Ours is the age which is proud of machines that think, and suspicious of men who try to

Ours is the age which is proud of machines that think,

and suspicious of men who try to

KGW Consultants Ltd.

Knowledge ManagementKnowledge Management

The Hype, Reality and Pitfalls of Managing Know-how


OverviewOverview1. Definitions2. Why should we manage Knowledge?3. Where is industry?4. Approaches5. Critical Success Factors6. Common Pitfalls7. Addressing Corporate Culture8. Conclusions


Definition:Definition:KnowledgeKnowledge

– within a business, what we know about customers, processes, products, competitors, industry dynamics, etc.

– knowledge is information combined with experience, context, interpretation and reflection. (Davenport et al)


Definition:Definition:Knowledge Management (KM)Knowledge Management (KM)

– “knowing what you know and then profiting from it” (CIO magazine)

– “obsoleting what you know before others obsolete it; and profit by creating the challenges and opportunities others haven’t even thought about” (Malhotra)

– “A systematic and organized attempt to use knowledge within an organization to transform its ability to store and use knowledge to improve performance” (Parlby)


Definition:Definition:Knowledge Management (KM)Knowledge Management (KM)

A strategic, systematic program to capitalize on what an organization “knows”


Why should we manage Why should we manage Knowledge?Knowledge?

– 43% of organizations had a relationship with a key client or supplier damaged

– 50% of organizations lost knowledge of a key best practice or process

– 10% of organizations admitted to losing significant income

• Statistics on this , and the next 5 slides from “Knowledge Management”, KPMG Research Report, 1998

Impact of a departing employee:



49% of organizations report that employees want to share knowledge – but do not have the time

Time



– 16% of organizations report that individuals are unwilling to share knowledge

– 18% report individuals will not share best practices

Culture



Profitability– 86% of organizations with KM programs report

better decision making– 66% reported faster response times to key

issues– 67% report increased productivity– 70% report reduced costs– 50% report increased profits



E nhance

U se

R euse

C reate


Enhance

Use

Reuse

Create

INNOVATIONBEST

PRACTICES

NEWOPPORTUNITIES

IMPROVEDPROFITABILITY


Common Motivation for KMCommon Motivation for KM

– Improved profits (> 50%)– Defending market share against a competitor

(42%)– Cost reduction (39%)– Creating new business opportunities (58%)– Better staff retention (32%)


Where is Industry?Where is Industry?

Many companies are appointing a “Chief Knowledge Officer” (CKO)

43% of large corporations reported having a KM approach in place (1998)

Only 2% of respondents considered KM to be a fad


Approaches to KMApproaches to KM

Two high level approaches or strategies to KM:

1. Codification– Knowledge is codified and stored in databases

2. Personalization– A distinct program whereby knowledge is recognized

as internal to a holder, and a structured approach to encourage and enforce person-to-person sharing exists

• (strategy approach from Harvard Business Review – March 1999)


CodificationCodification

High investment in ITReward mechanisms required to encourage

people to contribute to databasesEconomics are to invest once in Knowledge

development and retention – and reuse the knowledge many times


PersonalizationPersonalization Requires formal structured networks of people to

ensure appropriate cross pollination of ideas and sharing of experiences

Significant investment in people, training, and travel

IT support is only to identify and locate the individual that holds the needed knowledge

Economics are to charge high fees for highly customized approaches to customer needs



Straddling the approaches does not workAn 80/20 approach appears effective.

– 80% effort towards one approach– 20% effort towards the alternative approach –

but only to support the primary approach



Consider the economics of the organizationConsider the business deliverables

(standardized or customized products)Consider the thinking and learning styles of

staff


What Knowledge is Managed?What Knowledge is Managed?

1. Customers2. Company’s own markets3. Products & Services4. Competitors5. Employee skills6. Regulatory environments7. Methods & processes


Critical Success FactorsCritical Success Factors

Leadership (CEO/HR/IT)ContentAccess Mapping via X Functional TeamsCulture: Learning and DevelopmentCulture: Trust & CollaborationAppropriate Technology


Critical Success FactorsCritical Success Factors

Get the right incentive system in place– The two approaches call for different incentive

systems– Codification requires incentives around

recording knowledge– Personalization requires incentives to have

people increase face-to-face knowledge sharing


Common PitfallsCommon PitfallsManaging the wrong knowledge (or, “lets

put the personnel manual online”)“Knowledge management is everyone's

responsibility”Believing KM will flatten an organization,

and empower decision makingAssuming accessibility results in usability

and reusability of knowledge


Cultural ObstaclesCultural Obstacles

Main cultural obstacles (workers):– People don’t like to share their best ideas– People don’t like to use other peoples ideas– People like to consider themselves experts, and prefer

not to collaborate with others


Cultural ObstaclesCultural Obstacles

Main cultural obstacles (management)– Lack of trust in employees– Perceived lack of control


“Knowledge is Power”– Sir Francis Bacon, 1597


Addressing Cultural ObstaclesAddressing Cultural Obstacles

Requires Total commitment from management, and a total buy-in from workers

Cultural issues from workers are more easily addressed than those from management


Addressing Cultural ObstaclesAddressing Cultural Obstacles

Change Management Approach:– Communicate– Reward, Recognition & Compensation– Accountability– Demonstrated Senior Management Support– Be prepared for changes in the organizations

power structure


What does success look like?What does success look like?

UbiquitySpeedVirtual communities of practiceBusiness without boundaries

• Business & economic Review (Coopers & Lybrand)


ConclusionsConclusions KM has moved from fad to accepted business practice Organizations are now budgeting for KM initiatives,

departments and infrastructure KM must be driven by senior management and

enthusiastically supported by all knowledge workers. The organization must define its specific approach

(personalization vs. codification) to KM at the start and avoid blended approaches


Documents

Ours is the age which is proud of machines that think, and suspicious of men who try to