Knowledge Management
What, how, and why

A critical perspective
Table of contents
Executive summary........................................................................................................................................ 3
What is Knowledge Management?................................................................................................................... 4
Knowledge Management: An Eye Opener........................................................................................................ 5
How to Lay the Knowledge Foundation............................................................................................................ 6
How to embrace and embed knowledge management?..................................................................................... 7
How to get the knowledge advantage?............................................................................................................ 8
Knowledge management… Doing the right things or doing the things right........................................................ 9
GE Workout................................................................................................................................................. 10
The paradoxical nature of knowledge............................................................................................................. 12
Knowledge in professional service firms........................................................................................................ 13
Knowledge and power shift........................................................................................................................... 14
Conclusion................................................................................................................................................... 15
Group members........................................................................................................................................... 16
Executive summary
Knowledge is the true organ of sight, not the eyes
Panchatantras


The process of globalization and the emergence of knowledge economy/knowledge society have lately been significantly influential in addressing the characteristics of an organization and in turn defining its culture. Knowledge workers are emerging as most important asset of an organization that is competing in the knowledge economy. With focus now being directed to newer and newer inventions and innovations, the increasing complexity of new technologies make retention and archiving of knowledgebase a crucial imperative. This project is about the emergence of knowledge economy, how it has evolved and affected the organizations across the world and in turn those who are contributors to this.

Organizations of any type can only stay competitive if they treat knowledge as a valuable asset and manage it consciously. Also discussed here is why knowledge management has come to the forefront of the minds of many knowledge managers because the productivity of these workers can be reliant upon the technology available in the workplace. From a critical perspective, though knowledge management allows workers to progress in their areas of specialty without having to backtrack to find bits of tacit knowledge that may have been lost through improper management, it also promotes an isolating exclusivity for the knowledge workers and hence redundancy factor becomes a threat in such cases.

What is Knowledge Management?
Knowledge management (KM) is a process that helps organizations find, select, organize, disseminate, and transfer important information and expertise necessary for activities such as problem solving, dynamic learning, strategic planning, and decision making. To define "knowledge management" we have to pull apart the two parts of that term.

Knowledge
Knowledge is part of the hierarchy made up of data, information, knowledge, and wisdom. Data are raw facts. Information is facts with context and perspective. Knowledge is information with guidance for action. Wisdom is understanding, which knowledge to use for what purpose.

Management
Management is part of another hierarchy that includes supervision, management, and leadership. Supervision is dealing with individual tasks and people and works at the operational level of an organization or sub-unit. Management is dealing with groups and priorities at the tactical level. Leadership is dealing with purpose and change at the strategic level. Hence Knowledge management is concerned with the exploitation and development of the knowledge assets of an organization with a view to furthering the organization’s objectives.

Knowledge Management: An Eye Opener
The new millennium is in the midst of explosive change witnessing intense competition amongst the domestic as well as the international players. Little wonder then, knowledge management is fast emerging as a core strategy that organizations worldwide are adopting to manage and leverage organizational knowledge, for sustainable business advantage. In this world of rapid change, we have to create new knowledge and ideas constantly. We get that by looking at what we know, and applying it to what we do not yet know. According to the Gartner Group, Knowledge Management (KM) emphasizes that human interaction is the focal point surrounding the collection, distribution, and re-use of information. In today’s competitive economy it is critical for organizations to manage knowledge in a way that positively impacts decision making and customer service.

The changes taking place in the world economy have made knowledge management a business necessity, at least for large multinationals that operate on a global scale, or hope to. Managing your company's knowledge more effectively and exploiting it in the marketplace is the latest pursuit of those seeking competitive advantage. The organizations that are driven by knowledge are the ones that will succeed. The combination of global reach and speed compels organizations to ask themselves, “What do we know, who knows it, what do we not know that we should know?” The benefits of knowledge management are clear: to maximize internal efficiency, internal co-ordination, service to customers, and overall profitability. For this to happen, an organization needs to capture the tacit knowledge residing in its people, and keep it up to date in a form that is "accessible-on-demand" as well as "pushed-out-as-useful". Today, organizations are employing various novel and modern methods to transform static data and information into a dynamic knowledge base for profitable re-use.

How to Lay the Knowledge Foundation
Most organizations already have a vast reservoir of knowledge in a wide variety of organizational processes, best-practices, know-how, customer trust, MIS, culture and norms. However, this knowledge is diffused, and mostly unrecognized. Hence the need for knowledge management, or what can be called a knowledge foundation. There are four key features to this foundation:
· A knowledge-based strategy
To push ahead into new products, markets, and ways of doing business requires information and knowledge.
· A knowledge-sharing culture
To maximize the impact of information collected and knowledge acquired, knowledge workers are being encouraged to share their best practices, new techniques and lessons learned with their colleagues, wherever they are in the organization or around the world.
· Technical support infrastructure
Huge investments are being made in hardware and software to ensure that the information and knowledge available within an organization is available to the people who need it and in a form that they can use. Given the costs involved, it is essential that these changes be well managed.
· Business research and analysis
There is increasing concern that despite the flood of information available, it is often in a form that is not useful or even useable. Increasingly, organizations are turning to experts who can interpret the information and make it valuable.
How to embrace and embed knowledge management?
Simple, if you want to survive you must improve. The full implementation of knowledge management has significant consequences for the structure and culture of the organization, and the roles of managers and workers. There are a number of questions that senior managers should seek to answer before moving to a full implementation of knowledge management:

• What is the central objective of knowledge management within an organization? Is the interest, for example, in leveraging implicit knowledge, retaining knowledge of employees as they exit the organization, or in more efficient access to knowledge repositories?
• What are the levels at which knowledge management must be considered, and how can it be executed at the different levels? Can knowledge management be utilized for specific projects or work groups, without impacting upon the entire organization?
• What is the scope of knowledge management in relation to the types of knowledge that it should embrace? The main divide is between implicit and explicit knowledge, but there may also be different types of focus. For example, the emphasis may be on competitor profiles, or on technical know-how.
• What are the technologies and techniques to be employed in knowledge management? Is the priority document creation and management technology or on group working technologies, such as Lotus Notes?
• What organizational roles are needed to support knowledge management, and what are the associated competencies that both individuals and organization need to acquire? Organizations have recognized that successful knowledge management initiatives depend on the commitment of top management, and the contribution of senior consultants or experts.

There will be no simple answers to these questions because in a diverse and changing business environment, the nature of knowledge management is likely to be ever changing. Indeed knowledge management in different organizations may serve different organizational purposes. There is no doubt, however, those organizations need to develop the capacity to be able to survive in a knowledge-based, global marketplace. An understanding of the potential offered by knowledge management and the way in which knowledge management can be used effectively within their business will become increasingly crucial for businesses and other organizations.

How to get the knowledge advantage?
How can companies use knowledge to secure a strategic advantage? In a nutshell, it’s about generating greater value through the knowledge in products, people, and processes:

• Knowledge in Products: 'Intelligent' or 'smart' products can command premium prices and be more beneficial to users. One example is the 'intelligent' oil drill that bends and weaves its way to extract more oil than ever from the pockets of oil in underground formations.
• Knowledge in People: "Our most valuable asset", according to many company reports, although the actual way they are treated and managed often belies this. Learning Organization' programs, is one way of nurturing and applying underutilized talent.

Knowledge in Processes: In many companies there are often differences in performance levels among different groups performing the same process. Closing such a gap saved Texas Instruments the cost of one new semiconductor fabrication plant (a $1 billion investment).

These are not the only ways that companies are creating strategic advantage through knowledge but give a flavor of what is possible. Others include active management of your intellectual property portfolio of patents and licenses, and creating new businesses that exploit your internally generated information and knowledge.

"Knowledge is power. Knowledge shared is power squared."
The advantages of sharing knowledge and disseminating information can be turned into a social benefit. Social capital is seen as a major contributor to power relations which can hamper knowledge dissemination. The study of two Belgian companies to reinforce the same revealed that social capital often enhances knowledge sharing. The human element of one’s political, social desires promotes only a selective form of knowledge sharing. Aristotle has captured the essence of human greed for power in a society by his classification of people into "political animals"/"social animals." The best example to this in the modern world is Web-based forums and mailing lists.

Knowledge management… Doing the right things or doing the things right
Says Dr. Dr Yogesh Malhotra, founding Chairman and Chief Knowledge Architect of the BRINT Institute, LLC. Being efficient without being effective certainly leads to business failure - as in the case of the ultra-efficient buggy whip companies that disappeared into oblivion along with horse-drawn carriages. However, companies that can more readily adapt to radical discontinuous change by rethinking their business models, best practices and business value propositions are ahead in the game of 'doing the right thing.

Some have defined KM as getting the right information to the right person at the right time. However, in a world of radical discontinuous change, there are no programmable systems that can predict in advance what the right information, right person, or the right time will be at any given point in the future. This can also help understand the key distinction between 'doing the right thing' and 'doing things right'. The relatively stable and unchanging environment of the past allowed the luxury of predicting, pre-defining and pre-determining the future based on past data. Businesses could once define their business models, business practices and business value propositions - thereafter, the key challenge remained that of optimization for increased efficiencies: of 'doing things right'.

However, changing customer trends, competitive products, and services and changing societal and governmental pressures make the existing business models, business practices, and business value propositions obsolete. Over the past decade, the pace of such changes impacting business enterprises has become more fickle and more rapid than at anytime in the past. Most of us are aware of the bloodbath in the desktop computer industry that eliminated many companies competing for business worldwide. However, some companies realized that the only performance outcomes that matter are the ones the customers really care about. They have been savvy in tailoring and growing their customer value propositions around what the customers really needed rather than what they wanted to sell to customers. Dell has been an agile player that has been able to refine and play the game of 'doing the right thing' again and again, first in desktops and later in web hosting, printers, PDAs, and storage. In the longer run, companies that can figure out the 'next right thing' and prepare well in advance to ride the next wave will be more effective in the longer run. However, it goes without saying that 'doing the thing right' also matters once you have figured out what the next cash cow will be.

KM…Is it the ultimate competitive advantage?
Knowledge is the ultimate competitive advantage only if understood from an action-oriented perspective. All the information technologies and data cannot assure competitive advantage in the long-term, nor do decisions that are made - if made at all - drawing upon insights hidden in information and data. Only translating information and decisions into actionable value propositions can assure competitive advantage. Hence, in this perspective, knowledge lies in action: in effective utilization of data and information resources for actionable decisions and, most importantly, in execution. As elaborated earlier, business managers need to define and continuously refine their business value propositions to ensure that they are not marginalized by radical discontinuous change. Therefore, this knowledge management strategy and its execution with the aid of information, communication, and collaboration technologies can provide a greater chance at being 'great' than is otherwise possible.
GE Workout
Two defining aspects of the Work-Out
1. Employees have to be able to make suggestions to their bosses face-to-face.
2. Employees have to be able to get a response – on the spot, if possible.

Key benefits of the Work-Out
• Reduces bureaucracy
• Empowers people
• Continuously reinvents ever-more-effective ways of doing business

Work-Out's four major goals
1. Build Trust. Encouraging employees to speak out critically inside the company about GE and the way they perform their jobs without negative consequences to their careers.
2. Empower Employees. Capitalizing on employees' knowledge and their unique perspective through granting them more power in exchange for expecting them to take more responsibility for their jobs.
3. Eliminate Unnecessary Work. Getting employees work smarter, not harder.
4. Create a New Paradigm for GE. Letting GE employees define and create a boundaryless organization in which the entire workforce works toward common goals. Encouraging employees to identify problems and come up with solutions.
5. Technologies to support Knowledge Management

There are a number of technologies commonly thought of when the term "knowledge management is intoned. The following diagram depicts the technologies that support knowledge management systems:

• Work flow
• Extranets
• Project management
• Document management
• Groupware
• Data warehouse
• Decision support systems
• Intranets
• Web conferencing

Pitfalls
KM has very few downsides as such. The problems that arise are basically due to
• Inadequate planning and implementation of the KM program in an organization.
• Non-integration of KM into the core operations of the business.
• Not adapting/size fitting the knowledge gained from one process for another.
• Insufficient career pathing for individuals interested in KM thereby reducing overall salability of the concept.


Two Defining Aspects of the Work-Out
1. Employees have to be able to make suggestions to their bosses face-to-face.
2. Employees have to be able to get a response – on the spot, if possible.

Key Benefits of the Work-Out
· Reduces bureaucracy
· Empowers people
· Continuously reinvents ever-more-effective ways of doing business
Work-Out's Four Major Goals
1. Build Trust. Encouraging employees to speak out critically inside the company about GE and the way they perform their jobs without negative consequences to their careers.
2. Empower Employees. Capitalizing on employees' knowledge and their unique perspective through granting them more power in exchange for expecting them to take more responsibility for their jobs.
3. Eliminate Unnecessary Work. Getting employees work smarter, not harder.
4. Create a New Paradigm for GE. Letting GE employees define and create a boundaryless organization in which the entire workforce works toward common goals. Encouraging employees to identify problems and come up with solutions.

The paradoxical nature of knowledge
A few of the fundamental concepts supporting knowledge management are now being questioned. Critics say that “Knowledge is not a “thing”, or a system, but an ephemeral, active process of relating. If one takes this view then no one, let alone a corporation, can own knowledge. Knowledge itself cannot be stored, nor can intellectual capital be measured, and certainly neither of them can be managed.” For all that this extreme position does bring out that mainstream theory and practice have adopted a Kantian epistemology in which knowledge is perceived as a thing, something absolute, awaiting discovery through scientific investigation. The question of the manageability of knowledge is not just an academic one. Organizations have increasingly discovered that the tacit and explicit distinction tends to focus on the container, rather than the thing contained.

Three heuristics illustrate the change in thinking required to manage knowledge:
1. Knowledge can only be volunteered; it cannot be conscripted for the very simple reason that one can never truly know if someone is using his or her knowledge. I can know they have complied with a process or a quality standard. But, we have trained managers to manage conscripts not volunteers.
2. We can always know more than we can tell, and we will always tell more than we can write down. The nature of knowledge is such that we always know, or are capable of knowing more than we have the physical time or the conceptual ability to say. I can speak in five minutes what it will otherwise take me two weeks to get.
Knowledge in professional service firms
From a personal point of view, being part of a professional services firm, I would say the most simple and humble question would be “what is knowledge?” From strategic and organizational management perspective, it would be easier to look at knowledge in terms of what it is not. It is not data and it is not information. Data are objective facts, presented without any judgment or context. Data become information when categorized, analyzed, and placed in context. Information, therefore, is data endowed with relevance and purpose. Information develops into knowledge when it is used to establish connections, make comparisons, and assess consequences. Knowledge can be seen as information that comes laden with experience, judgment, and values.

The primary activity of a professional service firm is the application of specialized technical knowledge to the creation of customized solutions to clients’ problems. Technical and client-based knowledge are, therefore, the key income-generating assets.

The technical knowledge of a professional service firm encompasses sectoral, organizational, and individual forms of knowledge. Sectoral knowledge is generic, widely shared by all firms in a specific sector, and may be formally codified through the syllabus of professional exams. Organizational knowledge is firm-specific and consists of distinctive products and processes which have been developed and disseminated within a firm, either through formalized knowledge management systems or through ad hoc methods of apprenticeship and socialization. Individual technical knowledge is proprietary to each professional and is derived from his or her previous work experience, education, and unique mix of client assignments.

Knowledge represents a source of power for individuals, particularly within a professional service firm. By sharing valuable knowledge with a colleague you run the risk of diminishing your value to your firm. Potentially you are no longer indispensable. To put forward an argument, knowledge should be shared with a colleague, management, or organization under three conditions. The first is reciprocity. Your time and energy are finite; you will only take the time if you think you are likely to receive valuable knowledge in return at some future point. The second is reputation enhancement. It is in your interests to be viewed as an expert within your organization; if you do not have a reputation for expertise your knowledge cannot represent a source of power. The third is altruism (or self-gratification). There will be some subjects you care passionately about and you will seek opportunities to discuss them with others. Sharing of knowledge could be viewed as exchange between "buyers" and "sellers", with reciprocity, reputation, and altruism/self-gratification functioning as payment mechanisms.

The distinction between tacit and explicit knowledge is not absolute. Much of our knowledge remains tacit simply because we have not attempted to make it explicit. It is this unarticulated yet codifiable knowledge that presents the greatest opportunity for knowledge-sharing within organizations. As outlined below, this process of knowledge-sharing is far from straightforward.
Knowledge and power shift
As quoted in futurist Alvin Toffler’s Power Shift, We are all in a power shift era. Power deals with knowledge and the role it plays in our lives. Inadequacy of knowledge leaves one alone in the battle, in war or in marketplace. Knowledge, utilization of knowledge, and retention of knowledge are the keys to success. Alvin Toffler gives many examples on how knowledge has changed lives in his incredible book Power Shift. Knowledge leads one to power, the power that would not be questioned by others. But the shifting of power has become more fluid; it can shift from one person to another quickly.

To begin with, the chanting nature of economies across the world from agrarian to industrialized and not to service-oriented, knowledge has emancipated the possessors in overcoming the obstacles. Manufacturers were once in control before our digital age. One example Alvin talks about is the Gillette razor company and the power it had. Gillette had all the control of its product in the beginning. Gillette controlled how many razors went in each store. How many different styles/brands of Gillette’s a store would display. The store owner had no control. To quote another example, while pursuing a major bank networking account, AT&T used knowledge management tools to integrate a global sales team’s efforts. The company set up an interactive web site offering competitive research fed by timely information from the field, which was accessed by the sales force. IT gave the team the agility to win the deal during an arduous sales cycle. Based on its success, AT&T began using knowledge management techniques to support its entire global sales force.

Scene 1: Earlier, manufacturers used to keep their competition running because of the information they knew. They had the know-how how to gather knowledge about their consumers. From this knowledge power was born. The invention of bar-codes shifted power from the manufacturer to the retailer. Bar-codes reveal a lot of information about the consumer. A retailer now has information about their consumer from these bar-codes. The invention of computers for bar-codes has shifted the power from the manufacture to the retailer. The reason….knowledge management.

Scene 2: Today these same manufacturers beg for space in stores. Retailers know what the customer wants from the information it collects through its barcode system. A very good example of how power can shift because of knowledge management and use of technology. Deeper knowledge permits us to reach high speed levels that produce items as a faster and better efficiency.

Invention and innovation in network computing and Internet has opened the floodgates of information the world to anyone. LANs and WANs can connect companies across the globe. It doesn't discriminate with the nature of the information to be sought the gateway to the information is only a 'click' away. Organizations are becoming increasingly dependent on their electronic networks for billing, ordering, tracking, and trading; for the exchange of design specifications, engineering drawings and schedules; and for actually controlling production lines remotely. Once regarded as purely administrative tools, networked information systems are increasingly seen as strategic weapons, helping companies protect established markets and attack new ones.

Conclusion
In summary, Knowledge Management involves connecting people with people, as well as people with information. Creating competitive advantage today requires developing and leveraging organizational knowledge. Leading edge firms consider their knowledge to be a strategic asset and actively and explicitly manage it as such. It is a management philosophy, which combines good practice in purposeful information management with a culture of organizational learning, in order to improve business performance. It's up to you to lead your teams to craft, communicate, and instill KM practices throughout your organization. Knowledge for its own sake does not help the organization unless it turns into action. To add value, give a competitive edge, create new opportunities, and improve profit, organizations, teams and individuals will have to make a real change in the way they see and do things. This means going beyond analyzing, reporting, benchmarking and sharing. They have to transform information and knowledge into action.
Group members: