People resourcing

1
People resourcing

• Knowledge management and HR
• Norma Heaton
• November 2006

2
Knowledge management and HR

• Why the interest in knowledge management?
• Concepts in knowledge management
• Knowledge workers
• Knowledge creation
• Managing knowledge and knowledge workers

3
Sources of wealth

• Land in the agricultural era (19th century)
• Labour and capital in the industrial era (20th
  century)
• Knowledge and skills in the knowledge era
• Capital consists in a great part of knowledge
  and organisationknowledge is our most powerful
  engine for production (Marshall(1890) cited in
  Storey (2001340)

4
Detecting and managing knowledge assets

• If TI only knew what TI knows CEO of Texas
  Instruments, Jerry Junkins
• I wish we knew what we know at HP Lew Platt,
  Chairman of Hewlett Packard
• Ref ODell and Grayson (1998) cited in Storey
  (2001 340)
• Q how does your organisation manage its
  intellectual resources ie the wealth of expertise
  and ideas scattered throughout the organisation?

5
Why the interest in knowledge management?

• Nonaka and Takeuchi(1995) propose that knowledge
  creation, mediated through innovation, will lead
  to competitive advantage
• Storey (2001) suggests
• Company value is increasingly dependent on
  intangible assets such as knowledge
• People own, create and retain organisational
  memory and can leave with it
• Global pace of change requires continuous
  regeneration of organisational learning bases

6
Factors which might stimulate engagement in KM

• A consciousness of knowledge loss through
  turnover or downsizing
• The effect of a takeover or merger
• Strategic change or readjustment
• Awareness of increasing difficulties in retaining
  key staff
• Developments in the IT field

7
Knowledge management territory

• Conceptual the foundations and frameworks of KM
• Technological the information technology
  infrastructure
• Management HR management issues, problems and
  priorities
• IT perspective has tended to dominate, but there
  are problems for the management of human resources

8
Concepts in KM definitions of knowledge

• Knowledge is organised information applicable to
  problem solving (Woolf, cited in Beckman, 1999)
• Knowledge is information that has been organised
  and analysed to make it understandable and
  applicable to problem solving (Turban, cited in
  Beckman,1999)
• 1234 street is information but my friend David
  lives in 1234 street is knowledge
• Knowledge is context-specific

9
Knowledge typologies

• Explicit knowledge
• Can be expressed in formal and systematic
  language
• Can be shared in the forms of formulae,
  specifications, manuals
• Can be processed, transmitted and stored
  relatively easily
• Tacit knowledge
• Is highly personal and hard to formalise
• Includes subjective insights, intuitions and
  hunches

10
Professional intellect

• Cognitive knowledge ( know-what)
• Advanced skills (Know-how)
• Systems understanding (know-why)
• Self-motivated creativity (care-why)
• Ref Quinn, Anderson and Finkelstein (2001)

11
Defining knowledge management

• KM is the process of capturing a companys
  collective expertise wherever it resides in
  databases, on paper, or in peoples heads and
  distributing it to wherever it can help produce
  the biggest payoff (Hibbard, cited in Beckman,
  1999)

12
Who are the knowledge workers?

• Identify certain occupations eg research and
  development, advertising, professional services?
• Identify knowledge-based sectors (aerospace,
  computer equipment) or services (finance,
  education, health)?
• Are managers being asked to change their
  approaches to the management of all employees in
  the new knowledge era, or just some of the staff?
  And if the latter, who is to be regarded as
  constituting this special category (Storey,
  2001)

13
Knowledge creation

• Interaction between tacit and explicit knowledge
• Socialisation from tacit knowledge to tacit
  knowledge
• Externalisation from tacit to explicit
  knowledge
• Combination from explicit to explicit knowledge
• Internalisation from explicit to tacit knowledge

14
Knowledge conversion (1)

• Socialisation
• Process of converting new tacit knowledge through
  shared experiences such as spending time together
  or living in the same environment
• Typically occurs in a traditional apprenticeship
  through exposure to hands-on experiences
• Externalisation
• When tacit knowledge is made explicit it can be
  shared by others and becomes the basis of new
  knowledge
• Example quality circles allow tacit knowledge
  accumulated to be articulated and shared

15
Knowledge conversion (2)

• Combination
• Converting explicit knowledge into more
  systematic sets of explicit knowledge
• Explicit knowledge is then combined, edited or
  processed to form new knowledge
• Internalisation
• Closely related to learning by doing
• Explicit knowledge is shared throughout an
  organisation and converted into tacit knowledge
  by individuals

16
Knowledge assets (1)

• Experiential (through socialisation)
• Firms have to build their own experiential assets
• Experiential assets can give a firm sustainable
  competitive advantage
• Conceptual (through externalisation)
• Explicit knowledge based on concepts held by
  customers and members of the organisation
• Brand equity would be one example
• Improvements in a process through a quality circle

17
Knowledge assets (2)

• Systemic knowledge assets
• Systematised and explicit knowledge
• Examples are product specifications, manuals,
  documented information about customers and
  suppliers
• The most visible type of knowledge asset
• Routine knowledge assets
• Tacit knowledge embedded in actions and practices
• Know-how and organisational routines are examples

18
How consulting firms manage their knowledge
(Hansen, Nohria and Tierney, 1999)

• Codification
• Invest once and re-use many times
• People to documents
• Electronic document system
• Heavy investment in IT
• Hire new graduates
• Reward contribution to databases

• Personalisation
• Expert economics
• Highly customised solutions
• Person-to-person
• Network for linking people
• Moderate investment in IT
• Hire problem solvers
• Reward sharing knowledge

19
Issues and problems in managing knowledge and
knowledge workers

• Developing and sustaining an organisational
  culture which supports and promotes knowledge
  creation
• Gaining access to tacit and explicit knowledge
• Winning trust, motivation and commitment
• Involving all workers
• Vulnerability of the organisation due to its
  reliance on knowledge workers
• Source Storey and Quintas (2001)

20
HR strategy for knowledge management (Storey and
Quintas 2001)

• Top management commitment to a radical KM
  strategy
• Redraw organisational structures and forms
• Encourage new organisational culture
• Implications for HR practices
• New priorities in recruitment and selection
• Preservation of corporate memory
• New emphasis on organisational learning
• Revised performance management and reward system

21
Designing appropriate organisational forms

• Teams
• Organisation wide structures
• Inter-organisational arrangements and networks

22
Designing appropriate organisational forms (1)

• Teams can play a vital role and provide
• A shared context for interaction and dialogue
• New points of view
• A pool of information
• A bridge between visionary ideals at the top and
  the market reality for those at the front line of
  business

23
Designing appropriate organisational forms (2)

• Organisation-wide structures
• Create and maintain a distinct RD department, or
• Aim for wider empowerment across the whole
  organisation
• Inter-organisational arrangements and networks
• Have gatekeepers or employees who are active in
  various networks

24
Encourage the emergence of an appropriate culture

• The following may be characteristics of a culture
  open to innovation
• Open to the flow of information across
  organisational boundaries
• Few hierarchical distinctions
• Tolerance of failure
• Reward for knowledge sharing

25
HR practices (1)

• Two models to consider
• A wide ranging concept where almost everyone is
  expected to contribute
• A selective group of innovators and knowledge
  creators
• Recruitment and selection may break with
  conventional procedures
• Retention may include profit sharing or other
  inducements
• Specialist workers may need protecting

26
HR practices (2)

• Preservation of corporate memory
• Use senior managers as mentors to new recruits
• Audits of knowledgeable people across the
  organisation
• Exit interviews
• Other steps might include
• Completing one page things we have learned at
  the end of every project
• See People Management 27/10/05

27
HR practices (3)

• Organisational learning
• Creating cross-disciplinary learning experiences
• Developing learning structures eg corporate
  universities
• See Carrington (2002) in People Management
• Career development
• Regular development reviews
• Job rotation between different functions and
  divisions

28
HR practices (4)

• Reward strategies
• Do not give priority to short-term financial
  performance
• Set out a broad range of objectives
• Example, 3Ms target To obtain at least 10 per
  cent of annual sales from products which did not
  exist a year ago

29
HR practices (5)

• Beckman (1999) summarises literature on reward
  and innovation, suggesting that organisations
  should reward
• Customer satisfaction
• High performance
• Personal knowledge and expertise
• Using and applying the knowledge and expertise in
  the knowledge repository
• Proactive problem solving and problem prevention

30
HR practices (6)

• Taylor (2005) suggests
• Providing opportunities for people to gain a
  range of experiences
• Encouraging sharing through reward and
  recognition systems
• Promoting a high trust/high security culture

31
KM initiatives the CIPD case studies

• Knowledge management initiatives may involve
• Rethinking selection methods
• Training should take on board opportunities for
  open and online learning
• Re-think career development
• Link performance appraisal to knowledge roles
• Revisit the motivational potential for different
  kinds of reward
• Consider the potential for communities of
  practice
• Source Beaumont and Hunter (200074)

32
Conclusions?

• If we are really entering the knowledge economy
  wherein the expected contribution from labour
  is of an entirely different kind than in the
  industrial past, then there would appear to be
  significant implications for the management of
  these human resources. The true extent of these
  implications have yet to be realised
• Storey and Quintas (2001361)

33
Conclusions?

• Knowledge management has a lot to offer the
  professional services sector, and some
  departments (such as RD) in larger organisations
  operating in other sectors
• KM theory provides the basis of a useful
  contribution to PD practice
• It is not as universal in application as many
  commentators lead us to believe
• Taylor (2005443-444)

34
References

• Beaumont,P. and Hunter,L. (2002) Managing
  knowledge workers, CIPD, London
• Beckman,T. (1999) The current state of knowledge
  management in Liebowitz,J. (1999) Knowledge
  management handbook, CRC Press
• Hansen,T., Nohria,N. and Tierney,T. (1999)
  Whats your strategy for managing knowledge?
  Harvard Business Review, March-April, 1999
• Nonaka,I. and Takeuchi,H. (1995) The knowledge
  creating company, Oxford University Press, New
  York

35
References ctd

• Nonaka,I. , Toyama,R. and Konno,N. (2001) SECI,
  ba and leadership a unified model of dynamic
  knowledge creation, Long range Planning, 2000,
  Vol 13
• Quinn,J. , Anderson,P. and Finkelstein,S. (2001)
  Managing professional intellect in S.Little,
  P.Quintas and T.Ray (eds) Managing knowledge an
  essential reader, Open University/Sage
• Storey,J. and Quintas,P. (2001) Knowledge
  management and HRM in Storey,J. (ed) Human
  resource management a critical text, Thomson
  Learning, London
• Taylor,S. (2005) People Resourcing, CIPD, London

36
Suggested further reading

• Case study Transforming the knowledge process at
  Buckman Laboratories, 1992-98
• People Management articles, available from the
  archive, including Oiling the wheels by Lucie
  Carrington, 27/6/02
• People Management feature Capturing the
  knowledge and skills of your workforce before
  they retire 27/10/05
• Leopold,J., Harris,L. and Watson,T. (2005) The
  strategic management if human resources,
  FT/Prentice Hall, London

37
Case study Buckman Laboratories

• Consider the steps taken in the KM programme and
  why they have been successful
• Reflecting on your own employing organisation,
  are there further steps/approaches which could be
  taken to more effectively manage knowledge. What
  are they?