Fortune Favors Companies With Chief Knowledge Officers
By George Anderson
A new book by the economist Lester Thurow, Fortune Favors the Bold, contends that businesses such as Kmart and McDonald’s may have avoided some of their recent difficulties
if they had a chief knowledge officer (CKO) on staff to keep an eye on competitive and technology trends.
According to a Reuters report, Mr. Thurow believes Kmart’s failures stem from it not understanding that Wal-Mart had turned retailing into “a logistics and information
game.”
Calling Wal-Mart “a bank in disguise,” Mr. Thurow said the retailer turns over its inventory in eight days and pays suppliers in 90 giving it “what amounts to an 82-day interest-free
loan.”
In the case of McDonald’s, writes Mr. Thurow, it “has yet to recognize that it is in a mature industry where it will earn a lot of money, but will be given stock market multiples
that are appropriate to a mature industry with slower growth.”
He recommends McDonald’s hire a CKO to help it develop strategies for creating profits with three or four percent annual sales increases rather than trying to keep profitability
up with larger yearly improvements.
Moderator’s Comment: Do you agree with Lester Thurow’s assessment of Kmart and McDonald’s and the need for companies to have a chief knowledge officer
on staff?
We have to disagree with Mr. Thurow on Kmart. Various leaders of the retailer throughout the years understood the need to improve the company’s use of information
and create a more efficient logistical system. They simply didn’t get it done. Perhaps, the current management will fare better. [George
Anderson – Moderator]