2016 49th Hawaii International Conference on System Sciences
Competence Management as a Dynamic Capability: A Strategic Enterprise System for a Knowledge-Intensive Project Organization Erkka Niemi Aalto University
[email protected]
Sami Laine Aalto University
[email protected] organizational level. This kind of information is often managed with the help of enterprise systems (ESs). There is plenty of research on knowledge management, as well as on ESs, but still the implementation initiatives often fail. In addition, there is only a limited amount of research regarding the utilization of a dynamic capability framework (DCF) in practice in information systems research. In this interpretive case study research we aim at: 1) increasing understanding of competence management as a strategic dynamic capability and 2) gaining more understanding about the organizational and technological aspects of ES development, especially regarding competence management. The case study is a part of a larger Action Design Research (ADR) [28] initiative that designed and developed a strategic ES for competence management. The paper proceeds as follows. First, we position the research by looking into existing literature and describing the research methodology. Second, we describe the course of development initiative focusing on competence management in a single case company. Third, we discuss and analyze the initiative from technological and organizational perspectives in relation to competence typology and design principles. Finally, we conclude the paper with a critical evaluation and the contribution of the research.
Abstract The concept of dynamic capabilities in strategy literature assumes that organizations need to adapt to radical perpetual change in order to ensure survival. In this research we aimed to increase the understanding of competence management as a strategic dynamic capability. This longitudinal interpretive case study was conducted from 2013 to 2015 in a publicly traded professional services company operating in the technology consulting field. The data was gathered during a real-life organizational development initiative and interpreted by an involved researcher and an outside researcher. During the research period, the company implemented organizational changes and developed a new enterprise system to transform its job-based human resource management into skill-based competence management. According to our experience, competence typology and Level 5 Leadership concepts fit well in guiding competence management in dynamic service economy markets. However, our experiences also suggest that competence management should aim towards customer demand and employee interests rather than only focusing on current strengths. Keywords: knowledge management, qualitative research, interpretive case study, action design research, enterprise system, human resource development, competence management, strategic management, dynamic capability.
2. The positioning of the research According to European Committee for Standardization [4], competence is ‘a demonstrated ability to apply knowledge, skills, and attitudes for achieving observable results’. Accordingly, in this paper we follow the information systems science (ISS) convention and speak about competence management systems. However, nowadays HR literature seems to favor the term capability instead of competence [21] when talking about an individual employee’s ability to perform a job. On the other hand, in this paper we use the term capability in the context of the organizationallevel strategic capabilities aiming at competitive advantage. The following overview of related research is a presentation of the main concepts influencing this research. Therefore, it should not be treated as a
1. Introduction The service sector is the biggest employer and source of growth in the world economy [17]. In this new service economy, the importance of knowledgebased occupations increases and they are the main sources of growth and productivity [3]. For knowledgeintensive project organizations (KIPOs) it is very important to understand the current and future needs of customers and to provide them with the right experts at the right time. Therefore, the KIPOs need comprehensive information on project allocations and the competences of their employees in order to match them with the customer demand, as well as to guide competence management on an individual and 1530-1605/16 $31.00 © 2016 IEEE DOI 10.1109/HICSS.2016.528
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systematic literature review even though we believe that we have covered most of the relevant literature, especially from the ISS point of view.
[22] competence According to Lindgren management consists of defining an organization’s competence needs and then filling the gaps with sourcing and development activities. He continues to state that, usually, the focus of strategic management is in defining the competence needs and gaps whereas the HR focus is in the actual management of competences. We can see this distinction in Swanson and Holton’s definition of Human Resources Development (HRD) as ‘a process of developing and unleashing expertise for the purpose of improving individual, team, work process, and organizational system performance’ [32]. It is also obvious that HRD is a separate process from the more administrative Human Resources Management (HRM) and recruitment. Swanson and Holton continue to state that HRD is realized in practice as organization development (OD) and individual level training & development (T&D). Competence management is a core process for KIPOs. It influences the way the organization acquires and allocates HR, and how employees experience working for the company. However, the temporary nature of work processes and the dynamic nature of the work environment create challenges for HRD in a project-based organization [15]. The knowledge-management research community has identified the interplay between organizational knowledge and firm level competitive advantage as an important research topic [1]. KIPOs compete in a dynamic business environment with their organizational knowledge base. Knowledge workers’ productivity and work quality vary significantly. Accordingly, knowledge workers’ effectiveness has been noted to be a critical research area [1].
2.1 Strategic management and leadership Business environments have become more and more dynamic, so the traditional strategy approaches, like Porter’s [27] market-based view (MBV), have been challenged with a resource-based view (RBV). It means that instead of a strategy focus on the external market, the focus is on internal resources and capabilities. The RBV supporters are convinced that the competitive advantage and above-average profits are on a more secure basis in this way, rather than focusing on industry attractiveness. It has been said that the RBV works especially well in high-velocity environments (e.g., the global hi-tech industry) when new companies are created to exploit specific technological capabilities [24]. However, nowadays in the continuously changing global environment, even a RBV is not enough to provide strategy practitioners with the knowledge of how to gain sustainable competitive advantage. For instance, Haeckel [13] introduced Sense and Respond as a concept for adaptive enterprises. Furthermore, Teece [33] supplemented the RBV with the concept of routines, using evolutionary organization theories, to create a DCF. These modern theories emphasize the dynamic nature of evolving business environments and the active development of company resources with, for example, knowledge and competence management. One of these evolutionary approaches is Collins’ [6] concept of ‘Level 5 Leadership,’ referring to the highest level in a hierarchy of executive capabilities. Leaders at the other four levels in the hierarchy can produce a high degree of success but not enough to elevate companies from mediocrity to sustained excellence. Collins also introduced the ‘hedgehog concept’ – a simple understanding of three intersecting circles: what a company can be best in the world at, how its economics work best, and what best ignites the passions of its people. According to him, breakthroughs happen when a company becomes systematic and consistent with its own hedgehog concept and eliminates virtually anything that does not fit in the three circles.
2.3 Competence management and ES ESs can provide organizations with substantial competitive advantage but the failure rate of implementation is high [26, 27]. ESs are large suites of applications supporting operational and analytical business processes on an enterprise level [2]. In other words, they provide organizations with the technological support to integrate business processes, and to seamlessly integrate and share all the information flowing through the company [20, 8]. There is a limited amount of literature available regarding the organizational aspect of ES projects and especially competence management functionality. Grabski et al. [11] divide current ES research into three major ES research areas: critical success factors, the organizational impact, and the economic impact of enterprise systems. Lindgren et al. [22] developed a typology of competence: competence-in-stock, competence-in-use, and competence-in-the-making. In addition, they developed a set of design principles for
2.2. KIPOs and human resource development KIPOs rely on intellectual capital and expertise, as well as horizontal collaboration between diverse groups [31]. KIPOs include professional service firms such as management consulting companies or computer software development and technology integration companies.
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management) began with early experiments in the beginning of 2013, progressing to a formal kick-off in October 2013 and the initiative s still continuing in the middle of 2015.
strategic competence management systems. Sein et al. [30] revisited the same research with new methods. Hustad and Munkvold [16] studied the issues related to the implementation of IT-supported strategic competence management. Corallo [7] studied the optimization of competence management processes. Simon [29] discussed competence management systems from a design theory perspective. Chae [5] performed an exploratory study on information sharing and HR information systems. Mattila [24] studied the way an organization increases efficiency through restructuring and through the implementation of a strategically important project delivery model.
3.3 Data collection The involved researcher conducted an initial data collection with 40 open interviews (case organization: 20; customers: 12; partners: 8) from October to December 2013 in order to perform a current-state analysis of R&D activities in 2014. These interviews were not recorded because this could have endangered the real-life setting and resulted in less truthful interviews [34], and the purpose was only to gain an understanding of the situation at the beginning of the development initiative. However, the researcher constantly wrote memos and has since been keeping a research diary on a weekly basis while taking part in the development activities of the case organization. From May to June of 2015 the involved researcher conducted 20 interviews to formalize the scientific learning and evaluate the progress of the initiative. The interviewees were selected to include the whole management team (the CEO, the business unit management, sales, R&D, HR, finance) and some of the team leads and consultants. The content of these semi-structured interviews was inspired by Mattila [23] and modified according to the preceding literature review. The themes consisted of: 1) The primary objectives for the ES, 2) The main business processes supported by the ES, 3) Technology (perceived usefulness and ease-of-use, development implementation process), 4) Data quality and governance, and 5) Organizational transformation. The 20 interviews were conducted on site at the case organization. The interviews lasted 15–60 minutes, the average being about half an hour. The interviews were recorded and transcribed for analysis purposes and the researcher wrote memos during and after the interviews. The researchers also collected secondary research material, such as management documents, reports, and instructions on the intranet, the version control and documentation tool, the project and requirement management tool, the collaboration tool, and the emails of the case organization, as well as publicly available information such as stock exchange releases and semiannual financial statements.
3. Methodology 3.1 The research approach This paper describes an interpretive case study [19, 35, 36] to provide in-depth knowledge about the development of competence management as a dynamic capability enabled with an ES. In this paper ES implementation is treated as an organizational intervention [9], designed and implemented to achieve the desired changes and objectives. The first author was hired as a director to lead a research & development (R&D) initiative in October 2013. Therefore, he has been actively participating in the development of organizational objectives and implementation projects for 20 months (from 2013 to 2015). The second author has not been participating in these development activities, although in 2015 he joined the same organization. Therefore, the main author is an ‘involved researcher’ and the second author an ‘outside researcher’ [35]. The primary objective of the business case was to design and implement competence management organization and ESs by emphasizing dynamic capabilities and automation. The internal development was linked to academic research to improve the credibility of the internal development, to guide development activities with systematic frameworks, and to provide novel contributions for external practitioners and researchers. In addition to ADR, the organizational development and research have been heavily influenced by the DCF of Teece [34].
3.2 Case description Siili Solutions PLC (the case organization in this research) is a publicly traded management consulting and technology integrator company employing several hundred experts in Europe. The company was founded in 2005 and has lately grown very rapidly and profitably. In order to continue the good trend, Siili decided to launch systematic R&D initiative. The development initiative (focusing on competence
3.4 Data analysis Siili’s initial competence management development initiative was inspired by the hedgehog concept [6] and, later on, by DCF [34]. In addition, after a literature review in 2014, we decided to adapt the typology of competence and respective design principles [21] into 4254 4253
the research project. These three theoretical frameworks have guided data gathering and analysis. We analyzed and described interpretations about competence management rather than sought causal relationships [12]. Therefore, we mapped the empirical findings to the concepts of theoretical frameworks by Collins [6] and Lindgren [22]. Both the involved and outside researcher interpreted and analyzed the data together throughout the research project and, therefore, the findings are based on a vast amount of data – not only on interviews at one point of time. During the research process, we conducted several exploratory workshops to analyze a vast variety of data and to construct a comprehensive view of the competence management organization and ES between 2013 and 2015. However, we decided to ‘step back and examine the interpretations of fellow participants’ [35] by conducting and analyzing the above-mentioned 20 interviews (May–June 2015). The analyses presented in this article were validated in confirmatory workshops with other involved executives, management, employees, and system developers in August 2015. The results of the interviews and workshops are summarized in the following interpretive descriptions regarding previous development activities, the current situation, and the future aims of competence management as a dynamic capability.
4.1 A description of the business situation As a KIPO, Siili needs to be able to constantly match customer demand with the correct specialist. For example, the sales cycle, from initial contact until closing the deal, is six months on average. The recruitment cycle, from initial contact to the first day at work, is four months on average. In order to sustain competitive advantage, Siili needs to forecast customer demand in the short term and long term, and to understand and develop its own competence pool. Siili’s business model is based on co-creation with customers, meaning that the consultants take part in projects mostly at customer premises. This way of working is challenging from an employer’s point of view as: 1) it is extremely difficult to gain an overview of the current competences of employees and lead the development of competence management as a dynamic capability, 2) employees do not necessarily experience any connection with their employer but connect with the customer organization and team member colleagues instead, 3) there are five main service offerings and dozens of sub-offerings, which are very difficult to match with the thousands of competence combinations of employees. However, in 2013 there was still no formal framework or process to manage, develop, or deploy competence management in Siili. Previous practices were based on intuition and goals were based on an individual employee level. Competence management in practice was done by trial and error. The risk and quality control was not adequate. The internal communication was not good enough and visibility was poor. There was a mismatch between companylevel and individual-level targets. There were not sufficient performance indicators to evaluate the level and success of the investments in the development of competence management. On the other hand, despite the lack of formal processes, Siili has been very successful in informally managing the necessary capabilities and the business as a whole. The company was founded in 2005 and has lately grown very rapidly and profitably: the average annual revenue growth has been 30% with about 10% EBITDA from 2009 to 2014. The initial public offering stock price was 7.00 euros (15.10.2012) and the alltime high stock price was 20.25 euros (10.4.2015), which equals an 189% increase. Therefore, it was extremely important to maintain the existing flexibility when designing the new capabilities. The initial current state analysis with DCF [34] conducted from October to December 2013, recognized two important development issues: a need for the systematization of the competence management as a dynamic capability and linking it with customer needs in the design of the service offering. Moreover,
4. Results The R&D initiative, formally started in October 2013, aimed to improve competence management in order to meet current and future customer demand. It started to design and implement an ES with a focus on organizational change and automated technology support (Figure 1). There have been two major organizational changes and three major releases of the ES (up to June 2015). The following descriptions are based on real-life situations in a knowledge-intensive project organization during 20 months.
Figure 1: The research context and frameworks
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according to HRD literature [33], the majority of the competence management methods seemed to require the description of current competences, the definition of target competencies, and a gap analysis, but Siili did not have any formal tools or methods for conducting these. Therefore, Siili decided to kick off a competence management initiative in December 2013.
As a part of the DCC, the company deployed data governance and master data management practices in fall 2014. The HR function was nominated as the owner of employee data and the respective processes, and R&D as the owner of competence data and the respective processes. At the same time the employee data was cleansed in the systems (50% of irrelevant records removed; 50% of new employee records added). Finally, data quality practices were introduced to proactively create good-quality data during recruitment, keep existing data up-to-date, and remove data when employees resign. The year 2014 was the fastest year of growth in Siili’s history, which resulted in the need to launch a new leadership model, Tribal Network 2.0, in January 2015. The headcount increased from 175 (12/2013) to 328 (12/2014) due to heavy recruitment and two company acquisitions. Therefore, the aim of the renewal was to improve the systematic competence management, but secondarily to help new Siili employees (those recruited and acquired) to integrate with existing employees. BUMs continued to have the same role as before, but the responsibility of the tribal network was given to R&D. It was agreed that the HR organization continues to coach the tribal leads and help them with, for example, growth discussions. In the new model the consultants belonged permanently to one of 20 tribes, which each belonged to one of the four competence areas based tightly on competences. Each tribe still had a tribal lead with 20% time allocation to the task, but now the tribal leads reported to one of the four competence area directors in R&D. In addition, Siili nominated a competence development manager to help the tribal leads in coaching the tribe members. ‘In this kind of consultant organization I feel that it is better to focus on subject-matter competence, as in (Tribal Network) 2.0, whereas the (Tribal Network) 1.0 was more HRdriven’, stated HR director Tim. It is too early to evaluate the success of the new leadership model and there are many ongoing improvement activities in 2015. First, each tribe member creates a personal business model canvas to systematically illustrate personal development targets. The canvas is updated at least twice a year in growth discussions. Second, there are planned Kaizen workshops to create more focus on leadership and clearer responsibilities for the tribal leads despite the matrix organization. Finally, there is an ongoing discussion on how to link customer demand and employee interests more explicit.
4.2 A competence management organization Siili had grown rapidly since 2005 and there was a growing need to take the next step in the development of leadership and organization in the beginning of 2013. The company had a flat line organization: 149 consultants (as of 31.12.2012) reporting directly to four business unit managers (BUMs), and about 10 other persons in management or administration. Moreover, the main focus of the BUMs was in customer account management, even though they each had 35 consultants to manage. The consultants worked mainly at the customer premises, which resulted in very little contact with their formal supervisors or any other Siili organization members. There was no formal way of managing competences and the responsibility was shared between the HR function and R&D. In fall 2013 Siili launched a new leadership model, Tribal Network 1.0, with a matrix organization. The goal was to improve the culture and create a better commitment to the Siili organization, and secondarily to support competence management. The BUMs continued to have line management and profit & loss responsibility, but HR was responsible for the new tribal network. In the new model the consultants belonged permanently to one of the 15 tribes based loosely on competences. Each tribe had a tribal lead with 20% time allocation to the task (otherwise working at customer projects) and reporting to the HR director. However, the official line manager was still one of the four BUMs. Tribes had unofficial meetings about once a month to exchange ideas and spend time together. The tribal network had many positive implications, but there was a common understanding that something more should be done to manage the competences. In spring 2014 the R&D organization launched a new Dynamic Competence Capability (DCC) framework to systematically lead the company-level competence management. The launch was a direct continuum of the current state analysis with DCF at the end of 2013. The main idea was to 1) sense new competences that should be evaluated, 2) seize the explicitly chosen competences that should be learned and commercialized, and 3) transform; that is to say, to continuously align the tangible and intangible assets in order to ensure sustainable competitive advantage.
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customer projects and only took care of some emergency updates and bug fixes. There were, from time to time, some developers without customer projects but they never had enough time to complete any releases they were working with. As a result, the common opinion among employees was that the technology stack was too difficult and any development effort would be a waste of time. However, the sales people appreciated the value of the tool and used it actively on a daily basis. There were also some attempts to create a backlog of all the development ideas, but the lack of motivation resulted in poor documentation because almost no one believed that any requirements would ever be implemented. However, in fall 2014 there was a new enthusiasm to kick off the development again as part of the DCC initiative. There were several reasons: 1) the company had grown so much that it started to be impossible for anyone to remember individual-level competences, 2) high profitability allowed an increased R&D spend, 3) there was a need to replace an expensive commercial HR application with monthly billing in one of the acquired companies. Therefore, Siili made a decision to dedicate full-time developers to take Knome to the next level. Knome version 2.0, which had many new features, was released at the end of 2014 after a heavy development effort. The development team started renewing the development practices, nominating stakeholders for the necessary roles, and rebuilding the infrastructure. Version 2.0 of the tool was the first true competence catalogue including information on the ongoing and latest projects, and a more structured data model. However, the main benefit was the solid foundation that enabled continuous delivery in short one-week development and release cycles. Knome version 3.0 was released at the beginning of 2015 to support the new Tribal Network 2.0. Previously the tribal memberships had been stored in Excel sheets because the invoicing system did not support the matrix organization and only contained the name of the direct supervisor (the BUM) of each employee. In Knome 3.0 everyone was able to see who belongs to which tribe immediately after the employment contract was signed. There were also many other reports and statistics as well as the possibility for recruits and partners to log in to the system with a LinkedIn user account. In Knome 3.0 there was also a new functionality to match, cleanse, and structurize the competence data in order to be able to generate a clear current-state overview of different competences. However, the previous ‘do-as-you-wish’ mentality with free-text fields had resulted in over 10,000 competence
Figure 2: The competence management organization context.
4.3 Competence management system ‘After implementing these features (during 20132015) we’ve actually developed from worst in the industry to the best one!’ – R&D director, Ted At the end of 2012 the competence data was poorly managed, which resulted in communications problems for sales, BUMs, HR, and R&D. The company employed 149 persons, but competence data was stored in Word documents on a network drive only open to management. There was a standard template for documenting the information, but the data quality was very poor and only covered the consultants. There was a cloud-based collaboration tool in use, but with a very limited amount of personal data and without any information on competences. As a result, there was no transparency regarding colleagues or their competences, which adversely affected employee satisfaction and complicated finding of the right person for customer projects or requests for help between colleagues. In the beginning of 2013 Siili created a service vision for a new competence management tool. The vision was inspired by the hedgehog concept [5] and the aim of the tool was to locate the focal point of customer demand, employee competence, and employee interest. Siili dedicated a team of five consultants to develop the tool because they did not have any customer projects at the time and saw this as an opportunity to learn new development tools and programming languages. Knome version 1.0 was launched in spring 2013 to provide complete transparency on the stored data for all employees. The first version of the tool included CVs (migrated automatically from Word documents), basic search capabilities, and the ability to print out the CVs for customers. The tool had a common data model with mainly free-text attributes. The main focus was on technology skills, expressed in years of experience and project history descriptions. It was also possible to store data regarding education, certifications, and language skills. Between spring 2013 and summer 2014 Siili could not publish any new versions of Knome. The original development team was scattered around different 4257 4256
combinations, so the cleansing and categorization of the data still continues in 2015. In 2015, there are also many other development activities that mainly focus on analytics. First, Knome is going to include a monthly employee satisfaction survey and analysis. Second, the personal business model canvases are going to be stored and aggregated in Knome to improve individual-level career planning as well as the company-level competence management. Third, Knome will enable people performance indicators, such as project allocation forecasts and actuals. Finally, there is going to be a full list of all customers and projects to increase transparency, knowledge sharing, and networking. According to our interviews and observations, sales, BUMs, tribal leads, R&D, and HR seem to actively use Knome especially (on an almost daily basis). Knome statistics show that 100% of employees are in the system, over 10% use it on daily basis and circa 90% have logged into the system in the past six months. Therefore, we conclude that Knome has become an essential part of daily business operations. ‘I use it a lot because, in addition to having to know people as individuals, I must know their technological background and capabilities, and I can get that information from Knome’, states tribal lead Dwayne.
Figure 4: A summary of the research analysis
5.1 The competence design principles
management
system
Lindgren et al. [20] introduced design principles for competence management systems, and we use them to evaluate the coverage of Knome’s development. HR director, Joss, stated ‘I wish we had known these principles when we started Knome’s development’. User-controlled transparency: Knome is open for all employees and the competence information is visible and accessible to the entire organization in accordance with this principle. However, the users cannot control what data is publicly displayed and this could result in a privacy violation, which is an especially important aspect when gathering interests. Real-time capture with feedback: Knome captures project and competence information in realtime in accordance with this principle. This principle aims at automatically gathering data on competence-inuse and competence-in-the-making so it is important to allow the users to give feedback and enhance the generated data. However, at the moment there are no feedback capabilities in Knome. Multi-perspective interest-integration: Knome allows individuals to store information on their interests in accordance with this principle. However, it is not possible to store the interests of other organizational perspectives. Therefore, it would make sense to visualize interests on three levels; those of the tribe, the competence area, and the entire company.
Figure 3: The competence management system context
5. Discussion In this section we discuss the competence management initiative in the case organization from technological and organizational perspectives in relation to design principles [21], competence typology [22], and the hedgehog concept [6].
5.2 Competence typology Our research indicates that the development journey of competence management in Siili (seen in chronological order) has roughly followed competence typology, introduced by Lindgren et al. [21]. In fact, R&D director Gilbert confirmed: ‘Yes, in my opinion that’s exactly how it has evolved’. Competence-in-stock means competences that an individual has developed in the past. Siili’s Knome 1.0 4258 4257
Therefore, we suggest that focusing on the intersection of passion and demand could be the best alternative for a company operating with experienced employees in a rapidly evolving business environment. Demand for a consulting company is external and requires a constant awareness of potential business opportunities. However, in a relatively big organization it is not possible for a small amount of managers to make these decisions alone. Account director Chuck states: ‘If there are, for example, several Java experts that I could offer to customers, of course I choose the one that is (according to Knome) most interested in this technology’. Therefore, in our opinion companies should transparently visualize customer demand to the employees, who can themselves make decisions on an individual level and passionately chase their dreams.
focused on existing technology skills and project experience. In addition, Tribal Network 1.0 was formed based on historical competences and a traditional job-based HR point of view. Competence-in-use means the competences an individual applies currently. Siili’s Knome 2.0 aims at real-time information and, for example, describes the needed competences in the ongoing projects of each individual. In addition, Tribal Network 2.0 was formed based on a more granular level, taking a skill-based point-of-view. Competence-in-the-making means competences that an individual purposively develops, motivated either by their own interests or organizational competence needs. In Knome 3.0 it is possible to classify each skill by interest level (ranging from ‘I don’t want to touch this’ to ‘I would love to work with this and develop my skills’) in addition to historical experience. Tribal Network is currently using a personal business model canvas as a communications tool and aiming at helping individuals and tribes to develop their skills so that they match current and future organizational competence needs.
6. Evaluation of the research In order to improve the validity of research it should be guided and evaluated by explicit quality criteria [28]. In this section we critically evaluate our interpretive case study research according to the principles published by Klein and Myers [19]. A hermeneutic circle: The research has been a continuous iteration of small details (such as weekly software development sprints) and strategic objectives (like empowering individual consultants with an automated visibility of future customer demand). These iterations provide a strong holistic understanding for competence management in the case company. Contextualization: Our analyses are not presented as a snapshot of a current state but as a longitudinal storyline, covering several years. Interaction between the researchers and the subjects: We highlighted our roles as both an involved and outsider researcher. These roles provide complementary benefits and some limitations that necessarily follow from a tight involvement in the research environment. Abstraction and generalization: This article provides in-depth details regarding organizational and technological development choices and then analyses their connections with existing theories in the field of competence management. For example, we illustrate how abstract competence typology concepts were applied in practice while pursuing the strategic objectives of the case company. Dialogical reasoning: The research has been a continuous interaction between involved research and research objects in an evolving research environment. During the research, emerging data was found to be aligned with the competence typology (rather than development being planned to follow the typology). Multiple interpretations: In our case study, alternative interpretations were iterated with the help of
5.3 The hedgehog concept The hedgehog concept, introduced by Collins [6], inspired the original competence management initiative in Siili. However, our analyses also found out some contradictions. In the original service vision of Knome the goal was to match customer demand with employee competence and interests, but customer demand is not at all visible in Knome. Customer demand is implicitly in use when R&D directors steer competence management, but it is based on their interpretation of customer demand. In order to increase transparency and individual decision-making, it might make sense to systematically match customer relationship management information with Knome information. Our research indicates that employee interests are more important than historical competences in highvelocity environments. Customer demand is evolving constantly as new technological innovations emerge on the market. In many cases there are a very limited amount of existing experts in the market and not enough good training courses available. In these kinds of situations consultants have to learn the new skills during customer projects, but this is usually not a big problem if the consultant is passionately interested in and motivated by the topic. In other words, in a dynamic environment the most interesting intersection is the one combining passion and demand. The best potential seems to be in the situations when experienced developers learn about new and profitable areas where experts are not yet available in the market. 4259 4258
all six types of triangulation: data source, investigator, theory, methodology, data type, and analysis [9]. Suspicion: Alternative interpretations and analytical results were discussed between the involved researcher and the outsider researcher. Finally, the research findings were presented in a confirmatory focus group meeting in order to validate the presented interpretations about the development of the ES.
findings indicate that the aiming for the intersection of customer demand, employee interest, and existing competences according to the hedgehog concept [6] functions well but could be modified in high-velocity environments. The case company’s experiences suggest that strategic competence management should aim towards customer demand and employee interests rather than focusing on current strengths.
7. Conclusion
7.2 The practical contribution This is practice-inspired research, resulting in a theory-ingrained artifact [30]. The case organization needed to construct competence management, as well as the respective organization and technology forming an ES. During this study Siili has deployed two organizational changes and three major IT releases, all contributing to its practice. Furthermore, this study provides more insight and evidence for the design principles of competence management systems [22] and the experience in the case organization indicates that companies should pay more attention to privacy, feedback, and multiple perspectives. We have also demonstrated in practice that it is possible to build automated and dynamic features for competence management in a real-life business setting.
In this paper we analyzed strategic competence management in knowledge-intensive project organizations operating in the technology consulting field. We conducted interpretive case-study research that studied the creation of competence management as a dynamic capability and the enabling ES in the case organization from 2013 to 2015. We used Lindgren’s competence typology [22] and Collins’ hedgehog concept [6] as the theoretical basis for our analysis and provided more evidence to support these concepts. In the next section we describe the ‘contribution of rich insight’ [35, 36] to this research.
7.1 Theoretical contribution Hevner [14] argues that design science research differs from routine system design by clearly identifying the scientific contribution. In this interpretive case study (and as a part of larger design science research initiative) we have participated in the description, construction, and evaluation of a particular organization instantiation and a management system instantiation that both address important, previously unsolved problems. Kasanen et al. [18] introduced the concept of market-based validation for constructive research. The research described in this paper fulfills the criteria of a ‘weak market test,’ meaning that the management of a single company has applied this construction and appreciates its usefulness. In addition, the case company has profitably increased its sales revenue and employee headcount, as well as the stock market value, during the research period, which also indicates that the strategic R&D initiative has been successful. Our research provides more evidence that competence typology [22] is a suitable concept for describing and guiding the development of competence management in KIPOs operating in the hightechnology field. Competence-in-stock, competencein-use, and competence-in-the-making would most likely have been useful classifications for the case organization in the initial design phase of the ES and could, therefore, be beneficial for other companies in similar endeavors. In addition, the research resulted in new insights for competence management as a strategic capability. Our
7.3 Future Research It would be interesting to study and evaluate the success of the competence management as a dynamic capability after longer usage. In addition, it would be beneficial to apply quantitative methods for measurement of customer and employee satisfaction. Moreover, there is potential for new artifact constructions aiming at better integration and visualization of customer demand in competence management context. Finally, studying wider adaptation of the artifacts and concepts could result in semi-strong market test [18] of the constructions.
Acknowledgments We would like to thank all our interviewees in Siili Solutions for giving their time and sharing their ideas and experiences with us. This study was funded by the Academy of Finland (grant number 259454).
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