- Buyer's Guide
Have you ever asked these questions and not known the answer …
It is safe to assume that most people have asked many of these questions and a thousand more just like them over the course of their careers. These questions evoke different responses in different people. Some make it their mission to leave no stone unturned in their quest to get the answers, regardless of whether these are the critical questions or just personally interesting. With some people, a response of “I don’t know” is a full and complete answer to any open-ended question – case closed. Others want to find the answers and gain the knowledge that comes with them, but they don’t know which direction to go or with whom to talk. They want to be diligent and thorough, but they can’t waste too much time on goose chases with one issue when they have multiple issues for which they are responsible. This ambiguity often manifests as personal frustration that eventually grows into apathy or even contempt for the system.
While each of these responses is not ideal on an individual level, the reality is that most organizations have all of them happening many times over on a daily basis throughout the organization. This mismanagement of what the organization knows is costing its bottom line in numerous ways. Organizations are continually investing in the process of re-obtaining repetitive information and knowledge. This can be a rather efficient learning opportunity of talking with a known expert in another department or reading a follow-up report from a previous project. But often, this involves a fresh root cause analysis, a new design from scratch, commissioning of a task force, or perhaps outside consultants. This equates to time, effort, and ultimately money that could have been spent creating new and innovative expertise that increases the capabilities of the organization as well as those that make it up.
While knowledge management (KM) may sound like just another corporate program or buzzword, few will argue that the knowledge, experience and expertise of the individuals in a company are the true competitive strength of the company, and thus understanding, protecting, nurturing and effectively using these people and their knowledge should be an organizational priority. Therefore, an argument can be made that an understanding of KM best practices and principles successfully developed by practicing corporations and academics will help a good leader tackle these issues with more clarity and structure.
This article will focus on defining knowledge management, explaining a few KM models and root principles as defined by some of the identified best practice organizations and thought leaders in the field, and introducing some implementation methods to practically apply these principles.
Knowledge management defined
Conceptually, KM is effectively and efficiently creating, capturing, transferring and leveraging the individual and collective expertise critical to the survival and success of the organization. Formally, KM consists of the culture, leadership and systematic processes that support these activities and enable replication of successes.
Knowledge can be described as a hierarchical evolution of data to information to knowledge. Data consists of numbers, yes/no, hard quantitative facts and figures. Information is the result of manipulating the data into a usable form. Information tells what the data means. Knowledge is the ability to use the information to do or accomplish something. Knowledge often involves applying contextual experience to the given information to achieve actionable conclusions.
In today’s societal and business environment, data is an abundantly available commodity. Computers and databases have simplified the act of collecting and storing data to the point that most of it is quite ambiguous and meaningless. Today, the first level of critical knowledge is the ability to evaluate and interpret data to understand what it is telling us or is not telling us. This can be statistical analysis, historical experience that tells us when this has occurred in the past the cause was determined to be this, or application of theoretical models, formulas or systems.
Given information about a situation, knowledge is what we use to determine “what next?” In the absence of adequate knowledge to move forward, the obvious next step is to acquire that knowledge. Knowledge acquisition can result from reading a book, consulting with a friend or colleague, taking a class, working alongside an experienced practitioner, and most painfully, by trial and error.
Anyone who has discussed KM at any length has invariably run across the terms tacit and explicit knowledge. While we will utilize these terms more deeply later, for now we will define these in simple terms. Tacit knowledge is what we know but can’t put into words or what we don’t even realize that we know. Explicit knowledge is that which we can explain verbally or even better, in the written form.
Knowledge management models and principles
A good place to start creating a picture of the essence of KM is with one of its recognized “fathers,” Karl-Erik Sveiby. Sveiby developed a framework to address what he called “intellectual capital.” This framework is made up of three elements:
Employee competence is what the people in the organization know and can produce. This knowledge and ability are only present when the individual is at work.
Employee competence is important in two primary ways. First, the organization benefits when more people know that which is useful to its business; and second, the organization benefits when it fully and effectively utilizes the expertise of its people. The growth of employee competence leads to better performance, innovation and abilities in the identified critical areas for organizational success. The principles to take from this element are that an environment of trust and sharing among the people of the organization is critical. The willing transfer of personal knowledge, both tacit and explicit, is encouraged, incentivized, and modeled by leadership.
Internal structure is the ability of the organization to meet the customers’ requirements. This includes process knowledge, patents, business strategy and vision, and IT systems and information. This structure is in place to support the employees. It starts with leadership providing the vision, strategy, policy and systems while developing and nurturing the culture at the same time. Documenting and managing processes helps to grow internal structure which facilitates easier transfer of knowledge between people. Some people describe internal structure as that which stays in place when the people are not there. The bottom line is that people who have what they need, know what the goals are and work in a healthy culture do better work.
External structure is the network of relationships with customers, partners, investors and suppliers. Communication, feedback and involvement with these parties is critical as it leads to trust, loyalty and ultimately value as true needs are learned and delivered. What starts as the exchange of data and information eventually leads to the exchange of knowledge that strengthens the external structure as well as the individual parties.
Melissie Rumizen, Ph.D., uses Sveiby’s framework to outline the benefits of KM initiatives to management and decision makers by asking this question. “How can we maximize leverage of all our intangible assets for our customers?” She adjusts the conversation from “intellectual capital” to “resources and investments,” which is speaking their language. Ultimately, the company must understand what its most important asset (its people) is and then invest to support and grow that asset.
Now that we have a vision of the importance of knowledge in an organization and the elements that support and depend on it, an honest question to ask is, “How is knowledge acquired, created, shared and increased?” Ikujiro Nonaka and Hitotaka Takeuchi created a model in their book, “The Knowledge-Creating Company”, called the knowledge spiral. This model explains the transfer of knowledge between individuals and throughout the organization as well as the transformation of knowledge from a single use to multiple applications and combinations with other knowledge and experiences. This is partially clarified by explaining how tacit knowledge is created and later formalized into explicit knowledge.
Let’s explain this model with a story. Steve is the manager of a small manufacturing firm and has just hired a new engineering intern for the summer. Steve wants the intern to experience manufacturing from the shop floor up so he assigns the intern to shadow the senior mechanic for a week. At the end of the week, Steve has the intern write a one-pager highlighting a few of his “ah-ha” moments during his first week. The paper was included in the weekly company bulletin sent to all of the employees. Bill the design engineer reads the intern’s article causing him to question some of his own base assumptions about the user interface for a design that he is working on. Bill proceeds to run simulations testing his new approach and thus gaining new insights and knowledge on what is possible.
Simple story, let’s tie it to the model. First, the senior mechanic is identified as a subject matter expert who has a lot of experience and knowledge locked in his brain, much of which he probably doesn’t even realize he knows or that it is special. The intern is sponge soaking up insights, techniques, processes and clues by watching, asking questions and listening. This interaction (dialogue) between individuals transfers tacit knowledge from one to the other. This interaction can be between peers, customer and clients, boss and subordinate, mentor and student, or any other personal relationship. Nonaka terms this “socialization.”
Next, the intern writes down what he has learned. He has effectively transformed his new knowledge into words that can be formally shared with others. Nonaka calls this transformation of tacit knowledge to explicit knowledge “externalization.”
Then, the intern’s paper is distributed throughout the company via an existing communication technique, i.e. the weekly bulletin. This could have been in the form of an email newsletter, a bulletin board posting, a Web page or perhaps a training class. All of these means of sharing formal, explicit knowledge to the organization are examples of what Nonaka calls “combination.”
Finally, Bill the design engineer reads the intern’s article and takes a few items to heart. Perhaps they are new understandings or they may be latent knowledge that Bill hadn’t considered during his design process. Either way, Bill now tests new ideas ultimately based on the expertise that the intern gained by shadowing the senior mechanic. A successful vs. unsuccessful result of this testing is immaterial as either way Bill has learned whether to apply his concepts or to not consider this path in the future. Nonaka refers to this transformation of explicit knowledge to tacit as “internalization.”
As the picture of a spiral suggests, when a person or organization travel around this process of learning, sharing, and reapplying they are naturally going to grow smarter, more experienced, and more productive individually and collectively.
It is important to point out at this time that information technology is often an instrumental tool in multiplying the impact of a knowledge-creating culture, but it is not the backbone of the effort. Just check out the picture of the knowledge spiral and note that people are the central characters in the socialization, externalization and internalization elements of this model, while technology and IT can be viewed as central importance in the combination element. Developing strong IT tools that support the growth of organizational knowledge is important. However, it must not be lost that developing relationships and the essential capabilities of the individuals in the organization and of the collective organization should be the driving factors in a company’s KM program.
While Nonaka and Takeuchi viewed and presented knowledge “creation” as the critical concept, Peter Senge came from a slightly different angle when he introduced the concept of the Learning Organization in his book, “The Fifth Discipline”.
Senge defined a learning organization as a place “where people continually expand their capacity to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together.” Rumizen summarized this definition as, “a learning organization creates, acquires, transfers and retains knowledge.”
This book of principles – or as Senge calls them, disciplines – is presented as a theoretical outline for a company that, as Rumizen summarizes: “creates, acquires, transfers, and retains knowledge, is particularly good at changing its behavior to reflect new knowledge and insights … rarely makes the same mistake twice.”
The five core disciplines are:
The fifth discipline, or Systems Thinking, is the glue that binds the other four. It is the collection of knowledge and tools that identifies patterns in complex systems that make up the organization. Personal Mastery is the understanding that people have a vision for their lives and careers or want to. Nurturing this process and development is beneficial to the company. Building Shared Vision is including the group from the beginning which encourages ownership and commitment as opposed to obedience to a directive. Team Learning refers to collective thinking, growing and acting that can only result from personal interactions and conversations. Mental Models is identifying the context and history that frames our philosophies, assumptions and behaviors. Often stating all baseline information, theories and beliefs from the outset of a project allows them to be proven, altered or challenged as necessary going forward. The final Knowledge Management model asks the question, “How is value created?” and suggests an answer that challenges most people’s traditional thinking.
In “The Knowledge Evolution: Expanding Organizational Intelligence”, Verna Allen defines a Value Network as a web of relationships that generates economic value through complex exchanges of both tangibles (goods, services and revenues) and intangibles (knowledge and other benefits such as strategic information, planning knowledge, process understanding, collaborative design, etc.). This value network is comprised of two or more organizations that work together to generate value for the participants. The organizations can be partners, suppliers, customers or even constituents. By mapping the exchanges that occur between the participants, patterns arise that define the system itself. While simple in nature, value mapping can become complex very quickly. However, this process can prove useful when searching for and identifying what is truly important to the success of an organization (i.e. which relationships, processes, goods, etc., are essential).
Each of these models brings their own perspective and emphasis that can help a company define and plan its individual introspection and contextual approach to knowledge management. While we believe that the knowledge spiral is the most useful overall tool for telling the story of knowledge, its importance to an organization, and how to manage it, the other models are important to reference when clarifying, structuring or emphasizing different phases of the spiral.
An approach to implementing KM
While some software companies might have you believe that you can drop and play their off-the-shelf knowledge management application and your organization suddenly has KM, hopefully you now see the improbability of this being realistic.
There are a few conceptually simple categories, not exactly steps, to consider when defining and implementing a KM program, but as you can imagine, they are far from simple to apply.
To some, knowledge management and its proposed benefits may just make sense. They can’t wait to get started. This energy is great and shouldn’t be lost, but a plan is essential to success in almost anything, and KM is no exception.
The formulation of a plan is useless without a goal or goals that necessitate it. It is important to realize that KM is not the goal. It is a tool. It can lead to improved morale, enhanced processes and productivity, increased profitability, stronger market share, etc. It is critical that specific business objectives are driving this effort. Distinct business driversprovide a purpose that everyone can understand and get behind, communicate that this is more than another fly-by-night management fad, and ultimately allow for naturally meaningful success metrics.
It has been written that it is the responsibility of the executive leadership to focus on where the organization should be. The frontline workers are responsible for knowing how the business actually works today. And it is the responsibility of the middle management to marry the two perspectives. This involves communicating the actual status of the company’s morale, support and operations to the executive levels, as well as translating the vision of leadership into actionable steps for the staff.
While this sounds like a nice delegation of authority, it tends to gloss over the importance of the entire organization being on the same page and committed to the same goals and objectives. In order for KM and the benefits that come with it to be absorbed and embraced by everyone on all levels, they need to see the big picture view of the today and the future.
The current corporate pictureneeds to be captured. Corporate culture and business climate are the key elements of this picture. Culture is a form of tacit knowledge derived from history and the assumptions that result from past experiences. “It is how it is done around here,” is the statement that captures the essence of current culture. This culture has evolved as a result of leadership forces, market forces, competitive advantages, operational capabilities, or the lack thereof. Understanding the evolution and status of the culture can be very important, not necessarily so that it can be changed, but so that it can be worked within appropriately and effectively.
The business climate includes the health of the industry and market, key partners, suppliers and clients, competitive advantages of the company and its competitors, core competencies, financial stability, etc. The big picture vision for the future is comprised of three primary elements: strategic, financial and cultural.
This big picture perspective is important as people make decisions at their personal level of the business. They have a focal point at which to confidently aim their efforts and measure their results. They know how they fit, which reduces the tendency to think and act in an isolated silo. This perspective encourages collaboration and communication, which leads to sharing, learning and creating knowledge.
With this organization-wide understanding of the current business climate and vision of the future, a strategy which addresses the KM implementation, connection of people and resources, and infrastructure to support all of these is well within reach.
2) Systematic Implementation
Implementation begins during the definition and development phases for any process, or at least consideration for implementation starts this early. The KM program should be approached as any new manufacturing process would be approached in R&D.
R&D would follow a very structured and systematic process such as:
It could be wise to include an experienced process developer from your organization to act as a coach for the development process. As an example, Ernst & Young started their program by identifying the Global Knowledge Steering Group (GKSG), which immediately identified and defined a short list of underlying principles for the KM program and then set out to design a system that would improve the business drivers that it was commissioned to tackle:
Then they established a deployment group to manage the implementation: the Center for Business Knowledge (CBK). Based on the fundamental principles already defined, the CBK staff managed the five-step process as developed by the GKSG. Their systematic process was defined as:
One of the keys to systematic implementation is making the first steps small and strategic [ i.e. choosing the proper pilot project(s), location(s) or department(s)]. The pilot needs to be important to the business and visible throughout the organization. Motivation and contagious energy should be dominant personality traits of the project’s leadership. These factors will make people want to participate.
Some companies actually choose to initiate their KM programs from multiple directions to challenge and learn individual principles in smaller bites. For instance, a company could initiate the program with a large capital project such as a production line introduction in one plant, while at the same time start the program in a small department/division that has a big cross-functional impact, such as the procurement office or maintenance department.
Throughout the entire KM implementation, the present must constantly be evaluated in terms of the future. How will our current approach and decisions scale to the rest of the organization? How will we do this better in the future? What are the principles that made our approach succeed or fail, and how do we communicate and apply these to other parts of the company? The key to this is documentation and communication.
3) Communications and Connections
Three of the quadrants of the knowledge spiral are essentially describing different aspects of sharing knowledge within the organization: peer-to-peer dialogue that transfers tacit knowledge, formal documentation of tacit knowledge by writing and speaking, and the organizational distribution of the resulting explicit knowledge. This focus on organizational sharing and learning must be equally emphasized and nurtured by finding various ways to connect people inside and outside the organization with the structure of the KM program.
Probably the most common approach for accomplishing this connection in successful KM programs has been Communities of Practice. Rumizen defines communities of practice as “a group of practitioners who share a common interest in a specific area of competence and are willing to work together.” These people have a passion about the same thing. This passion is what brings them together. It might be a skill set such as electrical maintenance, a professional discipline such as mechanical engineering or even a topic such as innovation. The community is simply a complex network of personal relationships. These people trust and rely on each other. These can be social or professional in nature. This network comes together to work on and develop their practice or domain. They create tools, documents, and processes while helping each other improve their work. This can be day-to-day work or more big picture in nature.
The trick with communities of practice can be getting them started. A person’s passion isn’t dictated by management; thus management dictating the creation or existence of a working group based on such can be counterproductive. However, management should encourage and support people who desire to network, share and learn from each other. More communities of practice will result from a culture that recognizes and rewards those that practice these traits.
SAP Americawas successful with planning and launching its community of practice effort with the following approach:
Even with this structured commissioning process, innovation and creativity were encouraged. Trained facilitators were provided to assist group interactions. Participation tripled in a short period of time because of the following:
Benefits to the participants
Benefits to SAP America
The key to success of these communities is often the community coordinator. This is not necessarily the intellectual giant or the respected guru. This is the cheerleader, historian and organizational expert. The network loves the practice. The community coordinator loves the people. This person helps the community develop the practice and helps the community develop as a community. Often, this is part of his or her official job description.
Another connection tool is the knowledge map (a.k.a. corporate yellow pages). The knowledge map is intended to help people find expertise and contacts within and outside their organization. Picture a road map with each person representing a city. Roads represent the connections or existing relationships between individuals. The cities are populated by the knowledge and experiences of the person, such as current and past titles, contact information, departments, locations, projects, special technical knowledge, key internal and external relationships, education, Myers-Briggs identifier, group and community of practice participation, personal information, etc.
These maps can start simply as a paper document or book with very specific data captured and organized. However, this is an example of where IT capabilities can truly magnify the potential of this effort. Many companies effectively create personal web pages for all of their employees that anyone in the organization can search to find expertise. This can be a computer-generated database with standard HR data, but some of the most successful applications have allowed and encouraged the individual employees to customize their pages. The company provides a fairly flexible template with simple interface capabilities and allows the employee to create and populate any fields beyond the basics.
Competitions and rivalries are held both formally and informally for who has the best pages. This encourages creativity and content and use of the tool. Best practices are a concept that most organizations understand, but few employ well. The biggest obstacle is often the combination of identifying, documenting, cataloging, and managing the process descriptions and explanations in a formal manner. This can be tedious, but a best practice system is critical for capturing and transferring knowledge throughout the organization, from team to team, plant to plant, or division to division.
An approach that has worked for some is a “suggestion box” type concept. Basically, any employee is allowed to suggest a best practice by filling out an online application. This application has a standard form with personal contact information, objective of the practice, an explanation of the process, experienced results, and associated benefits and risks. The applications are screened and reviewed by a cross-functional board that evaluates the clarity of the information and researches the cursory claims.
With this approach, the intent is not to necessarily define every process in minute detail, but to encourage people to connect and discuss how to solve problems. The access to expertise and knowledge is of primary importance over the depth of information. Once again, IT can make this system more powerful and less painful for the end user. While communities of practice, corporate yellow pages and best practice systems are interesting concepts and applications that might make sense individually to an ambitious individual leader or manager, it is important to remember the bigger picture of the organization. Make sure that the business drivers are identified, the strategy is defined, and the culture is appropriately receptive before trying to implement any of these tools.
Any new program needs some outside support and cooperation to achieve success. But a fundamental or cultural adjustment such as a knowledge management program must have deep backing, complete buy-in, coordination and communication from all corners of the organization. Some of the key components included in this support structure have already been introduced or alluded to, others have not.
The lifeblood of the program is what we will call the champion. The champion can be an individual or a team. This position is responsible for creating the energy and awareness within the organization for the effort. It campaigns the executives for money and influence. It sells the benefits of the system and recruits for participants. The champion coordinates the development of the vision, the defining principles and the strategy with key business leaders. The champion administers and/or manages the implementation of the strategy. The champion might lead a staff of administrators and coordinators that directly support specific aspects of the program such as communities of practice, IT tools, financial and accounting needs, training staff or recognition and reward systems.
While vision, skills, abilities, and passion are most important, the champion still needs an executivesponsorat the upper levels of the organization. It doesn’t necessarily need to be the top person in the organization. It is more important to have someone who completely buys into the concept and is willing to go to bat for the effort. After that, access to and respect for the top leaders is ideal.
Very few things in business can get done without proper funding, and KM is not one of them. Identification, definition and management of a budget and its source are critical. This often signifies the level of support from the senior executives and defines the empowerment of the champion to implement the strategy.
The mind-set and approach to obtaining funding is the same as an entrepreneur who is looking for investors. An entrepreneur has a bright picture of the future and a concept of a product or service that is going to make it that way. The entrepreneur knows how to explain his idea clearly and concisely. He understands the strengths, weaknesses, opportunities and threats of his business proposition and how to communicate it to those that might invest in it. The entrepreneur initially seeks seed money to pay for product development, market testing and prototyping. The results of these undertakings and potential future return on investment ultimately determine the next steps and the available money to make them happen.
Companies have placed KM in a number of places on the organizational chart. It has been placed in HR, IT, operations or alongside these departments. And while there isn’t one place that works for every organization, this decision often signals the status of the program in the eyes of the leadership. In the end, the business drivers that justify the program should define its organizational position.
A specific best practice to develop and implement in the project management process is a systematic After Action Review (AAR) procedureto identify and document what was learned during certain phases of every project. The U.S. Army uses a simple method based on the STAR format. STAR represents:
An AARprocedure is a good way to capture knowledge to be utilized on future projects. The documents resulting from this system should be easily accessible similar to information in the corporate yellow pages described above.
Once again, knowledge management can be defined as effectively and efficiently creating, capturing, transferring, and leveraging the individual and collective expertise critical to the survival and success of an organization.
With a complex definition such as this, you can imagine that implementing a system or program for accomplishing this aim will not be a simple task. However, when one considers that by not addressing this subject, knowledge and competitive advantage will continue to walk out the door and continue to get lost in the cobwebs of people’s minds. We remember that most important and meaningful work is difficult. A simple framework to use when planning your KM program is:
When strategizing, first identify the critical business drivers that are necessitating the program. Then look internally at the existing culture of the organization. Finally, develop and communicate a picture of the future that will lead this effort and proceed to get as many people on board with this vision as possible, for everyone must be working together and not independently.
The initial implementation should be small, yet important to the business. Where the project is launched, who is involved and who can see it succeed are all critical to the campaign.
Knowledge management is all about connecting people and sharing the expertise that they knowingly or unknowingly have trapped in their minds in formal and informal ways. Thus, developing systems to make this happen is the structural part of KM. Some examples processes are communities of practice, knowledge maps or corporate yellow pages, and best practice documentation systems.
The infrastructure can make or break this effort. Telling the organization to talk and share with each other may sound sufficient, but without the proper support structure everything will fall through the cracks or under the rug. So, recruit the right participants and advocates [i.e. the champion, the executive sponsor(s), the communities of practice, and the support team(s)], and develop the right tools. Always remember that the infrastructure is there to support the people and to help them to connect with each other and the knowledge they need to do their work better. The people shouldn’t feel they are at the mercy of the structure of the system.
In short, knowledge management is a lofty, yet necessary goal that can determine the ultimate success and survival of an organization that has a vision of the future and the leadership to make it come to fruition.
For more information on this topic, visit www.noria.com or call 918-749-1400.