Project Report On
Knowledge Management
1
INDEX S.NO. NAME OF THE CHAPTER
PAGE
A.
EXECUTIVE SUMMARY
4
B.
OBJECTIVE OF THE STUDY
6
C.
RESEARCH METHODOLOGY
7
KNOWLEDGE MANAGEMENT 1. 2.
INTRODUCTION WHAT IS KNOWLEDGE?
8 9
3.
WHAT IS KNOWLEDGE MANAGEMENT
12
4.
HISTORY OF KNOWLEDGE MANAGEMENT
14
5.
THE SEVEN BASICS OF KNOWLEDGE MANGEMENT
16
5.1
KNOWLEDGE MANAGEMENT STRATEGY
17
5.2
ORGANIZATION
25
5.3
BUDGET
27
5.4
INCENTIVES
27
5.5
COMMUNITY
28
5.6
TECHNOLOGY
33
5.7
MEASUREMENT
35
6.
THE SIX LAWS OF KNOWLEDGE MANGEMENT
37
6.1
KNOWLEDGE IS KEY TO BUSINESS SURVIVAL
37
6.2
COMMUNITIES ARE THE HEART AND SOUL OF KNOWLEDGE SHARING
38
6.3
VIRTUAL COMMUNITIES NEED PHYSICAL 2
INTERACTION
S.NO. NAME OF THE CHAPTER 6.4
PASSION DRIVES COMMUNITIES OF PRACTICE
39
PAGE 39
6.5 KNOWLEDGE SHARING HAS AN INSIDE-OUT AND AN OUTSIDE-IN DIMENSION
40
6.6
41
STORYTELLING IGNITES KNOWLEDGE SHARING
7.
THE SEVEN KNOWLEDGE LEVERS
42
8.
CHALLENGES OF KNOWLEDGE MANAGEMENT
44
9.
KNOWLEDGE MANAGEMENT JOB DESCRIPTION
46
10.
KNOWLEDGE MANAGEMANT AND E-BUSINESS
48
12.
WHY KM INITIATIVES FAIL?
49
KNOWLEDGE MANGEMENT AT INFOSYS 13.
CORPORATE PROFILE
51
14.
INTRODUCTION – KM IN THE INFOSYS CONTEXT
52
15.
INFOSYS KM STRATEGY
53
16.
THE INFOSYS KM FRAMEWORK
56
17.
CHALLENGES FOR THE FUTURE
56
18.
CONCLUSION
57
19.
ANALYSIS AND RECOMMENDATIONS
58
BIBLIOGRAPHY & REFERENCES
3
A.
EXECUTIVE SUMMARY "A company that is not managing knowledge is not paying attention to business,"
observed Thomas Stewart, author of Intellectual Capital, in his keynote presentation at TRAINING 2000. KNOWLEDGE MANAGEMENT revolves around the concept that one of the most valuable corporate assets is the experience and expertise floating around inside employees' heads. In order to manage this intellectual capital, executives must devise a way to capture and share that knowledge with co-workers. If done right, Knowledge Management is supposed to create a more collaborative environment, cut down on duplication of effort and encourage knowledge sharing—saving time and money in the process. There is as such no formal definition for Knowledge Management. The term Knowledge Management (KM) has come to encompass the gamut of organizational processes, responsibilities and systems directed towards the assimilation, dissemination, harvest and reuse of knowledge. It can be thought of as a tripod with its three legs defined as follows. 1
Content: To be able to convert information into knowledge - knowledge that is reliable, available in the right form tailor-made for diverse target groups, and which is readily accessible. The knowledge could take diverse forms such as technical contents, business intelligence, approach documents, artifacts, methodologies, best practices, FAQs (frequently Asked Questions), checklists, etc.
2
Culture: To be able to sustain a culture of knowledge sharing both as a process, as well as a philosophy. 4
3
Technology: To be able to harness the power of technology to make knowledge available on-demand. THE GOALS OF KNOWLEDGE MANAGEMENT (KM) are the same as any
management plan: long-term organizational viability through the consistent generation of stakeholder value. During the course of the project, it was found that though many companies talk about knowledge as a key asset, but the number that have actually jumped into practicing knowledge management is not more than a few hundred out of thousands of corporations around the world, with consultancies and IT companies around the world leading the way. Besides, because of the various beliefs and myths wrongly associated with KM, the KM initiatives undertaken in an organisation with the right intentions sometimes fail miserably. The project report seeks to identify the various issues that underline an effective and efficient KM implementation such as the basic strategies that help in its successful implementation, the technologies to be made use of, the measurement techniques etc. The Knowledge Management initiatives undertaken and the strategies made use of at INFOSYS, one of the world’s leading IT consulting and software services company in the world, has been incorporated in the project report as a case study to serve as a pointer to any organization that seeks to successfully implement KM initiatives.
5
B.
OBJECTIVE OF THE STUDY In this report an attempt has been made to present the issues connected with the
successful implementation of Knowledge Management in an Organisation like the strategies to be used, technology to be made use of, measurement techniques etc. The reasons owing to which KM initiatives fail also find a mention. The objective of the report is to outline the issues that organizations need to consider in detail when they decide to go for Knowledge Management which involves significant process, mindset and culture change. A successful implementation hinges on various factors like equal support from the top management and all the employees of the organisation, the understanding of the various propositions related with the change, the company’s adaptability for a change etc.
6
C.
RESEARCH METHODOLOGY Data was collected from diverse sources such as the internet, books and
periodicals to get a thorough understanding of the finer points of Knowledge Management such as implementation methods, opportunities etc. Information relating to the Knowledge Management initiatives at INFOSYS was collected from the various white papers, which were written and made available on the Internet, various articles which appeared in the Economic Times etc.
7
1.
INTRODUCTION In 1876, the English novelist, George Eliot, wrote that, “Of a truth, Knowledge
is power�. Now, over a century later, that observation still holds true. Knowledge gives us, as individuals, the power to grow, to better ourselves, and to succeed in our endeavours. In the business world, knowledge is power as well. As with individuals, knowledge is what enables businesses to grow and to succeed. Contained within every business is a wealth of knowledge about its policies and practices, and about the industry that it serves. A business uses this knowledge to sell and support the products and services that it offers. However, knowledge is not held within a business itself, but rather by the various individuals that make up the organization. Without the knowledge possessed by the people within it, a business cannot survive. To a business, therefore, knowledge can be considered an asset, perhaps the most important asset that it has. The primary concern, then, that must be addressed, if a business is to grow and prosper, is how this knowledge can best be captured and harnessed. How can companies preserve their existing knowledge assets, encourage the dissemination of that knowledge across the organization, and use that knowledge to identify the best business practices and to refine and improve those practices? The answers to all of these questions lie in the application of Knowledge Management (KM) to the business’s operations and the adoption of Knowledge Management Systems within the business infrastructure.
8
2.
WHAT IS KNOWLEDGE? Any discussion of Knowledge Management should, logically, begin with a
definition of ‘knowledge’ itself. Unfortunately, Knowledge is a very slippery concept with many different variations and definitions, each of which is valid in its own right. The nature of knowledge and what it means to know something are epistemological questions that have perplexed philosophers for centuries and no resolution looms on the horizon. According to Webster's Dictionary, knowledge is "the fact or condition of knowing something with familiarity gained through experience or association". In practice, though, there are many possible, equally plausible definitions of knowledge. A frequently used definition of knowledge is "the ideas or understandings which an entity possesses that are used to take effective action to achieve the entity's goal(s). This knowledge is specific to the entity which created it." There are two basic kinds of knowledge in an Organization: Explicit and Tacit. Explicit knowledge is knowledge that has been articulated and, more often than not, captured in the form of text, tables, diagrams, product specifications and so on. According to a Harvard Business Review article titled “The Knowledge Creating Company”, explicit knowledge is referred to as “formal and systematic” and examples include product specifications, scientific formulas and computer programs. An example of explicit knowledge with which we are all familiar is the formula for finding the area of a rectangle (i.e., length times width). Other examples of explicit knowledge include documented best practices, the formalised standards by which an insurance claim is adjudicated and the official expectations for performance set forth in written work objectives. Thus explicit knowledge is systematically documented know-how that becomes available to everyone in the organization. Tacit knowledge is knowledge that cannot be articulated. Tacit knowledge is the “know how” possessed by individuals. It’s often intuitive and demonstrated more in how someone goes about his/her work in a knowledgeable way, even though this knowledge is not written down anywhere. Of course, one of the goals of knowledge management is to 9
make tacit knowledge more widely available and to the degree possible, capture it in explicit terms. Tacit knowledge resides in a few, often-in just one person and has not been captured by the organization or made available to others. It is this tacit knowledge that provides strategic edge to the organization. Typically tacit knowledge is asked for and transferred in non-formal situations and so it is extremely difficult to record it. Data and information are the essential components of Knowledge Management but are totally different entities. Knowledge often gets mixed up with data and information and creates problems. The understanding of these three distinct concepts is therefore equally important. Data can be broadly defined as a collection of facts, ‘facts’ about specific events and about an industry in general. These facts can originate from a variety of sources and includes such items as raw statistics, demographic and marketing information, and so forth. Data can form the basis of knowledge, as it is gathered, analysed, and synthesized by individuals within an organization. Information, which is sometimes referred to as ‘explicit knowledge’, results from the collection and communication of ideas and experiences. Information is usually codified into documents, e-mail, voice mail, and other forms of communication, which can be easily shared between individuals. It is explicit precisely because it has been ‘written down in some format, and it is useful because it can be stored and reused to avoid the duplication of work and the repetition of mistakes.’ Knowledge, however, transcends both data and information in that it comprises ideas, experiences, and insights themselves. For this reason, true knowledge is often referred to as ‘tacit knowledge.’ Knowledge also represents the intelligence that individuals apply to data and information to draw conclusions and to make decisions. Without intelligence, information cannot become knowledge. Therefore, it is the possession of knowledge, along with intelligence and the ability to create new knowledge, which determines an individual’s value to a business. Thus knowledge is not just an explicit tangible “thing”, like information, but information combined with
10
experience, context, interpretation and reflection. Knowledge involves the full person, integrating the elements of both thinking and feeling.
Where Corporate Knowledge Lies A study of more than 700 US companies shows that only a small portion of corporate knowledge is in a shareable form. The majority is in the employee’s brains and documents not easily shared.
Where Corporate Knowledge Lies Employee Brains 20% 42%
Electronic Knowledge Bases Paper Documents
26% 12%
Electronic Documents
11
3.
WHAT IS KNOWLEDGE MANAGEMENT? Unfortunately, there's no universal definition of KM, just as there's no agreement
as to what constitutes knowledge in the first place. For this reason, it's best to think of KM in the broadest context. Succinctly put, KM is the process through which organizations generate value from their intellectual and knowledge-based assets. Most often, generating value from such assets involves sharing them among employees, departments and even with other companies in an effort to devise best practices. The term is used loosely to refer to a broad collection of organizational practices and approaches related to generating, capturing and disseminating know-how and other content relevant to the organization’s business. Knowledge management can be explained as an effort by organizations to manage some or all of the knowledge within them as a resource, much as they manage real estate, inventory, and human resources. It involves the following: 1. Capturing it; that is, explicitly recording the tacit knowledge within an organization. 2. Cataloguing and storing it; that is, placing the information into a central area where all members of an organization who have a need to know have access to it 3. Transforming it for use in other contexts (when appropriate); that is, making connections among pieces of information to create new approaches 4. Disseminating it; that is, transferring knowledge to people when and where they need it. Some definitions of "Knowledge Management" University of Texas: The systematic process of finding, selecting, organizing, distilling and presenting information in a way that improves an employee's comprehension in a specific area of interest. Knowledge management helps an organization to gain insight and understanding from its own experience. Specific 12
knowledge management activities help focus the organization on acquiring, storing and utilizing knowledge for such things as problem solving, dynamic learning, strategic planning and decision making. It also protects intellectual assets from decay, adds to firm intelligence
and
provides
increased
flexibility.
The Biz Tech Network (www.brint.com): Knowledge Management caters to the critical issues of organizational adaptation, survival and competence in face of increasingly discontinuous change. Essentially, it embodies organizational processes that seek synergistic combination of data and information processing capacity of information technologies, and the creative and innovative capacity of human beings. Computerworld (Maglitta, 1996): Knowledge management in general tries to organize and make available important know-how, wherever and whenever it's needed. This includes processes, procedures, patents, reference works, formulas, practices,� forecasts
and
fixes.
"best
Technologically, intranets, groupware, data
warehouses, networks, bulletin boards videoconferencing are key tools for storing and distributing this intelligence. Forbes: (Bair, 1997): Partly as a reaction to downsizing, some organizations are now trying to use technology to capture the knowledge residing in the minds of their employees so it can be easily shared across the enterprise. Knowledge management aims to capture the knowledge that employees really need in a central repository and filter out the surplus. Whatever be its definition, Knowledge Management is increasingly seen, not merely as the latest management fashion, but as signaling the development of a more organic and holistic way of understanding and exploiting the role of knowledge in the processes of managing and doing work, and an authentic guide for individuals and organizations in coping with the increasingly complex and shifting environment of the modern economy.
13
4.
HISTORY OF KNOWLEDGE MANAGEMENT Knowledge Management is nothing new. For hundreds of years, owners of family
businesses have passed their commercial wisdom on to their children, master craftsmen have painstakingly taught their trade to apprentices, and workers have exchanged ideas and know-how on the job. But it wasn’t until the 1990’s that chief executives started talking about knowledge management. As the foundation of industrialized economies has shifted from natural resources to intellectual asset, executives have compelled to examine the knowledge underlying their businesses and how that knowledge is used. At the same time, the rise of networked computers has made it possible to codify, store and share certain kinds of knowledge more easily and cheaply than ever before. The pursuit of any significant human activity typically leads to the acquisition by those involved of know-how and expertise as to how the activity may be successfully conducted. In so far as what is learned in the process can be captured and communicated and shared with others, it can enable subsequent practitioners - or even generations - to build on earlier experience and obviate the need of costly rework or of learning by making the same repetitive mistakes. The concept of managing knowledge can be traced back to the early 1970's and first appeared in the realm of academia. Notables such as Peter Ducker and Paul Strassman stressed the importance of information and explicit knowledge. Peter Senge stressed on the "learning organization" and the cultural dimension of managing knowledge. Research at Stanford in the diffusion of innovation and at MIT in information and technology transfer contributed to mapping an understanding of how knowledge is produced used and diffused within organizations. By the mid 1980's, the importance of knowledge as a competitive asset became apparent. At the same time, the computer technology that itself had contributed so heavily to the superabundance of information, also became part of the solution. The 80's 14
also saw the development of systems for managing knowledge that relied on work done in artificial intelligence and expert systems. These generated the concepts of "knowledge acquisition", "knowledge engineering", "knowledge-base systems" and "computer-based ontology’s". At about the same time, the phrase "knowledge management" entered the corporate lexicon. The initiative for Knowledge Management was started in 1989 by a consortium of US companies and Knowledge Management (KM) articles began to appear in management publications like Sloan Management Review, Organizational Science and Harvard Business Review. By 1990, a number of management consulting firms had begun in-house KM programs directed at their own bodies of knowledge, and in 1991, Fortune published Brainpower, KM introduction to the popular press. Perhaps the most widely read work to date is Ikujiro Nonaka's and Hirotaka Takeuchi's The Knowledge-Creating Company: How Japanese Companies Create the Dynamics of Innovation, published in 1995. Also in the mid-90, and largely because of the Internet, knowledge management initiatives were thriving. The number of KM conferences and seminars has been growing as organizations focus on managing and leveraging explicit and tacit knowledge resources to achieve competitive advantage. Furthermore, with the advent and acceleration of collaboration technologies, the Internet presents an ever-flourishing environment for knowledge exchange, creation and management. Hence, clearly, organizations have been sharing knowledge long before knowledge management became fashionable in the mid to late 1990s. Organizations have been knowledge organizations for many years before they explicitly realized that this is what they are.
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5.
THE SEVEN BASICS OF KNOWLEDGE MANAGEMENT: Executives in large organizations around the world are increasingly confronted
with the question of how to launch an enterprise-wide knowledge-sharing program. In some ways the most difficult thing is to get started, i.e. how to persuade the managers and staff of the organization to adopt the approach with enthusiasm, when at first it seems unfamiliar, counter-intuitive and strange. Once the organization has decided to adopt knowledge sharing as an approach, the management faces the question: what specific action steps need to be taken? Typically, they will find that they have pilot projects for sharing knowledge informally under way in parts of their company. But these isolated pilots do not amount to an enterprise-wide program. To get to the next level and help the company use knowledge management to make a major change in overall organizational performance, a new set of actions will be needed. What should be done? How do they do it? What are the priorities? What are the most important things to focus on? What can wait for a later stage? The questions stem not so much from an unawareness of the many things that will need to be done, but rather a need to prioritise among a daunting array of possible actions, including culture, structure, processes, organization, and personnel. Since knowledge management can involve changes in every facet of an organization, it is sometimes hard to know where to begin. Among the many things that need to be done, the following are among the highest priority and form the basis on which the KM program should be ideally implemented. 1
Knowledge Management Strategy
2
Organization
3
Budget 16
4
Incentives
5
Community
6
Technology
7
Measurement
1. “Strategy of Knowledge Management”: The first and perhaps most difficult part in launching a knowledge management program is to put in place a strategy for sharing knowledge. It entails a collective visioning as to how sharing knowledge can enhance organizational performance and the reaching of a consensus among the senior management of the organization that the course of action involved in sharing knowledge will in fact be pursued. Implicit in such a process is a set of decisions about the particular variety of knowledge management that the organization intends to pursue, including: 1
What knowledge to share? Knowledge-sharing programs may aim at making available various types of content. The program will be very different depending on whether the intent is to share know-how, best or good practices, or knowledge of clients or customers, or competitive intelligence, or knowledge of processes. The knowledge-sharing program will differ considerably depending on the type of knowledge being shared. Comprehensive, organization-wide programs for sharing knowledge typically emerge when the organization’s know-how is perceived as critical to its mission, where the value of the organization’s knowledge is high, and where the enterprise is geographically dispersed. In other cases, knowledgesharing programs are limited to a specific function, such as sales and marketing or research, or a specific area of expertise such as engineering.
The question of “what to share” includes not only the type of knowledge, but also its quality. In organizing knowledge-sharing programs, it is common to put processes in place to ensure that the content that is shared reaches a certain minimal threshold of value and reliability. Some programs make no explicit distinction between different levels of reliability of the material offered, once the 17
initial threshold has been met, thus allowing users to reach their own conclusions as to its ultimate value. Other programs, particularly those that offer external knowledge sharing, provide explicit guidance on whether the material has been authenticated, so that users can make inferences about its reliability. Most knowledge-sharing systems also allow in varying degrees the inclusion of new and promising ideas that have not yet been authenticated and in this sense are not yet knowledge. 1
With whom to share knowledge? One of the major decisions concerns the intended beneficiaries of the knowledge-sharing system. Knowledge sharing programs may aim at sharing with either an internal or an external audience. Internal knowledge sharing programs typically aim at making the existing business work better, faster or cheaper, by arming the front-line staff of an organization with higher quality, more up-to-date and easily accessible tools and inputs to do their jobs, and so add value for clients or save costs. External knowledge sharing poses greater risks than internal sharing programs — raising complex issues of confidentiality, copyright, and in the case of the private sector, the protection of proprietary assets — but it may also offer greater potential benefits.
2
How will knowledge be shared? There needs to be a consensus within the organization as to the principal channels by which knowledge will be shared, whether face-to-face, or by way of help desks, by telephone, fax, email, collaborative tools or the web or some combination of the above. It is important not to ignore face-to-face communications, since this is still the best and highest quality to transfer knowledge between individuals.
3
Why will knowledge be shared? Knowledge management is not something that is undertaken for its own sake, but rather something that supports the business of the organization. Reaching explicit agreement as to why knowledge is being shared, and its likely contribution to organizational performance, is crucial to sustaining support over the medium term. These motivations may relate to o
Increasing speed, 18
o
Lowering costs of operation,
o
Accelerating innovation, or
o
Widening the client base.
Since pursuing all of these worthy objectives simultaneously may result in a failure to achieve any of them, it will be useful to make an explicit choice about objectives from the outset. Moreover, agreement on objectives can help keep focus: since knowledge management in a large organization is inevitably a longterm process involving many people in different units of the organization, there is a tendency for people to forget why the organization is pursuing knowledge management in the first place, and become distracted with peripheral activities. Finally, since knowledge management programs inevitably have a cost, expenditures will need to be justified and defended against those who would prefer to spend the resources on other activities. Having explicit KM objectives can help win these budget battles. For instance, in a large global organization where the explicit objective of knowledge management was improved quality and responsiveness, attacks on the KM budget on the grounds that it did not lower costs of operation were unsuccessful in part because the explicit objectives had never included lowering the costs of operation. 1
Will knowledge be shared? In large organizations, discussions of strategy can go on for long periods, sometimes years, without ever coming to closure on the components. In the end, actually crossing the Rubicon and unambiguously deciding to share and communicating that decision explicitly throughout the organization is a key step in launching a knowledge sharing strategy. An explicit decision is critical because knowledge management typically involves a shift from a vertical hierarchical mode of operation to a horizontal boundary-crossing mode of operation: such a shift is unlikely to occur on a sustained basis unless that there is an explicit decision at the very top of the organization that it should occur. Without such a decision, the opponents of KM will sooner or later be able to block the shift, and so thwart the organization's systematic ability to share its knowledge. 19
Since knowledge management as a conscious practice is so young, executives have lacked successful models that they could use as guides. Because knowledge is the core asset of consultancies, they were among the first businesses to pay attention to - and make heavy investments in – the management of knowledge. They were also among the first to aggressively explore the use of information technology to capture and disseminate knowledge. Their experience, which is relevant to any company that depends on smart people and flow of ideas, provides a window onto what works and what doesn’t. Consultants do not take a uniform approach to managing knowledge. The consulting business employs two different knowledge management strategies. In some companies, the strategy centres on the computer. Knowledge is carefully codified and stored in databases, where it can be accessed and used easily by anyone in the company. This strategy is referred to as the codification strategy. In other companies, knowledge is closely tied to the person who developed it and is shared mainly through direct person-toperson contacts. The chief purpose of computers at such companies is to help people communicate knowledge, not to store it. This is referred to as the personalization strategy. A company’s choice of strategy is far from arbitrary – it depends on the way the company serves its clients, the economics of its business, and the people it hires. Emphasizing the wrong strategy or trying to pursue both at the same time can, as some consulting firms have found, quickly undermine the business. The two strategies are not unique to consulting. The same two strategies are at work in computer companies and health care providers. In fact, the choice between codification and personalization is the central one facing virtually all companies in the area of knowledge management. By better understanding the two strategies and their strengths and weaknesses, chief executives will able to make more surefooted decisions about knowledge management and their investments in it.
20
How Consulting Firms Manage Their Knowledge CODIFICATION
PERSONALISATION
Provide high-quality,
Provide creative, analytically
reliable and fast
rigorous advice on high-level
information-systems
problems by channelling
implementation by reusing
individual expertise.
codified knowledge. REUSE ECONOMICS:
EXPERT ECONOMICS:
Invest
once in a
Charge
knowledge asset;
highly customized
reuse it many
solutions to unique
times.
problems.
Use
large teams
Economic
with a high ratio of
Model
Use
small teams with
a low ration of
associates to
associates to partners.
partners.
high fees for
Focus on
Focus on maintaining high profit margins.
generating large overall revenues. PEOPLE TO
PERSON TO PERSON:
DOCUMENTS: Develop
an
electronic document system that codifies,
Develop networks for linking people so that
Knowledge Management
tacit knowledge can be shared.
Strategy
stores, disseminates, and allows reuse of knowledge. 21
Invest highly in IT;
Invest
the goal is to
moderately in
IT; the goal is to
connect people
Information
facilitate
with reusable
Technology
conversations and the
codified
exchange tacit
knowledge. Hire new college
knowledge. Hire MBAs who like
graduates who are
problem solving and
well suited to the
can tolerate
reuse of knowledge
ambiguity.
and the
Train
implementation of solutions. Train
people in
people through
one to one mentoring. Human Resources
Reward people for directly sharing
groups and through
knowledge with
computer-based
others.
distance learning. Reward
people for
using and contributing to document databases. Anderson Consulting, Ernst & Young
Examples
McKinsey & Company Bain & Company
Codification or Personalization? Some large consulting companies, such as Andersen Consulting and Ernst & Young, have pursued a codification strategy. Over the last five years, they have developed elaborate ways to codify, store, and reuse knowledge. Knowledge is codified 22
using a “people-to-documents” approach: it is extracted from the person who developed it, made independent of that person, and reused for various purposes. Ralph Poole, director of Ernst & Young’s Centre for Business Knowledge, describes it like this: “After removing client – sensitive information, we develop ‘knowledge objects’ by pulling key pieces of knowledge such as interview guides, work schedules benchmark data, and market segmentation analyses out of documents and storing them in the electronic repository for people to use.” This approach allows many people to search for and retrieve codified knowledge without having to contact the person who originally developed it. That opens up the possibility of achieving scale in knowledge reuse and thus of growing the business. Take the example of Randall Love, a partner in the Los Angeles office of Ernst & Young. Love was preparing an important bid for a large industrial manufacturer that needed help installing an enterprise resource planning system. He had already directed projects for implementing information systems for several manufacturers in other industries, but he hadn’t yet worked on a manufacturing project in this one. He knew other Ernst and Young teams had, however, so he searched the electronic knowledge management repository for relevant knowledge. For help with the sales process, he found and used several presentations on the industry-documents containing previously developed solutions-as well as value propositions that helped him estimate how much money the client would save by implementing the system. Because Love reused this material, Ernst & Young won the project and closed the sale in two months instead of the typical four to six. In addition, his team found programming documents, technical specifications, training materials, and change management documentation in the repository. Because these documents were available, Love and his team did not have to spend any time tracking down and talking with the people who had first developed them. The codification of such knowledge saved the team and the client one full year of work.
23
Ernst & Young executives have invested a lot to make sure that the codification process works efficiently. The 250 people at the Centre for Business Knowledge manage the electronic repository and help consultants find and use information. Specialists write reports and analyses that many teams can use. And each of Ernst & Young’s more than 40 practice areas has a staff member who helps codify and store documents. The resulting area databases are linked through a network. Naturally, people-to-documents is not the only way consultants in firms like Ernst & Young and Andersen Consulting share knowledge - they talk with one another, of course. What is striking, however, is the degree of emphasis they place on the codification strategy. By contrast, strategy-consulting firms such as Bain, Boston Consulting Group, and McKinsey emphasize a personalization strategy. They focus on dialogue between individuals, not knowledge objects in a database. Knowledge that has not been codified – and probably couldn’t be - is transferred in brainstorming sessions and one-on-one conversations. Consultants collectively arrive at deeper insights by going back and forth on problems they need to solve. Marcia Blenko, for example, a partner in Bain’s London office, had to consider a difficult strategy problem for a large British financial institution. The client wanted Bain to help it expand by offering new products and services. The assignment required geographic and product-line expertise, a broad understanding of the industry, and a large dose of creative thinking. Blenko, who had been with Bain for 12 years, knew several partners with expertise relevant to this particular problem. She left voice mail messages with them and checked Bain’s “people finder” database for more contacts. Eventually she connected with nine partners and several managers who had developed growth strategies for financial services institutions. She met with a group of them in Europe, had videoconferences with others from Singapore and Sydney, and made a quick trip to Boston to attend a meeting of the financial services practice. A few of these colleagues became ongoing advisers to the project, and one of the Asian managers was assigned full 24
time to the case team. During the next four months, Blenko and her team consulted with expert partners regularly in meetings and through phone calls and e-mail. In the process of developing a unique growth strategy, the team tapped into a worldwide network of colleagues’ experience. To make their personalization strategies work, firms like Bain invest heavily in building networks of people. Knowledge is shared not only face-to-face but also over the telephone, by e-mail, and via videoconferences. McKinsey fosters networks in many ways: by transferring people between offices; by supporting a culture in which consultants are expected to return phone calls from colleagues promptly; by creating directories of experts; and by using “consulting directors” within the firm to assist project teams. These firms have also developed electronic document systems, but the purpose of the systems is not to provide knowledge objects. Instead, consultants scan documents to get up to speed in a particular area and to find out who has done work on the topic. They then approach those people directly. Consulting companies manage knowledge by using both the codification and the personalization approaches. However, effective firms excelled by focusing on one of the strategies and using the other in a supporting role. They do not try to use both approaches to an equal degree. 2. “Organizing for knowledge management”: In order to launch enterprise-wide knowledge sharing, some kind of organizational arrangements need to be put in place. Organizations are still experimenting with the right way to organize – some putting the function in the computing group, some putting it in strategy or finance, some putting it in operations, and some locating it as a function of top management. Whatever the organizational location, a pattern of arrangements that is becoming increasingly common includes: 25
1
a very small ‘central coordinating unit’ with overall coordination responsibility and spearheading the change process in the organization, making the case for change, solving problems as they emerge, measuring progress, providing support to communities of practice, and in general, doing whatever needs to be done in order for knowledge management to succeed.
2
Decentralized implementation responsibility resting with line managers of the existing business;
3
Communities of practice or help desks as the key instrument for sharing; and
4
Some kind of capacity to make organization-wide policy decisions. There is less agreement as to where to place the coordinating unit. Some
organizations place it in the computer group. Some place it in the strategy or finance group. Some place it in general operations. No matter where the unit is located, there are risks and dangers: 1
The danger with placing the coordination unit in the computer group of an organization is that knowledge management will become associated with information technology, rather than being seen as a better way of pursuing the organization's business.
2
The risk of placing the coordination unit in strategy or in general operations is that there will be inadequate coordination with IT.
3
The risk of placing the unit in the strategy group may be the lack of connection to day-to-day operations. Ultimately, there is thus no absolute right answer as to where to place the
coordinating unit. Each organization will decide where to place the coordinating unit, depending on the politics and preoccupations of the organization at the time. If the computer group provides a congenial and supportive home for the unit, that may be the best interim location. The size of the coordinating unit, even in large organizations, is usually less than ten people. Larger units have been tried, but have mostly been dismantled, as they encourage excessive centralization of a function, which should be decentralized. It is 26
important to keep the implementation arrangements light and flexible, so that they can be adjusted to deal with changes in the organization's business. 3. “Budget for knowledge management”: The provision of financial resources for sharing knowledge is often an unambiguous signal to staff that the organization has definitely decided to incorporate knowledge sharing into the way the organization functions. Funding will be needed to cover the incremental costs of the central coordinating unit, the technology and the communities and help desks. The main focus of the financial provisioning should be on support to operations. If more than 20% of the resources are being spent on technology, a review may be warranted as to whether knowledge sharing has become confused with information
management.
In the more knowledge-intensive organizations, the expenditures for knowledge management can be quite significant. For instance, it has been estimated that the major consulting firms may spend as much as 6-12 % of revenues on knowledge sharing programs. While few organizations could, or even should, attain these levels of spending, there does need to be recognition that knowledge sharing does not run on air and appropriate
funding
needs
to
be
provided.
4. “Incentives for knowledge management”: People need incentives to participate in the knowledge sharing process. Since knowledge sharing usually entails a change in the way the business of an organization is conducted – often, it entails a shift from vertical “look up and yell down” modes of behavior to horizontal knowledge-sharing behaviors – it is important that the relevant behaviors are reflected in whatever incentive systems are in place in the organization. Thus, it is important that the value of knowledge sharing be reflected in the on-going personnel evaluation, periodic merit review or pay bonuses of the organization, so that managers and staff can see that knowledge sharing is one of the principal behaviors that the organization encourages and rewards.
27
It is important that knowledge sharing be designated as one of a small number of core behaviors that are rewarded in the performance review system. Getting agreement across a large organization to focus on knowledge sharing, as one of a small number of core behaviors is not easy, and even when accomplished, does not have any instant effect. In the short run, there is often cynicism and posturing, but the experience of organizations, particularly the large consulting firms, is that over time such a change sends an unmistakable signal throughout the organization, which does accelerate the intended behavioral change. In practice, informal incentives, in the form of recognition by management, and visibility within the organization can often be more powerful incentives than the formal incentive system. While the establishment of formal incentives is important for the long-run sustainability of a knowledge management program, it is easy to over-estimate the value of incentives. The absence of formal incentives in the early days of knowledge sharing can become a pretext for not implementing the program. The establishment of rewards for individual knowledge sharing activities can signal the importance of knowledge sharing, but also run the risk of creating expectations of rewards for behavior that should be part of the normal way of conducting the business of the organization. In the long-term, however, the establishment of incentives through the regular personnel and reward system of the organization can establish a clear value framework that confirms that knowledge sharing is not a mere management fad, but rather part of the permanent fabric of the organization.
5. “Communities for knowledge management�:
28
In the field of knowledge management (KM), a Community Of Practice (COP) is one of the more prevalent mechanisms for sharing organizational knowledge. Definitions of community of practice vary somewhat, but are usually taken to mean a group of practitioners who share a common interest or passion in an area of competence and are willing to share the experiences of their practice. Often, COPs are composed of people in a company who have the same job, such as members of a field sales force or mechanical engineers. But COPs can also include employees who may have similar skills and expertise but work in several divisions of a company, such as project managers. It differs from a work team, principally in that it has no specific timebound work objective, but exists indefinitely for the promotion of the issue or issues around which the community is formed. Organizations should not apply team-oriented processes to COPs. Requiring a COP to provide status reports or allocate its time to various projects imposes a degree of structure that will only serve to inhibit the free flow of ideas. It's better to let the community figure out how to do its own work. In undertaking knowledge sharing programs, most organizations have found – sooner or later – that the nurturing of knowledge-based communities of practice is a sine qua non to enabling significant knowledge sharing to take place. Such communities are typically based on the affinity created by common interests or experience, where practitioners face a common set of problems in a particular knowledge area, and have an interest in finding, or improving the effectiveness of, solutions to those problems. Various tools can be used to strengthen such communities, including the establishment of specific work objectives for the community, the provision of adequate staff, financial resources, technology and management support to enable it to conduct its activities. Communities of practice tend to have different names in different organizations, including: o
Communities of practice
o
Thematic groups (World Bank)
29
o
Learning communities or networks (Hewlett Packard)
o
Best practice teams (Chevron)
o
Family groups (Xerox)
Communities of practice are relevant in both the connecting and collecting aspects of knowledge sharing. 1
Connecting people who need to know with those who do know requires an element of trust that is often lacking in large organizations, particularly when it comes to sharing knowledge across organizational boundaries. Thus, asking for advice or other opinions can be seen in a low-trust environment as tantamount to an admission of ignorance. Advertising that ignorance across the entire organization is unlikely to occur if there is a risk that it may have personnel sanctions, particularly in organizations that are downsizing, or looking to save costs by laying off personnel.
2
Collecting knowledge so that it can be shared through the web or other technology also comes to be dependent on communities, since it is only in communities of practitioners that share common objectives and pre-occupations that it can become apparent as to what knowledge needs to be shared. Efforts to build knowledge collections in the hope that "users will come" almost always encounter a disappointing response, since the builders find it difficult to anticipate what knowledge users will want, and even if they succeed in theory, the users will regard the collection as something external and foreign unless they had a hand in designing and constructing it. The experience underlines the difference between a reference tool such as an information system and knowledge collections: the former can be effective if the information is relevant and correct, in the same way that a yellow-pages telephone directory can be useful. The latter depends for its dynamic and living quality on the active participation of those who use it, since knowledge is a much more personal affair than data or information. Communities depend on the fundamental finding that communities thrive on
passion, and die from lack of it. That is to say, communities depend on the members of the community being interested in, enthusiastic about and committed to the issues around 30
which the community is formed. Communities comprise volunteers, not conscripts, and the community exists only so long as the members are willing to contribute their time and effort to promoting the community and its interests. Communities cannot be commanded into existence, and if this is attempted, they will become something other than a community,
except
in
name.
Launching and nurturing communities of practice for knowledge sharing programs can be accomplished in a variety of ways. 1
Endorsing informal communities that already exist: In almost any organization, there are bound to be at least some informal communities that exist, without management support or even awareness. Finding out what they are and where they are and how they can be supported can be an important first step in demonstrating that communities of practice are not something foreign, but something "home-grown".
2
Asking practitioners what issues they care about: Often the most effective way of nurturing communities of practice is to consult practitioners as to what issues they care about, and worry about, and would like to find out more about. The results of such consultations which can take place in informal focus groups or in structured groupware sessions can then be used to elicit volunteers to come forward and lead communities built on the issues about which the practitioners care most. In this fashion, the chances of having communities built on issues, issues about which members are passionate, are enhanced.
3
Instructing leaders to form communities: Having the management instruct leaders to form communities is usually a recipe for disaster, unless the leaders so designated happen to be informal leaders on the relevant issues, or unless they elicit the co-leadership of others who possess this informal leadership status. Without such support, the communities may exist on paper and may occasionally perform functions for the organization, but the dynamism and energy of genuine communities is likely to be lacking.
4
Launching communities among the "incorrigibles": In any organization, one will find staffs that are naturally and enthusiastically attracted to participate in 31
communities of practice. One will also find staffs that are naturally antipathetic to communities for a variety of reasons, including habits of hierarchical behaviour, distrust of fellow practitioners, or organizational game playing. Provided that there are many active communities in core areas of the business, the knowledge management program might choose to ignore these "incorrigibles" either totally, or until such time as the measures to encourage compliance with organizational priorities (budgets, formal incentives, measurement) eventually "kick in", so that even incorrigibles find it difficult to go on working successfully in the organization, unless they at least go through the motions of participating in communities. Among the key elements for launching communities are: 1
A knowledge sharing vision that makes sense for the business: Since communities comprise volunteers, not conscripts, it is vital that the management has articulated a compelling vision of knowledge sharing that makes sense to front-line practitioners. Without this, communities of practitioners will never form or survive.
2
Budgets: Financial resources or budgets for communities can be an unmistakable sign that communities have an official status in the organization, even if they are not part of the formal organization chart. Resources may be needed for instance for: o
Building knowledge collections that are of relevance to community members and that help staff do their jobs better?
o
Outreach to the community members, such as holding informal meetings and clinics, issuing newsletters and the like; and
o
Funding of ad hoc advice for those experts who will be expected to provide unprogrammable advice from time to time.
Care has to be taken that financial resources are made available in such a way that both the priorities of the organization and the independence and the dynamism of the community is preserved. 32
1
Incentives for communities: Participation in a community is a volunteer activity, based on personal interest and passion, and cannot be "bought" with financial incentives. Nevertheless, the reflection of knowledge sharing in the personnel system of the organization can send a signal, reinforcing the budget allocations, that participation in communities is not something extraneous or "extracurricular" but rather part of the core business activity of the organization. Raison d'etre for communities: The dynamic to create communities of practice
is irresistible: knowledge sharing is often essential to organizational survival, and communities of practice are usually essential to any effective knowledge sharing. Hence communities of practice are essential to organizational survival. The effectiveness of a community is most easily measured by surveying the members of the community and asking them whether and to what extent the community has proved helpful to them and why. Such surveys can however give false positives, in the case of communities, which have become self-serving or exclusionary in their mode of operation. More valid, albeit more expensive, measures can be obtained by tracking client or customer satisfaction in areas covered by the community. 6. “Technology for knowledge management�: The reach of know-how and experience possessed by individuals can be greatly extended once it is captured and explicated so that others can easily find it and understand and use it. Reports of activities, minutes of meetings, memoranda, proceedings of conferences and document filing systems maintained by organizations are traditional commonly used devices for recording content in paper format so that it can be transferred to others. The availability of new information technology, particularly the World Wide Web, has been instrumental in catalysing the knowledge management movement. 33
Information technology may, if well resourced and implemented, provide a comprehensive knowledge base that is speedily accessed, interactive, and of immediate value to the user. However there are also many examples of systems that are neither quick, easy-to-use, problem free in operation, or easy to maintain. The Web, for example, frequently creates information overload. The development of tools that support knowledge sharing in an appropriate and user-friendly way, particularly in organizationwide knowledge sharing programs, is thus not a trivial task. Most of the technological tools now available tend to help dissemination of knowhow, but offer less assistance for knowledge use. Tools that assist in knowledge creation are even less well developed, although collaborative workspaces offer promising opportunities, by enabling participation, across time and distance, in project design or knowledge-base development, so that those most knowledgeable about development problems — the people living them on a day-to-day basis – can actively contribute to their solution. Some of the more user-friendly technologies are the traditional ones — face-to-face discussions, the telephone, electronic mail, and paper-based tools such as flip charts. Among the issues that need to be considered in providing information technology for knowledge sharing programs are: 1
Responsiveness to user needs: continuous efforts must be made to ensure that the information technology in use meets the varied and changing needs of users.
2
Content structure: in large systems, classification and cataloguing become important so that items can be easily found and quickly retrieved.
3
Content quality requirements: standards for admitting new content into the system need to be established and met to ensure operational relevance and high value.
4
Integration with existing systems: since most knowledge sharing programs aim at embedding knowledge sharing in the work of staff as seamlessly as possible, it is key to integrate knowledge-related technology with pre-existing technology choices.
34
5
Scalability: solutions that seem to work well in small groups (e.g. HTML web sites) may not be appropriate for extrapolation organization-wide or on a global basis.
6
Hardware-software compatibility is important to ensure that choices are made that are compatible with the bandwidth and computing capacity available to users.
7
Synchronization of technology with the capabilities of users is important so as to take full advantage of the potential of the tools, particularly where the technology skills of users differ widely. Knowledge sharing programs that focus on the simultaneous improvement of the whole system, both technology tools and human practices, are likely to be more successful than programs that focus on one or the other.
7. “Measuring knowledge management programs�: Organization-wide knowledge sharing programs require significant investments and will entail major management effort, as well as behavioral changes throughout the organization over a significant period of time. In large organizations, given the likely large scale of activity, systematic efforts are to be in place to provide reliable information on both the progress and shortfalls in performance. Without measurement, there is an ever-present danger of premature abandonment of successful efforts, or alternatively, of complacent continuation of unsuccessful efforts when course correction is needed. Putting in place a system for measuring progress is therefore an essential step for a sustainable knowledge-sharing program. The organization must be prepared to accept some ambiguity, or at least to rely on non-traditional measures, when it tries to evaluate the impact of knowledge sharing. Measuring that impact, either in terms of return on investment (for private companies) or development impact (for public sector institutions), remains problematical. In principle, inputs lead to activities, which generate outputs, which in turn produce outcomes, which in turn result in overall impact. But each link of this chain poses its own measurement difficulties.
35
In the early stages of the program, the focus will inevitably be on inputs (such as dollars invested or staff recruited) and activities (such as help desks or communities established or knowledge resources made available). As the program gathers momentum, the focus of measurement will increasingly shift to outputs (numbers of queries responded to, amount of material downloaded from the web, or usage of electronic tools) and outcomes (such as changes in turnaround times or
unit
costs
or
comparisons
with
competitors).
The difficulties in measurement in knowledge management are not necessarily a fatal flaw. Once there is a realization that the choices facing a global organization are binary - either to share knowledge or to die - the task becomes, not one of justifying whether to undertake knowledge sharing, but rather how to conduct it more effectively. Knowledge managers will be expected to talk of knowledge as something that can be valued (even if not absolutely) and tracked by accountants as a form of intellectual capital, something that can be traded for a certain value, something that accountants can put on the balance sheet and track from quarter to quarter, a resource that can be extracted from stores of information, the way a precious mineral is extracted from a rock. Whatever the truth of the matter, they will be pressed to present knowledge as though it is an object, rather than what it really is, namely, a living, dynamic volatile aspect of human activities.
6.
SIX LAWS OF KNOWLEDGE MANAGEMENT Knowledge sharing is becoming the central driver of the new millennium
economy. More and more companies are now recognizing human capital as the major asset to business success, access to knowledge and just-in-time learning. The continuous changes and innovations in information technology and telecommunications will make knowledge
even
more
accessible. 36
As the unit costs of computing, communications and transactions decline towards zero, all economic sectors are going through major and rapid transformations. Economic success in this fast pace environment requires considerable agility and adaptability. Those countries, sectors and organizations that can adapt will flourish in the new millennium. Over the last five-to-six years, companies have increasingly been using new organizational models to capture and spread new ideas and know-how. Communities of practice and networks have emerged to complement existing hierarchical structures. As a consequence they have radically galvanized knowledge sharing, learning and innovation. As experience was acquired of implementing knowledge sharing in many different organizations in different countries and different cultures in the public and private sector, the initial impression was one of diversity of terminology, concepts and approaches, along with the differences in context in which knowledge sharing was being applied. More recently, however, as the richness of the knowledge sharing experience has been digested, it has become clearer that certain features of the knowledge sharing experience are common across most, if not all, organizations that attempt to implement an organization-wide program. If the universality of these features is confirmed by further study, these features might eventually attain the status of the “laws� of knowledge management. The seven laws of KM are: 1
Knowledge is key to business survival
2
Communities are the heart and soul of knowledge sharing
3
Virtual communities need physical interaction
4
Passion drives communities of practice
5
Knowledge sharing has an inside-out and an outside-in dimension
6
Storytelling ignites knowledge sharing
Law 1. Knowledge is a key to economic survival
37
In the new knowledge economy, knowledge sharing is increasingly seen as the sine qua non to survival. Traditional hierarchical organizations cannot cope with fastchanging client demands unless they are able to agilely share knowledge among employees, partners and clients. Innovations and the creation of new e-business lines depend on communal rather than individual knowledge. The knowledge of the community is always larger than the individual’s. Someone else in the group already knows capturing what and adding one’s own knowledge is often faster and more efficient than an individual reinventing a solution. For this to occur, organizations need to develop knowledge sharing culture and processes. In this situation, knowledge sharing is not merely an alternative strategic option: knowledge sharing is required for organizational survival. Law 2. Communities: heart and soul of knowledge sharing Knowledge sharing only takes place on a significant scale where organizations have organized themselves into communities of practice. These communities need to be “integrated” to the company’s strategy and its organizational structure. The phenomenon of communities of practice is known under different names. In the World Bank, they are called thematic groups; in Hewlett Packard they are "learning communities" or "learning networks"; in Chevron they are called "best practice teams", and in Xerox they are know as "family groups". Whatever the name, the formation of professional groupings where people voluntarily come together with others to share similar interests and learn from others’ skills has become the common feature of knowledge organizations. Vibrant communities operate in an environment of trust and mutual understanding, which encourages learning and candid dialogue. They are safe places where people who do not know can learn from those who do know. Learning and knowledge transfer can be accelerated when email or the World Wide Web electronically links community members to each other.
38
Information technology is insufficient by itself to create knowledge, but can be a catalytic tool, which gives global reach to community members across large distances and time zones. This would have been scarcely possible even ten years ago. Building "learning organization" requires building communities within which learning can take place. Without communities linked to structure, organizations don't learn very fast at all. Law 3. Virtual communities need physical interaction While technology has dramatically expanded the possibilities for global communities operating in a virtual mode, with members scattered around the world communicating seamlessly by email and the World Wide Web, many organizations have found it difficult to launch communities without initial face-to-face meetings of at least some of the members. There are no true communities in which a portion of the members do not periodically get together in person, see each other face-to-face, look each other in the eye, sniff each other out, and interact so as to establish the bonds of trust and affinity that are needed in communities. Without such face-to-face meetings, most organizations have found it difficult to get communities even started. Once a community has been launched, the absence of periodic face-to-face time leads to entropy, as the community starts to lose energy, and eventually dies. Law 4. Passion is the driver of communities of practice The experience of knowledge sharing shows that communities of practice only flourish when their members are passionately committed to a common purpose, whether it be the engineering design of water supply systems, the pursuit of better medical remedies, or more efficient economic techniques. Efforts at building communities in a hierarchical or top-down fashion are at best successful on a temporary basis. Soon they come unstuck as members refuse to contribute their time to activities that have no meaningful purpose for them. Instead, they will be 39
looking for professional interest groups who will give them a sense of professional and personal raison d’etre. The necessity for passion in the workplace is a hard lesson for companies and executives who have spent their lives trying to keep emotion out of the work place. Nevertheless the lesson repeatedly emerges from case studies and benchmarking of knowledge sharing programs. As a result - for reasons of sheer efficiency and effectiveness - the modern workplace is finding it necessary to provide time and space for both the head and the heart. In the process, it is discovered that communities also enrich organizations and personal lives. Nurturing communities of practice and building on positive human emotions in the workplace provide a key to creating and developing healthier forms of organizations. The limited liability company has been an invention that has helped generate immense wealth. It has also led for the most part to emotionally desiccated lives for the individuals who work in these organizations. The emergence of non-hierarchical communities of practice and the central role of passion in cementing them can lead not only to an enhanced form of organization capable of generating even greater wealth, but would also provide more meaningful lives for those who work within. Law 5. Knowledge sharing: the inside-out and outside-in dynamic Starting and implementing knowledge sharing in an organization must be done from inside, not outside. This means that using outsiders such as consultants to "kick start" or "do it for us" doesn’t work. The successful knowledge sharing programs appear to be driven by insiders. This means that the person charged with starting/implementing knowledge sharing must have credibility among both the line and staff functions, so that when he/she says "here's the direction we're going in", people start moving in that direction. It is vital that the changes be made from inside the organization, not grafted on 40
from the outside (or by outsiders). The insiders must "own" the process, be involved in all aspects of it, make the changes happen, encourage others to make the changes and to get involved. Only they can do that legitimately, and with organizational (or internal political) savvy. That said, the inside person must also use the outside world to validate and "push" the agenda forward within the organization. For example, using the external recognition and knowledge fairs and expos as ways of showing that what is happening internally is valid, good, useful, appropriate, adds value, correct etc. This legitimizes the activities, which consequently makes it "all right" for others to jump on board. Law 6. Storytelling ignites knowledge As organizations start on their knowledge journey, they inevitably find great difficulties
in
communicating
complicated
ideas
through
abstract
forms
of
communication. This is even truer where this knowledge journey also implies large-scale changes in behavior and understanding of the mission of the organization. Telling stories that build on real knowledge sharing situations enables individuals to gather in some of the understanding of the storyteller as well as recast the story into their own contextual work environment; hence adding their own understanding to the process. Organizations are finding that the marriage of narrative and abstract communications provides a more powerful tool for sharing knowledge than merely abstract communications.
7.
THE SEVEN KNOWLEDGE LEVERS Lever Customer
Knowledge
Key Activities
Example
Developing deep knowledge
Steel case - an office products
sharing relationships.
manufacturer has totally
Understanding the needs of
redefined its market into 41
your customers' customers.
knowledge worker productivity
Articulating unmet needs.
through opening a customer
Identifying new opportunities. knowledge channel from its product end-users into its R&D. Stakeholder Relationships
Improving knowledge flows
Toshiba collects comparative
between suppliers,
data on suppliers ranking 200
employees, shareholders, and
quantitative and qualitative
community etc. using this
factors. It has an active
knowledge to inform key
suppliers network and
strategies.
association where knowledge is shared and suppliers are integrated into future strategies.
Business
Systematic environmental
Smith Kline Beecham has
Environment
scanning, including political,
evolved a virtual library that
Insights
economic, technology, social
delivers market updates, patent
and environmental trends.
information and a wealth of
Competitor analysis. Market
externally sourced material to
intelligence systems.
the desktops of its research scientists.
Organizational Memory
Knowledge sharing. Best
Price Waterhouse is typical of
practice databases.
several consultancies that have
Directories of expertise.
knowledge databases to allow
Online documents,
sharing of company
procedures and discussion
knowledge. In addition to the
forums. Intranets.
KnowledgeViewSM they have knowledge centres that provide human analysts and navigators. It helps them solve customer problems faster. 42
Knowledge in Processes
Embedding knowledge into
CIGNA made their best
business processes and
underwriting knowledge
management decision-
available as guidance screens
making.
in their computerized underwriting processes. This helped them turn a loss into a profit.
Knowledge in
Knowledge embedded in
Campbell Soup's "Intelligent
Products and
products. Surround products
Quisine" (IQ) delivers weekly
Services
with knowledge e.g. in user
packages of nutritionally
guides, and enhanced
designed, portion-controlled
knowledge-intensive services.
meals to those suffering hypertension or high cholesterol.
Knowledge in People
Knowledge sharing fairs.
Tetra Pak Converting
Innovation workshops. Expert Technologies has learning and learning networks.
networks, where people from
Communities of knowledge
across the organization update
practice.
and develop their expertise in key technologies such as laminating and printing.
8.
CHALLENGES OF KNOWLEDGE MANAGEMENT
Getting Employees on Board The major problems that occur in Knowledge Management usually result because companies ignore the people and cultural issues. In an environment where an individual's knowledge is valued and rewarded, establishing a culture that recognizes tacit knowledge and encourages employees to share it is critical. The need to sell the KM concept to employees shouldn't be underestimated; after all, in many cases employees are being asked to surrender their knowledge and experience - the very traits that make them valuable as individuals. 43
One way companies motivate employees to participate in KM is by creating an incentive program. However, then there's the danger that employees will participate solely to earn incentives, without regard to the quality or relevance of the information they contribute. The best KM efforts are as transparent to employees' workflow as possible. Ideally, participation in KM should be its own reward. If KM doesn't make life easier for employees, it will fail. Allowing Technology to Dictate KM KM is not a technology-based concept. Software vendors touting their allinclusive KM solutions should not dupe companies. Companies that implement a centralized database system, electronic message board, Web portal or any other collaborative tool in the hope that they've established a KM program are wasting both
their
time
and
money.
While technology can support KM, it's not the starting point of a KM program. Companies should make KM decisions based on who (people), what (knowledge) and why (business objectives). The how (technology) part can be discussed last. Not Having a Specific Business Goal A KM program should not be divorced from a business goal. While sharing best practices is a commendable idea, there must be an underlying business reason to do so. Without a solid business case, KM is a futile exercise. KM Is Not Static As with many physical assets, the value of knowledge can erode over time. Since knowledge can get stale fast, the content in a KM program should be constantly updated, amended and deleted. What's more, the relevance of knowledge at any given time changes, as do the skills of employees. Therefore, there is no endpoint to a KM program. Like product development, marketing and R&D, KM is a constantly evolving business practice. 44
Not All Information Is Knowledge Companies diligently need to be on the lookout for information overload. Quantity rarely equals quality, and KM is no exception. Indeed, the point of a KM program is to identify and disseminate knowledge gems from a sea of information.
9.
KNOWLEDGE MANAGEMENT JOB DESCRIPTION The main function of the knowledge sharing position would be to help champion
organization-wide knowledge sharing, so that the organization’s know-how, information and experience is shared inside and (as appropriate) outside the organization with clients, partners, and stakeholders. Key responsibilities include: 2
Promoting knowledge sharing through the organization's operational business processes and systems by, among others, strengthening links between knowledge sharing and the information systems, and improving integration among information systems in the organization, to facilitate seamless exchange of information across systems; 45
3
Promoting collaborative tools such as activity rooms to facilitate sharing of ideas and work among internal teams and external partners;
4
Providing support for the establishment and nurturing of communities of practice, including workshops, one-on-one guidance, and troubleshooting;
5
Sharing experiences across communities of practice, business units, and networks on innovative approaches in knowledge sharing, including preparation of case studies;
6
Helping monitor and evaluate the knowledge sharing program, including external benchmarking and evaluation programs/opportunities;
7
Helping disseminate information about the organization's knowledge sharing program to internal and external audiences, including organizing knowledge sharing events (such as knowledge fairs, site visits, interviews), maintaining communications on knowledge sharing across the organization, participation in orientation and training sessions, and preparation of brochures/presentations.
Skills: Communications: Ability to get consensus and collaboration across many business units; ability to explain complex concepts in layman's language; ability to generate enthusiasm; ability to communicate with all levels of management and staff. Establishing straightforward, productive relationships; treating all individuals with fairness and respect, demonstrating sensitivity for cultural and gender differences; showing great drive and commitment to the organization’s mission; inspiring others: Maintaining high standards of personal integrity; Client Orientation: Understands clients' needs and concerns; responds promptly and effectively to client needs; customizes services and products as appropriate. Drive for Results: Makes things happen; Is proactive; balances "analysis" with "doing"; sets high standards for self; Commits to organizational goals. Teamwork: Collaborates with others in own unit and across boundaries; acknowledges others' contributions; works effectively with individuals of different culture and gender; willing to seek help as needed. Influencing and resolving differences across 46
organizational boundaries: Gaining support and commitment from others even without formal authority; resolving differences by determining needs and forging solutions that benefit all parties; promoting collaboration and facilitating teamwork across organizational boundaries. Learning and knowledge sharing: open to new ideas; shares own knowledge; applies knowledge in daily work; builds partnerships for learning and knowledge sharing. Analytical Thinking and Decisive Judgment - analyzing issues and problems systematically, gathering broad and balanced input, drawing sound conclusions and translating conclusions into timely decisions and actions.
10.
KNOWLEDGE MANAGEMANT AND E-BUSINESS Since management as now practiced is a faddish activity, with each new fashion
following the previous with dizzying rapidity, it is not surprising that managers who were caught flat-footed when knowledge management became the craze, are already looking beyond it to discern the next wave. Could it be e-business? Does this mean that knowledge management is already passĂŠ, and can be safely skipped?
47
In fact, the arrival of e-business only underlines the necessity for organizations to adopt systematic approaches to sharing knowledge. The demands of e-business for rapid response and agile adaptation to the market-place is a challenge both for the new dotcoms springing up (the "clicks") and the older traditional companies (the "bricks") that are trying to adapt to the new world of electronic business. E-commerce: A minimal response to enable survival in this fast-paced world is to offer e-commerce, in which sharing of existing services and products electronically through the Web. For this purpose, the rapid sharing of know-how among employees is already a necessity. Without it, the company finds itself publicly stumbling through inability to respond to the requirements of the marketplace, whether it be B2B or B2C. E-Business: An e-commerce approach may be enough to enable an organization to get by and stave off imminent death. But growth in this new electronic world requires something more. It will require innovation and the generation of new businesses, with sharing of know-how among not only staff but also partners and customers in new and unexpected ways. Strategic knowledge sharing, particularly
48
external sharing will affect every aspect of the organization's activities and will become a necessity.
12.
WHY KM INITIATIVES FAIL? Several of the Knowledge Management initiatives fail in a number of
organizations. The causes could be attributed to a variety of reasons. Perhaps unavoidably, KM suffers from a certain amount of hyperbole, resulting from overenthusiastic efforts to sell it. For example, several existing products, which have been touted in the past as tools for decision-support, information management or data management, are being "born again" as KM products. For KM to be seen in a realistic perspective, it is thus imperative to strip away this Emperor’s-new-clothes syndrome. Another reason could be that it is highly equated with technology and sometimes its true critical success factors are lost in the pleasing hum of servers, software and pipes. As vendors label their document management, database or groupware products "knowledge management solutions," executives can be excused for mistaking the software for the solution when in the real sense it is not. Also there are several myths associated with KM. Some of them are as follows: MYTH: Knowledge management technologies deliver the right information to the right person at the right time. This idea applies to an outdated business model. Information systems in the old industrial model mirror the notion that businesses will change incrementally in an inherently stable market and executives can foresee change by examining the past. The new business model of the Information Age, however, is marked by fundamental, not incremental, change. Businesses can't plan long-term; instead, they must shift to a more flexible "anticipation-of-surprise" model. Thus, it's impossible to build a system that
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predicts who the right person at the right time even is, let alone what constitutes the right information. MYTH: Information technologies can store human intelligence and experience. Technologies such as databases and groupware applications store bits and pixels of data. But they can't store the rich schemas that people possess for making sense of data bits. Moreover, information is context-sensitive. The same assemblage of data can evoke different responses from different people. The reason this is important is that many information textbooks say that while people come and go their experience can be stored in databases. But unless you can scan a person's mind and store it directly into a database, you cannot put bits into a database and assume that somebody else can get back the experience of the first person. MYTH: Information technologies can distribute human intelligence. Again, this assumes that companies can predict the right information to distribute and the right people to distribute it to. And bypassing the distribution issue by compiling a central repository of data for people to access doesn't solve the problem either. The fact of information in a database doesn't ensure that people will see or use the information. Most of our knowledge management technology concentrates on efficiency and creating a consensus-oriented view. The data therein is rational, static and without context. And such systems, he adds, do not account for renewal of existing knowledge and creation of new knowledge.
KNOWLEDGE MANGEMENT AT INFOSYS
13.
CORPORATE PROFILE Infosys is the leader in providing IT consulting and software services to the
world's finest organizations. Infosys Technologies Limited was established in India in the year 1981. Infosys specialises in offering a complete range of software and consulting services such as business-technology consulting, Internet and e-business consulting, 50
system integration, custom application development, re-engineering and sustenance amply supported by the company’s execution methodologies and delivery models. Over the years, Infosys has grown into one of the major IT companies in the world and now has offices in different parts of the world such as the U.S., Japan, Canada, U.K., Germany, Belgium, Australia, France, Scandinavia and Hong Kong. Infosys’ business model focuses on having a long-term strategic relationship with clients and a significant portion of their revenue comes from repeat business. Their solutions include building next generation communication, networking and einfrastructure products for their clients. Their global delivery model leverages costcompetitive development centres in different parts of the world to provide high quality, rapid time-to-market solutions on time and within budget. Various Fortune 1000 companies leverage on the expertise of Infosys to align their business and IT strategies and successfully transform themselves for the new economy. Infosys’ also partners leading-edge technology companies looking to be the architects of the Internet infrastructure. The sustained growth of Infosys as a technology company delivering business advantage comes from their presence at the top of the technology evolution and maturity curve. In a world where excellence in execution is the key to success, Infosys has an enviable record of completing 85% of its projects on schedule. Infosys' well-defined processes and a strong Body of Knowledge enables the company to capture effectively the best practices of every project implemented.
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INTRODUCTION – KM IN THE INFOSYS CONTEXT The primary driver for Infosys’ Knowledge Management (KM) strategy is that, as
the company climbs the value curve, it increasingly needs effective mechanisms for speedy and efficient consolidation of expertise. The large consulting organizations are the most enthusiastic users of KM, and as Infosys’ business profile evolves to more closely mirror the profile of these organizations, KM becomes an imperative. The turbulent scenario of the e-business era, with its premium on speed, agility and competitive intensity, has given a further fillip to this need. 51
The goal of Knowledge Management (KM) in the Infosys context is that all organizational learning must be leveraged in delivering business advantage to the customer. The objectives are to minimize effort dissipated in redoing learning that has already happened elsewhere, and ensuring that Infoscions (as employees at Infosys are called) in contact with the customer have the collective knowledge of the organization behind them. The company thus aims to move towards a "Learn Once, Use Anywhere" paradigm. The conception and implementation of the KM strategy is anchored by a Central KM group, which forms a part of the E&R department. The group currently consists of four fulltime staff, and has a sanctioned strength of eight. When ramped up to its full strength, the group will have three sub-groups – one each to oversee KM research and content management, technology architecture development and maintenance, and internal publicity and brand management. Efforts are also on to identify Practice Champions members of the practice units who will devote time to facilitation for content generation
15.
INFOSYS’ KM STRATEGY The Infosys KM strategy can be described under the following headings: Existing Initiatives 1
The company maintains an organization-wide Body of Knowledge (BoK), which enshrines experiential learning gained by past projects. Entries are contributed by Infoscions, and a review mechanism screens their content, applicability and presentation aspects. Each contributor must declare that the work is experiential, and that it does not violate third-party IPR (Intellectual Property Rights) – in case 52
the IPR belongs to a third party such as the customer, clearance from that party must be obtained. This system is available on the intranet, via an easy-to-use interface that incorporates search utilities. Incentives for contribution exist, as do mechanisms to publicize contributions periodically; prizes are given for meritorious contributions. Several project- and PU (Practice Unit)-specific BoKs also exist. 2
Since only a small proportion of employees will distill and write up their experiences, "as-is" project deliverables must be captured too. Hence a "Process Assets" system has been developed to capture these assets into an intranet-based repository. As part of project closure, a Project Leader fills in a brief description of the project, the target audience and others details while uploading into the system. This helps in classification and focused search.
3
Given the knowledge-intensive nature of Infosys’ business, a key determinant of success in the global marketplace is the ability to leverage the know-how, innovation and reputation of the company as well as its employees. A clear understanding of this ‘knowledge capital’ is hence essential, but cannot be obtained via traditional financial statements represented by the balance sheet and the income statement. Today's discerning investors look at both financial and nonfinancial parameters in evaluating the long-term success of a company, as is amply evident from the fact that companies that have spectacular market valuations most often have only a fraction of those valuations captured by their financial statements. As a company that is committed to the highest quality of disclosure to its global investors, Infosys has adopted various models for evaluating its intangible assets, and disclosing them in its financial reports. For e.g. In the Annual Report for fiscal 1998, Infosys has published data on some of its internal and external assets in the form of a score sheet. The methodology used was based on Dr. Karl-Erik Sveiby’s Intangible Assets Monitor framework [Sveiby 1997]. The company believes that such a representation of its knowledge
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assets would provide a tool to its investors for evaluating the market-worthiness of the company. 4
A Knowledge Directory providing pointers to expertise available within the organization has been developed and deployed. It is called the People-Knowledge Map (PKM). It provides an intranet-based interface via which people can register or locate expertise. The system is designed to be driven off a proprietary knowledge hierarchy that the company has created, which consists of a multilevel taxonomy of topics that represent knowledge in the Infosys context. The hierarchy consists of about 800 nodes, with the top level being technology, process, project management, application domain and culture and deeper levels representing a finer grain of topics.
5
The company-wide intranet, christened Sparsh, acts as a central information portal. The intranet consists of about 5000 nodes, spread throughout the various India-based development centers (DCs) and the US-based marketing offices. Official policies and documentation, press releases and articles, and web-based inhouse information systems are available from the home page. Sparsh has a knowledge shop that provides access to several of the intranet-based knowledge systems. It also links project, PU, department and personal web pages. Access is governed by IPR guidelines. Security and protection from external intrusion are provided by means of firewalls.
6
The company’s e-mailing system, which every Infoscion has access to, supports bulletin boards for official announcements as well as technical and personal queries. An e-mail protocol has been defined and is adhered to.
7
A web-based virtual classroom has been developed and deployed on the intranet, and allows access to various courses whose content has also been developed internally. This system incorporates a discussion forum where participants can post and respond to course-related queries. In addition, several online tutorials 54
have also been purchased and deployed over the intranet. Systems for supporting training management – course announcements, nomination and reporting - and participant evaluation have also been internally developed and are in use. 8
Practices that have worked are also propagated through regular seminars and bestpractice sessions, held both within units and organization-wide.
9
A few other such systems also exist. One such system is Odyssey, a system that provides an umbrella for websites maintained by individual projects and a marketing intranet, which provides information and reusable artifacts useful at the sales and project initiation stage.
16.
THE INFOSYS KM FRAMEWORK
Infosys Knowledge Management Service offering is designed to assist clients in: 1
Formulating a “knowledge strategy� for sustaining the knowledge creation and reuse in the organization
2
Aligning the knowledge strategy towards business goals and priorities to maximize value creation 55
3
Designing a collaborative process-framework, to organize, capture and share knowledge
4
Designing content taxonomy and technical architecture for the knowledge management program
5
Developing and deploying the appropriate technology tools for organization wide implementation of the program
6
Instituting a “balanced - scorecard� based system for continually measuring the strategic impact of knowledge management efforts
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CHALLENGES FOR THE FUTURE The Infosys KM effort has come out of infancy, but is hardly past adolescence.
Major inroads are being made on the "hard" front of putting systems in place. However, there is still a long way to go on the "soft" front - that of ensuring large-scale awareness and usage of the systems by all quarters within the organization for business leverage. An important objective for the future includes giving the customer direct benefit from the KM effort - plans to make this happen include an extranet that will expose internal knowledge, suitably screened for Intellectual Property Rights issues, to select Infosys customers. The criticality of Knowledge Management will increase in the future, given the current revenue and people growth rates, geographical expansion, diversification into new markets and more sophisticated services.
18.
CONCLUSION Knowledge Management (KM) at Infosys has truly come a long way from the
time when employees only shared information through Body of Knowledge documents. Infosys strongly believes that having a culture of knowledge sharing and reuse is more critical than building a technology infrastructure. Infosys has therefore embarked on a number of initiatives aimed at taking the prevailing knowledge sharing culture to even 56
greater heights. Demonstrating the business value of knowledge re-use and creating a system demand for knowledge sharing / re-use are other means designed to accelerate this culture-change. Today Infosys has a comprehensive Knowledge Management infrastructure complete with a dedicated team, a fully functional technical infrastructure and, most importantly, increasing awareness of the criticality of knowledge sharing amongst all employees. Infosys envisions itself as a knowledge organization: 1
Where every action is fully enabled by the power of knowledge;
2
Which truly believes in leveraging knowledge for innovation;
3
Where every employee is empowered by the knowledge of every other employee;
4
Which is a globally respected knowledge leader.
The Infosys Approach focuses on linking knowledge management to overall business strategy and is holistic in character; it addresses people and processes, with technology tools playing the role of key enablers. Any new effort needs top management push in the early stages and the full cooperation of the top executives of the company is of utmost importance. The top management of Infosys ably supported its KM initiatives, which is making it a success, as the top brass was quiet early in recognizing that Knowledge is the currency of the new millennium, and Knowledge Management is a key survival imperative. 19.
ANALYSIS AND RECOMMENDATIONS Intellectual capital, or employee knowledge and experience, is a vital corporate
asset. KM seeks to best use that asset through knowledge sharing and documentation. If KM is going to continue, either consciously or subconsciously, it's crucial to address the larger issue of KM. According to Davenport, co-author of Working Knowledge: How Organizations Manage What They Know, "Organizational and behavioral change is the hardest part of implementing anything," he says. "Buying software is the easiest part." 57
RECOMMENDATIONS: All businesses must react effectively to the need to maximize profits, make operations more efficient, reduce costs, and generally change to meet market needs and beat the competition. Whilst these core business goals are apparent to all companies, many fail to address them in a systematic manner and few pauses to think about designing business processes to best approach them. The mindset of most companies is 'serial', conditioned by the 'problem - action result' sequence. This has given rise to the Business Process Re-engineering, or BPR, industry that has boomed over the last decade. Sadly BPR has often been used to disguise a relatively straightforward and occasionally unwarranted downsizing of organizations for short term Profit &Loss benefit. The longer-term effects have frequently led to problems for the re-engineered organization. What is the reason for this? The chief reason is that re-engineering rarely creates a source of competitive advantage, rather it 'sweats' cost, sells off non-performing businesses, and worst of all, removes a core base of knowledge. This knowledge base is now being recognized as an intrinsic source of competitive advantage and a means to reacting quickly to fast moving change. A fundamental issue is communication within an organization, between Directors and Executive Management, within operational management, and to the customers of the organization. This lack of an embedded knowledge base and effective communications reveals a complete absence of knowledge management that leaves the organization unable to respond to changing competitive pressures and customer needs. The mindset of all leading companies must become anticipative - not reactive. Anticipation depends on a fundamental understanding of customers, and their existing and potential needs. This can only be achieved by an intensive information gathering process that can be greatly enhanced by technology. Fundamentally, knowledge management is about generating and recording a clear understanding of business fundamentals, processes, and customers. This process itself is enabled by technology and should be considered an ongoing commitment. Knowledge management is the means to creating a true understanding of the way a business operates 58
and allows companies to test different operational alternatives before putting the optimum process into operation. The matrix of processes, systems, strategies, and people is endlessly complex but nonetheless holds the key to delivering the core business goals of revenue and profit generation, competitiveness, and growth. Knowledge management can help organizations to unravel the mysteries of the way their business functions and hence anticipate and address the ever-changing business environment. Hence, there is scarcely any dissent about it: Knowledge is the currency of the millennium, and knowledge management is a key survival imperative. Hence organisations from all sectors should adopt KM measures with a view to increase their competency, be more agile and be in a better position to respond to changes. Knowledge Management is the Holy Grail of the modern company and is a ‘mission critical’ for all managers of today and tomorrow.
BIBLIOGRAPHY & REFERENCES
BIBLIOGRAHY: 1
The Knowledge Management Yearbook 2000-01 - James H. Cortada, John A. Woods.
2
Managing Knowledge Workers 59
- Horibe, Frances. 3
Working Knowledge - Thomas H. Davenport, Laurence Prusak.
REFERENCES 1
www.cio.com
2
www.infy.com
3
www.brint.com
4
www.kmmag.com
5
www.dmreview.com
6
www.knowledge_nurture.com
7
www.indiainfoline.com
8
www.astd.org
9
www.skyrme.com
10 www.sveiby.com.au 11 www.stevedenning.com
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