Knowledge ManagementTheory into practice…

Catherine Kelly

City Information Group

23rd October 2007

Contact: c.kelly@londonmet.ac.uk

Key Topics • Rationales for the strategic management of knowledge

• The value of knowledge

• Defining different kinds of knowledge

• Managing different kinds of knowledge

• Panel Discussion

Rationale for the strategic management of knowledge

Knowledge Management

• “The knowledge economy is not yet all conquering, but it is well on the way to being so..it marks a major transition in the nature of economic activity. Information technology, plus communications technology are the enabling media of the new economy, but its agents are knowledge workers..The know how of such workers is the most valuable property firms have” (Anthony Giddens, 2000)

Knowledge ManagementThe Rationale?

• Knowledge is of central importance to advanced economies

• Knowledge is key to improved organisational performance

• Organisations and work have become more knowledge intensive

Knowledge Management

• The “post industrial” economy is also referred to as the “knowledge economy”.

• Last quarter of twentieth century was a period of profound change with significant developments in the types of products and services produced, and the nature of work itself.

• Role of information and knowledge has increased substantially and knowledge is now recognised as a key asset in driving organisational survival and success.

Knowledge Management?

• Knowledge management can be viewed as the process of identifying, organising and managing knowledge resources. These include explicit knowledge (information), ‘know-how’ (learning capacity), ‘know-who’ (customer capacity) and tacit knowledge in the forms of skills and competencies. (David Skryme)

The Value of Knowledge

Knowledge ManagementWhat is the Knowledge Society?

• Statistics provided by the OECD indicate that the percentage of GDP that comes from knowledge based business is now around 50%

• Percentage of the workforce employed in managerial, professional and technical roles is increasing in mature knowledge economies.

The value of knowledgeFor example….

• More than half the costs incurred, in finding and extracting petroleum, is for information

• Value of all microchips produced exceeds the value of all steel produced, yet the chips themselves are composed of nothing more than a small amount of sand. Source: Thomas Stewart, 1997

The need to manage knowledge?

• Expansion of knowledge across many subject areas is doubling approximately every 20 years.

• However, intellectual capacity in humans is estimated to double only every 3 million years!

• The building of “intellectual muscle”, in the form of intelligent knowledge workers, and the retaining of organisational knowledge, has become essential to organisational success and even survival.

Knowledge Management

• Increasingly, the value of a company has less to do with its physical assets, and a lot to do with its intellectual assets.

• The value comes from the knowledge that people hold in their heads, which forms part of the intellectual capital of an organisation

• The challenge is to create organisations in which people work collaboratively, increasing both sharing of existing knowledge, and the development of new knowledge (innovation).

We need to define different types of knowledge in order to

manage them effectively.

Data, Information and Knowledge?

Data Sequence of numbers, letters, pictures, etc, presentedwithout a context.

Information Organised data, tables, for example sales statistics.

KnowledgeOrganised information together with understandingof what it means.

Two Types of Knowledge:No. 1: Explicit or Tangible Knowledge

• Tangible Knowledge (Information)• consists of the hardware, software, databases, organisational

structure, patents, trademarks and everything else of organisational capability that support the employees productivity.

• Also defined as data or information– Easily Measured– Easily Stored– Focus is on reuse of information– Appropriate for standardized information

Approach to management: Databases, codification/classification

Two Types of Knowledge:No. 2: Tacit or Intangible Knowledge

• Tacit or Intangible Knowledge• Tacit knowledge is carried around in employees heads.

• It is estimated that approximately 80% of an enterprise’s knowledge is tacit. This includes insight, judgement, creative talents, craftsmanship.

• It also includes the organisation’s values, culture and philosophy.– Generally not easily recorded– Often unique in nature– Best transferred through personal interaction and

communication.

– Approach to management: Create collaborative work environments

Information versus Knowledge?

• “Knowledge differs from information in that it involves interpretation and use by the human brain” BSI PD 7501 (2003)

Effective transfer of tacitknowledge is a crucial aspect of knowledge management

Knowledge Transfer

• Knowledge that is explicit can be embedded in procedures or represented in documents and databases with reasonable accuracy.

• Tacit knowledge is transferred in organisations whether we manage it or not, but we can help to accelerate and improve this process.

Through KM we are aiming to maximise the transfer of explicit and tacit knowledge in order to further the achievement of organisational goals.

Collaboration not competition!

• ‘ Over the past five years..instead of competition, the discussion in the executive offices is increasingly of collaboration. While the former focused on bosses and hierarchies, and was about withholding knowledge and the exercise of personal power, this new way of management thinking is about working with peers and colleagues’ (Financial Times, 29/06/07)

Intellectual Capital?

• Structural Capital (Tangible Knowledge)

– Databases, hardware, software, patents, trademarks and everything that supports employee knowledge productivity.

• Human Capital (Intangible or tacit knowledge)

– Combined knowledge, skill, innovativeness and ability of the

company’s individual employees

– Knowledge Management manages structural and human capital, but also….

The Third Dimension of KM : Social Capital

Intellectual Capital

Human Capital

Social Capital

Structural Capital

Individual Capabilities Capacity to collaborate Processes, Systems

and Procedures

Social Capital

• “The sum of actual and potential resources within, available through and derived from the network of relations possessed by an individual” Nahapiet and Ghoshal (1998)

Development and utilisation of networks?

• Organisations need to be outward facing to bring relevant knowledge in from the outside

– Customers?

– Suppliers

– Competitors?

– Research organisations?

– Universities or government bodies?

– Mentor programmes?

How do we manage knowledge?

Changing Organisational Structures

• Developments in information and communications technologies have led to new organisational forms - the networked organisation.

• Information and knowledge increasingly flow across organisations.

• Organisations must deal with uncertain environments not merely through passive adaptation, but though active interaction

• A continuous need to develop and innovate and maintain a learning organisation.

Characteristics of classic and knowledge sharing organisational cultures

• Imposed control• Appointed leaders• Command and control• Vertical communication• Centralised • Inward looking• Power through personal

knowledge

• Self managed• Natural leaders• Consultation• Loosely defined jobs• Lateral interaction• Interdependence• Outward looking• Power through sharing

knowledge

Classic Organisation Knowledge Organisation

Source: Jashapara, A.. Knowledge Management: An Integated Approach, Harlow: Pearson Education

Mind shift required to overcome cultural barriers

• Knowledge is power• Building empires• Individual work bias• Internal competition• Making mistakes is

bad• Not paid to share• No time to share

• Knowledge sharing is power

• Building new relationships

• Team/collaborative bias

• Internal collaboration• Sharing is expected

behaviour

Main Cultural Barriers Mind Shift to:

Source: Jashapara, A.. Knowledge Management: An Integated Approach, Harlow: Pearson Education

Knowledge ManagementIntegrated approach?

• Any advancements in KM need to adopt an integrated, interdisciplinary and strategic perspective

• The key strands of any KM strategy are:

– Knowledge strategy aligned with organisational goals

– Human Resources: Culture and change management

– Technology: The right “fit” for the KM purpose

– Measurement: Ensuring that your put in place measures which can be used to monitor the success or otherwise of your KM strategy.

The Benefits of an Effective KM Strategy

• Increase and add to continuous organisational learning (Innovate)

• Do more with existing resources

• Provide improved products and services

• Learn from the past

• Share best practices

• Avoid mistakes

Knowledge Management

• KM is establishing itself firmly as both an academic and practice based management area.

• It is cross disciplinary, drawing on theory and practice from a wide number of different academic and practitioner areas.

• Real synergies in KM will come from boundary spanning individuals who can see beyond the narrow margins of their own disciplines.

Knowledge ManagementInformationTechnology

Knowledge, Culture,and Change

Legal IKM practice

MSc in Information and Knowledge Management Subject Areas

Content

Academic Discipline Roots

AnthropologyEconomicsSociologyManagement Science

StrategyHuman ResourcesManagementComputer Science

Information SciencePsychologyPhilosophy

Information Architecture

Strategic Information Management

ResearchMethods

The Key to a Successful Knowledge Management Strategy?

Knowledge Management: The Key to Success?

• Data and information can be successfully managed, primarily through the appropriate use of technology, and through professional information management practice.

• In order to manage tacit knowledge, we need primarily to manage the environment in which knowledge can be created, discovered, captured, shared, adapted and applied.

Knowledge and Power

• All KM initiatives could be considered to be highly political and are likely to be accompanied by what are described as “turf wars” (Storey and Barnett, 2000)

• What comes to be regarded as ‘knowledge’ can also be a political process

• KM practitioners must be aware of these issues in order to

ensure a measure of success in any KM programme.

Note: For a full exploration of this issue, please refer to: Kelly, C. (2007) Managing the

relationship between knowledge and power in organisations, Aslib Proceedings, Vol 59 (2)

A blueprint for a knowledge centric organisation?

Clearly definedknowledgebehaviours

Embracesdiversity

Clear ValuesEnergising Workspaces

Fluid roles and responsibilities

NurturesCreativity

LearningCentric

Networked

PermeableStructuresFlexible

FacilitativeLeadership

Evans, C (2003)

Summary

• Rationales for the strategic management of knowledge

• The value of knowledge

• Defining different kinds of knowledge

• Managing different kinds of knowledge

• Panel Discussion

Contact Details: c.kelly@londonmet.ac.uk