A Knowledge Management Model for Organizational Competitiveness

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A Knowledge Management Model for Organizational Competitiveness

Speaker: Dr. Shy-Ming Ju

15 June 2011

Ton Duc Thang University

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Introduction (1/2)

• Knowledge management (KM) is the process of identifying, capturing, organizing and disseminating the intellectual assets that are crucial to the organization’s long-term performance.

• Today, KM becomes more important because of globalization, leaner organization, organizational memory lost, and technological advance.

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Introduction (2/2)

• However, KM is complex due to the subjective and dynamic nature of knowledge and the cultural and contextual influences.

• Therefore, a holistic KM model is needed to explain the key KM concepts and processes.

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A KM Model for Organizational Competitiveness Assessment of organizational

competitiveness

Evaluation of product/service quality

Knowledge activities integrated into business processes

Knowledgestorage/access

Knowledgeacquisition/creation

Knowledgesharing/dissemination

Knowledgeapplication/adaptation

Managerial infrastructure

Technologicalinfrastructure

Socialinfrastructure

A unified view of knowledge and information

Measurement of KM performance

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A Unified View ofKnowledge and Information (1/14)

• Information may be recorded on digital medium (e.g., magnetic tapes, magnetic disc, optical disc, mass storage, flash memory) or non-digital medium (e.g., paper, cloth, wood, stone, metal, glass), called explicit information.

• Information may also be held in human brain, called tacit information.

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• Explicit information can be processed by either human or computer.

• Tacit information, on the other hand, can only be processed by the human who holds it.

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• Knowledge is the ability to apply explicit or tacit information for a problem or an issue (e.g., solving a problem, making a decision on an issue, or pursuing self-fulfillment on a subject) in a given context.

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• For a human, to apply the explicit or tacit information for a problem or an issue would require a certain level of competence in generalization and specialization, or the competence in induction and deduction.

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• For a computer, to apply the explicit or tacit information for a problem or an issue would require a special-purpose software program with induction and/or deduction logic in it.

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This concept of knowledge may be expressed formally as:

{ P, D, S, T },

{ } stands for an ability,

P is the required competence level of a human or computer to process the information relevant to this knowledge,

D is the tacit or explicit information relevant to the domain of the problem or issue,

S is the tacit or explicit information specific to the problem or issue at hand,

T is a description of the problem or issue by a taxonomy, which may be tacit information or codified in the form of explicit information for computer retrieval.

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• Tacit knowledge is denoted as { Ph, Di, Si, Ti } in which the subscripts h and i stand for human and implicit, respectively.

• For example, an author’s knowledge about writing a research paper would comprise:

P - The author’s expertise related to the subject

D - Review of literature

S - The author’s insight to the subject

T - The subject title and keyword

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• Tacit knowledge is difficult to describe because we do not know how human competence and tacit information are codified inside human brain.

• However, since most of the knowledge assets in an organization are tacit knowledge, how to share them within an organization has become a major challenge of KM.

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• Explicit knowledge is denoted as { Pc, De, Se, Te } in which the subscripts c and e stand for computer and explicit, respectively.

• For example, a computer’s knowledge about diagnosing a cardiac patient may comprise:

P - An expert system shell which has the capability for logic inference

D - Inference rules for cardiac diagnosing S - Symptoms and lab test reports the patient T - Medical service classification for cardiac

diagnosing

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• Explicit knowledge that is codified according to a metadata standard is called a knowledge object, which can be stored in a knowledge repository for later retrieval.

• Conversion between tacit- and explicit-knowledge takes place in the SECI-mode (Nonaka, Toyama and konno, 2000) and can be expressed formally as:

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• Socialization - This is where knowledge sharing takes place.

{ Pha, Di, Si, Ti } transient [(Pha and Phb), De, Se, Te]

{ Phb, Di, Si, Ti }

where [ ] stands for a collection of components; subscripts a and b indicate two individuals

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• Externalization - This is the precursor of knowledge storage and dissemination.

{ Ph , Di, Si, Ti } [ (Ph or Pc), De, Se, Te ]

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• Internalization

It appears that people solve problems by consulting relevant explicit information; for example, fixing a defunct appliance by consulting a user’s manual. Technically, however, human brain must internalize the explicit information before it can act on it.

[Ph, De, Se, Te] { Ph , Di, Si, Ti }

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• Combination - This is where knowledge enhancement or adaptation takes place.

{ Ph , (Di1, Di2), Si, Ti } { Ph , Di3, Si, Ti }

where the tacit information Di1 and Di2 have been acquired through socialization or internalization; Di3 is the adapted or enhanced tacit information resulted from combination.

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Infrastructures for Supporting KM (1/17)

There are three types of infrastructures for supporting KM:– Managerial infrastructure – Technological infrastructure – Social infrastructure

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Managerial infrastructure (1/4)

• Knowledge leadership– Strategic leaders– Core leaders– Team leaders

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• Organizational culture– Emphasize knowledge values– Encourage knowledge sharing– Discourage the NIH-syndrome – Preach KM philosophy

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• Human resource management– Organizational structure that facilitates

employee empowerment– Incentives that encourage knowledge sharing

and use– Recruitment of appropriate knowledge

competencies– Retention of tacit knowledge)

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• Work Practices– Any task must be executed according to a

standard operating procedure (SOP). – If deficiency or improvement is found in an

SOP, it must be documented for later update to the SOP.

– The work practices foster knowledge externalization, utilization, and enhancement.

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Technological infrastructure (1/9)

• Knowledge management system

There are many possibilities which could be incorporated into a knowledge management system. However, the system should link closely with the needs of the particular organization, and aim to build a gradual, staged enhancement as users become more empowered. Core functions of a KMS may be:

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Technological infrastructure (2/9)Internet and information portal, enabling eff

ective search for relevant records and sources of knowledge and expertise in the organization

Ability of linking to or integrating with external application systems

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Technological infrastructure (3/9)Identifying and pulling content from any sys

tem, regardless of differences in platform, location, language or server

Effective knowledge security management through the use of a single security access point

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• Metadata standards Metadata provide templates to enable unifor

m presentation of explicit information by a variety of contributors.

Metadata standards ensure that different human or computer processors can process codified explicit information correctly.

In this respect, XML is a widely-accepted and powerful data standard.

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• Taxonomy schemes

To provide a standard way of codifying problem/issue description for effective retrieval of knowledge objects.

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Technological infrastructure (6/9) • Knowledge repository

Where codified explicit information and knowledge objects can be stored, indexed and retrieved.

• Customer relationship management Staff may contribute insights, experiences and

historical data to build customer profile which are accessible to all colleagues.

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• Authoring support and content managementProviding non-technical interfaces for users to

author, publish and control their contentContent version control and archivingEmail support and management

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• Intelligent agentsDeduction-capable software such as expert sy

stem shellInduction-capable software such as neuro-net

work shellNatural language processor

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• Collaboration support toolsVarious communication channelsWeb-conferencingGroup decision supportProject managementWorkflow management

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Social infrastructure (1/3)

• If knowledge resides primarily in people and it is people who decide to create, use and share their ideas to attain business results, then KM is as much about managing people as it is about managing information and IT.

• Building an effective social environment within which people operate is a crucial requirement for effective KM .

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Social infrastructure (2/3)

• Communities of practice

Groups of people bound together by shared experience and passion to pursue new and effective ways of doing things.

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Social infrastructure (3/3) • Ba

Any setting or arrangement that fosters socialization, externalization, combination, and internalization.

• Mentoring

One of the effective mechanisms to foster knowledge sharing.

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Knowledge Activities Integrated with Business Processes (1/10)

There are four major types of Knowledge activities: Knowledge acquisition and creation Knowledge storage and access Knowledge sharing and dissemination Knowledge application and adaptation

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Knowledge acquisition and creation (1/3)

• Tacit knowledge is acquired by identifying the person who owns the tacit knowledge and seeking his/her help.

• Tacit knowledge is created solely by human, through socialization, internalization, and combination, for one’s own use.

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• Explicit knowledge is acquired by identifying the problem taxonomy and the required competence level of the human or computer processor, and obtaining the codified information relevant to the problem domain and that specific to the problem at hand .

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• Explicit knowledge is created by human through codification of the problem taxonomy, the required competence level of the human or computer processor, the information relevant to the problem domain, and the information specific to the problem at hand.

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Knowledge Storage and Access (1/2)

• Tacit knowledge is stored nominally by establishing an expertise directory, which tracks who owns what tacit knowledge.

• Tacit knowledge is accessed by looking up the expertise directory to locate the expert and then seek his/her advice.

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Knowledge Storage and Access (2/2)

• Explicit knowledge can be stored in a knowledge repository.

• Explicit knowledge can be accessed by using problem taxonomy as a locator to search the knowledge repository and then retrieve it from there.

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Knowledge Sharing and Dissemination (1/2)

• Tacit knowledge is shared through socialization.

• Tacit knowledge dissemination is to make the expertise directory available to the concerned parties.

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Knowledge Sharing and Dissemination (2/2)

• Explicit knowledge sharing and dissemination can be done by storing the explicit knowledge in a knowledge repository and making it known through an information portal.

• Anyone can then retrieve it from the knowledge repository anytime.

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Knowledge Application and Adaptation (1/2)

• If knowledge is not used then it is of no value. So, knowledge application should be encouraged.

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Knowledge Application and Adaptation (2/2)

• In most cases, the purpose and the domain of a given knowledge may not have a perfect match with the problem at hand; thus, adaptation is required.

• Adaptation may increase the competence level of the processor and broaden the domain information, thus contributes to new knowledge

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Evaluation of service and Product Quality

• Quality of products and services is the most fundamental embodiment of organization’s competitive advantage.

• Everyone in the organization should know what the quality criteria are and place them under vigorous quality assurance.

• Feedback from the stakeholders such as end-users and customers

• Evaluation could be based on ISO quality standards

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Assessment of Organizational Competitiveness (1/3)

• Competitive advantage varies from organization to organization.

• Everyone in an organization, especially the top management, should know what kind of competitive advantage the organization has or should be developed to win over a real or imaginative competitor.

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• Sustainable competitive advantage depends on firm’s capacity to:– Develop and deploy its knowledge-based

resources, including intellectual capital and human resource

– Identify and retain its critical employees who possess deep knowledge that is necessary to enhance organizational competitiveness

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– Foster peer mentoring – Create and transfer knowledge effectively.

Facilitate interaction between technologies, techniques, and people.

– Shape a corporate culture favorable to

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Measurement of KM Performance (1/4)

• Evaluating KM effectiveness in terms of:– People – Planning – Processes – Products and services.

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The 11 deadliest sins of KM:# 1: Not developing a working definition of

knowledge

# 2: Emphasizing knowledge stock to the detriment of knowledge flow

# 3: Viewing knowledge as existing predominantly outside the heads of individuals

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# 4: Not understanding that a fundamental intermediate purpose of managing knowledge is to create shared context

# 5: Paying little heed to the role and importance of tacit knowledge

# 6: Disentangling knowledge from its uses

# 7: Downplaying thinking and reasoning

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# 8: Focusing on the past and the present and not the future

# 9: Failing to recognize the importance of experimentation

# 10: Substituting technological contact for human interface

# 11: Seeking to develop direct measures of knowledge

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Conclusion (1/2)

• Leader’s vision and determination as the pulling force and the positive and negative incentives as the pushing force are the two critical success factors for KM initiatives.

• Without them, a KM model is just a form but no essence.

• Historically, knowledge has always been managed, at least implicitly.

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Conclusion (2/2)

• However, effective and active KM requires new perspectives and techniques and touches on almost all facets of an organization.

• We need to develop a new discipline and prepare a cadre of knowledge professionals with a blend of expertise that we have not previously seen.

• This is our challenge!

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Case Study

Snapshot Industries

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Snapshot Industries (1/15)

• Snapshot Industries is a very traditional company.

• The original owner, Sam Snapshot, had maintained close control over the business for 25 years.

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• The business comprises a plastics section, a machinery and tools factory, packaging and distribution, and an office.

• It had maintained the same business focus and systems for a very long time.

• Sales were steady and reliable.

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• 95% of staff had been with the company for over 20 years.

• They boasted of their well-developed systems and the way everyone had complete control over their work.

• They liked the fact that each section had its own tearoom and distinctive office systems.

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• Each person had a particular role, and there was a strong, informal understanding of where each fitted.

• Each day was totally predictable, and the level of work was comfortable.

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• Sam died and his grandson, Jim, took over the rein.

• As the 30-year-old MBA graduate started to hire movers and shakers, and started acquiring several other businesses in service areas as well as manufacturing, employees’ anxiety increased.

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• The company expanded from 200 employees to 600, and a restructuring was undertaken.

• The number of products was reduced, and the output for each product was increased.

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• Several teams were responsible for building similar products, and bonuses were introduced for higher performance.

• A vigorous marketing team was installed.• A centralized record and personnel

system was initiated, and employees were asked to enter their work times, leave applications and supervisory records online.

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• Stress was high, and taking a toll in accidents, absenteeism and turnover.

• Within a year of the restructure, Jim found that 60%of the original 200 staff had retired.

• They indicated they couldn’t see where they fitted now, and were feeling too overwhelmed with the rate of change.

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• Key people found new positions and left, often taking several other good members of their team with them.

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• A number of the newly acquired people were also resigning because:

– It was too hard to integrate with the old Snapshot people.

– They were excluded from information they need to do their job.

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Snapshot Industries (11/15))

• The original staff argued:– They couldn’t share it, as it was in their

heads and much too hard to explain.– They had so much to do and learn in their

new work roles, they don’t have time to social or help out.

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• Employees had no idea where the organization was going, or what it wanted from them.

• This was resulting in some major inconsistencies and misdirection in business.

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• Jim was staring to recognize he had a problem:

– People were unhappy and were leaving– Inconsistent systems were starting to emerge with

different teams operating in very different ways– Major faults in product lines because the new hands

didn’t know how to manage the process so well anymore

– Major problems in capturing of information– Difficulty of both locating and accessing sources of

expertise

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• In sum, costs were up and productivity was diminishing rather than increasing, despite the bonuses being offered.

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• Jim hired a consultant to see what might be done, and the conclusions are:

– Need to introduce better knowledge management at all levels of its operation

– Need to Shift the culture to a more collaborative focus

– Need to enhance the leadership.

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Case Study Questions (1/4)

1. Why did the expert see the problem as one linked to knowledge management?

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2. Identify the types of knowledge which can be found in Snapshot Industries. Consider which elements would be strategic knowledge.

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3. Why were the resignations and retirements a problem? What could be done about this?

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4. Identify the reasons for the consultant’s concern over leadership. How has Jim’s leadership affected the business? Can you see some ways in which Jim could improve his practices?

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~ The End ~

~ Thank you for your attention ~

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A Knowledge Management Model for Organizational Competitiveness