Can knowledge be managed? The words management and knowledge at first sight appear uneasy bedfellows. Knowledge is largely cognitive and highly personal, while management involves organisational processes. Many knowledge workers do not like to be managed in the traditional sense. However, knowledge is increasingly recognized as a crucial organisational resource, that gives market leverage. Its management is therefore too important to be left to chance. This briefing paper outlines what steps senior managers should take to leverage the knowledge in their organization.

The last few years have seen a rapidly growing interest in the topic of knowledge management. 'Leveraging Knowledge for Sustainable Advantage' was the title of one of the first conferences (in 1995) that brought knowledge management onto the management agenda. From 1997 a surge of books, magazines and websites have come onto the scene. Today (2003) most large organizations have some form of knowledge management initiative. Many companies have created knowledge teams and appointed CKOs (Chief Knowledge Officers). Knowledge is firmly on the strategic agenda.

The level of interest has been building for several years. Many innovative companies have long appreciated the value for knowledge to enhance their products and customer service. Our analysis indicates several reasons why the level of interest has grown dramatically during recent years:

• Globalization and competition - many organizations rely on knowledge to create their strategic advantage. With available knowledge widely dispersed and fragmented, organizations often waste valuable time and resources in 'reinventing the wheel' or failing to access the highest quality knowledge and expertise that is available.
  
  
• Knowledge can command a premium price in the market - Applied know-how can enhance the value (and hence the price) of products and services. Examples are the 'smart drill' that learns how to extract more oil from an oil field, and the hotel chain that knows your personal preferences and so can give you a more personalized service.
  
  
• Restructuring and downsizing - Without effective mechanisms in place to capture knowledge of experienced employees, organizations make costly mistakes or have to pay again for knowledge they once had on tap.
  
  
• Sharing of best practices - Companies save millions a year by taking the knowledge from their best performers and applying it in similar situations elsewhere.
  
  
• Successful Innovation - Companies applying knowledge management methods have found that through knowledge networking they can create new products and services faster and better.

These and other benefits, such as improved customer service, faster problem solving and more rapid adaptation to market changes, have resulted from an explicit focus on corporate knowledge as a strategic resource.

Knowledge management is the explicit and systematic management of vital knowledge and its associated processes of creating, gathering, organizing, diffusion, use and exploitation. It requires turning personal knowledge into corporate knowledge than can be widely shared throughout an organization and appropriately applied.

Our research shows that companies adopt two broad thrusts in applying knowledge management:

1. Sharing existing knowledge better - making implicit knowledge more explicit and putting in place mechanisms to move it more rapidly to where it is needed;
2. Innovation - making the transition from ideas to commercialization more effective.

Knowledge management programmes typically have one or more of the following activities:

• Appointment of a knowledge leader - to promote the agenda, develop a framework
• Creation of knowledge teams - people from all disciplines to develop the methods and skills
• Development of knowledge bases - best practices, expertise directories, market intelligence etc.
• Enterprise intranet portal - a 'one-stop-shop' that gives access to explicit knowledge as well as connections to experts
• Knowledge centers - focal points for knowledge skills and facilitating knowledge flow
• Knowledge sharing mechanisms - such as facilitated events that encourage greater sharing of knowledge than would normally take place
• Intellectual asset management - methods to identify and account for intellectual capital.

Our cases database has over 100 examples of organizations that have achieved significant benefits through knowledge management. Here are just a few examples:

• BP - by introducing virtual teamworking using videconferencing have speeded up the solution of critical operation problems
  
  
• Hoffman La Roche - through its Right First Time programme has reduced the cost and time to achieve regulatory approvals for new drugs.
  
  
• Dow Chemical - by focusing on the active management of its patent portfolio have generated over $125 million in revenues from licensing and other ways of exploiting their intangible assets.
  
  
• Texas Instruments - by sharing best practice between its semiconductor fabrication plants saved the equivalent of investing in a new plant.
  
  
• Skandia Assurance - by developing new measures of intellectual capital and goaling their managers on increasing its value have grown revenues much faster than their industry average.
  
  
• Hewlett-Packard - by sharing expertise already in the company, but not known to their development teams, now bring new products to market much faster than before.

Our research has identified a number of recurring success factors:

• A knowledge leader or champion - someone who actively drives the knowledge agenda forward, creates enthusiasm and commitment
  
  
• Top management support - a CEO who recognizes the value of knowledge and who actively supports the knowledge team in its work
  
  
• A clear value proposition - identification of the link between knowledge and the bottom line business benefit; new measures of performance and appropriate rewards.
  
  
• A compelling vision and architecture - frameworks that drive the agenda forward
  
  
• Creation of a culture that supports innovation, learning and knowledge sharing. This is usually supported by appropriate reward mechanisms.
  
  
• A technical infrastructure that supports knowledge work - from simple knowledge support tools to Intranets and ultimately more sophisticated groupware and decision support. Simulation, data mining and good document management also have a role.
  
  
• Systematic knowledge processes, supported by specialists in information management (librarians) but with close partnership between users and providers of information.

Usually, the knowledge agenda develops through a process of evaluation from pilot projects that are used to build capabilities and derive learning for subsequent applications.

The biggest challenge reported by those practitioners we have met, is that of changing the culture from "knowledge is power" to "knowledge sharing is power". Other common obstacles are:

• Finding time - with so many initiatives vying for attention, it is easy to sideline more challenging issues like knowledge management. However, those organisations that have committed resources and have knowledge champions have achieved outcomes that far surpass the level of inputs
  
  
• Introversion - afraid to learn from outsiders or expose internal operations to customers
  
  
• Too focused on detailed process - rather than the big picture and the more chaotic process of knowledge creation
  
  
• Treating it as one-off project or quick-win - knowledge management is a commitment to the long-term: the organization’s future prosperity.
  
  
• Individual disciplines and 'turf wars' - knowledge management goes beyond the remit of any single function or discipline. All functions must collaborate.
  
  
• Organizational recognition and reward systems usually do not sufficiently recognize knowledge contributions. They are linked to traditional financial measures.

None of these challenges are insurmountable. Implementing successful knowledge management requires a systematic change and project management approach. However, it is more than just a project. Over time knowledge management changes the way that people work so that thier indiviudal knowledge is more effectively harnessed for the benefit of all.

© Copyright. David J. Skyrme. First published 1997, revised 2003. This material may be copied or distributed subject to the terms of our copyright conditions (no commercial gain; complete page copying etc.)

Several books give a good overview of knowledge management strategies and practice:

Knowledge Networking: Creating the Collaborative Enterprise, David J. Skyrme, Butterworth-Heinemann (1999) - Chapter 2 gives strategies, and chapter 7 programme implementation guidelines.

Innovation Strategy for the Knowledge Economy: The Ken Awakening, Debra M. Amidon, Butterworth-Heinemann (1997) - focuses on the innovation aspects of knowledge management.

Harvesting Experience: Reaping the Benefits of Knowledge, Jan Duffy, ARMA (1999) - a practical approach for implementing knowledge management.

Intellectual Capital: The New Wealth of Organizations, Thomas A Stewart, Doubleday (1997)

The New Organizational Wealth: Managing and Measuring Intangible Assets, Karl Erik Sveiby, Berrett Koehler (1997).

Related resources on this site include:

• KM Basics - including a list of practices
• Knowledge Briefings - for executives, including Seven Ways to Create Value
• K-Guides and K-Tools - for practitioners, including Developing a KM Strategy and the KM Benefits Tree.

See also Knowledge Management Resources and related Insights - The Global Knowledge Economy, Knowledge Assets, Measuring Intellectual Capital and Knowledge Networking.

For full listing of other Insights go to Insights - List of Titles.

Back to: Top - Why Now? - What Is? - Examples - Guidelines - Challenges - Resources - Feedback
 

Management Insights are publications of David Skyrme Associates, who offers strategic consulting, presentations and workshops on many of these topics.

Additional coverage of these topics can be found in our free monthly briefing I³ UPDATE/ENTOVATION International News, various articles, publications and presentations.

Top of Page