Essential Knowledge Management : Transforming Experience to Competitive Advantage Johannesburg March

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Essential Knowledge Management Transforming
Experience to Competitive AdvantageJohannesburg
March 2002

• Following Knowledge Management
• through the Ages
• Dr Stephen Little,
• Open University Business School,
• Walton Hall MK7 6AA
• United Kingdom
• email s.e.little_at_open.ac.uk
• fax [phone]
• http//www.geocities.com/stephen_e_little

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Technology Drivers

• Toward the end of the second millennium of the
  Christian Era, several events of historical
  significance have transformed the social
  landscape of human life. A technological
  revolution, centred around information
  technologies, is reshaping the material basis of
  society. Economies throughout the world have
  become globally interdependent, introducing a new
  form of relationship between economy, state and
  society, in a system of variable geometry.
• Castells, 1996, p.1

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Economic Drivers

• The notion that something fundamental is
  happening, or indeed has happened, in the world
  economy is now generally accepted. As we look
  around us all we seem to see is the confusion of
  change, the acceleration of uncertainty, feelings
  currently intensified by our proximity to the new
  millennium with all its promises and threats
  of epochal change.
• Dicken, 1998, p.1

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Business Drivers

• The firm is an institution that has evolved to
  make the most efficient and effective use of the
  factors of production traditionally labour,
  money and materials. These factors of production
  are being transformed by the increasing
  importance of knowledge in economic activity. As
  the factors of production change, so too must the
  nature of the firm.
• Burton Jones, 1999, p.57

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Past and Future

• The Intellectual and Moral Capital of Great
  Britain far exceeds all the Material Capital, not
  only in importance, but in productiveness
• Nassau Senior, 1836
• In 1997 I predicted that KM would not survive
  beyond the year 2000 as a management innovation.
  One of my arguments was that KM had attracted an
  unholy alliance of disparate interest groups ...
• My prediction may have proved too gloomy. It
  could well be that this genetic diversity of KM
  could actually be a source of strength not
  weakness.
• Clive Holtham, City University Business School,
  London, 1999.

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Growing Awareness

• Economists have, of course, always recognised
  the dominant role that increasingly knowledge
  plays in economic processes but have, for the
  most part, found the whole subject of knowledge
  too slippery to handle.
• Edith Penrose, Theory of the Firm (1959)
• Knowledge, during the last few decades, has
  become the central capital, the cost centre and
  the crucial resource of the economy
• Peter Drucker The Age of Discontinuity (1969)
• Knowledge is the axial principle of
  post-industrial society
• Daniel Bell, The Coming of Post-Industrial
  Society (1973)

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Perils of Prediction

• Every major US city will have a telephone
• 1880s business journalist quoted by Marvin (1988)
  When Old Technologies were New
• Internet and its impact predicted, but confined
  within (US) national boundaries
• John Brunner Shockwave Rider 1975

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Social learning

• Short term technical learning
• measurable objectives of efficiency
• Longer term social learning
• possible redefinition of organisational
  objectives
• Sproull and Kiesler (1991)

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Putting Technology in its Place?

• Knowledge management is
• 70 per cent people, 20 per cent process
• and 10 per cent technology.
• Marc Baker, Knowledge Management Programme,
  Royal Mail, 1998

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Paths and Barriers to Globalised Knowledge

• 1990s Business Process Re-engineering (BPR)
• Downsizing - rightsizing
• staff displacement becomes main measure
• individuals rightsized out of organisations
  took with them key knowledge.
• 1980sAI-Knowledge-based Systems Hype
• Rule-based systems deal with explicit or
  codifiable knowledge
• Neural nets or inductive systems face problems of
  transparency

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Knowledge Creation in a Global Context

• Silicon Valley is the only place on Earth not
  trying to figure out how to become Silicon
  Valley.
• Robert Metcalfe InfoWorld, March 2, 1998
• Dominant model of innovation and knowledge
  creation
• BUT
• Silicon Valley has a specific historical
  trajectory
• key government involvement
• Creative Milieu (Castells ,1996)
• captures the complex web of relationships
  necessary to the support of genuine innovation

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Global Production/Global Consumption

• Waves of capitalist development operating on a
  world-wide scale (David Wheelwright, 1989).
• C19-C20 U.K.gtU.S.A.gtJapan
• Three dominant super-regions, NE Asia, North
  America and Western Europe, the 'triad' described
  by Ohmae (1990)
• The rapid cross-diffusion of innovations within
  an emerging globalised economy dependent on the
  widespread use of information and communication
  technologies.

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Re-alignments in a Global System

• Post-Cold War Era,
• growing global economic integration
• disparate national and regional cultures
  increasingly interacting within networked and
  globalised organisations.
• facilitation through information communication
  technologies
• In the post-cold war era difference and diversity
  are resources (Delamaide 1994, Ohmae 1995).

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Textures of globalisation

• Differences within individual national states
• as significant that those between developed and
  developing states.
• Differences between centre and periphery,
  between large and small scale economic activity
• central to an understanding of the impact of
  globalisation and its supporting technologies.

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Globalizing Response

• Zebra strategies (Ohmae 1995)
• play to the relative strength of the most
  developed components of national economies
• create regional synergies.
• -Taiwan Straits
• South Wales - Northern Spain
• Differential development entrenched
• global infrastructure driven by the priorities of
  the dominant developed economies.
• key supporting technologies, in particular ICT
  infrastructure, may be optimised for
  externally-driven activities.

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Chains into Networks

• Global Production Chains replaced by Global
  Production Networks
• linkages among members of the Triad account for
  the majority of global trade (Dicken, 1998)
• production AND consumption at both ends
• substantial areas and populations are excluded
  from the global cycle of technical innovation and
  improvement
• Network Organisations
• flexible coalitions
• within and between existing corporations
  (Castells, 1996)
• between independent partners (Inoue, 1998)

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Impact on Knowledge Needs of Organisations

• Increasingly dynamic competitive environments
• Technological convergence
• Reduction in cost, capacity and increased
  connectivity of IT
• Emphasis on competencies rather the industry
  structure
• Growth in alliances and partnerships
• Larger players can mimic the agility of smaller
  firms and invade niche markets

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Response of Established Players

• Shifting Focus to Higher Value Activities
• ICL from IT manufacture to IT services
• Unilever disposal of specialist chemicals and
  concentration on Consumer Packaged Goods,
  reducing from 1600 to 400 high value brands
• ICI taking Unilever specialist chemicals and
  disposing of bulk chemicals
• UK and EU programmes
• promoting alliances with Asian partners

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Re- positioning Knowledge

• Asian companies establishing RD facilities in
  markets
• eg Korean Malaysian automotive companies in UK
• Gains
• knowledge of local market characteristics
• development of regionally targeted products
• Nissan Primera
• access to intellectual capital base
• enhancement of home based operations

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Life Space Knowledge Space

• Brazilianisation of the West
• Beck (2000)
• changes in the nature of employment reflecting
  prevailing neo-liberal economic policies
• discontinuous, flexible working
• Cost Spiral
• temptation to competitive on labour cost and
  flexibility at the expense of depth of skills and
  communities of practice
• threatens cultures supportive of knowledge
  management

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Inclusion Exclusion and Infiltration

• Digital Divide
• access to the information economy as important
  as physical location
• Excluded economies
• difficulty maintaining modest economic
  objectives.
• excluded from policy making processes
• no influence over the emerging global information
  system
• reducing ability to negotiate sustainable
  exploitation of their own resources

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Balancing Development

• Organisation plus Technology
• re-organisation can transform efficiency and
  effectiveness
• (Kaplinsky Posthuma, 1992)
• East African agricultural equipment manufacturer
  adopting Japanese kanban system
• Moving along the Value Chain
• higher value-added activities sought
• distinction between products services is eroding

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Community of Practice

• Knowledge management must integrate individual,
  community-of-practice and organizational
  knowledge
• Brown and Duguid(1998)
• joint enterprise
• mutuality
• shared repertoire
• informal structure

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The Individuals Four Knowledge Contexts
Environment
Organisation
Team
Community of Practice
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Maintaining Communities of Practice

• Effective communities are needed across space and
  culture
• Internationalisation of Software Development
• Indian and British alliances hampered by
  different modes of group working
• Indian firms place key workers and team in target
  markets to deal with clients
• Indian firms use foreign partners to enter third
  countries
• (Nicholson Sahay Krishna, 2000)

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Virtual CoPs

• Example Texas Instruments
• Taipei and Austin
• corporate systems replicated at both ends of a
  broadband link
• Place-based community is a limiting case
• Webbers Non-place realm (1964)
• Castells Informational city of flows (1989)
• material and information
• Accessibility, rather than the location of
  "place" is key
• Current conditions allow access to be non-physical

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Knowledge Loss within a global system

• Organisational learning is needed to move beyond
  the technical effects of direct substitution of
  information technology for manual processes
  (Sproull and Kiesler 1991).
• The transformative gains of the "informated
  organisation" (Zuboff 1988), will come about in
  the globalised arena only through an
  understanding of the meaning of cultural
  interoperability at both pre-competitive and
  competitive stages of development (Kaye
  Little 1996).

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Technology Revisited

• Knowledge Extraction and Business Intelligence
• Department of Trade and Industry U.K. initiative
• Post 9/11 surge in research investment from U.S.
• Expertise versus competence
• "Competent performance is rational, proficiency
  is transitional, experts act arationally".
  (Dreyfus Dreyfus, 1986, p.36)

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Leads and Lags

• Productivity Paradox
• Weak relationship between ITC investment and
  performance measures
• Remedy - User Centred Design Landauer (1995)
• Institutional Lag
• Systems of corporate and social governance
• New forms of organisation
• E-governance response

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Access from the Margins

• Divisions in both developed and developing
  countries present the less advantaged actors with
  a major problem
• accessing or utilising technologies which have
  been shaped by other players towards the support
  of different priorities.
• Existing inequalities will be reinforced unless
  access to these technologies can be achieved.
• Next Generation Mobile Communications
• Switching from geostationary Earth orbits (GEOs)
  to medium Earth orbit (MEO) and low Earth orbit
  (LEO) satellites

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Local Points of Presence

• Business Centres, Accra
• Microsoft Township initiative

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Windows of Opportunity

• How can small players influence an emerging new
  "techno-economic paradigm" (Perez, 1985) ?
• A window paradigm for globalising information
  systems
• using available technologies without regard for
  their underlying assumptions
• mobile phones and micro-enterprises
• Windows of opportunity may be inadvertently
  closed by the momentum of mainstream technical
  development
• E-commerce already mutating in to M-commerce
• GPS LEO satellites

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Sharing Practice One to One

• http//www.geocities.com/odysseygroup2001/sharing/
  index.html

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Sharing Practice One to Many

• IT skilling for social work students

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Ghana Social Indexhttp//www.geocities.com/csps_m
aps

• Locally generated and integrated data
• ported to Geocities web site
• designed for slow connections
• Exemplar and portal
• resource for students and local organisations
• draw for CSPS main site
• performance indicator for funding agencies

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Greenstar Ghana - Patriensah http//www.e-greenst
ar.com/Ghana/

• State of the Art Infrastructure in village
  community
• Solar powered satellite linkage
• Support for local craft industries
• Window of Opportunity
• International charitable promoter
• Local politician
• Sustainability requires self-generated income
  flows

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Continuing Projectshttp//www.goneat.org
http//www.geocities.com/moorparkexploreclub

• North East England Action on Transport
• real-time monitoring of transport services wap,
  web and gps

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Local and Global Knowledge

• Social and Institutional Paradigm Shifts must
  accompany Technical Paradigm Shift
• Local experience still matters
• in determining strategies
• in creating alternative paradigms
• Glocalisation of Knowledge practices

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Links to Further Resources

• For links to resources and examples see
• http//www.geocities.com/knowledge_links
• and
• http//www.geocities.com/the_odyssey_group