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Knowledge management. = information combined with experience, context, reflection, interpretation Davenport, DeLong, & Beers Sloan Management Review 1998 = formal process of figuring out what information company has that can benefit others in company

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knowledge management
Knowledge management

= information combined with experience, context, reflection, interpretation

    • Davenport, DeLong, & BeersSloan Management Review 1998

= formal process of figuring out

  • what information company has
  • that can benefit others in company
  • & developing ways to make it easily available
    • Harvard Management Update February 1999

Knowledge management

knowledge management forms
Knowledge management forms
  • Knowledge management can take many forms:
    • Simple procedures to archive & reuse
      • templates,
      • outlines
      • “boilerplate” clauses (law firm) and
      • project proposals
    • Elaborate hierarchical “knowledge bases”
      • Customer contact histories
      • Best practices
      • Solutions in various contexts
    • Face-to-face “communities of practice”

Knowledge management

knowledge management in oil gas
Knowledge management in oil & gas

Borrelli - Collaboration & competition in oil & gas

  • Learning comes from knowing where you’ve been
    • “We can improve production and cut operating costs by doing post-mortem work, quarterly look-backs, etc.”
    • “You create advantage from your history by codifying the learning process”

=============

  • Beyond oil & gas: Buckman Labs: water treatment chemicals
    • Pioneer in equipping technical sales force with laptops loaded with best practice and solutions
    • Sales force could contribute & query via e-mail

Knowledge management

knowledge management process
Knowledge management process
  • Creating repository of information about best practices,
  • Setting up networks for transferring information between employees who interact with customers and those who create the product / service
  • Creating formal procedures and incentives to ensure that lessons learned in projects are passed along to others doing similar tasks
        • Harvard Management Update February 1999

Knowledge management

two knowledge management strategies
1. People-to-documents

Develop electronic document system to collect, disseminate & reuse codified knowledge

High investment in IT

HR strategy

Hire college grads who are suited to reusing knowledge and implementing solutions

Train in groups & DL

Reward for contributing to KM databases

2. Person-to-person

Develop networks for linking people to share tacit knowledge

Low investment in IT

HR strategy

Hire MBAs who like problem solving and tolerate ambiguity

Train one-on-one by mentoring

Reward for sharing knowledge with others

Two knowledge management strategies

Hansen, Nohria & Tierney HBR 1999

Knowledge management

knowledge management strategies in consulting firms
1. Codification strategy (people-to-documents)

Andersen Consulting

Ernst & Young

Provide high-quality, reliable, & fast solution

Apply codified knowledge (“reuse”)

2. Personalization strategy (person-to-person)

McKinsey & Co.

Bain & Co

Provide creative, analytically rigorous advice

High-level strategy problems

Channel individual expertise

Knowledge management strategies in consulting firms

Hansen, Nohria & Tierney HBR 1999

Knowledge management

knowledge management strategies in consulting firms 2
1. Codification strategy

Andersen Consulting

Ernst & Young

REUSE LOGIC

Invest once in knowledge asset => reuse many times

Revenue generated by high volume ($600/d)

Large teams

High ratio associates to partners

2. Personalization strategy

McKinsey & Co.

Bain & Co

EXPERT LOGIC

Charge high fees for highly customized solutions to unique problems

Revenue through high margins ($2000 fee/day)

Small teams

Low ratio associates to partners

Knowledge management strategies in consulting firms-2

Hansen, Nohria & Tierney HBR 1999

Knowledge management

knowledge management strategies in other firms
1.Codification strategy codified knowledge

Health

Access Health call-in center

Nurse uses “clinical decision architecture” to assess symptoms (300 algorithms)

Computers

DELL

Assemble to order

40,000 possible configurations

2. Personalization strategy tacit knowledge

Health

Memorial Sloan-Kettering Cancer Center, NYC

Intense face-to-face collaboration between researchers and clinicians and between types of clinicians

Computers

Hewlett-Packard

Emphasis on person-to-person exchanges to share tacit knowledge

Knowledge management strategies in other firms

Hansen, Nohria & Tierney HBR 1999

Knowledge management

incentives in knowledge management strategies
Codification strategy codified knowledge

Need to encourage people to record what they know and enter documents into electronic repository

Contributions to (quantity and quality) and utilization of knowledge base need to be part of annual performance reviews

Personalization strategy tacit knowledge

Need to encourage people to share knowledge directly with others

Help to colleagues forms part of annual performance review

Up to 25% of compensation at Bain

Incentives in knowledge management strategies

Hansen, Nohria & Tierney HBR 1999

Knowledge management

knowledge management pitfalls
Knowledge management pitfalls
  • Mixing the 2 strategies inappropriately
    • Ok to do 80%/20% split
    • Excessive codification undermines personalization strategy by delivering standard solutions
    • Excessive costly person-to-person interaction undermines cost-structure of codification strategy

Hansen, Nohria & Tierney HBR 1999

Knowledge management

knowledge management pitfalls 2
Knowledge management pitfalls - 2
  • Starting too big
    • Need pilot projects & success stories before gearing up
  • Overinvesting in knowledge management
    • Payoffs greatest if multiple locations or large number of employees
  • Overinvesting in the IT side for technology “fix”
    • If you build IT, they won’t necessarily come.
    • Often need human help desks + search engines
    • Anecdotal stories may be more effective than IT

Knowledge management

knowledge management pitfalls 3
Knowledge management pitfalls - 3
  • Neglecting the cultural prerequisites of KM
    • Pride of authorship can inhibit learning from other or previous solutions (World Bank challenge)
    • Experts may feel sharing threat to job, skills, power
  • Neglecting formal incentives to contribute & use
    • Need to reward those who share knowledge
  • Neglecting need to “walk the talk”
    • Model the desired knowledge sharing
    • Ask people
      • How they’re leveraging knowledge
      • How they’re sharing knowledge from last project

Knowledge management

starting too big africa region world bank roome s km cathedral for africa page 6 of 12
Starting too big: Africa region, World BankRoome’s “KM cathedral” for Africa: page 6 of 12

Knowledge management

starting too complex
Starting too complex

Davenport, DeLong, & Beers SMR 1998

  • Over-engineering the KM process
    • One firm defined organizational learning as having
      • 4 subprocesses
        • 15 sub-subprocesses
          • 53 sub-sub-subprocesses
    • At end of 12 months only 5 percent of project had been implemented

Knowledge management

knowledge management projects
Knowledge management projects

Davenport, DeLong, & Beers SMR 1998

  • Study of 31 KM projects in 24 companies
    • Common features
      • Creating knowledge repositories
        • External knowledge (competitive intelligence)
        • Structured (more codified) internal knowledge: research reports, product attributes, technologies
        • Informal (more tacit) internal knowledge: best practices, lessons learned, discussion databases
      • Improving knowledge access
      • Enhancing knowledge environment
      • Managing knowledge as an asset

Knowledge management

knowledge management projects 2
Knowledge management projects - 2

Davenport, DeLong, & Beers SMR 1998

  • Creating knowledge repositories
    • Models for collecting, pruning, classifying, interpreting, routing information
    • Discussion threads (Lotus Notes or Web) for tacit knowledge
  • Improving knowledge access
    • Electronic Yellow Pages & search engines
    • Communities of practice with help desks
    • Video conferencing

Knowledge management

knowledge management projects 3
Knowledge management projects - 3

Davenport, DeLong, & Beers SMR 1998

  • Enhancing knowledge environment
    • Change incentives, norms to encourage contributions to and use of knowledge base
      • e.g. Value time to market more than original design
      • Formal incentives
      • Risk of over-structuring the process
  • Managing knowledge as an asset
    • Skandia, Sweden (financial services)
      • Intellectual capital audit included in annual report to shareholders
      • Leveraging patents (Dow, Texas Instruments)

Knowledge management

knowledge management projects 4
Knowledge management projects - 4

Davenport, DeLong, & Beers SMR 1998

  • Hypothesized attributes of successful KM
    • Link to economic performance / value
    • Appropriate technical & organizational infrastructure(National Semiconductor: engineers on Web, sales force on Lotus Notes for laptop replication)
    • Standard but flexible knowledge structure
    • Knowledge-friendly culture (downsizing hurts)
    • Clear purpose (distinguishing knowledge from data)
    • Change in motivation, incentives
    • Multiple channels for knowledge transfer
      • Face-to-face aids KM “bandwidth”
    • Senior management support(Wolfensohn: W&S)

Knowledge management

knowledge management at world bank
Knowledge management at World Bank
  • Changing context:
    • Official development assistance declining relative to private capital flows to developing countries
      • Down to 1/5 of total flows prior to Asia crisis
        • But private flows highly concentrated:
          • China, Mexico, Indonesia etc. not Rwanda, Bhutan, Paraguay, Haiti, etc.
  • World Bank Strategy
    • Become Knowledge Bank for development
    • KM strategy launched mid-1990s

Knowledge management

strategic context
STRATEGIC CONTEXT
  • Strategic Compact ‘97: “...Making the Bank a premier global knowledge organization is priority.”
  • World Bank Development Report ‘98: “Knowledge has become...the most important factor [ in development ].”
  • Action Review of Knowledge Management ‘99: “Knowledge Bank [requires] mobilizing global knowledge from inside and outside the organization and applying it to solve local development problems in timely fashion.”

Knowledge management

the vision
The vision

By 2000, the World Bank Group is the first port of call for development expertise:

- good practice & cutting edge knowledge - internal and external sharing - global network - common institutional approach

Knowledge management

implementation

Sep 96

Sep 97

Sep 98

Pilot KM projects

#s of knowledge objects

Coverage of help desks

Coverage of sectors in KMS

Yes

100

5%

5%

Yes

2030

40%

25%

Yes

(Yes)

(30)

Yes

5800

Most

Most

Yes

Yes

(100+)

Decided

(Yes)

--

--

--

--

Governance mechanism

Budget for KM

Thematic Groups

KM in personnel evaluation

Staff use of KM resources

--

--

--

Implementation

Knowledge management

knowledge management at world bank1
Knowledge management at World Bank
  • World Bank external advisory panel for KM:
    • Bob Buckman (Buckman Labs)
    • Wendy Coles (General Motors)
    • Carlos Cruz (Monterey Tech Virtual University)
    • Tom Davenport (Andersen Consulting)
    • Eric Darr (Ernst & Young)
    • Kent Greenes (BP)
    • Brook Manville (McKinsey), plus consultants:
    • Larry Prusak (IBM Institute for KM), etc.

Knowledge management

knowledge management at world bank challenges april 1999
Knowledge management at World Bank - Challenges (April 1999)
  • Top management needs to restate knowledge management strategy as route to Knowledge Bank goal
    • Less than half of respondents thought strategy was clear
  • 3 of 5 “Networks” (broad groups of specialists) had effective knowledge collections on intranet
  • 4 of 6 Regions had knowledge management activities
  • DEC & WBI considered all of their activities to be knowledge management, no separate budget
  • Key units not aware of or not acknowledging key components of knowledge management

Knowledge management

knowledge management at world bank challenges 2
Knowledge management at World Bank - Challenges - 2
  • Thematic groups (more than 110) were found to be functioning well overall (communities of practice) but wide variation in activity & quality
    • 70% felt thematic groups added value
  • Bank-wide directory of expertise (30% coverage) not linked to thematic groups, not searchable

Knowledge management

knowledge management at world bank challenges 3
Knowledge management at World Bank - Challenges - 3
  • Electronic knowledge resources highly fragmented and scattered over
    • Intranet
      • Regional vs. Networks
      • Some domains well organized but
        • Many empty taxonomy trees & 900 dead ends
    • External web, and
    • Lotus Notes
  • Other issues
      • Only 13% felt there were adequate incentives for knowledge sharing
      • Only 37% of respondents found knowledge resources easily accessible

Knowledge management

dissent on knowledge management
Dissent on knowledge management

Crossan, Lane & White (AMR 1999)

  • Knowledge management (or intellectual capital) focuses mainly on cognition rather than action
  • Crossman, Lane & White urge focus on organizational learning to link cognition and learning
    • Organizational learning involves interplay
      • Exploration - assimilating new learning
      • Exploitation - using what has been learned

Knowledge management

organizational learning
Organizational learning

Crossan, Lane & White (AMR 1999)

  • Organizational learning occurs at 3 levels: individual, group, and organization, through
    • Intuiting
      • individual level
    • Interpreting
      • individual and group levels
    • Integrating
      • group level
    • Institutionalizing
      • organizational level

Knowledge management