“Definitions of Knowledge and Knowledge Management”
Chapter 1 of If Only We Knew What We Know by Carla O’Dell and C. Jackson Grayson, Jr., with Nilly Essaides. Summarized by: Caycay Roxas |
Knowledge comes in two basic varieties: tacit and explicit, also known informal/uncodified and formal/codified:
Other organizational experts, such as Leif Edvinsson of Skandia, further divide commercial knowledge into individual, organizational and structural:
Knowledge is broader than intellectual capital (IC). While some writers have chosen to expand IC to include practices and processes, in its purest form, IC refers to the commercial value of trademarks, licenses, brand names, formulations, and patents. In this view, knowledge-as-intellectual-capital is an asset, almost tangible. Our use of knowledge is broader: knowledge as dynamic—consequence of action and interaction of people in an organization with information with each other.
Knowledge is bigger than information. Our organizations are awash in information, but until people use it, it is not knowledge. While you cannot have too much knowledge, you can certainly have too much information. Indeed, many organizations have already discovered that information, carried faster and in greater volume by electronic media, leaves employees overwhelmed, not overconfident; fumbling rather than focused, paralyzed rather than proactive.
Knowledge is information in action. Knowledge is what people in an organization know about their customers, products, processes, mistakes, and successes, whether that knowledge is tacit or explicit. Data (facts, figures, without context and interpretation), and information (patterns in data), are not in themselves knowledge (actionable information).
What is Knowledge Management?
What Managing and Sharing Knowledge is NOT:
- A religion or a spiritual calling
- An attempt to rally disgruntled employees around an appealing philosophical concept
- An existentialist search for the Truth
- A science or a “discipline”— yet
- The latest management fad.
When explicitly managed, organizational knowledge is used to accomplish the organization’s mission. Knowledge management is therefore a conscious strategy of getting the right knowledge to the right people at the right time and helping people share and put information into action in ways that strive to improve organizational performance. KM is a framework, a management mind-set that includes building on past experiences (libraries, data-banks, smart people) and creating new vehicles for exchanging knowledge (knowledge-enabled intranet sites, communities of practice, networks).
For most organizations, KM represents a continuation of efforts begun in other times with other names (or acronyms), all of which have yielded valuable learning:
- Radical reengineering may have not delivered sustainable success, but it has “delivered” the mind-set of the process-oriented organization. Processes can be made explicit, and knowledge about how to make them work can be transferred.
- Total quality management (TQM) may have not always yielded big-time change, but it laid the foundation for a corporate-wide, systematic initiative for measurement and change and cross-functional teaming, all of which, are critical to the successful of management of knowledge.
Steps in the Knowledge Transfer Process
Managing knowledge and transferring best practices is simple in concept, but difficult in execution. Every knowledge management and transfer initiative we will describe had to design approaches to address all of the steps in the knowledge transfer process shown below:
Most companies start their organized efforts by focusing on creating, identifying, collecting, and organizing best practices and internal knowledge, in order to understand what they know and where it is. The process must explicitly address sharing and understanding of those practices by motivated recipients. Finally, the process involves helping the recipients adapt and apply those practices to new situations, to create new “knowledge” and put it in action. This is where the payoff really comes.
Does managing and Transferring Knowledge really work?
It does—big time—and for a growing number of companies, large and small, private and public, in services and manufacturing, in high-tech and in chemicals. Below are just 9 examples of organizations who gained from KM:
- At Buckman Laboratories, their transfer of knowledge and best practices system helped push new product-related revenues up to 10 percentage points and sales of new products up to 50 percent. Responding to customer inquiries about products now take hours instead of weeks.
- Texas Instruments generated $1.5 billion in annual increased fabrication capacity by comparing and transferring best practices among its existing thirteen fabrication plants.
- At Dow Chemical, early efforts to manage intellectual capital brought an immediate kick-back in the form of $40 million in savings. Analysis of existing patents to determine which technology streams were the strongest and which were the weakest allowed more effective negotiations with joint venture partners.
- At Kaiser Permanente, benchmarking of their internal best practices helped drastically cut the time it took to open a new Woman’s Health Clinic with no costly start-up problems.
- At CIGNA Property & Casualty, knowledge-sharing efforts, combined with a reengineering campaign, lifted profits back into the black.
- Skandia, has leveraged internal know-how to dramatically reduce start-up time for new ventures to seven months, compared to an industry average of seven years.
- Chevron team learned that they could save $20 million a year just by adopting practices already being used in their best-managed fields. More so, Chevron’s network of 100 people who share ideas on energy-use management has generated an initial $150 million savings in its annual power and fuel expense by sharing and implementing ideas to reduce company wide energy costs.
- At Arther Andersen, a Global Best Practice Knowledge base has improved the quality of services, helped lower research costs, and shortened delivery time in business consulting.
- At USAA, knowledge management increased the proportion of business conducted over the phone with members from 30 percent to 70 percent and helped establish ten new strategic alliances.
Is KM another management fad?
We don’t think so for four reasons:
- It is built on the never-obsolete power of learning. As David Garvin of Harvard Business School asks, “How can an organization improve without learning something new?”
- While there are plenty of people who treat knowledge management as a religion, real knowledge management is practical and action oriented, not ideological and theoretical. If done right, it produces bottom-line results—always a sure way to guarantee sustainability.
- Unlike other process-improvement methods, KM does not rely on technology to make processes more efficient. It relies on recognizing the knowledge resident in people’s minds, using technology to facilitate its sharing, not replace its human’s origins.
- Finally, KM is consistent with emerging models of organizations. Most modern business models involve people in teams coming together on a project basis, then moving on to new relationships. All these models are process oriented, not bound by functions, industries, structures. Knowledge underpins their continuous existence.
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