A Strategic Approach to KM

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I.Vencatachellum/LLC3214/2009 1

A strategic approach to KM

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

This view is understandable, to an extent, among senior executives who may see themselvesas too busy focusing on the big problems of profitability, efficiency, positioning in themarketplace, perceptions of key stakeholders and the overall direction of the organisation toget 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, hasviewed business as being driven by the cost of transactions. In this view, organisationstypically formed because it was cheaper to do certain things in-house rather than tooutsource them. There was an allowance for strategic exceptions, to protect the supply chainand so on. But the view was essentially one based on transaction cost. The key resources hereare ones familiar to students of Marx: land, labour and capital.

But these days, a competing or at least complementary view exists: one based on thenotion that the success of an organisation lies not just in its resources (in todays terms,money, buildings, people, equipment and technologies), but in how it uses its knowledge toconvert these resources into organisational capabilities. Companies dont turn a profit byowning resources: you have to know what to do with these resources. Knowledge is at theheart of everything an organisation does, the binding of all its core capabilities.

Thus, the challenge facing would-be knowledge management pioneers within organisations istwofold. The first task is to build a consensus that KM should not be viewed as an extra, butas an integral part of business management. The second is to find a way to approach theproblem that will address the complexities of the dynamics of knowledge in organisationsand 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. Effortsusually start with an individual or small group looking to tackle one particular business issuethat has some kind of knowledge focus. This work often takes the form of a database, intranetapplication or other software-based solution. These efforts often get labelled as KMinitiatives, but in reality most of them are focused on information management. Finding newways of capturing and processing explicit information is only a small part of the largerpotential for knowledge management.


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It is doubtful whether the field of endeavour we call knowledge management would havecome into being without the world wide web and the excitement in the mid-1990s over thepotential of intranets. Nowadays, most organisations have some kind of intranet and many areamazing 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 andsystems of motivation and reward are in place, staff will simply not use intranets to anythinglike their full potential.

Indeed, a great deal of the work of ICLs knowledge management practice centres on whatmight be uncharitably called failed intranets systems-focused projects with great features(the issues are seldom technical) that dont deliver business value, typically through limiteduse or limited content. These problems typically stem from the common fallacy that once youhave implemented KM tools, you are doing knowledge management. It is true thatknowledge 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) andapplying KM tools (infrastructure-based approaches), there are more holistic approaches toknowledge 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 ororganisation, its industry sector and its particular management focus. Examples of knowledgetypes 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, contentlifecycle management and communication outside organisational boundaries, and starts totake a more holistic viewpoint in the way it looks at knowledge management issues. Basingefforts on knowledge themes enables the organisation to focus on the natural knowledgeflows around an organisation and across structural boundaries, including external flowsbetween the organisation and partners, suppliers and customers.

Implicit within this approach is the ability to make a clear distinction between ways tomobilise 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 codifiedwritten form. This is the kind of knowledge you might acquire in formal learning, asrecorded on a curriculum vitae;

Know who knowledge includes individuals personal networks, contact databasesand directories of expertise. Given that the only real knowledge is in peoples heads in effect, systems only provide ways to structure information addressing ways toaccess 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 uniqueexpertise 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 somelevel match their personal ethics and beliefs. Thus, it is important for organisations tobe able to communicate what they stand for, to employees, customers and the widercommunity. In addition, clear business goals need to be expressed and demonstratedto staff. If employees are working in alignment with the goals, objectives and overallethos of the company, their motivation levels will be higher, contributing toorganisational success.

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

Organisations that have previously followed point solution and infrastructure-basedapproaches to knowledge management are beginning to turn to a more strategic approach:

driving a vision for organisational knowledge directly from the larger mission and objectivesof the company. This reflects what amounts to a fundamental shift in the way organisationsview knowledge. Ultimately, in this scenario, knowledge management is not focused on newways to shape and structure information; rather, it is about finding better ways to leveragewhat people in organisations know, and know how to do.

If this is to happen, if knowledge management initiatives are to succeed, the end result mustbe that people on the ground start to change what they do on a daily basis; how they behaveand 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 mobilisingknowledge is seen as central to the business, as a fundamental capability that must be fullydeveloped and nurtured if organisations are to meet their potential to compete in a crowdedmarketplace.

Some companies are starting to recognise this. But how can a concerned manager in anorganisation that has not made this leap start to build the consensus that knowledgemanagement has a bearing on the issues that top management focuses on as really impactingon the business: efficiency, cost savings, quality of work, customer service, effectiveness andinnovation? This task is not an easy one, because you cannot necessarily achieve change inorganisations 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 mostorganisations).

ICLs experience has demonstrated that a useful way to start creating this consensus isthrough internal case studies that demonstrate practical potential. If this is to be done, thenknowledge management pilot and infrastructure projects need to be very carefully selectedand aligned to the key business concerns so that they can be used to demonstrate the strategicimportance of knowledge management activity. Communicating the outputs of these projectsin an appropriate way is also important. ICL, for instance, uses freelance journalists to createinternal case studies, writing them from a different perspective than a consultant or projectmanager might do. The use of internal case studies is one of ICLs most powerful changemanagement 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 itsrole in the nations health, and some more general ones as a large government department. Itemploys 5,500 people and runs Englands National Health Service, which employs onemillion members of staff, reputedly the largest payroll in Europe, as well a policymaking inthe areas of social care and public health. In recent years, and particularly since the 2001general election, improving the NHS has been a core issue. The department is being impactedby initiatives like the push for joined-up government, which involves co-ordinatingpolicymaking and delivery across departments, as well as compliance with various e-government deadlines. These and many other factors have meant that effective knowledgemanagement is of growing importance.

The department (a long-standing customer of ICLs Outsourcing division) already had veryeffective IT systems, particularly compared to some other departments. These included aLotus Notes/Microsoft Windows and Office desktop available to all staff, a pervasiveintranet, an electronic records and document management programme, and remote accessarrangements for mobile workers.


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First of all, the key issues for the organisation must be identified in a way that seniormanagers can relate to. For example, in the case of the Department of Health these includedissues like joined-up health care, greater efficiency in supporting ministers, better focus onpatients 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 beenidentified, the actual knowledge management strategy needs to be created, a process thatinvolves three stages:

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

A full assessment of the current organisation, using a variety of auditing tools, so thata 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 visionfor knowledge;

The mapping of this gap analysis onto the levers and enablers available to aknowledge 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 testedfor things like suitability, feasibility and acceptability to the main stakeholders, before adetailed 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 divisionalresponsibilities. Activities are also grouped into prerequisites, pilots, medium and long-termelements. In the departments case, as well as various leadership roles assigned, a long-termprogramme was structured that aims to bring together the various initiatives and links them todetailed work at the ground level using KLIMT to start to leverage best practice, embedknowledge capture, sharing and re-use steps into formal and informal processes, and tochange overall behaviour.

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


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One concern with this strategic approach is that it may make knowledge management seemvery complex and likely to incur huge costs, but for many organisations (and this wascertainly 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 bringingall this together in a co-ordinated fashion. It certainly isnt a zero-cost exercise, but theadditional expense may not be all that high relative to the possible gains. Once again, it isimportant 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 acompetitive edge the only thing that is sustainable is what it knows, how it uses what itknows 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 organisationalobjectives at the UKs department of health.

Documents

A Strategic Approach to KM