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Knowledge Management
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Knowledge management has been one of those fuzzy ill-understood phrases in existence for the last 15 years. In this article Ian Evetts, director of Oakleigh's Technical Division, outlines a vision for how knowledge management can benefit local government and the five fundamental requirements for success.
He also explores how companies in the East and the West are taking differing approaches to making best use of this intangible asset.
A Vision of Knowledge Management: Realising the Benefits
The basic idea is this: Organisations must gather, cultivate and manage intellectual capital as carefully as they do financial capital. Leverage knowledge, the thinking goes, and you can reduce time to market, cut research and development costs and boost productivity.
But that can only happen if an organisation's intellectual assets for information, know-how and understanding about customers, competitors, markets, processes and people are freed from the computers, brains, libraries and file cabinets where it's now trapped.
Five Fundamental Requirements for Knowledge Management
To achieve the benefits Knowledge Management offers, an organisation will need to:
- Nominate a "knowledge champion" who obtains funding, sets and enforces policies;
- Educate, guide and equip users with knowledge access tools;
- Map knowledge and information resources both online and offline;
- Build "knowledge networks" and "knowledge infrastructures"; and
- Monitor a wide sweep of news and information.
Knowledge Management a Realistic Option
In the past, organizational and technical hurdles have crippled the knowledge management movement, but with the advent of ubiquitous internet access and technology which has become more intuitive to use, knowledge management technology is finally attaining the corporate role it deserves. Leading companies like General Motors, Fidelity and Monsanto are learning how to tap their own brain power in this way.
"A lot of the value of the corporation is in the minds of employees," says Leif Edvinsson, Skandia Group Insurance Corp.'s director of intellectual capital in Stockholm. "Corporate knowledge, skills, experience and business processes, as well as information stores and systems, become more valuable when shared globally." he adds.
Skandia used its knowledge about how to set up and manage its offices to create a system that has slashed the time needed to create a branch office from 24 months to just six. The system contains all the information, business processes and technology required to open and run an office but, as is always the case with many technology solutions, it is the confidence in the system which the people who use it have which has made this a success.
Leading Lights of the Knowledge Management Movement General Motors Corp., Fidelity, Inc., Ford Motor Co., Monsanto Corp., Dow Chemical Corp., Hallmark, GE Lighting, Hewlett-Packard Co., and IBM are amongst the leading firms which are taking the discipline of knowledge management very seriously.
Each is pursuing a policy of continuous improvement to how they acquire, share and use knowledge in their organizations. In each case technology plays a key leadership or support role. However, companies in the East are taking a fundamentally different approach to their Western counterparts.
Nissan - The Japanese Use of Tacit Knowledge
The Nissan story, which is detailed in the book 'The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation', is an example of how Japanese companies "create new knowledge, disseminate it throughout the organization and embody it in products and services," say the book's authors, Ikujiro Nonaka and Hirotaka Takeuchi. They are professors at Japan's prestigious Hitotsubashi University outside Tokyo.
The authors, well-known in the Japanese business community, wrote the book in English rather than Japanese to reach a global audience. The Japanese approach is slightly different to that used in the West, and it is interesting to note the subtle differences between the two approaches.
The authors distinguish between experiential (tacit) and explicit knowledge. Tacit is the kind of knowledge the Nissan employees glean as a natural course of action: hunches, personal knowledge and experiences, insights and intuitions. This is contrasted with "explicit knowledge," which can be described easily in facts and figures. Such an intuitive way of working can therefore be anathema to the cold logic preferred by the Western business world.
"Creating knowledge involves a little bit of trial and error. It is knowledge that is gained through experience, converted into organizational knowledge and [isn't] as simple as just putting data on a computer," Takeuchi says. "It runs counter to the American style of trying to communicate everything by electronic mail."
Knowledge management in the West has risen hand-in-hand with technologies such as document management, information portals, workflow, digital meetings and video conferencing, but tacit knowledge is difficult to verbalize, represent digitally or store in a database. It is the stuff of metaphors and analogies and is better communicated face to face, the authors say.
How do you tap this fuzzy knowledge trapped in the minds of your workers? The answers may surprise, given that they lie partially in the stuff Western re-engineering efforts have been driving out: waste, redundancy and middle managers.
Knowledge-creating Japanese companies rely on redundancy (of information and responsibilities, for instance) as a means of "encouraging frequent dialogue and communication" from which tacit knowledge can be converted to usable, explicit knowledge. Japanese companies often divide a product development team into groups that each devises a different approach to the same problem. The groups then argue over the advantages and disadvantages of each method.
Supermanagers
Middle managers are the heroes of a company's knowledge creation, according to Nonaka and Takeuchi. The stratum held as the source of corporate inefficiency in the West sits between front-line workers - those with useful reserves of tacit knowledge - and upper management. Therefore it is this layer where knowledge creation occurs, the authors argue.
The role of the middle manager is to take the tacit knowledge of the workers closest to customers and markets and try to mesh it with the knowledge and broad business goals coming from above. Middle managers mediate between the "what should be" of upper management and the "what is" of the real world.
These strategies served Japan well through the 1990s, but the country today has some reassessment to do as it rapidly tries to improve white-collar productivity through information systems. Nonaka admits: "The weakness of the Japanese is they rely on tacit knowledge too much. They love it, but experiential knowledge is time-consuming and costly." That may not float well in a country looking for leaner ways of doing business.
At the moment there is little take-up for this kind of tacit knowledge management in current technology solutions for Knowledge Management which are designed by software professionals imbued in the "facts and figures" approach of the West. But perhaps we will see new generation technology which combines fuzzy searches with hard fact management combining to allow a more intuitive and probably more effective means of managing knowledge.
How Do You Know Knowledge Management is Working?
Measurement of the efficacy of knowledge management is difficult. Robert R. Walker, HP's director of information systems, says creating extensive on-line knowledge maps and delivery systems has helped improve access and slash costs. "Forty percent of the occupancy cost of one organization was paper storage," he told attendees at a recent conference.
Other questions loom: Will companies already reluctant to fund employee training be willing to pay for them to learn knowledge management? Like re-engineering, knowledge management will be embraced by some, delayed or even ignored by others. Time will tell which is the correct approach.
The Difficulties of Knowledge Management
Implementing knowledge management is tough. There are two major issues you are likely to face:
New Mindset
You need a new mind-set as to how your IT department approach their use of technology. University of Texas professor Thomas H. Davenport says companies must "begin by thinking about how people use information, not how people use machines."
This enormous change boggles many IT departments, many of whom Davenport says are often tempted to deliver a "knee-jerk response, by throwing technology at the requirement without really understanding how it is going to be used."
New Skills
Speedy delivery and analysis of knowledge requires mastery of many new tools and techniques, say experienced chief information officers.
Among those tools and techniques may be the ability to deliver technology quickly via new rapid and joint application development methods, involving cross departmental teams, "scrubber" software to improve data quality, middleware technology for integrating information in disparate systems, search engines used at many different data levels (for example, across the internet, across personal data, and search engines of search engines), data warehousing to aggregate copies of information and enterprise reference systems.
Nevertheless, knowledge management is becoming pervasive as its use becomes an organisational "given" rather than an organisational "nice to have". The reason for this is that the benefits of collaborative working - the ability to turn information into knowledge - are easily perceived.
Furthermore, there is no longer the need for a massive infrastructure investment to put Knowledge Management in place - indeed Microsoft's core offering in this area, Sharepoint, will be embedded within their next version of Office, Office 12, offering a technology usable globally at a commodity price.
However the best technology in the world is ineffective if the people who need to use that technology either lack the confidence in how to use it, or have little belief that this will help them do their jobs better.
Quite often, what is needed is impartial, independent help of a practical and honest nature, which can cover the full spectrum of Knowledge Management from business case to technology implementation.
If you have any questions about the subjects covered in this white paper or you would like to find out more about how Oakleigh Consulting could help your organisation, please contact us on 0161 835 4100 or email us.
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