A strategic approach to KM

The term knowledge management is in danger of being devalued and becoming yet another
initiative that companies feel obliged to implement without fully understanding the potential
benefits of doing so. Jostling for recognition with the tens of other ‘must have’ trends of the
moment, it would be easy for KM to be seen as a luxury: a nice idea if you have the time, but
easily ignored by managers who have more important things like costs and profit margins to
consider.

This view is understandable, to an extent, among senior executives who may see themselves
as too busy focusing on the ‘big problems’ of profitability, efficiency, positioning in the
marketplace, perceptions of key stakeholders and the overall direction of the organisation to
get involved in peripheral things like knowledge.

But this is a risky stance to take and ignores a dimension that has become a fault line in the
very definition of the organisation. Classical business theory, from Adam Smith onwards, has
viewed business as being driven by the cost of transactions. In this view, organisations
typically formed because it was cheaper to do certain things ‘in-house’ rather than to
outsource them. There was an allowance for strategic exceptions, to protect the supply chain
and so on. But the view was essentially one based on transaction cost. The key resources here
are ones familiar to students of Marx: land, labour and capital.

But these days, a competing – or at least complementary – view exists: one based on the
notion that the success of an organisation lies not just in its resources (in today’s terms,
money, buildings, people, equipment and technologies), but in how it uses its knowledge to
convert these resources into organisational capabilities. Companies don’t turn a profit by
owning resources: you have to know what to do with these resources. Knowledge is at the
heart of everything an organisation does, the binding of all its core capabilities.

Thus, the challenge facing would-be knowledge management pioneers within organisations is
twofold. The first task is to build a consensus that KM should not be viewed as an extra, but
as an integral part of business management. The second is to find a way to approach the
problem that will address the complexities of the dynamics of knowledge in organisations
and help deliver on the larger goals and objectives of the business: a strategic approach to
knowledge, driven directly from corporate and business strategy.

The beginnings of knowledge management in any organisation tend to be haphazard. Efforts

usually start with an individual or small group looking to tackle one particular business issue
that has some kind of knowledge focus. This work often takes the form of a database, intranet
application or other software-based solution. These efforts often get labelled as KM
initiatives, but in reality most of them are focused on information management. Finding new
ways of capturing and processing explicit information is only a small part of the larger
potential for knowledge management.

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It is doubtful whether the field of endeavour we call knowledge management would have
come into being without the world wide web and the excitement in the mid-1990s over the
potential of intranets. Nowadays, most organisations have some kind of intranet and many are
amazing structures, full of features and carefully published content. However, the issue
remains that unless KM practices are firmly embedded into the culture of an organisation and
systems of motivation and reward are in place, staff will simply not use intranets to anything
like their full potential.

Indeed, a great deal of the work of ICL’s knowledge management practice centres on what
might be uncharitably called ‘failed’ intranets – systems-focused projects with great features
(the issues are seldom technical) that don’t deliver business value, typically through limited
use or limited content. These problems typically stem from the common fallacy that once you
have implemented KM tools, you are doing knowledge management. It is true that
knowledge management tools are important enablers, but when it comes to turning
knowledge into business value, they represent a small fraction of the overall effort.

Beyond the twin approaches of focusing on problem-specific projects (point solutions) and
applying KM tools (infrastructure-based approaches), there are more holistic approaches to
knowledge management. One of these is the ‘knowledge types’ method pioneered by ICL.
The ‘types’ depend to a large extent on the specifics of the particular company or
organisation, its industry sector and its particular management focus. Examples of knowledge
types might be:

 Product and service knowledge – in effect, the business ‘content’ relating to the
customer experience;

 Process knowledge – how to get things done, both formal and informal;

 Customer and/or supplier knowledge – knowledge about relationships;

 Project knowledge – focused on organisational memory and learning;

 Technical or expert knowledge – supporting people with ‘know-how’.

A knowledge types approach begins to address some of the wider issues that are not properly
addressed in the point solution or infrastructure-based approaches, such as skills gaps, content
lifecycle management and communication outside organisational boundaries, and starts to
take a more holistic viewpoint in the way it looks at knowledge management issues. Basing
efforts on knowledge themes enables the organisation to focus on the natural knowledge
flows around an organisation and across structural boundaries, including external flows
between the organisation and partners, suppliers and customers.

Implicit within this approach is the ability to make a clear distinction between ways to
mobilise explicit knowledge (codified, published, ‘hard’ knowledge) and tacit knowledge
(held by individuals or embedded in routines and working practices).

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Another useful device is to categorise knowledge by more generic labels:

 ‘Know what’ or ‘know that’ knowledge is what we might mean by ‘body of

knowledge’ – embodied at some level by people but also accessible in codified
written form. This is the kind of knowledge you might acquire in formal learning, as
recorded on a curriculum vitae;

 ‘Know who’ knowledge includes individuals’ personal networks, contact databases

and directories of expertise. Given that the only real knowledge is in people’s heads –
in effect, systems only provide ways to structure information – addressing ways to
access expertise in the form of people should be a priority of any KM programme;

 ‘Know how’ knowledge is about getting things done – there are two main elements,
the processes (formal and informal) by which things get done, and the unique
expertise of individuals, their personal skills and capabilities;

 ‘Know why’ knowledge concerns the value system that exists within an organisation.
These days, most individuals join or elect to stay with organisations that on some
level match their personal ethics and beliefs. Thus, it is important for organisations to
be able to communicate what they stand for, to employees, customers and the wider
community. In addition, clear business goals need to be expressed and demonstrated
to staff. If employees are working in alignment with the goals, objectives and overall
ethos of the company, their motivation levels will be higher, contributing to
organisational success.

So, in addition to the ‘knowledge types’ approach, the ‘know what, know who’ method is a
useful tool to structure thinking, to help companies understand the value of tacit knowledge
in particular, and offer the beginnings of a holistic approach to KM. But while both of these
approaches demonstrate important lessons, neither really answers the question relating to how
a knowledge management programme should start.

Organisations that have previously followed point solution and infrastructure-based

approaches to knowledge management are beginning to turn to a more strategic approach:
driving a vision for organisational knowledge directly from the larger mission and objectives
of the company. This reflects what amounts to a fundamental shift in the way organisations
view knowledge. Ultimately, in this scenario, knowledge management is not focused on new
ways to shape and structure information; rather, it is about finding better ways to leverage
what people in organisations know, and know how to do.

If this is to happen, if knowledge management initiatives are to succeed, the end result must
be that people on the ground start to change what they do on a daily basis; how they behave
and interact with each other, with customers and with the systems and tools at their disposal,
as well as changing the processes they follow and building up the skills they have. The end

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game is that companies need to develop a new behavioural paradigm, in which mobilising
knowledge is seen as central to the business, as a fundamental capability that must be fully
developed and nurtured if organisations are to meet their potential to compete in a crowded
marketplace.

Some companies are starting to recognise this. But how can a concerned manager in an
organisation that has not made this leap start to build the consensus that knowledge
management has a bearing on the issues that top management focuses on as really impacting
on the business: efficiency, cost savings, quality of work, customer service, effectiveness and
innovation? This task is not an easy one, because you cannot necessarily achieve change in
organisations by rational argument: you have to prove your point and also manage the politics
(knowledge, and who possesses and controls it, is a highly political subject in most
organisations).

ICL’s experience has demonstrated that a useful way to start creating this consensus is
through internal case studies that demonstrate practical potential. If this is to be done, then
knowledge management pilot and infrastructure projects need to be very carefully selected
and aligned to the key business concerns so that they can be used to demonstrate the strategic
importance of knowledge management activity. Communicating the outputs of these projects
in an appropriate way is also important. ICL, for instance, uses freelance journalists to create
internal case studies, writing them from a different perspective than a consultant or project
manager might do. The use of internal case studies is one of ICL’s most powerful change
management tools.

One useful example relates to work conducted with an ICL customer, the UK Department of
Health. The Department of Health faces a variety of knowledge issues, some specific to its
role in the nation’s health, and some more general ones as a large government department. It
employs 5,500 people and runs England’s National Health Service, which employs one
million members of staff, reputedly the largest payroll in Europe, as well a policymaking in
the areas of social care and public health. In recent years, and particularly since the 2001
general election, improving the NHS has been a core issue. The department is being impacted
by initiatives like the push for ‘joined-up government’, which involves co-ordinating
policymaking and delivery across departments, as well as compliance with various e-
government deadlines. These and many other factors have meant that effective knowledge
management is of growing importance.

The department (a long-standing customer of ICL’s Outsourcing division) already had very
effective IT systems, particularly compared to some other departments. These included a
Lotus Notes/Microsoft Windows and Office desktop available to all staff, a pervasive
intranet, an electronic records and document management programme, and remote access
arrangements for mobile workers.

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Moreover, for the past two years, various knowledge management initiatives, some
implemented with ICL’s help, had already been under way. The most notable of these is
called KLIMT: the Knowledge, Learning and Information Management Toolkit project. This
toolkit is not software, but a set of materials containing workshop exercises and frameworks,
assessment questionnaires, technical white papers and templates for planning, measurement
and reporting – a methodology for workgroup-level knowledge management, designed to be
used by teams to enable them to assess their use of and access to the various knowledge
assets at their disposal, and build new ways of interacting with them and with each other.
KLIMT is a facilitated, bottom-up approach that is aimed at making employees aware of the
ways that they behave and the processes (formal and informal) that they follow, and to get
staff actively involved in addressing and solving the knowledge sharing and capture issues
that emerge, fostering improved exploitation and utilisation of technology tools.

The KLIMT project, which has been piloted in a number of workgroups with very
encouraging results, was being conducted in parallel with various other KM-related
initiatives, including plans for databases of expertise, freedom of information infrastructure
development, next generation electronic records and document management tools, and a
revised intranet with personalisation and communities of practice capability, as well as
‘softer’ initiatives involving elements such as e-learning, storytelling and knowledge sharing
mechanisms, driven by operational or policymaking groups. It became clear to the
Information Services group responsible for a number of related knowledge management
efforts that a synchronised approach, or a ‘knowledge management strategy’ was required, to
address issues like co-ordination, prioritisation, costing and resource allocation.

More importantly, it was recognised that a knowledge management strategy must play an
integral part in the wider change agenda of the department, indeed in the actual delivery of
better health services. While KLIMT addressed the bottom-up delivery of change, this move
now reflected a top-down, strategic approach.

As part of the strategy creation process, ICL created a framework that could be used to ensure
that knowledge management and overall organisational strategy were aligned at the start, and
remained aligned throughout the implementation process. Based on ICL’s own internal KM
Consultancy Framework, the framework developed for the department had a four-part
structure, focusing on the following main topic areas:

 Knowledge management drivers and how they map to issues of organisational

strategy;

 The creation of knowledge management strategy;

 A programme for implementing that strategy;

 Mapping benefits and using measurement tools.

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First of all, the key issues for the organisation must be identified in a way that senior
managers can relate to. For example, in the case of the Department of Health these included
issues like joined-up health care, greater efficiency in supporting ministers, better focus on
patients and a move to more evidence-based policymaking, currently a hot topic in
government circles.

Once the link between organisational strategy and the key knowledge issues have been
identified, the actual knowledge management strategy needs to be created, a process that
involves three stages:

 The creation of a clear vision for the organisation that envisages how knowledge and
information would best be created, shared, captured, codified and made available in
an ideal world. It also considers what sort of resources might be available and what
capabilities the organisation might have in this future state;

 A full assessment of the current organisation, using a variety of auditing tools, so that
a knowledge gap analysis can be conducted. This process examines what roles, skills,
technologies or processes might need to be put in place to meet the established vision
for knowledge;

 The mapping of this gap analysis onto the levers and enablers available to a
knowledge programme. These are grouped under the headings of leadership, people,
process, infrastructure and technology, content, and change management.

Next follows the creation of a programme for implementation – the various choices are tested
for things like suitability, feasibility and acceptability to the main stakeholders, before a
detailed programme is drawn up. Actions are divided between top-down (run by the centre),
bottom-up (handled at workgroup level, with KLIMT as the delivery vehicle) and divisional
responsibilities. Activities are also grouped into prerequisites, pilots, medium and long-term
elements. In the department’s case, as well as various leadership roles assigned, a long-term
programme was structured that aims to bring together the various initiatives and links them to
detailed work at the ground level using KLIMT to start to leverage best practice, embed
knowledge capture, sharing and re-use steps into formal and informal processes, and to
change overall behaviour.

Finally, the success or failure of a knowledge management initiative and its contribution, or
otherwise, to the business can only be assessed if proper measurement is put in place. The
department is currently investigating Balanced Scorecard approaches, the main benefits of
which are well known. In particular, though, the emphasis on non-financial measures such as
satisfaction and efficiency sit well with the outputs of knowledge management activity. As
part of the measurement process, it is intended to build new benefits-based business case
tools into KLIMT.

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One concern with this strategic approach is that it may make knowledge management seem
very complex and likely to incur huge costs, but for many organisations (and this was
certainly the case with the Department of Health) the main thing required is a sense of
direction, combined with co-ordination and a re-focusing of priorities. Almost all
organisations are already spending money on IT systems, training, change management,
leadership and content. For the department, the strategy creation exercise was about bringing
all this together in a co-ordinated fashion. It certainly isn’t a zero-cost exercise, but the
additional expense may not be all that high relative to the possible gains. Once again, it is
important to be able to build a business case based on value and benefit.

To finish with a quotation from Larry Prusak: “The only thing that gives an organisation a
competitive edge – the only thing that is sustainable – is what it knows, how it uses what it
knows and how fast it can learn something new.”
Tom Knight Inside Knowledge Magazine, 20 Nov 2001 in Volume 5 Issue 4.

Question:
Discuss the alignment of knowledge management with organisational
objectives at the UK’s department of health.

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