Knowledge Management Value Chains

Knowledge Management:A Value-Chain Approach

Albert Simardpresented to

Interdepartmental Knowledge Management Forum

October 27, 2004

An opening thought…

An era in which the key economic resource is knowledge is startlingly different from an era in which the key resources were capital, raw materials, land, and labor.

James Martin CYBERCORP (1996)

OUTLINE

• Knowledge Assets

• Knowledge Value

• Knowledge Management

Knowledge is different from industrial resources

Knowledge Attributes

• Total knowledge is increasing; half-life is decreasing• Knowledge can be in more than one place at one time• Knowledge may be permanent or time sensitive• Knowledge can be used without being consumed• Selling does not reduce supply nor ability to sell again• Buyers only purchase knowledge once• Once disseminated, knowledge cannot be recalled

Thomas Stewart (1997)

Knowledge Costs

• Production cost is independent of the number of users• Reproduction is controlled by users, not producers• Production cost greatly exceeds reproduction cost• Costs accumulate at the front-end of production• The more intangible, the greater the cost discrepancy• Inputs and outputs for creative work are uncorrelated

Thomas Stewart (1997)

Explicit Knowledge

• Knowledge that has been formally expressed and transferred in a tangible form; intellectual property. – databases, statistics, collections– books, publications, reports, documents, correspondence– photographs, diagrams, illustrations– computer code, expert systems, decision-support systems– presentations, speeches, lectures– recorded experiences, stories– materials for education, teaching, and training– laws, regulations, procedures, rules, policies– embedded into products

Canadian Forest Service Explicit Knowledge Assets

0255075100125150175

# o

f Ass

ets

Percent

Number

531 assets; 211 responses

Tacit Knowledge

• Intangible personal knowledge gained through experience and self-learning. It is influenced by beliefs, perspectives, and values. – awareness

– skills

– mental models

– expertise

– judgement

– wisdom

– corporate memoryThe Thinker - Rodin

Intellectual Capital

“Intellectual capital is intellectual material … that can be put to use to create wealth.”

Thomas Stewart Intellectual Capital (1997)

Intellectual capital includes both tangible, material (explicit knowledge) and intangible knowledge in the minds of individuals (tacit knowledge)

OUTLINE

• Knowledge Assets

• Knowledge value

• Knowledge Management

If you can’t measure it, you can’t manage it.

Knowledge Value

• Value is very difficult to measure

• Value is extracted when knowledge is used

• Sharing increases the value of knowledge

• Value increases with abundance

• Buyer cannot judge value in advance

• Value can be added by filtering knowledge

• Value is not well related to acquisition cost

Thomas Stewart (1997)

Knowledge Value Chains

Flow of knowledge through a sequence of processes in which it’s value is increased at each stage.– Creation– Use– Management

• Preservation• Sharing• Integration

Knowledge Creation Value Chain

Information Management

Decision-making

Knowledge Management

Data Management

Acquisition

Data WisdomInformation KnowledgeInputs

sensing facts meaning understanding judgement

Knowledge creation is a precursor to everything else

Creating Knowledgeis not Enough

• Bell Labs: lasers

• Xerox: graphical user interface, object-oriented programming, laser printer, Ethernet

• IBM, DEC: mainframe/mini computers

• CERN: World-Wide Web

• Encyclopaedia Britannica: synthesizing knowledge

Knowledge Use Value Chain

Individual OpinionCompiled TargetedRecommend

Reporter Analyst AdvocateAuthor Marketer

promotepublish represent influence agenda

The value of knowledge is realized only when it is used for something

Plant Hardiness

Zones

Knowledge for Canadians

(climate + elevation)

Knowledge for PractitionersFire Monitoring, Mapping, and Modeling System

OUTLINE

• Knowledge Value

• Knowledge Assets

• Knowledge Management

KM adds value by linking creation and use

Knowledge Management Value Chain

Network Manager Executive

Senior ManagerCustodian

Preservation ManagementSharing Integration

interface interoperability organizationavailability

Higher-level KM goals generally have decreasing ranges of applicability

Knowledge Management:Linking Past, Present, & Future

Past Present Future

Capture Archive

Share Integrate

Learn Adapt

Infrastructure Content

Processes People

Knowledge Management:A Definition

Developing organizational capacity and processes to capture, preserve, share, and integrate data, information, and knowledge to support organizational goals, learning, and adaptation.

Knowledge Preservation Value Chain

Capture MaintainOrganize RetrieveStore

Librarian Systems ManagerCodifier Provider

accessinventory map capacity continuity

Preservation is the foundation of knowledge management

Briefing Note Database

Organizing Knowledge Assets

• Epistemology• Cognitive approaches• Automated methods • Classification systems• Thesauri• Interdisciplinary issues• Linguistic issues• Metadata• Knowledge map

Library of Alexandria – artist’s concept

Storing Knowledge Assets

• Information Technology infrastructure

• Systems for archiving and managing content

• Interface for entry and administration

• Data warehouse, distributed databases

• Information repository, records management

• Knowledge repository, knowledge map

• Digital libraries, traditional libraries

Retrieving Knowledge Assets

• Access to content

• Browser interface

• Search engine

• Extraction tools

• Manipulation tools

• Assembly tools

• Retrieval system

Relativity - Escher

Knowledge Sharing Value Chain

conversation letters

speaking publishing

hoarding networking synergy

Individual GroupsColleagues Community

personal synergydialogue evolution

The value of a network is proportional to the square of the number of users

Sharing Knowledge: Methods

• Conversations, discussions, dialogue • Advice, briefings, recommendations• Mentoring, teaching, examples• Questions & answers, knowledge extraction• Presentations, lectures, speeches, stories• Documents, books, manuals, instructions• Education, training, demonstration• Meetings, workshops, conferences, forums• Networks, communities of practice

Sharing Knowledge: Technology

• Talking (real, virtual)• E-mail (individuals, list servers, distribution lists)• Chat rooms, forums, discussion groups• Communities of interest, informal networks• Groupware (teams, working groups)• Conferences, workshops, knowledge fairs• Data bases, information bases, knowledge bases• Digital libraries (repositories, search, retrieval)• Information & knowledge markets

Knowledge Integration Value Chain

Coordinator

AnalystCreator Synthesizer

Isolated IntegratedOrganized Whole

structureelement relationships system

The whole is more than the sum of it’s parts

Soils of Canada

Land Cover

Natural Resources Canada Ressources naturelles Canada

Canadian Forest Service Service canadien

des forêts

Climate Change

B) climate at 1.5 X COB) climate at 1.5 X CO22

A) present climateA) present climate

0 - 10%

11 - 20%

21 - 30%

31 - 40%

41 - 50%

51 - 60%

61 - 70%

71 - 80%

81 - 90%

91 - 100%

X location of black spruce sites

Distribution of Black Spruce

“Products are physical manifestations of knowledge, and their worth largely, if not entirely, depends on the value of the knowledge they embody.”

Dorothy Leonard

Wellsprings of Knowledge (1995)

A final thought….