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Considering Knowledge as an Organization Resource

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  1. To insert your company logo on this slide • From the Insert Menu • Select “Picture” • Locate your logo file • Click OK • To resize the logo • Click anywhere inside the logo. The boxes that appear outside the logo are known as “resize handles.” • Use these to resize the object. • If you hold down the shift key before using the resize handles, you will maintain the proportions of the object you wish to resize. Considering Knowledge as an Organization Resource University of Dayton--6 June 06 Summer Bartczak, Lt Col, USAF (PhD) Asst. Prof. of Information Resource Mgt. Air Force Institute of Technology

  2. Overview • Introduction • Drucker Pitstop • Recap “The Coming of the New Organization” • Discuss ties to Drucker’s discussion of knowledge as a resource in “Post-Capitalist Society” • Discussion of “The Knowledge-Creating Company” (Nonaka & Takeuchi) • Discussion of “What’s Your Strategy for Managing Knowledge?” (Hansen, et al) • Discussion of “Building a Learning Organization” (Garvin) Bartczak, UD 6 June 06

  3. Questions to Contemplate • Why is knowledge such an important organization resource to consider these days? • Why is creating NEW knowledge so essential to achieving competitive advantage? • What are the basic strategies organizations can consider for managing existing/new knowledge? • What are the connections between managing knowledge (KM) & learning organizations? Bartczak, UD 6 June 06

  4. Framing Thought Every few hundred years in Western history there occurs a sharp transformation [or divide]. Within a few short decades, society rearranges itself—its worldview; its basic values; its social and political structure; its arts; its key institutions. Fifty years later, there is a new world. And the people born then cannot even imagine the world in which their grandparents lived and into which their own parents were born (Drucker, 1993). We are currently living through just such a transformation. It is driving new organization forms, the need for knowledge creation & organizations that “learn”, and, generally, the evolution of a post-capitalist society...which are all the subject of today’s discussion. Bartczak, UD 6 June 06

  5. Background Peter F. Drucker • Born in Vienna (1909), escaped to the US in • 1930s • Holds a PhD in Public/International Law • from Frankfurt University; holds honorary • doctorates from American, Belgian, Czech, • English, Japanese, Spanish & Swiss • Universities • One of the most influential management • consultants of all time • Prolific writer…40+ books on society, • politics, economics, and management • WAS an active professor at Claremont • Graduate University until Fall 05 • Coined the term “knowledge worker” Peter F. Drucker (aka “The Man”) Bartczak, UD 6 June 06

  6. “The Coming of the New Organization” (Drucker, 1988) Recap Bartczak, UD 6 June 06

  7. “The Coming of the New Organization” (Drucker, 1988) • 1988 piece that explores the differences with organizations/organization forms of the past • Recognizes importance of “knowledge” but crux of the conversation centers around “information” • Looks to hospital, orchestra, & university organization examples • Says the info-based organization will have its own mgt. problems • Rewards, recognition, opportunities for specialists • Creating a unified vision • Devising a mgt. structure for an org. of task forces • Ensuring good top mgt. people Bartczak, UD 6 June 06

  8. “Post-Capitalist Society”(Drucker, 1993) Bartczak, UD 6 June 06

  9. “Post-Capitalist Society”(Drucker, 1993) • Published in 1993 • Emphasizes that knowledge is an important organization resource…now sidelining the traditional factors of production (land, labor, capital) • Says the meaning of knowledge changed from an aspect of “being” to “doing” and over time transformed Western society to post-capitalist Bartczak, UD 6 June 06

  10. Overview of Major Historical Phases and Changing View of Knowledge • Drucker proposes that the world has undergone five major historical phases: • Pre-Scientific Age • Industrial Revolution • Productivity Revolution • Management Revolution • Knowledge Revolution • He says the differing views of knowledge (for the most part) distinguish one phase from another Bartczak, UD 6 June 06

  11. Overview of Major Historical Phases and Changing View of Knowledge Bartczak, UD 6 June 06

  12. Overview of Major Historical Phases and Changing View of Knowledge • Pre-Scientific Age • (1300-1500) • Cities became the center of culture • City guilds were dominant social groups • Urban universities replace monasteries as cultural centers • (1500-1700) • Gutenberg’s invention of printing with movable type • Protestant Reformation • Blossoming of the Renaissance • Rediscovery of scientific inquiry • Knowledge viewed as “philosophy” or “being”; purpose of knowledge was self-knowledge/self-development Bartczak, UD 6 June 06

  13. Overview of Major Historical Phases and Changing View of Knowledge • Industrial Revolution (1700-1900) • Watt’s perfected the steam engine • Adam Smith wrote Wealth of Nations • Capitalism and communism emerged • Capitalists became great powers, overshadowing kings and princes • Knowledge seen as “doing”; Knowledge applied to tools and products Bartczak, UD 6 June 06

  14. Overview of Major Historical Phases and Changing View of Knowledge • Productivity Revolution (1900-1950) • Converted the proletarian into middle-class w/upper class income • Frederick Taylor studies/analyses/engineers work • Incredible gains in productivity • Capitalists made more money • Knowledge applied to work (processes) Bartczak, UD 6 June 06

  15. Overview of Major Historical Phases and Changing View of Knowledge • Management Revolution (1945-1990) • Management emerges as a discipline after WWII • Being in management meant rank and power • Knowledge became seen as an essential resource • Knowledge began to be applied to knowledge (i.e. managers became responsible for applying their knowledge to the management of others with knowledge) Bartczak, UD 6 June 06

  16. Overview of Major Historical Phases and Changing View of Knowledge Knowledge Revolution (1990-20??) • Knowledge becomes THE KEY resource • Many organizations exist that produce no physical product • Intellectual capital becomes key issue for orgs. • Traditional knowledge considered general; knowledge now necessarily specialized • Knowledge workers recognized • Knowledge is applied to cognition/intelligence (i.e. we begin to use knowledge to create new knowledge and innovate) Society becomes “post-capitalist” Bartczak, UD 6 June 06

  17. Some Key Characteristics ofthe Post-Capitalist Society • Economics and Productivity • Increasingly, there is less and less return on traditional resources; the main producers of wealth have become information and knowledge (information capitalism) • The return which a country/business gets on knowledge must increasingly be a determining factor in its competitiveness • Innovation (the application of knowledge to knowledge) requires systematic effort and a high degree of organization—but it also requires both decentralization and diversity • Management’s challenge is to make knowledge productive Bartczak, UD 6 June 06

  18. Key Characteristics ofOur Post-Capitalist Society So, again, what is the Post-Capitalist Society? • A society where land, labor, and capital are no longer the key factors of production that allow competitive advantage • A society no longer controlled by industrial-era capitalists such as Rockefeller, Carnegie, etc. • A society characterized by a knowledge revolution….where knowledge is the key strategic resource Bartczak, UD 6 June 06

  19. …And Since 1993/Drucker 1994—Tom Stewart warns in Fortune article that companies should focus less on what they own and more on what they know. 1995—Paul Romer (Stanford economist) calls knowledge the only unlimited resource 1995—Nonaka and Takeuchi publish ground-breaking study about knowledge creation in Japanese companies. 1998—Davenport and Prusak publish “Working Knowledge” 2000 and on…. Knowledge increasingly recognized as an important resource/issue for organizations Bartczak, UD 6 June 06

  20. What do we mean when we talk about knowledge? Two types of knowledge: Tacit: personal, context-specific, and hard to formalize and communicate Explicit: “codified,” transmittable in formal, systematic language Bartczak, UD 6 June 06

  21. The Knowledge–Creating Company (Nonaka & Takeuchi, 1991/1995) Bartczak, UD 6 June 06

  22. The Knowledge–Creating Company (Nonaka & Takeuchi, 1991/1995) • Focus is on managing the creation of NEW knowledge • More about tacit than explicit knowledge • Companies aren’t “info processing machines” they are “ living organisms” Bartczak, UD 6 June 06

  23. The Knowledge–Creating Company (Nonaka & Takeuchi, 1991/1995) The Knowledge Spiral • Tacit knowledge To Explicit knowledge Tacit knowledge Explicit knowledge Bartczak, UD 6 June 06

  24. The Knowledge–Creating Company (Nonaka & Takeuchi, 1991/1995) • Interaction/exchange between tacit & explicit knowledge is especially important • Facilitate new knowledge creation with metaphors, analogies, and models • Implications for organization design include: redundancy, managing chaos through a sense of purpose/vision, requisite variety Bartczak, UD 6 June 06

  25. What’s Your Strategy for Managing Knowledge?(Hansen, Nohria, Tierney, 1999) Bartczak, UD 6 June 06

  26. What’s Your Strategy for Managing Knowledge?(Hansen, Nohria, Tierney, 1999) Why should we care about managing knowledge (tacit & explicit)? Again… • Knowledge is an organization asset/resource just like any other • Knowledge may be the product itself • Knowledge is a key to competitive • advantage Bartczak, UD 6 June 06

  27. Strategies for Managing Knowledge • Codification Strategy • Personalization Strategy Bartczak, UD 6 June 06

  28. Strategies for Managing Knowledge Codification Strategy: • Focuses on ways to codify (i.e. put into text-based form), store, and reuse knowledge • Uses a people-to-documents approach • Knowledge is extracted from people, made independent of them, and then reused by others Bartczak, UD 6 June 06

  29. Strategies for Managing Knowledge Personalization Strategy: • Focuses on dialogue between individuals not objects in a database • Uses a people-to-people approach • “Uncodifiable” knowledge is transferred by brainstorming and one-on-one conversations Bartczak, UD 6 June 06

  30. Choosing the Strategy That’s Right for You Consider…. • How you create value for customers • How you turn a profit • How you manage people Bartczak, UD 6 June 06

  31. Choosing the Strategy That’s Right for You Consider…. • How you create value for customers • Deal with similar problems over and over? • Re-use plans, briefs, ideas, software code, problem solutions? Or • Deal with one-of-a-kind problems that don’t have clear solutions? • Create highly customized solutions? Bartczak, UD 6 June 06

  32. Choosing the Strategy That’s Right for You Consider…. • How you turn a profit • Employ “economics of re-use”; codified knowledge can be used over and over again at a low cost by many people? Or • Employ “expert economics” where clients are offered advice that is rich in tacit knowledge; slow, expensive, and requires lots of expertise? Bartczak, UD 6 June 06

  33. Choosing the Strategy That’s Right for You Consider…. • How you manage people (hire and train) • Hire inexperienced personnel and train them to do routine tasks? Or • Hire experienced personnel for their expertise, creativity, communication skills, and analytical thinking skills? Bartczak, UD 6 June 06

  34. Choosing the Strategy That’s Right for You • Straddling both strategies risky • Pick a primary strategy…80/20 mix • Don’t try to excel at both—you may fail Bartczak, UD 6 June 06

  35. Building a Learning Organization (Garvin, 1993) Bartczak, UD 6 June 06

  36. Building a Learning Organization (Garvin, 1993) • Before people/companies can improve, they must first learn • Look beyond rhetoric, pie & the sky philosophies to fundamentals • Three key issues that must be addressed before a company can become a learning organization 1. Meaning 2. Management 3. Measurement Bartczak, UD 6 June 06

  37. Building a Learning Organization (Garvin, 1993) MEANING • What is a learning organization? • What is the connection between knowledge management (or managing knowledge) and a learning organization? Bartczak, UD 6 June 06

  38. Building a Learning Organization(Garvin, 1993) A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights Many other definitions exist! Bartczak, UD 6 June 06

  39. Building a Learning Organization (Garvin, 1993) MANAGEMENT • Building Blocks • Systematic problem solving • Experimentation • Learning from past experiences • Learning from others • Transferring knowledge Bartczak, UD 6 June 06

  40. Building a Learning Organization (Garvin, 1993) MEASUREMENT • “If you can’t measure it, you can’t manage it! • Learning/experience curves • Surveys • Questionnaires • Direct observation Bartczak, UD 6 June 06

  41. Building a Learning Organization (Garvin, 1993) How to… • Foster an environment conducive to learning • Give time • Give skills • Open boundaries Bartczak, UD 6 June 06

  42. Questions to Contemplate…Wrapping Up • Why is knowledge such an important organization resource to consider these days? • Why is creating NEW knowledge so essential to achieving competitive advantage? • What are the basic strategies you can consider for managing existing/new knowledge? • What are the connections between managing knowledge (KM) & learning organizations? Bartczak, UD 6 June 06