Knowledge Management: Ticket To Survival

Or the time your
‘key’ guy, with the domain knowledge of that off-beat project, joined
your competitor down the road. Or when your expansion
plans created regional offices at a speed, that didn’t allow employees
to get to know each other or share on-the-job experiences and tread
the learning curve again. Or, when you wished you could get those last-minute
tips from someone on how to bid. Welcome to the world of Knowledge Management,
the latest hype. Slated to be the panacea for all these evils, and the
survival ticket for dynamic organizations of tomorrow.

There is unlikely
to be a pair of words, more talked about in today’s world of business
than Knowledge Management (KM). There is also unlikely to be a term
of such importance, which brings out so many varying definitions of
what it stands for and confusion in many minds. When faced with making
a business proposal for a KM initiative within their organization, CIOs
are unable to get very far in describing the nuts and bolts of its benefits.
And this is not very surprising.

Peaking the hype curve
According to Partha Iyengar, Country Manager, GartnerGroup, KM is at
the peak of a hype cycle. The ‘hype cycle’ is a technology life cycle
phenomenon, which according to this global consulting firm, is where
an emerging technology trend first rises along a huge wave of over-blown
expectations and hype. Misinterpretations, failed adventures, confusion,
taxing learning and relearning will finally burst the bubble of euphoria,
gradually bringing the fledgling technology down to earth, alongwith
an associated feeling of disillusionment. And that’s when the real work,
application and development starts-a time of slow and steady implementation
and gradual productivity realization. So KM as an early and evolving
technology is going to go through all this-and that’s before organizations
figure how to use it.

So now what is KM? The global consulting firm GartnerGroup defines it
as a discipline which promotes a collaborative approach to creation,
capture, organization, access and use of an enterprise’s information
assets (page 100). Lotus Development Corp, a vendor which recently rebuilt
its core product-Lotus Notes and Domino R5 around KM, has its own definition.
It defines KM as the systematic leveraging of information and expertise
to improve organizational innovation, responsiveness, productivity and
competency. Underlying these definitions are two core fundamentals:
knowledge and collaboration.

What KM actually stands for
From the mid-eighties to the early-nineties, it was the process and
systems certification and business process reengineering, which were
the organizational buzzwords. These initiatives were driven by the eulogies
of quality gurus like Deming and Kaizen, that getting it right the first
time through extensive documentation of processes, would add to organizational
productivity and competitiveness. With organizations standardizing their
processes, the next step up the ladder was integration of information
and data, because that’s how decision making can become more effective.
The early nineties saw ERP, datawarehousing, datamining, messaging and
groupware become the buzzwords and the focus for organizational initiatives.
Today, with increasing globalization, acquisitions, mergers, virtual
teams and downsizing, the traditional structure of an organization is
undergoing a metamorphosis. The survival formula now pivots around the
ability to innovate and time-to-market products and services. An organization
can no longer afford to reinvent the wheel-it has to leverage the expertise
within employees, available as tacit knowledge. Current estimates indicate
that only 20% of knowledge within an average organization is used productively.
The usual grouse of an enterprise worker today, “We don’t know
what we know,” spells tomorrow’s doomsday.

While KM definitely involves creation, capture and access of explicit
knowledge in the form of reports, manuals, and emails, the real challenge
lies in capturing the tacit knowledge of employees. According to the
GartnerGroup framework, the three pillars for a successful KM project
are culture, project and technology foundations (page 102). For a KM
project to succeed, an organization needs strong project management
capabilities and familiarity with intranet and groupware technologies.
But the most important is the cultural foundation. If an organization
does not support a human communication network that operates freely,
seeking the shortest path between knowledge providers and knowledge
seekers, a KM project will never succeed. An organization built on a
strong hierarchical structure will resist bypassing of formal authority
and communication channels. According to GartnerGroup, there is a 0.7
probability that 20% projects will fail because of a weak foundation
in these three areas. And a casual approach to changing the culture
of an organization, currently accounts for at least 50% of KM project
failures.

The Lotus approach to KM adopts a slightly different perspective. The
company looks at KM as an offshoot of collaboration between employees
on scales that range from the individual to the enterprise (page 107).
When collaboration takes place between individuals and teams-you get
innovation. And when it ranges across the enterprise-you get responsiveness.
But again, the key word is-collaboration. As Michael Zisman, Executive
VP, Strategy, Lotus Development Corp, puts it, “Sharing is not
built into the way people work, though most companies are not hostile
toward it. Without an incentive, without making it a natural part of
the way people work-employees are unlikely to comply. And KM is all
about group behavior.” Laurence Prusak, Co-Director, IBM Institute
of Knowledge Management #(IKM), describes the same as, “Knowledge
is embedded in social relationships. People by nature don’t share knowledge.
It takes coaxing to get them to know what they know, to share what they
know and to absorb what other people know.” In British Petroleum,
a typical KM case study cited by Lotus, 70% of the project cost was
utilized for employee coaching.

Another approach to KM is defined by Microsoft’s product-based approach,
involving Digital Nervous System, Exchange and Site Server. According
to Bill Landefeld, Director, Global Marketing, Microsoft Corp, “When
we talk of KM we look at how people work in an organization and become
more effective in what they are doing. This essentially involves four
components: business planning and analysis, product development and
feedback, customer management and development and training of employees.”

In short, KM means finding out what an enterprise knows, how to locate
people with specific knowledge and expertise, how to effectively distribute
the knowledge across the enterprise for others to use and getting the
right knowledge to the right people at the right time.

Where will KM work
Typically, every enterprise should have some degree of KM initiative
underway. This initiative need not encompass the complete enterprise-it
can be limited to select departments or divisions or business units.
It need not cover the entire range of expertise available within-it
can be focused on select skills and knowledge domains. However, there
should be a very clear alignment with the business strategy. An important
factor remaining that such focused efforts cannot be directly scaled
to the enterprise without modifications.

Lotus describes the critical success factors for a KM project in any
type of enterprise to include fostering culture, leadership and incentives,
suitable measurement and tracking, technology maturity and strategic
alignment. However, according to GartnerGroup, certain types of enterprises
need to consider a KM initiative as a requisite for tomorrow’s survival.
Organizations which exist in a highly volatile and competitive industry,
have geographic dispersion and whose core business is the application
of knowledge, need to have a KM initiative underway, before it is too
late (page 104). Another type of business environment, which necessitates
an organizational initiative, includes those with a shortage of skilled
manpower, lengthy process of expertise build-up, highly collaborative
processes, frequent change and high level of creative input. Still another
type of environment involves mission-critical processes, time-bound
processes, complex and diverse skills and frequent innovation.

GartnerGroup describes another check-point for organizations attempting
to initiate a KM project and that is to ascertain the extent of intellectual
capital in the organization (page 106). This can be determined by the
ratio of an organization’s intangible assets to its tangible assets.
The intangible assets is the difference of the market capitalization
of an organization and its book value. If the ratio is greater than
2.0, then the organization has considerable intellectual capital, which
can be leveraged across the enterprise and as products and services.
If the ratio is less than 2.0, then the organization has more assets
in its customer base, processes, resources and these should be enabled
across the enterprise using KM.

Organizations, which are knowledge-intensive, like consulting firms,
technology-intensive product companies, software development ventures,
software product companies, project management companies involving integration
and implementation need to have processes in place to capture, access
and share tacit and explicit knowledge across their enterprise. Other
organizations with a wide customer base across many portfolios need
to present a unified fulfillment interface across the enterprise for
effective customer service. Typical examples of organizations with extensive
KM deployments include British Petroleum, Buckman Labs, Monsanto Life
Sciences, IBM Global Services, Microsoft Corp, Andersen Consulting,
Ernst & Young, Xerox and others.

Products for KM
There are a number of products, which can facilitate collaboration,
including Microsoft Site Server and Exchange, NetShare/NetMeeting, Netscape
Compass Server, Personalization Server and certain document management
solutions. However, these products do not appear to have been built
from the ground-up to facilitate an open collaborative application development
environment and offer mostly point solutions. At the recently-concluded
Lotusphere ’99, Lotus announced its R5 Notes Client, Domino Server and
Domino Designer. The R5 product range is stated to have been developed
with KM functionality as the basis for its core architecture. The Lotus
Institute which conducts extensive research on collaborative learning
alongwith IKM, has also released other products fostering collaboration,
including LearningSpace, Domino.Doc and TeamRoom. According to the GartnerGroup,
there is a 0.8 probability that by the year 2000, Lotus Notes will have
the industry’s most complete KM functionality and will continue to add
semantic, visual and collaborative functionalities.

Which way do you go
Evolving global business environments have spawned the emergence of
KM as a salvation tool, which will challenge even the most competitive
enterprises of the 21st century. However, Indian companies must realize
that even limited KM initiatives can reap tremendous benefits for them.
Organizations need to build suitable rewards and recognitions within
their culture to foster team building and sharing across knowledge streams.
The cultural shift from individual to group and collaborative focus
is likely to be the most taxing, taking up 50 to 70% of efforts in many
KM projects. But there is no turning back now…

ARUN SHANKAR,
in New Delhi.

Building
Knowledge Powerhouse

A clear understanding
of the current and emerging role of knowledge in the enterprise is a
pre requisite to tailoring a KM strategy, says Gartner Group.

KM process framework
Clients and vendors are confused by the concept of Knowledge Management
(KM). Clients are excited by KM’s potential, but CIOs and knowledge
program leaders are deterred by the difficulty of explaining KM concepts
beyond initial definitions. Some CIOs hesitate to propose or discuss
KM for their enterprise because of these difficulties. Multiple definitions
are also competing in the vendor marketplace.

Our review of the framework begins with a revised definition of KM.
“Knowledge management is a discipline that promotes a collaborative
and integrated approach to the creation, capture, organization, access
and use of an enterprise’s information assets. This includes databases,
documents and, most importantly, the uncaptured, tacit expertise and
experience of individual workers.”

The Gartner Group KM Process Framework asserts that KM is composed of
five activities:

Create: The activities that result in new knowledge.

Capture: The activities that enable capture and representation
of tacit knowledge in explicit form, thereby moving knowledge from the
individual and making it available across the enterprise.

Organize: The activities that classify and categorize knowledge
for storage and retrieval purposes. This includes maintenance of knowledge
data as well as the indices, maps and processes that manage it.

Access: The activities through which knowledge is disseminated
or requested by users.

Use: The application of knowledge to work activities, decisions
and opportunities. Use is recursive i.e., it generates feedback that
affects other activities, and this feedback may be injected into the
KM process through any of the other four activities.

There are two additional dimensions to the KM Process Framework:
Scope of content: The breadth of knowledge contained within or acted
upon by a KM technology or program. Scope of content may address several
characteristics of knowledge. Its temporal nature or time value (permanent
vs. temporary; current vs. historical); the subject or topical coverage;
the organizational level or scope of the knowledge (team, departmental
or enterprise-level content); its structural characteristics; and finally
the data types of the knowledge. Scope may range from very wide (all
the knowledge used by a consulting company to carry out all engagements)
to very narrow (e.g., a sales contact knowledge base).

Depth of functionality: A technology’s functional coverage of
any of the knowledge activities may be deep or shallow. Depth of a technology
is defined as its coverage of four classes of KM functionality: semantic,
collaborative, visualization and scale. Scope may range from shallow
coverage in one class of functionality (e.g., a tool that learns and
updates user profiles) to deep coverage in all four (a fully-integrated
KM solution across all knowledge activities).

Finally, the five KM activities namely, create, capture, organise, access,
use, can be further grouped into three sub-processes of KM: knowledge
creation, knowledge sharing and knowledge application. The three activities
that comprise knowledge sharing-capture, organization and access-are
the core
of KM. Knowledge creation and knowledge application rely heavily on
the cross-process activity of collaboration, which is generally recognized
as intrinsic to KM, but is not in itself sufficient to constitute KM.

Using the KM Process Framework: What immediate value does this
framework bring to KM users, vendors and service providers caught in
the confusion surrounding KM? The framework provides a holistic view
of the full scope and scale of the KM process. As such, users, vendors
and service providers can employ its strong visual representations and
specific definitions to clarify the scope of their current programs,
set the targets for future work, and compare their own KM vision to
that of others. A vendor-service offering, a vendor technology or tool,
or a KM user program may be described in terms of which five knowledge
activities it addresses, which knowledge sub-processes are supported,
what scope of content is included, and how deep is the functionality
provided in terms of its scope.

Is your enterprise ready for KM?
Building and sustaining a KM program will challenge even the most successful
enterprise. However, many obstacles can be identified and addressed
before the KM program is initiated. A simple KM readiness test will
highlight these impediments. KM readiness requires a solid foundation
in cultural, project and technical areas. Till 2003, 20% of KM programs
will fail because the cultural, project and technical foundations of
the enterprise are inadequate to support and sustain the change induced
by KM (0.7 probability).

Cultural foundation: KM thrives if the human communication network
operates freely across the shortest path between knowledge providers
and knowledge seekers. Strict hierarchical organizations will resist
KM users bypassing formal authority and communication channels. A shift
to collaboration and participative decision-making is imperative in
KM. Rate ‘high’ if shifts to collaborative processes and participative
management styles have been successful in at least one key department
targeted for KM; ‘medium’ if there has been some success, but there
is a tendency to revert to the hierarchical state; and ‘low’ if there
have been no shifts away from a strict hierarchy.

Project foundation: Building a KM program requires a complex
array of tasks, skills and structure for conducting a knowledge audit,
defining an architecture, implementing KM technology, building a KM
organization and performing other unfamiliar tasks. KM requires a sponsor,
a business case, a project manager (PM), a project team and a planning
discipline. Rate the company ‘high’ if it historically provides strong
critical success factor (CSF) support; ‘medium’ if a strong sponsor
and PM are present, but other CSFs are missing; and ‘low’ if either
a strong sponsor or a strong PM are absent.

Technology foundation: KM technology is defined as four categories
of function (semantic, visualization, collaborative and scale), which
are typically installed on a foundation of an intranet and collaborative
tools (including email and groupware). The implementation of a KM program
will be simplified when technical and user experience with an intranet
and collaborative tools are already in place. Rate ‘high’ if an intranet
and collaborative tools are installed and actively used; ‘medium’ if
an intranet is in place, but there are no collaborative tools; and ‘low’
if no intranet or collaborative tools are in place.

Interpreting results: If the enterprise rates ‘medium’ or ‘high’
in all three foundations, there are few inherent obstacles to KM success.
However, an enterprise with one ‘low’ rating could also be successful
if it acknowledges issues and aggressively addresses them. For example,
if cultural readiness is ‘low,’ then adding a senior cultural change
manager, a cultural support team and special funding may boost the program
and achieve a successful cultural change. If the technical readiness
score is ‘low,’ then initiating a project now to implement an intranet
and collaborative tools and having them in place when the KM program
roll out begins can aid the chances of success. Finally, if the enterprise
project foundation is low, reviewing past project issues carefully and
putting mitigating processes and structure in place will alleviate these
issues in the KM project.

Bottomline: Enterprises should use the KM readiness assessment
to gauge their ability to support a KM initiative. Results should be
used not to declare that KM cannot be successful, but to identify where
intervention is critical to success. Enterprises should seize the opportunity
to address obstacles before they impede the KM program.

Choosing a KM strategy: one size does not fit all?
Before drawing the first graphic of an architecture, before drafting
KM job descriptions, and long before purchasing tools, sponsors of KM
should define a strategy for where and how knowledge will be employed
to generate business value. KM can succeed as a grassroots effort aimed
at improving processes and productivity, or as an enterprise-wide program
aimed at building competitive advantage.

Enterprise-wide KM is driven by the belief that knowledge assets are
mission-critical, and therefore, a formal program is needed to manage
and leverage them. An enterprise should choose this approach if one
or more of the following are true:

* The core business is defined as the application of knowledge.

* The value of the organization’s knowledge is high (capitalization
is three or more times physical and financial assets), and much of this
knowledge is tacit.

* The enterprise’s industry is volatile and highly competitive.

* The leading companies in the enterprise’s industry are building KM
programs.

* The enterprise is highly virtualized or geographically dispersed.

Business-unit KM mirrors an enterprise-wide program on a smaller scale.
It extends to all the business unit’s processes and people, including
outsourced functions and employees. An enterprise would focus its KM
efforts on a business unit if one or more of the following apply:

* The primary business function of the unit is dependent on expert knowledge.

* The business function requires a high level of innovative or creative
output.

* The number of experts and areas of expertise within the business unit
is high.

* The impact of loss of expertise is significant and building expertise
is a lengthy, complex process.

* The business unit processes are highly collaborative.

* The business unit is subject to continual, frequent change.

Process-specific KM may be invoked to solve a difficult process issue,
to support the reengineering of a single process or a tightly integrated
set of processes, or to improve a process that enables a multi-enterprise
supply chain. Characteristics of processes that are viable targets for
KM include:

* The process is mission-critical to the enterprise.

* The process is subject to intense competition and rapid change.

* The process is complex and relies on a diverse set of skills and expertise.

* The process is time-critical.

* Frequent process and technology innovations are required to remain
competitive.

* Collaboration and sharing of information are critical to process reliability.

Competency/expertise-specific KM is a viable strategy when a major portion
of an enterprise’s success is vested in a given competency or expertise.
Characteristics supporting such a KM strategy include:

* The competency or expertise is the source of a competitive advantage
for the enterprise.

* The impact of loss of experts is high.

* Increases in productivity, innovation and creative output will outdistance
competitors.

* Industry competition for experts is intense.

* Developing expertise by current methods is costly and time-consuming.

* Experts are isolated from each other and from other process participants.

Hybrid KM programs are also viable. An organization may require an enterprise-wide
KM program, develop a long-term plan for such, but implement KM as a
series of tactical solutions addressing the most critical processes,
business units or competencies first.

Bottomline: KM permits the highly flexible application of knowledge-managing
technology and techniques. Therefore, business targets for KM programs
can be selected for their high probability of success. Enterprises should
seize this unique opportunity by clearly defining a KM strategy and
selecting appropriate business targets as prerequisites for implementing
KM.

The role of knowledge in the enterprise
KM is a strategic opportunity for every enterprise, but the role of
knowledge is unique within each enterprise. A clear understanding of
the current and emerging role of knowledge in the enterprise is a pre-requisite
to tailoring a KM strategy.

The value of knowledge: Knowledge capital is embedded in the enterprise’s
intangible assets. While its role may not be well-understood, one approach
to validating its role is to approximate its ‘value.’ This can be done
by subtracting the enterprise’s book value (physical and financial assets)
from its market capitalization (the combined value of both tangible
and intangible assets, calculated by multiplying the outstanding shares
of stock by the current share price). Market capitalization typically
exceeds the book value by a significant amount, and intellectual or
knowledge capital is a major component of the incremental value. Knowledge
capital includes intangible assets like brand image (particularly for
very influential companies, such as Coca-Cola or Microsoft) as well
as intellectual capital. Intellectual capital includes the knowledge
of employees; data and information about processes, experts, products,
customers and competitors; and intellectual property such as patents
or regulatory licenses.

GartnerGroup analyzed the average value of intangible assets by industry
by calculating a ratio of intangible assets (the incremental value of
market capitalization over book value) to tangible assets (the book
value). We called this the intangible/tangible (I/T) ratio, and among
the findings are these: A simple average of the I/T ratios across all
industry segments analyzed was 1.9-to-1 ($1.90 in intangibles for every
$1.00 of tangible assets).

Despite the high percentage of market capitalization vested in intangibles,
most industries still focus management on their tangible assets. For
example, on July 1, 1998 the value of Microsoft’s tangible assets was
$22.4 billion, but its market value was nearly $260 billion-an I/T ratio
of more than 10-to-1.

I/T ratios
in selected industries

* Health and personal care: 2.8-to-1

* Beverages and tobacco: 2.7-to-1

* Broadcasting and publication: 2.5-to-1

* Business and public services: 2.3-to-1

* Data processing: 2.3-to-1

* Insurance: 1.8-to-1

* Steel: 1.6-to-1

* Electric and gas utilities: 1.5-to-1

* Banking: 1.2-to-1

* Automotive: 0.9-to-1

* Real Estate: 0.8-to-1

Average ratio for these industries: 1.9-to-1



* The lowest
I/T ratio was 0.8-to-1, in the real-estate industry. (Real-estate enterprises
have 80 cents in intangibles for every $1.00 of tangible assets.)

* The highest ratio was 2.8-to-1, in the insurance industry. (Insurance
enterprises have $2.80 in intangibles for every $1.00 of tangible assets.)

Strategy based on the role of knowledge: How does this I/T ratio
relate to KM strategy? If the enterprise’s I/T ratio is more than 2-to-1,
a knowledge-focused strategy is appropriate. In such an enterprise,
knowledge is a key asset and critical to the enterprise’s mission. Therefore,
the enterprise should determine how knowledge can be leveraged internally
and packaged into products and services to compete. If the I/T ratio
is less than 2-to-1, this indicates that the enterprise’s operational
competencies or tangible assets are the source of competitive advantage,
and that a knowledge-enabled strategy may be more appropriate. These
operational competencies and tangible assets should be enabled and enhanced
by KM to improve their competitive value through higher operational
effectiveness, the leveraging of expertise for reuse or innovation,
and so on.

Knowledge-focused
Strategy

Consulting companies are knowledge-focused enterprises. Nearly
100% of their market value is knowledge capital. The following
is an example of a knowledge-focused strategy for such an enterprise:

* Business objective: Build a new KM practice.

* Strategies: Build and grow the practice into a $100 million
revenue producer by year-end 2001; develop a reputation as a thought
leader in KM within the consulting industry; successfully market
and support KM components on 50% of non-KM engagements; and have
the internal KM program be recognized by the industry as a leading-edge
program.

* Actions: Install a chief knowledge officer; establish
a research function to define and support KM internally; develop/publish
thought leadership concepts; develop a training program for consultants;
and immerse executive management in KM to build top-down thought
leadership.

Knowledge-enabled Strategy
There are many examples of enterprises that may choose a knowledge-enabled
strategy such as the following:

* Business objective: Become the #1 in customer service
in their industry.

* Strategies: Reduce the number of departments that a customer
must call for information to only one; enable customers to perform
(and develop a preference for) self-service; handle every customer
inquiry on the first contact (i.e., the first person reached solves
the problem or answers the question); and decrease the number
of calls due to problems by 50%.

* Actions: Build a knowledge base of the collective expertise
of all agents; identify agent experts whose knowledge can be captured,
or who can be contacted to assist others; provide access to the
knowledge base for all agents; and automate the solicitation and
capture of feedback and insight from all agents and users.

 


However,
caution is imperative. The enterprise must also consider its business
direction (which may be moving from capital-intensive to service-intensive,
or vice-versa), the valuation (or devaluation) trend in its assets,
and its market’s direction in these same areas. If these trends point
to a different KM strategy from the current state, enterprises should
choose the more strategic approach.

Bottomline: Enterprises have a high percentage of their value
vested in knowledge assets. Analyzing the unique role of knowledge within
an enterprise can clarify whether a knowledge-focused or knowledge-enabled
strategy is more appropriate. Enterprises should assign a value to their
knowledge assets, adjust the value based on business trends and direction,
and choose a knowledge strategy that uniquely supports their business
mission and goals.

Courtesy: GartnerGroup
(email: gg.india@gartner.com)

The
Collaboration Imperative

Competence, innovation,
productivity and responsiveness are the ingredients of the Lotus-IBM
KM framework.

Companies gain
most from Knowledge Management (KM) when they map their knowledge activities
to sharply defined strategic goals. Lotus and IBM’s Knowledge Management
Framework identifies four basic business goals that lend themselves
to improvement through KM: innovation, responsiveness, productivity
and competency.

Innovation: In businesses characterized by rapid technological changes
and compressed cycle times, innovation is often the primary source of
sustained competitive advantage. The challenge for many companies is
bringing employees together across the boundaries of time and geography
to brainstorm, share ideas, and co-create new products and services.
Innovation has been a key objective of collaborative technologies for
many years.
Responsiveness: Decades of technology investments have helped companies
build systems that manage well-known and well-understood business events.
But today’s business environment seems to present more unanticipated
events- such as the recent turbulence in the Asian financial markets,
dramatic changes in technology, or the sudden appearance of non-traditional
competitors-for which traditional information technology is necessary
but insufficient. KM technologies often confer the greatest benefit
when they simply help a company sense weak signals.

Productivity: A common lament of executives is “we don’t know what
we know.” Employees are forever re-creating the wheel, failing
to leverage on learned lessons, best practices and expertise that exist
elsewhere in the company. Most KM efforts concentrate on effectively
documenting, cataloging and distributing such corporate knowledge assets.
What organization would not benefit from tapping the expertise and knowledge
that resides in its individuals and systems for use in everyday decisions?
Or from reusing the knowledge created in one business process in another
business process altogether?

Clearly, productivity depends on how well the knowledge created by individuals
and groups can be captured and packaged for reuse by others inside (and
outside) the company.

Competency: A company that wants to remain competitive must develop
its people-both new hires and existing employees. New hires need to
learn not only new skills, but also “how things get done around
here.” To do so they read as much as they can, get “on the
job” training, uncover resources through browsing the corporate
web, enroll in a course of study, and even apprentice with mentors and
other colleagues. Just as important is building the skills and expertise
of existing employees. Anything a company can do to support and accelerate
such learning is successful KM.

When we examine the four strategic goals, it becomes clear that they
are a function of two dimensions: collaboration and organizational scale.
Together, these two dimensions form the Lotus Knowledge Management Framework-and
the full domain of KM solutions.

Collaboration: The process of creating, sharing and applying
knowledge involves varying degrees of collaboration. Some knowledge
activities, such as individual learning (competency) or reusing well-defined
best practices (productivity) require some collaboration. In these activities,
employees are more likely to find knowledge resources in documents and
databases, rather than through interaction with co-workers. Of course,
the degree of collaboration varies within a sector itself: an instructor-led
course is more collaborative than, say, browsing the web (even though
both are competency-building activities). In general, activities related
to competency and productivity are relatively low on the collaboration
scale overall.

By contrast, knowledge activities related to innovation and responsiveness
are much more collaborative. For example, brainstorming sessions (innovation)
and strategy planning meetings (responsiveness) are usually highly interactive,
involving multiple people. They rank higher on the collaboration axis.

Organizational scale: The second dimension of the Lotus Knowledge
Management Framework is scalability-that is, the extent to which KM
activities and output can be leveraged throughout the organization.
Competency building and innovation typically occur on a small scale,
at the individual or work group level. For example, people may attend
conferences, workshops and training sessions to improve their individual
competency. However, what they learn is not easily accessible for use
throughout the organization. It is not scalable knowledge. Only when
the output of individual learning or an innovation is packaged for reuse
can the results be leveraged throughout the organization. The company
can then perform well in the productivity and responsiveness sectors.
For example, in resolving customer problems, a productive organization’s
help-desk might reuse a knowledge base of previously answered questions.
It is important to remember, of course, that scale does not necessarily
imply a finite limit. KM is often successful when it is applied across
and beyond organizational boundaries.

This framework implies some
inter-dependencies among the sectors. Without competent individuals,
innovation, productivity and responsiveness are difficult to achieve.
Similarly innovation, productivity and competency are pre-requisites
for responsiveness. To extend the help-desk example, a responsive organization
might dip into communities of experts to resolve problems. To be responsive,
the help-desk staff need to be more than merely plugged into a repeatable
process. They need to be able to leverage on the competence and innovation
of the organization at large. Smaller companies will realize better
returns by concentrating on the collaboration dimension.

Following are two brief case studies of companies who have initiated
a KM approach:

Andersen Consulting
Management consulting firms are the poster children for KM. More than
in any other industry, the competitors in this field compete directly
on the basis of knowledge. It is no secret to any of them that the efficient
creation and distribution of knowledge assets (analysis, best practices,
lessons learned) is critical to their ability to better service clients
and win new business. Like all of the leading management consultancies,
Andersen Consulting has invested heavily in its KM practices.

Andersen Consulting understood that to make its knowledge repository
useful and to keep it fresh, it would have to be more than a dumping
ground of documents. Instead of looking like somebody’s attic, it needed
to look like a library-complete with librarians. Andersen spelled out
specific job requirements for knowledge professionals. These employees
are subject matter experts who cull through documents to ensure quality,
relevance and currency. They make sure that documents are appropriately
categorized and summarized. They make particularly worthwhile ‘gems’
easy to find, and eliminate redundant or obsolete content. In this way,
Andersen ensures that the company’s most relevant and current knowledge
is not only captured, but reused. Andersen has dubbed this role knowledge
integrator, which is also referred to as a knowledge steward in some
knowledge management literature.

Insights: A knowledge repository is only as good as its ability
to make good knowledge easily available:

* Consistent categorization.

* Surfacing of valuable content.

* Ongoing ‘uncluttering’ of the library.

British Petroleum
When British Petroleum (BP) constructs an oil production platform in
the North Sea, it brings together the combined knowledge of its own
experts and an extended community of construction sub-contractors. One
recent construction project brought together a BP office in Teeside,
England, another office in London, a sub-contractor in London, and another
sub-contractor in Aberdeen, Scotland.

BP used a Notes-based project management system that allowed each of
the parties to contribute progress reports, to identify bottlenecks,
and to quickly resolve hot issues. Now project management is not the
equivalent of KM. When an unexpected event occurred, BP used the roster
of employees and contractors to quickly determine who should respond
to that event. What’s more, BP found that connecting these ‘players’
through videoconferencing often helped to establish familiarity and
to take advantage of non-verbal communication. This ‘war room’ approach
allowed BP to resolve urgent issues quickly before they impacted a tight
schedule by gathering the right people at the right time and by providing
them with a medium to communicate with the least loss of information.

Insights: It is useful not only to have access to documents but
also to know who the right people are to include in a decision. An ‘expertise
map’ can be an invaluable knowledge asset. Second, real-time collaboration
significantly enhances the value of shared knowledge of project participants.

Courtesy: Lotus
Development Corp.


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