Analytics and Forecasting

A rose by any other name

3 Apr 2007  

I didn’t start out to become a business researcher (though, in hindsight, that was the first professional role I was paid for).  I started out to become a physician, and completed the four year-long courses needed to enter medical school—inorganic chemistry, organic chemistry, physics, and biology.  This took much of my time, energy, and waking thoughts for two years in college.  And though I later decided not to pursue medicine as a career, it was not time wasted.  I often find myself using scientific thinking, or referring by analogy to some principle of science to understand a business problem.

Modern science is based on the scientific method—hypotheses are developed, then tested for validity in the real world.  Eventually, some become known as theories.  Others are so time-tested and reliably true that they are known as laws.  The scientific method is a specialized kind of knowledge value chain.

Other knowledge-based disciplines have their own “brands” of KVC.  US government intelligence professionals use something called the intelligence cycle, to which the KVC has several similarities—as well as some key differences.  We will compare and contrast these models later.

Many other professions have something similar.  Lawyers have the process of discovery of the facts prior to a lawsuit or a trial.  Detectives and security professionals conduct investigations.  Journalists ask their “journalistic” questions who what when where why and how.  Lawmakers hold hearings and undertake fact-finding missions.

Business people need to do same thing—to continually find the best possible answers to questions like:  Should we enter this new market?  Should we buy that company?  Was the drop in sales just a blip, or the beginning of a long-term trend?  But, more than the other professionals, business people have an additional restriction—they must do so at the same time as creating value.  That means not only watching costs, but also making sure the questions are focused on the processes by which the business creates value.

I’m not suggesting that once you understand the KVC model, you’ll be able to drop into any other profession and be competent.  There is also content that one must master.  The KVC model deals only with process—by itself, it is content-free.  But, assuming you do have content mastery of an area, having KVC process knowledge in addition creates a powerful combination that is hard to beat.

Excerpt from the Introduction to The Knowledge Value Chain Workbook by T.W. Powell.

1 Response

  1. This is an excellent article, Dr. Powell.

    Would you consider Michael E. Porter’s methodologies (his corporate planning methodology, his Five Forces model, and his activity-based value chain analysis) valid methods for business professionals analogous to the scientific method?

    The more we read about and understand The Knowledge Value Chain the more we like it, and would be interested in suggestions and insights into using The Knowledge Value Chain along with Porter’s methodologies, they seem very complementary. (At we have analyzed over 9,000 industries using Porter and we now want to add the fresh thinking and added value that you bring to the table.)

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