Knowledge Management and Strategic Thinking

By Dr. David Stevens
Psychologist and Adjunct Professor School of Engineering and Industrial Design
University of Western Sydney


Knowledge Management is “much ado about something” but I’m sure most people don’t know what the “something” is.

The business community is awash with such terms as Knowledge Management; and also Strategic Thinking, Tactical Thinking, Intellectual Capital, Social Capital and a plethora of other interesting but obscure terms. No two people seem to agree on a conceptual framework that holds all these terms together; or indeed, can describe a conceptual structure that reflects an understanding of these terms. Referring to my book, “Strategic Thinking” (McGraw-Hill 1997) and drawing on the running of over a 1,000 group problem solving workshops for a variety of large and small, public and private sector, organizations worldwide I will try and link all these concepts into a meaningful approach.


There is quite a simple distinction to what constitutes intellectual material and what makes intellectual capital.

If I take a pile of telephone books and throw them on the floor in front of me I have a mass of intellectual material. This is undifferentiated information that has not been exploited at all. It has no intrinsic value. However, if I define a target market and then create a mailing list that relates to the target market I have created intellectual capital. I have leveraged the situation.

Intellectual material is merely the result of brainstorming or bright ideas that anybody can have. Intellectual capital is the stuff of recognized brands, successful positioning etc. Intellectual capital is the difference between bricks and mortar book entries, when assessing the assets of a company, as distinct to its market capitalization that embodies all it’s intangible assets.

The process of conversion of intellectual material to intellectual capital is all-important. The more opportunities for the creation of intellectual material in an organization, under the right circumstances, the more intellectual capital can grow.

But brainstorming by oneself is sterile, monochrome, shallow! It’s the collaboration between the members of the organization that really matters. That’s where social capital comes in.

And social capital is all to do with relationships and collaboration. The more effective the relationships between members of a company, and even it’s suppliers and users, the more social capital they’ve got. The more social capital they have the more likelihood that they will be able to develop intellectual capital.


To develop intellectual capital we need an environment that facilitates the creation of a lot of intellectual material. Intellectual material is useless by itself. It needs to be “transmuted” to create intellectual capital. All this best happens in an organizational culture which promotes lateral thinking, yet does so in a structured group decision-making context.

Strategic Thinking is about promoting unorthodox perspectives. Most human societies condition us to believe that there is only one right answer to any problem. We must train ourselves to resist this to achieve high creativity. Self-discipline is required to achieve high levels of creativity just as much as it is necessary to have stimulating environments.

We must learn to challenge the obvious. We must resist the temptation to grasp at the first solution of a problem and seek better, richer solutions.

Strategic Thinking is also about provoking the individual mind in a group problem-solving situation. Strategic Thinking is about facilitating and exploiting group dynamics as a powerful and rapid process for achieving high quality decision-making.

For effective Strategic Thinking you need to work in a project orientated context rather than an undifferentiated organizational context. The construction industry has historically done well in the utilization of project management principles. More recently IT and the finance industries have taken the lead in adopting project management techniques. The advantage of working in a project context is that there is a beginning and an end. Outcomes are measurable. Monitoring is relatively easy. Any organization is capable of breaking up internal components of that organization into specific projects rather than attacking them on an organizational wide front. This is best done when we identify key project teams and take them through precise methodologies to achieve specific project objectives.

Ultimately Strategic Thinking is using the right group problem solving methodologies, at the right time in the life of the project, with the right people to give the project maximum margins. This ultimately will translate into greater profitability for the organization.


There are many well-established group problem-solving methodologies. The methodologies start at the concept of a program, product, or business and run right through the life of the same. They include Participatory Strategic Planning, Value Management, Value Engineering, Risk Management, Partnering and so on. These well-defined methodologies have been around for a long time; but not many people seem to know of them. None of them are complicated processes but all of them are based on a creative infrastructure over which a series of techniques are superimposed to generate intellectual material, to in turn create intellectual capital utilizing collaborative decision-making.

On many occasions I’ve had to demonstrate to the skeptical the power of group problem solving. In the first instance I talk about the linking of batteries. In one configuration a series of batteries linked to a bulb merely keeps that bulb alight a lot longer than if only one battery was connected. When the series of batteries are re-configured, something magical happens. The light bulb bursts forth with brighter light. There is a surge of energy, but it’s the still the same number of batteries. The analogy can be extended to the simple PC. Configured in one way the PC merely communicates with other PCs. If it’s configured in an innovative way the same number of PCs re-connected can create a super-computer. Something magical happens again.

And it’s the same for the ultimate package of energy. The human mind. If it’s linked in one particular way, decision making like the light bulb, just takes a lot longer than it needs to. However, if the configuration of the people is done in a certain way then the decision-making process can be enhanced and shortened. Quality in decision-making is enhanced in that there is a greater richness in the decision-making. Multiple solutions or options are looked to for particular problem areas. Only this can occur with properly constructed group problem solving groups, collaborating in the most effective way. The methodologies indicated above capitalize on this fact. They determine the style of collaboration.


It’s an erroneous belief that the longer it takes to reach a decision the higher the quality of that decision. Some of the greatest decisions ever made have been achieved in a very short period of time. Think of the urgency of wartime decision-making. Think of the “eureka” phenomenon. Obviously behind the speed of some decisions is the fact that creative forces might have been at work at a subconscious level for some time prior to the decision-making event. However it is the role of Fast Track Thinking to bang out multiple decisions on a very rapid basis; but again doing so within a very structured context. There are certain things that a facilitator can do to expedite Fast Track Thinking.

One of the roles of the external facilitator is to ensure that the “batteries” or “PCs” are all in good working order.

The most important role of the facilitator is to ensure high quality decisions are being made in a relatively short period of time. There are certain devices that he/she can use to provoke Fast Track Thinking. The facilitator can instill a sense of urgency by asking questions, creating a sense of impending “finish” to the workshop. In my book “Strategic Thinking”, I list a series of rules or guidelines for achieving Fast Track Thinking.

The role of the facilitator is to ensure that the “connections” between the batteries are intact and that the “terminals” are not corroded. In other words the facilitator is responsible for super-imposing a methodology that configures the people in such a way that the aggregating of their intelligence, problem solving or creativity is vastly superior to any individual operating alone.


Knowledge Management to me is a generic title that incorporates all of the above. Knowledge Management is about the exploitation of the individual mind in the corporate context, working within certain specified group problem solving methodologies to produce high value results. Results are expressed as social and intellectual capital. Many skeptics believe because Knowledge Management deals with intangibles that it is hard to measure. The measurement in fact is simple. It is measured by market capitalization, profitability and over a period of time, data emanating from organizational climate surveys.


Knowledge Management is another name for R&D. The real issue is how we encourage R&D within organizations. We must experiment and make mistakes for effective R&D to manifest itself. The risk adverse culture endemic in Australia and the lack of encouragement through lack of tax incentives does nothing to excite us to be creative.

The essence of R&D is for a group of people to get together and ‘bang out’ ideas with Fast Track evaluation that filters the ideas so the organization ends up with high value ideas relevant to the organization.


Knowledge Management can’t happen unless there is knowledge production. Knowledge production can’t happen unless there is an environment within the organization that stimulates the development of intellectual material. Group problem solving naturally generates social capital because of its collaborative decision-making. Fast Track Thinking can deliver high quality decision-making, and product innovations in a matter of two days, if covered in the appropriate facilitated workshop situation.

The notion of Strategic Thinking is achieved when individuals in groups know which group problem solving methodology to use in the lifetime of a particular project. They must also be able to identify the key people or stakeholders who would need to be involved in a group problem solving situation to resolve whatever issues are at stake.

Tactical thinking is merely the techniques that are used within the methodologies that are identified by the strategic thinker to be the most fruitful in creating intellectual material and then intellectual capital.

To get all this right ‘good’ Strategic Thinking leads to good Knowledge Management.

BWW Society Member Dr. David Stevens is a pioneer in the application of group problem solving methodologies to major complex government and private sector projects worldwide. He has demonstrated how to effect significant capital cost savings totaling in the hundreds of millions of dollars in his sets of remarkably short, highly structured workshop programs. Dr. Stevens initiated the concept of fast track thinking, described in his book Strategic Thinking: Success Secrets of Big Business Projects, published by McGraw Hill in 1997. He is also the author of Participatory Business Planning, published in 1990, by Wright books.

Much of Dr. Stevens' work in the 1990s has centered on the Asian continent. He successfully identified over HK $1 billion worth of savings on the Tsuen Kwan O line for the Mass Transit Railway Corporation in a brief three-day period, and facilitated the ten-year strategic plan for the new Chairman of the Kowloon Canton Railway Corporation. In Hong Kong he is regarded as the most experienced practitioner in his area, and draws clients from most government departments and many major private organizations. For instance, with his aid Swires Property was able to identify US $43 million worth of savings on one of its major projects in just three days. In addition, he played a significant part in the fast tracking of the new Kuala Lumpur International Airport by facilitating a single workshop, which was attended by more than 120 delegates, and had as its objective the creation of a seamless action plan. Dr. Stevens has also worked on cost saving and project enhancement in Vietnam and Indonesia. To date, he has carried out over 1,000 intensive, and in many cases, cross-cultural, work- shops worldwide.

Dr. Stevens is Chairman of the International Center for Strategic Thinking. He recently trained more than one hundred engineers from Malaysia over a two-day intensive period through his unique group problem solving activities, which aim to help stimulate the economy by making financial accountability a part of major projects. Dr. Stevens has been asked by the City Hall of Malaysia to repeat the same process there. Additionally, he is an Adjunct Professor at the School of Engineering and Industrial Design at the University of Western Sydney, where he is applying psychological practices designed to enhance engineers' ability to effectively deliver projects. He has also held a Visiting Professorship at the University of Nevada and was the winner of a competition in Asset Management Excellence in 1997. Moreover, Dr. Stevens has presented papers in more than twenty countries around the world and has a long list of publications to his name. Aside from his business activities, Dr. Stevens ran for the Senate in Australia and was nominated for pre-selection for the Federal Government seat of Macquarie. In addition, he has been Founding Chairman of the Blue Mountains Tourism Authority, which was to become a tourism blueprint for local government. He is also Chairman of the Australian Standards Committee. Interestingly enough, Dr. Stevens' undergraduate degrees were in Psychology and Literature; in addition, he has Master's degrees in Literature and Psychology, and a Ph.D. in Psychology. He is also a writer of fiction novels under the nomme de plume D'ettut.

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