT be able to maintain secrecy, neither patenting. See generic medecines, I-Pod music etc,. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

9. BEYOND PYRAMIDS TOWARDS NETWORKS
Pyramids are the « normal » structure of all industrial organizations. But knowledge is created only in networks. This is the form that will prevail in the XXIst century. Thus Pyramids are in crisis everywhere. In Governments, Military, Churches, NGO etc. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

10. CAPITALIZING ON CULTURAL AND GENDER CAPITAL
Paradoxically culture and gender diversity becomes important as they feed creativity The knowledge management is thus potentially socially / gender inclusive and sustainable The Lisbon strategy was thus an excellent choice and much forward looking. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

CONCLUSION : NEW VALUES…
Underlying values needed in the industrial capitalist society are freedom, initiative, ceativity… NEW Values are needed: Freedom (of sharing) Solidarity, Caring, Respect Transparency Concern for the Common Good Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

BUSINESS AND VIOLENCE Because of the danger of collective death, because of the end of patriarchy, because of the end of modernity, because of the knowledge economy,... The relation of Business to violence is shifting 180°. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

MORE FEMININE VALUES… Values needed in the industrial capitalist society are freedom, initiative, ceativity… More feminine values are needed: Freedom of sharing Solidarity, Caring, Respect Transparency Concern for the Common Good and future generations Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

WOMEN ARE DOING VERY WELL
Women are doing very well in leadership positions in this knowledge economy. Because they have no problems to push for new feminine values. They have – usually- no problems to work in networks... Men have usually to ulearn first... Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

HR WOMEN HAVE A MISSION HR Women have a mission: Help this new society and this new non-violent logic to come to life ! Are they sufficiently conscious of their important mission? Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

HR MANAGERS ARE CRUCIAL
HR managers have a crucial role in helping the trasition towards the Knowledge society. They have to help the birth of this new society…, and the very survival of the company ! It is a fascinating job. But they are squeezed between the two logics. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Some good Books… Peter DRUCKER: “Post capitalist society”, Harper Business, New York, 1993. Verna ALLEE: “The future of knowledge” Elsevier Science, 2003, USA. Marc LUYCKX GHISI: "A win–win strategy for the European Union in the knowledge society" published in the "European Visions for the knowledge age: a quest for a New Horizon in the information society". Paul KIDD(Ed.) Cheshire Henbury, Harvard Business Review on Knowledge management Book with 8 articles. Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

Good Books (II) Jeremy RIFKIN: “The European Dream: when Europe’s vision of the future is silently eclipsing the American dream” Penguin 2004. Ray ANDERSON: “Mid Course correction” (Interface) World Business Academy: “Neskey” on intangible measurements : Skopje, Macedonia, Sept 28, 2007 Marc Luyckx Ghisi CBA Dean, expert European Commission

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