The following is an academic essay on Knowledge Management prepared for my Msc in Management at Birkbeck University, London.
[Updated 15 Dec with final version]
Organisational Knowledge as One of the Core Assets of our Time:
Implications for Management
by Mark Gibaud
Knowledge is one of the key assets of the intellectually-powered “new” economy. Organisations can achieve critical competitive differentiation if they learn to leverage the collective and cumulative knowledge of their employees. Starting earnestly in the mid 90’s, Knowledge Management (KM) has emerged as the key discipline to support this endeavour, but many organisations have not yet fully recognised the benefits of managing their knowledge due to a poor understanding of the nature of workplace knowledge itself and how to effectively manage its capture, storage and distribution within the organisation. This essay aims to explore the implications for management by illuminating the nature of knowledge in the workplace, how it is generated and how to further amplify its generation such that an organisation can be in a better position to capture and diffuse it. Also highlighted are the compelling reasons as to why knowledge should be managed. Finally, one leading strategy, of moving from “channels” to “platforms”, is more fully explored through the analysis of a new type of “wiki” software.
Knowledge is defined by the Oxford English Dictionary as “expertise and skills acquired by a person through experience or education”. One might think that simply by extending this definition to include the situational context of the workplace, one can then arrive at an accurate assessment of organisational knowledge. However, this is only a part of the story. Organisations amplify knowledge in a number of ways from the cumulative efforts of its staff (Nonaka 1994), potentially creating a knowledge repository contributed to and in turn leveraged by all employees. Michael Polyani popularised the nature of tacit or implicit knowledge which is embodied in an individual and not easily codified or transferred (Polanyi 1966). Later, Ikujiro Nonaka focused on the distinction between tacit knowledge and explicit knowledge, which can be written down and transferred (Ikujiro & Takeuchi 1991). Polyani also argued (1966:55) that all knowledge is either tacit or rooted in tacit knowledge. Pairing this observation with the fact that the world is full of visible codified knowledge, it follows that tacit knowledge could be further broken down into that which is codifiable, albeit with more intensive effort and management, and that which remains uncodifiable, such as intuition gained from experience, vis-à-vis Polanyi’s “We can know more than we can tell”. Organisations have historically exhibited a high level of explicit knowledge codification such as operational manuals, process documentation and annual financial reports. However, it is the generation, codification and dissemination of knowledge further along the knowledge continuum (Leonard & Sensiper 1999) (that is, increasingly tacit knowledge) that represents the major challenge for contemporary organisations and thus becomes the primary opportunity for knowledge management solutions (Twentyman 2006) (see diagram 1). In turn, the term “Knowledge Management” has many definitions. The common elements of the most-cited definitions centre around defining a strategy for creating, capturing, storing, accessing, and distributing knowledge across individuals, teams and the entire organisation (and sometimes even outside it) in an effort to generate value (increased skill in employees, more innovative products or services, etc) from an organisation’s knowledge-based assets (Stankosky 2005, Davenport et al. 2008, O’dell & Grayson 1998, Rumizen 2001, Brooking 1998).
Nonaka, through the development of his SECI model (Nonaka 1994), argued that organisational knowledge can take on a self-generative nature when knowledge is transferred between tacit and tacit, tacit and explicit, and explicit and explicit states. He argued, after closely studying Japanese firms, that organisational knowledge takes on a “spiral” nature when transferring between these states, inferring that this “knowledge conversion” process serves to continually increase the organisation’s total stock of knowledge as learning becomes embedded in the organisation’s culture. A deeper analysis of Nonaka’s SECI model is beyond the scope of this essay, but the key implication for management is that in order to create a useful knowledge base from which employees may leverage value, an organisation must first take the necessary steps to begin to support and facilitate the generation of that knowledge.
Another useful lens through which to define knowledge is with reference to the Knowledge Hierarchy (Zeleny & von Hayek 1980) or DIKW (Data to Information to Knowledge to Wisdom) taxonomy, if only to assert that while an organisation might record data and make sense of that data turning it to information, gaining knowledge from that information is indeed the next level entirely. Consider when Google asked users in a survey whether they would prefer more search results per page (Millis 2006). Users responded that “more is better”, so Google lengthened the results from 10 to 30 for some users. However, it turned out that the extra half-second that the page took to load drastically decreased user satisfaction such that users conducted fewer searches. Google took the data from the initial survey, turned it to information (a recommendation to provide more search results per page and thereby increase user satisfaction) but then, only after going forward with an experiment, did Google gain the knowledge that users actually far preferred faster load times than more results per page. The lesson here is that the management of knowledge, is very different to the management of mere data and information.
Much reference is also made to the dynamic nature of organisational knowledge (McInerney 2002), in that it is constantly being updated, upgraded and refreshed, and should be regarded and managed as a living entity rather than a static artifact. Davenport & Prusak argue that knowledge is not only bound to “documents and repositories” but also “routines, processes, practices and norms” (Davenport & Prusak 2000). Knowledge is produced, captured and transferred in many ways, from formal mentoring arrangements, apprenticeships and training programs to informal workplace discussions. Since these workplace practices occur on an ongoing basis, it is imperative that any KM strategy and/or solution needs to facilitate the consistent and continual upgrading and improving of the organisation’s knowledge.
There is broad and growing consensus that the strategic management of knowledge assets contributes directly to an organisation’s competitive advantage (Teece 2000) and is key to providing new products and services (Kessels 2001). On the other hand, neglecting this need leads to organisations suffering redundancy in effort and repeating past mistakes (Garfield 2007). International Data Corporation, a technology research group, reported that a poor capability to manage knowledge cost the Fortune 500 $12 billion per year (Stewart 2001, cited by McInerney 2002). But knowledge cannot be bought in and of itself; rather, it has to be cultivated in-house (Teece 2000) before any opportunity to embed it into new products or services can be fully exploited. The more salient knowledge an organisation has, and the more accessible it is, the more opportunities employees will find to leverage that knowledge in the innovation of new products and services. This will not only decrease time-to-market and increase quality, but also expand the potential for future improvements to said products and services. It would appear that executives can no longer afford to lack a strategy for managing the collective of their employees’ knowledge.
There are many opportunities to both capture and diffuse knowledge already present in most organisations. Any design, development or engineering of a product is fundamentally a knowledge creation process, and the lessons of bringing a product to market are invariably valuable to future efforts (M. Poppendieck & T. Poppendieck 2006). Davenport and Prusak, in their book “Working Knowledge: How Organisations Manage What They Know”, highlight the value of interpersonal communication when facilitating knowledge transfer (Davenport & Prusak 2000). Time should be allotted, they argue, to allow staff members to engage in spontaneous conversations, organised group KT (knowledge transfer) sessions, demonstrations, presentations and experience reports, and the idea of “productivity” should be broadened to include these activities. Swap et al. suggest (2001) that storytelling and mentoring are also powerful ways to diffuse knowledge if well managed, and highly recommend the practice of joint-problem solving involving a senior and junior practitioner (Leonard & Swap 2004). A good example of this is in the software development industry where two programmers engage in “pair programming” (Williams & Kessler 2002). Two programmers sit at one computer, taking turns to command the keyboard and mouse while the other reviews the code as it is written. The result is a higher quality piece of work, and a good deal of knowledge transfer between the programmers involved. Peter Senge also advocates creating learning situations (Senge 1993). In his book “The Fifth Discipline”, he champions the creation of a “learning organisation” through five key disciplines including “team learning” through dialogue and group discussion. It is clear that there is already a wealth of key opportunities for the capturing of knowledge in the workplace, but the key is to institutionalise the culture of knowledge capture and sharing. Workers should not feel harried or rushed; rather, they must have the opportunity to constantly reflect and analyse how practices and processes might be improved (Garvin 2003). Projects should end with (or be punctuated by) “retrospectives” or “post-mortems” where questions such as “What did we do right?”, “What did we do wrong?” and “How can we improve?” are asked and provoke discussion in their answers (Derby et al. 2006). Another key aspect to evolving towards a culture that facilitates KM is the breaking down of boundaries and isolated teams and individuals. Along with the aforementioned communities of practice, working groups provide an opportunity for individuals to share and collaborate with employees outside of their day-to-day teams. Management teams that cultivate this kind of culture will, in addition to fostering innovation, prime themselves for return on investment when engaging in KM practices.
But how exactly do we use these opportunities to capture a deeper set of knowledge? Andrew McAfee recommends that organisations move away from communication “channels” where knowledge is one-to-one, formulated haphazardly and expended quickly, to communication “platforms” where knowledge has a bigger audience (and thus often displays more care in its creation) and can be kept relevant, salient and accessible (McAfee 2006). An instruction sent in an email to a new employee detailing the tools, practices and processes of the organisation is redundant effort, likely to be incomplete, and loses accessibility and visibility rapidly after its immediate use has expired. But a web page on the corporate intranet titled “Things you need to know to start” that is both easy to find, and easy to update, is instantly accessible to anyone, likely to be kept relevant and updated, and also likely to be a product of a group of people rather than one individual, greatly increasing the chance that it is of a higher quality (Mader 2007). A “wiki” is a website that allows users to create and edit HTML pages with rich content for immediate consumption by potentially everyone with a web browser. Wikipedia has built its success and huge popularity on this model. Contemporary wiki products include features like configurable access rights, a WYSIWYG (what-you-see-is-what-you-get) text editor, document revision history and several more features that make it an extremely compelling KM tool for the enterprise. A number of organisations have identified wikis as an excellent tool to facilitate communication and collaboration (Grace 2009) and one of the easiest ways to move from the “channel” of communication (often email) to a “platform” of wiki documents, photo galleries and blog entries. Management teams should look keenly to this and other “Web 2.0” technologies that contribute in bringing people together, as Nonaka’s spiral can be greatly infused when large groups of employees, who are otherwise distributed across the organisation, are brought together in the same virtual space.
However, it is important to note that the role of technology in Knowledge Management has historically been misdiagnosed and overstated. Consequently a number of organisations have missed the mark by focusing too much on the technology (Davenport et al. 2008). According to Teech (2000), IT solutions are only an enabler, and they should be implemented not to enable the storage and retrieval of knowledge, but the connection of people. This should be self-evident in today’s Facebook dominated world, but as Joel Spolsky says, to promote the successful community-driven collaboration tool he helped create, “A successful Exchange [an installation of the product] depends on whether you [the product buyer] can supply the community”, implying that even the best software solution will not create a useful knowledge base without the engagement of a community.
Microsoft chairman Bill Gates framed the challenge precisely in an interview for a Newsweek magazine article in 2006: “While information wants to be free, knowledge is much ‘stickier’ – harder to communicate, more subjective, less easy to define.” He continued that an employee’s value to their firm is wrapped up in their tacit knowledge. “Your ability to combine it with the knowledge of co-workers, partners and customers can make the difference between success and failure – for you and your employer.” (Twentyman 2006) The message to management is clear: the cultivation and generation of strategic knowledge, followed by the effective capture, diffusion and consequent amplification will define competitiveness in tomorrow’s businesses. Organisations are highly advised to adopt strategies for the effective management of their employees’ collective knowledge, as it is critical to survival in a knowledge-driven economy of the 21st century.
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