What is Knowledge Management?
Introduction*
Generally, knowledge is interpreted, subjective information within a context, which involves understanding and is mostly tacit, not explicit. Knowledge can take many forms. It can be in the form of thoughts, insights, ideas, lore, lessons learnt, practices, and experiences undergone to name just a few.
The term knowledge management has become common in businesses throughout the world. Despite its increased prevalence, there remains a large degree of confusion concerning the applied definition of what knowledge management is. Within the knowledge management community, attempts at defining this elusive term appear to be in constant flux. However, a basic description of what constitutes knowledge management, and the various factors leading to its importance, source, problems, and other basic related issues necessary to achieve a general understanding have been provided below. This field guide is intended to provide information concerning these issues in terms that are applicable in any situation. Obviously each business has their own sets of definitions, applications and style with respect to this tool.
What is Knowledge Management?*
There are prevalent definitions of knowledge management needing to be highlighted. First, that knowledge management (KM) is the discipline that enables productive generation, retention, sharing and maintenance of knowledge to improve the decision-making process and resulting actions. Alternatively, one can state that knowledge management is the process by which individual learning and experience can be accessed, reflected upon, shared, and utilized in order to foster enhanced individual knowledge and, thus, organizational value. It is an approach to managing thoughts, insights, ideas, lessons learnt, best and worst practices, experiences made available, etc. Managing this knowledge requires that knowledge is captured where it is created, shared between people and applied in business processes. If the culture allows and encourages it, and if technology supports it, then learning will happen. Currently, 85% of organizations said their ability to strategically manage knowledge is weak, 80% said hiring, evaluation, and compensation practices do not take knowledge into account, 70% believe knowledge assets can fuel growth – both revenue and core competencies.
Knowledge spans a continuum ranging from Explicit to Tacit:
Explicit: being more data/information oriented content which can be captured and reused effectively generally without further human instruction, example or experience. Rote processes are good examples of explicit knowledge.
Tacit: that knowledge which requires development of intuition and judgement, generally the result of experience and/or close relational learning modeled by the journeyman/apprentice model.
* Source: Gartner Group
Stair Step Chart
As knowledge goes from tacit to explicit, the volume decreases as the information is captured into a generally useable form:
Culture and technology are shown here as the key drivers of knowledge management, and both encompass many things. Culture is more than just people – it covers behaviour, organisations and reward structures, for example – just as technology is more than just IT – we use it to mean the whole supporting infrastructure for knowledge management. Technology is the key driver for capturing and using knowledge, while culture is key to the activities of sharing and learning.
Capturing core knowledge: characterised by a growing awareness of the kinds of knowledge that relate to a core capability. This phase is dominated by identifying and locating that knowledge and putting in place the technical infrastructure to facilitate capture. The organisation recognises the value of knowledge management to its business, and begins its journey with a few successful pilots, which then attract the interest of a wider community.
Sharing between communities: the organisation provides means and motivation for communities of practice (CoP) to assemble (induced by a business need) and disassemble (if the business need disappears). CoPs differ from teams in that they are driven by a common interest, whereas a team is driven by a common purpose or business objective. This distinction is important, as we wish to encourage sharing between teams, not just within them, and CoPs represent a much wider community. This phase is community-driven and dominated by experiments in knowledge capture, sharing and application within and between different CoPs.
Consolidate knowledge for use: as more CoPs form and share their knowledge, information overload and relevance of knowledge become issues. This phase is dominated by the need to impose structure and standards on the core knowledge bases, and to ensure adequate management of the Web, or any other means of linking and accessing the growing knowledge stores. The organisation discovers the need to balance freedom of expression and business focus.
Creativity and learning: this is when managing knowledge becomes a standard business practice, and is characterised by significant cultural change. The pace of learning quickens, solutions improve and the speed of innovation increases as we work in new ways.
Why is Knowledge Management Necessary?
While there are many reasons for pursuing KM, three main objectives stand out:
1. to capture and transfer internal knowledge and best practices;
2. to increase employee capabilities; and
3. to capture, transfer and use/leverage customer and market information.
In addition to these three objectives, applications to business strategies and general organizational benefits may be extrapolated as well.
Applications to Business Strategies
KM can assist an organization s pursuit towards various business strategies, as well as ensuring such strategies are incorporated in a highly effective manner by creating the following opportunities:
KM is able to create and —successful business strategies through the delivery of:
Joint Ventures/Partnership/Acquisitions
Contract relationships
Global Practice
Grow organically
Establish customer consortium
Develop support model
Become a Value Added Reseller for KM technologies
Define & develop core competencies (technology, business acumen, leadership
Enhanced Market Penetration
Penetrate from the top
Leverage alliances/partners
Exposure through conferences/internet
Utilize account management to fullest
Embed KM into existing products & services
Establish customer consortium
Brand Name Creation
Participate and exploit recognized benchmarks for industry exposure and recognition
Be published
Be quoted
Deploy and assess the contribution of KM toward achieving business results
Industry recognition (e.g. American Productivity and Quality Center, Gartner Group)
Develop ability to quantify value delivered
Create mindshare
Financials Value
Value-based pricing
Accelerated growth by repeatable solutions
Develop capacity to deliver
Stabilize core offering
Apply to our internal solutions
Develop people competencies
Obtain and maintain venture level returns
General Organizational Benefits
The efficient use of a KM system in companies often leads to many general benefits within the organization. Such benefits may include:
Eliminating expert drainage
Gaining Competitive advantage
Becoming a global company
Supporting continuous transformation
Sustaining innovation
Increasing understanding of your customers
Motivating staff
Speeding up Innovation
Enabling the collection and distribution of knowledge related to key transformation objectives
Enabling a company to become a learning organization
Empowering employees to reach their full potential by benefiting from the experiences of others
Fostering the development of talented resources/people & a credible service company
Leveraging the strengths of our alliances
Increasing quality due to industry/insider knowledge
Being a full spectrum service provider, one stop shopping
Providing the best total solution (think, build, operate)
Benefits to Sharing and Collaboration
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The benefits to sharing and collaboration are:
Standardize procedures and develop into best practices.
For management level, need to share market information: types of services, pricing.
For consultancy, sharing methodologies, case studies and expertise, would be the key to a successful operation. This is true especially for new recruits who can get up the learning curve more quickly, people become more valuable more quickly (good for them in terms of being personally satisfying; good for the company in terms of them being more profitable for SSI). We could also retrain/reskill staff more quickly to be able to respond more rapidly to customer needs for new services. Learnings from projects could allow us to more rapidly train other staff to help with similar work, instead of learning by doing, repetition.
Headhunting: increasingly about contacts, who knows someone who might be interested in working for Shell; we should be collecting information on potential recruits and looking for external best practice.
Access to instant expertise (re-use of existing presentation, report material, so that fairly new staff can give credible response to customers).
Personal information on customers, to enable more effective presentations to them, better marketing
Better bid material
A comprehensive prospects database
Best Practices
[Future Topic for Discussion]
Success Stories from Other Companies
While there are many reasons for pursuing knowledge management, many companies cite three main objectives:
1. capturing and transferring internal knowledge and best practices;
2. increasing employee capabilities; and
3. capturing, transferring and using (leveraging) customer and market information.
Demonstrating the rewards to be gained from capturing and sharing internal knowledge and best practices, the following are some knowledge management success stories: *
Buckman Laboratories credits much of its 250 percent growth in sales in the past decade to its online knowledge management system
Texas Instruments sharing best practices on existing manufacturing locations helped forgo investment in a new $500MM plant
Chevron saved $20MM/year by adopting best-managed oil field techniques (via establishing a best practices network)
Xerox saved $400MM/year from sharing best practices of acquiring customer intelligence
* Source: APQC Consortium Study
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