Knowledge Management

1
Knowledge Management
Baskar Subbarao Sarah Sullivan Michael Tobin
Knowledge management reflects a point made by Lew
Platt, former CEO of Hewlett-Packard "If HP
knew what HP knows, we would be three times as
profitable."
Ref. 28
2
Introduction - KM

• Before something can be managed, it must be
  understood.
• A discussion of Knowledge Management must start
  with
• Data Data Management
• Information Information Management
• Knowledge Knowledge Management

3
Background of Knowledge Management

• Although knowledge and management have been
  around for a long period of time, the topic of
  Knowledge Management is fairly new and is
  generating much interest and study.
• Neither information management, nor information
  and communication technology are the same as
  Knowledge Management.
• Information management is data based and
  generally addresses information which can be
  processed by the programming of computers.
  Information management has influenced knowledge
  management and indeed plays a role in the
  knowledge management process.
• Information and communication technology (ICT)
  often act as a catalyst for Knowledge Management.
  The availability and development ICT has
  facilitated the Knowledge Management process.

4
Knowledge Management
Information
Data
Knowledge
Data Management
Information Management
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Background of Knowledge Management

• DATA
• Data includes Facts, figures, statistics
• Data is easy to store, sort, and manipulate (it
  is greatly enhanced by ICT)
• Data is clear cut and concise
• Data is of limited value by itself
• Data is very easy to share
• EXAMPLES OF DATA

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Data and Data Management
Information
Data
Knowledge
DATA is a collection of discrete, factual
records Data Management The storage and
addressability of data. Purpose - Ensure that
data resources are continuously available for
manipulation and interpretation.
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Background of Knowledge Management

• INFORMATION
• Information consists of patterns of data
• Information is developed when people analyze
  Data and put into useable terms
• How the Data is interpreted can change from one
  person to another
• The value of Information is increased over raw
  Data, but so is ambiguity
• Information is relatively easy to share, open
  to various interpretations
• EXAMPLES OF INFORMATION

Ref. 11
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Information Management
Information
Data
Knowledge

• Information is meaningful organization of data
  that is communicated.
• It is a complex function with
• Specific intentions of the originator
• Specific context
• Depends on interpretation by recipient.
• Specific goal
• Information Management
• Management of the communication channels that run
  between the people in an enterprise.

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Background of Knowledge Management

• KNOWLEDGE
• Knowledge is the information inside peoples
  minds
• Knowledge is the understanding of the
  information data
• Knowledge is very valuable
• Sharing of knowledge is much more difficult
  than the sharing of data or information
• The creation of knowledge in organizations is a
  collective process of sense making.
• EXAMPLES OF KNOWLEDGE

Ref. 7
10
Knowledge
Information
Data
Knowledge

• Knowledge is the meaningful organization of
  information.
• Knowledge includes Data, Information and personal
  experience know how
• Knowledge consists of Explicit knowledge and
  Tacit knowledge
• Results in a greater use and sharing of valuable
  information and thus eliminates the need for
  everyone to reinvent the wheel

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Background of Knowledge Management

• KNOWLEDGE
• Knowledge in peoples heads is the most
  important resource a company has. Only a small
  amount of a companys knowledge is available in
  exchangeable data files.
• It is the explicit and tacit knowledge which
  makes up the knowledgebase of a company.
• Explicit Knowledge
• Explicit knowledge is easy to code, it comes in
  the form of books, company policy manuals,
  mission statements, company documents, databases,
  reports and etc.
• Tacit Knowledge
• Tacit Knowledge is hard to code and extract. It
  is the practical knowledge on how to get things
  done and personal knowledge based on individual
  experience. Tacit knowledge is invisible and the
  most difficult to share.
• EXAMPLES OF TACIT KNOWLEDGE

Ref. 30
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Managing Knowledge

• Managing Knowledge well means creating an
  culture that demands, supports, encourages and
  rewards the sharing of knowledge. This includes
  paying attention to people and organizational
  structure, as well as to the information
  technology for knowledge sharing and use.

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KM Interview - Accenture

• Knowledge is important for the success of the
  company.
• Knowledge Source - People on the front lines,
  actually doing the work.
• Knowledge Users - Everyone.
• Knowledge captured in databases usually
  self-submitted, sometimes external.
• Distribution Next generation mobile devices.
• KM tools used - Intranet and proprietary
  software.
• People aren't threatened by KM.
• Success Criteria Difficult to measure value.
  Showing value is difficult. Support from company
  leadership is critical.
• KM obstacles - Lack of management support, Poor
  communication and communication devices,
  financial resources
• Lisa Pappalardo, has a Masters in
  Industrial/Organizational psychology and has been
  with Accenture for over six and half years.

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Have you ever heard of a little company called
General Electric?

• Annual Sales Roughly 132 billion
• Major Products Power systems, aircraft engines,
  plastics, television media, medical systems,
  consumer finance, corporate finance, lighting,
  real estate, insurance, transportation,
  appliances, to name a few
• Who are GEs customers? Just about everyone!
• Who is the CIO? Gary Reiner, a GE veteran
• Who does he report to? The CEO

Ref. 17,22
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A case study General Electrics Knowledge
Management success 

• Jack Welch took over in 1981
• GE must become
• Lean, and
• Agile  

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Why was the change needed?

• A decision that should have taken a half an hour
  would take months
• GEs numerous reporting layers hindered the flow
  of information
• From the top down, and
• The bottom up   

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I mean business

• Become either 1 or 2 in its respective area, or
  face the consequence of being divested   
• Welch cut nearly 20 of the global GE workforce
• So in his first moves, he let them know he meant
  business

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The culture shifts

• It was at this point that Welch believed the
  company was primed for the vision.  
• Welch began his crusade with changing the culture
  at GE
• Shun the incremental and go for the leap
• He started with attitudes
• He started at the top  

Ref. 5
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TALK TO ME!!

• Welch began
• The constant interactive process
• Aiming to produce consensus
• Teaching by example that listening was more
  important than talking
• Emphasizing that Real communication takes
  countless hours of eyeball to eyeball contact
• Idealizing honesty and clarity as business
  imperatives  Those managers who could not get
  on board with GEs new vision, well, they had to
  go  

Ref. 5
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Share the vision

• The next steps
• Ensure that every single employee understood what
  the business was trying to achieve
• Engender self-confidence in his people, which he
  believed to be central in unfettered
  organizational communication  people who were
  freed from the confines of their box on the
  organizational chart, whose status rests on
  real-world achievement-those are the peoplewho
  share every bit of information  

Ref. 5
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See how easy this is?

• Business isnt complicated. Complications arise
  when people are cut off from information they
  need  
• As people began to feel free to exchange
  information, decisions that used to take months
  were taking minutes

Ref. 5
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Let the games begin!

• Corporate Executive Council
• An intensive 2-day session
• Held quarterly
• To candidly and openly share ideas and
  information

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And KM takes shape

• Welch soon began 2 extremely significant KM
  programs  
• Work Out
• Best Management Practices  

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Work Out

• The Work Out Process 
• Based upon the sharing of knowledge internally
• Brings thousands of employees together to share
  knowledge and perspectives
• Fights middle managements tendency to do
  nothing with ideas from below
• -hot seat example
• Encourages trust, teamwork, independence and
  confidence in the system
• Allows for empowerment of the employees, thereby
  doing more with less  The goal of Work-Out was
  to get to a point where people challenge their
  bosses every day 

Ref. 5,16
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Best Management Practices

• Best Management Practices 
• Based on the gathering of external knowledge
• Involves a system whereby
• weaknesses are identified
• superior processes are located
• -Welch goes to market example
• those processes are communicated
• those practices become embedded in the company
  through intensive and extensive training  

Ref. 16
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If you build it, will they come?

•  
• GE employees are continually motivated to
  participate in KM programs by 
• Compensation plan overhaul
• Stock and bonus awards
• Strong cultural promotion of KM  
• Intense management support of KM
• Evaluation criterion for success within GE
• Re-defined the internal concept of loyalty from
  giving time to an affinity among people who
  want to grapple with the outside world and win

Ref. 5
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What has this meant to GE?

• Ideas developed and implemented as a result of
  the Work-Out process saved over 200,000 in
  1991 
• GE expects a 5 to 1 return on every dollar of
  working capital invested 

Ref. 5
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Can I get a CIO over here?

• In 1996, Welch appointed GEs first ever CIO,
  Gary Reiner.
• Reiner encouraged employee use of technology in
  KM by
• Eliminating other options so the only option left
  is the one we want them to take
• Get complete company support and commitment, from
  the top down
• Talk to you internal customers listen to what
  works, and what doesnt

Ref. 26
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Examples of it all coming together

• Destroy Your Business!!
• GE Capital Fleet Services
• GENet
• GE Answer Center USA

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Applying what we have learned for the future

• As a result of the huge amount of knowledge GE
  has gained, GE took on a new 3-prong e-business
  strategy to improve yet again in the processes
  of
• Making goods
• Buying goods
• Selling goods  

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The make side

• Digitize internal processes for competitive
  advantage
• Aims to eliminate manual and paper processes to
  increase efficiency
• Get there by using the Six Sigma process
• -Process starts with mapping workflow and
  determining the cycle of corresponding actions
• -Desired result is to reduce defect rates,
  improve productivity, and efficiency  
• Current implementation identified 1.5 billion in
  cost savings for 2001 

Ref. 17
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The buy side

• Apply e-business to improve sourcing and
  purchasing
• E-Auctioning which provided 480 million in
  annualized savings in the first 6 months
• The process drives costs down by a competitive,
  open bidding process  The price of a each
  transaction has decreased by about 8  

Ref. 17
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The sell side

• Digitize the online sales process
• New customers are attracted through online
  offerings
• Old customers are migrated to the online system
   Online transactions have grown from 0 to over
  7 billion in 3 years  

Ref. 17
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Other successes resulting from GEs KM process

• Mentor program provides for reverse mentoring for
  top management, regular meetings and reviews on
  e-business learning's and practices, discussion
  groups for best practice sharing
• The Six Sigma approach to quality significantly
  reducing manufacturing errors
• 2001 won Most Admired Knowledge Enterprises study
  for world-class effort in managing knowledge,
  resulting in superior performance
• (noted in subcategories Establishing an
  enterprise culture, management support for
  managing knowledge, maximizing the value of
  intellectual capital, establishing a culture of
  continued learning, managing customer knowledge
  to increase loyalty/value, manage knowledge to
  increase shareholder value.)

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GEs Corporate Values

• All of usalways with unyielding integrity
• Are passionately focused on driving customer
  success
• Live Six Sigma Qualityensure that the customer
  is always its beneficiaryand use it to
  accelerate growth
• Insist on excellence and are intolerant of
  bureaucracy
• Act in boundaryless fashionalways search for and
  apply the best ideas regardless of their source
• Prize global intellectual capital and the people
  that provide itteams to maximize it

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GE Values continued

• See change for the growth opportunities it
  bringse.g., e-Business
• Create a clear, simple, customer-centered
  visionand continually renew and refresh its
  execution
• Create an environment of stretch, excitement,
  informality and trustreward improvementsand
  celebrate results
• Demonstratealways with infectious enthusiasm for
  the customerthe 4-Es of GE leadership the
  personal Energy to welcome and deal with the
  speed of changethe ability to create an
  atmosphere that energizes othersthe Edge to make
  difficult decisionsand the ability to execute

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Lessons learned

• It starts at the top
• Dont be afraid of change
• Share ideas, and promote idea sharing
• Culture is KEY

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What is Knowledge?
Information put into User-actionable Reports,
Records, Documents, Files
Experience
Knowledge
Value
Insights
Comparison ConsequencesConnectionConversation
Requires human activity
Knowledge andInformation are symbiotic
Tacit
Explicit
Information
Relevance
Data arranged in Meaningful pattern
Contextual zedCategorized Connected Condensed
Must inform
Purpose
Raw facts and figures
Data
No inherentmeaning
Ref. 1
39
KM Truisms
Perfect information does not equal perfect
decisions Behaviors are not changed by
technology alone Connecting is not sufficient to
create value Example - Collapse of Dot-Coms
Ref. 27
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KM - Possible Benefits
20 Creative
80 Routine
Without knowledge Management
Cycle Time Reduction
80 Creative
With knowledge Management
TIME
Ref. 14
41
KM - Enablers
Community
Content
Computing
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KM - Enablers
Community
Content
Computing
Explicit Knowledge
Tacit Knowledge

• Tacit Knowledge often takes the form of a mental
  model
• Beliefs and perspectives so ingrained that they
  are difficult to articulate.
• It's the wisdom and expertise in people's heads

Written or otherwise recorded. It can be readily
identified, articulated, captured, shared, and
applied. Examples - Books, manuals,
patents, databases, reports, libraries,
policies, and procedures.
43
KM - Enablers
Community
Content
Computing
Community is the most significant differentiator
between knowledge management and information
management.
Processes
Collaboration

• Processes
• Include aligning policy, incentives, and
• performance measurement with the
• forms of collaboration desired.

• All community members have a
• vested interest.
• Members must have a strong
• bond that encourages them
• to work together.

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KM - Enablers
Community
Content
Computing
The requisite backbone of knowledge sharing and
the most significant enabler.
Enables
Processes
Enables new types of relationships. Connects
through hardware, software, networks, and the
like. Access through data repositories,
browsers, search technology, Collaboration
through chat discussion groups, bulletins
boards
Identify

Capture
Sharing
Storage
Package
Formalize
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Essence of Knowledge Management
INTELLECTUAL CAPITAL
Explicit
Tacit
HUMAN CAPITAL (Individual)
CORPORATE CAPITAL (Organization)
SOCIAL CAPITAL (Team)

• Expertise
• Experience
• Capability
• Capacity
• Creativity
• Adaptability

• Intellectual Property
• Processes
• Databases
• Flexibility

• Networks
• Relationships
• Interactions
• Language
• Patterning

KNOWLEDGE
Ref. 27
46
Information and Knowledge
Information
Data
Knowledge
Information
Knowledge
Information and KM is closely linked
Information e-mails, memos, reports etc.
People convert knowledge
Transform well structured Information (with
employees help)
People Improve their knowledge.
Intellectual asset
By acquiring information from others
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Relationship of IT, IM and KM
The Essence of Knowledge Management
Human CapitalIndividual
Social CapitalTeam
Corporate CapitalOrganization
The Essence of Information Management
Enabler

• Data
• Info
• Mapping

• Relationships

• Successes
• Lessons Learned

Technology Innovation
Enabler
The Essence of Information Technology

• Software
• Hardware

• Connectivity

• Capability
• Capacity

Infrastructure
Enabler

• Incentives
• Education
• Training

• Teams

• Physical Assets

Ref. 27
48
Relationship of KM and eBusiness Different
Lenses, Common Focus
Ref. 27
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Knowledge Management - Aspects

• Five aspects to be considered
• 1. People or personnel (who does the work)
• 2. Culture, communication, corporate climate,
  society (where, when and why the work gets done)
• 3. Processes (how the work gets done)
• 4. Resources (what can help work get done
  better-- intellectually)
• 5. Tools, including technology (what can help
  work get done better--physically or mechanically)

Ref. 2
50
Knowledge Types
Experimental
Practical (Skills/Knowledge)
Conceptual
Factual
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Knowledge Management Schools
Economic
Technocratic
Behavioral
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Knowledge Management Schools
Economic
Technocratic
Behavioral
Cartographic
Engineering
Systems
Focus Aim Example Critical Success Factors Pri
ncipal Contribution Philosophy
Technology Knowledge Bases Xerox, Sharko
Films Content Validation. Incentives toprovide
Content Knowledge Based Systems Codification
Maps Knowledge Directories Bain Co,
ATT Culture/Incentives to Share Knowledge.
Networks to connect People Profiles and
Directories on Internet Connectivity
Processes Knowledge Flows HP,
Frito-Lay Knowledge Learning and Information.
Unrestricted Distribution Shared
Databases Capability

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Knowledge Management Schools
Economic
Technocratic
Behavioral
Commercial
Focus Aim Example Critical Success Factors Pri
ncipal Contribution Philosophy
Income Knowledge Asset Dow Chemical,
IBM Specialized Teams, Institutionalized Process
Intellectual Asset, Register and Processing
System Commercialization

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Knowledge Management Schools
Economic
Technocratic
Behavioral
Spatial
Strategic
Organizational
Focus Aim Example Critical Success Factors Pri
ncipal Contribution Philosophy
Networks Knowledge Pooling BP Amoco,
Shell Sociable culture Knowledge
Intermediaries Groupware and Intranets Collabora
tion
Space Knowledge Exchange Skandia, British
Airways Design for purpose Encouragement Access
and Representation Tools Contactivity
Mindset Knowledge Capabilities Skandia,
Unilever Rhetoric Artifacts Eclectic Conscio
usness

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How organizations implement Knowledge

• Management Intranet 47
• Repository 33
• Decision-support 33
• Groupware 33
• People networks 24
• Map links to expertise 18  
• Source American Society for Training
  Development (ASTD) Research

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Survey Definitionsn 423 Organizations
Knowledge The knowledge in the business about
customers, products, processes, competitors, etc.
that can be locked away in peoples minds or
electronic form. Knowledge Management The
systematic and organized attempt to use knowledge
within an organization to improve performance
The research was conducted among company
executives in organizations with turnover
exceeding 350 million a year.
Ref. 4
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Survey Knowledge Management Strategyn 423
Organizations
Based on definitions, does your company have a KM
strategy?
Ref. 4
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Survey Industry Sectorn 423 Organizations
Ref. 4
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Survey - Status of Knowledge Management
Programsn 423 Organizations
Which one of the following statements best
describes your organizations?
Ref. 4
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Survey KM Drivers, Who is pushing hardest?n
345 Organizations in KM Program
What level in the organization pushed / is
pushing hardest to have a KM program?
Ref. 4
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Survey Current Knowledge Problemsn 413
Ref. 4
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ROLE OF CKO

• Create knowledge sharing culture
• Provide leadership and Strategy
• Secure resources
• Promote best practices and outcomes
• Champion Education
• Champion communities of practice
• Create and Use Common Language
• Provide Tools Technology
• Use incentives and Awards
• Measure outcomes

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12 Guiding Principles of KM

• Knowledge is messy
• Knowledge is self-organizing
• Knowledge seeks community
• Knowledge travels via language
• The more you try to pin Knowledge down, the more
  it slips away
• Looser is probably better
• There is no one solution
• Knowledge doesnt grow forever
• No one is in charge
• You cant impose rules and systems
• There is no silver bullet
• How you define knowledge determines how you
  manage it

Ref.
64
Challenges to Knowledge Management

• It is almost impossible to directly tie results,
  sales, income to Knowledge Management
• As such, the task of judging success or failure
  is not cut and dry. While the importance of
  Knowledge Management may be agreed upon, the
  disconnect between KM and results may pose
  justification challenges. This reinforces the
  need for strong support from the top down.

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Take Away Points

• We have discussed how knowledge is in the minds
  of the employees. The extraction of this
  knowledge is a critical portion of knowledge
  management. This extraction presents a
  significant challenge both in process and
  cooperation. In many cases an employees value may
  be tied closely to their knowledge, convincing
  them to share this knowledge and possibly lessen
  their value is a tough task.

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Take Away Points

• Mastering Knowledge is a decisive factor for
  success. Optimizing knowledge acquisition and
  knowledge transfer results in competitive
  advantage.

Ref. 7
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Take Away Points

• Sharing Knowledge means the wheel does not have
  to be reinvented by everyone.

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Summary

• Everyday that a better idea goes unused is a
  lost opportunity. We have to share more, and we
  have to share faster. I tell employees that
  sharing and using best practices is the single
  most important thing they can do.
• Ken Derr, CEO of Chevron

Ref. 31
69
References Page 1 of 5

1. Defining knowledge management Barry
   Sterndale-Bennett The British Journal of
   Administrative Management, Orpington Jul/Aug
   2001, Iss. 26 pg. 26, 2 pgs
2. Map you knowledge strategy Xenia Stanford
   Information Outlook, Washington Jun 2001 Vol.
   5, Iss. 6 pg. 18, 7 pgs
3. The information audit as a first step towards
   effective knowledge management Susan Henczel
   Information Outlook, Washington Jun 2001 Vol.
   5, Iss. 6 pg. 48, 10 pgs
4. Knowledge Management Research Report 2000, KPMG
   Consulting
5. Jack Welch General Electrics Revolutionary,
   Harvard Business School, 9-394-065, Rev. April
   12, 1994
6. Customer Knowledge Management, The GE Answer
   Center, 800-626-2000.

70
References Page 2 of 5

1. Knowledge Management, New ways to improve the
   Bottom Line Films for the Humanities
   Sciences Video 2000.
2. Jack Welch General Electrics Revolutionary
   Harvard Business School 9-394-065 Rev. April
   12, 1994.
3. Many rivers to cross from ICT to knowledge
   management systems Paul H. J. Hendricks Journal
   of Information Technology June 2001, Vol. 16,
   No. 2 pg. 57, 15 pgs.
4. Sharing knowledge across boundaries Claudio
   Ciborra and Rafeal Andreu Journal of Information
   Technology June 2001, Vol. 16, No. 2 pg. 73, 19
   pgs.
5. Innovation through knowledge codification
   Carsten Sorensen and Ulrika Lundh-Snis Journal
   of Information Technology June 2001, Vol. 16,
   No. 2 pg. 83, 16 pgs.

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References Page 3 of 5

1. The knowledge management tussle speech
   communities and rhetorical strategies in the
   development of knowledge management Steffen Raub
   and Charles-Clemens Ruling Journal of
   Information Technology June 2001, Vol. 16, No.
   2 pg. 113, 13 pgs.
2. Practicing peer review in organizations a
   qualifier for knowledge dissemination and
   legimization Magnus Bergquist, Jan Ljungberg and
   Ulrika Lundh-Snis Journal of Information
   Technology June 2001, Vol. 16, No. 2 pg. 99, 13
   pgs.
3. Managing Engineering Knowledge, MOKA Methodology
   for knowledge based engineering applications
   Melody Stokes MOKA Consortium, 2001
4. http//academic.emporia.edu/smithwil/00spmg456/gro
   ups/genelectric.html
5. http//www.mountainplains.org/articles/csr.html

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References Page 4 of 5

1. GE Web Site - http//www.ge.com
2. http//www.zdnet.com/products/stories/reviews/0,41
   61,2763630,00.html
3. http//www.knowledgebusiness.com/resource/news_rea
   d.asp?id623
4. http//www.kmmag.co.uk/CURRENTFEB/TOOLSfeb.HTM
5. http//www.knowledgebusiness.com/resource/news_rea
   d.asp?id325
6. http//www.ktic.com/topics6/13_lead.htm
7. http//www.uts.edu.au/fac/hss/Department/DIS/km/kn
   owman.htm
8. http//www.emgltd.com/events/kmnews31.htm
9. CIO Magazine, "Destructive Behavior" article,
   July15,2000
10. PC Magazine, "QA Gary Reiner CIO and Executive
    Vice-President, General Electric Company"
    article, May 31,2001

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References Page 5 of 5

1. Building the Knowledge Enterprise, Department of
   the Navy, USA, Feb 2001
2. Mastering Information Management, Complete MBA
   companion in Information Management Donald
   Marchand, Thomas Davenport and Tim Dickson 2000.
3. CIO Magazine, "Capital Gains" article, August
   1997.
4. A guide to planning a knowledge management system
   by Floyd W. Carlson (1999) University of
   Maryland Bowie State University.
5. O'Dell, C. Grayson, C.J. "If only we knew what
   we know the transfer of internal knowledge and
   best practice. New York Simon Schuster, 1998.