Working Knowledge: How organizations manage what they know Presented By: Rahul Sharma January 29, 2006 Author: Thomas H. Davenport and Laurence Prusak.

Working Knowledge: How organizations manage what they know

Presented By:

Rahul Sharma

January 29, 2006

Author: Thomas H. Davenport and Laurence Prusak

Agenda Knowledge Knowledge Markets Knowledge Generation Knowledge Codification Lessons learned Comments My opinion Reviews and references

CH-1 What do we talk about when we talk

about knowledge Data Information Knowledge

These are all transformation from one to another.

Data

Set of unorganized and unprocessed facts

but highly objective Used mainly in organizations like Banking, Insurance and other

governmental organizations as structured records for transactions No judgment and no sustainable basis of action Data is essential for information creation Data Management is evaluated in terms of Cost, Speed and Accuracy

Information

Information has impact on receiver's judgment and behavior It has a sender and receiver Information has its relevance and purpose Information means to shape the person who gets it, to make some difference

in his outlook or insight

Information moves through Hard and soft Networks.

Data transferred into information in following ways Contextualized Categorized Calculated Corrected Condensed

Knowledge Essential component of Human Progress Knowledge is a fluid mix of framed experiences, values, contextual

information that provides a framework for evaluating and incorporating new info.

Knowledge is a mixture of various elements, intuitive, hard to capture in words

Delivered through structured media such as books, documents and contacts Comparisons, connections, consequences, conversations helps in

transformations to knowledge

Knowledge in Action Better knowledge can lead to efficiency in product development and

production Knowledge moves down value chain to information and data Knowledge has key components as experience, truth, judgment and rules of

thumb

Knowledge Components Experience

Refers to things done in the past and happened previously. They have been tested and trained by experience Firm hire experts with experienced based thought Knowledge born of experiences make familiar connections

between what is happening in present and past

Ground Truth Real Life Knowledge and real situations experiencing close up “After Action Review Program” which helps in examining what

happened in a mission and what can be learned from disparities

Knowledge Components

Complexity Knowledge can deal with complexity in a complex way Knowing what is important leads to better decisions

Judgment It judges and refines itself in response to new

situations and information When knowledge stops evolving, it turns into opinion

or dogma

Knowledge components

Thumb and intuition rules It gives shortcut solutions to complex problems that

are solved by experienced workers It gives “compressed expertise”. Phrase describing

how knowledge works E.g. Skill of experienced driver drives series of

complex actions without thinking about them

Knowledge Components

Values and Beliefs Organizations have history, value and beliefs derived

from people’s action and words that express corporate values and beliefs

Integral components to knowledge serving as “seeing” aspects of organization

Power of knowledge comes from values and beliefs as much as from logic and information

Knowledge as a corporate asset

Companies hire for experience in spite of intelligence or education

Managers get two third of info. And knowledge from working mass

Organizations hire expert people for a particular subject

Knowledge as Corporate asset Changing global economy

Companies are fiercely competitive and competition is for every marginal dollar of profit

Companies require quality, value, service, speed to market. e.g. Outsourcing

Product and services convergence Knowledge based intangibles are part of “products”

firms offer Intangibles that add value to product’s are part of

product’s firms offer

Knowledge as Corporate asset Sustainable competitive advantage

Trade secrets are not difficult to find with use of reverse engineering, information flow, technology

Knowledge assets value increase and provide a sustainable competitive advantage

Networked computers are not difficult to find as knowledge source

Case Study: British Petroleum BP’s virtual Team work program

42 separate business models Goal :Agility of small company with resources of large

one Implementation:

Stressed Corporate behavior vs. technology Coaches and Teams Knowledge Management Teams Emphasis was on Person to Person interaction and

system requirements

Results 4 of the 5 Pilot groups have great success

Great savings Better Enthusiasm

Case in Point: Equipment failure on mobile driving ship Utilized communication media to localized

communication expert to solve problem in few hours for localized savings

Ch-1 Summary

Data, Information and knowledge are forms of transformation

Knowledge originates and resides in people’s mind Technology enables new knowledge behaviors Knowledge sharing must be encouraged and rewarded Knowledge initiatives should begin with a Pilot program Knowledge sharing requires Trust

Chapter 2: The promise and challenge of Knowledge Markets Composes of buyers and sellers who use their market

knowledge to create power bases Knowledge is bartered, bought, found, generated, and

applied to work People rarely give their valuable knowledge without

something in return Recognizing markets of knowledge is very important

Political Economy of Knowledge markets Social, Economic and Political realities must be taken

into consideration Cultural Norms restrict knowledge to be shared Buyers, Sellers and brokers are people in KM Buyers

Knowledge seekers looking for insight, judgment and understanding

15-20 % of knowledge time is spent in knowledge search and responding to Knowledge requests

Complex answers embed with emotional subtexts important to our decision making

Political Economy Sellers:

People are skilled but unable to articulate their tacit knowledge ,they need specialized knowledge

Knowledge sharing is rewarded more than Knowledge hoarding Brokers:

Make connections b/w buyers and sellers, hence act as gatekeepers

Corporate librarians are natural knowledge brokers Informal Knowledge Brokers set out to become

experts on knowledge and its exploitation

Price System

Markets have a price system so that value exchanges can be efficiently rendered and recorded

Within the organizations, the medium is money but there are agreed upon currencies to drive the KM

Factors affecting Price System

Reciprocity Within the organizations, the medium is money but

there are agreed upon currencies to drive the KM Time, energy and knowledge are valuable resources

unless they bring valuable return Related to Repute

Factors for Price System

Repute: Value of knowledge depends upon political and social

structures of organization Many Consulting firms, bonuses are tied to knowledge

generation and transfer Likelihood of cooperation leading to future tangible

benefits will increase Length of service and loyalty erodes in most businesses,

hence it is important

Factors

Altruism Nice people who want to help others Likelihood of cooperation leading to future tangible

benefits will increase

Factors Trust: Most important factor that can positively affect the

efficiency of KM Established in 3 ways i.e. :

Trust must be visible It should be ubiquitous It should start at the top

Firm’s KM should be established upon mutual trust

Knowledge Market Signals

Position and education Most common frame signal for indicating who has valuable

knowledge, not consistent signal Informal Networks Informal chats like chats in Cafeteria, water cooler Disadvantage is undocumented and ramble, hence not

readily available to market Communities of Practice Self organized groups to share knowledge with one

another, hence share work practice, interests

Knowledge Market Inefficiencies Clear Pricing system is very essential for efficient markets i.e.

consumer info, classifieds. Efficient markets generate most good at least cost 3 key factors:

Incompleteness of information:

Location of existing knowledge Absence of explicit information about pricing structure

Inefficiencies

Asymmetry of knowledge Prepares knowledge from getting where it is needed

Localness of Knowledge KM depends on trust and trust is very important for

people you know People get knowledge from their organizational

neighbours

Knowledge Market pathologies

Monopolies Knowledge will come at higher price They establish that fact to establish position of power Knowledge won’t be their when people need it the

most Artificial Scarcity

Hoarding culture keeps scarce for departments and groups

It walks out of the door during downsizing

KM Pathologies

Trade Barriers Refusal to accept new knowledge Status difference b/w seller and buyer Hampers organizational markets by hoarding

departments Downsizing and reengineering ends to damage KM

Infrastructure

Effective KM

Using IT widely Technical developments change IT Structure

dramatically Trying to force fluid knowledge into rigid data

structures Focusing more on the system

Building Market places Knowledge transfer is to create market place for

physical and virtual spaces

Effective KM

Talk rooms are formalized and sanctioned locations for conversations

Creating and defining KM value Employees rewarded for sharing knowledge proves

that value exists for knowledge

Peripheral benefits of KM

Higher workforce morale Employees see that their work is valuable . They may be more satisfied with their work

Greater corporate coherence Shared Awareness of Corporate goals and strategies Richer Knowledge stock Constantly refined and validates the organization knowledge Stronger Meritocracy of Ideas Genuinely open KM will test official beliefs and expose flaws of faulty ones

before they can do any damage

Ch-2 Summary

Knowledge Markets exists and should be recognized Buyers, Sellers and brokers are important for KM Price System depends upon reciprocity, repute, altruism,

trust KM pathologies like monopolies, artificial scarcity and

trade barriers should be removed Knowledge market benefits are higher workforce morale,

greater corporate coherence, richer knowledge stock

Ch-3 Knowledge Generation

Hire smart people and leaving them alone

Modes of Knowledge generation Knowledge Acquisition Dedicated Resources Fusion Adaptation Networking

Acquisition

Knowledge focused firm needs appropriate knowledge available

Effective way to acquire knowledge is to buy it Determining the value of knowledge is hard to quantify Cultural and political barriers to accepting and absorbing

acquisition's knowledge

Knowledge Generation Modes

Rental Renting knowledge means to take steps to retain it too Knowledge can be leased or rented Knowledge rentals involve Knowledge transfer Make sure to take steps to retain knowledge

Knowledge Generation Modes Dedicated Resources Establish units or groups for this purpose Many R & D groups use these Fusion Brings people together with a joint answer Combining people with different ideas, skills and values Group members find some common ground to

understand one another

Adaptation

Imposing various environmental threats New products from competitors, new technologies drive

Knowledge generation Most organizations are incapable of changing attitudes of

lifetime. Employees who are willing to learn new things are vital to

adapting company

Networks

Knowledge is generated by informal, self organizing networks within organizations

Conversation often generates new knowledge within firms

A particular practice can become part of knowledge capital of the firm

Common Factors

Need for adequate time and space Time is the most important factor Recognition by managers that Knowledge Generation is

important factor for success Firms that fail to generate new knowledge will cease to

exist

Ch-3 Summary

Modes of knowledge generation are acquire, dedicated resources, fusion, adapt and network

Organizations needs to focus more on time, not on physical storage

Ch-4 Knowledge Codification and Coordination Basic Principles

Business goals for codified knowledge should be identified

They should evaluate knowledge for usefulness in codification

Managers must be able to identify knowledge for reaching goals

Codifiers must identify appropriate medium for codification

Labor intensive and company knowledge are successful for codification knowledge

Codifying different knowledge

Codifying Tacit Knowledge Tacit, complex knowledge is impossible to reproduce in

database Knowledge incorporates accrued and embedded learning

that it is impossible to separate from individual acts We simply can’t represent knowledge outside the human

mind

Codifying different knowledge Providing access to people with tacit knowledge is difficult to capture

and modify Mapping and modeling knowledge

It is a guide not a repository Locating important knowledge in organization with

picture to find it Employee with good knowledge base has access to

knowledge sources A good Knowledge map goes beyond boundaries

Technology of Mapping knowledge

Creates an organizational wide map, better for individual mini-maps

Improves search speed Electronic map can be revised more frequently Value of map is quality and depth of info.

Politics of Mapping knowledge

Map has a picture of status and success as well as a knowledge locator

A limit should be made to see if politics exceed the good sign of maps

Capturing Tacit knowledge

Substantial value of tacit knowledge makes it worth effort for codifying it

Difficult to locate dividing line between Tacit knowledge and fully embedded knowledge

Transfer maximum knowledge through mentoring or apprenticeship

A good story is best way to convey meaningful knowledge

Codifying tacit knowledge

Expert system represents explicit attempt to capture human knowledge using rules

Evaluating codified knowledge and making it available is integral part of process

Evaluation of existing knowledge is classification based on quantitative, structured, unstructured, qualitative contents

Codifying Knowledge

Structured content is made by database and unstructured by web

Codification provides permanence to knowledge Knowledge codification is vital to human beings more

than anyone else

Ch-4 Summary

It is difficult to codify Tacit knowledge Always the principles for codifying knowledge should be

kept in mind Mapping and modeling knowledge is essential for

codifying knowledge to give access to impossible knowledge resources

Human Mind is vital to knowledge codification

Lessons Learned It addresses the key managerial and behavioral issues for managers Effective KM for any company is key to competitive edge Knowledge derives from people’s mind Recognize markets for knowledge Time is the most important corporate resource given to knowledge

activists Codification gives permanence to knowledge

Comments Upside Ron Hagan, editorial review

http://www.amazon.com/gp/product/product-description/0875846556/ref=dp_proddesc_0/103-8143813-7933421?ie=UTF8&n=283155&s=books

Author provides simple overview of knowledge Market and its potential obstacles

Includes numerous examples of successful knowledge projects like British Petroleum

PC week, editorial review It provides strong, fundamental ground in concepts critical to KM Knowledge Point site review

http://www.knowledgepoint.com.au/knowledge_management_tools/books.html

Excellent resource for managers who want to harness wisdom and experience in their organizations

My opinion

Provides practical and realistic template for initiating a KM system with wealth of content on KM systems

Ch-1 to 4 provides deep insight to many basic concepts which are important for any beginner in KM

Reviews and References Reviews from Book “KM” by Elias Awad KM is newly emerging, interdisciplinary business model that has

knowledge within the framework of organization. It has disciplines like business, economics, information management.

Types of knowledge are shallow and deep knowledge, procedural and episodic, explicit and tacit, expert knowledge

KM System Development Life cycle: Evaluate existing infrastructure, form the KM team, knowledge capture design, KM blueprint, test the KM system, implement the KM system, manage change and reward structure, post system evaluation. So better than the Davenport’s one

Approaches for Codifying knowledge are Knowledge maps, decision

tables, decision trees, frames, production rules, software agents

Reviews and References According to site for IT, for IT n/w http://products.watchit.com/20010207.pdf This program is excellent resource for managers to harness their

experience and wisdom According to metapress article

http://mesharpe.metapress.com/(pvhl4o45jbkisa55yzfsaw55)/app/home/contribution.asp?referrer=parent&backto=issue,2,9;journal,22,26;linkingpublicationresults,1:106046,1

According to metashape, this provides pragmatic approach to knowledge, information technology, knowledge management, practice and research

According to article, “Sharing expertise beyond KM” http://books.google.com/books?

id=M8hDpBWOFQMC&dq=working+knowledge+by+davenport The field of KM focuses on how organizations effectively store,

retrieve and enlarge their Intellectual properties

References According to IBM systems journal article for KM, http://researchweb.watson.ibm.com/journal/sj/404/marwick.html Selected technologies that contribute to KM solutions are reviewed

using nonaka’s model of organization knowledge According to Journal of American information science and

technology,

http://www3.interscience.wiley.com/cgi-bin/abstract/97516011/ABSTRACT

KM is based on knowledge creation and transfer

Questions?