M M S S P PR RO OG GR RA AM MM ME E I IN N C CO ON NS SU UL LT TE EN NC CY Y M MA AN NA AG GE EM ME EN NT T
India Habitat Centre Core - IV B, 2nd Floor, Lodhi Road New Delhi 110003 November, 2008
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KNOWLEDGE MANAGEMENT 2
Contents
S.NO INDEX PARTICULARS
1. Chapter 1A Introduction to Knowledge Management
2. Chapter 1B Knowledge Cycle: An Overview
3. Chapter 2 Data Information Knowledge
4. Chapter 3 Strategic dimensions of KM; Impact of Business Strategy
5. Chapter 4 Knowledge Management Process
6. Chapter 5 Discussion on Knowledge Use Process: Tacit / Explicit Knowledge
7. Chapter 6 Introduction to Knowledge Sharing Tools & Techniques 8. Chapter 7 Assignment 9. Chapter 8 Overview of Other KM Tools & Techniques
10. Chapter 9 Role of it in Knowledge Management
11. Chapter 10 Communities of Practice
12. Chapter 11 Practices of Knowledge Management in Modern Global Organisations
13. Chapter 12 Measurement Systems for KM
14. Chapter 13 Barriers To Success for KM
15. Chapter 14 Building a Knowledge Management Capability Framework
16. Chapter 15 Developing a Knowledge Organization
17. References
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Chapter1A
Introduction to Knowledge Management
Knowledge Capitalism
Wealth and power had traditionally been equated with ownership of physical resources. Material, labour and money,- the traditional factors of production are physical in nature. The role of knowledge has been rather limited. The industrial revolution some two and a half centuries ago was largely facilitated by money capital, labour and steam power.
In contrast, increasingly, wealth and power is being derived mainly from intangible, intellectual assets knowledge capital. This transformation from a world largely dominated by physical resources to a world dominated by knowledge has enormous implication for all of us in this planet. We can see economic power being shifted from nations with huge physical resources to nations that largely use knowledge as a factor of production. India and China are being frequently quoted as examples. We are as yet in the early stages of knowledge revolution. But the impact is already becoming apparent all around. The extreme volatility of markets, uncertainty over future direction within governments and businesses, and the increased insecurity of career and job prospects are just some examples. This new economic paradigm has enormous implication on work, jobs, employers, and employees. In order to comprehend this we need to appreciate how the new economic paradigm is changing the traditional inputs to wealth creation: materials, labour, and money.
GOODS AND SERVICES : ROLE OF KNOWLEDGE
Economists and thinkers have been talking of post-industrial society for over a quarter of a century now. According to the theory of post-industrial society, production of goods would decline in favour of services. And knowledge would become the basis of economic growth and productivity, - and occupational growth would largely happen in white-collar managerial and professional jobs. Data shows that actual trends in economic growth and employment is quite consistent with these predictions. Employment in agricultural sector has shown a steady decline in favour of manufacturing and services, in all major economies Further, between 1970 and 1990, manufacturing employment itself declined in all G-7 countries : USA, J apan, Germany, UK, France, Canada and Italy.
What is a good and what is a service has not been easy to define. When I buy a CD with Satyajit Rays immortal film Aparajita - thats a good. But if NDTV 24X7 broadcasts it its a service. Increasingly services sector contributes a larger proportion 4
of GDP. The strong growth of services sector in recent years is linked to the connection between services and goods-producing sectors. With increased competition, manufacturers are outsourcing non-core functions to specialist service organizations. This has seen a decline in employment in manufacturing and a rise in employment in services.
What is a Service anyway ? Service has been defined as an activity where the output is characteristically consumed at the same time as it is produced,- having a hair-cut or riding a cab, for example. But not all services are consumed as they are produced. Defining service as anything sold in trade that could not be dropped on your foot is as good as any other definition. When Dell makes a PC as per your specification and delivers to your home, that is as much a service as a product. When you feel hungry and order a Pizza with Dominoes, with guaranteed delivery in half an hour, there is a lot of service built into the product,- pizza.
In fact, as goods and services become more knowledge and information intensive, it becomes increasingly difficult to distinguish the two. Attempting to distinguish is also becoming less relevant. Knowledge is the defining characteristic of economic activities,- rather than either good or service. However we still do not have the tools to measure this important activity.
KNOWLEDGE: A FACTOR OF PRODUCTION
Knowledge is transforming the nature of production and thus work, jobs, the firm, the market and every aspect of economy. However, in spite of this, knowledge is as yet a poorly understood and thus undervalued economic resource. We need to wear different set of glasses to view the emerging knowledge economy. Older ways of looking at things is no longer applicable. We need different and new models to predict and plan the future strategies,- national, corporate or personal whatever. In order to be able to do this, we first need to understand knowledge and its role as an input to production.
KNOWLEDGE DEFINED
Everyday words like data, information, and knowledge are often used loosely to describe the same phenomenon. It is good to clear the confusion,- or at least attempt to do so, as early as possible. Data can be defined as any signals which can be sent from an originator to a recipient. Information is data which are intelligible to the recipient. And, finally, knowledge is the cumulative stock of information, and skills derived from use of information by the recipient. The and which joins the two parts of the previous sentence has a huge role in clarifying what knowledge is. Knowledge isnt just a stock of information. It includes skills derived from use of information. Well, we will go deeper as we move later in this study material. We wanted to have the big picture.
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Knowledge Characteristics
As this point we are only trying to understand the role of knowledge in economic activities. However it is good to remember some important characteristics of knowledge. For one, we must distinguish between knowledge about something, and knowledge about how to do something what is called know-how.
We could also classify knowledge according to whether it can be made explicit, or whether it remains implicit or tacit. It is easy to codify, store, transfer, and share if it is explicit. Not so easy with tacit knowledge.
INFORMATION TECHNOLOGY AS AN ENABLER
The change from a physical to an increasingly non-physical information and knowledge- based economy has been mainly achieved through commercial application of Information technology. As such, it is good to understand how IT industry has evolved over the years,- and how it is likely to affect the knowledge economy in future.
Continuously declining cost coupled with improved performance, has meant that information technology has had a pervasive impact on the overall economy. Information Systems uses systems analysis and design tools to represent the real world,- trying to be as accurate and complete in representation as possible. It is thus possible to represent a complex process, which perhaps describes some knowledge of an individual, through information systems. It thus enables knowledge to be fragmented into pieces of information which can be accessed, and if needed, reassembled at low cost. Other components of information systems would enable this to store , access and transfer the knowledge models.
It is this ability which enables us to evaluate and use the information, thereby creating new information. IT therefore plays an important enabling role in creation and transfer of knowledge. It is in early days, and we will have enough time to spend on these issues later.
THE CHANGING ROLE OF IT
What we now discuss has an important bearing on the role and importance of knowledge management. Between the mid-1950s and mid-1980s, as compared to cost of processing information manually, cost of computing power fell by 8,000 per cent.
In 1900, less than 18% of the total workforce in the USA were engaged in data and information handling tasks. It had risen to over 50% by 1980. Lets pause for a while. We said, by around 1980, half of the total work force in USA were in information handling tasks. If we dissect these information handling workforce, 19% were associated with R & D, education and training, and design and similar work. Lets remember, these are the work that can be classified as adding to the long-term knowledge-stock of business. The 6
rest 81% were associated with transient data and information related to day-to-day operations.
Lets see the trend now. By 2020,- we are now in 2008, it isnt far over 80% of the work force are likely to be associated with information- handling tasks. Compared to now, a far higher proportion of these people will be engaged in knowledge building and decision making tasks. Later in this chapter, we discuss these issues how todays products and services, because of their complexity, has a much larger knowledge content. Routine day to day management of information, because of its very nature, and the capabilities of information technology, will be automated. This factor is pregnant with the possibility of large scale reduction in work force. Those who remain, need to be much smarter,- and managing knowledge will be their key focus.
If we follow IT applications in the business area from around early 1960s to date, we find a clear trend,- the focus of IT has shifted from data processing, to information management, and further onto knowledge management. During the 60s and 70s main focus of business was control and standardization through the use of IT. What was specific to some became general,- tacit knowledge became explicit. 1990s saw massive spread of networking, linking different functions in an organization first, and then beyond the organizational borders to customers, suppliers, collaborators etc, and eventually with internet, networking across the world. This capability dramatically improved access to, and sharing of information among the various stakeholders which in turn helped to create a platform for decision support, organizational learning, and knowledge sharing. Routine functions meanwhile continued to be automated.
Organizations switching to standardized software like SAP R/3 had the effect of leveling. Viewed from the knowledge perspective, one of the striking features of these comprehensive and sophisticated commercial application packages, is the extent to which it provides very comprehensive standards for financial, logistical, and human resources system, in widely different industrial settings. In one go, with such a system installed, the organization gets the benefit of a set of best practices for operating many of the routine functions. While the initial expenses are high, such a system results in lower operating cost, lower inventory, faster cycle time and so on. Using standardized software, rather than trying to make one, gives the benefit of knowledge of best practices. There is a risk though,- the organization may lose firm-specific or tacit knowledge embedded in the internal processes. However the benefit of the knowledge of the best practices may far outweigh the loss of such firm specific knowledge.
THE WORLD OF BUSINESS IN AN ECONOMY DRIVEN BY KNOWLEDGE
As we moved into 21 st century, the world seems to be moving faster and faster. As the clich goes Change is the only constant. In the rapidly changing business environment, survival itself is a challenge. There are innumerable areas where this change is visible.
ONE: Larger varieties of products and services. Choices are almost limitless. If your purse allows, you could have almost anything. Gone are the days of Henry Ford and his Model T. Though there is some disagreement, most people attribute to Henry Ford the 7
famous words You could have any colour as long as it is black. Trying to make a car which is affordable at $300 price range, Ford did everything possible to cut down the cost. This gave birth to the concept of Assembly Line. Ford even restricted his model T to one colour, that too black,- because it dries up faster and keeps the cost down. Ever since Maruti Suzuki landed in our country in the early 80s , we have seen a flood of cars of different makes, sizes, colours and so on.
The picture is same no matter what product or service we are talking about,- Washing machine, Refrigerator, TV, Insurance cover, Airlines seat, Banking services and so on and on.
So what can we expect because of this ? Scientists say human behaviour has remained largely the same. The more you give, more she wants. This leads us to the next factor.
TWO: Demanding customer. With innumerable choices available, each marketer trying grab your attention you do tend to become choosy. Bargaining is inevitable. Worse, you look for higher and higher quality as you keep bargaining for lower and lower prices. Well, thats a pretty good life when we go shopping. But, perhaps life isnt as rosy on the other side of the table.
THREE: Shorter product life cycle. And we are not talking of microprocessor chips. Almost any product,- not just TVs, Computers , Music Systems and other electronic products. With higher disposable income people are looking for newer and newer products. And whats making all these possible ? That brings us to next point.
FOUR: Rapidly changing technology. Increasingly technology is becoming more and more powerful,- making it possible to bring out newer products faster and faster at lower and lower prices. Better and lower cost technology is also making another contribution. That brings us to next point.
FIVE: Products are becoming increasingly complex. In the mid-70s a washing machine would have a price of around Rs 600. But what exactly was the washing machine ? A vertical steel drum with an agitator at the bottom powered by a motor below. All that it could do is just churn the clothes. We have moved a world from this. Todays washing machine is a complex one but makes users life easier. With a fuzzy logic and all that it has a microprocessor inside, build-in intelligence, hardware, software and so on. Probably 40% ( or more ), of the value of the latest BMW would comprise of electronics,- hardware, software and so on. So what does it mean for the manufacturer and marketer ? Expertise in multiple areas. That means more collaboration among different people.
Fortunately, information technology makes that possible.
SIX: Globalization: Thats the buzz word. Companies have manufacturing facilities spread around the world, components coming from around the world, markets beyond the borders, money flowing in the shape of FDI, expertise coming from around the world, and so on. As Thomas Friedman rightly said,- the world is indeed flat. ( I am referring to the book The World is Flat by Thomas Friedman, New York Times correspondent. ) 8
As one could move beyond borders for market, the same border allows others to come in. And that makes things difficult for the manufacturer / marketer. That brings us to competition.
SEVEN: Competition. Increased competition keeps the manufacturer / marketer on their toes. Trying to survive in this highly competitive world, he needs to bring out newer and newer products of higher quality at realistic prices. As Akio Morita, President SONY said If you dont make your own products obsolete, the competition will do it for you.
SPEED IS THE ESSENCE
So what does all these mean to us ? It simply means anything we do, we have less time to do today than we had yesterday. With the world moving faster, we have less time to respond. It means faster decision making , faster access to information, increased collaboration among employees, suppliers, customers etc. With heightened competition, our researchers must come out with newer designs faster, with better quality. No wonder, this sweeping changes made Bill Gates title his 1999 book Business @ The Speed Of Thought . In fact Bill Gates perhaps sums it up in the very first sentence of this famous 1999 book this way: Business is going to change more in the next ten years than it has in the last fifty. Continuing,- Gates writes later If the 1980s were about quality and the 1990s were about reengineering, then 2000s will be about velocity. As we see the business world now in 2008, it is indeed pretty different ,- one might even call it an impatient, intolerant world. If we have to innovate, come out with newer designs faster, it does mean there is absolutely no scope for making the same mistake again. If an engineer in Chicago has struggled for five hours to diagnose and fix a problem, it makes no sense for his colleague to spend another five hours diagnosing the same problem in Kolkata. Doing this made no sense ever in history, but today its simply suicidal for any business organization.
Technology has enabled us to put any kind of information numbers, text, sound, video to be put in digital form enabling a computer to store, process, and forward it. Handheld computers ( PDAs ), Cellular phones and of course Internet technology has enabled us to access information anytime, anywhere.
SERVICE ORIENTED PRODUCT COMPANY OR OTHER WAY AROUND ?
Lets see the impact of heightened speed of activity of business. With an intolerant customer, business has little time to react. When a manufacturer ( or, for that matter a retailer ) has to respond to market changes in a matter of hours, rather than days or weeks available earlier, is he a Product company with service attached to it, or, a Service company that has a product to offer ? Or, for that matter, when Dell allows a customer to design his PC as per his needs, and then makes the PC and ships to his customer,- does it look like just a product or far more ? These are indeed serious thoughts that come to mind when we look at business today. Things look topsy-turvy.
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HIGHER CONTENT OF KNOWLEDGE
It had always been true that in a typical business organisaion the middle and higher level executives had been largely involved in processing information. These were typically operational information like sales data, inventory status, production data, costs and so on. Typically the products too were far less complex. This essentially meant that the knowledge content in employees work were limited. However, increasingly things seemed to be changing rapidly. The complexity of the environment in terms of globalization, competition, intolerant customer, rapid change in technology particularly after the advent of internet, global connectivity, low cost of computation, powerful software tools for analysis, software for collaboration etc. has completely changed the character of business,- the very way business is done. This has meant a shift in the nature of work a typical employee does. The fact that products have higher technology input itself means that you need people who are smarter, can handle complex products, complex situations and all ,- in short he has to handle situations that are just not routine. Increased competition means faster response to market signals, customer feed back, technology changes etc. This again raises the level of work to more thinking type. Intolerant customer means faster action which in todays world may mean more group work.
In this changing scenario, economic activity is shifting from physical goods to information-based products. For instance, increasingly we need to carry less and less of currency and coins for any purchasing done. This is done through credit / debit / (smart cards where the information regarding the money available is stored ).
For employees at the shop floor too, it is no longer the dull repetitive activity that was best represented by Henry Fords Assembly line. Today the work is far more process oriented, that requires action from multiple persons.
Lets take the case of DELL when they changed the process of manufacturing. In the typical assembly line situation, there were 22 people through whom raw material and intermediate products were moved before it came out as a final product. The new process at DELL made it possible to manufacture a PC as per customers specification, and assembled by just two persons sitting in front of terminal, guided by software.- a PC with all software installed and fully tested. This job is far more enriching than the assembly line case of each person fixing just one component. In turn , this job requires people who are more educated, better trained and so on.
I had mentioned the case of a washing machine. As an appliance, - this product today has a lot of technology built into it to make it an user friendly. A lot of money, research effort etc has gone before building this product. Actual manufacturing cost may not be high.
Or, take the case of an air-conditioner. Early model air conditioners had an on-off switch, a rotating knob for lower or higher cooling, and another to control air speed.
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As I write this material, Delhi city is flooded with advertisements of a new Hitachi air conditioner. Hitachi Home and Life Solutions ( India ) Ltd at their website www.hitachi- hli.com announces the new air-conditioner with the following :
Presenting for the first time ever, an air-conditioner that relieves you from uncomfortable sweat. HITACHI ACE WITH AUTO HUMID CONTROL Air-conditioning is not just about cooling, it's more about comfort. An average human being feels comfortable with the right blend of temperature, air-flow & humidity control. Conventional air-conditioners may provide the requisite temperature & air-flow but fails to control the rising humidity levels alongside. Thereby with your conventional air- conditioner, you struggle to find the desired comfort level and despair with the rising heat and sweat. Lets look at it again: Air-conditioning is not just about cooling, it's more about comfort. Here is an AC that not only cools ( that was the primary reason so to say ), and controls air-flow, but manages the humidity as well. In order to build more and more intelligence into our products we spend more on design aspects. While from user point of view it is easy, product itself is complex. What it all means is that of the total product cost, the proportion of raw material and manufacturing cost is lower these days. Much of the expenses have been incurred before. Whether you are a research engineer or a repair mechanic, knowledge content is higher.
Another trend,- products customized to individual needs,- is increasingly visible. This is to satisfy customers,- who seem to be asking for more and more all the time. DELL did it Levi Strauss does it and a lot more,- Nike at one end,- BMW at the other. When we move from mass produced to mass- customized products we can easily see the higher knowledge content in the product. We talked of DELL earlier.
With increased competition, manufacturers and producers of goods and services have realized that latching on to an existing customer, and giving and satisfying him with value-added products with higher margins is a better proposition than offering mass- produced goods to one and all. This necessarily requires the company to know his customer profile better which needs use of lot of analytical tools, and thus much knowledge-based.
As contribution of knowledge towards production of economic wealth increases, economies that were largely natural physical resource-based,- for instance Australia, seem to be slipping in the table of nations with highest per capita income. It is perhaps no charity that such nations,- Australia, Canada and many other countries, have easier immigration laws for people with higher skills. Much advertised, discussed, and debated,- United Kingdoms Highly Skilled Migration Programme (HSMP) is one such.
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To survive in this highly technology oriented, innovation focused economy,- even USA is encouraging easier immigration for people with better education and research skills. Microsofts Bill Gates was one among the many top CEOs to plead with Clinton government to increase H1B visa.
KNOWLEDGE SHARING
With little time to react, organizations are compelled to rediscover that it makes enormous sense to share what employees know, and thereby increasing what Bill Gates term Organisational IQ. If we share what we know with our colleagues the total of what the organization knows is much more than what an individual does. For instance, if what I know is X and what you know is Y , and if you share with me what you know then I will know X+Y which is more than X. Similarly if I share with you what I know, you would know Y+X which is more than Y.
This seems pretty different ball game all together. If two brothers divide their ancestoral land of 5 bighas, each will have 2.5 bighas. If I have thousand rupees, and give you two hundred, I am left with eight hundred only. So unlike other factors of production like land, labour, capital where sharing results in reduction , or depletion, sharing of what I know results in increment of what you know.
Now, whats the best way to describe what I know ? Assume I know the following ( Its all in my head ):
a) Name of the worlds highest mountain peak b) How to fix Windows booting problem c) Name of the largest circulated English daily in India d) How to eat with my hand e) How to make a Chapatti or a Romali roti. f) What is Knowledge Management g) The Sun rises in the east. h) How to eat fish without the bones getting stuck in the throat. i) How to ride a bicycle
This is what we could call Knowledge. The more one knows such things the more Knowledgeable he is. This is apparent that sharing some of this knowledge is easy,- namely which is the largest circulated English daily in India. However it wont be that easy to share the knowledge how to make a romali roti. Or, what is knowledge management But more on this later.
Lets pause for a while and try to figure out what that illusive term knowledge means.
Without becoming bookish, one could attempt to define Knowledge as a mix of accumulated experience, values, contextual information, insight and intuition that enables one to evaluate new experiences and information. It originates and is applied in the minds of knower. In an organizational context, knowledge often becomes embedded not only in documents or repositories but also in organizational systems and procedures.
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Now, let us get back to what I know or my knowledge. Name of the worlds highest mountain peak,- Mount Everest , Largest Circulated English daily in India The Times of India ( an on date of writing this material ), The Sun rises in the east these are all facts. This is what is called explicit knowledge or formal knowledge. We could easily write it on a piece of paper or store in a computer.
Now, let us look at some other knowledge. How to eat fish without the bones getting stuck in throat is something that even a ten year old Bengali boy ( or girl for that matter !! ) knows. But is that something that one could describe in a piece of paper ? Or, take the example how to ride a bicycle. No matter how much we might try, it is impossible to write a one page, easily understood document that would teach a young child and help him or her understand how to ride a bicycle. It would be hard to transcribe into a document feelings such as confidence and balance. This is what is called embodied knowledge, or informal or tacit knowledge.
The key distinction is we could store explicit knowledge or formal knowledge in a piece of paper or computer storage. Implicit or embodied knowledge is personal. Its all in the head !!
As I was writing this material, I saw an interview on NDTV 24X7 with the rather controversial British Author J effrey Archer who has sold millions of copies of his books. Someone in the audience asks How do you write ? referring to the beautiful expressions in his books. And what do you think was J effrey Archers answer ? I dont know I wish I knew he says. Elaborating further he says,- If you asked Sachin Tendulkar,- one the greatest batsman on planet according to his admission- how he manages to bat so well, - could he explain? Perhaps no. This is simply God-gifted. So, there it is. Some knowledge is simply not describable.
KNOWLEDGE MANAGEMENT
It follows from whatever we discussed so far that indeed it makes sense to collect the knowledge and expertise available with people in the organization, store it and share with people who need them to enhance the overall competence level of the organization which is a necessity in todays competitive world. This is what knowledge management is all about. There are a lot of technical tools available to assist in this tapping, coding, storing and sharing efforts. A lot of people tend to equate KM with these technical tools. But in reality, while these tools are a necessary ingredient of KM, KM is far more. We will delve into these deeper as we move along.
Back
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Chapter 1B
KNOWLEDGE CYCLE: AN OVERVIEW
Knowledge management ( KM ) is a process that helps organizations to identify, select, organize, disseminate and transfer important information and expertise that are part of the organisations memory.
In simplest terms knowledge cycle refers to the repetitive process of gathering knowledge, organize it by codifying, indexing etc, and finally sharing or making it available for use by employees. Fundamental point to realize is that its a virtuous circle increasingly refined and of higher value to the organization.
KNOWLEDGE CYCLE: DEFINITION
A quick recap of what knowledge is. Knowledge is the cumulative stock of information, and skills derived from use of information by the recipient. While data refers to individual, unconnected facts,- information is data organized in a specific way for a definite purpose, knowledge is information in action in the context of personal experience.
Information could reside anywhere,-paper, computer storage and of course in the mind. Knowledge is based on information, but primarily consists of continually evolving skills and experiences of an individual or a group.
Knowledge Management System Cycle
A functioning knowledge management system follows six steps in a cycle. The reason why it is a cycle is simple. Knowledge is never static. It continually gets refined and upgraded. In a good knowledge management system knowledge is never finished because the environment changes over time, and knowledge must be updated to reflect these changes. The cycle works as follows:
1. CREATE KNOWLEDGE : Knowledge is created as people find new ways of doing things. Often external knowledge is brought in,- some of these could be best practices.
2. CAPTURE KNOWLEDGE: New knowledge must be identified as valuable and be represented appropriately.
3. REFINE KNOWLEDGE: New knowledge must be placed in context so that it is actionable. This is where insight ( tacit knowledge ) must be captured along with explicit knowledge. 14
4. STORE KNOWLEDGE: Useful knowledge is stored in a format in a knowledge repository so that other people in the organization could access it.
5. MANAGE KNOWLEDGE: J ust as a library must be must be kept current, knowledge must be continually reviewed to see that it is current, relevant, and accurate.
6. DISSEMINATE KNOWLEDGE: Make the knowledge available to anyone who needs it.
With proper dissemination of knowledge, individuals develop, create and identify new knowledge or update old knowledge which they replenish into the system.
It must be noted that knowledge as a resource is never consumed when used, though it can age. Knowledge must be updated. Knowledge grows with time.
MYTHS ABOUT KNOWLEDGE MANAGEMENT
Like the learned Professor of Economics who got completely bewildered with the term Knowledge Management, there are others who perhaps have a narrower view of KM. Like as we said a little while before: KM is just Technology.
While in the early 1990s the whole business world were talking about Reengineering, a few years later when KM came, people wrongly assumed it as reengineering by another name. Reengineering is about dismantling and making it over again with new thinking. It is all about changing the process to make it simpler, enabled by information technology. Moreover, with reengineering it is a one-shot affair. In contrast KM is an ongoing continuing thing. 15
Its a new concept- some would think,- which it is not. Organisations have used it for long, except that newer technologies have enabled it on a scale and at a level that was simply not possible earlier. IBM for instance, - a company that was known for its service, had a system where customer engineers would report difficult problems, their diagnosis, and solutions. Collected from around the world, experiences like this would be circulated all over the world for sharing by other customer engineers. Only thing, this was in paper form, of course. Incidentally, IBMs customer focus,- a much talked about topic today was visible even from the designation it gave to its engineers Customer engineer. They were not designated Service engineer or something similar.
KM is just data warehouse a place where lot of business data is stored ,- thats another incorrect impression. As we will see in later chapters, todays technology tools provide extremely complex analytical ability to know about a problem, to know the customer, his likes dislikes etc. much better. These are fairly recent developments.
IMPORTANCE OF KNOWLEDGE MANAGEMENT
As early as September 1943 in a speech delivered at Harvard University Sir Winston Churchill said -- The empires of the future are the empires of the mind. Remember 1943, peak of world war II,- its the time when manufacturing drew all the attention. And, - the sun never sets in British empire, -thats what was a popular saying.
Much before the term Knowledge Management gained currency, noted industrialist Andrew Carnegie said,- The only irreplaceable capital an organization possesses is the knowledge and ability of its people. The productivity of that capital depends on how effectively people share their competence with those who can use it. Late Peter Drucker who needs no introduction, wrote The basic economic resourcethe means of productionis no longer capital, nor natural resources, nor labor. It is and will be knowledge.
Knowledge as a resource has always been valued. It is only that changes in business environment and technology has made it inseparable from survival. Even Charles Darwin wrote: In the struggle for survival, the fittest win out at the expense of their rivals because they succeed in adapting themselves best to their environment. In recent times authors after author have emphasized on KM. One of the best known authority has to say the following: In the rapidly changing social, political and economic environment,-disruptive change,- as it is often referred to , survival depends on Knowledge, or to be more specific application of knowledge. ( Yogesh Malhotra ) 16
In the path-breaking article The Knowledge-Creating Company ( HBR ) Ikujiro Nonaka writes: In an economy where the only certainty is uncertainty, the one sure source of lasting competitive advantage is knowledge. Today, the ability of an organization to stay current and stay relevant requires a core competence in Knowledge Management. Organisations need to respond to social and economic trends. Three major drivers of change are: globalization, ubiquitous computing, and the knowledge-centric view of the firm.
Perhaps the biggest factor is globalization. The complexity and volume of global trade today is unprecedented; the number of global players, products, and distribution channels is much greater than ever before.
Information technology has speeded up all the elements of global trade. This, coupled with the decline of centralized economies have created an almost frenetic atmosphere within firms, which feels compelled to bring new products and services,- catering to a wider market - much faster than ever before. The combinations of global reach and speed has compelled the organizations to ask themselves what is it that we know, who knows it, and what is it that we dont know but we should know.
To sum it up knowledge, and its management is important today more than ever before because:
Globalization leading to extreme competition , outsourcing products & services beyond the core competence, mergers & acquisitions, never ending drive to accelerate product development, - all these factors forces organizations today to tap into resident knowledge more urgently than ever before.
Technological tools are available today to:
1. Facilitate knowledge sharing through centralized depositories of information 2. Enable real-time collaboration through electronic workplace 3. Help identify experts and expertise with intranet-based location systems
Need for Knowledge Managements: Some Specifics If we look around, we can see a number of common situations that seem to be immensely benefiting from knowledge management approaches. While it is obvious that these are not the only issues that can be tackled with KM techniques, it is useful to explore a number of these situations. This would provide us a context for the development of a KM strategy. Beyond these typical situations, each organisation will have unique issues and problems to be overcome. 17
Call Centres Pressures of competition have forced organizations to open Call centres that have increasingly become the main 'public face' for many organisations. Heightened customer expectation to get response to their queries has made the role of Call Centres much more challenging. Other challenges confront call centres, including high-pressure, closely-monitored environment high staff turnover costly and lengthy training for new staff In this environment, the need for knowledge management is clear and immediate. Failure to address these issues impacts upon sales, public reputation or legal exposure. Front-line Staff Many organisations have a wide range of front-line staff who interact with customers or members of the public on a regular basis. They may operate in the field, such as sales staff or maintenance crews; or be located at branches or behind front-desks. In large organisations, these front-line staff are often very dispersed geographically, with limited communication channels to head office. Typically, there are also few mechanisms for sharing information between staff working in the same business area but different locations. The challenge in the front-line environment is to ensure consistency, accuracy and repeatability. Business Managers Todays managers are flooded with information. The volume of information available has increased greatly. Faced with 'information overload' or 'info-glut', the challenge is now to filter out the key information needed to support business decisions. The pace of organisational change is also rapidly increasing, as are the demands on the 'people skills' of management staff. In this environment, there is a need for sound decision making. These decisions are enabled by accurate, complete and relevant information. Knowledge management can play a key role in supporting the information needs of management staff. It can also assist with the mentoring and coaching skills needed by modern managers.
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Aging Workforce Many public sector organizations are particularly confronted by the impacts of an aging workforce. Private sector organisations are also recognising that this issue needs to be addressed if the continuity of business operations are to be maintained. People who have been long in the organization have a depth of knowledge that is relied upon by other staff. This is particularly so in environments where little effort has been put into capturing or managing knowledge at an organisational level. In such a situation, the loss of these key staff can have a major impact upon the functioning of the organisation. Knowledge management can assist by putting in place a structured mechanism for capturing or transferring this knowledge when staff retire. Supporting Innovation Faced with extreme competitive environment, many organisations have now recognised the importance of innovation in ensuring long-term growth, or even survival. This is particularly true in knowledge-intensive sectors such as IT, consulting, telecommunications and pharmaceuticals. Traditionally, most organisations, however, are constructed to ensure consistency, repeatability and efficiency of current processes and products. Innovation is not in their focus. As such, organisations need to look to unfamiliar techniques to encourage and drive innovation. Knowledge management can significantly contribute to process of innovation. Challenges:
There are challenges to implementation of KM systems. One, employees need to acknowledge that what is in their head is valuable. Two, and more importantly, management has to convince employees that the best way to develop that value is to share what they know among others. More on this later, towards the end of this study material,- under title Barriers to success for KM.
Mobilising Knowledge Explained There are two basic forms of knowledge: That which resides in our heads which we call Tacit Knowledge 19
That which is written down and stored in forms that are accessible, which we call Explicit Knowledge Research over the past few years have concluded that something between 50% and 85% of the knowledge in an organisation is tacit, i.e. only available through people. Other research has also shown that much of the explicit knowledge is inaccessible - locked in systems that people cannot readily get at it. The Value of Different Forms of Knowledge
The text below shows some of the differences in value associated with these two forms of knowledge Tacit Knowledge Ability to adapt o to deal with new and exceptional situations o expertise Ability to collaborate o to share a vision o to transmit a culture o to coach Explicit Knowledge Ability to disseminate o to reproduce o to access and re-apply o to teach Ability to systemise o to articulate a vision and translate it into operations o to integrate into products, services and processes Given these two forms of knowledge, then there are four associated transformations. We can transfer knowledge between us across the table, in meetings, around the coffee machine, etc. This is defined under the heading of Socialisation and has many advantages, primarily that it is personal and can be adapted to suit the circumstances and the understanding and responses of those listening. However, outside of the exchange, nobody else gets to know anything. So we can capture the knowledge so that it can be made available to a much wider audience. This is known as Externalisation. Whilst this enlarges the recipient knowledge base, the downside is that the lack of personal interaction may lead to misunderstandings and misinterpretations. 20
Once knowledge is captured, there is an opportunity to classify it and combine it with other knowledge. The trend in the sales figures can now both be seen and associated with other factors, such as sales resources, seasonal buying peaks and troughs, etc. It is often in the process of Combination, that we truly extract knowledge from what was previously really just information. But the truth is that we don't ever really use explicit knowledge directly. In order to use knowledge we have to internalise it. For instance, if you are driving along the motorway and someone pulls out in front of you, it's no good having to look in the glove compartment for the manual (explicit knowledge) on how to avoid an accident - you must have that knowledge internalised. Knowledge is typically fed around the loop through further tacit to tacit exchanges in a continual spiral of evolving knowledge. The model is shown diagrammatically below
The Four Knowledge Transformations
Based on: The Knowledge-Creating Company, Nonaka and Takeuchi, 1995. In mobilising knowledge, one has to consider a holistic view taking account of four important dimensions: 1. People: This needs to address such aspects as personal motivation, a possible recognition programme and incentives for knowledge sharing 21
2. Processes: This should address such issues as Knowledge capture, validation/approval of content and removal of out of date content 3. Organisation: The overall organisation associated with any programme for mobilising knowledge will be a critical aspect in achieving success. Specific roles and policies are required 4. Technology: Technology underpins the programme and helps deliver knowledge to those who (re-)use it In mobilising knowledge it is also critically important to understand the knowledge cycle. The diagram below shows key elements of the knowledge cycle but it is very important to read it the correct way. Start on the left at Use and work your way back anti-clockwise to the top. Too many people start by trying to identify, capture and create knowledge so it can be stored for re-use. This is a recipe for failure. One must start by asking what knowledge is likely to be useful and then implement solutions that help to capture and store that knowledge for sharing. Otherwise, you are likely to end up with a store of knowledge that no-one uses. The Knowledge Cycle
The focus of mobilising knowledge is always around the value that can be achieved. Consequently, it is key to deliver the knowledge at the 'Point of Performance'. The picture below highlights this crucial point by placing the user in the centre of our consideration and the shows the types of knowledge that user may find of value in their business of employee roles in respect of the processes they undertake. 22
Delivering Knowledge at the Point of Performance
In summary, to mobilise knowledge effectively one must: address the management of the four types of knowledge transformation, cover the four dimensions and service the full knowledge cycle focus on the value to be delivered by concentrating on delivering knowledge at the 'Point of Performance in addition, one must build on, and incorporate associated domains of activity:
o Content Management (CM), historically a system used to manage the content of a Web site, with a focus on the managing for presentation but now more about managing and providing access to relevant content across the Enterprise - Enterprise Content Management (ECM) o Document Management (DM), which helps manage the entire life cycle of a document, from creation, through multiple revisions to final version o Records Management (RM) which covers the creation and implementation of systematic controls for records from their creation or receipt through to final disposal or archive. Back 23
Chapter 2
DATA INFORMATION KNOWLEDGE
Data Information Knowledge,- very common terms indeed. We use them everyday in our conversations. But do we really understand the meaning of each, and how they differ from each other? Between Data and Information there is often a bit of confusion,- in fact we tend to use one for the other sometimes. As regards Knowledge, well we understand it is something with much deeper, much wider meaning. But if we are asked to define Knowledge most of us would fumble looking for words to express it. But I suppose we can forgive each other for not being able to do so,- simply because there isnt an agreed definition. Indeed the word Knowledge seems a bit hazy. But trying to understand what Knowledge management means, and how it could be useful in organizations, we do need to clear the haze,- first things first.
Lets make an attempt. Commonsense suggests that we begin with a more familiar territory, - DATA.
As we all know, data is a collection of discrete objects, facts or events,- but has no context. Data is represented in the form of a text, numbers, audio, video, images, or any combination of these. We could collect data in many ways. For instance, surveys, interviews, the use of sensors and so on. The blood pressure instrument the doctor uses thats a way to collect data regarding a persons blood pressure. ECG (electrocardiogram) is a test that measures the electrical activity of the heart. In an ECG test, the electrical impulses made while the heart is beating are recorded and usually shown on a piece of paper. This is known as an electrocardiogram. By itself it has no meaning. This is data.
Or, let us say, when we buy something from the store, as we check out the transaction gets recorded. That is Data. When an organization buys something, sells something, produces something,- it all gets recorded. Someone is present or absent from office, that gets recorded. Thats all data. But by itself it doesnt mean anything. Rainfall data for all 365 days of year for the last 50 years for Delhi city, available with the met department,- again thats data. Primarily, it doesnt carry any meaning no matter how large the quantity of data is.
In order to get a meaning, we need to process the data. When we process the rainfall data we may find that long-term average rainfall in Delhi in the month of May is 17.5 mm. Now thats something useful to us. We call it Information. Basically Information is processed data. For instance, the recorded sales data of the store, when processed appropriately gives product wise, category wise daily sales. Thats meaningful to the store owner for decision making,- for instance whether to reorder the items sold. We need to categorise and summarise the data. In order to convert data into information the following steps are involved: 24
- Collect data - Classify - Sort / merge - Summarise - Store - Retrieve - Disseminate
Depending on what we want to do, some or all of the above steps may be required to convert data to information.
In the early days of computing, if we recollect, we used to call this process Electronic Data Processing ( EDP ). The emphasis was on quantity of data. In the enthusiasm of processing the data and distributing the reports, the bigger picture often got lost. Those tons of paper got distributed to any number of managers in the organization. Trying to process huge data through not so fast and convenient computing devices, the word relevance was in the back seat. Often the report would be so delayed that from managerial point of view it would lose relevance. A marketing manager could hardly react if the sales figure is four months old.
We have moved a world from this picture. Todays computing devices are enormously fast, and collecting data has become extremely easy. For instance, going back to grocery store example, as the sales assistant flashes the bar code scanner on the Universal Product Code stuck on the packet, the store collects a huge lot of information like whats the product, its price, quantity, the time this transaction was done and so on. But the point is no matter how voluminous the collected data is, it has little value to the store owner unless he has the bigger picture,- the context.
Lets see if we can make some sense out of it. By processing the data, the store can figure out the number of transaction carried out during different time periods of the day, week etc. The store owner can now use this information to decide how many counters for check out should be kept open during what time period. He could optimize the customer queue to increase customer satisfaction, and yet save on salaries to sales assistants.
I believe we now realize that while raw data is necessary and important, in order to be useful to us we need to convert it to information by putting appropriate context to it.
Whats Information for one is sheer garbage for another.
I had often seen my daughter play what she calls music while studying seriously for her exam. To me its sheer noise. I would often ask her to reduce the volume at least, if she wouldnt stop that music all together. To me,- I would much like to play a Tagore song ( Rabindra sangeet ). Thats something I enjoy. But to my daughter, being born and brought up at Delhi those Tagore songs are too slow kind of stuff. So it is,- what is information to one could very well be sheer garbage , noise to others. That piece of recordings of Tagore or, whoever, is Data. No argument on that. But is that relevant, 25
does it have a purpose ? As I and my daughter raise this question the answer isnt same. As Drucker rightly said information is data endowed with relevance and purpose.
In our journey from a familiar ground of data to information to a rather cloudy area of Knowledge, we are now around half way. I am saying almost half way because the travel from data to Information is comparatively easier task,- not so as we approach Knowledge.
KNOWLEDGE
Unsure of what it means I did what anyone else would do. I opened the dictionary, - Oxford dictionary for that matter. This is what it has to say against Knowledge: 1. Knowing, familiarity gained by experience 2. Persons range of information 3. theoretical or practical understanding ( of a subject, language etc.)
In an age of web I wanted to explore how others look at the word knowledge. Following is only a sample:
Knowledge is part of the hierarchy made up of data, information and knowledge. Data are raw facts. Information is data with context and perspective. Knowledge is information with guidance for action based upon insight and experience.
Lets pause for a while. Knowledge is part of the hierarchy made up of data, information and knowledge.
This view looks at it as a continuum from data to information to knowledge.
Next sentence says: Data are raw facts. Information is data with context and perspective.
As we said, information has a context, a perspective. Thats how it becomes meaningful. And we can see, knowledge has something to do with experience, insight. Information backed with experience and insight becomes knowledge. Even the Oxford dictionary refers to knowledge as familiarity gained from experience.
Important point is knowledge needs interaction with the world,- and we dont intend to get philosophical -thats how experience is gained. That learning from experience is what is stored in the mind, and is called knowledge. At the organisatioal level, knowledge is stored in the minds of employees. Knowledge can also be stored in diagrams, blueprints, books and such physical media.
We could define knowledge as a mix of experience, values, contextual information, and expert insight that provides a framework for evaluating and incorporating new experiences and information. This definition suggests that knowledge is something that grows with time. 26
A distinguishing factor between information and knowledge is that knowledge has a connotation of action. While information by itself does not lead to action, knowledge does. In the context of an organization, knowledge is what employees know about their customers, about their products, processes, the mistakes they made, as also the success stories. An interesting thing about knowledge assets is that while conventional material assets decrease as they are used, knowledge assets increase with use. When you share your knowledge with somebody, you dont lose anything while the receiver is enriched. Ideas breed new ideas in a spiraling fashion. CHARACTERISTICS OF KNOWLEDGE 1. Extraordinary leverage and increasing returns: Knowledge is not subject to diminishing returns. When it used, it is not consumed. It doesnt get reduced. Users of Knowledge can add to it thereby increasing its value. 2. Need to refresh : Knowledge is dynamic, it is information in action. As environment keeps changing, some knowledge gets obsolete while we add new knowledge and skills. Thus organizations must continually refresh its knowledge base to be able to use as a competitive advantage. 3. Uncertain value: This is very peculiar about knowledge. It is difficult to estimate its value. While a particular knowledge is extremely useful to company A , it could be totally useless to company B. This characteristic is so different from other material assets. A piece of furniture would have a price that wouldnt vary too much. To give an example, while companies hire people, those who dont get selected often get a letter like this : We regret we do not have a vacancy suitable to your qualification and experience . The same applicant gets an offer from another company perhaps at a multiple salary of the previous one. It all depends on how your knowledge is valued by the company. Till a few years back students with Statistics background,- very bright minds indeed, werent valued much by corporate world. Today Google would hire these bright students at fabulous salaries simply because their knowledge of Statistics is of enormous value to Googles search efforts. 4. Knowledge has context 5. Knowledge resides in knower 27
Dimensions of knowledge A key distinction made by the majority of knowledge management practitioners is distinction between tacit and explicit knowledge. Tacit knowledge is often subconscious, internalized. The individual may or may not even be aware of what he or she knows and how he or she accomplishes particular results. At the other end of the spectrum is conscious or explicit knowledge -- knowledge that the individual holds explicitly and consciously in mental focus, and may communicate to others. To a layman, tacit knowledge is what is in our heads, and explicit knowledge is what we have codified. Nonaka and Takeuchi (1995) argued that a successful KM program needs, on the one hand, to convert internalized tacit knowledge into explicit codified knowledge in order to share it, but, on the other hand, it also must permit individuals and groups to internalize and make personally meaningful codified knowledge they have retrieved from the KM system. The focus upon codification and management of explicit knowledge has allowed some knowledge management practitioners to appropriate prior work in information management. This has led to the frequent accusation that knowledge management is simply a repackaged form of information management. Critics have argued that Nonaka and Takeuchi's distinction between tacit and explicit knowledge is oversimplified and that the notion of explicit knowledge is self- contradictory. Specifically, for knowledge to be made explicit, it must be translated into information (i.e., symbols outside of our heads). Another common framework for categorizing the dimensions of knowledge discriminates between embedded knowledge as knowledge which has been incorporated into an artifact of some type (for example an information system may have knowledge embedded into its design); and embodied knowledge as representing knowledge as a learned capability of the bodys nervous, chemical, and sensory systems. These two dimensions, while frequently used, are not universally accepted. It is also common to distinguish between the creation of "new knowledge" (i.e., innovation) vs. the transfer of "established knowledge" within a group, organization, or community. Collaborative environments such as communities of practice or the use of social computing tools can be used for both creation and transfer. TYPES OF KNOWLEDGE Knowledge is of two kinds Explicit and Implicit. While we try to distinguish between them, we need to remember that the distinction is a bit blurred. We will soon see how. Explicit knowledge: It is the visible knowledge available in the form of letters, reports, memos, literatures, etc. It can be easily explained and stored in computer databases. Explicit knowledge can also be embedded in objects, rules, systems, methods etc. 28
Tacit knowledge: Tacit knowledge is confined in the mind of a person, and hence is highly invisible . It is hard to capture and therefore, difficult to communicate to others. Lets take an example. A master craftsman after years of experience develops a wealth of expertise. As we often say Its all in his finger tips. But would he be able to articulate the scientific or technical principle behind what he knows? Perhaps no. Transforming knowledge from tacit to explicit form makes it visible and usable. However, capturing the experts tacit knowledge that resides within him in the form of know-how and insights is indeed a very difficult and challenging task. Roomali roti how to make,- only the man who makes it knows. Can he describe in detail? Perhaps no. Or, lets go back to fish. How does one eat fish without the bones getting stuck in throat ? Trust me even asking a Bengali wont help. He eats it everyday morning and evening,- but he just cant explain. As I said earlier, clearing the hills of Data and Information is easier. But it is very cloudy and hazy when we reach Knowledge. We have dissected knowledge into explicit and tacit. But is the dividing line clear ? We said explicit knowledge is something that could be put on a piece of paper and therefore easily transferable. How about process diagram of an oil refinery ? Or, the logic diagram of a computer ? To understand completely such a written document, which we said is explicit knowledge, it often requires a significant amount of experience i.e. tacit knowledge. It needs a background in engineering. Knowledge Creation Process - SECI Model
According to Professor Ikujiro Nonaka, knowledge creation is a spiraling process of interactions between explicit and tacit knowledge. The interactions between the explicit and tacit knowledge lead to the creation of new knowledge. The combination of the two categories makes it possible to conceptualize four conversion patterns.
Knowledge created in an organization through the process of interaction of tacit and explicit knowledge. It can't be just one way or the other. The knowledge creation happens by different linking processes of these two types of knowledge in the organization. The process of knowledge creation is a continuous one. As knowledge is created between individuals, or between individuals and the environment, individuals transcends the boundary between self and others. As per Ikujiro Nonaka there are four types of knowledge creating process.
1. Socialisation
2. Externalisation
3. Combination
4. Internalisation
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SECI MODEL
Socialization New knowledge is created through the process of interactions, observation, discussion, and so on. Basically, this mode enables the conversion of tacit knowledge through interaction between individuals. One important point to note here is that an individual can acquire tacit knowledge without language. It happens by analyzing what is observed. Apprentices work with their mentors and learn craftsmanship not through language but by observation, imitation and practice. It is like in traditional environments where son learns the technique of wood craft from his father by working with him and not from reading books or manuals. By the way, in the Indian context, much of the traditional art and craft are dying simply because the traditional family no longer exists In a business setting, on job training (OJ T) uses the same principle. The key to acquiring tacit knowledge is experience. Without some form of shared experience, it is extremely difficult for people to share each other thinking process. The tacit knowledge is exchanged through joint activities such as being together, spending time, living in the same environment rather than through written or verbal instructions. In practice, socialization involves capturing knowledge through physical proximity. The process of acquiring knowledge is largely supported through direct interaction with people. Externalization
Externalization requires the expression of tacit knowledge and its translation into comprehensible forms that can be understood by others. In a way the individual transcends the boundaries of the self. During the externalization stage of the knowledge- creation process the individual commits to the group and thus becomes one with the group. Knowledge gets crystallized through this process . The sum of the individuals' intentions and ideas fuse and become integrated with the group's mental world. An example would be quality circles formed in manufacturing sectors where workmen put their learning and experience they have to improve or solve the process related problems.
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In practice, externalization is supported by two key factors. First, the articulation of tacit knowledgethat is, the conversion of tacit into explicit knowledge involves techniques that help to express ones ideas or images as words, concepts, figurative language (such as metaphors, analogies or narratives) and visuals. Dialogues, "listening and contributing to the benefit of all participants," strongly support externalization. The second factor involves translating the tacit knowledge of people into readily understandable forms. This may require deductive/inductive reasoning or creative inference. Combination
Combination involves the conversion of explicit knowledge into more complex sets of explicit knowledge. In this stage, the key issues are communication and diffusion processes and the systemization of knowledge.
The finance department collects all financial reports from each departments and publishes a consolidated annual financial performance report. Creative use of database to get business report, sorting, adding , categorizing are some examples of combination process In practice, the combination phase relies on three processes. Capturing and integrating new explicit knowledge is essential. This might involve collecting knowledge in the public domain from either inside or outside the organisation and the combining such data. Second, the dissemination of explicit knowledge is based on the process of transferring this form of knowledge directly by using presentations or meeting. Here new knowledge is spread among the organizational members. Third, the editing or processing of explicit knowledge makes it more usable (e.g. documents such as plans, report, market data). The knowledge conversion involves the process of social processes to combine different bodies of explicit knowledge held by individuals. The reconfiguring of existing information through the sorting, adding, recategorizing and recontextualizing of explicit knowledge can lead to new knowledge. This process of creating explicit knowledge from explicit knowledge is referred to as combination.
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Internalization The internalization of newly created knowledge is the conversion of explicit knowledge into the organization's tacit knowledge. This requires the individual to identify the knowledge relevant for ones self within the organizational knowledge. That again requires finding ones self in a larger entity. Learning by doing, training and exercises allow the individual to access the knowledge realm of the group and the entire organization. In practice, internalization relies on two dimensions: First, explicit knowledge has to be embodied in action and practice. Thus, the process of internalizing explicit knowledge actualizes concepts or methods about strategy, tactics, innovation or improvement. For example, training programs in larger organizations help the trainees to understand the organization and themselves in the whole. Second, there is a process of embodying the explicit knowledge by using simulations or experiments to trigger learning by doing processes. New concepts or methods can thus be learned in virtual situation.
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Chapter 3
Strategic dimensions of KM; Impact of Business Strategy
Introduction :
To understand strategic dimensions of KM, it is imperative to know the meaning and implications of Business Strategy, its dimensions of KM & overall impact.
(A) Business Strategy: In business parlance, Strategy implies differentiation.
In order to comprehend the overtone of this statement, the onus of any business is to address 3 (three) issues:-
1. How any business creates value for money? 2. How does it make profit? 3. How the business differentiate from others?
The answer to these vital questions is to decide and devise the following:
Business Model identifies customers and describes how the business will profitably address the customers needs and addresses to the first two questions.
Business Strategy is about differentiating how the business satisfies the customers and is addressed to the third question.
Competitive strategy is about being different. It means deliberately choosing a different set of activities to deliver a unique mix of value.
----- Michael Porter Business Strategy is a plan to differentiate the enterprise and give it a competitive edge.
Definition: Strategy is the patterns of decisions that shape the ventures internal resource configuration and deployment and alignment with the environment. 33
Steps for Formulating Strategy:
1. Look outside to identify threats & Opportunity
At the highest level, strategy is to be devised to analyze outside environment. There are threats new entrants, demographic changes, suppliers, product substitute etc.
2. Look inside at Resources, Capabilities,& Practices
A strategy can succeed only if it has the backing of right set of people and other commensurate resources.
3. Consider strategies for addressing Threats & Opportunity
A) Create many alternatives B) Check all facts and question all assumptions C) Get the missing information D) Vet the leading strategy with wisest men you know
4. Build a good Fit among Strategy- Supporting Activities
Strategy is not merely a blueprint for winning customers. It is about COMBINING activities into a chain whose links are mutually supportive.
5. Create Alignment
Development of a strategy is half the work done. The other half is to create alignment between people and activities.
Business Strategy, therefore, basically means differentiation with the competitors. This differentiation can be any or all of these:-
a) Product / Services b) Technology c) Management style & practices ( HRD, Financial Management etc.) d) Marketing
(B) Knowledge Management (KM): To quote T S Eliot Where is wisdom we have lost in knowledge? Where is the knowledge we have lost in information? Where is the life we have lost in living? 34
However, knowledge in KM does not necessarily mean the understanding of any particular knowledge OR the depth of that knowledge - in any subject/topic/arena. Knowledge in KM signifies any activity in the business which adds value to the product/services.
To clarify it could be the methods / applications in any business primary/secondary or even rudimentary whatsoever its degree may be.
Technology, or any aspect of value addition devices which may be any typically efficient, Management system - adopted and practiced by the company could as well be the distinguishing factors. These enable it to be different and hence makes it apart from its competitors.
To illustrate from a common activity in any established business - the way how an attendant serves tea / coffee to the employees / executives during tea/coffee break is also a Knowledge. Because - in absence of that knowledgeable person, or in the eventuality of a replacement serving tea/coffee from the same resources does not always meet the requirement / expectation. The replacement, lacking the expertise, does not know the choices/tastes of the beneficiaries. Consequently un-satisfactory serving may cause less or no satisfaction thereby reducing the efficiency of the concerned employees affecting their performances.
Knowledge is power.
We are living in a knowledge age. Present world economy is rightly termed as Knowledge Economy. Knowledge is the edge by which a business organization can sustain and thereby flourish.
India the new paradigm is rapidly ascending the knowledge chain. India is on the knowledge map as a vibrant source of intellectual capital of the world. The next step on the journey is to move from BPO to EPO (Engineering Process Outsourcing) and then to KPO (Knowledge Process Outsourcing).
What is KM? Knowledge Management is concerned with the knowledge in the work place. Knowledge in the work place is the ability of people and organization to understand and act efficiently & effectively.
Knowledge in a business organization is any activity, technique, technology, or any business process that adds value to the product or service.
KM is a newly emerging inter-disciplinary business model that has knowledge of an organization as its focus. It has many disciplines viz. Business, Economics, Information Technology & Psychology among many others.
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KM involves:-
1. People 2. Technology 3. Processes
KM contains :-
1. Accessible knowledge from outside sources 2. Embedding and storing knowledge in business processes, products and services 3. Knowledge in data-bases and documents 4. Promoting knowledge growth though culture and incentives 5. Transferring and sharing knowledge 6. Assessing the value of Knowledge Assets on regular basis.
KM is the process of i) Gathering Firms collective expertise anywhere in the business ii) Making use of
Knowledge Management is the process of gathering and making use of a firms collective expertise anywhere in the business to add value by creatively identifying, applying, and integrating knowledge in unprecedented way.
Why KM?
KM has already demonstrated a number of benefits. Internet facilitated its development and growth. As a result of KM, systems have been developed to gather, organize, refine, and distribute knowledge throughout the business.
Justifications / Benefits of KM are:-
1. Creates exponential benefits from the knowledge as people learn from it. 2. Business processes become faster and more effective. 3. Enables the organization to respond quickly to customers by a) Creating - New market b) Developing - New product/Services c) Dominating - emergent technologies
4. Ensures successful partnering and core competencies with suppliers, vendors, customers and other stakeholders 5. Shortens the period of learning curve, facilitates sharing of knowledge to achieve higher performance levels. 6. Enhances employee problem solving capacity by providing access to resource files/documents or CD-ROMs
(C) Knowledge Economy Next to be familiar with and aware of the present day scenario, it is moot to follow the evolution the world has undergone. For that, the recent best-seller World is Flat is considered to be a helpful guide.
In this book, Thomas Friedman, the celebrated journalist and the winner of the prestigious Pulitzer award, indicates three distinct phases in human civilization which transformed the world into a close community - hence the name of the book.
As indicated by Friedman, the first phase was in 14 th & 15 th century when Spain, Portugal, under royal patronage, sailors were sent to discover new lands. During this period, Columbus discovered America, Vasco Da Gama came to India. South America was discovered and these countries promptly set up their colonies there. This is the 37
reason for which South America is known as Latin America because of the languages of Spain & Portugal derived primarily and overwhelmingly from Latin.
Industrial Revolution in 18 th /19 th century - is the second phase. Steam was invented by J ames Watt. Steam engine was incorporated in ships. For the first time in human history, transportation was mechanized instead of depending on the vagaries of nature or manual devices. Application of steam was also used for factories manufacturing various industrial items.
In and after Industrial Revolution, civilization turned into manufacturing sector replacing and or complimenting agriculture as the erstwhile main economic activity. Because of the dire necessity of ensuring the raw material and also to avail the markets, western countries started to discover and thereafter capture new-found lands to make those as their colony. France, Britain and Germany were in hot pursuits in that direction.
Subsequently, in consequence of these expeditions, the world became closer in respect of transportation, communication for trade & commerce.
The most significant phase in the recent past is the introduction and proliferation of Internet. By a click in the computer, anyone in any part of the world is connected to another in another part of the globe, however distant it may be. This connectivity and thereby close proximity can be for personal reason or any business purpose. So the World has NOW truly become Flat.
In this context, the competition in trade and commerce has become fierce. Technology is being up-dated regularly and almost daily. As a consequence knowledge in business has to be the latest to remain competitive.
This paradigm shift is the recent transformation. Industrial society is now a Knowledge society. Product or services is no more the determining criterion. Information, innovation and its adaptation through co-operation / collaboration are the present trends. Without this approach, any business can become a failure and incorporation of this philosophy and its implementation makes the business competitive. This process, however, has to remain continuous.
(D) Strategic dimensions of KM Organizations have different goals and objectives. Among various Strategic Management Schools, any organization chooses the most appropriate strategy. To elaborate a Table (I) is enclosed for ready reference.
From the same it can be observed that the necessity and success of any business largely depends on selecting the right approach (To choose the appropriate School) which is in synchronization of its nature of business, and its goal & objectives. Once the goal is determined, then the scope of KM and its application is ordained to meet the corporate goals and strategies. The KM strategy then focuses on the key needs and issues of the organizations.
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To give examples the companies may face the issue of Technology obsolesce, poor financial management, inadequate HR policy thereby causing heavy work-force turn-over etc.
According to this basic necessity of an organization to fit the KM process in alignment of its Business Strategy the alternatives of KM process to be followed may be any of the following:-
1. Deploying system - To capture and document the experiences/ expectations of its employees 2. Facilitations of team-work 3. Improvement of process efficiency 4. Avoiding duplication of efforts 5. Management of risk 6. Avoidance of continuous training without any visible results
A good, clear KM Strategy can help to:
Increase awareness and understanding of KM in the organization
Articulate the business case and identify potential benefits
Gain Senior Management Commitment
Attract resources for implementation
Communicate good knowledge management practice
Give a clear, communicable plan about where you are now, where you want to go, and how to plan to get there
Provides a basis against which to measure the progress.
How do I go about it?
There are many ways to approach the development of a KM Strategy, as well as many ways of presenting the strategy document itself.
There is no one size fits all. Larger organizations will probably need a detailed, formal strategy document whereas for a smaller organization something briefer and less formal might be more appropriate.
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The Strategy Document
As a general guideline, a strategy of any kind tends to include answers to three key questions:
1. Where are we now? 2. Where do we want to be? & 3. How do we get there?
A relatively brief and informal KM Strategy may be structured around these three questions and include things like:
1. Where are we now?
An assessment of the current situation.
How does current knowledge management practice (or lack of it) affect the organizations ability to meet its goals?
How does it affect the effectiveness of individuals and teams?
To what extent do the organizations culture, processes and systems currently act as enablers of, or barriers to, good knowledge management practice?
2. Where do we want to be?
An outline of what KM will do for the organization.
How will it help the organization and the people in it to meet their objectives?
What might good knowledge management practice look like for this organization specifically?
How will you know when you are there i.e. how will you measure the progress and value of your efforts?
3. How do we get there?
Describing the specific actions that will be taken to get to where you want to be. An action plan covering the three key elements of people, processes and technology: what specific knowledge management tools and processes will you use;
How will you motivate people and realign your organizational culture to a knowledge friendly one; and how will you develop the supporting technological infrastructure? Also needs to include details of resources required, deliverables, timescales and responsibilities. 40
Developing Your Strategy
a) In developing a KM Strategy, various practitioners offer a range of tips, some of which are outlined here:
b) Understand what your organizational goals are, and how you are currently performing them
c) Understand and Define the organizations overall Strategy and Goals
d) Purpose of KM is to help the organization to achieve its goals, the KM Strategy should describe that precisely
e) Discuss with key people throughout the organization about strategy and goals
f) Discuss plans for the future, and look at factors that influence reaching goals.
g) Look for gaps that could prevent the organization from achieving its goals.
h) Identify the problems and pains
i) Needs, problems, pains and opportunities give you an opening to use knowledge to make a difference .
Note: A KM Strategy should also be coherent with Human Resources and Information Technology strategies.
(E) Conclusion : 1. KM process, therefore, depends on the strategic alternatives of the organization so chosen. 2. The success of KM largely relies on the Strategic dimension of the organization. KM must align with the goal of the organization. 3. The impact of the Strategy is abiding and irrevocable. 4. Strategy and focus of KM should be guided by a clear strategic focus of the organization. The corporate strategy is, therefore, the precursor of KM and its choice & implementation in sync with the selected strategy brings success to the organization.
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Chapter 4
KNOWLEDGE MANAGEMENT PROCESS
Introduction
In to days world, technology seems to be changing so rapidly that there isnt enough time to develop subject matter experts, training courses and so on. It is not that just technologies are changing faster, but also products and product-lines, laws etc. The world indeed seems to rotate faster. In such a scenario, to be able to survive, and compete effectively organizations are focusing on how to speed up knowledge creation and sharing. Knowledge Management ,-KM is supposed to be the answer to this question
Although every organisation has somehow dealt with knowledge since its beginning this does not mean that it is easy to control and steer KM processes. In a way, organizations cannot truly manage knowledge because it is tacit or internal to individuals. However, they can manage the environment necessary for the community of practice to flourish and share information that is a product of that knowledge. In order that knowledge can be managed - at least to a certain grade, a proper management of the environment, however, is a necessary precondition.
The need for Knowledge Management Process:
The most common reasons that makes having a knowledge management Process necessary: Proper study of products available and hence informed choice is made. Keep the staff researching newer technologies. Better planning and preparation for eventual application selected Transfer of Knowledge to new employees in Enterprise is effective Data loss due to reliance on Email for knowledge transfer Managing sharing rights of crucial data among restricted group Loss of information when staff leave or failure of hardware devices Flexibility to employees for remote access Effective man-management and resource management 42
KM Process Knowledge management is a systematic process by which knowledge needed for an organisation to succeed is created, captured, shared and leveraged. For this reason, knowledge management involves leadership establishing processes, also defined as activities or initiatives, to help organizations adapt to an ever changing environment. Successful knowledge management depends on processes that enhance individual and organizational ability, motivations, and opportunities to learn, gain knowledge, and perform in a manner that delivers positive business results. Organizational processes that focus on these three attributes will lead to an effective management of knowledge. Rewards and other motivational incentives are keys to the knowledge management process. Often members of an organization are unlikely to share insights and ideas within the organization if they are not rewarded for the knowledge sharing. Researchers point to the impact of social rewards as being just as important as monetary rewards. A strong social culture within an organization can promote the transfer of knowledge. Within the midst of this strong culture there is a development of a desire for social cohesion and genuine spirit of reciprocity. A less altruistic and a more egocentric motivation for knowledge sharing within an organization with a strong social culture would be that the employees are willing to transfer knowledge in order to protect their own social standing. Demonstrating uncooperative behavior or attitudes will damage ones reputation and so to afford this social and professional risk, knowledge sharing increases. In the rapidly changing business, political, social and technological environment, there is a challenge to move from an organizational mindset that suggests that knowledge is for the few on the top echelon to an understanding that knowledge once held by the few is available to the masses. In this chaotic and complex twenty-first century, the pace of evolution has entered warp speed, and those who can't learn, adapt, and change from moment to moment simply won't survive. The need to rethink the process of knowledge management even in very large organizations is of paramount importance. After all, we're trying to manage something, -knowledge -that is inherently invisible, incapable of being quantified, and borne in relationships, not statistics. The time to understand knowledge management from a multi-directional perspective has come. Our most important work is to pay serious attention to what we always want to ignore: the human dimension. Understanding knowledge creation as a process of making tacit knowledge explicit--a matter of metaphors, analogies, and models--has direct implications for how a company designs its organization and defines managerial roles and responsibilities within it. This is accomplished within J apanese companies through redundancy, -"the conscious overlapping of company information, business activities, and managerial responsibilities". As a process, redundancy can become a medium that assists in the management of knowledge within an organization. Though to many western managers redundancy may conjure up mental images of "unnecessary duplication and waste", it can assist in the area of employee expectancy, alleviating unnecessary assumptions and confusion. 43
Creating opportunities for individuals to create, retain, and transfer knowledge can be managed through employee development processes. For example, placing individuals in situations where they can gain new experiences, or share learning from a prior experience will enable knowledge management. Many companies have processes to intentionally move personnel across the organization (across units, regions, functions, etc.) for the purpose of transferring knowledge as well as building learning capability and agility within the individuals. Ability, while innate, can also be increased through effective training processes and experiences. Training in analogical reasoning, for example, will increase an individuals ability to transfer knowledge between tasks, assignments, or reporting units, thereby spreading knowledge further across the organization. Recognition and reward processes and systems can also influence the knowledge management process. Members of an organization, who are recognized and rewarded for knowledge transfer are more likely to engage in such sharing of knowledge, especially if it is integrated into the performance management process and will influence their standing or reputation in a positive manner. Knowledge management cannot be proficiently processed independent of creative work that is meaningful, leaders who are trustworthy, and organizations that foster everyones contribution and support by giving the staff time to think and reflect together. KM facilitators We must realise that humans create knowledge, and its natural to create and share that knowledge, - everyone is a knowledge worker, and people choose to share their knowledge. Another process issue is gathering knowledge,- that knowledge exists throughout any given organization, but the ability to inventory or tap into that knowledge is difficult. To revisit the point, we must recognize that knowledge is everywhere in the organization, but we wont have access to it until, and unless we create work that is meaningful, leaders who are trustworthy, and organizations that foster everyones contribution and support by giving staff time to think and reflect together. Given the definition of knowledge as the fact or condition of knowing something with familiarity gained through experience or association, it is impossible to acquire knowledge without either experiencing something yourself or interacting with someone else who has. We should realise that Knowledge Management is not synonymous with IT systems and processes. Rather knowledge resides in the experiences of people in different contexts. With regard to Knowledge Management, the aim of an organization is to work within business processes that create, and transfer knowledge throughout the organization. If knowledge is created and transferred via human experiences then these business processes must encompass an understanding of how people learn and transfer their knowledge; - that is, the business processes must emphasize person-to-person contact. We can take a few examples of business processes that will lead to effective knowledge management : 44
The setting of goals and objective be realistic and recognize the limitations of data mining and information gathering. Make the increase of organizational knowledge a stated and specific goal for the all. Employee retention HR processes should focus on what it takes to retain employees who hold key knowledge. Provide opportunities that are developmental, have purpose, and have a high impact on business performance. Compensate such employees above typical market rates. Employee development processes pairing experts and apprentices provide opportunities for employees with differing levels of knowledge to work together and increase the organizational knowledge. These relationships allow for a true exchange of knowledge through a human relationship and experience. Organized networking and annual conferences these provide forums for face-to- face interaction and knowledge sharing and can lead to effective organizational knowledge management. Accountability line management, not just IT or HR, should be held accountable for knowledge management. They should be held accountable for management of the human resources and organizational knowledge. They do this through the above business processes of employee development (experiences, developmental assignments, etc.). In the process of KM there must be significant steps taken to eliminate any barriers that may get in the way of becoming or increasing the ability to be a learning organization. There must be positive efforts to remove barriers that would inhibit ideas, talent, and money from getting to the point of best use. Managers and leaders play in important role in the success of knowledge management in their organization. There are a few key principles to ensure that information management activities are effective and successful. These focus on the organizational and cultural changes required to drive improvements forward. Those principles are: Prioritise according to business needs Recognise and manage complexity Choose the first project very carefully Deliver tangible & visible benefits Provide strong leadership Mitigate risks Communicate extensively Aim to deliver a seamless user experience The practical value of KM lies is in what it is able to impact, how it impacts, and how well it impacts. The line between KM and business is through the processes of business. KM's biggest impact on business may be in its ability to improve processes and their performance . It is suggested that the changing of processes should take into consideration the role KM plays in this process. In turn, the information that is needed to make decisions to make changes must be identified as well as determining the effects those decisions will generate. 45
An organization that wishes to begin to use Knowledge Management must begin by specifying specific processes. These processes must be supported by technological resources and must facilitate the sharing of information about problems and solutions, improvement suggestions and information concerning best practices practiced by other organizations. Organizations that follow this plan will develop a framework that catalogues, uses and integrates the knowledge used by individuals as organizational knowledge for driving innovation and organizational change. Strategies for developing knowledge management processes within organizations: 1. Define a KM business case. What levels of knowledge and innovation will your agency need to stay ahead of your "environment" and be "competitive?" (Do not start until you can prove you need it.) 2. Baseline your intellectual capital. Knowledge is an intangible asset, but human capital is not--measure current and projected workforce capabilities, your HR investments, and expected return on investment. (Get HR involved from the outset.) 3. Make sure your senior executives are involved. Collaboration and knowledge sharing begin at the top, not at the bottom. Top management has to see how KM will affect performance and why it is critical for innovation and change. 4. Build KM from the bottom up and across. What's most important about any KM program or process is its ability to facilitate knowledge exchange among those individuals closest to the work, to the customers, and to the processes. KM must be an enabling process that captures both best practices and new ideas while promoting access. 5. Balance external and internal. The value of your KM program is multiplied by its reach--it needs to connect to other agencies, customers, and stakeholders. 6. Think technology last and let your investments be in chunks. Allocate 75 percent of your KM IT budget to products you will need to support your first level of KM development . Save 25 percent for building your technology strategy to support future KM phases or new investments. It is worthwhile noting that factors at the individual level greatly influence knowledge processes. These includes a persons perceptions of approachability, credibility and trustworthiness, which directly influences knowledge importing and knowledge sharing. Researchers discovered that scientists in a bio-medical consortium actively filtered knowledge importing by deciding whom they would ask for information, whom they would allow to give them input, and with whom they would share their own knowledge. They made decisions based upon what they felt their co-workers would do with the sensitive information. In each case the scientists made a judgment of co-workers as to their perceived trustworthiness. The importance an organisation gives to Knowledge Management affects its competitiveness and the bottom line in significant ways. There are three important things that can be leveraged in large companies to help take advantage of being a big organization, - money, talent, and ideas. Managing knowledge and intellectual capital increasingly grows as the most critical of these three components that organizations need to align, and use as leverage to foster improvement from within against stiffening 46
competition. Larger organizations can struggle to overcome significant barriers to discover, organize, and utilize what some would call a marketplace of ideas. Overcoming barriers and hindrances to sharing and utilizing great ideas takes discipline and cultural values in which new ideas are readily shared, honoured, and implemented. Fostering an organizational culture that values new ideas necessitates that meetings become places where ideas are shared, appreciated, and implemented in timely fashion. Additionally, infrastructure must connect people in trust relationship with a context where meaningful ideas are shared. Technology and data storage are inadequate to facilitate this kind of transference of new ideas.
KNOWLEDGE MAP KMAP
We are all familiar with City Map, Road Map, and even Weather Map, Political Map or, Physical Map of a country. Any school atlas shows the political map of a country like India, state like Tamilnadu, West Bengal, Bihar and so on. A careful look also shows Geological Map, Map of food grain and other crops, Population Map, Mineral Map and so on. A map is a representation of something. A climate map shows which parts are cooler or warmer, where to expect more rains etc.
However the term Knowledge Map seems a bit weird. In reality however we all know what a knowledge map is, without realizing it. Knowledge Mapping is all about keeping a record of information and knowledge you need such as where you can get it from, who holds it, whose expertise is it, and so on. For instance, if you need to find something at your home or in your room, you can find it in no time because you have almost all the information/knowledge about -what is where- and -who knows what- at your home.
In a similar way, K-map is a map about your organisation and organisational knowledge. K-map becomes handy and shows details of every bit of knowledge that exists within the organisation including location, quality, and accessibility; and knowledge required to run the organisation smoothly - hence making you able to find out your required knowledge easily and efficiently.
Knowledge mapping is a process by which organisations can identify and categorise knowledge assets within their organisation - people, processes, content, and technology. It allows an organisation to fully leverage the existing expertise resident in the organisation, as well as identify barriers and constraints to fulfilling strategic goals and objectives. It is constructing a roadmap to locate the information needed to make the best use of resources, independent of source or form.
Knowledge Map describes what knowledge is used in a process, and how it flows around the process. It is the basis for determining knowledge commonality, or areas where similar knowledge is used across multiple processes. Fundamentally, a process knowledge map contains information about the organisations knowledge. It describes who has what knowledge (tacit), where the knowledge resides (infrastructure), and how the knowledge is transferred or disseminated (social).
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Process of creating a Knowledge Map: Knowledge maps are created by transferring tacit and explicit knowledge into graphical formats that are easy to understand and interpret by the end users, who may be managers, experts, system developers, or anybody. Basic steps in creating K-map for specific task: 1. List the outcomes of the entire process, and their contributions to the key organisational activities 2. Write down the logical sequences of all the activities needed to achieve the goal 3. Figure out the knowledge required for each activity. This in turn gives the knowledge gap. 4. Human resource required to undertake each activity. This would show gap in human resources. What is it that is mapped ? We map such explicit knowledge like a subject of knowledge, whats the purpose, where and in which format the knowledge is stored, who owns it, who are the users , and who has the right to access etc. With regard to tacit knowledge, the map shows the kind of expertise, skill, experience, location, accessibility, contact address, relationships etc. The knowledge which is mapped also includes organizational process knowledge. What do the knowledge maps show? Knowledge map shows the sources, flows, constraints, and sinks of knowledge within an organisation. It is a navigational aid to both explicit information and tacit knowledge, showing the importance and the relationships between knowledge stores and the dynamics. The following list will be more illustrative in this regard: Available knowledge resources Knowledge clusters and communities Who uses what knowledge resources The paths of knowledge exchange The knowledge lifecycle What we know we dont know,- the knowledge gap Where does knowledge reside? Knowledge can be found in such diverse areas as correspondences, internal documents, library, archives like past documents, sales proposals, best practices etc.
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Benefits of K-mapping In many organisations there is a lack of transparency of organisation wide knowledge. Valuable knowledge is often not used simply because people do not know it exists. Even if one knows that the knowledge exists, he may not know where it is. This is where knowledge mapping helps. Followings are some of the key reasons for doing the knowledge mapping: to find key sources of knowledge creation to encourage reuse and prevent reinvention to find critical information quickly to highlight islands of expertise to provide an inventory and evaluation of intellectual and intangible assets to improve decision making and problem solving by providing applicable information to provide insights into corporate knowledge The map also serves as the continuously evolving organisational memory, capturing and integrating the key knowledge of an organisation. It enables employees learning through intuitive navigation and interrogation of the information in the map, and through the creation of new knowledge through the discovery of new relationships. Simply speaking, K-map gives employees not only -know what-, but also -know how-. Key principles of Knowledge Mapping Because of their power, scope, and impact, the creation of organisational-level knowledge map requires senior management support as well as careful planning Share your knowledge about identifying, finding, and tracking knowledge in all forms Recognise and locate knowledge in a wide variety of forms: tacit, explicit, formal, informal, codified, personalised, internal, external, and permanent Knowledge is found in processes, relationships, policies, people, documents, conversations, links and context, and even with partners. It should be up-to-date and accurate. K-mapping - key questions Knowledge map provides an assessment of existing and required knowledge and information in the following categories: What knowledge is needed for work? Who needs what? Who has it? Where does it reside? Is the knowledge tacit or explicit? What issues does it address? How to make sure that the K-mapping will be used in an organisation? 49
Note: K-maps should be easily accessible to all in the organisation It should be easy to understand, update and evolve It should be updated regularly It should be an ongoing process since knowledge landscapes are continuously shifting and evolving Reference: Ezine Articles Knowledge Mapping by Deependra Tandukar http://ezinearticles.com/?Knowledge-Mapping&id=9077
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Chapter 5
Discussion on Knowledge Use Process: Tacit / Explicit Knowledge
Introduction:
To understand the various Knowledge Use processes, it is important to know the phases of Knowledge Management. Like Product Life Cycle, KM has also Life Cycle. and KM System Life Cycle.
KM Life-Cycle is a Four Process interactive activities, as depicted below :-
KM Life-Cycle
Like product Life-Cycle the above is the KM Life-Cycle encompassing Organization Personnel, Culture, Information Technology to facilitate Management-Decisions. KM requires a system to achieve its goals. Accordingly. KM systems are evolved. Like KM Life-Cycle the KM System has also a life cycle.
Knowledge Architecture is a combination of People, Content & Knowledge sharing. People with knowledge provide content, relying on technology to transfer and share knowledge.
Nonaka (1995) coined the terms Tacit Knowledge & Explicit Knowledge. For conversion of knowledge between tacit and explicit knowledge he developed a model known as Nonakas Model. The model is helpful and widely used for Knowledge Creation & Knowledge Transformation. Evaluate Existing Infra-Structure Form the KM Team Knowledge Capture Design KM Blueprint Post-System Evaluation Manage change and Rewards structure Implement the KM System Verify & Validate the KM System 52
Tacit Internalization Communication Explicit Knowledge Knowledge
Explicit Knowledge Explicit Knowledge
Diagram 2
Tacit to Tacit
Socialization
(Team Meetings & Discussions) Tacit to Explicit
Externalization
(Dialogue within Team Answer & Questions) Explicit to Tacit
Internalization
(Learn from a Report) Explicit to Explicit
Communication
(Email a Report)
One of the main tasks of Knowledge Management is to capture tacit knowledge. This is to extract problem-solving knowledge from human expert. There are three levels of Experts:
1. Highly Expert 2. Moderately Expert 3. New Expert
Knowledge Developer is to decide on the most qualified expert among the above three for the particular situation. 53
Knowledge Capture:
Knowledge capture is the process by which the Experts thoughts and experiences are captured. Three important steps are :-
1. Using an appropriate tool to elicit information from the Expert 2. Interpreting the information and inferring the Experts underlying knowledge 3. Using the interpretation to build the rules that represent the Experts thought processes or solutions
Note: The KM systems task is not simply to display the knowledge but also to codify it at different level of reasoning or explanation.
Knowledge Developer uses SINGLE or MULTIPLE experts for knowledge capture.
Advantages and Drawbacks of using Single and Multiple Experts
Advantages :
Sl No. Single Expert Multiple Experts 1. Ideal for a simple domain KM system Works best for complex problem domains 2. Works well for problems in a restricted domain Stimulates interaction and synthesis of experiences 3. Simplifies logistical issues Presents a variety of views 4. Increases the probability of resolving conflicts Generates more thoughtful contributions 5. Decreases risks to confidentiality
Disadvantages :
Sl No. Single Expert Multiple Experts 1. Not easy to capture an Experts tacit knowledge Creates scheduling difficulties 2. Provides only a single line of reasoning Increases the probability of disagreements 3. Increases the chance of schedule changes Raises confidentiality issues 4. Does not accommodate dispersed knowledge Requires more than one knowledge developer 5. Leads to process loss
Steps for Knowledge Capture:
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a) Understanding the Experts style b) Preparing for the session c) Conducting interview d) Assessment of the exercise
Interviews vary from structure to unstructured. Unstructured interview is used when the knowledge developer wants to explore an issue. The structured interview is used when knowledge developer wants specific information.
Apart from individual efforts of Knowledge Developer to capture tacit knowledge from Expert(s), other Knowledge Capture techniques/ methods are as under:
1. Brainstorming :
It is unstructured approach to generate ideas about a problem. Knowledge Developer invites two or more experts into a session in which discussions are carried out and a variety of opinions are tossed around.
After the first step of idea generation, the opinions are grouped logically and evaluated. Then the consensus is arrived in order to reach agreement on the final solution.
Guidelines for Brain-Storming Session
a) Restrict number of participants to 2-6 b) No hierarchy No ranking during session c) Problem needs to be well defined d) Duration should be 40 60 minutes e) Circular or U shaped sitting arrangement to make it interactive f) Throw logic out of the window. Playful attitude is to be encouraged g) Encourage ideas even if they are wild & extreme h) Stress on Quantity more Quality not important (which will be evaluated later) i) Forbid evaluation or criticism at Brain-Storming session to ensure/elicit original ideas 55
2. Mind Mapping : It is an extension of Brain-Storming. Mind-mapping is a graphical technique. a) Start by writing down or sketching a picture b) Write down every idea connecting to central picture Word or a line c) Connect with a line to the central picture d) The perceived idea, considered best, is selected as possible solution
3. Delphi Method : The Delphi method gets its name from the ancient Greek oracle at Delphi, who was said to be able to look into the future. The steps are: a) A panel of experts is asked to prepare an anonymous opinion about a focused problem domain. Each person is usually given a short written explanation of the problem. b) For the second round, each expert is given a summary of the results of the first round and is asked to make a second (still anonymous) estimate on the same issue. Based on the additional information and reasons provided in the summary. An expert may stick to or change his or her initial answer. c) Step 2 is repeated two or more times and then a final summary is prepared. d) By this exercise, all extreme estimates are deleted, and those remain will converge on a narrow range of answers.
4. Rapid Proto-typing : This technique/ method is on Build-As-You-Go approach. Here, all the respondents are encouraged to put forward their opinions as it comes. This is an incremental / iterative process. In this process random thoughts are encouraged and progressive selection of feasible idea is finally selected.
Three Rs a) Rough Idea b) Rapid Idea c) Right Idea
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Conclusion :
Knowledge in tacit and explicit forms, is the critical factor for attaining competitive advantage. Hence a conducive culture needs to be articulated and encouraged to share knowledge all along the organization. Knowledge Developer plays a key role in achieving these goals by applying the methods of:-
1. Capturing the Tacit Knowledge 2. Transferring the same to Explicit Knowledge 3. The methods to be adopted largely relies on appropriate techniques of:- a) Selection of Single or Multiple Experts b) Devising the right Questionnaire
Note: The success of this exercise depends on integrating the favourable HR practices into the organizational framework to facilitate Knowledge Capture & Knowledge Sharing to improve the efficiency and effectiveness of any organization to attain and sustain competitive advantage.
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Chapter 6
Introduction to Knowledge Sharing Tools & Techniques Introduction Enterprises are realizing how important it is to "know what they know" and be able to make maximum use of the knowledge. This knowledge resides in many different places such as: databases, knowledge bases, filing cabinets and peoples' heads and are distributed right across the enterprise. All too often one part of an enterprise repeats work of another part simply because it is impossible to keep track of, and make use of, knowledge in other parts. Enterprises need to know: What their knowledge assets are; How to manage and make use of these assets to get maximum return. Most traditional company policies and controls focus on the tangible assets of the company and leave unmanaged their important knowledge assets. Success in an increasingly competitive marketplace depends critically on the quality of knowledge which organizations apply to their key business processes. For example the supply chain depends on knowledge of diverse areas including raw materials, planning, manufacturing and distribution. Likewise product development requires knowledge of consumer requirements, new science, new technology, marketing etc. The challenge of deploying the knowledge assets of an organization to create competitive advantage becomes more crucial as: The marketplace is increasingly competitive and the rate of innovation is rising, so that knowledge must evolve and be assimilated at an ever faster rate. Corporations are organizing their businesses to be focused on creating customer value. Staff functions are being reduced as are management structures. There is a need to replace the informal knowledge management of the staff function with formal methods in customer aligned business processes. Competitive pressures are reducing the size of the workforce which holds this knowledge. Knowledge takes time to experience and acquire. Employees have less and less time for this. There are trends for employees to retire earlier and for increasing mobility, leading to loss of knowledge. 58
There is a need to manage increasing complexity as small operating companies are trans-national sourcing operations. Note: A change in strategic direction may result in the loss of knowledge in a specific area. A subsequent reversal in policy may then lead to a renewed requirement for this knowledge, but the employees with that knowledge may no longer be there. Knowledge assets are the knowledge regarding markets, products, technologies and organizations, that a business owns or needs to own and which enable its business processes to generate profits, add value, etc. Knowledge management is not only about managing these knowledge assets but managing the processes that act upon the assets. These processes include: developing knowledge; preserving knowledge; using knowledge, and sharing knowledge. Therefore, Knowledge management involves the identification and analysis of available and required knowledge assets and knowledge asset related processes, and the subsequent planning and control of actions to develop both the assets and the processes so as to fulfil organisational objectives. Why is Knowledge Management Difficult There are many problems associated with identifying these knowledge assets and being able to use them and manage them in an efficient and cost-effective manner. Enterprises need: to have an enterprise-wide vocabulary to ensure that the knowledge is correctly understood; to be able to identify, model and explicitly represent their knowledge; to share and re-use their knowledge among differing applications for various types of users; this implies being able to share existing knowledge sources and also future ones; to create a culture that encourages knowledge sharing. Knowledge engineering methods and tools have come a long way towards addressing the use of a company's knowledge assets. They provide disciplined approaches to designing and building knowledge-based applications. There are tools to support the capture, modeling, validation, verification and maintenance of the knowledge in these applications. However these tools do not extend to supporting the processes for managing knowledge at all levels within the organization. At the strategic level the organization needs to be able to analyze and plan its business in terms of the knowledge it currently has and the knowledge it needs for future business processes. At the tactical level the organization is concerned with identifying and formalizing existing knowledge, acquiring new knowledge for future use, archiving it in organizational memories and creating systems that enable effective and efficient application of the knowledge within the organization. At the operational level knowledge 59
is used in everyday practice by professional personnel who need access to the right knowledge, at the right time, in the right location. A Knowledge Management Framework The knowledge management framework was originally based on work by Van Der Spek and De Hoog. It covers: Identifying what knowledge assets a company possesses o Where is the knowledge asset? o What does it contain? o What is its use? o What form is it in? o How accessible is it? Analyzing how the knowledge can add value o What are the opportunities for using the knowledge asset? o What would be the effect of its use? o What are the current obstacles to its use? o What would be its increased value to the company? Specifying what actions are necessary to achieve better usability & added value o How to plan the actions to use the knowledge asset? o How to enact actions? o How to monitor actions? Reviewing the use of the knowledge to ensure added value o Did the use of it produce the desired added value? o How can the knowledge asset be maintained for this use? Did the use create new opportunities?
Techniques to Manage Knowledge Knowledge modeling techniques that exist to support the use of the knowledge, along with traditional business management techniques, provide a starting point to manage the knowledge assets within a company. Therefore the techniques we employ for managing knowledge within the organization are drawn from these two distinct areas: (1) The techniques that have been used previously from business management, for example, SWOT (Strengths Weaknesses Opportunities Threats) analysis, Balanced Scorecards (1996)), Modeling Languages such as: IDEF (Process Flow and Object State Description Capture Method (1992)) RADs (Role Activity Diagrams, (1993)); (2) The knowledge techniques that have been used previously for the disciplined development of knowledge-based applications Recommended approach is a multi-perspective modelling approach.
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Several models need to be developed, each of which represents a different perspective on the organization which can be characterized as How, What, Who, Where, When and Why How the organization carries out its business - modeling the business processes What the processes manipulate - modeling the resources Who carries out the processes - modeling capabilities, roles and authority Where a process is carried out - modeling of the communication between agents When a process is carried out - this specifies the control over processes Knowledge Management Roadmaps Knowledge Asset Road Maps highlight the critical knowledge assets required by an organization to meet market needs five to ten years in the future. They are mechanisms enabling organizations to visualize their critical knowledge assets, the relationships between these and the skills, competencies and technologies required to meet future market demands. They allow: Individual knowledge management actions to be defined and justified in terms of their contribution to the overall aims. Effective communication of the work and progress on the programme to the participants and observers. Management aids for those involved in carrying out the programme and measuring its progress. More effective communication between users, researchers, technicians, managers and directors involved in the various aspects of the programme. Sensible decisions to be taken on the opportunities for further exploiting the results of the programme The identification of knowledge gaps that need to be filled. The Road Map is a living document regularly updated and serves as a framework for the monitoring of the knowledge management programme. The document reflects the current state of the interrelationships between work in progress and proposed for the future and the overall milestones and aims of the programme.
Knowledge Transfer & Sharing
After knowledge is captured, codified and deployed; the goal is to turn knowledge into action or to transform individual learning into organizational learning. Knowledge transfer is to demonstrate how knowledge is transferred to the right party in the right format and at the right time.
Knowledge may be transferred from repositories to people, from team to individuals, and between individuals. Various ways are:
1. Knowledge bases, Databases or Internet 2. Between Persons & Computers 3. Between Computers & Computers 61
4. Teams & Individuals
The process of knowledge transfer & sharing is depicted in the following diagram-
Knowledge Transfer & Sharing
The terms Transfer and Share are interrelated. Knowledge is personal. The term Share signifies an exchange of knowledge between individuals, between or within teams, or between individuals and knowledge bases, repositories. Guidelines for knowledge transfer and sharing:
1. Create an atmosphere of trust in the organization 2. Instill the culture to accommodate change 3. Ensure that cooperation and collaboration are not competition or rivalry 4. Ensure employee stability and job satisfaction.
Main types of knowledge transfer methods are:
1. Collective Sequential Transfer
An ongoing team specialized in one specific task moves to other locations and performs the same task. Once the task has been completed, the same team reuses the same knowledge, goes to another new site, builds the same system, and so forth.
2. Explicit Inter-Team Knowledge Transfer
This allows a team that has done a job on one site to share the experience with another team working on a similar job on another site. Inter-Team knowledge transfer is explicit knowledge. Most of this type of knowledge transfer is routine work and the procedure is precise. Knowledge Transfer Knowledge Sharing Database Knowledge Base Web Browsers Web Pages Collaborative Tools, Networks Intranet 62
3. Tacit Knowledge Transfer
The team receiving tacit knowledge is different by location, by experience, by technology, and by cultural norms. Knowledge needs to be modified in language, tone, and content to ensure that the receiving team can use it effectively. Knowledge Codification After knowledge capture, the next step is to find a way to codify and organize knowledge into a form for others to use when needed getting the right knowledge to the right people at the right time.
Knowledge Codification is organizing and coordinating knowledge before the user can access it. It must be in a form and a structure meaningful for access at any time, from anywhere, by any authorized person. Codification is a prerequisite to knowledge transfer.
Nonakas Model tag the four possible relationships between tacit and explicit knowledge and the resulting outcome of Codifying tacit knowledge is complex and is more an art than science. Several ways of encoding facts and relationships are:
One of the underlying principle of knowledge capture You cant verbalize unless you visualize is the basis. Knowledge is codified to visualize it via Knowledge Maps.
A Knowledge Map is a visual representation, not a repository of knowledge. It is a directory. The main purpose of Knowledge Maps is to direct people where to go when they need certain expertise.
There are five key elements:
i) The Map depicts visually the business issue or problem. ii) A set of question is devised to guide groups collaborative discussions. iii) Facts are represented to the group to focus on the realities of the problem iv) The collaborative discussion is organized by a coach in an open environment v) Finally, post-session follow-up activities are reviewed and conclusions are drawn.
Decision Table :
Decision Table is like a spreadsheet. It is divided in two parts:
a) A list of conditions and their respective values b) A list of conclusions
The various conditions are matched against the conclusions and the final decision is taken to frame the rule.
Decision Tree : A Decision Tree is a hierarchically arranged semantic network. It is closely related to a Decision Table. It is composed of nodes representing goals and links that represent decisions or outcomes. A Decision Tree is read from left to right.
Frames : A Frame is a structure or a codification scheme for organizing knowledge through previous experience. It handles a combination of declarative and operational knowledge which makes it easier to understand the problem domain.
Knowledge Portals: A portal is a secure, Web-based interface that provides a single point of integration for access to information, applications, and services to all people. Google, Yahoo! etc are the examples.
Data Mining: Data mining is the process of extracting useful patterns and regularities from large bodies of Data. The DM process is best illustrated by a seven-tep methodology: 1. Business understanding 2. Data understanding 64
3. Data preparation 4. Data modeling 5. Analysis of the results 6. Knowledge assimilation 7. Deployment evaluation Back
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Chapter 7 Assignment
1. Case Study Marconi 2. Elaborate the following quote: ( 800 1000 words )
It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change. said Charles Darwin. CASE: MARCONI From: http://www.cio.com/article/30646 Acquisition Spree Leaves Marconi in Need of Knowledge Management (KM) Louise Fickel, CIO November 01, 2001 When Marconi went on a shopping spree and acquired 10 telecommunications companies over a three-year period, it faced a serious challenge: How could the $3 billion manufacturer of telecommunications equipment ensure that its technical support agents knew enough about newly acquired technology to provide quick and accurate answers to customers on the phone? And how could Marconi bring new agents up to speed on all the companys products? Marconis technical support agents, 500 engineers scattered in 14 call centers around the globe, field approximately 10,000 questions every month about the companys products. Before the acquisitions, agents had relied on Tactics Online, an extranet where they and customers could search for frequently asked questions and text documents. As new agents and products joined the companys ranks, Marconi wanted to supplement the website with a more comprehensive knowledge management system. As engineers from the newly acquired companies came on board, however, they were hesitant to share their knowledge about the products they had been supporting. "They felt that their knowledge was a security blanket that helped guarantee their jobs," says Dave Breit, director of technology and R&D for managed services in Warrendale, Pa. "With all of the acquisitions, it was essential that we all avoid hoarding knowledge and share it instead." At the same time, Marconi wanted to streamline its customer service organization by making more of its product and systems information available directly to customers and shortening the length of customer calls. "We wanted to leverage the Web for customer self-service versus increasing the number of agents," Breit says. "We also wanted to 66
provide our frontline engineers [who interact directly with customers] with more information more quickly so that they could resolve more calls faster." Building on a KM Foundation When Marconi began evaluating knowledge management technologies in the spring of 1998, the concept of sharing knowledge among agents was nothing new. Agents were already accustomed to working in teams of three or four people, gathering in war room fashion to solve customers technical issues. And a year earlier, Marconi had started basing a percentage of agents quarterly bonuses on the amount of knowledge they submitted to Tactics Online as well as their involvement with mentoring and training other agents. "Each agent was expected to teach two training classes and write 10 FAQs to earn their full bonus," says Breit. "When we brought new companies online, the new agents received the same bonus plan. This approach allowed us to build a very open knowledge-sharing environment." To augment Tactics Online, Marconi chose software from ServiceWare Technologies, in part because its technology would integrate easily with the companys Remedy CRM system, which agents use to log incoming calls from customers and track other customer interactions. In addition, says Breit, Marconi wanted its agents to populate its existing Oracle database of product information. Breits division spent six months implementing the new system and training agents. The system, dubbed KnowledgeBase, is linked to the companys CRM system and is powered by the Oracle database. The integrated view of Marconis customers and products provides agents with a comprehensive history of interactions. Technical support agents can, for example, put markers in the database and immediately pick up at the point where the customer last spoke with another agent. On the Front Line Tactics Online complements the new system. "The data stored in KnowledgeBase are specific troubleshooting tips and hints on our various product lines," says Zehra Demiral, manager of knowledge management systems. "Tactics Online, on the other hand, is more of a doorway for customers to come into our customer support organization. From there, customers can access KnowledgeBase or their service requests or our online training manuals." Technical support agents now rely on KnowledgeBase for the latest solutions to customers product and systems problems. Level 1 agents answer all incoming calls, solve customers problems when possible, record the calls in the companys CRM system and transfer the more difficult calls up the line to Level 2 agents. Level 2 agents, meanwhile, are the heart of the organization, composing about 70 percent of the technical support organization. They handle the more difficult calls and troubleshoot and diagnose equipment and network problems. "Theyre the majority of our knowledge users and contributors," says Breit. "They write up a synopsis of the call and feed it into KnowledgeBase [on an ongoing basis] so that other agents can refer to the solution later." 67
After Level 2 agents submit their knowledge "raw" to a holding queue, Level 3 agents confirm the accuracy of the information, make any necessary changes and then submit the document to Demiral. (Level 3 agents also act as consultants, helping Level 2 agents solve problems and serving as intermediaries between the agents and the companys engineering departments.) The entire process of updating the KnowledgeBase system with a new solution typically takes between three days and two weeks. Changing Roles As Breit anticipated, implementing KnowledgeBase has changed the agents roles. Level 1 agents, for example, now do more in-depth troubleshooting because they have more information available at their fingertips. In fact, they solve twice as many calls themselves (50 percent instead of 25 percent) in a shorter time (10 minutes versus 30 minutes). Since Level 1 agents can handle more calls, this group has doubled in size during the past two years. The transition wasnt quite as painless, however, for the Level 2 and Level 3 agents. Indeed, their roles changed significantly. "Rather than simply submitting HTML pages to Tactics Online, they were now asked to analyze the problems in a very procedural way and create diagnostic trees," says Breit. "Thats a more analytical way to think through a problem. Most of these guys had thought in terms of what is the fastest way to solve a problem rather than what is the most efficient way to solve a problem." With hundreds of people submitting solutions, Marconi tended to get a lot of wheel reinvention. "There can be five or six ways to solve the [same] problem, but theres one way thats most efficient," Breit says. To unearth and disseminate the most efficient solutions, agents were required to flowchart each of their solutions for the first three months following KnowledgeBases launch. "Its amazing how many [agents] were unconscious of their own methodologies," says Breit. "It was somewhat painful, but they eventually felt they benefited because they understood how they solve problems." As a result, agents now create technical solutions for customers in the most efficient?and logical?way possible instead of simply offering a "quick and dirty" solution. Think of the difference between simply being told what keys to strike on your PC and being taught how your software works and the logic behind executing a certain sequence of keystrokes. Once you actually understand how the product works, you can use the software more effectively and resolve more problems yourself. Agents also had to change the way they present the solutions to customers. "We wanted to provide a collaboration tool for employees and a library source for our customers," says Demiral. "Engineers wanted to provide a lot of detailed information yet we needed a degree of simplicity for customers. Most of the time, the immediate focus is on what a great collaboration tool this is and how it overcomes geographical distance among agents. Then I have to remind [agents] that this is a tool that we want customers to use and that theyll have to organize, write and present the content with customers in mind." 68
Making It Work Demiral spent a lot of time working with the Level 3 agents to make their solutions less complex and streamline the review process. "We had to go through two iterations of how to organize and present the content," Demiral says. "Customers tend to think in terms of the product and then the problem. But engineers often think about the problem first and then the product." The result: Customers often wouldnt fully understand the solution. At the same time, Marconi had to work at easing Level 3 agents concerns that making them responsible for reviewing solution content would suddenly turn them into technical writers. Marconi confronted cultural issues as well. "Business needs are different in different parts of the world," says Demiral. "What may be normal business practice for Americans may not be common elsewhere." In Europe, for example, the value of the KnowledgeBase system was not readily accepted. But once employees there saw that customers could use the system to solve some of their own problems, they got on board. Such an experience has been incorporated into how Marconi approaches KM. "We sometimes have to introduce the idea of knowledge management over time, validate it, and then move forward," Demiral says. To ensure that agents continue contributing new knowledge to KnowledgeBase, Marconi uses rewards. Besides bonuses, knowledge contributors receive recognition during meetings and in a newsletter. "Rewards help feed this culture," Breit says. "Peer pressure also plays a role. Everyone wants to contribute because its the right thing to do. You also have to make sure that the system works well and that employees use it long enough to see it work. It has to be embedded in training and fully integrated into daily operations so that it just becomes part of how you do business." 2008 CXO Media Inc.
Questions: 1. Critically comment on the KM initiatives at Marconi. Give your reasons. Mergers and acquisitions being fairly common in the current business scenario, what in your opinion are the biggest concerns for the organizations ?
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Chapter 8
Overview of Other KM Tools & Techniques
Introduction: Overview of KM Tools & Techniques cover the following:- (A) KM Practices (B) KM Tools (C) KM Technologies (D) KM Techniques (E) Critical Analysis of KM Process (F) Data Mining (G) Conclusion
(A) KM Practices
In order to understand the requirements and implications of various KM Tools and Techniques it is imperative to know the various phases / steps of KM Practices. These are :- i) Assessment - the effectiveness of knowledge management ii) Strategizing - planning KM, linking KM to business strategies iii) Knowledge Creation - creativity, generation iv) Gathering - needs analysis, collection strategies v) Organizing - schems, taxonomies, information architectures vi) Conversion - tacit to explicit etc., harvesting vii) Sharing - mechanisms, sharing best practices, work environments viii) Communities - Communities of Interest and Practice, Knowledge Networking ix) Learning - learning programmes, learning tools x) Exploiting - commercializing, licensing etc. xi) Evaluating - measuring intellectual capital xii) Trading - knowledge markets xiii) Governance - corporate policies, protection, ethical issues.
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(B) KM TOOLS KM Tools are resources for planning knowledge management (KM) projects - projects that promote sharing and use of knowledge such as ideas, expertise, best practices. (C) KM Technologies KM Technology is that knowledge gained by studying the techniques of managing knowledge. Included are the tasks of knowledge creation, knowledge sharing (incorporating knowledge classification and recording, even writing is a KM technique) and the managing of the person who knows, the entity that delivers the knowledge to where it is needed, at the point of acting upon an object the knower wishes to change. Computers and the various configurations made possible through software, are only part of the technology of KM. Reconciling the concepts of technology and knowledge emphasizes the need to take a more holistic approach, encouraging practitioners to take a look at the broader set of techniques available for doing KM. KM Technologies include the following:- Knowledge Discovery - data mining, text mining, visualization Content Creation - creativity tools, content management systems Infrastructure - intranet, extranet, portal building software Information Retrieval - search engines, intelligent agents Competences/Expertise Profiling - expertise directories Knowledge Sharing - computer conferencing, portals, document management Sense Making - pattern recognition, Concept Mapping, filtering Integration - KM/CMS suites, enterprise application integration (EAI), portals. Standards - XML, metadata standards (D) KM Techniques These are the methods, ways or procedures used to accomplish or achieve an end goal or objective. KM techniques are usually intended to focus on specific and essential knowledge, and using KM techniques can allow for knowledge to be validated, to collate knowledge from various expert sources and to build a framework from which non-experts are better able to understand the experts knowledge. There are a variety of KM related techniques used to accomplish specific objectives related to knowledge creation, transfer and utilization including for example: metaphors, 71
story telling, narrative, anecdotes, collaboration, after action reviews, peer assists, retrospect, knowledge cafes, positive deviance, contextual inquiry, surveys, focus groups, facilitated discussions, social network analysis, problem solving, benchmarking, group think, laddering, 20-questions, repertory grid, knowledge mapping, knowledge modeling, and knowledge communities (including Communities of Practice, Communities of Interest, Communities of Purpose). Many techniques used in KM have been developed or adapted to assist in eliciting knowledge from Subject Matter Experts (SMEs). When used in this manner these are generally referred to as Knowledge Acquisition (KA) techniques. While it may seem to those new at KM that there are many different types of techniques which can be selected (seemingly at random) the reality is that the selection of KM techniques is often driven by and tied to a specific need to elicit a particular type of knowledge. And one viewpoint is to assume that most KA or knowledge eliciting focuses on either concept knowledge or process knowledge, each having their own range within the parameters of tacit-to-explicit knowledge. And in using techniques to elicit knowledge it is not uncommon to begin using more natural techniques and then to move toward more formal or contrived techniques. (E) Critical Analysis of KM Process
Vision
Does the overall process vision of the organization and its people embrace the acquisition, development, sharing and exploitation of information, knowledge and understanding and the provision appropriate support tools? Who IS responsible for this vision. Does the individual's role specifically embrace knowledge entrepreneurship?
Is the vision translated into actual processes with the necessary people, organization and supporting systems, procedures and tools and a knowledge framework in place to operate them effectively? The following questions could be used to identify areas of deficiency: What processes are in place specifically to support the acquisition, development sharing and exploitation of information knowledge and understanding? Is relevant information and knowledge captured and shared at each stage of these processes? Can this be done in a variety formats? Are feedback loops, and opportunities for the review, refinement, sharing and exploitation of information, knowledge and support tools built into the operating processes of organization?
Process ownership and status
Is each of the relevant processes owned, approved and operational? In particular: Does each process have an owner who is accountable for 3". To end performance? 72
Are the process roles and responsibilities clear to the process owners, and in relation to other processes? Has the overall process vision holders approved the processes?
Process documentation
Is each Process adequately documented? In particular:
Have appropriate diagrams been produced? Do these clarify supporting knowledge and tool requirements? Have all significant areas been covered?
Does the documentation capture the essence of what is special about the organization and its activities and offerings?
Is the documentation stored in an accessible form? Is it considered part of the intellectual capital of the organization?
Are exploitation opportunities reviewed, for example licensing the processes to other organizations?
Are the diagrams for the documented areas up to date? Are arrangements in place to capture any changes?
Are links with other related processes, for example providing triggers or receiving outputs, clear and understood?
Where appropriate, is supporting process documentation available in a compatible format and on a central repository?
Does the process documentation include sufficient explanatory notes to guide users?
Could the documentation be used for induction and training purposes? Might this be a source of external income?
If appropriate, is relevant information available on a corporate Intranet? If not, are other arrangements made to provide help desk support to the operators of these processes?
Process management
Are arrangements in place for the proper management of each process? In particular:
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Have process performance objectives been set for process outputs, efficiency and improvements? Have appropriate measures been established? Are these reported and monitored?
Are people operating the processes provided with the job support tools and other enablers they will require to achieve desired performance improvements?
Have points within the processes been identified at which operational and/or management reports could and/or should be generated?
Have the process owners specified 'the reports required to monitor and manage the processes? Have arrangements beer made for these to be generated?
Do the reports cover the extent to which the acquisition, development, sharing and exploitation of information, knowledge and understanding, and the proper use of support tools are occurring?
Process operation and support
Is each of the processes properly supported? In particular:
Is an appropriate form of organization in place? Is this documented?
Do the people concerned have job or role descriptions? Do these cover the acquisition, development, sharing are exploitation of information, knowledge and understanding?
Are adequate systems, procedures and job support tools in place? Do these include appropriate approaches, tools and technologies for supporting the acquisition, development, sharing and exploitation of information, knowledge and understanding?
Have the supporting systems, procedures and tools been properly tested and documented? Is adequate back-up and technical support provided? .
Have the people operating the processes been adequately trained? What specific tests of competency have they passed. Is further development required?
Does the competency framework of the organization specifically embrace competencies relating to the acquisition, development, sharing and exploitation of information, knowledge and understanding, and the use of job support tools?
Have appropriate arrangements been negotiated with shared learning and knowledge creation and exploitation support partners?
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Are people operating the processes aware of their roles and responsibilities and supporting systems, procedures, tools and partnerships?
In the case of new and re-engineered processes has a knowledge transfer plan been prepared to ensure that the process teams (and the business unit/area concerned) will be sufficiently confident and competent to operate the processes at the 'go live' date?
What changes to support arrangements will be required there- after to ensure effective operation? Are the necessary steps being taken to ensure that these are in place, documented and monitored?
What is being done to capture and exploit knowledge specifically relating to the support of the processes concerned?
Could this knowledge and any of the tools be used to support the people and processes of other organizations?
Process review and revision
Are arrangements for process review and revision in place? In particular:
At what intervals are the processes and job support tools reviewed to ensure they continue to reflect process designs and current objectives and priorities?
Who undertakes these reviews?
Are the knowledge creation and exploitation aspects adequately addressed?
When systems developments, activity changes and other projects that may have process implications are undertaken, are the risks to process integrity assessed?
If changes are to be made, who examines their consequences?
Are the implications for knowledge creation and exploitation adequately assessed?
Process control
Are arrangements for process control in place? In particular:
Are controls in place to prevent unapproved changes from occurring?
Are there controls to ensure overall process considerations are taken into account when individual changes are made?
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Who is responsible for ensuring that proposed changes and updates to the processes are compatible with overall 'end-to- end' or total process requirements?
Do controls adequate\y address know\edge creation and exploitation considerations?
Are changes and updates approved by the business process vision holder?
Process context
Where do the processes fit within the overall corporate organization? In particular:
In relation to new processes, who is to run the business units/areas concerned when the processes 'go live'?
Who will form the unit/area management teams?
Have these teams been given a clear direction, and clear goals and priorities? Do these cover the acquisition, development sharing and exploitation of information, knowledge and understanding, and the use of relevant job support tools?
Have the roles and responsibilities of unit managers and other team members been agreed? Are these clear in relation to boundaries and interfaces with other groups?
What are the key lateral relationships with other business units/areas? Are appropriate liaison relationships in place;
Will training and development be needed to equip the business unit/area teams, and their individual members, to operate effectively?
Will this cover the creation and exploitation of knowledge and the use of appropriate job support tools? How important is this for the teams concerned?
Are the members of the business unit/area teams themselves role models in relation to the acquisition, development, sharing and exploitation of information, knowledge and understanding, and use of relevant support tools?
Process accountability
How do the processes (or units of which they are a part) relate to the business entity as a whole? In particular: 76
Where do they fit into the entity management process and its annual calendar of meetings? Do these cover the processes' or units' key activities?
What contributions are they expected to make to knowledge creation and exploitation within the entity as a whole?
Is there an effective link with relevant committee/meeting owners, and are the units aware of relevant agenda items, terms of reference, inputs/outputs, reports, etc?
(F) DATA MINING ACROSS THE ENTERPRISE In today's enterprise, predictive analysis is key to strategic decision making, and data mining is an essential tool. Knowledge Developer brings data mining and knowledge discovery to experts and novices alike. Drag, Drop, Analyze. Developers intuitive interface makes development faster than ever. Drag-and- drop components document every step of data analysis process. Templates for standardized operations save time and effort. Adapt, Build, Reuse. Data mining workbench adapts to the changing needs by building own custom components for advanced predictive modeling, charting, and reporting using the S-PLUS language to share libraries of components with other Knowledge Workers / Users across the organization. Create, Integrate, Deploy. Knowledge Developer generates C-code components for run-time model scoring in Web or desktop applications for use of batch processing and native database access to automatically update data warehouses Scale, Increment, Analyze. Knowledge Architecture processes data incrementally, eliminating data size constraints thus offering scalable data analysis, even on desktops with limited specifications.
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(H) Conclusion: Knowledge Management is the key to the success of any business today. In order to ensure the best KM practices, it is necessary and essential to incorporate the appropriate KM Tools & Techniques in the business process. Critical analysis of the business process enables the Knowledge Developer to select such Knowledge Management Tools & Techniques.
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Chapter 9
ROLE OF IT IN KNOWLEDGE MANAGEMENT
KNOWLEDGE PORTALS AND KNOWLEDGE MANAGEMENT TOOLS AND INFRASTRUCTURE
We are in a knowledge-base society where; a vast majority of our work is information based Organisations compete with each other on the basis of knowledge Increasingly products and services available in the market are getting more complex Life-long learning is perhaps a way of life facing us
Whats the role of Knowledge management in a Knowledge economy ?
Knowledge management can : Promote and nurture innovation through free flow of ideas Sharply improve customer service through quicker response Improve the top line, and bottom line too, by bringing out products and services faster Attract and retain the best brain by recognizing the value of knowledge and having a suitable rewards system for their knowledge contribution Streamline the operations and reduce cost, and thereby improving bottom line, by eliminating unnecessary and redundant processes
Given that we are in a knowledge-based society, and knowledge management has an enormous role in it, what exactly s the role of Information Technology ( IT ) in this scheme of things ?
We need to remember that Information Technology by itself is not knowledge management. However,
KM is often facilitated by IT in managing documents, in data storage, by providing access to information, dissemination, exchange of ideas IT can help in realizing higher value by enhancing efficiency and productivity through improved processes
It is no wonder that managing an organizations knowledge more effectively and exploiting it in the marketplace is the latest pursuit of those seeking competitive advantage.
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We could look at Knowledge Management in an organization from two angles. The first is that of making better use of the knowledge that already exists within the firm, for example by sharing best practices. When we do this, we addresses the oft cited lament: if only we knew what we knew.
It is not uncommon for people in one part of the organization reinvent the wheel or fail to solve customers problems quickly because the knowledge they need is elsewhere in the company but not known or accessible to them. As such, the first initiative of many knowledge management programs is that of installing or improving an Intranet, and adding best practice or expert databases.
The second major way of looking at KM is from the angle of innovation,- the creation of new knowledge and its conversion into valuable products and services. This is often referred to as knowledge innovation . This requires an environment where creativity and learning flourishes and knowledge is encapsulated in a form where it can be applied. One way is to embed knowledge into products, where it is more easily disseminated. All kinds of products, from tractors to domestic appliances, are getting smarter, while other products, such as software, represent packaged knowledge.
There is a wide range of knowledge management activities in an organisation, and they touch many aspects of business operations. For example:
i) Creation of knowledge databases - best practices, expert directories, market Intelligence etc.
ii) Effective information management - gathering, filtering, classifying, storing etc.
iii) Introduction of collaborative technologies, especially Intranets or groupware, for rapid information access
iv) Development of knowledge centers - focal points for knowledge skills and facilitating knowledge flow
v) Reuse of knowledge at customer support centers e.g. via case-based reasoning
vi) Incorporation of knowledge into business processes e.g. through the use of help screens in computer procedures or access to experts from icons
vii) Enhancement of decision support processes, such as through expert systems or group decision support systems.
viii) Knowledge webs - networks of experts who collaborate across and beyond an organizations functional and geographic boundaries
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OLD WINE IN A NEW BOTTLE ?
The fact is, any activity that uses and applies knowledge can benefit from the disciplines of knowledge management. The truth is most managerial and professional activities will fall in this category. Therefore, it is fairly common to see many existing business practices such as information management and intelligence gathering coming under the knowledge management umbrella. In the same way, many information systems solutions,- such as document management and data warehousing- are being similarly rebranded as knowledge management solutions. While people from IT discipline may not share the view, such relabelling often raises the question as to whether the current knowledge focus is merely a passing fad. The importance of knowledge as a strategic weapon can in fact be traced back many years, to writers like Peter Drucker, who is credited with coining the term knowledge worker. Many authors have given important insights as to the contribution of knowledge to corporate success.
So, whats new ? Is knowledge management more fundamental than simply a passing fad ? Lets look at the following factors:
i) The value of an organizations wealth is increasingly in its intangible assets - its people, know-how, brands, patents, licenses, customer relationships etc. Knowledge can command a premium price in the market. Know-how, applied properly, can significantly enhance the value, - and therefore the price, of products and services. Knowledge about the customer,- his personal preferences, his likes and dislikes, can enable a hotel chain to provide personalized services. This in turn not only allows them to charge a premium, it will earn the loyalty of the customer. Wal-Mart collects huge data about the customer purchases, and through Data mining techniques, can target specific customer with offers he is likely to value.
ii) As suppliers and consumers get more globally connected through the Internet, access to critical knowledge becomes easier and more cost effective.
iii) As organizations become more efficient at what they do, they can apply new learning and talent to help them differentiate themselves in the marketplace.
iv) Organisational restructuring and normal retirement often can result in a huge loss of talents. By retaining knowledge as organizations downsize or restructure, organizations can save costly mistakes and prevent reinventing the wheel.
As companies respond to these factors their knowledge processes become more explicit, more systematized, more cross-organizational and more geographically dispersed. As a result they more readily lend themselves to the application of information and communications technologies . Internet, intranet, email etc are being used as effective knowledge management tools. Also, videoconferencing, document management, online information sources and decision support tools are quite widely used.
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HUMANS THINKING FASTER ? OR, COMPUTERS THAT THINK ?
As computers became faster, and powerful, in the 1970s, there was huge euphoria over the possibilities of Expert systems and Artificial intelligence. Highly respected Professors had gone on town declaring early arrival of machines that could think like human beings and replacing human labour in many activities. Looking back, we find we are still far away from it. The point is human brain is far too complex to comprehend its working. Creating machines that think like humans is a daunting task.
Today, after years of steady progress, artificial intelligence has evolved new techniques, such as neural networks and intelligent agents, and is being widely applied in a growing number of applications. A significant proportion of the world-class knowledge management programs use these techniques.
IT in Knowledge Management In order to appreciate the role information technology in knowledge management activity, we need to know the different IT tools and their capability, which we assume we know. We will take a re -look at knowledge, its different forms, and the knowledge cycle in order to figure out how different IT tools could assist us.
EXPLICIT AND TACIT KNOWLEDGE While trying to use Information technology for knowledge management, we need to keep in mind the clear distinction between explicit and tacit knowledge. Explicit knowledge is that which can be codified into documents, databases and other tangible forms. Tacit knowledge on the other hand is in the heads of individuals. Ask a person to describe explicitly how to ride a bicycle and they cannot, yet they know how to. This author, in spite of decades of experience would find it difficult to spell out how to eat fish without the bones getting stuck in the throat.
This distinction, and the processes by which tacit knowledge is converted in to explicit knowledge and vice versa, is the seminal work of Nonaka and Takeuchi (1995).
FIG 1
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One of the most widely cited concepts by knowledge management practitioners is the concept of explicit and tacit knowledge, and their distinction. However this is often ignored by information systems professionals. There is a belief that knowledge can be captured by getting it into a database. Yet some of the most successful applications of Information and communication technology in knowledge management include those that help human-human communications, most notably groupware, and especially Lotus Notes.
KNOWLEDGE FRAMEWORK
From the viewpoint of a knowledge architect, frameworks provide a convenient way of thinking about the role of information and communication technologies in supporting knowledge processes. Most frameworks map different IT tools according to their function and whether they are used individually or by teams. One such framework is shown below in Table 1.
Passive (information)
Active (knowledge) Person to Person Computer conferencing Expert networks
Meeting support Video-conferencing Person to Computer Document Mgmt Info Retrieval Knowledge bases
Expert Systems Decision Support Computer- Computer Data Mining Neural Networks Intelligent Agents
Table 1. Knowledge Transfer mechanism
From an analysis of a wide range of tools and classifications, J an Wyllie of Trend Monitor International has developed the functional schema shown below:
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I n f r a s t r u c t u r e : N e t w o r k s - I n t e r n e t s ; I n t r a n e t s C r e a t e T h i n k i n g a i d s C o n c e p t u a l M a p p i n g I d e n t i f y K n o w l e d g e D i s c o v e r y T o o l s D a t a M i n i n g T e x t R e t r i e v a l / M i n i n g C o l l e c t / C o d i f y I n f o r m a t i o n f e e d s I n t e l l i g e n t A g e n t s D i f f u s e / U s e D e c i s i o n S u p p o r t G r o u p w a r e V i d e o c o n f e r e n c i n g K n o w l e d g e D a t a b a s e D o c u m e n t R e p o s i t o r i e s ( D a t a W a r e h o u s e s )
THE KNOWLEDGE PROCESS AND THE RELATED INFORMATION TECHNOLOGY SOLUTIONS SUPPORTING THE PROCESS
Key Technologies
The impact of a specific technology would vary enormously from situation to situation. Some technologies are found in many knowledge management programs, largely because they are generic and hence their impact is pervasive across many core activities and processes. Lets now look at the different technologies.
Internet and Intranet Perhaps no other technology had so much impact on knowledge management as internet technology. The ubiquitous Internet protocols make it easy for users to access any information, any where, at any time. Further, browsers and client software can act as front-ends to information in many formats and many of the other knowledge tools such as document management or decision support. We need to remember that the basic functions of email, discussion lists and private newsgroups often have the biggest short term impact.
For example, Booz Allen & Hamiltons Knowledge Online is an Intranet that provides a wealth of information (e.g. best practice, industry trends, database of experts) to their consultants world-wide. Through active information management by knowledge editors (subject experts and librarians) the information remains well structured and relevant. Groupware - Lotus Notes
A major feature of groupware products like Lotus Notes is discussion data bases. Users such as Thomas Miller, a London based manager of insurance mutuals, access their organizational memory, as well as current news feeds in areas of interest, through one of Lotuss key features, its multiple views. When writing new insurance proposals, 84
existing explicit knowledge can be assembled from the archive, guided by an expert systems front-end, while tacit knowledge is added through discussion databases. Intelligent Agents The problem of information overload is becoming acute for many professionals. Intelligent agents can be trained to roam networks to select and alert users of new relevant information. Additionally they can be used to filter out less relevant information from information feeds. Intelligent agents are like the efficient Secretary in office ( minus the personal touch ).
A related technology is that of text summarizing ( text mining ). British Telecom uses it to summarize large documents, retaining over 90 per cent of the relevant meaning with less than a quarter of the original text. Mapping Tools These tools, help individuals and teams develop cognitive maps or shared mental models. These have been used by companies such as Shell to develop future scenarios and resolve conflicting stakeholder requirements. Additionally mapping tools, such as those found in Knowledge X, can represent conceptual linkages between different source documents. Document Management Much of the explicit knowledge is shared through documents, especially structured documents. With annotation and redlining facilities, they can become active knowledge repositories, where the latest version and thinking is readily shared amongst project teams.
By using a document management system for the construction of the Thelma North Sea oil platform, AGIP reduced construction time by 9 months and reduced document handling costs by 60 per cent. Suppliers like Dataware are repositioning their products as knowledge management products and are also adding knowledge enriching functionality.
IT Solution, or Knowledge Solution ? As we mentioned earlier, with knowledge management area exploding, often IT companies rushed in with a platter full of solutions repackaged as KM solutions. What was information management yesterday became knowledge management, databases took the name of knowledge bases, data warehouses as knowledge repositories and so on. We need to remind ourselves once again that true knowledge management solutions are not simply new labels, but add knowledge-enriching features. These include:
This is an important feature Adding contextual information to data - where was this information used? What factors need to be considered when using it?
Another way would be using multimedia e.g. adding video clips or voice to databases of best practice or problem solution databases
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Providing annotation - adding informal notes to individual data items; using MAPI enabled software, where a document or file can be sent with a forwarding note by email
Not just the information but qualifying the same by giving details of originator, users comments on the information Providing links to experts - a click button to contact an expert (either by email or phone).
All these help the transfer of tacit knowledge. Any tool should increasingly provide links that add new levels of interaction, not just person-to-computer but person-to-person.
Knowledge Management Infrastructure As technologies and applications evolve, the boundary line between the individual tools seem to get blurred,- for instance, groupware and internet, document management and information retrieval. Effective usage requires seamless interoperability and fluidity of information and knowledge flow.
In view of this, organizations using IT to support knowledge activities need to think about an overall architecture. Some companies, such as Glaxo Wellcome are recognizing that knowledge management requires changes in established technical architectures.
Levels of an IT Knowledge Infrastructure
We can note that the different KM tools and the processes they support happen at different levels.
At the base level is the requirement that people should be able to connect into knowledge whenever and wherever they are ,- in the office, at remote sites or on the move . At 86
higher levels, there must be mechanisms for threaded conversations and structured collaborative work.
As we move up through each architectural layer, - each of which depends on the one below, increasingly the challenges are people and organization, rather than technology.
KNOWLEDGE PORTALS
As we said before, no other technology had as much impact on the way a business is conducted, as Internet. Advent of Internet gave Knowledge Management an enormous push,- opening up newer and better ways of knowledge sharing and collaboration. The popularity and wide acceptance of Internet made innumerable new products available in the market. Web-based technology allows KM solutions to be on the Internet, or the firms Intranet ( intranet is an internal network using internet technology ). Organisations have created VPN,- Virtual Private network, using Internet as the medium of transmission, but through security measures the access is limited only to internal employees. This allows employees to access the portal from anywhere in the world. The access could the controlled through appropriate log-in. This gives a platform to the employees to share best practices, problems, customer interactions etc and prevent reinvention of wheel.
Web-based KM system: Advantages i) Maintenance is easy,- whatever changes,- including upgrades, are to be installed are done on the server. ii) Any web browser can be used to access the server. Rather than a build- to- order system, a browser makes it easy to access. New employees can access the system with lesser training. iii) Any technical assistance needed is easily available.
Web based KM tools
Web based discussion board for Knowledge Management
A virtual community can be created by using Web based discussion boards. Web based discussion boards can be hosted where any one can post questions or doubts on any issue. In response, others can share their experience over the issue. This will help in sharing experience, solutions and best practices as and when required. However, we need to keep in mind that the key to the success of in any discussion board is trust among the members. Organization has to ensure that the trust is established among the members. Occasional face-to-face interaction through conferences, seminars, etc helps to bring the members together.
These discussion board scripts can be customized to integrate with existing web sites of the organization . Different sections in the discussion board can be created to take care of different domain of knowledge for sharing and discussions. The forum administrator has 87
an important role as he has to maintain and ensure the dignity, usefulness and involvement of all the members in the forum.
Document / Content publishing tool
Tools are available so that documents can be published in the internet or intranet portals of the organization. Many organization have adopted this system. Authors can post their articles, research papers etc to a web based content or document management solution. The author can publish the document for evaluation by the subject expert and after evaluation and clearance by the experts the document can be accessed by other members of the organization. They can also post their comments, ratings, feedbacks on the document. A search engine can search the database of all the published documents based on different criteria. One could introduce features like 'what's new', whats hot, document of the month, most read etc. Proper administration and monitoring of the site like member authentication, member management is however required for control purposes.
MAKING IT A SUCCESS
Knowledge management is more to do with people, process, leadership and all, and less to do with technology. As any manager trying to implement change knows, it is the human, organizational and cultural factors that are the ultimate determinants of success. IT solutions for Knowledge Management are, in essence, social computing, and therefore need such an approach. Organisations that have implemented KM systems successfully are typically found to share the following characteristics:
Clear vision and leadership top leadership must have a solid appreciation of how knowledge can contribute to business success and how IT can help.
Multidisciplinary teams - team should include information managers , facilitators, business analysts, and also technologists.
User involvement - users are actively engaged in developing solutions that enhance knowledge activities.
A knowledge sharing culture. People want to share information and their experience and are rewarded for doing so.
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SUMMING IT UP
Information technology plays an important role in every successful knowledge management program. This is an evolving field and a wider range of highly effective solutions are coming to market. This includes a new generation of artificial intelligence solutions, upgraded document management systems and various collaborative technologies. Web-based solutions are increasingly getting popular.
However, successful implementation largely depends on giving proper focus to the non- technical factors such as human factors, organizational processes and culture.
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Chapter 10
COMMUNITIES OF PRACTICE
The future belongs to organizations that learned to truly unleash the creative powers of self-organizing project communities, knowledge networks, open source teams, and other new ways of work and learning, based on free associations of people who are passionate about what they do together Communities of practice What is it ?
CoPs are basically a small group of people who have worked together over a period of time. People in CoPs could do the same job, say Technical Representative, or collaborate on a shared task, like,- software development, or work together on a product (engineers, marketers, and manufacturing specialists). They are peers in the execution of 'real work.' Primarily, what holds them together is a common sense of purpose and a real need to know what each other knows. There could be many communities of practice within a single company, and most likely a majority of the people would belong to more than one community.
Elements of Communities of practice
It is a fairly common observation that a group of people would come together and share each others experience over a particular subject of a common interest. This experience sharing helps each other in solving day to day problems and updating themselves with new knowledge in the area of their work. A group of teachers sharing experiences in handling difficult students during the break, or nursing staffs sharing each others experience about patient care while taking lunch together in a hospital canteen,- these are examples of natural learning community interaction. This happens naturally without any outside involvement. Similarly a group of Xerox technicians sharing their experiences over handling customer complaints is a example of how community forums are naturally evolved and helps every member in their professional life.
In a typical Community of Practice there are three elements present. These three elements are: i) Domain ii) Community, and iii) Practice.
Let us try to understand what we mean by each of these three elements.
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Domain
This is the area or the subject of interest which binds all the members. This can be the profession or any other area of our interest. A lawyer by profession can be member of a IT community because of the interest he or she has on the subject. Members of the community are passionate about the domain. It is quite possible that a member can be involved in more than one community. It is the domain that keeps the point of discussion focused.
Community
When we talk of community we refer to things like how often the members meet ? How is the trust and relationship among the members of the community? Do they freely express their views? How is the structure of the community? All these answers tell about the community. We must remember that the frequency or the periodicity of the interaction is an important factor. If two computer networking experts working on similar infrastructure projects happen to meet on a trans-atlantic flight,- the discussion can't be called a community interaction,- simply because it is a chance meeting only. A one time interaction can't form a community interaction.
Practice
One must be actively involved in the practice area in order to get the benefit of interaction. A one time machine technician or a doctor who is not practicing can't join a community of their profession. Organization culture and its Knowledge Management system play an important role promoting community interaction.
Communities of Practice: The origin Corporate: This is where it all began
Private sector is where Communities of Practice ( CoP) can be traced to have their origins. Informal groups of employees, meeting regularly to share experiences and learn from each other in corporations like Xerox, Boeing, etc., have been in existence since long. By the late 1980s,organizations have recognized knowledge as the fourth important factor of production and efficiency. This had led to organisations looking for possible ways for their employees to learn from within the organisation, as well as from outside. Meanwhile, advances in information technology offered enormous potential of high speed data retrieval from storages with huge capacity. This led many organisations to interpret knowledge management narrowly as digital capture and retrieval of information. This narrow view however failed to address many issues related to knowledge management, particularly the human side of KM. How do we address the problems of incentives, and impediments to learning on the part of individuals, organisations and institutions ?
Almost around the same time organizations faced tremendous challenges due to globalization and connectivity. Traditional methods of human resource development were 91
faced with increased costs and uncertain effectiveness. They were looking for new ways to solve their problems of attracting and retaining talented people. The search for a comprehensive approach for organisations to learn ended in authors like Senge (1990) drawing from a vast array of disciplines to consolidate and give a comprehensive framework for knowledge management. One of the effective stratagems was the import and adaptation of social communities groups within the organisation who would share and learn from each other, impelled by their own search and interest, and contribute incidentally to the greater goals of the organization
1990s, saw many of the larger corporate organisations (both in the private sector and development agencies such as the World Bank), instituting communities in an attempt to elevate their levels of learning. This was done to improve the organizational performance, and to create a more dynamic and learning environment. Working in a globalised environment, with large number of employees scattered across many geographical locations and divisions, organizations found that special efforts were required to get people and organisational units to learn in an informal, yet semi-structured manner.
During the 1990s one could witness a large number of Indian private sector organizations also experimenting with CoPs. And by the turn of the century, this was common in many organisations. As the benefits became obvious, many organizations had also taken the initiative to put CoPs firmly in their Knowledge Management structures. CoPs across organisations had also become popular by now, and thus bringing together professional practitioners irrespective of organisational affiliations. This was quite in line with many of the already existing professional associations e.g., HRD professionals, accountants, lawyers, etc.
Structure of Communities Of practice
COP has became a natural choice of many knowledge management systems in order to create a collaborative culture and providing a face to face platform for knowledge sharing. The exact frame work of COP and its structure varies from organizations to organization, based on its culture and environment. We will consider a more generalized structure.
Organizations start COP model with existing communities and then move towards other domains of strategic importance. During the process the structure remains two layers. With the growth and success of the community the third layer is added. The third layer relates to external knowledge flow and consists of suppliers, customers, academicians, consultants and other interested parties. In the early stage mostly there will be two layers. Some community will have just one sponsor or key leader who is included in the core or inner layer of the community structure.
The general structure of the community of practice consists of two layers,; the core group and the general members of the group. Core group consist of the key leaders of the community who decides on the learning agenda of the community and always tries to build a network among the members for an effective knowledge flow. The success of COP depends on the dedication and hard work of the core group. The core group meets 92
regularly and decides on the agenda of the meeting. Their home work before the community meeting sets the direction for the meeting and has the major impact on the learning and results of a successful community meeting. At times, some members from the outer group takes active interest and became practice leader when the learning agenda falls in their area of expertise. However, they are kept in the outer layer as their high involvement is not regular. Following are the characteristics of core group members: Core group members are the people who have good understanding of the domain. They are also familiar with the knowledge gaps of the domain. They can see the future knowledge requirements, and attempts to bridge the knowledge gaps existing in the organization. Core group members establish the network among the members. They maintain a profile of subject experts and know whom to contact. In a way, they are the virtual directory of who's who. By virtue of their knowledge of the domain, and always volunteering to assist, members of core group are highly respected among community members.
Can spare sufficient time and priority for the community.
Coregroup& leader General members 93
Members in general
They are the members who participate in the community main meeting. They bring with them their problems, success stories, and lessons learned to the community. They are active participants in the discussions and problems of other community members. However, there could be some members who maintain a low profile, but that does not necessarily mean they are not interested. Primarily they are in the learning stage. They speak little because they don't want to dilute the high learning agenda.
TOPIC OF DISCUSSION IN A COP SESSION
Usually, in a community interaction the topic for discussion or the agenda is decided by a common agreement among the members. Members are encouraged to suggest a new topic or a new area of an on going topic of discussion. Often the topics emerge during a discussion or interaction. However there are other ways to identify a topic. For instance, a recent development in organization which falls on the community domain could become the hot topic of discussion. Similarly, a recent development in industry, or advent of a new technology can became a key issue. The members would be keen to know the developments to update themselves.
The topic of discussion in a Community of Practices interaction could emerge in a number of ways. Let us take some examples:
a) A recent happening or event
The trigger can be from inside the organization, or outside. For instance, a change in govt policy, the discovery of a new molecule for cure of some disease, or a dramatically new product can create enough interest among the members to discuss on the subject. Some happenings within the organization can take the centre stage of the discussion. These are basically hot topics which everyone is interested to know about.
b) Conference / Visit
Members often attend various seminars, conferences,- sometimes to present papers, or visit other organizations. They collect lot of information. The best place to share what they learn is to present the key learnings in the community session. At times members could use this platform to get ideas / suggestions on their papers before presenting outside.
c) Suggested by members
Members of communities of practice are passionate about the domain to enrich their knowledge. They discuss various issues and suggest topics of their interest. After a discussion a topic would emerge that interests the majority of the members. Some time out of some common questions raised by members the idea to go for a basic topic is decided.
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d) Common Problem or issues
This platform is often used by members to discuss and find solution for common problem affecting the community. Collectively the members debate and share their experience to come out with best possible solution.
It is important to remember that it is part of the CoP culture that the topics to be discussed are evolved, - it comes from among the members, and they are never forced by top management.
These are some of the process through which a topic in a Community interaction is finalized.
References: ALLKM.COM
STORYTELLING
We know more than we realize. The role of tacit knowledge has become a major preoccupation because it is often the tacit knowledge that is most valuable. Yet if we do not know what we know, how can we communicate it ? Storytelling provides an answer, since by telling a story with feelings, we are able to communicate more than we explicitly know. Our body takes over and does it for us, without consciousness. Thus, although we know more than we can tell, we can, through storytelling, tell more than we consciously know.
Stephen Denning,- Formerly Program Director for Knowledge Management at the World Bank ( Quotation from : The Role Of Narrative In Organisations : Chapter Six , Page 169 of the book Storytelling in Organizations, Publisher- Butterworth-Heineman Indian Reprint 2007 )
Storytelling,- this is an art known in our country for ages. Passing on knowledge from Guru to Shishya, learning from Dada / Dadi through stories is itself an age old story. Tacit knowledge can be passed on far easier through stories. This is because stories have a context, it is easy to relate. Storyteller uses expressions to convey what cannot be put in words. Much of tacit knowledge has the problem of not being explainable. Turn right to turn left on a bicycle is not something that can be explained, no matter how much science you put into it. So what can we do? As J ohn Seely Brown, former Chief Scientist and Director of world famous Xerox PARC ( Palo Alto Research Centre ) laboratory says, -perhaps the only hope lies in narrative.
( Narrative as a Knowledge Medium in Organisations Chapter Three, of the book Storytelling in Organizations, Publisher- Butterworth-Heineman Indian Reprint 2007).
As Stephen Denning writes: narrative and storytelling far from being trivial and insignificant, constitute an obvious and central aspect of every functioning organization. Indeed, he further adds, the presumption should be the other way: any discussion of 95
organizations that does not place narrative and storytelling at the centre is bound to be misleading and incomplete.
To counter the argument of triviality and insignificance of storytelling, Denning reminds us of the characteristics of narrative and storytelling,- the reasons why it is so pervasive in organizations and elsewhere.
- Stories help us make sense of the organizations - Storytelling is quick and powerful - Narratives communicate naturally - Storytelling communicates collaborately - Storytelling communicates persuasively - Storytelling communicates context - Storytelling is memorable
It is time organizations took serious note of this powerful medium for knowledge capturing and sharing.
READING:
Once Upon a Time
By Bill Birchard
When a meeting of the minds isnt enough, try a meeting of the emotions: Tell a story
A company president faced a familiar dispute between his design engineers and business managers: Should the lions share of engineering money go into new product design or into current product support? The design engineers were keen on getting cash to invent the next new thing. The business managers wanted money to support existing products. The president wrestled with how to tell the engineers he preferred channeling most money to current products. How could he effectively communicate that message? Its real-life business. And its just the kind of conundrum Annette Simmons tackles in her book The Story Factor: Secrets of Influence from the Art of Storytelling. Ms. Simmons argues that stories help managers deliver direction, information, and inspiration to their colleagues more powerfully than a pure logical argument. Thats a special power to have in a world where managing change and innovation are central to business success. In the case of the company president, an appeal to reason would not have worked, Ms. Simmons says. Design engineers could have responded with charts and statistics 96
advocating their side. Nor would issuing a directive have won the day. The designers, as sophisticated knowledge workers, would have found subtle ways to resist. To get past this behavior, the president knew he had to play partly to his designers imaginations and emotions. So he told them the briefest of stories: The early bird gets the worm, but something that is just as true and people dont talk about as much is that the second mouse gets the cheese! The first mouse gets his head squished, he added. I dont want to be the first mouse. I want to be the second. I want our company to be smart about where we put our resources. Let someone else be first; second is where the money is. With an image of rodent roadkill, he got his point across in a colorful, amusing, right- brain way. As Ms. Simmons writes, influencing people through scientific analysis is a push strategy. It requires the speaker to convince the listener through cold, hard facts. That sets up an antagonistic conversation. Storytelling is a pull strategy, coaxing listeners disarming them, even into imagining outcomes toward which facts would not lead them. Stories, which may embellish or emphasize a certain point of view, are central for making sense of the world around us. Authors like Annette Simmons note that people are raised on stories and see their lives as an ongoing story. As Robert Fulford, author of The Triumph of Narrative: Storytelling in the Age of Mass Culture, says, To discover we have no story is to acknowledge that our existence is meaningless, which we may find unbearable. Thats not to reject the value in facts, of course, but simply to recognize their limits in influencing people. Compared to facts, stories often better convey meaning, better create sense out of chaotic experience, better establish rapport among the speaker and listeners. Stories flick a switch in adults that can bring them back to a childlike open-mindedness and make them less resistant to experimentation and change. Witness the success of Spencer J ohnsons Who Moved My Cheese? An Amazing Way to Deal with Change in Your Work and in Your Life. The messages in the book about the pain of change arent new. Its how the story is told that keeps this simple book on the bestseller list four years after its publication. Stephen Denning, author of The Springboard: How Storytelling Ignites Action in Knowledge-Era Organizations and the head of knowledge management at the World Bank, maintains that stories engage listeners as participants, rather than spectators. The story invites them to join the experience, and to grow from it. Mr. Denning argues that listeners co-create the story. They actually visualize themselves acting on the mental stage the storyteller has set up. In business, stories are useful in many kinds of communication to explain, inspire, educate, train, convince, schmooze, mentor, and, obviously, entertain. Stories used in a business context are perhaps most widely thought of as a means to sustain company cultures. Hero stories abound in corporations, for example, stressing integrity in the face 97
of an ethical dilemma; extraordinary service that delights and surprises the customer; and empathy and kindness extended to employees by their leaders. Peg C. Neuhauser, author of Corporate Legends & Lore: The Power of Storytelling as a Management Tool, tells the story of the hospital CEO who visited shivering steelworkers who were erecting an addition to the hospital in the middle of winter. He took pity on their discomfort and installed free coffee and hot-chocolate vending machines at the outdoor work site. In so doing, the CEO reinforced the caring culture he nurtured inside the hospital. Ms. Neuhauser says such stories become part of the sacred bundle of tales that guide employees in how to act toward customers, vendors, and each other. Yiannis Gabriel, author of Storytelling in Organizations: Facts, Fictions, and Fantasies, suggests the power of culture-reinforcing tales. One of his stories goes like this: A new CEO has just joined a struggling corporation. Right before meeting with his vice presidents, he uproots a sign in the parking lot that reads reserved for the CEO. He throws it on the table at the meeting and asks who put up the sign and all the other signs reserving spots for the VPs. This is not the kind of leadership I will have around here, he says. By weeks end, he fires the offending executive. Perhaps the most powerful role of stories today is to ignite and drive changes in management policy and practices. Mr. Denning describes his use of stories imaginative anecdotes, really to change his organization from being solely a lender of money to also offering its expertise in project implementation. The World Banks clients, the poor nations of the world, need more than loans these days; they need knowledge about how to use those loans wisely. To help staff visualize what it means to provide implementation knowledge to clients, Mr. Denning relied on what he calls springboard stories sketchy vignettes that suggested a new vision and set of values for future client service. Mr. Dennings goal was ambitious. He wanted the anecdotes he told to stir fresh ideas among the staff about how, placed in analogous situations, they would triumph over problems similar to those described in the stories. Yet Mr. Denning says the story he used in 1996 to launch his change effort was based on the slimmest material. It didnt even come from the World Bank. A colleague told Mr. Denning how a health worker in Kamana, Zambia, was struggling to find a solution for treating malaria. In this tiny and remote rural town, the health worker logged on to the Web site of the U.S.s Centers for Disease Control and Prevention and got an answer. This true story happened, not, as if in a fantasy, in 2015, but in J une 1995, Mr. Denning recounted. This is not a rich country: It is Zambia, one of the least developed countries in the world. But the most striking aspect of the picture is this: [The World Bank] doesnt have its know-how and expertise organized so that someone like the health worker in Zambia can have access to it. But just imagine if it did! Mr. Denning knew he didnt have to spell out his entire message. World Bank employees, who work in the most impoverished locales on earth, could picture themselves elbow to elbow with poor professionals like that health worker. They knew what it was like to be asked a question by a local worker and not be able to give the kind 98
of answers expected from a World Bank employee. By helping employees paint this scene in their minds, Mr. Denning made them realize that the status quo was untenable, which encouraged them to take action. Even when the listeners are adults, all they have to hear are words akin to once upon a time, and the judgmental doors of their left brains tend to swing closed. The doors of their right brains always eager to hear life turned into a story swing open Consider this fable: Once upon a time there was a crow. She was a hot, thirsty crow, and she soared from east to west and north to south in search of water. After many hours, she spied a pitcher full of water in a gravel courtyard. But, alas, the neck of the pitcher was too narrow for her to insert her beak. What could she do? As her black feathers baked in the sun, inspiration struck. She picked up a bunch of stones from the courtyard, and tossed them, one by one, into the pitcher. As the water rose to the rim of the pitcher, she could drink. This Aesop fable has a moral: Necessity is the mother of invention. But the moral, however relevant, is not whats most notable to a student of storytelling. Whats remarkable is that when listeners hear the start of such a story whether fable, personal remembrance, or corporate myth they implicitly agree to a certain set of rules as an audience. Rather than judge the veracity of each fact presented, as they would in a traditional analytical presentation, they tend to let the facts slide (what would be the point of arguing over the reasoning powers of a crow?). As Yiannis Gabriel says, stories coax listeners into colluding with the storyteller to find meaning, no matter how fantastic or fanciful the story may sound. Squished mice? Thirsty crows? No matter. Stories quiet the nettlesome nit-picking of left-brain thinking and stimulate peoples creativity. You may wonder, if you dont fancy yourself a storyteller, just where do you come up with relevant stories to tell in a corporation? Dont get the impression that most of your tales should come from Aesop or from other fiction. Most come from your own experience. From childhood. From college. From work. From military experience. Professor Gabriel recalls a story from a naval training camp. Recruits were standing for inspection before receiving furloughs. They shifted nervously. The commanding officer could cancel their furlough for the least reason. On one occasion, so the recruits said, the officer had asked them to lower their trousers while standing to be inspected. He then canceled everyones leave because the men were wearing a motley selection of briefs rather than the official Navy-issued white boxers. If you were to recall a similar humorous memory, you could use it, for example, to illustrate the kind of controlling behavior you abhor. Or you could use a story to show humanness, or even to suggest vulnerability. Alternatively, you could share stories from master management storytellers like Stanley Bing. Mr. Bing, a columnist at Fortune magazine (and the nom de plume for Gil Schwartz, a senior CBS executive), is known for mercilessly using edgy humor to expose management truths. His latest book, Throwing the Elephant: Zen and the Art of Managing Up, gives self-help advice about managing 99
your boss by telling stories through the eyes of a modern-day Buddah. Mr. Bing uses an elephant as a metaphor for a boss. One tip: If the elephant can see what youre doing in its rearview mirror, you are too close. You may think that you cant possibly bring stories into your speeches and conversations, or that you cant remember anything worth telling. But professional storyteller J ack Maguire, author of The Power of Personal Storytelling: Spinning Tales to Connect with Others, documents a variety of means to dredge up, and liven up, such memories. Mr. Maguire suggests listing story triggers on a sheet of paper, and then seeing what they conjure up. One set of story triggers is simply a set of emotions pride, anger, fearlessness, joy, masterfulness, amazement. When you feel a particular emotion, what emerges in your memory? Another inspiration is to think backward through five-year phases of your life 40 to 35, 35 to 30, 30 to 25, etc. Still another is to draw a lifeline. On a vertical line, mark branches off each side, like a tree. The branches on one side are choices made and actions pursued (quitting a job, giving a speech). The branches on the other are choices deferred and actions not taken (not quitting a job, not giving a speech). The lifeline depicts the crossroads in your life, which invariably brim with personal drama. In getting the most out of stories, storyteller Doug Lipman, author of Improving Your Storytelling: Beyond the Basics for All Who Tell Stories in Work or Play, advises storytellers to first identify the Most Important Thing (or MIT) in the story. That is, whats so important about the story? Is it about egalitarianism? About decisiveness? About the firms willingness to clean out deadwood? To find the MIT, Mr. Lipman counsels storytellers to ask, What do you love about this story? He stresses that an effective telling depends on not letting subthemes muddy the tales meaning. The MIT, he says, drives the storys direction in the same way a strategy drives the direction of a business. Mr. Maguire says we instinctively follow a four-step dramatic pattern to shape our stories: We find a protagonist with a situation or problem, depict a change that creates drama (a decision, an outside development), highlight a turning point in the drama (crisis, conflict), and describe the aftermath. You can find all four steps in the story about the CEO who removed the reserved-parking signs and then dismissed the executive who had them installed. Here, the four-step formula gives the story a satisfying sense of closure. But a story could simply be an analogy, a joke, or a behavioral snapshot. Fragments of stories spur listeners imaginations in the same way. Storytellers engage peoples imaginations and emotions best when they are working face to face, using voice, gestures, and body language to convey the emotional weight that grabs listeners. Many stories, especially organizational ones, sound flat on paper. Thats why most books on storytelling include several chapters on delivery. The Storytellers Guide: Storytellers Share Advice for the Classroom, Boardroom, Showroom, Podium, 100
Pulpit and Central Stage, by Bill Mooney and David Holt, features interviews with seasoned storytellers to get at a broad array of insight. Professional storytellers rarely learn stories by rote. Yes, they do memorize key turns of phrase. But as the storyteller Doug Lipman says, they always have to be thinking in the present making decisions from moment to moment on everything from voice to word choice. Or, as another storyteller reminds us, you can find the secret to live delivery on the back of a sweepstakes ticket: You have to be present to win. No doubt the company president was present when he told his story about the mouse. If he hadnt been, the image and meaning of squished heads and squashed profits wouldnt have sunk in. Back
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Chapter 11
PRACTICES OF KNOWLEDGE MANAGEMENT IN MODERN GLOBAL ORGANISATIONS
Early adopters of knowledge management, with some exceptions, were the consulting firms like McKinsey, Ernst & Young, Bain & co, and Information technology firms like IBM. Some organizations like HP started practicing knowledge management when the term knowledge management wasnt so popular. We will take some examples of firms which are global in their operations, and have successfully implemented knowledge management. IBM: Not only that IBM has made significant contributions to knowledge management through Lotus Notes etc. , but IBM was one of the first to provide a company-wide architecture for mapping the vast amount and range of information within the company. IBMs Guide to Market Information was a sort of catalog of catalogs in integrating the information available within IBM, and linking each information area to a contact person. SKANDIA: This Sweden-based multinational insurance company, under the leadership of Leif Edvinsson, Director of intellectual capital, has been a world leader in intellectual capital accounting: identifying, valuing, and measuring the performance of intellectual capital. Since 1992 Skandia has published an intellectual capital supplement to its annual report. In 1993 it launched its Business Navigator, an integrated system for linking intellectual capital management with strategy and performance management. TEXAS INSTRUMENTS: Knowledge Management program was initiated in Texas Instruments in 1994. This was after an after an extensive program of cost reduction and business process reengineering. Cindy J ohnson, Director of Collaboration and Knowledge Sharing had commented: We felt we needed to find a new paradigm for reaching the next level of improvement. We had to find ways to become more agile and learn faster so that we can innovate faster than our competitors. This is not about cutting people or bringing in new machines. It is about facilitating the flow of ideas, practices and knowledge. ( Knowledge Horizons : Butterworth Heinemann pp45 ) 102
We had pockets of mediocrity right next door to world-class performance simply because one operation did not know what was happening at the other operation : observed Jerry Junkins, Chairman, TI. The TI Business Excellent Strategy, known as I-BEST, provided a common methodology and common language for defining excellence, assessing progress, identifying opportunities for improvement, and establishing and deploying action. TIs first major initiative was transferring best practices around its 134 fabrication plants. In 1994, TI created an Office of Best Practices to facilitate identification and transfer of best practices. At the heart of the system was a Best Practices knowledge base based on Lotus Notes. Dow Chemical: A pioneering effort was initiated by Dow Chemical to systematically manage its knowledge through its Asset management Model. At the core of it lies Dows portfolio of over 30,000 patents which it values and links with the strategies of Dows individual businesses. Intellectual asset Management is supported by 75 multinational teams, each aligned with a business. Each team is responsible for the development and exploitation of a segment of Dows intellectual capital. Hewlett Packard: Hewlett Packard is one of those companies that made enormous effort and progress in knowledge management much before the term was known to many people. HPs position as one of the oldest and most adaptable of the leading companies in Californias Silicon Valley owes much to the companys ability to acquire, rearrange, and redeploy knowledge. History tells us that few in the world had known what knowledge management is at a time when the processes of acquiring, reconfiguring, and redeploying knowledge was deeply ingrained in HP. Like most companies, many of HPs knowledge management activities were heavily IT based, and focused on the management of explicit knowledge. Further, Hewlett Packard was particularly concerned with the management of tacit knowledge. The late Lewis Platt, the then Chairman and CEO of HP observed: Successful companies of the 21 st century will be those who do the best jobs of capturing, storing, and leveraging what their employees know. HPs Knowledge Links system shares knowledge about product generation. At HP Consulting, knowledge sharing has extended beyond GroupWare and knowledge mapping to include informal groupings with common interests called Learning Communities and Project snapshots that collect lessons from various project teams.
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BECHTEL About Bechtel Bechtel is one of the world's premier engineering, construction, and project management companies. Bechtel had revenue in 2007 of $ 27 billion. With headquarters in San Francisco, Bechtel has 41,000 employees and more than 60 offices worldwide. Bechtel is engaged in 1,100 projects in 66 countries, and has customers in industries ranging from airports, telecommunications, and power plants to mining and metals, petroleum and chemical, and water. SOURCE: MARINA DEL REY, Calif.--(BUSINESS WIRE)--May 30, 2001 Bechtel Corp., one of the world's premier engineering, construction and project management firms, is using Digital Lava Incs rich media technology as part of the company's corporate wide initiative to capture and distribute knowledge over the Internet. Using Digital Lava's rich media platform, Bechtel has taken portions of a primer course on Rail Systems Engineering and made that content available globally to thousands of employees. For Bechtel, enabling employees to access this content on-demand provides a key competitive advantage in the burgeoning and highly lucrative rail business. Ralph Mason, a principal vice president in Bechtel's rail business, explained that he initially founded the Bechtel rail program in response to heightened demand for Bechtel project managers and civil engineers with railway knowledge and expertise. "There is a tremendous amount of rail work around the world, particularly in the United Kingdom," Mason commented, "and, because of this demand, we often find ourselves transferring talent from one business line to another. In order to provide these employees with the best introduction possible to the business, we decided to partner with the University of Sheffield in the United Kingdom -- one of the few universities with a highly rated master's program in the field of Rail Systems Engineering -- to design a course that specifically met our needs. It wasn't until the Global Learning and Development Group approached us with the idea of using on-demand interactive learning technologies that we realized there was even greater potential to distribute this valuable content on a global scale," Mason explained. According to Dennis Morin, manager of global learning and development, Digital Lava's rich media format is particularly well suited to Bechtel's needs due to the fact that the Sheffield program primarily consists of a series of lectures by world-renowned experts in the rail industry. "The ability to capture these experts on video, synchronize that video with associated graphics, animations and PowerPoint(R) slides, and provide that content in the form of a fully integrated and searchable desktop presentation is particularly compelling for our workforce," stated Morin. 104
Mike Myatt, a vice president and manager in Bechtel Civil, the business unit that includes Bechtel's rail business, underscored the importance of being able to deliver the instructional rail program on-site and on-demand. "When I was managing a high-speed rail project in Korea, it would have been great to be able to send some of my team members to the Sheffield program in London. Unfortunately, that simply wasn't feasible from a cost or time standpoint. Now, with Digital Lava, even folks in the most remote locations have the ability to benefit from this course," Myatt stated. Morin said that the company has had tremendous feedback from the employees and executive team members who have viewed the content. He also stated that with its newly implemented Learning Management System (LMS), Bechtel will be able to track and report the numbers of users who access the program online. "Bechtel is committed to migrating more of the Sheffield program into Digital Lava's rich media format over the next year," commented Morin. "The cost of utilizing Digital Lava's rich media software and services is small in comparison to the overall value of enabling any Bechtel employee, anywhere, to learn from highly credible subject matter experts in the field of railway design and construction -- literally on-demand." Bob Greene, chairman and CEO of Digital Lava, responded: "It's extremely gratifying when a company like Bechtel -- which prides itself on its global reach and enterprising spirit -- recognizes the value of Digital Lava's on-demand rich media solutions for achieving key business objectives. What we're seeing with clients like Bechtel is that there truly is an overall `return on information' that can be gained by capturing and distributing knowledge and information on a global scale." Following is an account of how Bechtel tries to meet stringent 36 month deadline to build Reliance Industries Jamnagar refinery, the worlds largest refinery. http://www.eleconomista.es/empresas-finanzas/noticias/140004/01/07/Bechtel-Tackles- One-of-Its-Most-Challenging-Projects-With-Help-of-Bentleys-ProjectWise.html
Bechtel Tackles One of Its Most Challenging Projects With Help of Bentley's ProjectWise 30/01/2007 Accessed 21.8.2008 Bechtel Corporation, one of the world's premier engineering, construction, and project management companies, is using Bentley's ProjectWise system to collaborate on the J amnagar Export Refinery Project (J ERP) in India. In both scope and complexity, the project rivals many of Bechtel's previous exceptional accomplishments, including Hoover Dam, the Channel Tunnel, and the Trans-Alaska Pipeline. J ERP has a plot plan bigger than that of London and a target completion time of less than 36 months. Bechtel is tackling this megaproject using engineering resources dispersed around the globe, including a design and engineering team of 2500 professionals in 10 design locations, 19 offices, and eight countries. In total, the project will employ more than 105
90,000 people during construction and call for the fabrication and installation of 109,170 metric tons of steel, about five million meters of varied size pipe, more than 4000 pieces of major equipment, and more than 110,000 isometrics. Connecting People and Information Across the Enterprise To successfully complete a project this vast in scope and widely distributed in so little time, Bechtel knew it would need unprecedented network connectivity, document access, and document control. The collaboration solution Bechtel selected for its 2D CAD file management was Bentley's ProjectWise. As described by Bechtel senior project personnel, "In our decentralized model, technology that supports work sharing is absolutely vital. The business must be able to reliably move attached pieces of work around the globe. Different pieces of engineering must be integrated and linked seamlessly, even though the work is occurring in multiple locations. ProjectWise helps make this possible." Nearly 1000 users in nine locations are employing ProjectWise to ensure that more than 50,000 drawings are available to the correct discipline at the correct location. With ProjectWise, the drawings can be worked on collaboratively, enabling designers in one location to view the results of design teams in other offices almost immediately. This means Bechtel can rapidly distribute the project work to the different locations in a much more granular way - by unit, by discipline, and even by drawing - as the needs of the project dictate. A key advantage realized by the project team is the ability to search for and find all files that were changed in the last week, and to cross reference the location of the files found with the location of the person who last changed them. This enables the J ERP team to regularly reassess and redistribute their project content, optimizing productivity and reducing network traffic. J oe Croser, global marketing director, Bentley platform products, commented, "This application of knowledge gained through querying a document's history enables Bechtel's team to redistribute the content to 'follow the skill' as the design process iterates towards construction." Data Reuse an Added Benefit J ERP is an expansion of the refinery that Bechtel built some 10 years ago for Reliance Industries. Once completed, this new project will roughly double the size of the original Reliance Industries site, creating the world's largest refinery complex. Using ProjectWise to track and manage data, Bechtel has been able to facilitate the reuse of more than 25 percent of the design and engineering information generated during construction of the original facilities. This has proved to be critically important in meeting the project's aggressive timescale.
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In addition, Bechtel has been able to use ProjectWise to coordinate and collaborate with Reliance Industries on the procurement of equipment and systems for the new facilities that match, as closely as possible, the equipment and systems used in the existing refinery. In many cases, reengineering has been required, which ProjectWise has also facilitated. The end result has been major time and money savings during construction, with significant and continued savings anticipated during operations.
About ProjectWise ProjectWise is a system of collaboration servers that enables distributed enterprises and related organizations to successfully deliver infrastructure projects. Its core capabilities allow users to manage, find, and share CAD and geospatial content. About Bechtel Corporation Bechtel Corporation is one of the world's premier global engineering, construction, and project management companies, with more than a century of experience on complex projects in challenging locations worldwide. Privately owned with headquarters in San Francisco, the company has 40 offices around the world and nearly 40,000 employees. Bechtel's project capabilities include roads and rail systems, airports and seaports, fossil and nuclear power plants, refineries and petrochemical facilities, mines and smelters, defense and aerospace facilities, environmental cleanup projects, telecommunications networks, pipelines, and oil and gas field development. Signature projects include Hoover Dam, the Channel Tunnel Rail Link, the Kuwait oil fires, the Boston Central Artery/Tunnel, Iraq reconstruction, the Three Mile Island cleanup, J ubail Industrial City, Hong Kong International Airport, and the San Francisco Bay Area Rapid Transit (BART)
SIEMENS: ( Decision Support Systems and Intelligent Systems :Turban, Aronson, Liang Pearson Education 2006 P-512 )
SIEMENS KNOWS WHAT IT KNOWS THROUGH KNOWLEDGE MANAGEMENT
THE PROBLEM
Siemens AG, a $73 billion electronics and electrical-engineering conglomerate, produces everything from light bulbs to X-ray machines, from power generation equipment to high-speed trains. During its 156-year history, Siemens has developed into one of the world's largest and most successful corporations. Siemens is well known for the technical 107
brilliance of its engineers, but much of their knowledge was locked and unavailable to other employees. Facing the pressure to maximize the benefits of corporate membership of each business unit; Siemens AG needed to learn to leverage the knowledge and expertise of its 460,000 employees worldwide.
THE SOLUTION
The roots of knowledge management at Siemens go back to 1996, when a number of people within the corporation with an interest in knowledge management (KM) formed a community of interest. They researched the subject, learned what was being done by other companies, and determined how KM could benefit Siemens. Without suggestion or encouragement from senior executives, mid-level employees in Siemens business units began creating repositories, communities of practice, and informal techiniques of sharing knowledge. By 1999, the central board of Siemens AG confirmed the importance of knowledge management to the entire company by creating an organizational unit that would be responsible for the worldwide deployment of KM.
The movement toward knowledge management by Siemens has presented several challenges to the company, the most notable of which are technological and cultural. At the heart of Siemens's technical solution to knowledge management is a Web site called ShareNet, whIch combines elements of a database repository, a chat room, and a search engine. Online entry forms allow employees to store information they think might be useful to colleagues. Other Siemens employees are able to search the repository or browse by topic, and then contact the authors for more information using one of the available communication channels. In addition, the system lets employees post an alert when they have an urgent question.. Although KM implementation at Siemens involved establishing a network to collect, categorize, and share information using databases and intranets, Siemens realized that IT was only the tool that enabled knowledge management. Randall Sellers, director of knowledge management for the Americas Region of Siemens, states: "In my opinion, the technology or IT role is a small one. I think it's 20 percent IT and 80 percent change management-dealing with cultural change and human interfaces." .
Siemens used a three-pronged effort to convince employees that it is important to participate in the exchange of ideas and experiences and to share what they know. The challenge is managing the people who manage the knowledge. You have to make it easy for them to share, or they won't. Siemens has assigned 100 internal evangelists around the world to be responsible for training, answering questions, and monitoring the system. Siemens's top management has shown its full support for the knowledge management projects. And the company is providing incentives to overcome employees' resistance to change. When employees post documents to the system or use the knowledge, Siemens rewards them with "shares" (like frequent-flyer miles). An employee's accumulation of shares can be exchanged for things like consumer electronics or discounted trips to other countries. However, the real incentive of the system is much more basic. Commission-driven salespeople have already learned that the knowledge and expertise of their colleagues available through ShareNet can be indispensable in winning lucrative contracts. Employees in marketing, service, R&D, and other departments are also willing to participate and 108
contribute once they realize that the system provides them with useful information in a convenient way.
The ShareNet has undergone tremendous growth, which resulted in several challenges for Siemens. The company strives to maintain a balance between global and local knowledge initiatives as well as between knowledge management efforts that support the entire company and those that help individual business units. Furthermore, Siemens works to prevent ShareNet from becoming so overloaded with knowledge that it becomes useless. A group is assigned to monitor the system and remove trivial and irrelevant content.
RESULTS
ShareNet has evolved into a state-of-the-art Web-based knowledge management system that stores and catalogs volumes of valuable knowledge, makes it available to every employee, and enhances global collaboration. Numerous companies, including Intel, Philips, and Volkswagen, studied ShareNet before setting up their own knowledge management systems. Teleos, an independent knowledge management research company, has acknowledged Siemens as one of the Most Admired Knowledge Enterprises worldwide for five years in a row.
Siemens has realized a variety of quantifiable benefits afforded by knowledge man- agement. For example, in April 1999, the company developed a portion of ShareNet to support the Information & Communications Networks Group at the cost of $7.8 million. Within two years, the tool helped to generate $122 million in additional sales.
Ultimately, knowledge management may be one of the major tools that will help Siemens prove that large diversified conglomerates can work and that being big might even be an advantage in the Information Age.
World Bank and Ryder Systems From: http://www.cio.com/ Finding the Lasting Value of Knowledge Management Tom Davenport, CIO, November 01, 2000
The two organizations Ill focus on are the World Bank and Ryder System. They dont have much in common other than the joint pursuit of knowledge-based transformation. Both are service organizations that are supplementing their primary offerings to provide knowledge to customers.
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WORLD BANK The World Bank Group has been dispensing loans to developing countries for 50-plus years. In 1996, J ames Wolfensohn, then the new president, announced that the World Bank would strive to become the "Knowledge Bank." As usual with such Olympian pronouncements, the banks staff scrambled to figure out what the heck Wolfensohn meant, and the skeptics argued that "this too shall pass." But it did not. Instead, a large variety of initiatives appeared that penetrated almost every corner of the far-flung organization. Sure, there were the usual knowledge repositories, benchmarking efforts with other companies and consulting projects. But what the Bank has that few other organizations can boast is integration with the organizations basic mission and processes. The Banks mission statement was modified to read: "To help people help themselves and their environment by providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors." Its strategic plan included a major section on knowledge management that defined the concept and how it would be applied within the organization. By fiscal 2000 the Bank spent about $45 million, or 5 percent of operational expenditures, on knowledge management. Every staff member was expected to devote two weeks of time a year to knowledge creation, sharing and learning. "Communities of practice" or, as the Bank quirkily called them, "thematic groups," were organized for the creation and sharing of knowledge in key content domains, such as early childhood development, school health and disaster relief. Presently, there are about 100 such groups, and almost half of the Banks employees were active members of at least one group. Most important, the effort is showing results. The "Urban Slums and Upgrading" thematic group, for example, used knowledge management-based approaches to begin circulating ideas around the Bank for dealing with the problems of slums in developing nations. They developed a CD-based "electronic tool kit," for those who need help in designing and implementing large-scale urban infrastructure projects. They also developed an approach to "tacit knowledge download" to help new staff members learn from experienced ones. Ryder Systems OK, maybe youre more interested in dollars made than dollars loaned. If so, Ryder System is your poster child for using knowledge management to transform the business. Ryder is a leader in the business of providing integrated logistics and transportation management solutions. Sure, that includes truckscompanies can rent, lease or even buy used trucks from Ryderbut it also includes knowledge. For example, say you are a PC manufacturer and you want to optimize your distribution network for your PCs. You need to know things like how many warehouses you should have, whats the right mix of truck and air transportation, what distribution strategies will minimize the rapid depreciation of your products and how to deal with product returns. Making use of Ryders truck fleet may be part of the solution to these problems, but a more valuable component is the knowledge of the companys "Logistics Solutions Experts" and "Transportation Solutions Experts." Ryders integrated logistics business is fast-growing, already big (almost $2 billion in revenues) and extremely dependent on knowledge-based solutions. 110
So the company is implementing a major knowledge management initiative. Leading the effort is Gene Tyndall, Ryders executive vice president of global markets and e- commerce. "Ryders employees, the knowledge they have and the knowledge they create are the corporate assets that impact our performance more than any other form of capital," says Tyndall. Like many companies, Ryders knowledge initiative has a technical component. Its called the Knowledge Center, and it has some spiffy elements. Its in part a repository or centralized knowledge portal, with role-specific customization. It also supports collaboration. Allowing a team for example, seeking the best solution for a customers supply chain to come together online and share best practices in a virtual work space. One of the biggest challenges to successfully implementing KM is to properly address the cultural change issues. Unlike many companies, Ryders efforts are focused on that aspect of organizational change. The Ryder implementation program includes communications, training, policies and procedures, knowledge proficiencies, incentives, a comprehensive measurement system, and the creation of an organizational team to lead and support the knowledge management effort. J ust as the World Bank will always offer loans, Ryder may always be the place to go for commercial trucks. But both organizations are also becoming destinations for high- powered knowledge-based solutions. The hype behind knowledge management may wax and wane, but the business transformations under way at Ryder and the World Bank are true indications of the long-term value of knowledge and its management. 2008 CXO Media Inc.
Xerox Shares Its Knowledge Michael Hickins Reprinted from Management Review, September 1999. Copyright @ 1999 American Management Association International. Reprinted by permission of American Management Association International, New York, NY. All rights reserved. http://www.amanet.org.
An acknowledged leader in knowledge management, Xerox has succeeded in its initiatives because it fits the information technology to the people. As the author notes, "Xerox assumes that KM initiatives can be as low-tech as notes on a refrigerator door or as high-tech as its intranet-based virtual office solutions." His conclusion: "Other companies. .. should emulate Xerox's implementation strategy, which is based on . .. allowing workplace habits-not IT -to drive the process. "
Reality check du jour: a competitive edge based on technological superiority is now measured in weeks rather than years, providing a head start at best. But companies can regain that edge by leveraging their knowledge (or intellectual capital) to get more mileage out of their innovations and bring them to market faster than the competition. Xerox Corp., an emerging leader in knowledge management practices, is an interesting example of how the process is done right. 111
A pioneer in knowledge management (KM) research and development, the Stamford, Connecticut-based company has been consciously managing knowledge since 1990, when it repositioned itself as a "document company" as part of a new 15-year strategic outlook and adopted its Year 2005 plan. Today, Xerox [www.xerox.com] is one of the top five "Most Admired Knowledge Enterprises" chosen by senior executives at Fortune's Global 500 companies and leading KM practitioners in a survey sponsored by Business Intelligence and the Journal of Knowledge Management, both of the UK.
Xerox's reputation as a leading knowledge company has been built on a strong knowledge-sharing culture. This culture has become a catalyst for the company's development of knowledge-intensive products. In Xerox's case, the innovations happen to be KM tools-technologies for efficient knowledge sharing developed on the basis of the company's existing copier, printing and scanning technologies. But even nontechnology companies can leverage their knowledge in this manner.
Xerox also aligns its KM practice with its business plan, which calls for the company to use its strength and customer base in traditional document management products to evolve into a total digital network solutions company. At the same time, it expects to improve staple metrics such as quality and time-to-market. Since the company now defines documents as any information structured for human comprehension, its business has expanded to include products and services that touch on document and knowledge management, including a KM consulting service.
Consistent with that strategic alignment is the active encouragement and support that senior management gives to each business unit's KM effort. The leadership believes that the company can gain a significant competitive advantage by leveraging the knowledge contained in the heads of 90,000 employees, its archives of patents and processes, and countless documents stored around the world in various digital formats.
While many companies' KM initiatives have failed, Xerox has been able to make KM work because it has focused on the right thing from the start. Rather than emphasizing the IT infrastructure of knowledge sharing and forcing employees to either adapt or fail, Xerox has gone to great lengths to tailor its KM initiatives to people by understanding how they do their jobs and the social dynamics behind knowledge sharing.
Eye on the Prize
Xerox's overarching KM strategy is to create added value by capturing and leveraging knowledge. This strategy is rooted in the lessons learned from Xerox's near collapse in the 1970s, when many of the company's most profitable patents, notably in copiers, expired. It also had failed to exploit numerous advanced technologies it had developed, such as the mouse and pull-down menus that were later commercialized by Apple. These lost opportunities led to the thinking behind the Year 2005 plan.
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Considering that documents are more than just paper, Xerox today calls itself a "digital document company." President and CEO Richard Thoman has said that documents are the DNA of knowledge-the blueprint of an organization's intellectual capital. As communications manager Sandy Mauceli puts it, "Documents are not physical things, they are the crucible of knowledge."
Dan Holtshouse, one of the architects of the Year 2005 plan and now director of corporate strategy and knowledge initiatives, believes that Xerox's clients will gain a strategic advantage by managing knowledge better than the competition. Xerox applies this thinking internally as well. Thus, its goal is to develop products that manage the "crucibles of knowledge"-be they hard copies or electronic documents-and make them accessible to a large number of people.
But Xerox did not create a KM strategy out of thin air. Instead, KM is the nomenclature for an overall cultural focus on knowledge sharing. KM programs are the enablers that allow Xerox employees to share their knowledge. Chairman Paul Allaire says that aligning KM and its related technologies with the way people function in the workplace is key. "Fundamentally the way we work is changing, and we have to look at ways to help shape the workplace of the future through technology he says. "Because work has become much more cooperative in nature, technology must support this distributed sharing of knowledge."
Where Corporate Knowledge Lives A study of more than 700 companies shows that only a small portion of corporate knowledge is in a sharable form. The majority is in employees brains and documents not easily shared.
Employee Brains 42% Paper document 26% Electronic documents 20% Electronic knowledge base 12%
Source: The Delphi Group 113
Knowledge Sharing
At Xerox, the sharing of knowledge translates into accelerated learning and innovation. Eventually that is where its competitive advantage lies. Indeed, it was the internal reflection on KM that led Xerox away from the analog copier business to digital copiers in the mid-90s and to digital document networking today.
In a sense, Xerox has put itself on a different level from its traditional rivals in the copier business. And it is frankly pinning its competitive hopes for the future on knowledge sharing. As Bob Guns, senior manager of knowledge management at Pricewaterhouse Coopers, notes, "It is a competitive advantage if your company is learning faster than the competition."
Learning begins with sharing at Xerox, according to Holtshouse. In companies where power is acquired by hoarding knowledge, learning cannot take place effectively. William Latshaw, knowledge manager for consulting firm Arthur D. Little, says, "In the past, power was derived from having the knowledge. Unless you address this, the knowledge management system will founder."
But knowledge sharing is more than telling hoarders to play nice. It is about capturing the tacit knowledge locked in people's heads. In the experience of David Owens, vice president of knowledge management at Unisys Corp. and vice chair of The Conference Board's Learning and Knowledge Management Council, "Only 2 percent of information gets written down-the rest is in people's heads."
For Xerox, the challenge is to capture and transform such knowledge into a sharable form-a tall order when tens of thousands of people are involved in the sharing. One example: Xerox has 23,000 repair technicians around the world who repair copiers at clients' sites. Some of the solutions exist only in the heads of experienced technicians, who can solve complex problems faster and more efficiently than less experienced ones. By drawing on the tacit knowledge they've accumulated over the years, they can save time and costs, reduce customer aggravation and increase customer loyalty-a significant foundation for business growth.
Xerox realized that such knowledge could be documented and shared among technicians, allowing all to achieve the same positive results. In 1996, it developed Eureka, an intranet communication system linked with a corporate database that helps service reps share repair tips. To date, more than 5,000 tips have been entered by Xerox technicians, and they are available to all via their ubiquitous laptops. For employees who are scattered around the world and travel often, the ability to share such know-how means they don't have to miss out on the kind of knowledge that's typically exchanged at the watercooler.
Holtshouse says this knowledge-sharing technology has had a significant impact on the culture of the entire workforce. "We're starting this knowledge-sharing initiative as a cultural dimension inside of Xerox," he says. "Knowledge sharing is going to become part of a fabric inside the company, for all employees."
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Making KM Work
Xerox is not alone in trying to make KM part of its corporate life. Many companies cre- ate a KM system, replete with IT glitter such as expert databases and intranet sites, and then foist it on a workforce that already has plenty to do. Employees often resist the added burden, and even the best intentioned may throw up their hands in frustration.
The problem is that technology itself can be off-putting. Employees may have a difficult time remembering the computer-generated passwords needed to use database systems, for example, says Stephen Cunningham, information resource consultant for Roche Diagnostics in Indianapolis, Indiana. Often, the users are embarrassed to call the systems administrators for help and simply give up.
Another problem is that people are loathe to spend time adding content to a knowledge repository. And everyone knows that a database is only as good as the information it contains. Mark Mazzie, chief knowledge officer at Barnett International, a consulting firm in Media, Pennsylvania, says, "Don't create extra work for the people who use knowledge management systems-that's the best way to kill a program."
That's one minefield Xerox has managed to sidestep, despite the technological focus of its business. Laura Tucker, manager of the company's technical information center, emphasizes that KM at Xerox is not technology-driven. "It's people-driven," she says. Internal KM experts say that 80 percent of designing KM systems involves adapting to the social dynamics of the workplace. Only 20 percent involves technology as an enabling mechanism.
With Eureka, for instance, the goal was to develop a system that would suit field technicians and a database they would populate with content. Hence the link to laptops, which are standard issue at Xerox. The company also discovered that the technicians were more than happy to add tips to the database because they received credit for their contributions, which enhanced their standing among colleagues. Indeed, when management suggested attaching financial incentives to the tips, technicians resisted the idea. They felt this would diminish the value of their contributions.
Xerox also avoided the pitfall of poorly designed electronic yellow pages. Those arranged by name and title, for example, do not necessarily help users identify sources of information. In the yellow pages at Xerox, employees identify themselves by areas of expertise, which are as varied as digital networking, cuneiform and workplace psy- chology. Each employee also qualifies the degree of his or her expertise-broad knowledge, some knowledge, hobby, etc.-so that those seeking help in a given area or subject matter can identify sources. People must register themselves to use the database, says Tucker, so that they are available to others as they use the resources.
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Social Dynamics
Xerox's KM practice is successful because of the priority it gives to people. The company examined how social dynamics shape the pattern of knowledge sharing to create technologies that reflect factors such as work habits, the perceived benefits of sharing and the contexts in which sharing is natural.
DocuShare is a good example of this. According to Holtshouse, the tool was first developed in 1996 to enable the 500-plus employees at Xerox's research labs in Rochester to share information. Now, it is available companywide and allows work teams to create a "virtual" office space on the corporate intranet -a 3-D room where visitors can navigate through and access filing cabinets containing electronic documents.
What You Buy Is Not Always What You Get
Knowledge management (KM) is an internal practice at Xerox-and would be, even if the company produced paper dips. But as it happens, Xerox produces technological tools that enable KM. This does not mean that purchasing Xerox products alone will give you its KM capability. Without a corporate philosophy that embraces learning and sharing, even the best KM technologies won't put you ahead of the competition.
But companies that adopt KM as a basic principle do tend to produce more knowledge- intensive products. One example is Monsanto Co., which also embraces KM as a guiding post. It is branching into increasingly sophisticated products in both of its core areas- agricultural and pharmaceuticals- and new areas of development, which it has spun off as its life sciences division. According to J ane Rady, vice president of prospecting, knowledge management at Monsanto, KM is a core value that helps the company develop better products and bring them to market faster.
In one case, the company found a way to imbed intelligence into seeds, which have essentially been a commodity product. Its new seeds are genetically engineered to fend off parasites, which reduces costs for farmers because they don't have to spray the crops and also benefits the environment.
For Monsanto, the seeds breathe new life into its agricultural business. Farmers generally use seed crop-the portion of their crop used to grow future plants-to avoid buying more seeds, But genetically engineered seeds pose a new challenge, as their novel qualities are lost in succeeding generations. It means farmers must go back to Monsanto for more parasite-resistant seeds every year.
Rady credits Monsanto's KM philosophy with helping the company to leverage the intellectual capabilities of various departments ( such as R&D and marketing) in the formerly siloed organization. "Surprisingly insights can be created thanks to knowledge sharing across a wide spectrum of the organization," she says.
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Individual users set codes to determine who can have access to their documents and who cannot. All members of a group can visit any filing cabinet in their "room" and give access codes to employees from other work groups. The tool encourages typically closed- lipped scientists to share information with colleagues while respecting their need for privacy. In the end, it helps break down the barriers of distance and the product silos that usually exist in larger companies.
Brian Falkenhainer, manager of Xerox's DocuShare project, offers one example of how the tool has helped speed up his work: In this case, he had waited until the
KM Consulting as a New Strategy
Knowledge management (KM) is a vital tool that can serve two purposes, as consulting companies have discovered. Managing their own knowledge is critical to their survival, while KM also is a consulting product they can market. So it should come as no surprise that not only Xerox, but also IBM, Unisys and other technology companies are developing consulting practices in this field.
Xerox is counting heavily on its relatively new consulting business, which it considers a natural extension of its core business, CEO Richard Thoman recently said that he expects Xerox Professional Services (XPS), which includes the consulting business, to generate at least 50 percent of the company's revenues within 10 years.
According to Bob Couture, XPS vice president and general manager, the division's mission is to leverage business with existing Xerox customers and build on the company's growing reputation in KM to help its clients better manage documents- and, by extension, knowledge and information.
To this end, Xerox recently reorganized its activities by industry group rather than geographic region. 'This helps us better understand and help our clients address issues that are important within their industries," says Couture.
But while XPS may rely on existing Xerox copier clients for business, Couture says XPS does not necessarily recommend Xerox hardware or software solutions. "We do not have a measurement system and will not have a measurement system that compensates Xerox consultants for placing Xerox products -there is no inherent incentive to do that."
On the other hand, the KM practice at XPS, headed by Priscilla Douglas, owes its intellectual legacy and competitive edge to the work done by Xerox scientists and thinkers at the Palo Alto Research Center. The KM practice focuses on clients' work practices and processes to help determine which kinds of documents need to be captured and the best ways of doing so. Unlike consulting companies that offer a broad array of services, XPS focuses exclusively on document Iifecycles and document management. According to Douglas, "This intellectual foundation, which developed a social and technical approach to capture. knowledge, is really what differentiates us in the market. " 117
With a workforce of 2,500 worldwide, XPS acquired XL Connect (since renamed Xerox Connect) in 1998 to augment its technological infrastructure -and provide clients with on- site technical assistance. XPS is not an incidental part of the corporation. We're square in the middle of the strategy," says Couture.
last minute to prepare for a presentation at a conference, but he knew that a colleague had made a similar presentation. Rather than having to hunt him down in the hallway and ask for a diskette or hard copy, he used DocuShare to find the presentation on the intranet. This saved hours of work recreating a document that already existed. Falkenhainer says this tool reflects a very different work atmosphere at Xerox: "It's very different from how we used to operate internally two years ago."
By allowing the same information to be reused, DocuShare also reduces development costs and potentially stimulates new applications for the same knowledge, which ultimately increases the information's absolute value.
DocuShare also takes into account what motivates people to share knowledge. During the early design phase, Xerox hired anthropologists to help understand how scientists at the labs generally worked, both individually and in groups. It then decided that certain conditions were required for these scientists to use a common knowledge-exchange platform-no training needed to use it, no maintenance and no bureaucracy. It also discovered how scientists set criteria about which information to protect and which to make accessible. These social dynamics affected the technological specifications for the tool.
Thus, Holtshouse says that while KM solutions may appear to be technical, successful ones come from an understanding of the social dynamics of a particular workforce. "A lot of what you know about the social aspects can actually be expressed in the product," he says.
The germ of Portals, another KM tool used at Xerox, developed at the company's Palo Alto Research Center (PARC) facility in California. Portals is a digitally networked tool that uses the scanning technology inherent in copiers to build electronic links between copiers and corporate databases, says Mark Hill, vice president and general manager of the Document Portals business unit. Instead of just making copies, employees can use Portals to scan in hard copies of documents and transfer them to a hard disk. They can also retrieve documents from anywhere on the corporate database and print them out from Portals. This allows them to capture, search for and retrieve knowledge more efficiently.
Like DocuShare, portals was developed from an understanding of people's work habits, says Hill. Rather than inventing a new digital scanning device, he decided to combine existing copier technology with people's preference for simple operations. In his own words, people are "used to hitting the little green button to make copies." By paying attention to the details of the workplace (that little green button), Xerox developed a tool that enhances the number of ways that documents-and knowledge-can be shared.
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Holtshouse sums up Xerox's approach of fitting technology to people instead of the other way round: "We started with an intense search around workers-what makes them tick, what's important, what problems they are solving-and then picked technology that suits the solutions."
A Pat on the Back
It goes without saying that any KM program requires strong leadership support. At Xerox, a consistent communications strategy from senior management demonstrates that support. Holtshouse says that public comments from the top executives are critical. The validation of CEO Thoman shows that KM is important and strategically relevant over time.
Besides giving verbal support, senior managers have adopted a hands-off policy toward KM projects to ensure that the process of innovation isn't hindered by bureaucracy or budgetary considerations. This does not mean that KM project teams are a freewheeling endeavor. But rather than setting specific KM goals in stone, senior management sets more traditional organizational goals, such as quality and time-to-market. Associates can then develop KM projects that will support those goals.
The top executives aren't looking for quick wins, and the biggest strides have come from a grassroots, project-by-project approach rather than grandiose, management-driven initiatives. As Holtshouse notes, "In my experience, Xerox has a little more respect for the unknown, of not knowing what the grand picture is to begin with."
Eureka and DocuShare are examples of KM solutions that began as modest grassroots projects. Management funded those ventures without knowing exactly where they would lead. Portals grew out of conversations between Hill, based in Rochester, and chief scientist J ohn Seely Brown and others at PARC in California. This sort of cross-boundary discussion can be called a community of practice, which J oe Horvath, a senior consultant at IBM Consulting Group, defines simply as "a group of people bound by interest in a common set of problems." These communities spring into being spontaneously, adds Holtshouse, and cannot be "ordered" up. "The critical knowledge in any society is living knowledge," he says.
Dale Bennett, a longtime Xerox employee who works out of his home without a specific title (a "freewheeling idea generator" is how he describes himself), says communities of practice are an informal kind of cross-functional teamwork that generates innovation. "It's cross-pollination where you say, 'Oh, he's doing that over there, I could use that over here.
And those 'aha' moments when you realize, 'Oh yeah! That's a great idea and this is how I'd use it. That process is what really gives you access to creativity and creates a competitive advantage."
But even at Xerox, Tucker notes, "You have to have some deliverables eventually-not necessarily related directly to the community of practice, but with regards to your own job. Otherwise it's just a coffee klatch." 119
Copying Xerox (Again)
The French philosopher Pascal said that the human race is like a man who never dies, always gaining knowledge. This immortality of knowledge is the aim of learning organizations-to get all the knowledge in people's heads written down somewhere. By most accounts, the know-how most vital to companies as they struggle to compete, innovate and improve shareholder value is undocumented in any form.
So while the importance of knowledge sharing is not in doubt, implementing a KM project is still a challenge to many. Xerox is a technology company and can create many of its own KM solutions. But that isn't the point. Despite the technological nature of its business, Xerox assumes that KM initiatives can be as low-tech as notes on a refrigerator door or as high-tech as its intranet-based virtual office solutions.
Other companies can and should emulate Xerox's implementation strategy, which is based on aligning knowledge sharing with business goals and allowing workplace habits- not IT-to drive the process. Furthermore, the process shouldn't be static. Says Holtshouse, "We need to enhance what we do inside around knowledge sharing so that we continually learn, so that we can be a leader on what we know about this."
For Holtshouse, who worked for NASA earlier in his career (and still holds some patents), this isn't rocket science. It's just smart.
Michael Hickins is a business writer who lives in West Hartford, Connecticut.
SOURCE: The Knowledge Management Yearbook Editor James Cortada & john Woods 2000-2001 Publisher Butterworth- Heinemann READING: From: http://www.cio.com/ Knowledge Management at Northrop Grumman Megan Santosus, CIO September 01, 2001 In the late 1990s, the defense industry, no longer fighting the Cold War, was consolidating and downsizing. At Northrop Grumman Air Combat Systems (ACS), that presented more than just a short-term headache. As lead contractor for the B-2 Stealth bomber, an aircraft that was nearing the end of its production life, ACS was in danger of losing the expertise it needed to support and maintain a complex machine that would be flying carrying precious lives and cargo for years to come. So ACS instituted knowledge management procedures designed to capture the so-called tacit knowledge, or know-how and experience with the B-2, locked in its employees heads. 120
By 1999, with more cuts on the way and with more knowledge in danger of being ushered out the door Project Manager Scott Shaffar wanted to institute KM initiatives throughout the El Segundo, California-based Northrop Grumman business unit. But before designing a program, Shaffar wanted to find out what barriers, if any, prevented employees from sharing knowledge with their peers. He figured that if he could apply hard numbers to ACSs cultural attitudes about knowledge, hed have a road map for designing a unitwide KM program and getting the funding for the technologies needed to facilitate it. So Shaffar decided to conduct a knowledge audit, surveying employees about their knowledge-sharing habits. That, he believed, would be a quick way to not only assess ACSs readiness for a formal knowledge management effort but would also highlight those areas where sharing was not happening. Shaffar hired Boston-based Delphi Group to conduct the audit and derive a baseline pulse of the units knowledge-sharing culture. "The audit helped us turn gut feelings into numbers," Shaffar says, adding that he suspected employees would find the self-contained nature of the units programs a hindrance when it came to sharing knowledge. Now hes using this information to implement a bigger KM project and get the funding he needs to build the systems to support it. How Do They Know What They Know? Knowledge management first gained a foothold in ACSs B-2 bomber program in the late 90s. As the B-2 program was winding down, and engineers with 20 or so years of experience were leaving, ACS established a 10-person KM team to identify subject matter experts and capture the content of their brain cells. After creating about 100 knowledge cells (including armaments, software engineering, manufacturing and so on) and identifying 200 subject matter experts within those cells, the KM council turned its attention to knowledge capture. The team created websites for each of the knowledge cells and logged information about the knowledge experts into an expert locator system called Xref, short for cross-reference. Using Xref, employees can search for information in any number of ways, including by employee name, program affiliation or skill. If, for example, the B-2s landing gear is locking up, one can find the landing gear expert through Xref. The B-2 KM effort was deemed successful, and when ACS announced in 1999 a reorganization that would cut the workforce from 8,000 to 6,000, ACS established a four- person KM team charged with developing a unitwide strategy. Thats where the audit came in. "Sure, we couldve introduced a database technology and hoped that employees used it," says Shaffar, "but we wanted to avoid that black hole approach." In other words, Shaffar wanted to be sure that the expertise collected in centralized systems would not only be useful, but that it would be used.
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The Delphi Groups key weapon in administering the audit was KM2, which begins with a customizable, 97-question survey designed to unearth employee attitudes about knowledge and knowledge sharing, and in the process identify areas for improvement. The survey asked questions such as, "From your perspective, to what extent is the knowledge that you and your team generate reused by other teams?" The survey was e-mailed to 4,760 ACS employees at six locations across the country. Another 200 employees on the shop floor received paper-based surveys. Participation was voluntary; employees got a free lunch for taking 30 minutes of their own time to complete the survey, and Shaffar was pleased with the response: 3,380 employees completed the survey for a rate slightly better than 70 percent. Employees completed the surveys in J anuary and February 2000. In March, Delphi consultants analyzed preliminary results and targeted 125 employees for face-to-face follow-up interviews. What They Think About What They Know "We expected that there would be challenges [when] sharing knowledge across programs, especially those with different customers and in different locations," Shaffar says. The survey results backed this up. But what Shaffar did not expect was the degree to which employees recognized the value of their fellow employees know-how and their willingness to share information. Asked to rank the importance of knowledge in the discovery, development and marketing of products they worked on, 75 percent said knowledge was either very or somewhat important. In a nod to the importance of tacit knowledge, 51 percent said the brains of ACS employees were the primary source for best practices and lessons learned. (By comparison, 16 percent said electronic documents; 13 percent said e-mail; another 13 percent said electronic knowledge bases; and only 7 percent said paper documents.) A majority (56 percent) also characterized their colleagues as knowledge sharers rather than hoarders. Those results, Shaffar says, reinforced his belief that ACS had, at heart, a culture that would be receptive to a formal knowledge management push. But other findings indicated that there was still a lot of work to be done. Among the more eye-opening stats: Almost half of the employees spent at least eight frustrating hours each week looking for information they needed to do their jobs, costing ACS an estimated $150 million annually. Employees said only 6 percent of knowledge generated by teams was widely reused by other teams throughout ACS. And 31 percent of respondents believed that ideas generated by junior staffers were not valued and were likely to get smothered by the ACS bureaucracy. Armed with the surveys hard numbers, the KM team devised a three-pronged strategy focusing on people, processes and technology. 122
How to Make Sure They Dont Forget What They Know On the human side, the KM team set out to identify and then retain experts throughout ACS, establish communities of employees who had similar responsibilities (known in KM circles as communities of practice) and facilitate sharing among employees. One such community of practice consists of ACS project managers in different programs. While many such communities exist informally, Shaffar says its important to identify the ones that are strategically important, raise their visibility, and provide funding for technologies and systems to support them if necessary. "Establishing a community of practice should enable knowledge sharing across boundaries," Shaffar says, and end the isolation of people working in individual product lines. As for processes, the KM team focused on finding out how people captured, organized and reused existing knowledge. For the most part, employees maintained knowledge in their own files. There was no central repository where lessons learned could be easily shared or accessed by employees who werent personally involved in a project. In response to that finding, the team implemented technologies designed to collect and disseminate lessons learned. The F/A-18 fighter jet program, for example, now has a Web-based system that capitalizes on years of technical expertise by tracking structural problems with the aircraft. When an issue surfaces?a cracked part, for example?the first thing an engineer does is search the tracking systems 900 previously encountered experiences. To add an issue into the system, an engineer inputs the relevant information into a PowerPoint template that can include pictures, drawings and notes on the appropriate action needed to rectify the issue. How has the KM team integrated the tracking system into the workflow? Each week, engineers meet to discuss unresolved issues. To give a briefing on an outstanding issue, an engineer must first input data into the system; once engineers resolve an issue, it automatically becomes a lesson learned. When it comes to technology, the audit helped the KM team recognize the need to integrate the various KM systems at ACS. "It was clear from the audit and follow-up analysis that ACS had a lot of sources of information, but no central repository," says KM Project Leader J eff Wessels. The technology pieces of the strategy tools such as the homegrown Xref system, collaboration applications and document management systems essentially serve as the glue lashing the KM initiative together. The audit revealed that people would share information if they had an easy way to do so. The technology initiatives that focus on five areas portals, expert locator, knowledge capture, media management and collaboration are a result of the barriers to sharing information, such as paper-based filing systems, disparate locations and an inability to locate internal expertise, which the audit highlighted. Currently, ACS has implemented the Xref system throughout the engineering unit as well as in systems for managing documents, collaborating and capturing knowledge. Other initiatives, including portals that push personalized information, are in pilot phase. 123
Although Shaffars team is still building a business case for KM attempting to show the ROI of making information more easily accessible to employees ACS will continue to invest in KM initiatives. (ACS wont reveal specifics, but it does say that overall investments in KM will increase in the future.) The KM team plans to conduct follow-up audits every 18 months or so to keep tabs on initiatives and culture. And while theres an interest in devising an ROI methodology, Shaffar says that executives are satisfied with soft benefits such as better decision making and improved collaboration. Now that employment levels have settled at 4,600, ACSs hopes for KM have shifted. Rather than serve as a mode of retaining knowledge, ACS views KM as a way to increase innovation and speed customer responsiveness. "Were positioning ourselves for the growth we see ahead," says Wessels. If innovation and speed translate to cost savings for the customer, then thats the ultimate sign that KM pays off. 2008 CXO Media Inc. Back
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Chapter 12
MEASUREMENT SYSTEMS FOR KM
Measuring the Value of Knowledge Management There are a number of approaches that are increasingly being used to measure the value of, and progress in, knowledge and knowledge management in organizations. Following are some of the more common approaches. A few questions that come up are why measure at all ? And what exactly do we measure ? Finally, how do we measure ? Why measure? Measurement is undoubtedly the least developed aspect of knowledge management, which is not surprising given the difficulties in defining it, let alone measuring it. In fact some practitioners feel that measurement is premature at this stage and that trying to measure knowledge before you fully understand how knowledge is created, shared and used is likely to lead you to focus on the wrong things. Elaborate measurement systems, they say, cannot currently be justified because we simply do not yet know enough about the dynamics and impact of knowledge. That being said, in practice, few organisations have the luxury of being allocated resources to implement something without being required to demonstrate its value. Without measurable success, enthusiasm and support for knowledge management is unlikely to continue. And without measurable success, you are unlikely to be able to figure out as to what works and what doesnt, and therefore make an informed judgement regarding what to continue doing, and what to modify or discontinue. What to measure? Common measurement approaches There are a number of approaches that are increasingly being used to measure the value of, and progress in, knowledge and knowledge management in organisations. We discuss here some of the more common approaches A ) Measuring the impact of knowledge management on the organisations performance
Given that the whole point of knowledge management is to improve the performance of your organisation and to help it to achieve its objectives, the best and most logical 125
approach is tie-in measurement of knowledge management with your organisations overall performance measurement systems. This can be done either at an organisational level, or for individual projects and processes. However, one limitation of this approach is that if knowledge management practices are made an integral part of work, you cannot be sure of the relative contribution of those knowledge management practices to the success of a project or process, versus other factors. In view of this, some authors recommend a two-pronged approach that seeks to measures both outcomes and activities. Measuring outcomes focuses on the extent to which a project or a process achieves its stated objectives. The success of the project or process serves as a proxy measure for the success of the knowledge management practices embedded in it. In other words, knowledge management is seen as an integral tool for improving a project or process, rather than as a separate thing. For example, outcomes might be measured in terms of the reduced cost of a process, improved efficiency, the reduction in time taken to do it, the improved quality of delivery, etc. Measuring activities then shifts the focus onto the specific knowledge management practices that were applied in the project or process. What were the specific knowledge management activities behind this practice and what was their effect? In measuring activities, you are looking specifically at things like how often users are accessing, contributing to, or using the knowledge resources and practices you have set up. Some of these measures will be quantitative (hard) measures such as the number and frequency of hits or submissions to an intranet site per employee. However these measures only give part of the picture they do not tell you why people are doing what they are doing. Hence to complete the picture, you will also need qualitative (soft) measures by asking people about the attitudes and behaviours behind their activities. B) The balanced scorecard An increasingly popular approach to measuring an organisations performance, and one that is being widely adopted in knowledge management, is the balanced scorecard. The advantage of this approach in knowledge management terms is that it directly links learning to process performance, which in turn is linked with overall organisational performance. Developed by Kaplan and Norton, the balanced scorecard focuses on linking an organisations strategy and objectives to measures from four key perspectives: financial, customers, internal processes, and learning and growth. In contrast to traditional accounting measures, the balanced scorecard shifts the focus from purely financial measures to include three key measures of intangible success factors. These roughly equate to the three components of intellectual capital namely human capital (learning), structural capital (processes), and customer capital. The four perspectives can be framed as follows: Financial: How do we look to our shareholders (or governing bodies)? Customer: How do our customers see us? Are we meeting their needs and expectations? 126
Internal processes: What do we need to do well in order to succeed? What are the critical processes that have the greatest impact on our customers and our financial objectives? Learning and growth: How can we develop our ability to learn and grow in order to meet our objectives in the above three areas? Thus knowledge management, which is about learning and growth, is measured as an integral and yet distinct part of overall organisational performance. The balanced scorecard approach can be applied to individual initiatives as well as to a whole organisation. C) Return On Investment (ROI) Most initiatives that require resources will be expected to show a return in investment what benefits did we get to justify the costs involved and knowledge management is usually no exception. The problem is that both the costs and the benefits of knowledge management can be notoriously difficult to pin down. While the costs associated with an investment in information technology can be relatively straightforward to identify, other costs can be less so, such as for projects that involve a combination of resources from across the organisation, or those inherent in challenging an organisations culture. On the benefits side, how do you measure things like increased knowledge sharing, faster learning or better decision-making? A number of approaches have been developed for showing financial returns on knowledge assets. Such approaches tend to be rather complex, and therefore are probably more appropriate to organisations that are reasonably advanced in their knowledge management efforts, rather than just starting out. D) The knowledge management lifecycle Some organisations measure the progress of their knowledge management activities in terms of their maturity how far down the line they are in implementing knowledge management practices and ways of working. The American Productivity and Quality Center has developed a framework known as Road Map to Knowledge Management Results: Stages of Implementation. The aim is to provide organisations with a map to guide them from getting started right through to institutionalising knowledge management embedding it in the organisation and making it an integral part of the way an organisation works. The map has five stages: 1. Get started 2. Develop a strategy 3. Design and launch a knowledge management initiative 4. Expand and support 5. Institutionalise knowledge management There are measures associated with each stage.
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E) Employee surveys
Given the importance of people in knowledge management, employee surveys can be a useful additional to your measurement toolbox. Surveys can be used to assess aspects of organisational culture and the extent to which peoples opinions, attitudes and behaviours are, or are not, changing. Obviously such surveys measure peoples subjective perceptions and these may or may not reflect reality, but in many ways that can be their very benefit, as peoples perceptions will determine their behaviours with respect to knowledge management. In order to be effective, it is vital that any such surveys are carried out by people with the required expertise, whether that be through in-house capabilities or by hiring external consultants. How to measure? Melissie Clemmons Rumizen outlines the following steps in developing measures: 1. Revisit your goals Your starting point for measuring any knowledge management initiative will be the original goals of that initiative: what is it that you set out to achieve? Developing measures will often lead you to get clearer about how you define your goals in the first place; if your goals are not concrete and clear enough, then measuring your success or progress against them will be difficult. Hence ensure that your goals define clearly what constitutes success in measurable terms. 2. Know the audience for your measures
In defining success, you will often find that different people have different ideas about what constitute success. Managers who approve the allocation of resources will want to know about the returns on their investment. Users of the knowledge management initiative will want to know how it has benefited them and whether their participation has been worthwhile. Other beneficiaries of the initiative, such as customers, will want to know how they have gained.
3. Define the measures Define what exactly you are going to measure, and what measurement approach or approaches you intend to take. Ensure that your measures are: Valid - they actually measure what they are intended to measure rather than something else Reliable - they give consistent results Actionable they give information that can be acted upon if necessary.
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4. Decide what data will be collected and how it will be collected
This is a process of putting the meat on the bones spelling out the details: what data will be collected, who will collect it, how, when, where, etc? 5. Analysing and communicating the measures
When analysing and presenting the results, be sure to refer back to your original goals and your audience. Aim to present results in a way that answers their questions in a meaningful way, rather than simply presenting facts and figures. 6. Review your combination of measures
Monitor and evaluate how your measures are working. Developing measures is a process of trial and error dont necessarily expect to get it right the first time. Similarly, remember that as objectives and situations change over time, so will your measures need to. Additional pointers emphasized by other practitioners include: Measuring for the sake of measuring is a waste of time be sure that you are measuring for a specific purpose or purposes. Be sure that some kind of action or decision will be taken as a result of your measures Dont try to measure everything; instead, focus on what is important. Trying to measure too much not only requires a great deal of work, it also tends to dilute the important issues. If your organisation already has a measurement system in place, then you can use those measures. If your knowledge management initiatives work, then you might assume that this will show up in your organisations other performance measures. Of course there is no guarantee that existing measures are good ones so you might like to look into them, but there are two major advantages to piggy-backing on existing measures: first, they are already accepted practice in the organisation, and second, they are most likely measuring things that are important to the organization
READING:
KNOWLEDGE MANAGEMENT OCT 2001 Issue
Measurement for Knowledge Management Examines the different stages of KM implementations and metrics for evaluating an initiatives progress.Introduces a "KM measurement bell curve" and offers case examples of organizations ongoing assessment Techniques
By Kimberly Lopez et al., American Productivity & Quality Center 129
Measuring knowledge management (KM) is not simple. Determining KMs pervasiveness and impact is analogous to measuring the contribution of marketing, employee development, or any other management or organizational competency. It is nonetheless a necessity if KM is to last and have significant impact in an organization.
During its 2000 consortium learning forum, Successfully Implementing Knowledge Management, APQC focused on how some of the most advanced early KM adopters implement a knowledge management initiative, mobilize resources, create a business case, and measure and evolve their KM programs. This multi-client benchmarking project helped APQC and project participants identify measurement approaches, specific measures in use, and how measures impact and are impacted by the evolution of KM.
The need for measurement of KM follows a bell curve pattern through the life cycle of a business life cycle. In the earliest stages of knowledge management implementation, formal measurement rarely takes place, nor is it required. As KM becomes more structured and widespread and companies move into stages two, three, and four, the need for measurement steadily increases. As KM becomes institutionalized--a way of doing business--the importance of KMspecific measures diminishes, and the need to measure the effectiveness of knowledge-intensive business processes replaces them.
For this paper, APQC collaborated with Corning, Dow Corning, and Siemens AG to find real-world examples of measures throughout the stages and gain perspective on how companies deal with the perennial question, "How do we measure the value of KM?"
STAGE 1: ENTER AND ADVOCATE
The fire to manage knowledge starts with the spark of inspiration. There has to be a new source of energy or interest to cause KM to appear in the option set for the organization. Someone must become inspired with the vision of what it would be like if the organization could effectively support human knowledge capture, transfer, and use. Energized by his or her vision, this champion begins to search for opportunities to share the vision with others and to find 130
opportunities to demonstrate the value of KM to the organization. The central task for the champion at this stage is to create a vision that inspires others to join in the exploration of how managing knowledge might contribute value to the enterprise and its people.
Measures Appropriate for Stage 1
The value of embarking on the KM journey needs to be understood by members of management--more in theory at this stage than in quantitative numbers. The most effective way of convincing them may be to find the greatest areas of "pain" within your organization. Find redundant efforts, discover areas where knowledge is lost, and find points of frustration in your employee base. It is important to expose the need for knowledge management at this stage.
Interviewing key stakeholders helps uncover KM needs and exposes areas of lost time, effort, and therefore money. Making comparisons with similar industries that have successfully implemented KM also can convince skeptics. If your competitor has gained recognition for its KM efforts and has seen its productivity jump and operating costs plummet, you have likely found a good candidate to use as proof of KMs power.
Stage 1 is the time for advocating the potential of KM. Once you have others on board, more concrete measures will be necessary.
STAGE 2: EXPLORE AND EXPERIMENT
During the second stage of KM implementation, a practical definition of knowledge management is formulated within an organization and consideration of its applicability is made. The movement can start from several isolated, grassroots knowledge-enabling activities and develop into a cross-corporate vision and strategy. The development of several successful knowledge-enabling practices and pilots can be the catalyst to draw positive senior management attention. Further, it allows organizational sponsors to realize and consequently support the formation of a crossfunctional team that can bring alignment.
At this point in the process, negotiations for some corporate funding can add additional resources to the scarce and limited funds from the local teams. Toward the end of this stage, the pilots focus begins to center on specific knowledge management ideas and principles in order to demonstrate concepts and capabilities.
Measures Appropriate for Stage 2
We begin to see the emergence of a need for measurement in Stage 2 as interest about KM escalates in several parts of the organization. These measures can appear in three main categories: anecdotal (war stories, success stories, etc.), quantitative (growth), and qualitative (mainly extrapolation from anecdotal). It is appropriate to begin this section by identifying what should not be measured in Stage 2. Since most management initiatives are driven by financial 131
results, the instinct is to identify quantifiable financial measurements such as productivity increases, increased sales, reduced overhead, etc.
Knowledge management will generate these financial measurements and others, but not in the early stages. Measurement of financial returns or results should not be undertaken at this point except as byproducts of other concurrent efforts. Simply stated, if you are measuring for financial returns when your organization is at this particular juncture, then you are measuring the wrong thing.
Focus should be on meaningful measures that concentrate on exploring the various opportunities in your organization for implementing knowledge management practices, developing your organizations knowledge management strategies, measuring the progress toward organizational awareness, and experimenting with different knowledge management concepts. You should concentrate on developing and selling the concept and then measure against your plan.
Examples of Stage 2 Measures
Simple measures are critical at this stage. Examples of potential measurements include: Measure for Progress Measure the progress you make in developing and growing sponsorship and support. How successful are you in gaining senior managements attention, i.e., is anyone listening to you? Measurement here is largely anecdotal with some quantitative measurements such as:
the number of sponsors you can recruit both as champions and as project sponsors, how many times you can get in front of decision makers to make presentations and the responses you receive, and how much corporate underwriting and other funding you can get. If all you receive is verbal support and no time or money, your measurement of results should indicate a need to rethink your strategy.
Measure the Gap
As part of your early work in Stages 1 and 2, you should have completed an assessment or knowledge map of your organization to determine what practices you currently have in place and what you are missing. As part of this assessment, you should attempt to identify what, if any, measurements are currently being used. You will at some point need to determine the value of that measurement and whether it can be used going forward. The existing measurement can, at a minimum, provide you with a benchmark for future measurements.
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Measure Against a Benchmark
Benchmarking with other organizations can be a persuasive tool and can lead to executive sponsorship. Since most successful KM initiatives are grassroots or organizational (department/division) and not corporate (top-down) in origin, measuring where you are in developing your program against other parts of the company can be useful. How many organizations have KM initiatives under way? What is their funding, staffing, and reporting structure? These types of measures can help you promote your KM program to your management.
If your top managers perceive that enabling knowledge capture and transfer is receiving attention in other organizations, they may be inclined to support you. If your KM activities can be shown to be less advanced than others, management may gain the incentive to provide additional focus and resources. If you are out in front of the other organizations, management may increase support to maintain the perception of leadership, which may also help you develop contacts for tacit knowledge sharing.
A company routinely captures its research intellectual property in the form of formal reports that are stored in the library. The library measures the volume of reports turned in by each department and forwards the numbers to department management, who can then use the numbers to determine the per capita reports being generated and other measurements. The number of reports accessed on an annual basis and specific areas of interest are also measured.
One approach may be to understand what your competitors are doing in leveraging knowledge sharing for their customers and within their organizations. Gaining an understanding of what your suppliers, customers, and peer companies are doing to enable knowledge sharing within their organizations and externally may also be a good idea.
Measure Your Cultural Readiness
It is important at this stage to build the foundation to develop a knowledge-sharing culture. Critical practices that foster employee information exchange, teamwork, collaboration, and trust development can be built upon through crediting the contributors. Look for teams that operate in this manner. Begin to collect the teams social norms and practices and determine if insights can be incorporated into other teams. Document stories to encourage role model behavior.
STAGE 3: DISCOVER AND CONDUCT PILOTS
This stage signals the formal implementation of a knowledge management initiative. The goal of Stage 3 is to provide evidence of knowledge managements business value by conducting pilots and capturing lessons learned that can be transferred and used to help the organization better implement KM on a larger and expanding scale. The framework 133
for communities of practice begins to be formalized at this stage, and funding and support are derived from a mix of central resources as well as the donation of time, people, and money from within organizations that are enthusiastic about enabling knowledge sharing.
Measures Appropriate for Stage 3
There is a convergence at Stage 3 of the three main categories of measurement that exist in the early stages of KM implementation: anecdotal, quantitative, and qualitative. The degree of rigor and refinement becomes more defined and focused on business strategy in Stage 3. The key here is to begin to ensure that direct business value is perceived by the organization as a result of the knowledge-enabling projects. It is important to establish a mechanism to capture the hard and soft lessons learned in the knowledge management pilots, as these will be the building blocks for the later KM stages.
Having a predefined taxonomy on the classification of lessons learned can be helpful in developing conclusions and identifying areas desirable for replication throughout an organization. In addition, during the acceleration of knowledge management scale-up, establishing measures for the various components of a knowledge management initiative is beneficial. These measures include process dimensions, culture dimensions, content dimensions, information technology dimensions, and people dimensions.
Examples of Stage 3 Measures
Measure the Business Value
Document both the hard and soft business value derived from each pilot. Begin to map measurements to your specific business goals, such as improved clock speed. This does not necessarily need to be rigorous at this point. Extrapolation of anecdotal measurements into more solid quantifiable measurements occurs. Can the pilot results be duplicated in other parts of the organization?
Time saved equals direct labor cost, which is easy to figure. Effort needs to be put into determining the ancillary costs associated with time savings. Some potential areas are resource redistribution, support staff cost reductions, and improved time to market.
Measure the Retention of Knowledge
Measure the amount of information contributed to the knowledge base over time against retrieval and reuse. Quantifiable measurements are not enough; they must be balanced with qualitative data to ensure an accurate, full picture. Unlike in previous stages, the number of hits to a Web site is not good enough. Specific measures and issues to be considered may include the following:
Time spent per hit. This can reveal if individuals entering the site are actually reviewing its content (indicates quick review and rejection vs. what would constitute an individual actually digesting some content). This would have to be correlated with the number of individuals using it for an extended period of time and repeat users. 134
Are the IP addresses those of repeat users? The intent for this measurement is to track repeat customers. Repeat customers indicate two things--either specific information is of repeated use to them or they find value in the additional information continually added to the application.
How often is a site visited? What percentage of total hits represents repeat users? Value can be measured by repeat business. What is the threshold for indicating a repeat user is a steady customer? Someone may sample a site several times but will stop visiting if they fail to get the results they seek.
Measure the Cultural Impact
In Stage 3, the issues surrounding the potential for measuring the cultural side of knowledge management need to be addressed. Considerable effort needs to placed on determining: the types of measurements the potential value of the measurements the cost for measuring vs. the value of measuring processes
In selecting measures, consideration should be given to if and how the cultural side (the big side) of KM can be measured in Stage 3.
Anecdotal stories. How do we measure them? As stated earlier, stories can form the basis for extrapolation of quantitative data. This Anecdotal stories. How do we measure them? As stated earlier, stories can form the basis for extrapolation of quantitative data. This is not necessarily the only or best means of using anecdotal measurements, but considering the intrinsic value of the anecdote can be important. Can a story or a lesson learned have behavioral impact that cannot be measured directly or in traditional terms?
Performance review. Another means of measuring cultural impact is through the performance review process. Individuals can be rated by their peers (360-degree feedback) on three major knowledge-sharing points listed below.
This can be implemented in Stage 3 because there are formal (if only pilot) applications in place. As part of these applications feedback on the usefulness of the knowledge provided is essential.
1. Do they share their knowledge in an open and constructive way?
2. Do others find their knowledge of value and use it? What results are gained from it?
This can also be demonstrated through venting processes for inclusion in databases and use of that information--Xerox Eureka, for example.
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3. Do they use others knowledge and apply it to improve operations? This can be measured somewhat by traditional business measurement tools.
Public and private recognition and rewards for individuals and teams. Though we advocate team building and sharing of knowledge, incentives for individual contributions are still required. A reward or recognition system properly implemented can provide quantitative measurements.
Measure the Effectiveness of Sharing Communities
Document the effectiveness of communities of practices (CoPs). Based on the findings, determine essential elements that contribute to a coherent and effective CoP. Draw correlations against CoPs that have not been as successful.Extract lessons learned and best practices from these correlations and use them to build new CoPs and improve existing ones.
Measure the Ownership of Capture and Compilation
What are the costs involved in capturing information in a usable manor? This includes not only the capturing but also the indexing. If the information is not retrievable it is of little value. Quantifiable measurement of the time required to capture the information in a usable manner is applicable. This can be critical in evaluating the impact of a pilot project. Is the cost of the capture process too high in comparison to the value of the captured information or knowledge?
Consider storytelling as an example. Here are some of the factors to be considered.
Creating the storytelling environment (either electronic production or live storytelling) If live, what is the time commitment of participants (storyteller and audience)? If electronic, what are the production costs? Are the storage and distribution costs insignificant? How much responsibility is there on the individual to capture his information in a usable manor? This includes not only the capturing but also the indexing. If the information is not retrievable, it is of little value. Does the measurement of capture and compilation warrant effort? Measure Project Management Effectiveness and Intended Results
Successful pilots will contribute to building organizational support and future funding. To ensure that projects are managed effectively, it is beneficial to track the projects. Was a formal methodology employed? Was a time line established and progress tracked? Were project objectives and expectations clearly stated and measured? Measure the performance of the pilots themselves against the intended results or hypothesis. Measurements can be quantitative, qualitative, or anecdotal.
Measuring cost in your pilots can provide critical information for determining program direction and strategy. If properly set up, measurements can enable a KM team to rethink its priorities in an efficient and timely manner, allowing for shifting resources to strengthen the potential for success. 136
Can the capturing of lessons learned from your pilots be used for measurements? The obvious answer is yes. An organization can quantify these in two basic ways: number submitted and number referenced.
A qualitative measurement can be reached through a feedback measurement system such as Eurekas thumbs-up or -down method of capturing the value of a tip to a user. Other measurements can be made using the number of times a lesson was used or through a feedback system allowing the capture of users comments.
STAGE 4: EXPAND AND SUPPORT
When an organization reaches Stage 4, KM has proved valuable enough to be officially expanded to become part of the organizations funded activities. Demand for KM support by other parts of the organization tends to be high, providing additional evidence of its value. Pilot results are an added benefit.
High visibility and the authority to expand are a mixed blessing; the added visibility of costs and resources devoted to KM will require more formal business evaluation and ROI justification. The good news is that unless unforeseen factors derail the efforts, KM is on its way to being considered a strategic and necessary competency.
Measures Appropriate for Stage 4
Since organizations at Stage 4 are undertaking multiple projects in diverse areas of the business, it becomes necessary to evaluate the fitness of the knowledge areas in relation to the whole organization. Evaluating a knowledge area project might require examining many areas of fitness that, in aggregate, help the organization determine whether the projects in its KM portfolio are of high impact and beneficial to the success of the company.
Project criteria may include: Proficiency. Has a process become world-class because of KM, or has it made only mediocre improvement? Diffusion. Has KM been properly executed? Is the project and knowledge managed well? Is it well understood? Codification. Because codifying knowledge is expensive, should the organization limit that? Is that limitation visible and understood? Openness for combination/innovation. Is the knowledge described in jargon that no one understands? Is the knowledge base open to other disciplines? Does the project generate questions to the organization to help it grow?
J ustification measures can be difficult when the organization is trying to decide whether to adopt KM as part of the ongoing corporate strategy. The question of measurement must often be restated at this stage. The organization has to not only measure how knowledge area projects perform but also evaluate how it feels the business key 137
indicators are linked to the knowledge areas. This can be easier if the business owner decides what needs to be improved through a project before embarking on it. When the improvements occur, he or she can communicate the causal linkages between where the business started and where it ended up because of the concentration on creating a viable knowledge project.
At this stage, it is important to tap into the values of the organization and determine whether a culture shift is occurring. Personal performance reviews can be a useful avenue to determine whether managers support knowledge sharing and give employees a chance to show their ability to share. Then questions can be asked of employees to determine whether management really does support knowledge sharing. Targeted questions such as "How do you support creation and innovation?" can also help determine employee mind- set.
Although most corporate KM programs have been well-established and "proven" by Stage 4, it is still important to show that KM is working and will work going forward. To estimate ROI, add the costs of a community (including labor, meetings, facilities) and then define how much effort is spent on KM by knowledge management experts. Then decide how much effort has been saved by sharing solutions in the community.
Another way to approach ROI estimation might be by looking at subcommunities and their generation of solutions in terms of community projects. If a group needs a solution and embarks on a knowledge-creation effort, determine how much has been saved in time to market, competitive positioning, etc.
Examples of Stage 4 Measures
To help prove the value of KM in its organization, Siemens is currently making a master plan of KM metrics that contains measures for each of four dimensions of its holistic KM system. 1. Knowledge community: the organization, community, people dimensions 2. Knowledge marketplace: the technology involved 3. Key KM processes: the sharing and creation that takes place 4. Knowledge environment: encompasses the above Community and Marketplace
Thinking in those terms, Siemens has realized that it can easily evaluate the success of its communities and marketplaces with such measures as: how much knowledge comes into or out of the community the amount of feedback that comes into and out of the community the quality of feedback
Since Siemens believes communities are the heart of the KM system, it has spent a great deal of time on CoP assessments-questionnaires for community members that provide ideas on how to improve the community and what the impact of the community has been on someones business.
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Environment
In addition, a company can measure its knowledge environment through sophisticated methods of value assessment, e.g., measuring the values of employees and business owners to see if they match. To determine the values, an outside firm asks a series of questions to determine at what level of importance various issues register with people. For example, a question might be "Is it more important for you to exchange experiences with friends or to create something new in your environment?"
The results of this effort have led the company to incorporate several new principles into the corporate value system.
KM Processes
Siemens has tried to check the health of processes to determine the performance of the sharing process. Ideally, the measures would evaluate whether a person has managed the process correctly and set the right limits on it. This would give Siemens a good way to not only look at the marketplace but also examine how much sharing and creation is taking place.
As a Whole
To monitor the entire KM system, it is possible to perform a KM maturity assessment that defines whether the process is still ad hoc and chaotic or has progressed to an optimized state. Siemens measures its four dimensions and 16 enablers, each of which has a set of questions. With a diagram showing the maturity for each dimension, an organization can get a feel for its maturity level.
Measures appropriate at Stage 4 are carried out with the future in mind. The value of KM principles has already been proven and companies in this stage are focused on how to embed KM throughout their organizations. Measures are used at this stage not to prove, but rather to improve, the existing projects and add to the corporate-wide strategy.
STAGE 5: INSTITUTIONALIZE KNOWLEDGE MANAGEMENT
In some ways, Stage 5 is the continuation of Stage 4 to its logical conclusion of full enterprise-wide deployment. However, Stage 5 differs from Stage 4 in three fundamental ways:
It does not happen unless KM is embedded in the business model. The organization structure must be realigned. Evidence of knowledge management competency becomes part of the formal performance evaluation.
Sharing and using knowledge become part of the organizations "way of doing business" as well as an expected management competency. In the relatively young arena of KM, only a few organizations have reached this stage. 139
As in Stage 4, Stage 5 measures are not used to prove value. They are used to check progress and monitor the continued evolution of the culture. KM can no longer be called an initiative or project at this stage: Your business relies on it.
Contributing authors: Cynthia Hartz of Dow Corning, Stuart Sammis of Corning, Dr. Josef Hofer-Alfeis of Siemens AG, Kimberly Lopez of APQC, Cynthia Raybourn of APQC, and Jennifer Neumann Wilson of APQC. Copyright 2001, American Productivity & Quality Center (APQC). For more information, please contact APQC at apqcinfo@apqc.org. Released February 2001
"Information systems will maintain the corporate history, experience and expertise that long term employees now hold. The information systems themselves -- not the people can become the stable structure of the organization. People will be free to come and go, but the value of their experience will be incorporated in the systems that help them and their successors run the business." These are the words of a Professor of nothing less than Harvard Business School (cf: Applegate et al., 1988, p. 44) Source: Malhotra http:// www.brint.org/KMNewOrg.pdf It is this view of Knowledge Management that perhaps explains much of the failures of KM initiatives. Experts subscribing to this view feel that knowledge is something that could be suitably packaged and transported wherever and whenever required. This is apparent from the very definition one often sees of knowledge management . Lets look at some samples: Source: Malhotra, http://www.brint.org/KMNewOrg.pdf ) Definitions: The process of collecting, organizing, classifying and disseminating information throughout an organization, so as to make it purposeful to those who need it. (Midrange Systems: Albert, 1998)
Policies, procedures and technologies employed for operating a continuously updated linked pair of networked databases. (Computerworld: Anthes, 1991)
Partly as a reaction to downsizing, some organizations are now trying to use technology to capture the knowledge residing in the minds of their employees so it can be easily shared across the enterprise. Knowledge management aims to capture the knowledge that employees really need in a central repository and filter out the surplus. (Forbes: Bair, 1997)
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Ensuring a complete development and implementation environment designed for use in a specific function requiring expert systems support. (International Journal of Bank Marketing: Chorafas, 1987)
Knowledge management IT concerns organizing and analyzing information in a company's computer databases so this knowledge can be readily shared throughout a company, instead of languishing in the department where it was created, inaccessible to other employees. (CPA Journal, 1998)
Identification of categories of knowledge needed to support the overall business strategy, assessment of current state of the firm's knowledge and transformation of the current knowledge base into a new and more powerful knowledge base by filling knowledge gaps. (Computerworld: Gopal & Gagnon, 1995)
Combining indexing, searching, and push technology to help companies organize data stored in multiple sources and deliver only relevant information to users. (Information Week: Hibbard, 1997)
Knowledge management in general tries to organize and make available important know- how, wherever and whenever it's needed. This includes processes, procedures, patents, reference works, formulas, "best practices," forecasts and fixes. Technologically, intranets, groupware, data warehouses, networks, bulletin boards videoconferencing are key tools for storing and distributing this intelligence. (Computerworld: Maglitta, 1996)
Mapping knowledge and information resources both on-line and off-line; Training, guiding and equipping users with knowledge access tools; Monitoring outside news and information. (Computerworld: Maglitta, 1995)
Knowledge management incorporates intelligent searching, categorization and accessing of data from disparate databases, E- mail and files. (Computer Reseller News: Willett & Copeland, 1998)
Understanding the relationships of data; Identifying and documenting rules for managing data; and Assuring that data are accurate and maintain integrity. (Software Magazine: Strapko, 1990)
Facilitation of autonomous coordinability of decentralized subsystems that can state and adapt their own objectives. (Human Systems Management, Zeleny, 1987) Commenting on the largely prevailing technological view of KM, and its inability to respond to turbulent business environment, by which we mean not only rapid change but a discontinuous change In an article titled: Knowledge Management & New Organization Forms: A Framework for Business Model Innovation ( Information Resources Management J ournal 13 (1), 5-14, J an-Mar 2000. ) 142
Dr. Yogesh Malhotra writes: Quote: Based primarily upon a static and 'syntactic' notion of knowledge, such representations have often specified the minutiae of machinery while disregarding how people in organizations actually go about acquiring, sharing and creating new knowledge (Davenport 1994). By considering the meaning of knowledge as "unproblematic, predefined, and prepackaged" (Boland 1987), such interpretations of knowledge management have ignored the human dimension of organizational knowledge creation. Prepackaged or taken-for-granted interpretation of knowledge works against the generation of multiple and contradictory viewpoints that are necessary for meeting the challenge posed by wicked environments characterized by radical and discontinuous change: this may even hamper the firm's learning and adaptive capabilities (Gill 1995). Unquote Studies after studies have shown that at the end of the day it is the People who make it a success. Lets take a Study titled: Mastering the Human Barriers in Knowledge Management : Kurt-Martin Lugger and Herbert Kraus (Institute for Organization and Human Resource Management, Karl-Franzens-University Graz, Austria) Here is the Abstract: Quote "New" essential resources and success factors keep being invested and provide fertile grounds, not only in the consultancy industry, for ever more glossy brochures to create success. The production factor of knowledge is currently at the focus of many theories and numerous publications. It remains to be seen whether we are seeing real innovations. Knowledge has always been prerequisite to creating products or services, an essential input, a "silent production factor". The modern, complex environment has also made products and processes more complex and extensive. The ability to adapt to changing conditions increasingly determines success or failure. All aspects of enterprises are affected, even the "smallest units", the human element. In this context, it is becoming increasingly important to be able to share knowledge with colleagues. Knowledge transfer is basically characterised by a question- and-answer principle. The focus is on the incalculable human factor. This causes more or less distinct transfer barriers. Prejudices, fear of criticism, lack of confidence, constant time pressures and other factors are some barriers to transfer caused by the individual. Besides organisations may create barriers, too, through rigid hierarchies, red tape, and outdated procedures.
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Knowledge management does not yet seem to attach enough importance to the issue of communication, particularly to internal communication. In addition to individual and organisational transfer barriers, communication media can also contribute to problems and barriers in knowledge transfer. Unquote Lets take another study: Individual and social barriers to knowledge transfer Disterer, G. (System Sciences, 2001. Here is the Summary: Quote It is often stated that people use knowledge for their own benefit and that they share it only grudgingly. This may be partly true because our society has deep cultural traditions which tend to discourage knowledge sharing. Even memories from school confirm the picture of knowledge as a treasury that has to be protected and hidden. During examinations, the rise of shared potentials is castigated as a 'crib' and as an attempt to deceive; what counts are the individually produced results. On the other hand, the necessity of sharing knowledge in a company in order to use the economic resource of knowledge efficiently and effectively is said to be one of the critical success factors nowadays. Unquote KEY TO SUCCESS So, What is the key to the success of Knowledge Management in any organization ?
An opinion poll found that 73% respondents feel that people are the key to the success of Knowledge Management. 11% says Process is the key and 14 % says technology is the key (rest 2% says can't say ).
The result isnt earth-shaking. But let us try to comprehend what it means.
People, Process and Technology: Three key areas
People
The success of any KM program depends largely on the collective knowledge of the organization. The organizational knowledge comes through learning and sharing culture of the organization. Bringing a culture where active experimentation is encouraged and this change in culture can come through involvement of all and by establishing trust and relationship among the members. Knowledge management program is primarily a change management process. And like in any change management program, people are the key to the success. 144
Process
J ust having a process in place is perhaps not enough. Effective monitoring of the process with key parameters and measuring the process outputs gives clear indication of success or failure of the program. The process can be a part of an existing strategic planning in place to achieve organizational objectives.
Technology
This is the easiest of the three factors. Technology is an enabler in a KM program. Some times it plays a crucial role in bringing people together specially when they are geographically located at distance places. Technology helps in managing corporate content by the way of codifying knowledge objects. However technology only pays important role in enabling a KM process. Without proper people strategy or robust process, technology is not going to give result.
FAILURES IN KM INITIATIVES: PRIME REASONS Steps taken in the early stages of project planning have the greatest impact on success. Experience has shown that knowledge management and collaboration projects most often fail due to: Lack of management buy-in Cultural barriers Failure to provide a business case that ensures the necessary funding Inability to properly scope the project The foundation for success in a KM initiative lies to a great extent on the above factors. To begin with, top management must be convinced regarding the usefulness of the initiative. Much would depend on how the respective people are able to make a solid business proposition. At the end of the day any initiative costs money, which could perhaps be diverted to some concrete project that assures a minimum return.
Another common reason for failure, often associated with an Information System related area, is the scope of the project. What exactly are we going to get out of it ? And, more importantly, what is it that we dont expect to be resolved by this project solution ? Defining clearly the scope of the project, the boundaries,- at the very out set could prevent a lot of disappointment, disenchantment, a lot of heart burning and all that.
Finally, one must be sensitive to the cultural issues. Like all of us, an organization too has a culture. Anything that steps on it might boomerang. 145
BARRIERS TO KNOWLEDGE SHARING
Finally, what are the barriers to knowledge sharing ? Why is it that people dont want to share what they know ?
There are number of reasons why people in an organization don't share their knowledge. Some of the reasons perhaps could be deep rooted to the organizational culture. There would be many reasons for not sharing which are essentially embedded in individual belief and perceptions. A right environment created by organization with a strong commitment of all members to sharing of knowledge is the key to success of any KM program. It is easier said than done. There are many road blocks in sharing of knowledge. What are they ? Let us try to identify them.
What I know is a common knowledge:
Many don't understand the importance of their own knowledge. 'I have noting to share' and 'what I know is a common knowledge only' are the statements one gets from many intelligent and experienced people. In organization level also the same feeling remains that their knowledge base has nothing special about it. Basically, these organizations do not know what they know. What they know is at an unconscious level. But, surprisingly, 146
in a discussion or in a community of practice meetings, it is they who strongly participate.
Knowledge is power:
Knowledge is power,- so why should I share my knowledge which I earned spending my time and effort? This is what stops many from sharing their knowledge. Prevailing system encourages this belief. Going back to our school days we recollect we had not been encouraged to share. The examination system tests ones knowledge. One would be debarred from exam if he or she tried to share knowledge. In a business environment, frequent interaction and exchange of ideas create new knowledge. Here organization must create an environment where knowledge sharing is encouraged. In a culture of fear / apprehension of loosing jobs or position by sharing will not help in creating new knowledge for an organization. Knowledge is fluid and it grows when it transcends ones boundary. Organizational knowledge is also enhanced by knowing more about customers and supplies. This knowledge helps in improving or developing new product and services. So by hoarding the knowledge neither individual nor the organization gains any business value.
Trust is the key :
Trust among the employees plays an important role in creating sharing culture. No one will share their problems or discuss any new idea when they don't have trust on others. Socialization, networking, get together are the tools by which we can bring people together and a trust can be developed. Working together, sharing a common problem, discussing improvements are the key to develop trust among each other.
I don't want to be on Focus:
Some times people don't want to be at the centre of attention by sharing their knowledge. This is very common in office meetings, particularly in organizations where there is little incentive to share. In fact, fear of extra responsibility falling on them often prevents them from coming forward. There are other barriers to knowledge sharing like internal conflicts, group politics etc.
Organization Policy and culture:
Some organization policy like rewarding individual employee rather than team does not encourage knowledge sharing. In fact, there is an interesting article titled 'Create colleagues, not Competitors' written by Marshall W. Van Alstyne (September 05 HBR ). The study says people rewarded for individual performance shared information least; the people rewarded for team performance shared more; the people rewarded for company performance shared most. Peer to peer competition is one the major reasons why people don't share. Organization has to create a conducive atmosphere for free sharing and reward or recognize all knowledge sharing efforts.
In fact, some organizations like XEROX decides on the bonus an employee receives not just on his or her performance, but also on team and company performance. To ensure 147
that bonus does not turn out to be largely a fixed amount, XEROX does not add the performances, but multiplies them. This ensures that there is a larger stake in group and corporate performance. ( Leveraging Processes for Strategic Advantage : David A. Garvin, HBR, Sep-Oct 1995 ) Reference: http://www.brint.org/KMNewOrg.pdf Malhotra Back
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CHAPTER 14
Building a Knowledge Management Capability Framework
Introduction Companies are in an unending struggle to differentiate themselves from relentless competitors. As markets become saturated with innovative and ever more customized products, the uniqueness of the way these products are produced becomes an important differentiator. This differentiator is referred to as a core capability. Core capabilities are not stagnant over time. A company needs to adjust or change its core capabilities in response to changing environments and market conditions. Knowledge Management is concerned with building the necessary technological and organizational infra-structure. Companies have been trying to differentiate themselves based on unique production processes, rare and distinct skills, creativity, and now on management initiatives such as Supply Chain Management, Customer Relationship Management, and Total Quality Management.. Core Capability Core capabilities are unique resources and constitute a high barrier to imitation, resulting in sustained superior performance and competitive advantage. Core capabilities refer to the organizational resources, processes, or abilities that make a company different from competitors and achieve market success. However, not every skill or ability can be turned into a core capability. A distinction, however, needs to be drawn between a core capability and the two other kinds of capabilities that are not sufficiently strategic in nature to provide a sustainable competitive advantage Supplemental capabilities are those that add value to core capabilities that in turn gives a company its competitive edge. Rivals can easily imitate them. Examples include distribution channels and powerful packaging design skills. In contrast, enabling capabilities not only add value, but also are necessary to competitively distinguish a company. A clear example is World-class quality in manufacturing. It has become a necessity for entering the game, but not the road to superiority. 149
Dimensions of a Core of Capability (1) Skills and Knowledge Skills and Knowledge refer to both, the techniques specific to the firm as well as the scientific understanding. These skills can be public, industry-specific, or firm-specific. While public skills can be obtained from journals and public sources and industry specific skills can be obtained from consultants, firm-specific skills are generally tacit, hence less codifiable and imitated by competitors. These skills are specific to the firm and people who own them. (2) Physical Systems Physical systems are systems that a company builds over time, such as databases, machinery, and software programs, where skills and knowledge are embedded. (3) Managerial Systems Managerial systems are defined as the organized routines that guide resource accumulation and deployment such as systems of innovation, rewards, and improvement . These systems may facilitate or set barriers to activities undesired by management. (4) Values and Norms Patterns of behaviour and passionate beliefs define the level of acceptance of new initiatives and techniques, hence acting as screening mechanisms that filter out anything foreign to the existing culture. Values and norms usually stem from the basic assumptions about human nature and personal values of the founders of the company. Some Definitions of Knowledge Management (A) Knowledge Knowledge is a complex and fluid concept. It can be either explicit or tacit in nature. Explicit knowledge can be easily articulated and transferred to others. In contrast, tacit knowledge, which is personal knowledge residing in individuals heads, is very difficult to articulate, codify, and communicate . Hence, it is equally difficult to imitate. KM has no unique or standardized definition. KM may however be defined as a combination of processes that control and manage the creation, codification, dissemination, and leveraging of knowledge in organizations. A key objective of KM is to ensure that the right knowledge is available with the right person at the right time in a manner that enables timely decision-making.
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(B) Infrastructure Requirements Organizational infrastructure comprises of corporate culture and values, high quality HR Department, organizational politics and employee skills. While, corporate culture and values guide channels of knowledge flow and define access privileges to knowledge, KM driven human resource practices ensure that the recruitment process serves KM objectives such as enabling and encouraging knowledge sharing Politics are a major component of KM Organizational infrastructure, since they define whether status and power are with or against knowledge sharing. Employee skills and prior knowledge can also be considered as a key component of this infrastructure, given that there has to be minimum knowledge about KM before the initiative can be undertaken. In comparison, IT infrastructure supports the process of codifying and storing knowledge, creation of knowledge maps (or corporate directories), sharing of best practices, and support for knowledge networks.. A company considering KM should, have personal computers for all employees, phones, and videoconferencing technologies, combined with ample storage capacity for documents to accommodate knowledge growth. (C) Activities and Processes KM activities and processes comprise of three main activities: Knowledge Acquisition, Knowledge Sharing, Knowledge Utilization. Acquisition refers to the process of creating insights, skills and relationships, capturing them, and codifying them to make them accessible to users. Knowledge sharing refers to the process of transmitting company knowledge to everyone who needs it. Knowledge utilization refers to the integration of acquired knowledge into the organization, which in turn is dependent on users absorptive capacity and the recipients willingness to use the transmitted knowledge. (D) Benefits Tangible KM benefits, such as reduced cost and new product development, are quite difficult to quantify and impute to KM activities. Most organizations seek four main benefits of KM. These benefits are capturing and sharing best practices, providing training or corporate learning, effectively managing customer relationships, and delivering competitive intelligence. Other advantages of successful KM implementation include fewer mistakes, less 151
redundancy, quicker problem solving, better decision making, reduced R&D costs, increased worker independence, enhanced customer relations, and improved service. KM also bring the company closer to the optimum use of employee knowledge in delivering value to customers, enhanced relationships and corporate coherence, and higher employee morale and retention. Indeed, KM also focuses on enabling, empowering, directing, and energizing employees. (E) Implementation Barriers Many barriers prevent the successful implementation of knowledge management. Over time, knowledge embedded in procedures becomes stagnant, a situation referred to as organizational blindness where people believe that current practices are the best Political status is yet another barrier. Corporate culture that encourages knowledge hoarding rather than sharing, and ambiguous reward systems for knowledge sharing, contributes to such a political system. Other barriers are insufficient communication, lack of time for employee learning and interaction, lack of training, complex technological systems, and unclear pricing systems. Core Capability & Knowledge Management Knowledge embedded in products and services has been recognized as a primary source of sustainable competitive advantage. Globalization, the growth of networked organizations, as well as the knowledge intensity of new products and services has added to the importance of managing knowledge. Knowledge, then, is becoming the most valuable strategic resource; and a firms ability to utilize knowledge to address problems and market opportunities is the most important capability. The more the firm knows about its customers, products, technologies and markets, the better it performs compared to its rivals. Therefore, various businesses can implement knowledge management as a core capability for a sustainable competitive advantage. Table below illustrates how KM can generate competitive advantages to businesses in various industries. Type of Business Business Depends on Why KM can be effective as a Core Capability Entertainment Intangibles It would develop creative skills and business networks Retailers Relationships It would enhance service quality and customer loyalty, hence profitability. Manufacturers Complex Activities It would increase key performance areas throughout the supply chain. 152
Therefore, instead of developing a certain core capability and then implementing KM as an enabler, companies should devote their efforts to building KM itself as a core capability, which would enable other innovative capabilities. Knowledge management can be viewed as the systematic management of intellectual capabilities in the organization and its organizational and technological infrastructures. Hence, managing knowledge is a time consuming and a comprehensive process that eventually creates a unique capability of supporting human creativity and the firms cycle of innovation embodied in firms processes and technologies . Consequently, knowledge activities, systems, and technologies establish the capacity to generate, integrate, transfer and import new knowledge. This core capability enables human creativity and management of intellectual assets, resulting in differentiated processes and products . Learning that takes place during the implementation of KM adds the element of uniqueness and competitiveness particular to any core capability. Learning that happens over time, guarantees that the company is in pace with environmental changes. However, the quality of learning is dependent on firm-specific factors and resources. KM Skills And Knowledge: Since KM would eventually be integrated into everyones job, employees should have a common background about KM. Firm-specific skills include knowledge about KM. However, these skills evolve only in the place where they were born and in the minds of people who own them. This implies that, if competitors can imitate products or processes based on articulated explicit knowledge of another company, firm-specific skills and tacit knowledge are not imitable and separable from employees who perform them and their native environment. The imitating company would have to recreate such an environment and acquire all the key employees of the target company to map their expertise. Keeping these firm-specific skills up-to-date is, then, a critical activity. KM should involve offering continuous formal and informal educational programs for employees to keep the firm-specific skills and knowledge stock from becoming outdated and even counterproductive. On-the-job training is another option. Investment in knowledge workers is a major component of KM. Equally important, an applicants educational background should be considered during the recruiting process. Although a poor indicator of knowledge sellers, educational background is a useful predictor of an employees ability to absorb and use the knowledge they receive.
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Types of KM Skills Knowledge Management Specialists In a KM initiative, they occupy the positions of knowledge integrators, librarians, reporters, or editors. They should be trained to extract knowledge from its sources, codify and structure it, and maintain and protect it over time . These worker need to develop hard skills such as in knowledge codification, specific industry or domain, and information technology, as well as soft skills such as the sense of the cultural, political, and personal dimensions of knowledge. Managers of Knowledge Management Projects This position requires IT expertise to select among the various technological options available to the company, and soft skills to persuade employees to contribute to KM projects and optimize the use of human and electronic channels of knowledge transfer and knowledge sharing . Skills in financial analysis, change management, and project management are also very important . Chief Knowledge Officer The CKO is required to possess knowledge about the various business operations, familiarity with the organizational and technological infrastructures, experience in knowledge creation, codification, dissemination, and application, and skill in financial analysis and human resource approaches. Knowledge Management Physical Systems Three kinds of physical systems are necessary for KM to be a core capability. These are Capture Tools, Communication Tools, and collaboration Tools. Figure 1 below illustrates how these three tools support the KM activities.
Acquisition
Sharing Utilization Knowledge Capture Tools Collaborative Tools Communication Networks 154
Capture Tools These tools help in acquiring, codifying and storing structured and explicit knowledge. Examples of such technologies are intelligent databases, note-capture tools, electronic whiteboards, and the associated DBMS. Another set of technological tools that are extremely effective in acquiring knowledge, through importing external knowledge, or generating new knowledge out of existing knowledge, is Intelligence Tools. Case-Based-Reasoning, for instance, helps search a collection of previous cases and chooses the one closest to the case at hand. Viewing old cases may spark new ideas that can be applied to new cases. Collaborative Filtering generates new ideas and suggestions by drawing analogies between the case at hand and the case in question. Meanwhile, Data Webhouses aggregate data across multiple sources and give decision makers the ability to run complex queries for high quality information. Communication Tools One of the major responsibilities of communication tools is to enable viewing of documents irrespective of their formats, operating systems, or protocols. This is why Intranets, which are platform-independent, are extremely valuable for communicating knowledge in the organization. Within these intranets or other distributed networks, videoconferencing and multimedia capabilities should be implemented to capture the informal content of messages that could be lost forever or rendered ineffective. Knowledge maps, which are pointers to knowledge sellers, are also essential to establish effective communication. Knowledge maps are directories of knowledge sellers backgrounds, contact information, and expertise. This illustrates the importance of face-to-face communication necessary for people to trust one another when sharing tacit knowledge. Collaboration Tools Once communication tools have been set, places for actual sharing of knowledge need to be established. Collaboration tools promote knowledge creation and transfer through informal talk and discussions . Web-conferencing, enable people in different locations to meet and share and view multimedia information, screens, files at the same time. Document Collaboration tools allow team members to instantly alter a document they are working on from different workstations. Alterations by any member are reflected in real-time. Informal Communication tools allow users to hear and see other users, in essence allow a real-time chat. Groupware allows users to share access to email, diaries, calendars, and so on. Internal messaging as well as communication with the outside world is also enabled. Reports and 155
anecdotes can instantly be sent and shared by users. With interactive web pages, groupware also has a database environment that allows for version tracking and workflow. Lotus Notes, meanwhile, has the ability to replicate data between workstations and servers to enables remote work that needs to be conducted on the road. KM Focused Managerial Systems KM initiatives and infrastructure development are heavily dependent on carefully designed systems and processes, such as organizational learning, reward systems, effective knowledge markets, and a meritocracy of ideas. Organizational Learning A formal mentoring system for new employees and opportunities for continuous education would also send a similar message. However, the recruiting process must emphasize not only existing skills and knowledge but also a positive attitude towards learning. As firms develop KM as a core capability, they should take into consideration the absorptive capacity of employees. An organizations absorptive capacity is its ability to recognize the value of new knowledge, combine it, and apply it productively. This capacity is an important determinant of knowledge transfer. It is a function of competency, which is the ability to evaluate valuable new knowledge and use it, and motivation, which is the drive to do so. If employees are to achieve high performance in KM activities, both ability and motivation should be present. Reward System The reward and incentive systems should communicate that companys commitment to expanding employees skills and knowledge. However, competencies and skills alone are useless if the employee is not sufficiently motivated. Therefore, human resource managers should design incentives that reinforce the knowledge-friendly behaviours, such as knowledge codification and sharing. That is, the reward system should reflect and contribute to the dynamics of an efficient knowledge market in the company by including employees contributions to knowledge activities in the performance evaluation criteria. Effective Knowledge Markets Individuals searching for insights and answers to complex problems can be considered knowledge buyers, while those who are known to possess knowledge, willing to share, and able to articulate that knowledge, are knowledge sellers. Firms should make sure that there are employees who make connections between the buyers and sellers, known as knowledge brokers. Knowledge brokers are from different departments and are aware of the diverse sources of knowledge. They should not be undermined or eliminated. Instead, they should be rewarded and appreciated as the primary channel of tacit knowledge transfer. In order for knowledge buyers, sellers, and brokers to interact, a clear price system should exist in the company. The reward can be either the potential of being paid back in 156
the future in money form or in future favours, reputation and respect, or the pure sense of satisfaction at ones assistance to others . In addition, to be effective, these markets should be carefully built. Marketplaces, formal and informal, should be established such as water coolers, talk rooms, knowledge fairs, and forums, besides information technology based channels . A firms level of investment in KM reflects its value as a resource and a source of competitive advantage. For instance, placing highly talented employees in KM positions and allocating slack time available to learn and share symbolizes a high commitment to KM. Establishing a Meritocracy of Ideas A system of meritocracy of ideas should be established throughout these knowledge markets. A firm should realize that knowledge exists at all levels of the organization, hence the importance of empowering those knowers. This would contribute to the companys ability to generate timely and knowledge-based decisions to address problems and opportunities. KM Culture and Values Values in the company should create a learning environment in which all individuals are commitment to excellence, failures and risk taking are tolerated, and outside ideas are welcomed . Distributed KM systems, such as knowledge maps, indicate that knowledge belongs to the company as a whole, so that people commit to contributing and using that knowledge to fulfill the companys objectives. In addition, as in most if not all organizational change initiatives, senior management commitment is vital to KM initiatives .The corporate mission should also emphasize such commitment . Based on these values and norms, the political system in the company should also emphasize that power is not a product of knowledge hoarding, but rather a product of knowledge sharing. Moreover, benefits of KM initiatives should be clarified to the employees through opinion leaders, who are respected and imitated by others. These individuals would act as knowledge evangelists. Conclusions: The steps that need to be taken for a company to build a KM Framework are to put the greatest emphasis on building the four dimensions of core capabilities . Table below illustrates, how to summarize and translate the framework into a practical guideline.
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Dimension Should Have Should Do Should Know
Skills & Knowledge
Knowledge and skills about KM processes, infrastructures, and principles. Solid educational background and training that enhances its absorptive capacity Invest in recruiting individuals with high absorptive capacity and willingness to share knowledge. Institute training, job rotation, and learning opportunities.
Where the knowledge resides What skills to promote How to evaluate, recruit, and retain knowledge workers Design learning programs
Managerial Systems
Organizational Infrastructures Fluid channels for KM activities Appropriate reward system Learning systems Develop KM driven reward systems. Build efficient knowledge markets Create a meritocracy of ideas for knowledge creation The barriers and facilitators for each KM activity Dynamics of its knowledge markets and price systems How to manage KM projects and initiatives
Physical Systems
Necessary IT infrastructures Knowledge map Capturing tools Communication tools Collaboration tools Implement the IT tools or acquire new ones Build space and places for face-to- face transfer of tacit knowledge Train employees to use KM technologies How to implement and encourage the use of KM technologies How to select appropriate KM technologies Potential barriers to IT implementation
Values & Norms
A learning environment that encourages knowledge activities, and values knowledge Employees who are willing to contribute to and use KM systems Tolerate risk taking Be open to external ideas Show commitment and support to KM initiatives
How existing values affect knowledge activities What should be done to build a KM- friendly culture.
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Caution: Once a system is set up to deliver a certain core capability, it becomes very resistant to change. Companies that spend a long period of time doing things in a particular way that proved successful are unlikely to switch. Although knowledge is critical to the development of new products and processes, it usually comes from outside the company. The company should ensure that the most important adaptive resources, namely employees, are readily capable of acquiring new knowledge and skills, and coping in a changing environment.
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Chapter 15
Developing a Knowledge Organization
(A) Organization & KM Organizational performance is the result of the interaction of strategy, organizational context, and individual behavior. This means managers need to choose the right approach to the right markets, create processes to deliver quality goods and/or services to those markets, and motivate people to act in line with the company's objectives.
Corporate decision makers need to ensure that the organization for which they are responsible and their people can operate effectively in the knowledge economy. The following questions could be used to assess the significance of particular trends and developments:
What are the growth, competitiveness and employment consequences of the emergence of the 'information society' an globalization of markets for information, knowledge understanding? What strategic and policy issues arise, how might these be handled and addressed? In which commercial sectors are information, knowledge understanding accounting for an increasing proportion value being generated for customers? Are existing players equipped to cope? What will happen to those that are not? In which of the sectors do they face exclusion? What are the consequences for individuals of the emergence of a knowledge- based economy? What help will be required by those who are less well placed to cope? What will the more fortunate need to seize the opportunities open to them? How attractive are the corporate, local and national contexts as a launch pad for intending knowledge entrepreneurs? What are the main concerns of those operating or planning knowledge-based ventures and businesses? Will new training and development initiatives be needed to develop any additional skills and competencies that might be required? What further forms of support will be required? What further forms of support will be required? What help will the educational system and its institutions require to encourage and develop the attitudes, qualities and competencies required by knowledge entrepreneurs? How might they be helped to become more effective as support networks? What support tools might their memberships require?
What is the more effective acquisition, development and sharing of information, knowledge and related support tools? What needs to be done to tackle obstacles at corporate, local, regional, national and international level? 160
How could more value be added in terms of creating new information, knowledge and support tools as opposed to processing or using that which already exists? What could be done to improve the acquisition, development, sharing and utilization of information, knowledge and support tools within government? What new mechanisms, processes and networks are required? What help will be required to increase the sharing of information , knowledge and understanding at European and/or international levels? What new European and international networks could to be established? What assistance will be required to ensure that information and intellectual property is appropriately and fairly recognized, valued and exploited? What can be done to encourage, develop and support knowledge entrepreneurs? Where, when and how would public policy intervention be appropriate and desirable? Is there scope for collaboration between public and private sector organizations? What will happen as a result of removing existing obstacles and barriers to the acquisition; development and sharing of information, knowledge and understanding? Will new ones be created? Are particular types of organizations, or those of a certain size, especially at risk? What needs to be done to increase their awareness of the situation and help them respond? Who should be the main targets of proposed actions, and how might they best be reached? What form should any public interventions take and what external inputs might be required? Are there particular practices, procedures or regulations that should be changed or removed? Who needs to be consulted and what help will be required? How should the actions that need to be taken be communicated and delivered? How will roles and responsibilities be allocated among the various organizations and institutions that may need to be involved? Are there gaps that will need to be filled? What action do individuals and organizations need to take to protect their intellectual property? What steps are required at national, European and international levels? What needs to be done to increase the security of private and public, and governmental and intergovernmental, networks for the communication and sharing of information, knowledge and understanding? If there are implications for public policy there may well also be commercial opportunities for both companies and individual entrepreneurs. Government bodies at all levels may need external help in determining and introducing appropriate responses.
Resulting initiatives will also have to be made known to those who must take whatever action is required for them to be effective. Implementation teams will need to be familiar with dissemination options and issues. The members should themselves be rolemodels in relation to the communication and sharing of information, knowledge and understanding.
Organizational design takes into account all three critical performance factors: strategy, organization, and motivation. 161
Organizational design is about enabling a group of people to combine, coordinate, and control resources and activities in order to produce value, all in a way appropriate to the environment in which the business competes. In this view, design is more a process than a structure in that the resulting organization should be intended as constantly adapting and evolving, not fixed forever in some pre- determined form. Recent empirical work provides evidence for this view.
Mohrman and her colleagues concluded from their study of knowledge work in eleven Fortune 500 companies that "appropriate organizational design enables an organization to execute better, learn faster, and change more easily" (1995:7). The task for leaders is to implement (by using the various structural levers) the mix of factors which increases the likelihood that individual and organizational knowledge acquisition, codification, and transfer will occur regularly, appropriately, and productively.
The increased importance of organizational design for business performance challenges the current paradigm and experience of many managers who may be quick to propose a technological ("We need better databases!") or a personnel-related solution ("Hire smarter people! Fire the laggards!"), rather than a structural one, to address business performance issues. As part of their respective training, doctors study the basic structures of the human body, engineers and architects understand the fundamentals of physics and materials science, auto mechanics learn how a combustion engine works. Only when they understand the underlying concepts, phenomenon, and variables in their field and how they interrelate, can these professionals deal with specific issues and identify solutions. Similarly, managers need to raise to a conscious, actionable level their understanding of the fundamental behavior, processes, and dynamics of the organizations they lead.
(B) History & Developments
Organizational design during this century reveals an enormous array of approaches and perspective, topics of interest,-underlying assumptions, research methodologies, and levels of analysis. On one side the field is anchored by social science discipline-based researchers who strive to understand society and organizations as they are and -no treasure that knowledge for its own sake.
On the other end of the spectrum are action-oriented consultants who are interested in providing solutions to practical problems of administration, but who pay scant attention to any higher-order or more generally applicable learning. Located between these two groups are those practitioners and management thinkers who seek to combine theory and practice, to understanding social systems in order to change and improve them.
Hayek's classic essay provides an economic theory of the link between knowledge and organizational structure. He provides a taxonomy which distinguishes between two kinds of knowledge by pointing out the importance of context and interpretation to its value. While Hayek addressed issues at the macro-economic level, J ensen and Meckling have written a companion piece to Hayek's which places his ideas in an organizational context. They expand on Hayek's ideas about the cost of transferring knowledge and argue that 162
organizational design is about more than simply choosing between centralization and decentralization in the allocation of resources. Rather, they highlight a framework for understanding the links between knowledge, decision making, and organization design which identifies the choices managers must make about their organizations in order to align individual behavior with corporate objectives.
Not surprisingly, the vast majority of management writing on organization design has dealt with industrial age organizations. The design choices, as the contingency theory approach posits, is the external environment of markets, technologies, and regulations. Pinchot and Pinchot describe the familiar, traditional bureaucratic organization and explain why it is no longer suited to the knowledge era. They focus their analysis on the changing nature of work and argue that the old model is being replaced by an interdependent set of structures and practices which better fits the demands of today's environment.
Bahrami's research in high technology companies suggests that flexible, agile firms with "novel organization structures and management processes to accommodate them" may be the leading organizational form of the next decade. He points out that this new form presents managers with a fresh set of dilemmas and tensions to be addressed on an on- going basis, rather than resolved ex ante through a single design choice.
Innovation requires applied knowledge, and highly innovative organizations are adept at knowledge acquisition, codification, and transfer (Nonaka & Takeuchi, 1995; Kanter, 1983). Burns and Stalker give an historical review of how innovation became organized in this century.
The book from which this selection has been excerpted, The Management of Innovation, is best known for introducing the concepts of "organic" and "mechanistic" organizations and linking their respective desirability to the stability of the external environment. They emphasize that. invention is a social phenomenon relying in great part on the diffusion of information through professional relationships and suggest that an organization's design can hinder or facilitate that process.
Kanter's article touches on the importance of inter-organizational relationships as an important source of input for the innovation process, and the growing numbers of business alliances and joint ventures over the past decade suggests that companies are well aware of this benefit from partnerships Badaracco studied the variety of alliances created by IBM and General Motors and found that among their main benefits were the creation of knowledge and learning new practices. This was particularly true regarding embedded" knowledge. For Badaracco, embedded knowledge is a social notion than Hayek's "particular knowledge" for it "resides primarily in specialized relationships among individuals and groups and in the particular norms, attitudes, information flows, and ways of making decisions that shape their dealings with each other" (1991). Although such knowledge is difficult and costly to transfer, alliances create an arena for building ties which will facilitate learning over time.
Pucik outlines a role for the human resource function in supporting organizational learning, which requires transforming HR from an administrative unit to a valued 163
business asset. Drawing on the alliance experiences of firms which demonstrate high levels of learning, he also offers specific advice for human resource professionals.
The need to manage knowledge more consciously raises more direct human resource implications: how can firms attract and retain knowledge workers? The rise of the intelligent organization," in Pinchot's phrase, has placed a premium on human asset rather than natural resources or financial capital which reigned supreme in earlier eras. Tampoe reminds us that motivating excellent performance presents challenges as well. More and more , companies must meet the expectations of their knowledge workers in terms of work environment and quality of life issues or else face lower productivity or even turnover of their highly valued assets. Addressing the personal and social objectives of employees to build effective and "empowering" workplaces, he argues, is the key to motivating knowledge workers.
The emphasis changed, replacing the old paradigm as indicated below :-
Unskilled work Knowledge work Meaningless repetitive tasks Innovation and caring
Individual work Teamwork
Functional-based work Project-based work
Single-skilled Multiskilled
Power of bosses Power of customers
Coordination from above Coordination among peers
From Unskilled Work to Knowledge Work Peter Drucker has been telling us for decades that more and more of work, both technical and nontechnical, is knowledge-based. We no longer need many unskilled assembly-line workers; most of the jobs in factories involve technical knowledge and training. What is more, few of the jobs in a manufacturing organization are in the factory. Most "manufacturing" jobs are in functions such as marketing, design, process engineering, technical analysis, accounting, and management, which require professional expertise and mastery of a large body of knowledge. This same trend toward more knowledge workers is present in service industries, not-for-profits, and government. Drucker estimates that one-third of all jobs are already filled by the highly paid and productive group he calls knowledge workers.
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From Repetitive Tasks to Innovation and Caring Since the passing of craft production, management has been responsible for organizing people to work efficiently at narrow, boring jobs. This has meant that the managerial role was as much to limit the intelligence and potential of employees as it was to elicit talent. Now the mindless repetitive jobs that bureaucracies were designed to manage are rapidly disappearing. Machines do more of the routine work, and the work that is left requires initiative and flexibility. As a result, the job of leaders is more nearly to bring out people's talents around a common Vision. What sort of work will be left as machines get smarter? What do people do so much better than machines that it will provide human work for the foreseeable future? People are much better than machines at innovating, at seeing new possibilities within fluid and imperfectly defined systems and knowing what to do. Innovation in this sense includes the creative salesperson who sees what the customer really wants and bends the system to get it. It includes the member of a quality action team who makes an intuitive leap that exposes the real root cause of a problem to measurement and analysis. It also includes the Corporate Entrepreneurs (Intra-preneurs) who sees how to use company assets to generate more revenues and thus create more jobs. Another apparently irreplaceable human talent is caring. As more work becomes service, caring about and for others becomes increasingly important. People do not generally sue doctors just because they make a mistake. They sue them because they make a mistake and relate to patients in a way that says they do not care. Good salespeople keep customers because the customers can sense that they genuinely care. Good intrapreneurs are able to break through barriers within the organization when others sense that they care more about the result than about personal success. Good leaders spread intrapreneurial zeal when it comes from inner values that all can get behind. Leaders elicit commitment when their people sense that they care about them, the group's success, and their mutual contributions. The rules of bureaucracy forbid caring and, in particular, acting on the basis of the inner values one holds dear rather than out of strict obedience and loyalty to the boss. We find no examples of innovation where the intrapreneur did not break some bureaucratic rules. Most often the intrapreneurs and team members were carried away by a passion for an idea that aligned with deeper values-that promised at least in some small way a better world. We know few con artists who can long fool the alert into thinking they care when they do not. Caring, like innovation, must come from the inside: We cannot order people to innovate or to care. We also cannot order people to use their intelligence; people engage their intelligence when they have reason to care, when they are part of something bigger than themselves and see that their wider interests are served by the work at hand. Bureaucracy is too autocratic and rule-driven to motivate and manage the intelligence that is brought to innovation and caring. Creativity and connecting with others require engaged relationships, personal responsibility, and flexible thinking and acting. Thus, as the rules of bureaucracy block both innovation and caring, they block the essence of modern work. 165
Education, Innovation, and Caring The Tofflers pointed out in The Third Wave that universal public education had the purpose of teaching obedience, punctuality, and the ability to sit still a long time and do mindless, repetitive work. In the early industrial era the ability to endure boredom was a key survival skill. Although education has improved a bit, bureaucracies have done little to prepare the average worker for the innovation, teamwork, and caring that constitute much of modern work. For years corporations have used effective training in creativity and innovation (for a chosen few), but these lessons are generally remedial. They seek to re- store what was destroyed by education. We need educational systems today that preserve "childlike" curiosity and give practice in teamwork, initiative, and collaborative big-picture responsibility.
Many of our current practices in education not only block innovation, they also blunt one's ability to care, to engage heart and mind in one's work. People who act on what they care about jump out of their seat. They fail to follow the lesson plan and ask too many questions. They help their fellow students rather than maximizing their own grades. Many schools are getting better at teaching children to care about one another and to treat one another with respect, but still follow the bureaucratic model in the way both teachers and students are treated- forced to measure up to defined procedures rather than pursue goals with creative innovations, evaluated on individual performance instead of teamwork and collaboration, taught compliance rather than participative self- management and democratic processes. From Individual Work to Teamwork Bureaucracy replaces the natural ability of humans to find ways to work together with the more sterile discipline of the chain of command. It is not rich and lively enough for today's fast-paced changes and challenges. Virtually every recent management innovation that works relies in part on the power of teams. A "Total Quality" program gives power to teams to examine processes and make them work better, a task that until recently belonged exclusively to managers. Because knowledge workers cannot produce much of value alone, their work takes them across organizational boundaries to search for integrated information. In reengineering, case teams replace isolated functions. In lean manufacturing, ordinary workers take responsibility for the whole and run for help whenever trouble shows up. When three members of a thirty-two-person work team at Hoechst Celanese's Salisbury plant left the team, the remaining team members had authorization to replace them but decided not to do so. As is so often the case, the people doing the work knew more than the bosses about where work and expense could be saved. Organizations become more intelligent when they find ways to bring the intelligence of every member into supporting the purpose and goals of the organization.
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From Functional Work to Project Work As knowledge workers shift from static jobs to solving a series of problems or seizing opportunities, they do so in work organized as projects. Each project in this complex world generally requires a cross-disciplinary team. These teams then learn together as the project evolves. Soon, their bosses in the functions they "report" to become too distant from the work to manage the decisions for the teams. As a consequence, control shifts from the functional organization of bureaucracy to project teams. Specialization will continue to be a critical part of every complex organization. But because of the interconnection of issues in a complex world, more and more work will involve integrating the viewpoints and activities of specialists, and less and less will be performing tasks completely within those specialties. As a result, each employee will have to be both a specialist and a generalist. The 1956 Pontiac was designed with a concave sculpted panel with many vertical ribs indented between the two taillights. The door to the gas cap was neatly hidden between two of the vertical ribs. Because the cracks at the edge of the gas door fell where the eye already expected a vertical line, the door did not break up the uniform sweep of the design. The design worked aesthetically, but a senior manager reviewing it was afraid car owners would be unable to figure out where to find the gas cap. Rather than raising the concern with the designers and asking them to deal with it in a thoughtful way, he ordered the gas cap door chromed, ruining the whole sweep of the design with an anomalous chrome square. Managers cannot bring out the intelligence of everyone in the organization if they pretend they can do better thinking in a few hours than a project team that has wrestled with the problem for months. Instead of issuing arbitrary orders, they need to raise concerns and trust the project team to find a way of handling them that integrates with all the other issues guiding the design. Paradoxically, as issues become more complex and specialties more differentiated, it becomes increasingly necessary for teams of diverse specialists to themselves integrate their work with the work of other teams. Management can never understand all the trade-offs and creative solutions that get the team where it is. Heavy- handed intervention leads to inconsistencies or worse. In an intelligent organization, participation is widespread to help expose all the issues as early as possible. Individuals with multiple skills are brought together to cover more viewpoints in a team of manageable size, and the team does its work guided by feedback, not commands.
From Single-Skilled to Multi-skilled As Fred Emery has pointed out, no system can exist without redundancy to provide reserve capacity when something does not exactly follow the plan. Bureaucracy gets its margin of safety from extra bodies. If extra work of one kind appears because customers ordered a different mix of products than expected, a bureaucracy has extra workers of that exact type waiting in the wings, or it falls short of meeting the orders. The same situation arises if someone is sick: Another "identical" worker needs to be waiting to do 167
the job. This system of narrowly de- fined skills and extra bodies is expensive and inflexible.
In a typical multiskilling program, responsibility shifts to teams, and employees get raises for each new skill they acquire. With a multiskilled workforce, when bottlenecks appear, whether through absenteeism or a sudden rush of one kind of work, someone can step in and get things moving. From the Power of Bosses to the Power of Customers For an organization to be responsive, customers' wishes have to have a strong influence on the people doing the work. Relaying this sort of information through bosses is too slow-and besides, they may not be there to hear what customers want. This sort of thinking applies to internal customers or "users" of a unit's out- put as much as to external customers. In a rapidly changing world, if internal customers cannot get what they need promptly and flexibly, the system will not be able to serve external clients promptly and flexibly. Freedom of choice between alternative suppliers gives users of internal services the power enjoyed by real customers the power to say no to one and yes to another. Once internal customers have this power, the attention of those internal suppliers shifts from pleasing their bosses to winning customers. If they have customers, the boss can be pleased; without customers, they had better find new work. From Coordination from Above to Coordination among Peers Clearly, new systems of coordination and control are needed. In a bureaucratic system, employees are not responsible for coordinating their work with others at their level; that is their boss's job. They need not think about the big picture beyond doing their specialty well-to do so would be presumptuous. It is the job of senior management to figure out how it all fits together, so cross-functional concerns are referred up to a level of management that can resolve them. When coordination is the boss's job, cross-functional, or horizontal, communication with one's peers is frowned upon as either a waste of time or a usurpation of the boss's authority. In post bureaucratic organizations, most of the coordination between functions and even businesses is done by teams. In 1988, J ohn Hanley, vice president for product development at AT&T, needed to cut in half the product development time for cordless phones. The old product development system was a series of handoffs from R&D to Manufacturing to Marketing to Sales. Hanley formed teams that included people from each of these functions and gave the teams authority to make decisions about almost everything except their deadline: They would be finished in one year. Rather than wrestle with the bureaucracy, the teams worked together as intrapreneurial generalists. They did market research, decided how much each product should cost, what its features would be, what it should look like, and how it should work. The result: half the development time, better quality, lower cost. Reality has become so complex and multidimensional that there is no way of dividing the organization into chains of command that will work for all aspects of the challenges 168
faced. As a result, integration is achieved through peer-level cross-organizational communication rather than through the hierarchy. Huge volumes of cross-functional communication are needed because every important process crosses the boundaries of the organization. The general manager does not have time enough in the day just to relay communications; the process is not fast enough. In the industrial era, the large-scale but stable means of production pushed us toward distant, formal, and unequal relationships at work. Today, our complex and intelligence- intensive tasks push us toward relationships that are close, open, honest, and more nearly equal. Because "organization" is about how we structure. The nature of work in modern high-tech workplaces calls on people in many positions in the organization to take responsibility for processes and services that intimately affect the customer and the wider community. Even in small service businesses and government agencies, the goods and services produced are knowledge and information-intensive by virtue of the skills and intelligence of the people with their hands on the work processes.
It is, therefore, clear that the organizational design approach offers valuable insights for those charged with helping their organizations acquire, codify, and transfer knowledge.
Knowledge-Based Organizations
The end of labor-intensive manufacturing leaves us with organizations which receive their added value from the knowledge and the creativity they put in rather than the muscle power.
Fewer people, thinking better, helped by clever machines and computers, add more value than gangs or lines of unthinking "human resources."
Knowledge- based businesses of consultancy, finance and insurance, advertising, journalism and publishing, television, health care, education, and entertainment, have all flourished. Even agriculture and construction, the oldest of industries, have invested in knowledge and clever machines in place of muscles.
From a functional perspective, in a Knowledge Organization, CONTENT (objects, data, information, knowledge, and wisdom) are generated by knowledge workers. Content is captured, organized, and preserved to enable its reuse and leveraging by people and groups other than those who generated it. Infrastructure is in place to enable sharing of content across all elements of an organization and with external partners, as appropriate. Procedures are in place to integrate content from multiple sources and mobilize it to achieve organizational goals and objectives. A learning culture promotes not only individual learning but also results in a shared understanding. Finally, the organization embraces continuous evolutionary change to sustain itself in a constantly changing environment.
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Pillars of KM Organization Without support and participation from senior management, a KM initiative is destined to fail quickly. No matter how strong the informal knowledge links are within a company, it is imperative that any knowledge management initiative has firm executive support behind it to develop grass root initiatives and sustain/enhance the culture for a successful transformation into a Knowledge Organization. Creating the right culture that encourages the sharing of knowledge is key to KM. Executive support is needed to add new incentives and recognition programs that can assist in further development of a sharing culture. But incentive and recognition programs are not the sole means to modifying an organization's culture. An approach that leverages all the components of the Knowledge Organization and integrated them with existing practices, skills, and experience to form a cohesive strategy will slowly "tweak" those organization's cultures over time. Cultural changes does not happen overnight. If it took years to develop the existing culture, why would it take days or months to change it? Two pillars of the Knowledge Organization are (1) Management support (2) Sharing culture The components of the Knowledge Organization cannot act independently. They rely on each other to further enhance the process, since Knowledge Management is not a destination, but an ongoing process. Becoming a learning organization is part of the process that links the knowledge management components together leading to the ultimate goal - organizational effectiveness.
Reference: Knowledge Management and Organization Design ( Edited by Paul S. Myers : ISBN 0-7506-9749-0 )
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REFERENCES
1. ALLKM.COM 2. idea.gov.uk 3. Knowledge Capitalism -Alan Burton J ones Oxford Univ Press 4. http://dev.skyrme.com/pubs/acm0398.doc 5. cio.com 6. Business @ The Speed of Thought : Bill Gates 7. Harvard Business Review on Knowledge Management HBS Press 8. The Road Ahead: Bill Gates Penguin 9. Knowledge Horizons: The Present and Promise of Knowledge Management (Butterworth-Heinemann )
10. Knowledge Management: A State of the Art Guide: Paul Gamble & J ohn Blackwell ( Kogan Page )
11. Knowledge Leadership: The Art and Science of the Knowledge-based Organization : Steven Cavaleri and Sharon Seivert ( Butterworth-Heinemann)
12. Storytelling in Organizations: Brown, Denning, Groh, Prushak (Butterworth- Heinemann)
13. Knowledge Management : Elias M. Awad & Hassan M. Ghaziri ( ISBN 81-297-0097-2 )
14. Knowledge Management and Organization Design ( Edited by Paul S. Myers : ISBN 0-7506-9749-0 )
15. Article by Abedkader Daghfous School of Business and Management, Sharjah, Post Box - 26666 Published in J ournal of Knowledge Management Practices in October, 2003
16. Article ' " A Km oversight Structure " by Cynthia J Odon & J ohn F. Starns Published in KM World in Feb, 2003 , Volume 12, Issue 2
17. Other References given in respective chapters.