Designing a knowledge management performance framework

Designing a knowledgemanagementperformanceframework

Jinette de Gooijer

Introduction

A common theme in contemporary

organisations is the concern of managers for

achieving cultural change through radical

management approaches. Knowledge

management is one such management

approach, and is portrayed in the popular

business literature as an innovation with the

potential to affect the whole of an

organisation's business, especially its processes

and information systems (Cole, 1998; Harvard

Business Review, 1998; Myers, 1996). The

issue of how to measure the success of a

knowledge management approach is one

which is still being explored by organisations,

researchers and management consultants.

Most of the solutions offered are geared

towards profit-making commercial firms:

measuring intellectual capital and the

intangible assets on a company's balance sheet

for example. (Edvinsonn and Malone, 1997;

Sveiby, 1997) These solutions have limited

application for public sector management, and

especially when applied to measuring cultural

change within an organisation.

In this paper, I will describe an approach for

embedding knowledge management within

the overall business performance

management model of public sector

organisations, and for discerning the degree to

which people use knowledge management in

their work. This latter point alludes to the

adoption of knowledge management by an

individual and tracking changes in her or his

behaviour. I will use a case study of the

Victorian Department of Infrastructure to

illustrate the two models.

Knowledge management in thedepartment

Public sector management in the state of

Victoria, Australia is experiencing profound

change as it adopts a contractual model of

public service. Since 1992, when a

conservative government was elected, a major

reform of government agencies has occurred.

This is manifest in large reductions in staffing

levels and the amalgamation of several small

departments into five mega-agencies whose

roles are to develop policy rather than directly

deliver services. Service provision to welfare

recipients or users of public utilities, for

example, is delivered from the private or

The author

Jinette de Gooijer is the Director of Innovative Practice

Consulting Pty Ltd, Victoria, Australia and also at the

Faculty of Constructed Enivronment, RMIT University,

Melbourne, Australia.

Keywords

Knowledge management, Performance, Behaviour,

Framework, Measurement

Abstract

Measuring the business benefits of knowledge

management is difficult. Even more so for public sector

agencies whose outcomes are social benefits, rather than

simple profit. Describes an approach for measuring the

performance of knowledge management strategies for a

public sector agency in Victoria, Australia. Knowledge

management is defined as those actions which support

collaboration and integration. Two models are presented

for measuring knowledge management performance and

knowledge management behaviours: a performance

framework based on the balanced scorecard approach,

and a behaviour framework that identifies levels of

practice demonstrated by individuals. The Knowledge

Management Performance Scorecard maps the objectives

for knowledge management across the balanced

scorecard's key result areas The Knowledge Management

Behaviour Framework identifies seven levels of

knowledge management skills for demonstrating

collaborative behaviour. The framework also outlines

what might be typical behaviours of managers and the

roles they would assume in relation to individuals at each

level.

Electronic access

The current issue and full text archive of this journal is

available at

http://www.emerald-library.com

303

Journal of Knowledge Management

Volume 4 . Number 4 . 2000 . pp. 303±310

# MCB University Press . ISSN 1367-3270

community sector under contractual

arrangements to the relevant government

agency (Alford et al., 1994).

In Victoria's public sector, the knowledge

worker is a policy-maker, strategic planner,

contract manager, information processor and

developer of performance management

systems. With the separation of policy-making

from direct service provision, the integration

and connectedness of information concerning

service and policy is critical. This is the crux

for knowledge management in the public

sector. And for public sector managers, the

question it gives rise to is: how will we know if

we have achieved a business benefit from

taking a knowledge management approach?

The Department of Infrastructure is one of

the smaller agencies in Victoria and was

formed in 1996 from the departments of

planning, transport and major projects. It

employs about 700 staff who are engaged in

policy development, strategic planning,

managing major projects in land use,

transport and building, the research and

monitoring of infrastructure use, and a

program of privatisation of infrastructure, of

which public transportation has been one of

the largest. Knowledge is an important

commodity used by the Department. It is also

a knowledge-creating organisation.

Knowledge is created by employees through

research and policy-making, and used in the

Department's consultation with communities

and businesses. It is a department employing

many specialists. Managing the flow of this

specialist knowledge is one issue the agency

recognised early when it focused on

developing its information technology base.

Perhaps being an agency concerned with

infrastructure helped it recognise the

importance of a good information technology

infrastructure to support knowledge flow.

By 1999 the Department had implemented

a networked information infrastructure that

connected all staff in its urban and regional

sites. A knowledge management strategy was

defined, and a steering committee in place

charged with planning, implementation and

overall coordination. The problem remained

of developing a performance management

framework for measuring the impact of these

initiatives.

Within the Department of Infrastructure,

the need for measuring the outcomes of

knowledge management was related to a

business vision of achieving an integrated

strategic approach to the state's infrastructure

development. The belief was that a new

business model needed to be created for

achieving this vision, and that knowledge

management was that model. Thus the

question: what benefit can be demonstrated by

knowledge management for the Department of

Infrastructure's business? was expected to be

resolved by designing a performance

management framework that measured

knowledge management outcomes. These

outcomes included increased collaboration

within the Department and with its

stakeholders and project partners, improved

information sharing amongst staff and with

stakeholders, faster response to the changes in

the Department's external environment, and

better coordination of development projects

under the agency's responsibility.

An extensive review of organisational

practices in measuring knowledge

management initiatives had failed to surface a

model that could be directly applied to the

Department. Two key differences that needed

to be accommodated, and which I aver are

what distinguishes public sector management

from management of commercial enterprises,

are that, firstly, public sector agencies are not

involved in a simple transaction of services

between themselves as a supplier and others

as customers. The relationship is far more

complex and better described as one between

the agency of government and diverse

stakeholders. Second, although it is currently

fashionable to describe public sector agencies

as business operations, they are not profit-

making concerns. Financial management is

only one accountability of many, and not the

primary task.

One particular requirement of the

Department of Infrastructure was that the

framework needed to be clearly linked to

public policy performance indicators. These

were defined as levels of outcomes, with the

minimum level described as: `̀ Awareness and

understanding of knowledge management

principles''; the next level as `̀ Use of tools,

information and knowledge''; then `̀ Changed

behaviours''; and, at the maximum level of

performance, `̀ Improved organisational

performance''.

These different levels present some

problems of logic. For instance, the first two

levels have a clearly stepped link: the use and

application of knowledge management is

premised on there being an awareness of what

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Volume 4 . Number 4 . 2000 . 303±310

it is and the tools available for employing the

principles. One can assume that awareness

precedes use. I make the assumption here that

one needs to know the utility of a tool before

one can successfully employ it to a task.

There is a monumental leap though from

use of tools to changed behaviours. Behaviour

is a learned response to the dynamics of a

system. The use of tools is only one

component of those dynamics. Here, the

assumption is that one can step from a specific

behaviour to a whole repertoire of behaviours,

as well as measure the performance of an

individual in isolation from their response to

the system. This raises questions of: What are

the knowledge management behaviours which

need to be exhibited? What is different about

them that would indicate `̀ changed behaviour''

from otherwise accepted behaviour in the

organisation? What, other than `̀ use of tools,

information and knowledge'', would constitute

knowledge management behaviour? What

other factors in the organisational climate

might impact upon behaviour? How will these

be taken into account?

The final level, improved organisational

performance, represents another leap from

individuals' performance to that of the whole

system. What are the links here that need to

be made explicit and unambiguous?

The resolution of these problems lay in two

areas: linking knowledge management to the

overall business performance framework; and,

organisational culture change. This lay open

the notion that a knowledge management

performance management framework was not

one all-encompassing model but two inter-

connected ones.

By adapting some of the existing models

described in the literature to the requirements

of the Department of Infrastructure, a viable

model emerged. The model is comprised two

frameworks: a Knowledge Management

Performance Scorecard, and a Knowledge

Management Behaviour Framework.

Some assumptions about a knowledge

management performance management

system have been made by the author. These

are:. A Knowledge Management Performance

Framework is not in isolation from the

organisation's business performance

framework.. There is clear and direct alignment

between individual work plans, team

goals, business unit objectives and the

organisation's key result areas.. There are clear benchmarks against

which performance can be measured.. Performance indicators are

unambiguous.. Knowledge management is a business

principle and is embedded in all aspects

of the organisation's work.

Knowledge Management PerformanceScorecard

The Department wanted a framework that

could provide a practical umbrella for more

detailed performance measures. The

framework needed to show how knowledge

management impacted on all areas of the

Department's operations. Knowledge

management performance measures needed

to be embedded in the overall business

performance model, and not be a marginal

`̀ add-on'' to the core measures. Several

approaches were reviewed. None was

identified as specifically applicable to

knowledge management in a public policy

setting. Models considered ranged from the

intellectual capital approach (Edvinsonn and

Malone, 1997), to reframing existing business

data models (Allee, 1997). Neither of these

alone seemed helpful enough for the

Department of Infrastructure's environment.

Three approaches offered some sensible

and pragmatic ideas. They were:

(1) a knowledge management map, based on

the structure of an information ecology

framework that considers the whole of an

organisation's culture, structure and

processes (Russell, 1995);

(2) tacit and explicit knowledge transfer

processes (Nonaka and Takeuchi, 1995);

and

(3) the notion of sensemaking as a key

element in electronic work and computer-

mediated communication, described by

Weick in a very early study on information

technology use (Weick, 1997).

I don't have the space to describe each of

these approaches, but it is sufficient to say

that they provided pointers to the

performance areas the Department needed to

consider. The elements in the knowledge

management map ± strategy, infrastructure,

products and services, relationships, culture

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and behaviour, processes, and content ±

offered a structure which could be applied in

a public sector performance management

system.

Ultimately, it was by considering the overall

business performance model in which a

knowledge management performance

framework had to sit, that a solution was

found. This was by considering a balanced

scorecard as the overall performance model,

and then mapping the knowledge

management performance elements across

the model. This formed the Knowledge

Management Performance Scorecard.

The Knowledge Management Performance

Scorecard adapts the balanced scorecard

approach (Kaplan and Norton, 1996) in

which an organisation measures its

performance in four key result areas:

(1) financial performance;

(2) internal business processes;

(3) customers; and

(4) growth.

The model, in its original conception, is

focused on broadening out the measures of

performance in a profit-making firm. In

recognition that the overall success of a firm

depends on all aspects of its business

performing well, the balanced scorecard takes

into account internal factors as well as the

relationship a firm has with its customers and

shareholders. The model is highly attractive

for this reason, especially in its capacity to

embrace the knowledge characteristics of an

organisation's business.

In choosing to use the balanced scorecard as

an umbrella for developing a knowledge

management performance framework, there

were features which sat at odds with the

purpose and tasks of a public sector agency.

For the Department of Infrastructure in its role

as an agent of government, the idea of

customers is problematic. First, the

Department is not engaged in an economic

transaction with consumers. Second, the

services the Department provides are strategic

policy and planning advice on public

infrastructure. Third, if the Department has a

customer, in the strict sense of the word, it is

probably its government ministers, who

determine the funding of the Department.

Since the outcomes of the Department's work

are experienced by the residents, businesses

and investors of Victoria, the term stakeholders

makes far greater sense than customers.

The second feature of the balanced

scorecard that needed review was the key result

area of (organisational) growth. In an era of

small government, the idea of organisational

growth is ludicrous. Since growth, in terms of

the balanced scorecard, encompasses the

notion of organisational learning for growth, it

made sense to reframe this into organisational

learning and name this key result area People.

The four revised organisational key result areas

appear in Table I.

The next step in formulating a performance

management framework involved mapping

the key result areas for knowledge

management across the scorecard. The key

result areas were considered to be:. strategy;. products and services;. information infrastructure (technology

and content);. processes;. relationships; and. culture and behaviour.

Inevitably strategy is embedded in every aspect

of the organisation, and thus the performance

of a knowledge management strategy will be

measured in all four areas of the scorecard.

Products and services is also an element that

lends itself to being measured in more than

one key result area.

The final framework is given in Table II.

The next step was in setting objectives,

expected outcomes, initiatives and

performance indicators for each of the

knowledge management key result areas. The

expected outcomes for each of the defined

objectives were grouped under the

Department's public policy performance

indicators. This provided a clear connection

between the policy performance framework

and knowledge management objectives. An

example of this is given in Table III.

The design allows for high detail at the

business unit and individual level. This is its

major advantage, that it can be cascaded

clearly down from the organisational level to

Table I Balanced scorecard for public sector performance management

Financial

performance

Internal business

processes Stakeholders People

What do we

need to do

to succeed

financially?

What business

processes do we

need to excel at?

How should we

appear to our

stakeholders?

How will we

sustain our

ability to learn

and develop?

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divisional, group and individual workplans.

Its major disadvantage is that people's

behaviour and organisational culture cannot

be realistically framed in terms of such a

rational planning model. Another approach

was needed for this. This is the function of the

Knowledge Management Behaviour

Framework.

Knowledge Management BehaviourFramework

There is a basic premise about introducing

knowledge management to any organisation

which informs the Knowledge Management

Behaviour Framework. It is that knowledge

management is a radical innovation or change

to an organisation's operations, and thus is to

be regarded as an intervention on the

organisation's culture. The value of regarding

it as an intervention is that the principles and

practices for managing change processes will

be considered in implementing knowledge

management.

The second framework designed for the

Department of Infrastructure identifies and

describes the use of knowledge management

tools, systems, resources and practices as

behaviours to be learnt when individuals

progressively adopt knowledge management

in their work. The behavioural framework,

defined in terms of learning and learned

behaviours, is directly linked to the key result

area people: culture and behaviour in the

Knowledge Management Performance

Scorecard.

The framework is informed by the

concerns-based-adoption-model (CBAM)

developed by Gene Hall and his associates at

the University of Texas at Austin in the early

1970s (Somerset, 1995). CBAM has two

dimensions to its system of describing how

organisations and individuals adopt

innovations. One is that individuals feel

various concerns about adopting new ways of

doing things, and that secondly their

behaviour will reflect these concerns through

differing levels of use they make of the new

innovation or change.

The CBAM makes several assumptions about

change. It assumes that change is a process, not

an event, is made by individuals first then

organisations, is a highly personal experience,

[and] entails developmental growth in feelings

and skills (Somerset, 1995).

Table II

Financial

performance

Internal business

processes Stakeholders People

What do we

need to do

to succeed

financially?

What business

processes do we

need to excel at?

How should we

appear to our

stakeholders?

How will we

sustain our

ability to learn

and develop?

Knowledge management key result areas

Strategy

Products and

services

Strategy

information

infrastructure

(technology and

content) processes

Strategy

relationships

Product and

services

Strategy

culture and

behaviour

Table III Knowledge management performance objectives

Key result area

Objectives Expected

outcome

Initiatives Performance

indicators

Stakeholders: relationships

To increase the

capacity for

integration and

collaboration

Changed

behaviours

% increase

in inter-

organisational

communications

Encourage more

formal and

informal

networks using

team rooms

No. of team

rooms and

participants in

each

Internal business processes:

information infrastructure

(technology and content)

To build

awareness

amongst all

staff of

knowledge

management

tools,

processes and

practices

Awareness and

understanding

All staff are

familiar with the

concepts and

practices of

knowledge

management

Use of tools,

information,

knowledge

Increase in use of

knowledge

management

tools and

adoption of

knowledge

management

practices

FAQ page on

knowledge

management is

placed on

intranet

All staff attend

awareness

training in

knowledge

management

tools

Knowledge

management

team room is

established and

attracts growing

number of

members

Metrics on use

of FAQ page

and

refreshment

rate of its

contents

No. of staff

trained

No. of

participants in

and

contributions

to knowledge

management

team room

discussions

and

documents

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CBAM asserts that people go through

predictable stages in adopting an innovation.

These stages are shown in Table IV.

Individuals exhibit a progressive order of

adoption from non-use to renewal. Non-use

might arise because individuals do not have

the time to learn about the new way of doing

things, or perhaps because they are concerned

that the new way is counter-productive. When

individuals begin to take action in learning

more about the changes to be adopted, they

are exhibiting a new level of use, that of

orienting themselves to what the change has

to offer. In deciding to begin using a changed

practice or innovation, individuals are

preparing themselves for more fully adopting

the new. A person who begins to use the

innovation has to grapple with organising and

managing her or his program of work in order

to establish a basic effectiveness. This is

coined as mechanical use in the CBAM

system. At the routine level, individuals have

attained a degree of stabilisation, and it is a

small step from here to developing some

refinements by which the impact of the

innovation can be modified to suit specific

needs of the work. The final stages describe

individuals engaged in integrating the

innovation within a team or larger group

context, and finally, having fully integrated

the innovation or change, individuals begin to

seek modifications in response to the need for

improved business performance.

What is especially attractive about this

system of describing levels of use, is that it

legitimises the learning that people experience

when adopting organisational change. Too

often, the implementation of change in

organisations is accompanied by an implicit

expectation that individuals will leap from

non-use to integration in one rapid step.

Another feature that makes this model

attractive for assessing the adoption of

knowledge management by individuals, is that

it is directly linked to the development of a

person's knowledge. This builds an inherent

integrity into the framework: learning and

knowledge are directly linked.

How was the CBAM system adapted for

describing knowledge management

behaviours within a performance

management framework?

First, it was assumed that knowledge

management was an innovation to be adopted

throughout the whole organisation by every

individual.

Second, the levels of use were described in

terms that related to people's skills in

knowledge management. The order from 0-6,

representing first to last stages, was retained.

Table V shows these levels.

Third, it was beneficial to describe what

role an individual might take up at each level,

and what behaviours would characterise both

the level and the role. Table VI outlines these.

The framework as it is presented in Table

VI bears a close relationship to the kind of

competency models found in many

organisations that have implemented

employee performance management systems.

An element missing in these systems, and one

which I consider critical when implementing

change, is the role supervisors or managers

adopt in assisting staff to learn and adapt their

work to the changes expected of them.

This relationship between supervisor and

supervisee is a critical success factor in both

implementing change and assessing its

effectiveness. The Knowledge Management

Behaviour Framework includes this element,

and is what gives it further integrity.

Table IV Levels of use in the CBAM

Order Level

Last 6 Renewal

| 5 Integration

| 4b Refinement

| 4a Routine

| 3 Mechanical use

| 2 Preparation

| 1 Orientation

First 0 Non-use

Table V Levels of skill in adopting knowledge

management

Level Knowledge management skills

0 Awareness but non-use of knowledge

management tools or practices

1 Seeks information about knowledge

management

2 Personal experimentation with knowledge

management tools and practices

3 Personal implementation of knowledge

management practices

4 Engaged with impact and consequences of

knowledge management behaviour

5 Actively collaborates in all aspects of work

6 Refocussing knowledge management skills

on new business opportunities

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Knowledge management is defined

specifically within the Department of

Infrastructure as those actions which support

collaboration and integration. Clearly

collaborative action in the relationship

between a manager and her or his staff

establishes a core practice of knowledge

management at its most critical interface. The

Knowledge Management Behaviour

Framework specifically defines this interface.

Table VII describes the roles and behaviours

anticipated of managers.

All of these actions are supported by the

knowledge management tools, systems,

resources and practices of the organisation. At

the Department of Infrastructure these

include: tools such as Lotus Notes team

rooms; an intranet system that enables access

Table VI Roles and behaviours for the levels of knowledge management skill

Level

Knowledge

management skills

Possible role for

someone at this

level Typical behaviours

0 Awareness but non-use

of knowledge

management tools

or practices

Maintainer of current

competency and

behaviour

Has little concern and low awareness about

knowledge management tools or practices

Interest may or may not be present

Needs to understand how knowledge management

will directly benefit individual's interests

1 Seeks information

about knowledge

management

Early learner Wants descriptive information and opportunities to

see knowledge management tools in use

Explores realistic expectations about benefits and

costs in acquiring knowledge management skills

2 Personal

experimentation with

knowledge

management tools

and practices

Follower Establishes rapport with people more skilled in

knowledge management practices

Accesses and uses knowledge management

resources and tools provided by others

Seeks personal support through access to facilitators

and other help

3 Personal

implementation of

knowledge


Implementer Begins to focus more on team issues and

collaborative opportunities

Clarifies how knowledge management can be

applied to other aspects of individual's work

Is continually building skill and increasing use of

knowledge management tools, probably on a

daily basis

Identifies knowledge resources, creates and

contributes own knowledge to organisation's

knowledge systems

4 Engaged with impact

and consequences of

knowledge

management behaviour

Problem-solver Independently and routinely applies knowledge


Competent in capturing and organising knowledge

for others' use

Clearly demonstrates collaborative knowledge

behaviours

Encourages other people to share expertise and

participate in group problem-solving

5 Actively collaborates in

all aspects of work

Leader Advocates and promotes collaboration to others

Models knowledge management practices,

especially learning and feedback into business

processes

6 Refocussing knowledge

management skills on

new business

opportunities

Investigator/

Innovator

Engages in creative inquiry and analysis of business

outcomes and strategies

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Volume 4 . Number 4 . 2000 . 303±310

to internal and external information;

resources of an electronic library storing

departmental documents and objects;

communities of practice; and, personal

practices in which knowledge resources are

identified, created, contributed, captured and

organised, accessed, shared, applied, weeded

and archived by each individual in the normal

course of daily work.

Conclusions

Implementation of the frameworks is still at

an early stage. The design is to be trialled

within one divisional group, then evaluated

and refined before full implementation.

By distinguishing between organisational

performance and individual behaviour, the

design of these frameworks provides for

`̀ hard'' business measures to be linked to

`̀ fuzzy'' social measures in a coherent way.

Importantly, learning, which is a fundamental

precursor to and an activity within knowledge

processes, is explicitly acknowledged and

included in knowledge management

performance.

References

Alford, J. et al. (1994), The Contract State: PublicManagement and the Kennett Government, DeakinUniversity, Burwood.

Allee, V. (1997), The Knowledge Evolution: ExpandingOrganizational Intelligence, Butterworth-Heinemann, Boston, MA.

Cole, R.E. (1998), `̀ Knowledge and the firm'', CaliforniaManagement Review, Vol. 40 No. 3, Special issue.

Edvinsonn, L. and Malone, M.S. (1997), IntellectualCapital, HarperCollins, New York, NY.

Harvard Business Review (1998), Harvard BusinessReview on Knowledge Management, HarvardBusiness Review Press, Boston, MA.

Kaplan, R.S. and Norton, D.P. (1996), `̀ Using the balancedscorecard as a strategic management system'',Harvard Business Review, January-February,pp. 75-85.

Myers, P.S. (Ed.), (1996), Knowledge Management andOrganizational Design, Butterworth-Heinemann,Boston, MA.

Nonaka, I. and Takeuchi, H. (1995), The Knowledge-Creating Company, Oxford University Press,New York, NY.

Russell, R.H. (1995), Implementing the InformationEcology Framework, Ernst and Young, Boston, MA(Center for Business Innovation Working Paper).

Somerset Consulting Group (1995), Concerns BasedAdoption Model, RMIT University, Melbourne.

Sveiby, K.E. (1997), The New Organizational Wealth:Managing and Measuring Knowledge-Based Assets,Berrett-Koehler, San Francisco, CA.

Weick, K.E. (1997), `̀ Cosmos vs. chaos: sense andnonsense in electronic contexts'', in Prusak, L. (Ed.),Knowledge in Organizations, Butterworth-Heinemann, Boston, MA, pp. 213-26.

Table VII Roles and behaviours for managers

Level

Role for manager in

response to someone

at this level Typical behaviours of manager

0 Provide vision Focus on the individual

Acknowledge that little concern and low

awareness is legitimate

Make individuals aware in a positive way

Use promotional tools

1 Information provider Focus on the individual

Get them in touch with an enthusiastic

person competent in knowledge

management

Help the early learner clarify needs and

identify training opportunities

2 Counsellor Focus on the individual, supported by

group processes

Answer all questions, listen to problems,

build success expectancy

Establish milestones and realistic timelines

in developing knowledge management

behaviours: celebrate and reward

achievements

3 Leader Focus on team development and

performance

Establish consulting pairs or support

groups

Use demonstration projects to increase

personal confidence and skill

Provide lots of opportunities for group

discussions, especially informal ones, to

allow cross-fertilisation of ideas

4 Supervisor Encourage cross-functional working parties

for identifying problems and exploring

solutions

Put individuals in contact with others who

are ahead and behind them in their levels

of competency with knowledge

management

5 Mentor Encourage collaborative problem-solving

with customers and suppliers

Give opportunities to go outside the

organisation for learning and sharing

expertise

6 Coach and sponsor Allow considerable scope for individual to

explore other ways of doing things

Provide resources for testing new ideas

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Volume 4 . Number 4 . 2000 . 303±310

Documents

Designing a knowledge management performance framework