Chapter 13
Knowledge Management (KM)..
Momentum of Knowledge Management
The last few years have seen a rapidly growing interest in the topic of knowledge management. 'Leveraging Knowledge for Sustainable Advantage' was the title of one of the first conferences (in 1995) that brought knowledge management onto the management agenda. From 1997 a surge of books, magazines and websites have come onto the scene. Today (2003) most large organizations have some form of knowledge management initiative. Many companies have created knowledge teams and appointed CKOs (Chief Knowledge Officers). Knowledge is firmly on the strategic agenda.
Why Now?
The level of interest has been building for several years. Many innovative companies have long appreciated the value for knowledge to enhance their products and customer service. Our analysis indicates several reasons why the level of interest has grown dramatically during recent years:
- Globalization and competition - many organizations rely on knowledge to create their strategic advantage. With available knowledge widely dispersed and fragmented, organizations often waste valuable time and resources in 'reinventing the wheel' or failing to access the highest quality knowledge and expertise that is available.
- Knowledge can command a premium price in the market - Applied know-how can enhance the value (and hence the price) of products and services. Examples are the 'smart drill' that learns how to extract more oil from an oil field, and the hotel chain that knows your personal preferences and so can give you a more personalized service.
- Restructuring and downsizing - Without effective mechanisms in place to capture knowledge of experienced employees, organizations make costly mistakes or have to pay again for knowledge they once had on tap.
- Sharing of best practices - Companies save millions a year by taking the knowledge from their best performers and applying it in similar situations elsewhere.
- Successful Innovation - Companies applying knowledge management methods have found that through knowledge networking they can create new products and services faster and better.
These and other benefits, such as improved customer service, faster problem solving and more rapid adaptation to market changes, have resulted from an explicit focus on corporate knowledge as a strategic resource.
- BP - by introducing virtual teamworking using videconferencing have speeded up the solution of critical operation problems
- Hoffman La Roche - through its Right First Time programme has reduced the cost and time to achieve regulatory approvals for new drugs.
- Dow Chemical - by focusing on the active management of its patent portfolio have generated over $125 million in revenues from licensing and other ways of exploiting their intangible assets.
- Texas Instruments - by sharing best practice between its semiconductor fabrication plants saved the equivalent of investing in a new plant.
- Skandia Assurance - by developing new measures of intellectual capital and goaling their managers on increasing its value have grown revenues much faster than their industry average.
- Hewlett-Packard - by sharing expertise already in the company, but not known to their development teams, now bring new products to market much faster than before.
Our research has identified a number of recurring success factors:
- A knowledge leader or champion - someone who actively drives the knowledge agenda forward, creates enthusiasm and commitment
- Top management support - a CEO who recognizes the value of knowledge and who actively supports the knowledge team in its work
- A clear value proposition - identification of the link between knowledge and the bottom line business benefit; new measures of performance and appropriate rewards.
- A compelling vision and architecture - frameworks that drive the agenda forward
- Creation of a culture that supports innovation, learning and knowledge sharing. This is usually supported by appropriate reward mechanisms.
- A technical infrastructure that supports knowledge work - from simple knowledge support tools to Intranets and ultimately more sophisticated groupware and decision support. Simulation, data mining and good document management also have a role.
- Systematic knowledge processes, supported by specialists in information management (librarians) but with close partnership between users and providers of information.
Usually, the knowledge agenda develops through a process of evaluation from pilot projects that are used to build capabilities and derive learning for subsequent applications.
The biggest challenge reported by those practitioners we have met, is that of changing the culture from "knowledge is power" to "knowledge sharing is power". Other common obstacles are:
- Finding time - with so many initiatives vying for attention, it is easy to sideline more challenging issues like knowledge management. However, those organisations that have committed resources and have knowledge champions have achieved outcomes that far surpass the level of inputs
- Introversion - afraid to learn from outsiders or expose internal operations to customers
- Too focused on detailed process - rather than the big picture and the more chaotic process of knowledge creation
- Treating it as one-off project or quick-win - knowledge management is a commitment to the long-term: the organization’s future prosperity.
- Individual disciplines and 'turf wars' - knowledge management goes beyond the remit of any single function or discipline. All functions must collaborate.
- Organizational recognition and reward systems usually do not sufficiently recognize knowledge contributions. They are linked to traditional financial measures.
None of these challenges are insurmountable. Implementing successful knowledge management requires a systematic change and project management approach. However, it is more than just a project. Over time knowledge management changes the way that people work so that thier indiviudal knowledge is more effectively harnessed for the benefit of all.
