Knowledge Management

Knowledge Management
and
Learning Organizations
Superfactory Excellence Program™

www.superfactory.com
© 2004 Superfactory™. All Rights Reserved. 1

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Outline
1. Why the Interest?

2. Knowledge Management
1. Trends in Knowledge Management
2. Forms of Knowledge
3. Intellectual Capital
4. Challenges & Critical Success Factors
3. Learning Organizations
1. Team Learning & Personal Mastery

“The basic economic resource is no longer
capital, nor natural resources, nor labor. It
is and will be knowledge.”
Peter Drucker

Why the Interest?
 Opinion leaders
 Perceived growth in knowledge
 Bandwagon effect
 Become part of everyday parlance
 Skills shortage
 Recognition of growing difference between tangible and
intangible assets

Opinion Leaders
 When the rate of change outside the firm is greater than

the rate of change inside the firm, the end is in sight.
Jack Welch - CEO General Electric
 The rate at which individuals and organizations learn may
be the only source of sustainable competitive advantage.
Ray Stata - CEO Analog Devices
 Any organization can change, but change without the
benefit of learning is risky and inefficient.
Sal Belardo

Exponential Growth in Knowledge
 By the year 2020 knowledge will double every 73 days or

less
 World Wide Web is doubling every 90 days
 Internet is doubling every 250 days
 Moore s Law The power of silicon technology doubles every
18 months
 Metcalfe s Law The value to those connected to a network
increases by n square

Bandwagon Effect
 General Electric, ABB, Siemens, BMW, Toyota, Monsanto,

Teltech, Roche, Microsoft, Andersen Consulting, McKinsey &
Company, A.D. Little, 3M, Otican, Pfizer, Skandia,
Steelcase, US West, British petroleum, etc.

Part of Everyday Parlance
 Go to Amazon.com, and look at the number of books

devoted to the subject
 Search the journal databases
 Look at the number of Ph.D. thesis titles

Skills Shortage
 The less translation that occurs within someone’s head, the

better. There is a 17% turnover in our business every year.
That means that every five years we lose most of our
knowledge. A knowledge management system must
capture this personal knowledge and translate it into
institutional knowledge.
- Roger Siboni KPMG Peat Marwick

Tangible vs Intangible Benefits
 The difference between market value and net assets in

growing. Think of this difference as intangible assets or
various types of intellectual capital customer capital,
investor capital, structural capital, human capital.

What is knowledge management?
“Knowledge management is leveraging

relevant intellectual assets to enhance
organizational performance.”
Stankosky, 2002

another useful definition
The systematic process of creating, maintaining

and nurturing an organization to make the best
use of knowledge to create business value and
generate competitive advantage.

“Management” of Knowledge
 Knowledge management is an integrated systematic approach to

identifying, managing and sharing all of an enterprise’s
information assets, including databases, documents, policies, and
procedures, as well as previously unarticulated expertise and
experience held by individual workers. Fundamentally it is about
making the collective information and experience of an enterprise
available to individual worker.

Some Definitions
 Policies, procedures and technologies employed for
operating a continuously updated linked pair of networked
databases. (Anthes)
 Bringing tacit knowledge to the surface, consolidating it in
forms by which it is more widely accessible, and promoting
its continuing creation. (Birket)
 Process of capturing, distributing and effectively using
knowledge. (Davenport)
 Knowledge management is the process of capturing a
company s collective expertise wherever it resides-in
databases, on paper, or in people s head-and distributing it
to wherever it can help produce the biggest payoff.
Knowledge management is getting the right knowledge to
the right person at the right time .(Info Week 10/20/97)

Redefining Business Innovation
The creative process through which additional economic

value is extracted from the stock of knowledge (OECD,
2001)

Why Knowledge Management?
 Organizing existing corporate knowledge

 New ways to share tacit knowledge
 Support for research and knowledge generation
 New ways to share explicit knowledge
 Smart tools to aid decision making

Why Knowledge Management?
Knowledge is: Knowledge results in:

 The cutting edge of organizational  The “learning organization” (Mayo
success (Nonaka, 1991) & Lank, 1995)
 The engine transforming global  The “brain-based organization”
economies (Bell, 1973, 1978) (Harari, 1994)
 Leading us toward a new type of  Intellectual capital” (Stewart, 1994)
work with new types of workers  “Learning partnerships” (Lorange,
(Blackler, Reed and Whitaker, 1993) 1995)
 The element that will lead to the  Obsolete capitalists economies
demise of private enterprise and radically different societies
capitalism (Heilbruner, 1976) (Drucker, 1993)
 The sum total of value-added in an
enterprise (Peters, 1993)
Conclusion
 The “mobile and heterogeneous
[resource that will end the] Knowledge is fast becoming a
hegemony of financial capital [and primary factor of production (e.g.,
allow employees to] seize power” Handy, 1989, 1994; Peter, 1993; Drucker, 1992)
(Sveiby & Lloyd, 1987)
© 2004 Superfactory™. All Rights Reserved. Source: Theseus International 18
Management Institute, February 2000
Knowledge Management Trends
 Survey of 200 Large Firms found:

 82% have KM underway in their organization
 50% have KM staff & budget
 27% have a Chief Knowledge Officer
(Conference Board)
 Survey of nations leading CEOs:
 Second top priority “Improving KM” (88%)
(Foundation for Malcolm Baldrige Award)

Knowledge Management Trends
 By 2001, enterprises that lack ongoing KM infrastructure will lag

KM-enabled competitors by 30-40% in speed of deployment for
new competitive programs and products
(Gartner Group)

KM Pays Off
True KM Implementation and Results
Dow Chemical: $100m

Silicon Graphics: $2.8m
Texas Instruments: $500m (cost avoidance)
Computer Sciences Corp: $5.8b
Chevron: $150m
Cemex: (average delivery time 20 minutes)
Ford: 3 month reduction in cycle time
Cisco: One hour virtual financial close

Knowledge is the human capacity
(potential & actual ability) to take
effective action in varied and uncertain
situations.

Wisdom is a state of the human mind
characterized by profound understanding
and deep insight. It is often, but not
necessarily, accompanied by extensive
formal knowledge.
Meeker, Joseph, “What is Wisdom”, LANDSCAPE, Vol. 25, No. 1, Jan 1981.

Use of Knowledge
 Knowledge Identification: Where is the knowledge? Who

has it? What type of knowledge is it?
 Knowledge Elicitation: How can we acquire it? What tools
can we use?
 Knowledge Dissemination: In order for it to be
disseminated, it must be represented so that it can be
stored and processed.
 Knowledge Utilization: We must be able to evaluate the
benefits of its use.

Paradoxes of Knowledge
 Using knowledge does not consume it but it does get
obsolete.
 Transferring knowledge does not lose it but market

mechanisms allow ownership.
 Knowledge is abundant, but the ability to use it is

scarce.
 Producing knowledge resists organization.
 Much of it walks out the door at the end of the day.

Forms of Knowledge
• Concepts, methodologies
• Facts, beliefs, truths & laws
• Know what, Know how, Know why
• Judgments & expectations, insights
• Relationships, leverage points
• Intuition & feelings
• Meaning and sense making

Data and Information
 Data are facts, numbers or individual entities without

context or purpose.
 Information is data that has been organized into a

meaningful context (to aid decision making).

KM versus Data Management
 Data / information management

 Processing large volumes of facts with little human
interaction
 Puts data into organized frameworks
 Knowledge Management
 Requires human interaction – material must be
organized to facilitate human access to it.
 KM provides links between organized frameworks.

Knowledge Workers
 Dominant group of workers in the 21st century.

 Specialists with job-specific skills.
 Have significant formal education or formal training.
 Are self-directed learners
 Require multiple, continuous learning opportunities to
maintain their specialized knowledge

Knowledge Technology
• Knowledge repositories
• Neural systems
• Data-mining tools
• Contact software
• Intranets
• Extranets
• Water Cooler Technology

Knowledge Repositories
 Tool used to store information

 Also known as data warehouses
 Examples:
 Discussion databases
 Best practices repository
 Lessons Learned
 Learning Histories

Knowledge Repositories
 Like a data base but for knowledge

 Often mechanistic, technical approach
 Requires tools or interfaces to
 Enter knowledge into repository
 Store, index, sort the knowledge
 Retrieve relevant knowledge when query
 Simplest would be keyword searches

Common Ideas
 Corporate “intranet” as knowledge repository

 (Intranet is internal network build using Internet technologies such as web,
search engines)
Internal users (as with Notes systems next time)
 External users (Knowledge@Wharton/HBS Working
Knowledge)
 Create a “corporate portal” interface
 Bring together resources, news of all times
 May be dynamic, personalizable

 Could converge with EIS/”Digital Dashboard” idea

Neural Systems
 Performance support tools for workers who need

information immediately
 Example: Case based reasoning
 Characteristics of a problem are entered into a system,
classified based on a huge statistical database of cases,
offers up potential solution. This case and it’s resolution
is then added to the database.
 Help Desks

Data Mining
 Attempt by the system to translate huge amounts of data

into knowledge
 Analyzes patterns
 some examples…..
 Credit Card Companies red-flagging purchases out of
the “norm”

Contact Software
 Facilitates interaction among individuals to encourage

sharing
 Email
 Intranet chat rooms
 Groupware
 Whiteboards

Intranets
 Usually the first stage of KM implementation for most

companies
 HR forms, online resources, work product status…
 Plan it with the user in mind: access, flexibility and
navigation
 Putting your cafeteria menu on the intranet does not count
as KM

Extranets
 Centralized electronic repository of information

 Accessed by clients
 Advertising, newsletters, client specific information, status
of orders….
 Interactive tools for collaboration

Water Cooler Technology
 A majority of knowledge sharing takes place during

informal conversation around the water cooler

What does it take?
 20% Right Technology
 80% Cultural change

 Behavior of the leaders
 What type of learning is valued
 Informal structure of the company
 How are mistakes handled
 What is rewarded and what is punished
 How is information shared

KM vs Information Management
 One expert calls idea that “knowledge management is

about managing knowledge, while information
management is about managing information” a “myth”
 She says knowledge and information are the same “stuff”
but that “[IM] focuses on finding the stuff and moving it
around, while the [KM] is also concerned about how people
create and use the stuff.
 Also “knowledge management deals with a far broader
range of approaches to communicating and using both
knowledge and information.
Source: Ruth Williams (PWC consultant) on CIO.com, 18 October 1999

KM and Artificial Intelligence
 Within computer field, knowledge first talked about in

Artificial Intelligence (AI)
 Trying to build systems to reason about the world, hold
beliefs
 Requires integrated knowledge base to work against
 Deep understanding of context (“frames”, “scripts”)

needed to understand actions or dialog
 So “knowledge representation” is an important (and
unsolved) challenge

Expert Systems
 Idea is to capture knowledge of wisdom as a set of rules

 Feed into standard “expert system shell”
 Produced automated expert-in-a-box
 Very hyped during 1980s

 Huge applications expected in medial diagnosis, etc.
 Reality disappoints
 Rules need constant changing
 Expertise is “tacit” and hard to extract from human and

formalize

Problems with Implementation
 In too many instances, knowledge management initiatives

start in the information technology department ultimately
focusing on the IT infrastructure, and what the IT people
deem important. As a result many of these efforts focus on
information rather than knowledge.
 It is difficult to evaluate learning or to place a value on
intangibles such as knowledge, especially tacit knowledge.
Some types of knowledge take years to digest so that the
benefits of learning may not appear until some time in the
future.

Organizational Knowledge
 Both explicit and tacit

 Explicit knowledge can be formalized and codified,
embodied in standard process, documented and taught
 Tacit knowledge is unconscious and cannot easily be
transmitted by formal description-requires interaction
and modeling to be transmitted
 Both individual and collective
 Embodied in individual expertise
 Embodied in communities of practice
 Embodied in collectives ofexpertisesthat work

collaboratively

Explicit and Tacit Knowledge
 Explicit knowledge – what is recorded; easily identified,

articulated, shared and employed
 Tacit knowledge – personal; wisdom and experience;
context-specific; more difficult to extract and codify

Tacit Knowledge
 Idea associated with Michael Polanyi

 Hungarian scientist turned philosopher
 Several influential ideas about knowledge

 See knowledge is social, public, often personal. Bound
up with contexts, experience
 Says that important knowledge is often tacit rather than
explicit
 Bound up with processes, actions, situations
 Not articulated in conscious, verbal form
 Can do something, but can’t explain how
 Challenge: how to capture this?

Sharing Tacit Knowledge
 One line of thinking:

 Tacit knowledge is transmitted in hall way chats,
experience working on projects, etc.
 So, can be captured by channeling discussions into
“collaborate workplace” online
 Instead of verbal or email
 Make on-line community groups

 Threaded discussions
 Searchable archives
 Places to post documents and hints
 Lessons from successes and failures

Intellectual Assets
 Social capital – relationships with customers, employees,

business partners and external experts
 Structural capital – patents; brand names; systems and
processes; management philosophy
 Human capital – education; experience; skills; attitudes

Intellectual Capital
 From accounting viewpoint, how to represent value of

intangible items
 Big buzzword in late 1990s
 Partly motivated by justifying absurd stock market premiums during boom
 From 1998 paper “If the market does not fall substantially… in 1999-2000 I
believe we have a serious indication that something has in face happened in
the US economy…”
 Quantifying invisible knowledge assets makes prices look more reasonable
 Equivalent to “human resource”, “information resources”,
etc.
 Knowledge and expertise of how to do things
 Bound up with people and culture, not physical assets

Further Attributes of Knowledge
 Know-how
 Know-why
 Know-what
 Know-who
 Know-where
 Know-when
(Collison and Parcell, 2001)

Organizational vs Individual Knowledge
 Two issues:
 Corporate knowledge owned by individuals
 Knowledge resides in silos

Components of KM Programs
 People – communities and networks

 Processes – knowledge-enabled
 Technology – collaboration, knowledge leverage tools
 Content – best practices, internal and external intelligence

Activities of Managing Knowledge
 Create
 Discover
 Capture
 Distil
 Validate
 Share
 Adapt
 Adopt
 Transfer
 Apply

Knowledge Management Approaches
 Self-service – intranet portals; yellow pages;

people finder
 Networks and Community of Practice –

knowledge sharing; learning communities
 Facilitated transfer – internal consultants;

dedicated facilitators; known experts

Sustainable Knowledge Management
 Unconscious incompetence
 Conscious incompetence
 Conscious competence
 Unconscious competence

KM Starts with
Process the Business
Efficiency Effectiveness
Strategy
Input Output
Business
Strategy
Bu
si
g
lin
ne
Implementation /
b
ss
Operational Plans
na
Dr
eE
iv
ris
er
s
rp
• Business Process / • Value Added

te
Best Practices
En
• Environmental
• Capabilities Influences
People Processes Technology

Infrastructure Management and Maintenance
LEADERSHIP ORGANIZATION TECHNOLOGY LEARNING

Baldanza, 1999
Barriers to Knowledge Management Success
Results From International Survey:
 Organizational Culture 80%

 Lack of Ownership 64%
 Info/Comms Technology 55%
 Non-Standardized Processes 53%
 Organizational Structure 54%
 Top Management Commitment 46%
 Rewards / Recognition 46%
 Individual vice Team Emphasis 45%
 Staff Turnover 30%
Ernst & Young KM International Survey, 1996 (431 senior executive responses)

Approaches to Knowledge Management
 Store, share, organize knowledge

 Knowledge Repository
 Like DBMS for “higher level” knowledge
 Manufacture knowledge from mining operational data

 Create/apply knowledge through online infrastructure for
teamwork
 Team Collaboration tools
 Specialist Community Building

 Related tasks in different areas of organization

Getting Started
 Identify what your most valuable knowledge is

 Identify where that knowledge is
 Create a knowledge map (skills, expertise, experience)
 Build an intranet, use groupware
 Buy more water coolers

Approach
Value
Concept Definition Assessment Opportunity/Threat
Framework Modelling
• How do we prioritise the

• What is this ? • How do we assess opportunities
the value
• How do we deal with
potential dis-continuities
(threats)

The Knowledge Value Chain
We must recognise that there is a value chain for
“Knowledge” in just the same way that Michael Porter
(1985) proposed that business functions be organised in
terms of the value added to customers.
Integration Preservation Transmission Application Creation
 Within the value chain, business processes and KM processes

interweave and at the touch points, create the “Points of
Confluence” that require integration of KM practices
It can be argued that part of the societal role of a university

is to nurture and protect this value chain

Mapping to the Points of Confluence
Which KM processes are active at the points of confluence in
the Knowledge Value Chain and what are we looking for ?
Integration Preservation Transmission Application Creation
Business Business Business Business Business
Processes Processes Processes Processes Processes
Catalogue & Store Publish Locate &

Retrieve
Discovery
• Meta-data standards • Netcasting • Neural Networks

• Semantic models • Portals • Visualisation
• Low barriers to access • Case-based Reasoning
• Rule-based Systems
• 24x7 Secure Storage • Information Request Brokers

• Data Warehouses • Search Engines
• Document Management • Content extraction
• Digital Archiving • Intelligent Agents
• Query Tools
• Collaboration Space

Conceptual Architecture
Interface Knowledge Portal
Knowledge Discovery Services Collaboration Services

Management services
Taxonomy Knowledge map
Information and Knowledge Repository

process management
Infrastructure E-mail, file servers, Internet / intranet services
Information and WP Email

Knowledge Sources
Corporate World Wide

Databases Web People
Collaboration Services supports knowledge sharing

Discovery services helps users to retrieve and analyse the information in the corporate memory
Knowledge Map provides a corporate schema for knowledge classifications
Knowledge Repository provides the information management functions for captured knowledge

Commercial Organizations and KM
1. Improvement in operating efficiency of business

processes which benefit from having access to superior
information at the point of need e.g customer-facing and
marketing processes, product development etc
2. A knowledge-empowered organization
3. A way of addressing concerns over the loss of corporate

memory arising from the increasing mobility of labor
“If we only knew half of what we know, we would be twice as profitable”
- Carla Fiorini, CEO Hewlett Packard Corp

Return on Investing in KM
Support  Increase Operational Effectiveness  Increase Rate of Innovation

Strategic  Shrink Delivery Times  Increase Competitive Positioning
Direction  Shrink Response Time
Enterprise  Ease Access to People  Increase Collaboration

Effectiveness  Increase Span of Experts  Increase Synergy
 Learning Organization  Learning Organization With an Attitude
n  Work Enrichment
io
sat
i
im
ax
eM
lu
Va
Job  Find Information More Quickly  Gain Insight

Effectiveness  Make Better Decisions Faster  Reuse Work and Ideas
 Create
Traditional Benefits Non-Traditional Benefits

Knowledge Sharing + Knowledge Share/Leverage

Preserving “Invisible Equity”
This illustration was developed using data taken from the CWO Balance Sheet of 31
March 2001
Assets Finance
Current
Current 1.99 1.98
Liabilities
Assets
3.58 Non Current
Liabilities
10.93
Non- 8.95 Visible
Current Shareholder
5.38
Assets Equity
Invisible
3.12 Equity • The “Invisible Balance Sheet”
• Management Value-Add
Market Value $14.05 Billion

Universities and KM
Similar drivers towards business performance, but the real

value lies in enhanced research outcomes.
1. Improving the velocity of information
2. Increasing the impact of research (freedom of access)
3. Long-term curatorship
The collaborative efforts of universities towards Knowledge

Management are likely to provide an ‘accelerator’ effect for
research in each participating institution.
This, dis-intermediation of the current publishing business model,

is something that will need to be carefully considered.

Universities and KM
Relevance to the core mission:
 Protection of the Knowledge Value Chain can be directly

related to the core mission of universities and the role
they play in society.
 Loosening of the traditional bonds between faculty,

students and institution brought about by the impact of
Information Technology, may require even greater
emphasis on the management of knowledge

Key Elements to Engineering a KM System
LEADERSHIP
Environmental Influences
Social Economic
Political Governmental
KNOWLEDGE MANAGEMENT
The Architecture of Enterprise Engineering
Business Culture BPR E-mail Intuition

LEARNING ORGANIZATION
Strategic Planning - Processes OLAP Innovation vs.
- VisionandGoals - Procedures DataWarehousing Invention
Climate Metrics Search Engines Learning
Growth MBO DecisionSupport Community
Segmentation TQM/L ProcessModeling Virtual Teams
Communications Workflow Management Tools SharedResults
Communications Communications Exchange Forums
Communications
MUL T I P L E D I S C I P L I NE S
Systems Engineering Organization Development Systems Management Organization Behavior
TECHNOLOGY
Theory: A formulation of apparent relationships or

underlying principles of certain observed phenomena
which has been verified to some degree.
Webster’s New World Dictionary

Knowledge Management Engineering Overview
SYSTEMS APPROACH
INPUT PROCESS OUTPUT
INFORMATION
SYSTEMS SYSTEMS KNOWLEDGE
SYSTEMS SYSTEMS SYSTEMS
ENGINEERING / ENGINEERING MANAGEMENT
THINKING ANALYSIS MANAGEMENT
BPR AND ENGINEERING
MANAGEMENT
THE ENTERPRISE
INTEGRATIVE MANAGEMENT / ENGINEERING
KNOWLEDGE MANAGEMENT INFRASTRUCTURE

Knowledge Engineering, Integration, and Management
FEEDBACK FEEDBACK
INPUTS PROCESS OUTPUTS

Functions
C u s to m e rs
E c o lo g y
L a b o r
M a te r ia l a n d G o v e rn m e n t
E q u ip m e n t
T h e O r g a n iz a tio n
IN P U T P R O C E S S
F e e d b a c k C o n tr o ls
O U T P U T
Processes
C a p ita l G e n e ra l
P u b lic
L a n d C o m p e tito r s
T e c h n o lo g y
E n te r p r is e Intellectual Assets
(Operational) Enhanced
organizational
Codification Personalization
S tr a te g ic performance
G o a ls  Assure  Generation
(M e a s u r a b le )
 Codification  Transfer  Use  Efficiency
In te lle c tu a l  Effectiveness
Organization
a s s e ts
( D e c is io n  Innovation
M a k in g ) Formal Informal
KM Technologies
LE ARNING
• Collaborative
LDERSHIP
• Distributive
TECH
ORG
• Codified
Integrative Management
 Management  Plans  Systems Approach  Teams
 Methods and Standards  Information Systems  Enterprise
Assess
© 2004 Superfactory™. All Rights Reserved.  Design  Plan  Implement 72
Stankosky 2001
Knowledge Engineering Summary
 Embodies a theory for knowledge management, with

validated key elements as design inputs
 Enterprise-wide approach in the design of a knowledge
management system
 Systems’ perspective throughout the various phases of
system design
 Integrates both integrative management and systems
engineering disciplines into a single construct to ensure
successful design, implementation, and management of a
knowledge management system.
If taking a true systems approach, a knowledge management system will

enhance efficiency, effectiveness, and innovation through leveraging its
enterprise’s intellectual assets.

So What’s Next?
 Identification of high-value business processes – student-

facing, marketing, library, teaching and research
 Systematic, and detailed analysis of the “Points of
Confluence”
 Benefits modelling
 Formalization of architectures within which key work
practices technology decisions and standards will be made
 Prototypical approach to deployment, given some
technology life-cycles

Challenges
 Finding suitable tools, formats, search methods to extract

relevant material
 Integrating with business processes/work systems
 In particular getting people to
 Spend time putting their knowledge in repository
 Persuading people that it’s worth searching
How to create culture of knowledge sharing?
 Particularly hard to do for general purpose, organization
wide system isolated from daily work

The Tough Questions
 How will managers know when their companies have

become learning organizations?
 What corporate changes in behavior will be required?
 What policies and programs must be in place?

More Challenges
Not only of how to develop new knowledge, BUT

 how to locate and acquire others’ knowledge
 how to diffuse knowledge in your organisation
 how to recognize knowledge interconnections
 how to embody knowledge in products
 how to get access to the learning experiences of customers

Creating Knowledge Maps
 What knowledge is critical to your company’s operating

performance?
 What knowledge differentiates it from competitors?
 How and where is that knowledge created or attained?
 Where is it applied?
 Is there value in sharing it? (can it be leveraged?)
 How does it travel from one part of the organization to

another? (how is it leveraged?)

Critical Success Factors
 Support of top management

 Alignment of culture and reward system
 Sufficient technology and tools to facilitate knowledge
sharing
 Enough time and resources to learn
 Involvement of everyone
Reward knowledge sharing instead of knowledge hoarding

Some Definitions
 Learning organizations are organizations where people
continually expand their capacity to create the results they
truly desire, where new and expansive patterns of thinking
are nurtured, where collective aspirations are set free, and
where people are learning how to learn together. (Senge )
 ..organizations skilled at creating, acquiring, and
transferring knowledge, and at modifying behavior to
reflect new knowledge and insights. (Garvin)
 Organizational learning means the process of improving
actions through better knowledge and understanding. (Fiol
& Lyles)
 An entity learns if, through its processing of information,
the range of its potential behavior is changed. (Huber)

 Popular idea in recent (80s onward) management literature

 One originator is Chris Argyris
 In systems terms, organization/individual
 Responds to environment (feedback) – focus of IT

efforts
 But also, updates rules & mental models used (“double
loop”) in face of experience
 Peter Senge (MIT) writes “The Fifth Disipline” in 1990
 Says successful organizations can learn on team and
group basis, in creative and visionary ways
 Manager as teacher and designer

Problems with Learning
 How can a whole organization learn?

 Knowledge and insight is locked up in minds of
individuals or small teams…
 (Senge doesn’t necessarily see this as a technological
problem, but others do)
 Learning is often seen as acquisition and assimilation of
knowledge
 So people look to technology to help share knowledge
and “learnings” beyond individuals

Organizational Phases of Learning
 Training
 Instructor led training
 Learning
 Self-directed learning, self-paced learning
 Double loop learning
 Performance Support
 learning becomes a byproduct of performance
 Knowledge Management
 focus on the use of knowledge for profit and performance

Characteristics
 Shared Vision: Where there is no vision the people perish

Proverbs 29:18
 Surfacing and Testing Mental Models: Essential to effective
communication
 Systems thinking: The essential properties of any system
are the properties of the whole that none of the parts
posses
 Team Learning: Two heads are really than one… sometimes
that is
 Personal Mastery: The difference between a master and
grand master is passion… caring and curiosity

Shared Vision
 The practice of shared vision involves the skills of

unearthing shared pictures of the future that foster genuine
commitment and enrollment rather than compliance.
 The single thread that runs through all success stories is
the involvement of large numbers of individuals in
identifying the vision. How the words get written are just as
important as what get written..
 All must understand, share in and contribute to the
organization s vision, or that vision will not become a
reality.
 It is not truly a vision until it connects with the personal
vision of the people throughout the organization--a by
product of interactions of personal visions.

Shared Vision
Information & Communication

 In their theory of Autopoiesis, Maturana and Varela contend
that communication is not the transmission of information,
but the coordination of behavior among entities that are
structurally coupled.
 Information is not objective: Think of the color red, or of a
textbook given to two different people.

Surfacing and Testing Mental Models
 Mental models are deeply ingrained assumptions,

generalizations or even pictures or images that influence
how we understand the world and how we take action
Mental models are active, they shape how we act Senge,
1990
 Mental models are mechanisms whereby humans are able
to generate descriptions of system purpose and form,
explanations of system functioning, and observed system
state, and predictions of future system states. Rouse &
Morris, 1986
 A collection of knowledge about a physical device, system
or process. Schumacher & Czerwinsky, 1992

Surfacing and Testing Mental Models
Representation & Cognition

 What we see is a function of where we stand, our
constitution, our experience. Cats and birds see trees
differently from the way humans do because they perceive
light in different frequency ranges. The shapes and textures
they bring forth will be different than ours.
 Maturana and Varela contend that the world is not pre-
given cognition is not representation. Cognition represents
perception, experience, and emotion.
 Heizenburg noted that what we observe is not nature, but
nature exposed to our method of questioning.

Systems Thinking
 The word systems come from the Greek, Synhistanai,

meaning to put together in a context. A system is an
integrated whole whose essential properties arise from the
relationship between its parts, and systems thinking is the
understanding of a phenomena within the context of a
larger whole. The properties arise from the interactions
among the parts, and are destroyed when the system is
dissected, either physically or theoretically.
 Systems thinking is not the same as systems analysis.
Think of an automobile.
 Systems can be understood by rich pictures made by
employing positive and negative feedback loops. Circular
not linear

Team Learning and Personal Mastery
The Key: Critical Thinking

 Critical thinking and reasoning are essential to
communication and collaboration. Unfortunately, most
people are not trained in these skills or do not practice
them for what ever reason.
 There are numerous approaches that can be employed to
teach or organize critical thinking the case method,
research methods, the scientific method, blooms
taxonomy, semantic structuring, etc.
 For team learning, it is essential that people are able to ask
questions in such a way that they understand the context
to which the discussion pertains. Individual must

More Characteristics
• Demands self-directed learning from their employees

• Promotes mentoring, coaching, facilitating, role-modeling
• Widens the concept of performance support to focus on
outputs, not inputs

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Knowledge Management

Superfactory Excellence Program™

© 2004 Superfactory™. All Rights Reserved. 1

 Current contact information can be found at: www.superfactory.com

© 2004 Superfactory™. All Rights Reserved. 2

1. Why the Interest?

4. Challenges & Critical Success Factors

© 2004 Superfactory™. All Rights Reserved. 3

© 2004 Superfactory™. All Rights Reserved. 4

© 2004 Superfactory™. All Rights Reserved. 5

 When the rate of change outside the firm is greater than

© 2004 Superfactory™. All Rights Reserved. 6

 By the year 2020 knowledge will double every 73 days or

© 2004 Superfactory™. All Rights Reserved. 7

 General Electric, ABB, Siemens, BMW, Toyota, Monsanto,

© 2004 Superfactory™. All Rights Reserved. 8

 Go to Amazon.com, and look at the number of books

© 2004 Superfactory™. All Rights Reserved. 9

 The less translation that occurs within someone’s head, the

© 2004 Superfactory™. All Rights Reserved. 10

 The difference between market value and net assets in

© 2004 Superfactory™. All Rights Reserved. 11

What is knowledge management?

“Knowledge management is leveraging

© 2004 Superfactory™. All Rights Reserved. 12

The systematic process of creating, maintaining

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 Knowledge management is an integrated systematic approach to

© 2004 Superfactory™. All Rights Reserved. 14

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The creative process through which additional economic

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 Organizing existing corporate knowledge

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Knowledge is: Knowledge results in:

 Survey of 200 Large Firms found:

© 2004 Superfactory™. All Rights Reserved. 19

 By 2001, enterprises that lack ongoing KM infrastructure will lag

© 2004 Superfactory™. All Rights Reserved. 20

Dow Chemical: $100m

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 Knowledge Identification: Where is the knowledge? Who

© 2004 Superfactory™. All Rights Reserved. 24

 Transferring knowledge does not lose it but market

 Knowledge is abundant, but the ability to use it is

 Producing knowledge resists organization.

 Much of it walks out the door at the end of the day.

© 2004 Superfactory™. All Rights Reserved. 25

© 2004 Superfactory™. All Rights Reserved. 26

 Data are facts, numbers or individual entities without

 Information is data that has been organized into a

© 2004 Superfactory™. All Rights Reserved. 27

 Data / information management

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 Dominant group of workers in the 21st century.

© 2004 Superfactory™. All Rights Reserved. 29

© 2004 Superfactory™. All Rights Reserved. 30