Is there a need to 'manage' knowledge?

Everyone in business intuitively appreciates the value of knowledge. People need access to knowledge in order to work, and as they work, they learn, or generate new knowledge.

To get their job done well, individuals need to know what to do and how to do it.

To make good decisions, they need to know what the true situation is in terms of relevant data or information, and be able to draw on past experiences or analyses or records to judge the implications of alternative courses of action.

As work is done, people learn. This happens naturally to a greater or lesser degree depending on individual personality and intelligence, and on the degree to which the corporate environment encourages independent action and experimentation.

It is also typical of businesses that, in various ways, they explicitly set about the task of learning. They do this by conducting Research and Development and by systematically collecting and analysing data about their operations, customers, and markets.

If all this happens now, why is there a need to 'manage' knowledge? The answer lies in three relatively recent major developments in corporate environments:

• The explosion of communications technology

• The advent of the 'knowledge worker'

• The widespread adoption of 'Learning Organisation' tools and techniques, otherwise known as process-oriented management

Explosion of communications technology

Before the proliferation of corporate networks and application software to support general communication, access to knowledge was limited to personal contact and paper-based reports and manuals. However, production time and cost, and the slow speed of paper-based communication, place severe limits on its practical value.

The advent of the World Wide Web changed this dramatically. Electronic communication became fast, cheap and flexible. However, when organisations came to utilize this new communication channel they often found their existing paper-based knowledge in poor condition. Their desire to use the new communication channels cast a bright light into some dark corners. They found that existing documented knowledge was often:

• badly written and not 'voiced' for its intended audiences

• disorganised, ill-structured, inconsistent, out-of-date, and of questionable authority

• not supported by existing management structures and responsibilities

... or simply not there

In short, the quality and quantity of readily communicable knowledge was low. This is an issue that needs to be managed.

Advent of the 'knowledge worker'

Another by-product of rapid technological development has been the changing nature of the workplace and the demands placed on employees. As lower-level and repetitive tasks are increasingly automated, two mutually reinforcing trends take place:

• To do the remaining more complex work, employees have to apply greater knowledge and adapt quickly through learning - hence they must become 'knowledge workers'

• Improvements in production capability and flexibility enable new products and services to be brought to the market more quickly and cheaply; this rapidly increases the level of competition and the rate of market change, and the need for employees to learn and adapt quickly

Supporting knowledge workers' enhanced needs for access to knowledge, and for capturing, cycling and leveraging the knowledge they generate, are issues that need to be managed.

'Learning Organisation' tools and techniques

Under the banners of 'Continuous Improvement', 'Total Quality Management', 'Total Quality Control', 'Quality Assurance', or simply 'Quality Management', organisations have adopted and benefited from the concepts of process-oriented management.

Collectively these concepts represent the notion of the 'learning organisation'; an organisation that is constantly re-making itself by staying close to its customers and suppliers, and changing and adapting its processes, products and services to better meet customer needs and improve operating efficiency. Managers in learning organisations consciously encourage and support constant investigation and innovation by staff to improve the way their organisation functions.

Even those organisations that have not explicitly implemented the above programmes have commonly adopted many of the management tools and techniques associated with them. Tools and techniques such as:

• customer-focused data collection and analysis

• customer-focused accountability

• employee empowerment

• statistical process control

• quality assurance systems based on international standards

• team-based problem solving and process improvement

• benchmarking and 'best practice' implementation

• business process re-engineering

Although the names of the original programmes are now much less commonly used, the concepts embodied in them have wrought a fundamental and permanent change in the way businesses are managed. The individual tools and techniques involved have become an integral part of accepted management practices.

Process-oriented management is 'knowledge work' at the corporate level. It systematically generates new and better knowledge about how best to tackle the thousands of interdependent tasks that an organisation relies on in order to be effective and to improve. But a major problem for process-oriented management is getting it to 'stick'. Like an open fire, much of the heat is going up the chimney. This is because:

• the techniques used rely on close contact between individuals, so the benefits of the knowledge generated have tended to be local rather than necessarily organisation-wide

• relatively little emphasis has been placed on documenting processes for audiences wider than immediate team members, thus limiting the ability to leverage the new knowledge generated

• beyond the 'workplace team' level, management and communication structures generally do not exist to support process improvement on division-wide and company-wide levels

• initiatives that share process-oriented approaches are often kept separate with their own implementation teams; for example 'Quality Assurance' is seen as different to 'Continuous Improvement', and in turn 'Best Practice' is often made distinct from 'Business Process Re-engineering.

These are problems of knowledge that need to be managed if the organisation is to get maximum benefit from its process-orientation.

What next?

In summary, the three major developments in corporate environments:

• explosion of communications technology

• advent of the 'knowledge worker'

• widespread adoption of 'Learning Organisation' tools and techniques

... have created both an overwhelming need and a golden opportunity to overtly manage knowledge for the betterment of an enterprise. The next question is – how? It seems to be a matter of exploiting communications technology, feeding knowledge workers, and leveraging process-orientation. 

We looked at the question, "why do we need to manage knowledge?" We uncovered three answers:

• the rapid development of cheap electronic networks and universal standards for encoding and displaying information (aka web technology) has created an opportunity to make information readily available on a massive scale

• an increasing requirement in organisations for 'knowledge workers' (people who need to learn new things constantly in order to keep up with customer demands and adapt to rapidly changing processes and technologies) is putting pressure on organisations to facilitate and support their knowledge development

• competitive pressures are forcing organisations to continuously improve product and service quality and reduce costs by managing knowledge to improve and automate organisational processes, in effect, by leveraging their process-orientation

The next question then is how to go about managing knowledge if these are the imperatives involved?

Leveraging knowledge - interaction, codification, encapsulation, and automation

Exploiting communications technology, feeding knowledge workers, and leveraging process-orientation are the three imperatives for managing knowledge. Responding to these imperatives involves putting processes in place that:

• utilise electronic networks to distribute information quickly, make it easily accessible, and keep it up-to date

• encourage individuals to share their knowledge, and develop it further through innovation and interaction with others

• transform innovations into formal corporate-wide processes that are clearly documented and widely communicated

• leverage processes by computerising and automating them, and documenting user information

• ensuring that automated processes can be effectively developed by documenting them for maintenance and enhancement

When all these things are done, the organisation is managing its knowledge. These things represent a process of 'leveraging' knowledge through four 'levels':

• Interaction

• Codification

• Encapsulation

• Automation

Interaction

The first level - interaction - is the process of personal communication. That is, people simply talking to each other and exchanging views, imparting information, tossing around ideas, and so on. This occurs naturally all the time of course but recognising its importance in the transfer and development of knowledge within an organisation encourages the implementation of conscious strategies to support and improve it.

Knowledge Management at this level of the leveraging process means doing things like organising forums and seminars (including things like video conferences), allowing time for team discussions, creating a corporate 'yellow pages', sponsoring 'tech talks' by internal experts, and even designing office layouts that facilitate easy communication.

It also means equipping staff with practical techniques aimed at helping them to collect and analyse data, clarify things, and generally get at the truth. And also to generate ideas and to test them properly before they are implemented.

Codification

Codification - the next stage of leveraging knowledge - is the process of producing a 'knowledge' or 'intellectual' artefact. This is anything that allows knowledge to be communicated independently of its holder. Most commonly the artefact is a document. Writing things down remains the most compact and powerful means of communicating knowledge widely and cheaply. But an intellectual artefact may also be a picture, a sound recording, or a film or video.

The ability to communicate knowledge widely and cheaply gives an organisation enormous leverage. This is a major step up from Interaction, which is limited in broadcast scope to those within hearing. Documents can be distributed widely and cheaply over a Corporate Intranet and they persist over time, which makes them available for reference as and when they are needed by both existing and new staff. They constitute the only real 'corporate memory' of the organisation.

But there are costs and difficulties associated with Codification. To manage knowledge effectively at this level of leveraging, the organisation needs to address a major issue of quality. Quality in this case covers a number of factors:

• accuracy

• readability /understandability

• accessibility

• currency

• authority

If these quality characteristics are not present in the ' intellectual artefact' concerned, be it a document, sound recording, picture, or film recording, then its value as a vehicle for transferring knowledge will be low.

Encapsulation and Automation

Encapsulating knowledge means embedding it in a way that creates a tool for people to use. This may be a physical device (a hammer or a screwdriver is embedded knowledge), or more commonly in business it will take the form of software.

When knowledge is embedded, it is leveraged. Having a tool available invariably means being able to perform a task more quickly and effectively. If you have a hammer, you can abandon tying things together. Not only does this speed up and improve construction, it makes it possible to construct new and more complex things. The same argument applies to, say, a clever new financial software system. It may enable a company not only to operate more efficiently but also to offer new and different services.

Automation is encapsulation taken to the extreme. In this case, knowledge is embedded so effectively in an artefact that it can perform tasks autonomously.

The pivotal role of codification

'Leveraging' knowledge then is all about getting maximum benefit from what people know and learn. The levels of leverage may be summarised as follows:

• knowledge held by a particular person allows that person to be more effective

• if people interact to share their knowledge, everyone involved increases their knowledge and becomes more effective

• if knowledge is codified in a material way (ie written down or otherwise captured), then it can be shared much more widely both in terms of audience and time duration

• if knowledge is encapsulated or automated it is leveraged still further because it creates tools that factor-out the need to apply individual knowledge to a task or range of tasks

But if knowledge is encapsulated or automated by way of an artefact (physical tool or software), then that knowledge must also be codified to enable that artefact to be understood, maintained and improved.

If we take the example of even a very simple tool such as a hammer, there is benefit to be gained from written knowledge about how best to use it and how best to maintain it. If we want to improve it, we will need to refer to knowledge about how it is constructed, the materials it is made from, how it performs and how it is manufactured.

Thus, in the leveraging process, codification plays a pivotal role not only by significantly leveraging knowledge in its own right, but also supporting and enabling the higher levels of encapsulation and automation.

The table below summarises, in broad terms, how knowledge management is a response to the three imperatives driving it.

We can now take these concepts and incorporate them in a model that can be used to analyse and improve an organisation’s knowledge management activity.

The model contains three key elements representing the main knowledge functions performed by employees, managers, and IT.

These functions are:

These elements are connected as illustrated here:

For shorthand reference, the levels in the diagram are labelled K0 to K3.

The model illustrates that the benefits of knowledge management emerge from a number of sources. At the level of day-to-day employee interaction, environments that support learning and knowledge sharing help all employees to do a more effective job (K0).

Beyond this level, organisational benefits come from leveraging knowledge and embedding it closely into the organisation’s operations. This is done in a number of key ways:

• by continuously standardizing and communicating improvements to attitudes (policies) and actions (procedures) for overall areas of activity (processes) - K1

• by continuously computerizing and automating activities (with associated comprehensive communication) to make them more efficient and free employee time to devote to creative and problem-solving activity – this is the process of ‘encapsulating’ knowledge – K2

• by documenting the functions and internal operations of computerized and automated systems so that they can be easily maintained and improved - K3

In summary, the four levels of potential organisational benefit are:

 

K0	for all employees - employee interaction, knowledge sharing, knowledge culture
K1	for managers - improving, standardizing, and communicating processes
K2	for managers and IT operations – computerizing and automating
K3	for IT operations – documenting computerized and automated systems

The common thread that runs through all these levels of knowledge management is the drive to turn tacit personal knowledge into explicit corporate knowledge so that it can be shared and leveraged.

In practical terms, undertaking knowledge management means:

• taking stock of where the organisation stands in relation to the four knowledge development levels

• identifying, planning and implementing initiatives to strengthen and improve knowledge development at all levels

• monitoring and measuring movement through the levels (that is, from personal skill to standardised process to computerized system) and associated costs and benefits

• educating and motivating managers and employees to participate fully in knowledge development processes

Listed here are some of the issues, and possible responses, that arise at each level (including the artefacts that represent explicit knowledge).

Here are the detailed requirements for implementing a knowledge management development program.

Take stock

Profile the organisation as a whole (purpose, customers, suppliers, core competencies) and also profile each major functional unit (or operating division). Examine the relationships between each functional unit and customers and suppliers by conducting a relationship analysis (customer /supplier map).

Do an initial high-level assessment of the current state of each unit in terms of the K0 to K3 issues identified above. Use this assessment to decide priorities for looking at each major functional unit in detail.

In priority order, assess the current state of each functional unit in detail in terms of the K0 to K3 issues listed above. Identify strengths, weaknesses and gaps in knowledge management.

Plan, and implement initiatives

After taking stock, decide on initiatives to be explored further and planned for implementation. These will be projects aimed at building on strengths, overcoming weaknesses, and filling gaps.

In some cases pilot projects to test effectiveness before full-scale implementation will be planned. In other cases (where the deficiencies to overcome and potential benefits are obvious) full-scale projects for immediate implementation will be planned.

After planning, undertake and manage each project as per standard project management guidelines.

Monitor and measure movement through the levels

Classify, monitor and report projects according to how they move knowledge through levels K0 to K3.

Educate and motivate managers and employees

Implement training programs for continuous improvement techniques, and quality assurance.

Monitor the degree to which each employee contributes knowledge that improves organisational processes.

Monitor the degree to which each manager contributes to the development of computerised systems.

Monitor the degree to which IT managers ensure that knowledge of computerised systems is fully captured and maintained.

Implementation

We have implemented all aspects of the above knowledge management development program for a number of large organizations, using a number of our implementation methodologies.  If you would like more information, please contact us.