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Working Knowledge: How organizations manage what they know
Presented By:
Rahul Sharma
January 29, 2006
Author: Thomas H. Davenport and Laurence Prusak
Agenda Knowledge Knowledge Markets Knowledge Generation Knowledge Codification Lessons learned Comments My opinion Reviews and references
CH-1 What do we talk about when we talk
about knowledge Data Information Knowledge
These are all transformation from one to another.
Data
Set of unorganized and unprocessed facts
but highly objective Used mainly in organizations like Banking, Insurance and other
governmental organizations as structured records for transactions No judgment and no sustainable basis of action Data is essential for information creation Data Management is evaluated in terms of Cost, Speed and Accuracy
Information
Information has impact on receiver's judgment and behavior It has a sender and receiver Information has its relevance and purpose Information means to shape the person who gets it, to make some difference
in his outlook or insight
Information moves through Hard and soft Networks.
Data transferred into information in following ways Contextualized Categorized Calculated Corrected Condensed
Knowledge Essential component of Human Progress Knowledge is a fluid mix of framed experiences, values, contextual
information that provides a framework for evaluating and incorporating new info.
Knowledge is a mixture of various elements, intuitive, hard to capture in words
Delivered through structured media such as books, documents and contacts Comparisons, connections, consequences, conversations helps in
transformations to knowledge
Knowledge in Action Better knowledge can lead to efficiency in product development and
production Knowledge moves down value chain to information and data Knowledge has key components as experience, truth, judgment and rules of
thumb
Knowledge Components Experience
Refers to things done in the past and happened previously. They have been tested and trained by experience Firm hire experts with experienced based thought Knowledge born of experiences make familiar connections
between what is happening in present and past
Ground Truth Real Life Knowledge and real situations experiencing close up “After Action Review Program” which helps in examining what
happened in a mission and what can be learned from disparities
Knowledge Components
Complexity Knowledge can deal with complexity in a complex way Knowing what is important leads to better decisions
Judgment It judges and refines itself in response to new
situations and information When knowledge stops evolving, it turns into opinion
or dogma
Knowledge components
Thumb and intuition rules It gives shortcut solutions to complex problems that
are solved by experienced workers It gives “compressed expertise”. Phrase describing
how knowledge works E.g. Skill of experienced driver drives series of
complex actions without thinking about them
Knowledge Components
Values and Beliefs Organizations have history, value and beliefs derived
from people’s action and words that express corporate values and beliefs
Integral components to knowledge serving as “seeing” aspects of organization
Power of knowledge comes from values and beliefs as much as from logic and information
Knowledge as a corporate asset
Companies hire for experience in spite of intelligence or education
Managers get two third of info. And knowledge from working mass
Organizations hire expert people for a particular subject
Knowledge as Corporate asset Changing global economy
Companies are fiercely competitive and competition is for every marginal dollar of profit
Companies require quality, value, service, speed to market. e.g. Outsourcing
Product and services convergence Knowledge based intangibles are part of “products”
firms offer Intangibles that add value to product’s are part of
product’s firms offer
Knowledge as Corporate asset Sustainable competitive advantage
Trade secrets are not difficult to find with use of reverse engineering, information flow, technology
Knowledge assets value increase and provide a sustainable competitive advantage
Networked computers are not difficult to find as knowledge source
Case Study: British Petroleum BP’s virtual Team work program
42 separate business models Goal :Agility of small company with resources of large
one Implementation:
Stressed Corporate behavior vs. technology Coaches and Teams Knowledge Management Teams Emphasis was on Person to Person interaction and
system requirements
Results 4 of the 5 Pilot groups have great success
Great savings Better Enthusiasm
Case in Point: Equipment failure on mobile driving ship Utilized communication media to localized
communication expert to solve problem in few hours for localized savings
Ch-1 Summary
Data, Information and knowledge are forms of transformation
Knowledge originates and resides in people’s mind Technology enables new knowledge behaviors Knowledge sharing must be encouraged and rewarded Knowledge initiatives should begin with a Pilot program Knowledge sharing requires Trust
Chapter 2: The promise and challenge of Knowledge Markets Composes of buyers and sellers who use their market
knowledge to create power bases Knowledge is bartered, bought, found, generated, and
applied to work People rarely give their valuable knowledge without
something in return Recognizing markets of knowledge is very important
Political Economy of Knowledge markets Social, Economic and Political realities must be taken
into consideration Cultural Norms restrict knowledge to be shared Buyers, Sellers and brokers are people in KM Buyers
Knowledge seekers looking for insight, judgment and understanding
15-20 % of knowledge time is spent in knowledge search and responding to Knowledge requests
Complex answers embed with emotional subtexts important to our decision making
Political Economy Sellers:
People are skilled but unable to articulate their tacit knowledge ,they need specialized knowledge
Knowledge sharing is rewarded more than Knowledge hoarding Brokers:
Make connections b/w buyers and sellers, hence act as gatekeepers
Corporate librarians are natural knowledge brokers Informal Knowledge Brokers set out to become
experts on knowledge and its exploitation
Price System
Markets have a price system so that value exchanges can be efficiently rendered and recorded
Within the organizations, the medium is money but there are agreed upon currencies to drive the KM
Factors affecting Price System
Reciprocity Within the organizations, the medium is money but
there are agreed upon currencies to drive the KM Time, energy and knowledge are valuable resources
unless they bring valuable return Related to Repute
Factors for Price System
Repute: Value of knowledge depends upon political and social
structures of organization Many Consulting firms, bonuses are tied to knowledge
generation and transfer Likelihood of cooperation leading to future tangible
benefits will increase Length of service and loyalty erodes in most businesses,
hence it is important
Factors
Altruism Nice people who want to help others Likelihood of cooperation leading to future tangible
benefits will increase
Factors Trust: Most important factor that can positively affect the
efficiency of KM Established in 3 ways i.e. :
Trust must be visible It should be ubiquitous It should start at the top
Firm’s KM should be established upon mutual trust
Knowledge Market Signals
Position and education Most common frame signal for indicating who has valuable
knowledge, not consistent signal Informal Networks Informal chats like chats in Cafeteria, water cooler Disadvantage is undocumented and ramble, hence not
readily available to market Communities of Practice Self organized groups to share knowledge with one
another, hence share work practice, interests
Knowledge Market Inefficiencies Clear Pricing system is very essential for efficient markets i.e.
consumer info, classifieds. Efficient markets generate most good at least cost 3 key factors:
Incompleteness of information:
Location of existing knowledge Absence of explicit information about pricing structure
Inefficiencies
Asymmetry of knowledge Prepares knowledge from getting where it is needed
Localness of Knowledge KM depends on trust and trust is very important for
people you know People get knowledge from their organizational
neighbours
Knowledge Market pathologies
Monopolies Knowledge will come at higher price They establish that fact to establish position of power Knowledge won’t be their when people need it the
most Artificial Scarcity
Hoarding culture keeps scarce for departments and groups
It walks out of the door during downsizing
KM Pathologies
Trade Barriers Refusal to accept new knowledge Status difference b/w seller and buyer Hampers organizational markets by hoarding
departments Downsizing and reengineering ends to damage KM
Infrastructure
Effective KM
Using IT widely Technical developments change IT Structure
dramatically Trying to force fluid knowledge into rigid data
structures Focusing more on the system
Building Market places Knowledge transfer is to create market place for
physical and virtual spaces
Effective KM
Talk rooms are formalized and sanctioned locations for conversations
Creating and defining KM value Employees rewarded for sharing knowledge proves
that value exists for knowledge
Peripheral benefits of KM
Higher workforce morale Employees see that their work is valuable . They may be more satisfied with their work
Greater corporate coherence Shared Awareness of Corporate goals and strategies Richer Knowledge stock Constantly refined and validates the organization knowledge Stronger Meritocracy of Ideas Genuinely open KM will test official beliefs and expose flaws of faulty ones
before they can do any damage
Ch-2 Summary
Knowledge Markets exists and should be recognized Buyers, Sellers and brokers are important for KM Price System depends upon reciprocity, repute, altruism,
trust KM pathologies like monopolies, artificial scarcity and
trade barriers should be removed Knowledge market benefits are higher workforce morale,
greater corporate coherence, richer knowledge stock
Ch-3 Knowledge Generation
Hire smart people and leaving them alone
Modes of Knowledge generation Knowledge Acquisition Dedicated Resources Fusion Adaptation Networking
Acquisition
Knowledge focused firm needs appropriate knowledge available
Effective way to acquire knowledge is to buy it Determining the value of knowledge is hard to quantify Cultural and political barriers to accepting and absorbing
acquisition's knowledge
Knowledge Generation Modes
Rental Renting knowledge means to take steps to retain it too Knowledge can be leased or rented Knowledge rentals involve Knowledge transfer Make sure to take steps to retain knowledge
Knowledge Generation Modes Dedicated Resources Establish units or groups for this purpose Many R & D groups use these Fusion Brings people together with a joint answer Combining people with different ideas, skills and values Group members find some common ground to
understand one another
Adaptation
Imposing various environmental threats New products from competitors, new technologies drive
Knowledge generation Most organizations are incapable of changing attitudes of
lifetime. Employees who are willing to learn new things are vital to
adapting company
Networks
Knowledge is generated by informal, self organizing networks within organizations
Conversation often generates new knowledge within firms
A particular practice can become part of knowledge capital of the firm
Common Factors
Need for adequate time and space Time is the most important factor Recognition by managers that Knowledge Generation is
important factor for success Firms that fail to generate new knowledge will cease to
exist
Ch-3 Summary
Modes of knowledge generation are acquire, dedicated resources, fusion, adapt and network
Organizations needs to focus more on time, not on physical storage
Ch-4 Knowledge Codification and Coordination Basic Principles
Business goals for codified knowledge should be identified
They should evaluate knowledge for usefulness in codification
Managers must be able to identify knowledge for reaching goals
Codifiers must identify appropriate medium for codification
Labor intensive and company knowledge are successful for codification knowledge
Codifying different knowledge
Codifying Tacit Knowledge Tacit, complex knowledge is impossible to reproduce in
database Knowledge incorporates accrued and embedded learning
that it is impossible to separate from individual acts We simply can’t represent knowledge outside the human
mind
Codifying different knowledge Providing access to people with tacit knowledge is difficult to capture
and modify Mapping and modeling knowledge
It is a guide not a repository Locating important knowledge in organization with
picture to find it Employee with good knowledge base has access to
knowledge sources A good Knowledge map goes beyond boundaries
Technology of Mapping knowledge
Creates an organizational wide map, better for individual mini-maps
Improves search speed Electronic map can be revised more frequently Value of map is quality and depth of info.
Politics of Mapping knowledge
Map has a picture of status and success as well as a knowledge locator
A limit should be made to see if politics exceed the good sign of maps
Capturing Tacit knowledge
Substantial value of tacit knowledge makes it worth effort for codifying it
Difficult to locate dividing line between Tacit knowledge and fully embedded knowledge
Transfer maximum knowledge through mentoring or apprenticeship
A good story is best way to convey meaningful knowledge
Codifying tacit knowledge
Expert system represents explicit attempt to capture human knowledge using rules
Evaluating codified knowledge and making it available is integral part of process
Evaluation of existing knowledge is classification based on quantitative, structured, unstructured, qualitative contents
Codifying Knowledge
Structured content is made by database and unstructured by web
Codification provides permanence to knowledge Knowledge codification is vital to human beings more
than anyone else
Ch-4 Summary
It is difficult to codify Tacit knowledge Always the principles for codifying knowledge should be
kept in mind Mapping and modeling knowledge is essential for
codifying knowledge to give access to impossible knowledge resources
Human Mind is vital to knowledge codification
Lessons Learned It addresses the key managerial and behavioral issues for managers Effective KM for any company is key to competitive edge Knowledge derives from people’s mind Recognize markets for knowledge Time is the most important corporate resource given to knowledge
activists Codification gives permanence to knowledge
Comments Upside Ron Hagan, editorial review
http://www.amazon.com/gp/product/product-description/0875846556/ref=dp_proddesc_0/103-8143813-7933421?ie=UTF8&n=283155&s=books
Author provides simple overview of knowledge Market and its potential obstacles
Includes numerous examples of successful knowledge projects like British Petroleum
PC week, editorial review It provides strong, fundamental ground in concepts critical to KM Knowledge Point site review
http://www.knowledgepoint.com.au/knowledge_management_tools/books.html
Excellent resource for managers who want to harness wisdom and experience in their organizations
My opinion
Provides practical and realistic template for initiating a KM system with wealth of content on KM systems
Ch-1 to 4 provides deep insight to many basic concepts which are important for any beginner in KM
Reviews and References Reviews from Book “KM” by Elias Awad KM is newly emerging, interdisciplinary business model that has
knowledge within the framework of organization. It has disciplines like business, economics, information management.
Types of knowledge are shallow and deep knowledge, procedural and episodic, explicit and tacit, expert knowledge
KM System Development Life cycle: Evaluate existing infrastructure, form the KM team, knowledge capture design, KM blueprint, test the KM system, implement the KM system, manage change and reward structure, post system evaluation. So better than the Davenport’s one
Approaches for Codifying knowledge are Knowledge maps, decision
tables, decision trees, frames, production rules, software agents
Reviews and References According to site for IT, for IT n/w http://products.watchit.com/20010207.pdf This program is excellent resource for managers to harness their
experience and wisdom According to metapress article
http://mesharpe.metapress.com/(pvhl4o45jbkisa55yzfsaw55)/app/home/contribution.asp?referrer=parent&backto=issue,2,9;journal,22,26;linkingpublicationresults,1:106046,1
According to metashape, this provides pragmatic approach to knowledge, information technology, knowledge management, practice and research
According to article, “Sharing expertise beyond KM” http://books.google.com/books?
id=M8hDpBWOFQMC&dq=working+knowledge+by+davenport The field of KM focuses on how organizations effectively store,
retrieve and enlarge their Intellectual properties
References According to IBM systems journal article for KM, http://researchweb.watson.ibm.com/journal/sj/404/marwick.html Selected technologies that contribute to KM solutions are reviewed
using nonaka’s model of organization knowledge According to Journal of American information science and
technology,
http://www3.interscience.wiley.com/cgi-bin/abstract/97516011/ABSTRACT
KM is based on knowledge creation and transfer