Improving Bottomlines through Knowledge Management

1. Philippine Exporters Confederation, Inc. 2nd Quarterly General Membership Meeting July 13, 2010; 1:30 – 5:30 pm; Sofitel Hotel Improving Bottomlines through Knowledge Management Elena Avedillo-Cruz VP & Managing Director Center for Knowledge Management Development Academy of the Philippines

2. Outline • Why the Need for KM? • Philippine Quality Award (PQA) Performance Excellence Framework • What is Knowledge? • Data, Information, Knowledge • Explicit vs. Tacit • What is Knowledge Management?

3. Why the Need for KM?

4. Signs that you need to manage your knowledge in the organization People are constantly re-inventing the wheel & duplicating efforts  People do not know who to approach or where to go when they need information to solve a problem There is no clear direction as to where the organization is heading and the reason for its existence Mistakes are frequently committed twice or repeatedly

5. Signs that you need to manage your knowledge in the organization Knowledge is either fiercely protected by individuals or shared reluctantly by individuals when told to do so  Knowledge sharing, if any, is limited to a few people.  “Story-telling” or oral communication of information and knowledge is common Knowledge is lost when employees leave the organization

6. “The only thing that gives an organization a competitive edge, the only that is sustainable is what it knows, how it uses what it knows, and how fast it can know something new!” Knowledge - the Key to the Future Knowledge Organization Laurence Prusak

7. CORE PROCESSES/ CAPABILITIES Philippine Quality Award Criteria for Performance Excellence Framework: A Systems Perspective ORGANIZATIONAL PROFILE: ENVIRONMENT, RELATIONSHIPS, and CHALLENGES KEY Organizational Performance RESULTS 5 Workforce Focus 2 Strategic Planning 7 Results 1 Leadership 3 Customer and Market Focus 6 Process Management SYSTEMATIC KNOWLEDGE MANAGEMENT PROCESS 4 Measurement, Analysis and Knowledge Management Baldrige National Quality Program, Criteria for Performance Excellence

8. Importance of KM • Knowledge transfer has become increasingly important to any organization • Knowledge is now recognized as the most valuable intangible asset • Knowledge has become a key driver for competitive advantage: productivity, quality, and innovation (and more)

9. What is Knowledge?

10. Knowledge vs. Data vs. Information DATA INFORMATION KNOWLEDGE Unorganized Numbers, Words, Sounds, Images (i.e. cycle time or turnaround time) Data Arranged/ Processed Into Meaningful Patterns (i.e. correlation between cycle time and customer satisfaction index) Information Put Into Productive Use, Made Actionable (i.e. process evaluation and improvement) Knowledge Management, Robert J. Osterhoff, 2005

11. Two Types of Knowledge Knowledge Knowledge • Explicit • Policy manuals • Work processes, • admin procedures • Strategic plan • Website • Tacit • Know how • Experience • Personal talent • Intuitive • Innovative • Documented • Codified • Archived • Not • Documented • Difficult to • identify Knowledge Management, Robert J. Osterhoff, 2005

12. What is Knowledge Management?

13. APO KM Definition KM is an integrated approach of creating, sharing and applying knowledge to enhance organizational productivity, profitability and growth. 13

14. What’s Really New About KM? Knowledge Management is the discipline of enabling individuals, teams, and entire organizations to collectively and systematically create, share, and apply knowledge to better achieve their objectives

15. The Bottom Line for KM What knowledge, if it could be better managed, would make a big difference to achieving our objectives?

16. What is the APO KM Framework?

17. APO KM Framework: Background • Commenced in September 2007 • Representation from China, India, Japan, Malaysia, Philippines, Singapore, Thailand, and Vietnam • Developed a framework that is applicable to all APO member countries • Considerations • Easily understood by APO member countries • Can be applied in any country and industry

18. Apply Identify Create Share Store APO KM Framework OUTCOMES Societal Capacity Productivity Growth KNOWLEDGE PROCESS Learning Innovation ACCELERATORS Processes People Vision Mission Organizational Capability Individual Capability Technology Leadership Learning Innovation Quality Profitability Team Capability

19. APO KM Framework • Starting point of the KM framework is the Vision and Mission of the organization • KM meets the business objectives of the organization • There are three levels in the framework: • Accelerators • Knowledge Process • Outcomes Vision Mission

20. Accelerators • Accelerators help to propel and speed up the KM initiative in the organization • Four accelerators can be identified: • Leadership • Technology • People • Processes ACCELERATORS Processes People Vision Mission Technology Leadership

21. Accelerator: Leadership • Drives the KM initiative in the organization • Ensures alignment of KM strategies and projects with the mission and vision of the organization • Provides support and resources for the implementation of KM projects

22. Accelerator : Technology • Accelerates the knowledge process through effective tools and techniques to enable participation across time and distance (e.g. Groupware, collaborative workspaces) • Provides a platform for retention of organizational knowledge

23. Accelerator: People • People are users as well as generators of knowledge • They create and possess intellectual capital • Trust is a prerequisite for knowledge sharing

24. Accelerator: Processes • Social and technological steps that enhance the contribution of knowledge in the organization • Systematic and effective processes can contribute to improving organizational productivity, profitability, quality, and growth

25. Knowledge Process • Refers to knowledge development and conversion processes • Five steps in the knowledge process: • Identify • Create • Store • Share • Apply

26. Knowledge Process Step – Identify • Initial crucial step of the knowledge process • Critical knowledge needed to build the core competencies of the organization is identified • The knowledge gaps in the organization are identified in this step

27. Knowledge Process Step – Create • Addresses knowledge gaps through knowledge conversion and generation of new knowledge • Many ways to create new knowledge: • Individual level • Team level • Organizational level

28. Knowledge Process Step – Store • Collection and preservation of organizational knowledge • Various forms of storage • Organized for easy retrieval

29. Knowledge Process Step – Share • Regular and sustained exchange of knowledge • Fosters continuous learning to achieve business goals • Mutual trust and benefit help foster a culture of sharing • Technology can be used to enhance sharing

30. Socialization Yokogawa (Thailand) Ltd.

31. After Action Review, Lessons Learned and Best Practice Yokogawa (Thailand) Ltd.

32. Knowledge Process Step – Apply • The use and reuse of knowledge in the organization • Translates knowledge into action • Knowledge only adds value when it is used to improve products and services

33. Learning & Innovation • Knowledge process enables learning and innovation at all levels and areas in the organization • New products, services, processes, markets, technologies, and business models • Build individual, team, and organizational capability leading to societal capacity

34. Outcomes • Expected outcomes: • Individual capability • Team capability • Organizational capability • Societal capability • Leading to: • Productivity • Quality products and services • Profitability • Growth

35. Apply Identify Create Share Store APO KM Framework OUTCOMES Societal Capacity Productivity Growth KNOWLEDGE PROCESS Learning Innovation ACCELERATORS Processes People Vision Mission Organizational Capability Individual Capability Technology Leadership Learning Innovation Quality Profitability Team Capability

36. What is the APO KM Implementation Approach?

37. 4Ds 38 38

38. Case Study Migakiya Syndicate: Cluster KM for Businesses Co-Creation among SMEs Showcase the possibilities of KM for SMEs, which can share and create core knowledge and skills beyond their individual enterprises – and thus establish strong business clusters

39. Organizational Profile • Industry: Local consortium of small manufacturers specializing in metallic polishing in Niigata, Japan • Date of Establishment: 2003 • Management : Chamber of Commerce and Industry in Tsubame, Japan • Business Domain: Joint operation of metallic polishing • Number of Member Companies: 47 (as of March, 2009)

40. Background of KM Initiative • Shift from manufacture of Japanese nails to copperware and then to metallic Western tableware • Half of Western tableware imported by the U.S. were made in Tsubame in the early 1970s • Lower labor cost (PR China) resulted in decline of Tsubame craftspeople doing metal polishing from 1,700 to 600 • In 2001, managers of more than 30 metal-polishing companies in Tsubame consulted with CCI

41. Background of KM Initiative • Twice a month discussions for 6 months with CCI • Benchmarking visit to Chinese manufacturers of Western tableware in 2002 • Realization of metal polishing as their core competency, not tableware production • Plan for consortium to market and operate metal-polishing industry • Continued benchmarking with several similar business consortiums in Japan

42. Background of KM Initiative Three Big Obstacles • Information Flow Who chooses which companies will get orders – and how? • Production & Quality Management Who is in charge of quality, cost, and delivery of products/services, and will they manage this process? • Public Relations How will we market? Will anyone order metal-polishing services through the Internet?

43. KM Implementation Collaborative KM: (1) The Model Website accepts orders from industries (2) Systems of Order Intake Manual for collective order intake (3) Technological Innovation Identification of magnesium polishing as a potential area of needed knowledge and skills (4) Public Relations - Search Engine Optimization (SEO) - News releases - Promo beer mug

45. Results Achieved • Gain of new business • metal polishing of digital cameras, cases for hard disks, motorbike parts, building products industry • revenue reached JPY20M 1st yr and increased to JPY30M 2nd yr and JPY100M in the last yr. • Increase of craftspeople’s motivation • sharing knowledge and skills • improve technical capabilities • increase their own business

46. Key Lessons • See knowledge and skills from a different perspective • redefinition of their core knowledge and skills • Build relations of trust before IT infrastructure • trust contributes to successful KM, especially collaborative KM among multiple companies • Form a business cluster among SMEs • sharing of specialties can boost capability of small firms and build up opportunities for larger businesses

47. Learning is not compulsory, neither is survival - W. Edwards Deming

48. THANK YOU!!!