history of knowledge management moving from the industrial era to the knowledge era created a...

History of Knowledge Management

Moving from the industrial era to the knowledge era created a

constant state of change. Peter Drucker identified a major trend in

the 1970s when he coined the term “knowledge workers” and began

to write about people whose minds and experience are more important

to the organization than their physical skills.

Change has become a constant. The pace of change is accelerating as we

move further into the knowledge era. The change, in part, is a response

to outdated organizational patterns that were built during the industrial

era, when business decisions were primarily made to allocate

scarce capital, specifically financial capital, to produce results.

An organization that does not learn faster than the speed of change, is ultimately doomed.


When Knowledge Management became popular in the business

press in the 1990s, many business practitioners initially considered it a fad.

Many discussions about Knowledge Management can be

abstract, leading to a misunderstanding about the real value of

“knowing what you know.” This continues to fuel the debate about

whether Knowledge Management makes a significant contribution

to creating a competitive advantage.


Despite the debate, organizations have identified successful cases where they have developed and implemented an effective Knowledge Management strategy.

Successful practices have been incorporated into standard

business processes in the same way as accounting and IT have

become integral to all business functions. Organizations such as

British Petroleum (BP), Clarica, Hewlett-Packard, General Motors,

Siemens, the United States Army, McKinsey, De Beers, and Buckman

Laboratories lead a long list of Knowledge Management success

stories—instances where concerted efforts to manage knowledge

assets have resulted in significant competitive advantage through

increased performance and learning.

The KnowledgeManagement Mandate:

What Is Knowledge Management?

Knowledge Management is fundamentally a systematic approach

for optimizing the access, for individuals and teams within an organ-

ization, to relevant actionable advice, knowledge and experience

from elsewhere. Actionable is the critical element for the KM prac-

tice.

If you cannot use the knowledge, it does not have measurable

value.

The KnowledgeManagement Mandate:

Organizations which are not yet applying Knowledge Man-

agement may be aware that they don’t capture and reuse good or

best practices, that they risk repeating the same mistakes, and that

they are likely to lose what employees learn, but never share, about

suppliers, customers, or competitors. The primary business problem

that Knowledge Management is designed to solve is that teams and

individuals are performing sub-optimally, because they do not have

access to knowledge acquired through experience elsewhere. In addi-

tion, new endeavors and innovations may be impeded from lack of

access to knowledge via Knowledge Management practices and

tools.

Growing interest in KM

Knowledge Management is a vehicle to systematically and

routinely help individuals, groups, teams, and organizations to

learn what the individual knows learn what others know (e.g., individuals and teams) learn what the organization knows learn what you need to learn organize and disseminate these learnings effectively

and simply apply these learnings to new endeavors

Slides by Payman Shafiee

Growing interest in KM

Experience shows there are common questions that anyone starting or involved in a Knowledge Management initiative might have.• Why should I implement or expand Knowledge Managementinitiatives in my firm now?• Are there cultural prerequisites for Knowledge Management?• What level of senior management support is required for KMto be implemented successfully in my firm?• Are there structures that need to be in place before KM can besuccessful?• How can I effectively implement Knowledge Management practicesand tools?• What is the role of information technology (IT) and humanresources (HR) in Knowledge Management?• How can I measure or assess the results of Knowledge Managementinitiatives?


Definition of Terms

The following terms are frequently used within this course. Brief definitions, which will be expanded on later are:

• Explicit knowledge—Knowledge contained within some artifact,

such as a process, a document or a video, that has typically

been created with the goal of communicating with another

person. It is an intellectual asset of an organization.

• Intangible assets—Things owned by a company that have no

physical existence but have value. As compared with tangible

assets, they are predominantly invisible and may be difficult to

track and quantify.


Definition of Terms

• Intellectual or knowledge capital—The intangible assets of an

organization which are held by individuals. Relationships, customer

loyalty, employees’ know-how, culture, and values are

elements of intellectual capital.

• Intellectual property—Legally protected knowledge components

of a company. Inventions or patents, trademarks, industrial

designs, copyrights are examples of intellectual property.

• Knowledge Assets—Compilations of the knowledge of an

organization, structured in such a way as to provide guidance

and to be a resource for future knowledge users. The compilations

of knowledge are often stored electronically.


Definition of Terms

• Physical capital—Infrastructure and natural resources combined

to be useful.

• Tacit knowledge—What the knower knows, that is not obvious

to others and is derived from experience.

• Tangible assets—Physical capital that depreciates with use (e.g.,

plant and equipment).


Knowledge Assets

Whereas tangible or physical assets usually depreciate with use,

Knowledge Assets can grow when they are shared and transferred. For

example knowledge about a customer leads to repeat business and

loyalty, one employee’s skill can be learned by others in the department,

and so on. Knowledge Assets may be a source of competitive advantage

because they can be unique


Knowledge Assets

Saint-Onge (Saint-Onge and Wallace, 2003) categorized intellectual or knowledge related assets as follows:

• Knowing how—Human capital: individual capabilities

• Knowing what—Structural capital: organizational capabilities,

including processes

• Knowing who—Relationship capital: knowledge of all stakeholders

(people inside and outside the organization who have

an interest in the organization; e.g., employees, stockholders,

and customers)


Knowledge Management and Organizational LearningWithout continuous learning, sustainable increases in performance are not

viable. This has been challenging in practice because Knowledge Management builds on and integrates several business and management disciplines:

organizational learning, business management, anthropology, sociology, intellectual capital, virtual teams, and communities of practice.

The solution provided in this course is to approach Knowledge Management by integrating people, process, and technology into a framework for implementation.


Knowledge Management and Organizational LearningOne source of debate about Knowledge Management

is differentiating between knowledge as a stock (an asset) and as a flow or process. The Knowledge Management framework presented in this course addresses knowledge as an entity (stock) as well as a process (flow). Our framework eliminates the either/or dichotomy and, instead, uses both. Much as a plumbing system in a house includes stocks (tanks and reservoirs) and flows (pipes and pumps), so a Knowledge Management system in an organization also needs to include both stocks and flows.

The Four Phases of Knowledge ManagementThe decade of Knowledge Management can be described as four

phases. David Snowden (2000) summarizes the recent history of

Knowledge Management as three phases. However, there is now evidence

that a fourth phase is in progress.

Phase 1 emphasized technology.

Phase 2 moved the focus to tacit and explicit knowledge

Snowden’s phase 3 recognizes the need to go beyond codified information

by using stories in the form of narrative representation

The 4th phase integrates the previous three by using a systems

approach to Knowledge Management, for the purpose of increasing

performance through learning in an organization’s internal culture

within a specific external environment.


Phase 1: Information to Support Decision MakersThe first phase is considered to be prior to 1995. Here “knowledge”

as a word was not problematic; it was used without conscious

thought. The focus was on information flow to support decision

makers.


Phase 1: Information to Support Decision MakersExamples of Knowledge Management applications or systems that

dominated the phase 1 period include:

• Executive information systems—Providing easy-to-access,

summary-level information to executives.

• Data warehousing—Large electronic libraries containing data

that can be combined easily into information for multiple

purposes.

• Process reengineering—Systems designed to improve quality by

analyzing existing processes and implementing more efficient

processes, most often for cost savings (e.g., staff reductions).


Phase 2: Tacit and Explicit KnowledgeThis second generation of Knowledge Management emphasized the

conversion of tacit to explicit knowledge in order to translate individual knowledge into public or collective knowledge.*

The popular success of The Knowledge Creating Company raised

Knowledge Management to a practice in consulting firms and

launched several software products to support collaboration. These

technologies were labeled “groupware” or “collaborative technology”

and were packaged with methods as well as tools

Explicit knowledgeis represented by some artifact, such as a document or a video,that has typically been created with the goal of communicating withanother person. Tacit knowledge is primarily in the heads of peopleand is the most important basis for the generation of new knowledge.

Phase 2: Tacit and Explicit KnowledgeTacit knowledge is primarily in the heads of people and is the

most important basis for the generation of new knowledge.

According to Nonaka and Takeuchi (1995), “the key to knowledge creation lies in the mobilization and conversion of tacit knowledge.”

Both forms of knowledge are important, however, for organizational effectiveness. Creation of new knowledge takes place through the social processes of combination and internalization.


Phase 2: Tacit and Explicit Knowledge These SECI processes are as followsSocialization (tacit to tacit). Socialization includes the shared formation

and communication of tacit knowledge between people

(e.g., in meetings, or other forms of dialogue). Knowledge sharing is

often done without ever producing explicit knowledge and, to be

most effective, should take place between people who have a

common culture and can work together effectively

Externalization (tacit to explicit). By its nature, tacit knowledge is

difficult to convert into explicit knowledge. Activities that facilitate

conversion include dialogue among team members, responding to questions,

and elicitation of stories (narratives).


Phase 2: Tacit and Explicit Knowledge These SECI processes are as followsCombination (explicit to explicit). Explicit knowledge can be

shared in meetings, via documents, e-mails, etc., or through education

and training. The use of technology to manage and search collections

of explicit knowledge is well established. An example is to use text

classification to assign documents automatically to a subject (e.g.,

taxonomies) to put a document into a shared database, or to create a

Knowledge Asset.

Internalization (explicit to tacit). In order to act on information,

individuals have to understand and internalize it. This process of

internalizing or habituating the knowledge makes it tacit. By reading

Documents from many sources, people have the opportunity to create new

knowledge by combining their existing tacit knowledge with the

knowledge of others.

Phase 2: Tacit and Explicit Knowledge These SECI processes are as followsIn typical business situations, these processes outlined by Nonaka

do not occur in isolation, but work together in different combinations.

For example, knowledge creation results from the interaction

of people and includes both tacit and explicit knowledge. Through

interaction with others, tacit knowledge is externalized or codified

and shared.

The greatest business value occurs from process combination.In this way new knowledge is created, disseminated, andinternalized by other employees who can act on it and form new experiences and tacit knowledge that can in turn be shared with others

(Nonaka and Takeuchi, 1995).

Phase 2: Tacit and Explicit KnowledgeCodification and PersonalizationCodification: the processes that make knowledge explicit “codification.”

Hansen, Nohria, and Tierney (1999) This corresponds to Externalization and

Combination in Nonaka and Takeuchi’s model

Personalization: to identify people who have the right knowledge, as a major

component of Knowledge Management methods and tools (Hansen and his

colleagues)

For second-generation thinkers and practitioners, most notably in central

Europe the function of Knowledge Management was

to convert individual or private assets into collective orpublic assets through the extraction of knowledge into codified form.


Phase 2: Tacit and Explicit KnowledgeCodification and PersonalizationSnowden (2000) argues that the codification approach unnecessarily

focuses on the container rather than the content.

Increasingly, practitioners recognize that much tacit knowledge either cannot or

should not be made explicit. On the other hand Tacit to tacit sharing strategies

can be powerful and add business value

(e.g., job shadowing, mentoring and role modeling)

Knowledge must be actionable to be useful and valuable to anindividual, team or group, and organization. However, a strategy thatdoes not incorporate codification is unable to address the problemsassociated with keeping knowledge in human heads


Phase 3: The Use of Narrative in Organizationsthe basic operating principles of the third and fourth phases of Knowledge

Management:

The process of moving from head (knowing) to mouth (saying) to hands

(recording) inevitably involves some loss which may at times be massive

We always know more than we will say, and we will always saymore than we will write down. (Snowden, 2000)


Phase 3: The Use of Narrative in Organizations, 2nd phase in contrastMost second-phase KM approaches are content management.

They focus on documents containing knowledge that is disconnected

and separate from the knowledge holder, which diffuses easily and

is formally structured.

On the other hand, context management

focuses on connecting and linking people through, for example, expertise location, social network stimulation, apprentice models of knowledge transfer, and retention strategies for key people

Managing context requires the recognition that knowledge cannot be easily

separated from human beings either as givers or receivers of information.

Context management takes control of what we know but

are not able to completely say or write, while content management

organizes what we can write.

Phase 3: narrative management“narrative management” the communication

linking between context and content management. Narrative management

is a tool to translate or act as a bridge in the knowledge sharing

process by managing the process of conversation and

attempting to emulate the natural patterns of knowledge acquisition

in organizations.

Narrative management is a tool to translate or act as a bridge in the knowledge

sharing process by managing the process of conversation and attempting to

emulate the natural patterns of knowledge acquisition in organizations. This is

done for two main reasons:


Phase 3: narrative management It is easier to capture video stories than written knowledge, because one

can record to a video camera in ten minutes what it can take two weeks to get around to writing up.

It is a natural process. When we face a new task or encounter a problem, we find people to talk to, to ask questions, to narrate theirs stories so that they can provide context-sensitive answers and advice. This kind of knowledge cannot be provided by past project reviews and idealized statements of best practice.


Phase 3: narrative managementThe Important Role of Stories in OrganizationsFor many people, narrative management is about telling stories

that describe experiences and events that occur during organizational

life. A common example is how a manager handles an event such as

downsizing.

The narrative includes the step-by-step process, the interactions between

employees, as well as how the manager and the employees felt and

reacted to the experience

To create Knowledge Assets, the process of capturing and presenting

core stories needs to be a skill for Knowledge Management

professionals. These stories should be real stories, from past experience,

told in the words of the people who gained the experience.


Phase 3: narrative managementThe Important Role of Stories in Organizations

The most significant use of narrative in relation to

Knowledge management is as a knowledge repository

that permits asynchronous conversations across time

and space (Snowden, 2000).

i.e. Use of narrative databases in employee training


Phase 4: An Integrated Knowledge Management FrameworkThe fourth phase is described as a framework that synthesizes the

components introduced in a Snowden’s three phases of

Knowledge Management.

Knowledge Management is a framework for applying, structures,

and processes at the individual, group, team, and organizational

levels so that the organization can learn from what

it knows (and acquire new Knowledge if required) to create

value for its customers and communities. The Knowledge Management framework integrates people, processes, and

technology to ensure performance and learning for sustainable growth.
