Ten Things You Need to Know About Knowledge Management

With the growing importance of knowledge management, every professional, manager and policy maker needs a quick boost of knowledge about knowledge. While we cannot make you an instant expert, we can at least point you in the right direction and help you get started with the essentials. We suggest you visit our KM Basics and pages to help you in your quest.

1. About Your Organizational Context

Unless you live in an isolated enclave, you will be aware that your external environment is subject to change and interdependence as never before. We are evolving into a networked and global knowledge economy, where organizations are knowledge intensive, where technologies such as the Internet are changing the fundamentals of business, where value is in intangibles, and where the old rules no longer apply. See also Part A: An Interdependent World in Knowledge Networking.

2. About Communications

In simple terms - what people hear is not what they are told! Whether your focus is sharing knowledge, building trust in virtual teams, or developing knowledge leadership, communications is at the core. I once asked a Chief Knowledge Officer what were his three key ingredients for success. His response: "Communications, communications, communications". The keys to effective communications are to be a good listener, to choose the appropriate medium (e.g. face-to-face vs. email vs. telephone), to position your message in its wider context, to make your communication relevant (i.e. adapted to the recipient's knowledge and needs), and to express your thoughts clearly and concisely. There are checklists on communications in the toolkits in Knowledge Networking: Building the Collaborative Enterprise.

3. About Information and Knowledge

Knowledge is very complex. It comes in many forms and types (e.g. see Know-Who and Other Knowledge. The most common distinction is that between explicit and tacit knowledge. The former is codifiable and expressed in documents, databases and other tangible forms. The latter is that in people's heads and not easily codified. You can't therefore simply relabel information management as knowledge management or information systems as knowledge solutions - but suppliers do! When asked, most people say that over 70 per cent of their organization's vital knowledge is tacit. Yet, what do their knowledge programmes focus on - explicit knowledge or information!! A good knowledge management programme will give as much attention to the practices for developing and sharing tacit knowledge (e.g. learning, knowledge communities, knowledge networking) as they do explicit knowledge or information.

4. About Inter-Organizational Networks

A significant source of business improvement and innovation in a knowledge-based enterprise is the knowledge that is created and developed across organizational boundaries, such as customer knowledge. For example, it is reckoned that over three quarters of organizational innovations are a result of collaboration or absorption of external knowledge. Knowledge Communities and Knowledge Networks should be nurtured, since they span organizational boundaries and help the flow of knowledge across hierarchical 'stove-pipes'. Focus on links and navigation - the organization's networkers are the unrecognized heros in many organizations. They should be recognized and rewarded. Complement human networks with a collaborative technology infrastructure, such as groupware or an intranet.

5. About Intellectual Capital

I believe Einstein is cited as saying "Not everything you count counts, and not everything that counts is counted". Too true!! Writer Tom Stewart says: "You can't see it; you can't touch it; yet it makes you rich. For this very reason you will find accountants and financial analysts fighting shy of trying to measure it. Yet intellectual capital measurement is something worth getting to grips with. The key things to know about intellectual capital are to categorize it e.g. into human, structural and customer capital, and to develop meaningful measures by which you can measure and manage it. See Insight: Measuring Intellectual Capital or for more depth read 'Measuring the Value of Knowledge'.

6. About Intangibles

Most companies are worth several times more in market terms (i.e. stock price x number of shares) that their balance sheets indicates. After allowing for market imperfections, or sentiment (such as with Internet stocks) the difference is essentially intellectual capital. In mid-1997 the average market to book value ratio for the Dow Jones industrials was over 5, and for companies hat are particularly knowledge-intensive e.g. biochemical companies, it is often 20x or more. Therefore, measuring and managing intellectual capital, including intellectual property such as patents, brands, copyrights and designs, is an important management task.

7. About Innovation and Creativity

These often get confused - see Creativity is Not Innovation. Being smart does not inevitably result in being the best. Being more creative does not automatically make you more innovation. Effective innovation requires the translation of creative ideas into improved processes, and/or commercially viable new products and services. Thus, creation is the starting point of the innovation process, the generation of new knowledge, that subsequently needs converting and encapsulating into usable or marketable forms. This requires the effective management of knowledge throughout the innovation process. See also the pages on knowledge innovation at the ENTOVATION web site.

8. About Human Resource Management

Most organizations do not know how many people they employ! Knowledge about your most critical resource is often inadequate. How good are your competency management systems? Do you have ready access to an expertise directory? The HRM function should provide is a vital 'soft' infrastructure for knowledge management, that includes reward and recognition systems, competence mapping and assistance with facilitating knowledge communities.

9. About Information and Communications Technologies

The success rate of introducing new information systems is not high. Introducing knowledge solutions, which are end-user oriented, less procedural in nature, add another layer of complexity. Despite the growing variety of KM tools and infrastructures (such as intranets) that are available, the critical success factors are 1) strong linkage to business needs; 2) People (human interface, individual styles and user characteristics) and 3) Processes e.g. seamless integration with ways of working and workflows. See 'The Impact of IT on Organizations' and Hybrid Managers.

10. About Knowledge Initiatives

There is no 'cook-book' approach. Every organization is different. Therefore an initiative needs be set against its organizational context, the business priorities, and the key people and influences. You will need to identify key hooks, such as related initiatives (e.g. quality, customer service, new product development), change of key personnel, new business opportunity or situation, significant shift in business performance, organization restructuring (e.g. merger, downsizing) - all opportunities for a new initiative. Those that succeed will selectively choose an appropriate lever. See also the article 'Knowledge Management: Making It Work

Ten Myths Of Knowledge Management

Slightly 'tongue in cheek', these are some generally erroneous statements and assertions on knowledge management, sometimes made by those who should know better. If someone tells you one of the following 'facts' you can now refute it! If you have another myth that should be listed here, please let me know (Email:david@skyrme.com).

1. It's New

You could argue that ever since the first caveman (or woman) showed his or her colleague how to use a tool, that knowledge management - the sharing of best practice - existed. Aspects of managing knowledge has been written for centuries, with a wealth of articles being written in the 1980s (e.g. by Karl Erik Sveiby). Also, many of the practices of knowledge management have existed for a decade or longer, although sometime under different terms (see Will the Real Knowledge Management Stand Up in I3 UPDATE No. 27. What is new is knowledge management's prominence, its strategic focus, and integrated view of many other facets of management, such as information resources management, intellectual capital measurement, knowledge sharing via intranets, the learning organization and innovation.

2. It's a Fad

There is growing evidence that it is not a fad. Surveys that in 1996-7 showed the majority of managers citing knowledge management as a fad, now show less than 5 per cent believe so. Reasons such as the value of knowledge assets, the proven benefits of knowledge management and the momentum of the knowledge movement show that, however it might be relabelled in future, its core strategies and practices are fundamental.

3. It's Just About Continuous Improvement

While it is true that many knowledge programmes start off by sharing existing knowledge, such as that of best practices, these generally bring only incremental improvements. The second, and potentially most rewarding thrust is that of knowledge innovation. Here breakthrough strategies can give business improvements of a factor of 10 or more.

4. It Must Be Led From the Top

While there are excellent examples, as in the cases of BP and Buckman Laboratories, where the CEO has provided strong support or even initiated knowledge management, there are many other examples, where the lead has come from other parts of the organization. Nonaka and Takeuchi in The Knowledge Creating Company talk about a 'middle-up-down' approach. What is important is knowledge leadership throughout the organization (see the contrast between leaders and laggards). It's also a matter of culture e.g. see Do you Need a CKO?.

5. There's no obvious pay-back

There are now numerous cases where there are positive and proven benefits. There are some cases claiming 1000 per cent RoI, but depends on what you count and what you don't. One of the problems is that benefits are indirect (and often not foreseen). The development of a benefits tree will help you unravel the cause-effect relationships.

6. Knowledge Centres are Libraries Relabelled

Good knowledge management needs all the skills of information organizing and classification that a librarian can bring. However, knowledge centres go beyond being merely libraries. They act as knowledge connectors and aggregators, linking people to information and people to people. They manage content on intranets, help nurture communities of practice, and play a key role in information resources management, knowledge mapping and navigating.

7. The Main Obstacle is That People Won't Share Knowledge

This is only partially true. Lack of a knowledge sharing culture is often cited as the primary obstacle, but more in depth studies have shown that lack of time is often a primary cause why knowledge does not get more widely shared. Time for knowledge sharing must be build into tasks and people's roles. Ways of capturing tacit knowledge from experts must be deployed. Most people are willing to share provided that this is recognized and rewarded and their efforts are not abused e.g. by other claiming credit. See also Knowledge Sharing and Trust in I3 UPDATE No. 19.

8. The Best Ideas Are Generated in the Office

In a survey on creativity it was found that less than 20 per cent of good ideas were developed in the office. Thinking while driving, having a bath, recall from dreams, informal conversation (how many good business ideas have started from scribbles on the back of a napkin in a bar or restaurant) are all good situations for idea generation. Additionally, traditional office designs are not conducive to quality thinking, which is why good knowledge management programmes will also consider working space as a dimension of their strategy. See Chapter 7 in Knowledge Networking: Building the Collaborative Enterprise.

9. The Internet is less Reliable Than the Corporate IT Network

Other than mission critical transaction systems, which too frequently email and intranets are not, many office systems available to knowledge workers throughout an enterprise do not give very high accessibility, reliability and support. A recent survey showed that 10 per cent of corporate networks suffer some break in service every month. Once at a client site (major Fortune 500, the network was unavailable for several hours on a Monday morning - not untypical according to an insider, since they often do 'upgrades' over the week-end. Since leaving corporate life, I have found the Internet to have high overall availability, and (unlike corporate networks) have never lost a file at my ISP. External network providers live and die by the level of service they offer - some do die, of course! One well known knowledge programme started by using a private section on CompuServe as its global knowledge network, since it could be put up more quickly (days rather than months) and reliably than building a corporate network from scratch. Challenge your internal MIS department to show you end-to-end availability and accessibility statistics.

10. Knowledge Management is Mature

Here's the paradox. If Myth 1 is false, how can this one also be? Most knowledge leaders see the institutionalization of knowledge management as a long-term activity, perhaps taking 5-10 years. Most organizations have been involved with serious implementation for much less. In terms of overall life cycle, we are probably (1999) at the rapid growth (20 per cent penetration) phase. Most Fortune 500 companies now have a formal programme, although only a minority have gone beyond specific projects or pilot projects to widespread implementation throughout their organization. There's a career in knowledge management for several years yet!

© Copyright 1999. David J. Skyrme. All rights reserved.

Last updated: 19th February 2011

"Good knowledge management is common sense but not common practice."
(Leif Edvinsson, former VP of Intellectual Capital, Skandia)

Think you know the basics of KM? Perhaps you do, but have you tried our latest trivia quiz?

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Think you know the basics of KM? Perhaps you do, but have you tried our latest trivia quiz?

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