Most major companies are making the identification, development and management of know-how a major priority. Some of them are providing physical recognition of this by appointing “Chief Knowledge Officers” at a board level or at lower lever—knowledge administrators, knowledge stewards and knowledge translators. Like people, companies use such a tiny proportion of their collective brainpower that any improvement has the potential to deliver disproportionate gains.
At the conceptual level, knowledge management appears to be disarmingly simple. Construct a knowledge base of useful information already floating around somewhere in the organization, make it available on a web base intranet or internet, and stand back to admire the results. The skill is to make knowledge management conscious and systematic.
Knowledge is "managed" when you add or create value by more actively leveraging the know-how, experience and judgment resident within and, in many cases, outside, an organization. Successful knowledge management is achieved when you use the intelligence of the people who work for an organization in a process designed to better serve the organization's customers. Similarly, the people who work in an organization will be more effective at what they do and lower the stress of what they do when they’re able to access and use knowledge in a fruitful and beneficial manner.
Many authorities on knowledge management have suggested elaborate and complex models. So complex have these models become, that we often need knowledge managers to interpret them for us. But in fact, the process is very simple. It involves asking these questions for each activity we undertake in the name of knowledge management:
What is our purpose in gathering this knowledge?
Unless the purpose is clear we will collect more data than we can use and we will lose our focus and sense of alignment around the opportunity. Always begin the purpose from the customer perspective – what will collecting these data do for our customers?
How will we gather the knowledge?
What is the best way and how frequently should we gather this knowledge? What is the best practice for the kind of knowledge we require? Who are the best people to collect it? What is the best way of ensuring that the knowledge is both valid and reliable?
How will we organise the knowledge, once we have it?
This is about how we give meaning to the information – who will interpret it, organise it, present it?
Who should have access to this knowledge – how shall we distribute it?
Knowledge is power, but it is also an opportunity. How do we maximise the opportunity to use knowledge by making sure that those who can make best use of it see it?
What actions should knowledge lead to?
This brings us back to purpose. For example, if the original purpose of creating knowledge was to build stronger customer loyalty, what action options are available to those who receive information from the process – how empowered will they be?
There are some basic “rules” of knowledge management we should advise executives to follow. These are:
Purpose
Rule 1: Know what you don’t know.
Effective knowledge management recognises what is known, what needs to be known and provides a system for filling knowledge gaps so that executives can constantly look to improve performance. By recognising knowledge gaps, serious efforts can be made to fill them. This starts with the question: what do we need to know so as to create a sustainable, high performing organisation?
Gathering
Rule 2: Never pay for knowledge you already possess.
You may need to develop a knowledge inventory or to audit your knowledge base to know what you already have and how readily accessible this knowledge is. Unless you do so, you will likely pay for consultants to find knowledge you already have and present it back to you.
Rule 3: Manage your points of ignorance.
When you have completed a knowledge audit, you will know what you have. Then you need to complete a knowledge map of the knowledge you need for your journey to high performance. This map will identify what you don’t know and what you need to know more of from your existing knowledge base. While you are collecting information, manage the points of ignorance.
Rule 4: Recognise that most consulting processes do not transfer knowledge.
Traditional consulting processes were not designed for knowledge and skill transfer, but to maximise billable hours. The key here is to use external support as a basis for transferring skills, ideas and learning from a consulting house to the company. Only in this way will knowledge be acquired. This is especially important in filling knowledge gaps.
Rule 5: See the knowledge you need as an investment, but never over pay for the investment.
One way of filling a knowledge gap is to buy the knowledge you need. There are many sources of knowledge, many of them expensive. Look for low cost ways of securing knowledge – trade associations, information exchanges on the internet, the benchmarking associations, think tanks, academic organizations, internet searching and so on. Look at securing knowledge as an investment, but calculate the return.
Rule 6: Companies that create knowledge which is “at the edge” of known experience (just beyond where others are) will win market share and competitive advantage.
By partnering with suppliers, researchers, inventors, customers you can develop new knowledge of needs and opportunities and create competitive advantage. Your knowledge strategy should aim at always being ahead of others.
Organizing
Rule 7: Knowledge un-applied is knowledge wasted.
Most organizations collect more data than they ever use, buy data they don’t use well and have data they don’t know about. Knowledge not used is knowledge wasted. Practice knowledge conservation and engage in “strategic introspection” about knowledge – link collection, organisation and distribution to strategic intent.
Rule 8: Never pay for knowledge more than once.
There are several cases here. Within a health care company, the German parent [paid £250,000 for access to a set of data which its US subsidary had bought a month earlier for $175,000 US (£106,000). It paid twice for the same data. The bigger the organisation the more critical this issue. Knowledge management requires vigilance.
Communicating and Distributing
Rule 9: If you can’t communicate your knowledge to others, you are doing something wrong.
There are many tools emerging for managing and communicating knowledge – e.g. Lotus Notes, Microsoft Exchange – and tools for caputuring knowledge simply and effectively – e.g. knowledge mapping tools (MindMap), knowledge indexing tools (relational databases), knowledge banks (e.g. e-library). What is key here is that knowledge can be communicated, received and understood quickly and efficiently within the organisation. That is, knowledge is used and communicated, not just stored. The future of an organisation will depend on the speed and quality of this communication of knowledge.
Action
Rule 10: Someone in your organisation should have responsibility for knowledge and securing a return on your knowledge investments.
None of this happens by chance. This is also not just an IS/IT problem – it’s a strategic issue involving the future of all aspects of the business. Its requires an executive level responsibility.
Wise organizations will accept that thinking about knowledge itself will evolve in a rich interplay between theory and practice, structure and experiment and human and organizational intent. In the age of the knowledge-based economy, the advantage will accrue to knowledge, not traditional resources.
Knowledge as an Economic Resource
Since 1968, there has been an increasing, although vague, recognition of the economic value of knowledge. Many calls are made for increased investments in knowledge, but the qualitative measurement of knowledge is an elusive art.
Some of the beneficial consequences of increased investments in knowledge are:
- faster product innovation;
- better tailoring through technology of customized customer service;
- joint innovation with customers of new opportunities;
- improved product quality; and
- empowered ways of providing customer service.
These are the returns on knowledge investment. But people are still struggling to understand the nature of the investment, how to treat knowledge as an economic resource, and how to improve the performance of knowledge workers.
Knowledge defies easy descriptions. Some estimates suggest only between 10-30 % of the knowledge needed to run an organization is codified in its procedures and systems. Much of it is in the heads of its employees. Thus, one of the key challenges facing knowledge-creating organizations is the development of processes to take implicit knowledge in the minds of individual employees and make it explicit so it can be shared. And it is important to note that knowledge and knowledge processing is different from and much more elusive than information processing. |
