Considering Knowledge as an Organization Resource

1
Considering Knowledge as an Organization Resource

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University of Dayton--6 June 06

• Summer Bartczak, Lt Col, USAF (PhD)
• Asst. Prof. of Information Resource Mgt.
• Air Force Institute of Technology

2
Overview

• Introduction
• Drucker Pitstop
• Recap The Coming of the New Organization
• Discuss ties to Druckers discussion of knowledge
  as a resource in Post-Capitalist Society
• Discussion of The Knowledge-Creating Company
  (Nonaka Takeuchi)
• Discussion of Whats Your Strategy for Managing
  Knowledge? (Hansen, et al)
• Discussion of Building a Learning Organization
  (Garvin)

3
Questions to Contemplate

• Why is knowledge such an important organization
  resource to consider these days?
• Why is creating NEW knowledge so essential to
  achieving competitive advantage?
• What are the basic strategies organizations can
  consider for managing existing/new knowledge?
• What are the connections between managing
  knowledge (KM) learning organizations?

4
Framing Thought

• Every few hundred years in Western history there
  occurs a sharp transformation or divide.
  Within a few short decades, society rearranges
  itselfits worldview its basic values its
  social and political structure its arts its key
  institutions. Fifty years later, there is a new
  world. And the people born then cannot even
  imagine the world in which their grandparents
  lived and into which their own parents were born
  (Drucker, 1993).
• We are currently living through just such a
  transformation. It is driving new organization
  forms, the need for knowledge creation
  organizations that learn, and, generally, the
  evolution of a post-capitalist society...which
  are all the subject of todays discussion.

5
Background Peter F. Drucker

• Born in Vienna (1909), escaped to the US in
• 1930s
• Holds a PhD in Public/International Law
• from Frankfurt University holds honorary
• doctorates from American, Belgian, Czech,
• English, Japanese, Spanish Swiss
• Universities
• One of the most influential management
• consultants of all time
• Prolific writer40 books on society,
• politics, economics, and management
• WAS an active professor at Claremont
• Graduate University until Fall 05
• Coined the term knowledge worker

Peter F. Drucker (aka The Man)
6
The Coming of the New Organization (Drucker,
1988)
Recap
7
The Coming of the New Organization (Drucker,
1988)

• 1988 piece that explores the differences with
  organizations/organization forms of the past
• Recognizes importance of knowledge but crux of
  the conversation centers around information
• Looks to hospital, orchestra, university
  organization examples
• Says the info-based organization will have its
  own mgt. problems
• Rewards, recognition, opportunities for
  specialists
• Creating a unified vision
• Devising a mgt. structure for an org. of task
  forces
• Ensuring good top mgt. people

8
Post-Capitalist Society(Drucker, 1993)
9
Post-Capitalist Society(Drucker, 1993)

• Published in 1993
• Emphasizes that knowledge is an important
  organization resourcenow sidelining the
  traditional factors of production (land, labor,
  capital)
• Says the meaning of knowledge changed from an
  aspect of being to doing and over time
  transformed Western society to post-capitalist

10
Overview of Major Historical Phases and Changing
View of Knowledge

• Drucker proposes that the world has undergone
  five major historical phases
• Pre-Scientific Age
• Industrial Revolution
• Productivity Revolution
• Management Revolution
• Knowledge Revolution
• He says the differing views of knowledge (for the
  most part) distinguish one phase from another

11
Overview of Major Historical Phases and Changing
View of Knowledge
12
Overview of Major Historical Phases and Changing
View of Knowledge

• Pre-Scientific Age
• (1300-1500)
• Cities became the center of culture
• City guilds were dominant social groups
• Urban universities replace monasteries as
  cultural centers
• (1500-1700)
• Gutenbergs invention of printing with movable
  type
• Protestant Reformation
• Blossoming of the Renaissance
• Rediscovery of scientific inquiry
• Knowledge viewed as philosophy or being
  purpose of knowledge was self-knowledge/self-devel
  opment

13
Overview of Major Historical Phases and Changing
View of Knowledge

• Industrial Revolution (1700-1900)
• Watts perfected the steam engine
• Adam Smith wrote Wealth of Nations
• Capitalism and communism emerged
• Capitalists became great powers, overshadowing
  kings and princes
• Knowledge seen as doing Knowledge applied to
  tools and products

14
Overview of Major Historical Phases and Changing
View of Knowledge

• Productivity Revolution (1900-1950)
• Converted the proletarian into middle-class
  w/upper class income
• Frederick Taylor studies/analyses/engineers work
• Incredible gains in productivity
• Capitalists made more money
• Knowledge applied to work (processes)

15
Overview of Major Historical Phases and Changing
View of Knowledge

• Management Revolution (1945-1990)
• Management emerges as a discipline after WWII
• Being in management meant rank and power
• Knowledge became seen as an essential resource
• Knowledge began to be applied to knowledge (i.e.
  managers became responsible for applying their
  knowledge to the management of others with
  knowledge)

16
Overview of Major Historical Phases and Changing
View of Knowledge

• Knowledge Revolution (1990-20??)
• Knowledge becomes THE KEY resource
• Many organizations exist that produce no physical
  product
• Intellectual capital becomes key issue for orgs.
• Traditional knowledge considered general
  knowledge now necessarily specialized
• Knowledge workers recognized
• Knowledge is applied to cognition/intelligence
• (i.e. we begin to use knowledge to create new
  knowledge and innovate)
• Society becomes post-capitalist

17
Some Key Characteristics ofthe Post-Capitalist
Society

• Economics and Productivity
• Increasingly, there is less and less return on
  traditional resources the main producers of
  wealth have become information and knowledge
  (information capitalism)
• The return which a country/business gets on
  knowledge must increasingly be a determining
  factor in its competitiveness
• Innovation (the application of knowledge to
  knowledge) requires systematic effort and a high
  degree of organizationbut it also requires both
  decentralization and diversity
• Managements challenge is to make knowledge
  productive

18
Key Characteristics ofOur Post-Capitalist Society

• So, again, what is the Post-Capitalist Society?
• A society where land, labor, and capital are no
  longer the key factors of production that allow
  competitive advantage
• A society no longer controlled by industrial-era
  capitalists such as Rockefeller, Carnegie, etc.
• A society characterized by a knowledge
  revolution.where knowledge is the key strategic
  resource

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And Since 1993/Drucker

• 1994Tom Stewart warns in Fortune article that
  companies should focus less on what they own and
  more on what they know.
• 1995Paul Romer (Stanford economist) calls
  knowledge the only unlimited resource
• 1995Nonaka and Takeuchi publish ground-breaking
  study about knowledge creation in Japanese
  companies.
• 1998Davenport and Prusak publish Working
  Knowledge
• 2000 and on.
• Knowledge increasingly recognized as an important
  resource/issue for organizations

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What do we mean when we talk about knowledge?

• Two types of knowledge
• Tacit personal, context-specific, and hard to
  formalize and communicate
• Explicit codified, transmittable in formal,
  systematic language

21
The KnowledgeCreating Company (Nonaka
Takeuchi, 1991/1995)
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The KnowledgeCreating Company (Nonaka
Takeuchi, 1991/1995)

• Focus is on managing the creation of NEW
  knowledge
• More about tacit than explicit knowledge
• Companies arent info processing machines they
  are living organisms

23
The KnowledgeCreating Company (Nonaka
Takeuchi, 1991/1995)

• The Knowledge Spiral
• Tacit knowledge To
  Explicit knowledge

Socialization Externalization (articulation)
Internalization Combination
Tacit knowledge
Explicit knowledge
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The KnowledgeCreating Company (Nonaka
Takeuchi, 1991/1995)

• Interaction/exchange between tacit explicit
  knowledge is especially important
• Facilitate new knowledge creation with metaphors,
  analogies, and models
• Implications for organization design include
  redundancy, managing chaos through a sense of
  purpose/vision, requisite variety

25
Whats Your Strategy for Managing
Knowledge?(Hansen, Nohria, Tierney, 1999)

26
Whats Your Strategy for Managing
Knowledge?(Hansen, Nohria, Tierney, 1999)

• Why should we care about managing knowledge
  (tacit explicit)?
• Again

• Knowledge is an organization asset/resource just
  like any other
• Knowledge may be the product itself
• Knowledge is a key to competitive
• advantage

27
Strategies for Managing Knowledge

• Codification Strategy
• Personalization Strategy

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Strategies for Managing Knowledge

• Codification Strategy
• Focuses on ways to codify (i.e. put into
  text-based form), store, and reuse knowledge
• Uses a people-to-documents approach
• Knowledge is extracted from people, made
  independent of them, and then reused by others

29
Strategies for Managing Knowledge

• Personalization Strategy
• Focuses on dialogue between individuals not
  objects in a database
• Uses a people-to-people approach
• Uncodifiable knowledge is transferred by
  brainstorming and one-on-one conversations

30
Choosing the Strategy Thats Right for You

• Consider.
• How you create value for customers
• How you turn a profit
• How you manage people

31
Choosing the Strategy Thats Right for You

• Consider.
• How you create value for customers
• Deal with similar problems over and over?
• Re-use plans, briefs, ideas, software code,
  problem solutions?
• Or
• Deal with one-of-a-kind problems that dont have
  clear solutions?
• Create highly customized solutions?

32
Choosing the Strategy Thats Right for You

• Consider.
• How you turn a profit
• Employ economics of re-use codified knowledge
  can be used over and over again at a low cost by
  many people?
• Or
• Employ expert economics where clients are
  offered advice that is rich in tacit knowledge
  slow, expensive, and requires lots of expertise?

33
Choosing the Strategy Thats Right for You

• Consider.
• How you manage people (hire and train)
• Hire inexperienced personnel and train them to do
  routine tasks?
• Or
• Hire experienced personnel for their expertise,
  creativity, communication skills, and analytical
  thinking skills?

34
Choosing the Strategy Thats Right for You

• Straddling both strategies risky
• Pick a primary strategy80/20 mix
• Dont try to excel at bothyou may fail

35
Building a Learning Organization (Garvin, 1993)
36
Building a Learning Organization (Garvin, 1993)

• Before people/companies can improve, they must
  first learn
• Look beyond rhetoric, pie the sky philosophies
  to fundamentals
• Three key issues that must be addressed before a
  company can become a learning organization
• 1. Meaning
• 2. Management
• 3. Measurement

37
Building a Learning Organization (Garvin, 1993)

• MEANING
• What is a learning organization?
• What is the connection between knowledge
  management (or managing knowledge) and a learning
  organization?

38
Building a Learning Organization(Garvin, 1993)

• A learning organization is an organization
  skilled at creating, acquiring, and transferring
  knowledge, and at modifying its behavior to
  reflect new knowledge and insights
• Many other definitions exist!

39
Building a Learning Organization (Garvin, 1993)

• MANAGEMENT
• Building Blocks
• Systematic problem solving
• Experimentation
• Learning from past experiences
• Learning from others
• Transferring knowledge

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Building a Learning Organization (Garvin, 1993)

• MEASUREMENT
• If you cant measure it, you cant manage it!
• Learning/experience curves
• Surveys
• Questionnaires
• Direct observation

41
Building a Learning Organization (Garvin, 1993)

• How to
• Foster an environment conducive to learning
• Give time
• Give skills
• Open boundaries

42
Questions to ContemplateWrapping Up

• Why is knowledge such an important organization
  resource to consider these days?
• Why is creating NEW knowledge so essential to
  achieving competitive advantage?
• What are the basic strategies you can consider
  for managing existing/new knowledge?
• What are the connections between managing
  knowledge (KM) learning organizations?