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Can the Knowledge Pyramid Be Used to Focus Business Design on Transformation Through Persona Development?

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Can the Knowledge Pyramid Be Used to Focus Business Design on Transformation Through Persona Development? Dean 1 Can the Knowledge Pyramid be Used to Focus Business Design on Transformation through Persona Development? Written by William G. Dean, DM, Vice President of Business Administration at NewGround The Knowledge Pyramid, commonly known as the Data-Information-Knowledge- Wisdom hierarchy (Figure 1), proposes a defined progression of data-based information transcending upward, toward the attainment of wisdom. Although wisdom has been studied for centuries, a current application can be posed as the interpolative processes involved in answering “why” questions, using gained knowledge (Hoppe, Seising, Nurnberger, & Wenzel, 2011). Ackhoff (1989) defined wisdom as an elevated knowledge, meaning knowledge is said to answer more difficult questions through moral and ethical codes (Hoppe et al., 2011). Figure 1: Source: Brahmachary, Ayan. “DIKW Model: Explaining the DIKW Pyramid or DIKW Hierarchy, CertGuidance, May 4, 2018, n. p. Web. Dean 2 Reasoning has followed a progressional hierarchy within the Knowledge Pyramid using assumptions that data can be used to create information; information used to create knowledge; and knowledge can be used to create wisdom (Rowley, 2007, p. 164). Many organizations use data and information to develop strategies and business objectives, oftentimes without the focused contribution of knowledge to guide strategic decisions and goal setting using the higher -areas of knowledge and wisdom. Additionally, organizations are not applying the concept of persona development to further guide organizational design and marketing for improved business results. The purpose of this paper is to briefly examine the Knowledge Pyramid and apply its key attributes to persona development that might allow for business transformation in organizations focused on shared behaviors for product or service delivery. Particularly, service organizations using data and information to create personae of both consumer characteristics and cultural applications might be used to better identify with individuals different than themselves, yet capable of being identified through a created, theoretical set of defined consumer attributes. Personae act as “model persons” created by aggregating behaviors and consumer interests, covering typical characteristics such as age, gender, and job requirements (Ratcliffe, 2014). Shafer and Klammer cited Cooper’s (1999) definition indicating “personas are not real people, but they represent them [..] They are hypothetical archetypes of actual users. Although they are imaginary, they are defined with significant rigor and precision” (2016, p. 259). Jensen, Hautopp, Nielsen, and Dean 3 Madsen (2017) proposed a persona as “a constructed, fictional character with a name, a narrative, and a picture usually based on empirical data” (p. 2). Most research agrees that persona-building has no single recipe, but does agree on three basic steps involved in constructing personae: a) collecting data about users; b) segmenting those users; and, c) creating a persona for each user segment, and then developing content scenarios for each persona (Cooper et al., 2007; Jensen et al., 2017; Pruitt & Adlin, 2006). Personae combine benefits of quantitative and qualitative methods related to how organizations might design services for these targeted users (Koltay & Tancheva, 2010, p. 173). Organizations that design products and services based on personae must first use believable data that is communicated well throughout any development cycle (Koltay & Tancheva, 2010; Pruitt & Grudin, 2003). Well-positioned personae tend to contribute to the creation of usable products or focuses on the service organization in creating value-in-use approaches (Schafer & Klammer, 2016). The idea of focusing on end-user characteristics in an organization’s design process helps create better solutions and allows for more up-front modeling for potential methodologies. (Neilsen, Hansen, Stage, & Billestrup, 2015). As one examines the consumer experience and how an organization determines service design, its creation must start with an understanding of the consumer’s actions, motivations, questions, and potential hesitations at all phases of the experience with the organization (Stewart & O’Connell, 2017). Personae represent clusters of images or symbols that constitute archetypes or fictional attributes embedded in a consumer’s imagination (Dion & Arnould, 2016). Stern (1988) further argued that commercial Dean 4 personae do three things: 1) act as a surrogate or embodiment of a company; 2) set expectations for a relationship type expected by the organization; and, 3) provide a set of qualities through which a customer may form an attachment to the firm (Dion & Arnould, 2016, p. 124). Focusing back on the Knowledge Pyramid, organizations can use both quantitative data and qualitative information to create knowledge through persona development. Data simply defined, are symbols or discrete, objective facts, mostly unorganized and products of observations (Rowley, 2007). One might infer that data are collected, relevant properties which are the result of some functional processes and essentially have no meaning. Using banking as an example data could be accounts, transactions, or balances. Information is formatted data, which is refined through descriptions or answers such as: who, what, when, or how many (Rowley, 2007). Information allows data to become meaningful and purposeful for the recipient to then interpret for decision- making. Again, banking might use information for scheduling personnel, budgeting, or some other use of organizational data. Knowledge organizes data and information through processes that convey understanding, experience, accumulated learning, and expertise to an application for a current problem or activity (Rowley, 2007). Knowledge answers “how” questions using both explicit and tacit knowledge, suggesting explicit knowledge represents information recorded through systems; whereas, tacit knowledge consists in the human mind and rests in experiences, rationalizations, and justifications (Bocij et al., 2003; Rowley, 2007). Bankers might use knowledge to develop customer loyalty programs, engage Dean 5 marketing campaigns, or create consumer product packages, based on applicable trends or usage factors. Wisdom engages the individual to ask “why” questions and to apply reasoned principles to new problems or use what Awad and Ghaziri suggested as “vision foresight and an ability to see beyond one’s horizons (p. 40). Authors argue that wisdom lies not in what is known, but rather in how knowledge is held and in what manner that knowledge is ultimately put to use (Rowley, 2007). Bellinger et al. (2004) suggested that wisdom is uniquely human and requires one to have a soul as much as a mind (p. 2). Using our banking example, bankers might ask why certain customers purchase products, why they do their banking, or solicit expertise through relationship banking to better understand why people do or act in certain ways. Businesses wish to transform processes and approaches as they move upward within the Knowledge Pyramid. The evolution from contextual information to future- thinking abstractions are what allows innovative organizations to flourish within their competitive environments. Firms that ask probing “why” questions about defined knowledge are the ones that apply abstract and alternative thinking to current and future issues facing the organization. Persona development addresses the abstract levels of consumer segmentation, branding, and program development for innovative organizations. Castro and Loeschenkohl (2015) discussed banking’s digital approach in their IBM white paper, proposing that “being present in your customer’s lives requires that you view them not as simply amalgamated data and transactions, but that you understand the total individual, the persona behind the data” (p. 2). Dean 6 In our banking example, Beard and Courbage (2015) discussed the concept of “bringing your own persona” (BYOP), related to how consumers might embrace technology and the levels they might trust their financial institution with their data (p. 2). Segmentation by usage types, communication patterns, and multi-channel access information was deemed inadequate to understand distinguishing attributes across data capabilities and consumer trust. This is where personas allow financial institutions to assess each customer’s current banking relationship and then use knowledge of behaviors, patterns, and usage to help determine engagement levels. One example Beard and Courbage (2015) provided is a Vicom Media study, which found “73 percent of millennial consumers would be more excited about a new offering in financial services from Google, Apple, Amazon, PayPal, or Square than a nationwide bank” (p. 6). Banks might evaluate this genealogical segment as more “digital natives,” but using personae might also attempt to develop a characteristic “user” profile that is more attuned to why this user might consider outside service providers rather than lumping them under standard segmentation strategies. Stewart and O’Connell (2017) suggested that creating great consumer experiences starts with understanding the consumer’s actions, motivations, questions, and hesitations at each phase of their interactions with your organization (p. 49). Designing for these humanistic actions requires the use of knowledge, elevated through wisdom, to create personas of those consumers the organization values and wishes to attract and retain for optimal relationships.
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