Knowledge Management:

Converting Theory into Practice

Knowledge Management Foundations

Course Slides

Chapter 1: Introduction
 Week 1: Introduction to
Knowledge Management (KM)
 A brief history
 From physical assets to knowledge assets
 Multidisciplinary Nature of KM
 3 Generations of KM
 Key KM concepts and their definitions
 Links to information
 Knowledge typology
 Intellectual Capital
Introduction

 When asked, most

company executives
say their greatest asset
is knowledge held by
their employees
 They also state they
have no idea how to
manage this knowledge
 A Brief History of KM
personalization 2000 ++

virtualization 1980
computerization 1950
communications 1900
transportation 1850
industrialization 1800
Deloitte Touche Tohmatsu

*birth of the internet 1969

 From physical assets to
knowledge assets
 Knowledge has now become more valuable that
physical “things”
 SABRE reservation system vs. airplanes
 Just-in-Time (JIT) inventory systems
 What is the useful lifespan of a piece of valuable
knowledge?
 Old news is worthless vs. some knowledge will never
lose value
 Knowledge obsolescence
 Intellectual Capital

 What is intellectual capital or

intellectual/knowledge assets?
 Difference between book and market value of a company
 Sum total of what employees in an organization know.
Value is at least equal to the cost of recreating this
knowledge
 Skandia was the first company to report intellectual
capital as part of its yearly financial report
 Examples of Intellectual
Capital
 Competence
 The skills necessary to achieve a certain (high) level of
performance - - cf. with mastery - - tactical level
 Capability
 Strategic skills necessary to integrate and apply
competencies – strategic level
 Technologies
 Tools, methods required to produce certain physical
results - - operational level
 Core Competencies &
Capabilities
 Core competencies are the things an organization
knows how to do well
 Give the organization a competitive edge
 Can be a process, specialized types of knowledge,
expertise
 Capabilities are the things an individual knows how
to do well
 Individual capabilities can aggregate to organizational
competencies under appropriate conditions
 Intellectual Capital
Increasing complexity

strategic Political negotiation

Mainly subjective

tactical

operational Technical integration

Mainly objective
 Another way of looking at
intellectual capital (IC)
 IC = Customer capital + Structural capital
 Customer Capital
 The bond between you and your customers – not just brand
loyalty but how well you understand your customers, their
changing needs and requirements. Its value is equal to at
least the cost of creating a new customer
 Structural Capital
 The reduction of intellectual capital and customer capital to
a product or service. The faster you can do this, the greater
your structural capital
 Some KM Milestones

YEAR ENTITY EVENT

1980 DEC, CMU XCON Expert System
1986 Dr. K Wiig Coined KM concept at UN
1989 Consulting Firms Start internal KM projects
1991 HBR article Nonaka & Takeuchi
1993 Dr. K Wiig First KM book published
1994 KM Network First KM Conference
1997 Consulting Firms First KM services for clients
Interdisciplinary Nature of KM
 The 3 Generations of KM

 1st Generation:
 “if we only knew what we know” IT

 2nd Generation:
 “if we only knew who knows about….” PEOPLE

 3rd Generation:
 “if we could only organize our knowledge….”
CONTENT
 Today’s Working Environment
Multi-lingual
Multi-site Multi-cultural
More More &
Global Faster

KM

PC

More More
Mobile Connected Internet
PC PC
 Increasing Complexity

 Today’s work environment is more complex due to an

increase in the number of subjective knowledge items
we need to attend to everyday
 Filtering over 200 emails, faxes, voicemail messages on a
daily basis – how to prioritize?
 Having to “think on our feet” as expected response time has
greatly decreased as well
 KM is a response to the challenge of trying to manage this
complexity amidst information overload
 A “science of complexity”
 Knowledge and entropy production have an inverse relationship
 Some KM Challenges

 Managing content
 Collaborating effectively
 Finding experts
 Learning and making decisions based on
complex mountains of information
 Key KM Concepts & Their
Definitions
 Two major forms of knowledge
 Tacit
 Explicit
 Intellectual Capital
 Competence
 Capability
 Technologies
Explicit vs. Tacit Knowledge

Tacit Knowledge

Explicit Knowledge

files

80-85% 15-20%
active passive
 Tacit Knowledge

 Difficult to articulate – to put into words, text, drawings

 “We have a habit of writing articles published in scientific

journals to make the work as finished as possible, to cover up
all the tracks, to not worry about the blind alleys or how you
had the wrong idea at first, and so on. So there isn’t any place
to publish, in a dignified manner, what you actually did in
order to do the work.” (Richard Feynman)

“We know more than we can tell”

(Michael Polanyi)
 Value of Knowledge

 Tacit knowledge  Explicit knowledge

 Ability to adapt  Ability to disseminate

– to deal with new and – to reproduce
exceptional situations – to access and re-apply
– expertise – to teach
 Ability to collaborate  Ability to systemise
– to share a vision – to articulate a vision and
– to transmit a culture translate it into operations
– to coach – to integrate into products,
services and processes
Bureau de Paris 21
 KM link to Information &
Information Management
 What is the difference between Information
Management and Knowledge Management?
 What are some of the similarities?
 Where are some of the synergies?

Beware GIGO: Garbage In Garbage Out

 Information vs. Knowledge
Management
 3 criteria must be met before information can be
considered knowledge:
1. Knowledge must be connected – it exists in a collection of
experiences and perspectives
2. KM is always a catalyst – it is an action. Information
which is not leveraged into action of some kind is not
knowledge – info that is not used nor applied is not
knowledge. Knowledge co-exists with intelligence and is
used in decision-making.
3. Knowledge is applied in new, previously un-encountered
environments, novel situations
 Information vs. Knowledge
Management (con’t)

unplanned

Response

Information
planned
Management

anticipated unanticipated
Stimulus
 IM consists of preplanned responses to anticipated stimuli
 KM consists of unplanned (innovative) responses to surprise stimuli
 KM Link to Other
Professionals
 Knowledge Organization
 Traditionally, IT and information specialists have
focused on the organization of explicit knowledge
 Books, documents
 This scope needs to be enlarged to include tacit
knowledge – all intellectual assets at 3 levels:
 Individual
 Group (“community of practice”)

 Organization (corporate/organizational memory)

 The 3 Pillars of KM

1. Knowledge is the foundation of all organizations

2. KM’s purpose is to increase the intelligence of the
organization by building and leveraging
knowledge
3. Knowledge must be embedded in all products and
services of the organization
KM is the leveraging of collective wisdom
to increase responsiveness and innovation
 Value of Knowledge
Management
 Improved learning  Better able to stay ahead of
 Individual the competition
 Teams
 Improved knowledge
 Organization
embedded in products and
 Better decision-making and
services
problem-solving
 Higher quality knowledge  More effective networking
work, greater expertise and collaboration
 More innovation and  More ethical behaviour
greater creativity
 Knowledge Hierarchy

 Data: symbols, a property of things

 Information: data that are processed to be useful;
provides answers to "who", "what", "where", and
"when" questions
Can be directly observed
Cannot be directly observed
 Knowledge: application of data and information;
answers "how" questions – a property of people
 Understanding: appreciation of "why"
 Wisdom: evaluated understanding.
 Data to Knowledge Path

 Knowledge builds on information extracted from

data – less about amount, more about # connections
 The traffic signal is red – can have 3 data states: red,
yellow or green
 Both perceived as gray by a colorblind person
 No information conveyed by visual signal
 Convention always places red light on top of yellow on
top of green
 Perceives light on top is on therefore it is red
 Knowledge is contextual, abstracted, valuable
 Knowledge Hierarchy

connectedness Filtering: perceptual

and conceptual

Wisdom
Understanding principles

Knowledge
Understanding patterns

Information
Understanding relations
understanding
Data
 Types of Knowledge

structured

abstract concrete

unstructured
 Structured vs. Unstructured
Knowledge
 Examples of Structured:
 Database
 Directory of names (alphabetic)
 Filed minutes of meetings (by date)
 Threaded emails
 Examples of Unstructured:
 Corridor meetings
 Telephone calls
 Post-it notes
 Abstract vs. Concrete
Knowledge
 Abstract Knowledge
 More general
 E.g. word processing principles such as cut & paste

 Concrete knowledge
 More specific
 E.g. user manual for Word
 More embedded with something physical
 Types of Knowledge

structured
Tacit - Explicit
Ef
fi ci e
nt ,
abstract sy concrete
s te
ma
ti c

unstructured
 Conceptual Typology of
Knowledge
 Different conceptual levels of Knowledge
 Know THAT = Declarative Knowledge
 Problem solving, decision making, general principles, theories, models
 Know HOW = Procedural Knowledge
 Practical and factual knowledge base, reference knowledge
 Know WHY (and WHY NOT) = understanding
 Goals, vision, paradigms, values
 CARE WHY = motivation
 AUTOMATIC knowledge = habitual
 Not usually conscious of this type of knowledge e.g. driving
 Summary – Types of
Knowledge
 Structured and unstructured knowledge
 Concrete and abstract knowledge
 Tacit and explicit knowledge
 Declarative and procedural knowledge
 Understanding, motivation & habits
 What is Knowledge
Management?
• KM is the systematic, explicit and deliberate building, renewal and
application of knowledge to maximize an enterprise’s knowledge-related
effectiveness and returns from knowledge assets (K. Wiig)

• KM is the process of capturing a company’s collective expertise wherever

it resides: in databases, on paper, in people’s heads – and distributing it to
wherever it can help produce the biggest payoff. (Hibbard)

• KM is getting the right knowledge to the right people at the right time so
they can make the best decision (Petrash)
 More KM Definitions
 It is the attempt to recognize what is essentially a human asset buried in the
minds of individuals, and leverage it into an organizational asset that can be
accessed and used by a broader set of individuals on whose decisions the firm
depends. —Larry Prusak

 KM applies systematic approaches to find, understand and use knowledge to

create value (O’Dell)

 KM is the explicit control and management of knowledge within an

organization aimed at achieving the company’s objectives (van der Spek)

 KM is the formalization of and access to experience, knowledge, and expertise

that create new capabilities, enable superior performance, encourage
innovation and enhance customer value (Beckman)
 A Concept Analysis Exercise

 What key attributes need to be present in a

definition of Knowledge Management?
 What are some good examples?
 What are some good “non” examples?
 KM is:

 A management philosophy that takes systematic

and explicit advantage of knowledge to make the
organization act more intelligently
 Knowledge is used/applied for both operational and
strategic purposes
 Ways to find, analyze, categorize critical
knowledge areas to make sure appropriate
knowledge is available when and where needed
 KM is NOT….

 KM is NOT power, it is how you use it that

matters!
 KM is not archiving all existing explicit
knowledge
 A set of isolated techniques without a common
framework
 a different label for IT, HR or training
 A command and control system for knowledge
 KM: Concept Definition

Key Attributes KM is…examples KM is not…ex

1. …………. 1. …………. 1. ………….

2. …………. 2. …………. 2. ………….
3. …………. 3. …………. 3. ………….
4. …………. 4. …………. 4. ………….
5. …………. 5. …………. 5. ………….
6. …………. 6. …………. 6. ………….
7. …………. 7. …………. 7. ………….
 KM Concept Definition – Key
Attributes (by the class)
1. Organizational learning
2. People-centric
3. Tacit and Explicit forms of knowledge
4. Structured access
5. Put into action
6. “GroupThink”
7. Innovations and ideas
8. Value criteria
9. Knowledge creation
10. Experience
11. Understanding, making sense of knowledge
12. Communities of practice
13. Communication of knowledge
 KM Concept Definition –
Examples (by the class)
1. ListServe
2. Intranet/portal
3. Discussion Lists
4. WebCT
1. Course-related
content
2. Other content Shared Workspace

5. Leveraging
6. Collaborating
7. Managing
8. Expertise directory
 KM Concept Definition – Non-
Examples – KM is not JUST:
1. Information management
2. Competitive intelligence
3. Data mining
4. Database Management System
5. 100% objective
6. 100% technology (e.g. portal)
7. 100% techniques (e.g. knowledge mapping)
8. Exploitation (motives involved)
9. Competitive (at the level of the individual)
10. Closed silos (isolated organizational units)
11. Controlling
 Next:

 Next: The KM Cycle