Why Knowledge Management?
In
a globalized economy, companies are facing stiff competition as consumers are
enjoying an unprecedented array of choices for goods and services across the globe.
It is the agile responsiveness with which businesses can deliver services to
customers that has become the key determinant of survival. Research reveals
that intelligence gathering and market intelligence have enabled many Japanese
companies to succeed. That is how knowledge management has taken center stage in
collecting bits and pieces of information relating to customers and competition
in the market and synthesizing it into a ready-to-use information to face the
competition.
Knowledge
management essentially aims at value addition to users. It leads not only to
improvement and innovations in the existing operations but also value addition
to the existing pool of organizational knowledge by filtering, synthesizing and
interpreting the knowledge through making use of feedback from the users.
Unless it goes beyond mere search and acquisition of knowledge, it cannot play
a significant role in achieving organizational efficiency. In this context, it
is ‘collaborative technology’ rather than the information management tools that
are found to be competent to deal with knowledge management.
There
is yet another fear among the organizations: a fat lot of tacit knowledge that
exists only in the minds of people is often found walking away from the
organizations as people leave them for one reason or the other. Similarly,
‘downsizing’ which is resorted to by companies as a cost reduction exercise has
also resulted in ‘knowledge scarcity’. It is to capture and retain such
critical knowledge within the organization, that knowledge management has
become a must. The importance of knowledge management in organizations has been
well captured by Stewart in his statement: knowledge
has become the primary ingredient of what we make, do, buy and sell. As a
result, managing it – finding and growing intellectual capital, storing it,
selling it, sharing it – has become the most important economic task of
individuals, businesses and nations.[1]
2. Knowledge Management: What is
Important?
Knowledge
Management is essentially concerned with both explicit and tacit knowledge.
Explicit knowledge is however of low strategic value for creating sustainable
competitive advantage for the organization, since it is commonly available to
everyone. But the ability to apply explicit knowledge to a given process or a
product or a service development can make it valuable, for it effectively
converts it into tacit knowledge of the organization, which, over a period of
time, becomes exclusive knowledge of the organizational members.
Tacit
knowledge, on the other hand, is really subjective and intuitive, highly
personal, highly specialized, and organizationspecific. Therefore, it is hard
to codify and distribute among the people. It can only be shared with other
members of the team/organization in the form of shared habits and intuitions as
its owners demonstrate it through action. It thus remains within the
organization as a potential source of sustainable advantage for the company.
Tacit knowledge, according to Nonoka and Konno (1998), can be split into two elements:
one, technical – skill or abilities that are creative out of experience or
knowledge, and two, cognitive – creation of models of different business views
expressed as hunches, insights or intuitions. It is by making and manipulating
analogies or images in their minds that employees create new experiences and
thus acquire new knowledge. It is through “the process of transforming and
enriching information and tacitly integrating the details”, that individuals
acquire new knowledge. It is essential to remember here that new knowledge does
not automatically come to an individual, for it is the interactions with others
and their contributions that stimulate joint production of knowledge and the
synergy emerging thereof will be more than the sum of the individual
contributions.
It
is this possession of tacit knowledge by individuals in the organization that
poses a question: How to release that tacit knowledge and make it explicit for
the use of others in the organization? This raises a supplementary question: Do
employees expect any return for such sharing and if so, what is that? It is commonsensical
that knowledge is ‘power’ for employees. Therefore, they do not normally share
it with others, for it lessens their bargaining power in the organization. It
means that they expect rewards to share their tacit knowledge with other
employees to make it explicit. Researchers indicate that “commitment” and
“trust” are the two most important things that employees look for in the organization,
besides scope for professional development. So, what importantly emerges now is
that organizations must create opportunities and such reward structures which
encourage employees to make their private knowledge public – convert tacit into
explicit knowledge for the good of the organization.
3. Knowledge Management
In
its simplest form, knowledge management can be described as “connecting people
to people and people to information to create competitive advantage.” It is
about applying knowledge assets owned by a company for creating a competitive
advantage. According to Stephen Denning[2]
(2000), it might be seen as comprising multiple dimensions, including knowledge
strategy, communities of practice, help desks, knowledge bases, knowledge
capture, knowledge storage, knowledge dissemination, knowledge taxonomies,
quality assurance, authentication procedures, budget incentives and knowledge
measures.
Essentially,
it is concerned with two main functions: one, creation of knowledge and two,
storage, use and reuse of knowledge. Knowledge creation is a process of value
addition to the existing knowledge. It means that the more the organization has
of it, the more it is likely to generate. Simply put, knowledge creates
knowledge and, in the process, bestows competitive advantage on its owners.
3.1 Knowledge Creation
Rob
Sharkie[3]
(2004) developed a cyclical model of knowledge creation, in which he showed an
employee in the knowledge creation process moving through four phases and,
then, into a spiral that represented an improved level of knowledge, skills and
attitudes which enabled him to contribute more in the knowledge exchange
forums.
The
critical component of the model is the “knowledge-sharing filter”, which can
function positively, reflecting a favorable climate of the organization for
creating knowledge or negatively stalling such conversion of tacit knowledge
into explicit knowledge. Let us now move into the details of the model:
Phase – I: Knowledge Presage
As
a first step in knowledge creation, the organization has to study the
background of the individual participant in the knowledge sharing process. It
shall look for the forces that enabled the employee to acquire knowledge and
predisposed him to contribute to the knowledge
creation process. The presage factors are again of two types: intrinsic
and extrinsic. Cumulatively, they influence the willingness of the employee to
participate in the knowledge creation process.
Phase
– II: Knowledge Sharing Filter
It is the
organizational culture, which represents its policies and practices,
traditions, philosophical beliefs and ways of doing things that encourage or
discourage employees to share their knowledge with others. If participants
perceive the culture as favorable, they would be more willing to share and thus
move through the filter into the next phase of knowledge creation and
vice-versa.
Therefore, maximization
of knowledge creation requires a trusting, caring and non-threatening culture
in the organization. The organization must also create a knowledge-centered
vision and provide support systems that continually challenge the fundamental
values of the organization, calling for continuous adjustments from the
employees. It is the organizational intent that ultimately fosters the
employee’s commitment for knowledge creation and acquisition. Secondly, it is
the vision which encourages managers to create such an atmosphere in which
employees enjoy autonomy, and in which their individual opinions are
encouraged. This, in turn, facilitates cultivation of a questioning attitude at
workplaces which is sure to result in knowledge creation.
Phase – III: Knowledge Exchange
Forum
In
this phase, through interaction, people, groups, and teams share their
knowledge and personal beliefs. This phase crystallizes knowledge through
interaction at the group level. This phase may come across the usage of
metaphors and analogies as a means to convey individual experiences. It is
possible that during discussions under this phase, conflicts and disagreement
may arise, but with discussion and argument, group members tend to absorb new
ideas. Absorption of new deas means giving a new sense to one’s own experiences
leading to fresh ways of thinking. Thus, new conceptual knowledge is generated.
Phase
– IV: Internal Interaction with Existing Ideas
In
this phase, individual employee draws out ideas from discussions in the group
and internalizes them. Such internalization, in turn, creates new conceptual
knowledge. This happens, only when the individual subjects the new ideas so
acquired to an internal interaction with his own insights, intuitions,
experiences and hunches. It is only with the individual integrating the new
information with his existing knowledge, that the creation of new knowledge
starts. Cumulatively, it develops a sustainable competitive advantage for the
organization.
3.2 Storage,
Use and Reuse of Knowledge
To make every employee
use the new knowledge so converted from tacit to explicit, it must be captured,
stored and made available for everyone. The capturing process is no doubt
difficult as seen in the preceding paras, but, when successfully executed, it
ensures retention. And technology facilitates its storage. Tools such as
database management systems, text retrieval systems, document management
systems, data warehousing, intranets, knowledge portals, etc., help
organizations store and retrieve knowledge. Knowledge portals are today fast
growing as integrated sets of knowledge management enabling tools. A knowledge
portal enables companies to access internally and externally stored knowledge
and provides users with a single gateway to required information for making
informed decisions.
Making knowledge
available for usage doesn’t mean that the employees would access it for their
use. It is only the ‘intrinsic motivation’ of employees to learn new things
that propels them to access new knowledge. It means that organizations have to
create knowledge communities, that have a shared interest in executing a given
task, so that they can voluntarily access new knowledge and generate
interactions leading to internalization of new knowledge. The other way of
making employees use stored knowledge is through external intervention. And
that is where HRM function becomes critical: it provides necessary
incentives/rewards to users, depending on value addition noticed and thereby
ensures their seeking new knowledge.
One such best example
for distribution of knowledge among the workforce is the Yokoten System[4] –
a method of documenting and distributing knowledge – put in operation at
Toyota. Under this model, every team or workgroup contributed to a library of
problem reports, that was made accessible to every employee. Yokoten acted as a
simple, yet useful knowledge management device which transferred knowledge from
the individual to the organization.
Toyota has also
developed another mechanism – suggestionscreening system. It has helped
prioritize the best practices depending on potential impact, advantages and
complexity of implementation. Appreciating the system, Larry Prusak, Director,
IBM Institute for Knowledge Management, remarked, “Knowledge sharing means the freedom
to ask questions. At Toyota anyone on an assembly line can ask a question. They
type it into a terminal whereupon it is flashed on to a large display visible
to the whole floor. Anyone can answer the question.”
Toyota has also used a
Web-based software tool called Analytical Problem Solving (APS) to help
employees collect problem data, find the root cause of the problem, and develop
countermeasures. This tool helps employees ascertain if the same problem had
happened before, and, if so, solve it rapidly by adopting the earlier used
solution. This has improved the efficiency levels in problem solving, besides enabling
the users to get coaching throughout the process of problem solving. Secondly,
the “library” function and the “reporting” function of the software help the
management review the process used to solve a problem and identify trends. This
system uses a question-based model to trace the root cause of the problem. Once
the problem is identified, it is entered into the database for future
reference.
The system bifurcates
problems reported into two groups: one, open problems – that have not occurred
earlier, and two, problemst hat have earlier been solved. It thus reduces
problem-solving time, retains problem-solving knowledge and reinforces the
company’s Sensei system, by optimizing the productive time of its expert consultants.
Toyota, thus, leverages excellently “Web-based as well as conventional techniques
to link and exploit the distributed knowledge found in the company’s various
communities of practice.”
-- to be continued
[1]
Stewart, T A (1997), Intellectual Capital,
London, Nicholas Brealey Publishing.
[2]
Denning, S (2000), The Springboard: How
Storytelling Ignites Action in Knowledge-Era Organizations,
Butterworth-Heinemann.
[3]
Rob Sharkie, “A Knowledge Creation Model: Harnessing, Managing and Utilizing
Knowledge for Competitive Advantage”, Int.
J. Learning and Intellectual Capital, Vol. 1, No. 4, 2004.
[4]
Adapted from the Case Study – “Knowledge Management Practices at Toyota Motors”
by Shirisha Regani, Former Faculty Associate, The Icfai Center for Management
Research and Sanjib Dutta, Senior Faculty Member, The Icfai Center for
Management Research, Case Folio, May
2006.
image- courtesy: collections.europarchi...
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