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Working Knowledge : How Organizations Manage What They Know

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Title: Working Knowledge : How Organizations Manage What They Know


1
Working Knowledge How Organizations Manage What
They Know
  • By Thomas H. Davenport
  • And Laurence Prusak
  • Elridge D'Mello
  • Graduate Student in Computer Engineering

2
Ch 1 What do we talk about when we talk about
knowledge?
  • Data
  • Information
  • Knowledge
  • Related, but not interchangeable!

3
Data
  • Set of discrete, objective facts about events.
  • Organizational context structured records of
    transactions.
  • Needed by all organizations especially Banks,
    insurance companies, government agencies
  • More not always better
  • Can be difficult to make sense of in large volume
  • No inherent meaning in data
  • Why is data important?
  • It is the essential raw material for the creation
    of information

4
Information
  • Data endowed with meaning and relevance Peter
    Drucker
  • Data that makes a difference
  • Data sent from sender to receiver intended to
    alter the receivers perception of something
  • Moves in hard and soft networks
  • Traditional networks hard networks
  • A note, an FYI soft network

5
How to add value to Data
  • Contextualized
  • Categorized
  • Calculated
  • Corrected
  • Condensed

Information
Data
6
Knowledge
  • Knowledge derives from minds at work.
  • Definition
  • Fluid mix of framed experience, values,
    contextual information, and expert insight that
    provides a framework for evaluating and
    incorporating new experiences and information.
    It originates and is applied in the minds of
    knowers. In organizations, it often becomes
    embedded not only in documents or repositories
    but also in organizational routines, processes,
    practices and norms.

7
How to Transform Information into Knowledge
  • Comparison how does this info compare with other
    situations weve known?
  • Consequence what implications does the
    information have for decisions and actions?
  • Connections how does this bit of knowledge
    relate to others?
  • Conversation what do other people think about
    this information?
  • These knowledge creating activities take place
    within and between humans

8
How do we know if it's any good?
9
Components of knowledge
  • Experience
  • Knowledge develops over time, through experience
  • Provides a historical perspective from which to
    view and understand new situations and events.
  • Firms hire experts buy experience-based
    insights.
  • Ground Truth
  • Knowing what really works and what does not.
  • Armys After Action Review (AAR) program.

10
Components of knowledge
  • Complexity
  • Knowledge is not a rigid structure that excludes
    what doesnt fit it it can deal with complexity
    in a complex way.
  • Knowledge is aware of what it doesnt know.
  • Judgment
  • It judges and refines itself in response to new
    situations and information.
  • When knowledge stops evolving, it turns into
    opinion or dogma.

11
Components of knowledge
  • Rules of Thumb and Intuition
  • Those with knowledge dont have to build an
    answer from scratch every time, thus offering
    speed.
  • Intuition is compressed expertise
  • Values and Beliefs
  • Values and beliefs are integral to knowledge
  • Knowledge, unlike information, is about beliefs
    and commitment. -- Nonaka Takeuchi

12
Knowledge as a Corporate Asset
  • Effect of the Changing Global Economy
  • No room for inefficient production.
  • Organization that knows how to do new things well
    and quickly will thrive over the next decade.
  • Product and Service Convergence
  • Knowledge and related intangibles are
    increasingly becoming part of the products
    firms offer
  • The intangibles that add value to most products
    and services are knowledge-based.

13
Knowledge as a Corporate Asset
  • Sustainable Competitive Advantage
  • Today, it is very easy for competitors to figure
    out the secrets of a companys products use
    of reverse engineering, information flow,
    advanced technology.
  • But knowledge can provide a sustainable
    advantage.
  • Unlike material assets which decrease with use,
    knowledge assets increase with use.

14
Information Technology and Knowledge Exchange
  • Caveat Having more information technology will
    not necessarily improve the state of
    information/knowledge.
  • E.g. TV was supposed to be device that bridged
    culture gaps and foster world understanding.
  • Networked computers can be used as knowledge
    enablers.

15
Case Study British Petroleum (BP)
  • British Petroleums Virtual Teamwork Program
  • BP Exploration 42 separate business assets
  • Goal Agility of small company with resources of
    a large one
  • Implementation
  • Stressed corporate behavior vs. technology
  • Coaches and teams Coaches helped team members
    link business objectives to system capabilities
    challenged individuals
  • Emphasis person-to-person interaction and
    understanding vs. system requirements

16
Case Study British Petroleum (BP)
  • Results
  • 4 of the 5 pilot groups had great success
  • Measurable savings (time and money)
  • Participant enthusiasm
  • Volume of use
  • Case in point Equipment failure on mobile
    drilling ship
  • Utilized communication media to consult a
    remotely located expert and fixed the problem in
    a few hours ? huge financial savings of avoided
    downtime.

17
Ch1 Summary
  • Data Information Knowledge hierarchy
  • Knowledge fluid in peoples minds
  • Knowledge is the way to maintain a sustainable
    economic advantage

Knowledge
Information
Data
18
Ch2 The Promise and Challenge of Knowledge
Markets
  • Knowledge is exchanged, bought, bartered, found,
    generated, and applied to work.
  • Knowledge transactions occur because all the
    participants expect the transactions to provide
    utility.
  • Fact of life people rarely give away valuable
    possessions (including knowledge) without
    expecting something in return.
  • Important fact to realize for any knowledge
    initiative there are markets for knowledge.

19
Political Economy of Knowledge Markets
  • Meet the players
  • Buyers
  • Knowledge seekers looking for insights, judgments
    and understanding.
  • Seeks answers imbued with emotional subtexts that
    are key to our sense making.
  • Sellers
  • People with an internal market reputations for
    having substantial knowledge about a process or
    subject.
  • Brokers
  • Gatekeepers, boundary spanners.
  • Examples Managers, corporate librarians.

20
Factors that affect the Price System
  • Reciprocity
  • Most important factor
  • Seller will spend time and effort needed to share
    knowledge effectively if he expects the buyers
    to be willing sellers when he is in the market
    for their knowledge, a.k.a. The favor bank.
  • Related to the next most important factor
    Repute.

21
Factors that affect the Price System
  • Repute
  • Intangible, but produces tangible results
  • Importance of repute is increasing
  • Workers at all levels feel considerable pressure
    to heighten their individual repute for their
    demonstrated knowledge, skills, and competencies.
  • Altruism
  • The seller is just a nice guy/gal

22
The Trump card Trust!
  • An essential condition of a functioning knowledge
    market.
  • Established in the following ways
  • Must be visible
  • Must be ubiquitous
  • Must start at the top
  • A firms knowledge market must be founded on
    mutual trust.

23
Knowledge Market Signals
  • Indicate both where knowledge actually resides
    and how to gain access to it.
  • Position and Education
  • Not a consistent signal
  • Informal Networks
  • Possibly the best knowledge market signals flow
    during chats at the water cooler, cafeteria, etc.
  • Disadvantage undocumented not readily available
    to all who need them
  • Communities of Practice
  • Employee initiated common interest groups.

24
Knowledge Market Inefficiencies Responsible
Factors
  • Incompleteness of Information
  • Lack of maps and yellow pages to guide the buyers
    to the sellers.
  • Asymmetry of Knowledge
  • Some asymmetry is needed, strong asymmetry
    prevents knowledge from getting to where it is
    needed.
  • Localness of Knowledge
  • People usually get knowledge from their
    organizational neighbors

25
Knowledge Market Pathologies
  • Monopolies
  • Knowledge will come at a high price
  • Not be there to benefit the company
  • Artificial Scarcity
  • Monopoly is one form
  • Downsizing can cause a scarcity as well
  • Trade Barriers
  • Refusal to accept new knowledge
  • Status difference between seller and buyer
  • Lack of good knowledge transfer infrastructure

26
Developing Effective Knowledge Markets
  • Using Information Technology Wisely
  • Tech developments can change market dynamics
    dramatically.
  • Pitfalls and Limitations of using IT
  • Trying to force fluid knowledge into rigid data
    structures
  • Focusing too much on the system and not enough on
    the content

27
Developing Effective Knowledge Markets
  • Building Marketplaces
  • Create virtual spaces dedicated to knowledge
    exchange
  • Members of an organization must be given time to
    shop for knowledge
  • Talk rooms, knowledge fairs, live and
    electronic forums
  • Creating and Defining knowledge Market Value
  • Recognize, promote, reward employees for sharing
    knowledge

28
Peripheral Benefits of Knowledge Markets
  • Higher Workforce Morale
  • Employees see that their expertise is valued
  • Greater Corporate Coherence
  • Shared awareness of corporate goals and
    strategies
  • Richer Knowledge Stock
  • Continuously refined and validated
  • Stronger Meritocracy of Ideas
  • Test official beliefs and expose flaw

29
Ch2 Summary
  • Knowledge markets exist
  • Important factors reciprocity, repute.
  • Trust is the key!
  • Organizations should value knowledge
  • Reward knowledge sharers
  • Promote culture of sharing

30
Ch3 Knowledge Generation
  • Modes of Knowledge Generation
  • Acquisition
  • Dedicated resources
  • Fusion
  • Adaptation
  • Networking

31
Modes of Knowledge Generation
  • Acquisition
  • Knowledge does not have to be newly created
  • Well stolen is half done Spanish proverb
  • Most effective way buy it!
  • Increasingly, firms acquire other companies for
    their knowledge
  • Knowledge acquisitions can be problematic must
    be handled with care
  • Various agencies trying to create metrics to
    quantify value of knowledge

32
Modes of Knowledge Generation
  • Rental
  • Knowledge can be leased or rented
  • Funded research, consultants
  • Likely to include some knowledge transfer
  • Make sure to take steps to retain it too!

33
Modes of Knowledge Generation
  • Dedicated Resources
  • Establish units or groups specifically for that
    purpose
  • Research and Development (RD) groups
  • Fusion
  • Bringing together people with different
    perspectives to work on a project
  • Group members must find some common ground need
    to understand one another

34
Modes of Knowledge Generation
  • Adaptation
  • External (and internal) changes cause businesses
    to adapt. E.g. new competitors products, new
    tech., etc.
  • The business world has become aware that success
    can lead to unwillingness to adapt
  • Ability to adapt based on
  • have existing resources and ability to change
  • being open to change
  • It is important to adapt new knowledge before a
    crisis occurs

35
Modes of Knowledge Generation
  • Networks (communities of knowers)
  • People brought together by common interests
    (informally) ? often generates new knowledge
    within firms
  • Consulting and service firms have organized their
    previously informal networks into formal
    networks, with budgets, coordinators, librarians,
    etc

36
Common Factors to the Modes of Knowledge
Generation
  • All these efforts need adequate time and space
    devoted to knowledge creation or acquisition
  • Critical that managers recognize
  • Knowledge generation is both an important
    activity for success
  • It must be nurtured
  • The firm that fails to generate new knowledge
    will probably cease to exist!!

37
Ch3 Summary
  • Various modes of knowledge generation
  • Acquire (buy/rent), Dedicate resources, Fusion,
    Adapt, Network
  • Organizations need to be flexible
  • Process takes time
  • Must be done carefully

38
Ch4Knowledge Codification and Coordination
  • Codification means converting knowledge into
    accessible and applicable formats
  • Basic principles to codify knowledge
  • What goals will be served
  • Identify appropriate forms to reach goal
  • Evaluate utility and appropriateness for
    codification
  • Identify an appropriate medium for codification
    and distribution

39
Major challenge Codifying Tacit Knowledge
  • Tacit knowledge
  • Internal to the knower difficult to articulate
  • E.g. the distinctive style of a master musician
  • Codification
  • Usually limited to locating someone with the
    knowledge and interacting
  • This method is more efficient than trying to
    capture it electronically or on paper.

40
Mapping Knowledge
  • A knowledge map is a picture of what exists and
    where it is located
  • Developing a knowledge map involves
  • Locating important knowledge in the org
  • Publishing a list or picture showing where to
    find it
  • Can be used as a tool to evaluate the corporate
    knowledge stock
  • Reveal strengths and weaknesses!!

41
Assembling the Map
  • Every employee has a piece of the map in his/her
    head
  • Creating an org wide map is a matter of combining
    these individual mini-maps.
  • Technology can be useful for mapping
  • Yellow-pages
  • Continuously updated ? better than paper
  • Common tools Lotus notes/intranet systems
  • Word of caution
  • Politics of mapping knowledge!
  • Knowledge matters

42
Back to Capturing Tacit Knowledge
  • As mentioned earlier, very difficult, but tacit
    knowledge has substantial value ? worth the
    effort
  • Narratives very useful
  • Knowledge communicated most effectively through a
    convincing narrative delivered with elegance and
    passion
  • Recall AAR program war stories that convey
    ground truth very effective to communicate
    knowledge
  • Embedded Knowledge
  • Some tacit, internal knowledge can be
    externalized in a companys products or services
  • Knowers use their expertise to develop a process
    or product

43
Codifying Knowledge in Systems
  • History of AI excessive claims of ability of
    computers
  • Bounded, unambiguous, rule-based knowledge can be
    embedded in an expert system. E.g. Deep-Blue
  • Evaluating Explicit Knowledge
  • Some forms of knowledge already codified and
    explicit patents
  • Evaluating codified knowledge and making it
    available is integral to the codification process

44
Continuing Codification Challenge
  • Challenge is to codify knowledge and still leave
    its distinctive attributes intact, putting in
    place codification structures that are as
    flexible as the knowledge itself.
  • Stories and rhetoric provide the richest and most
    flexible approach to this task
  • For the near future this is more art than science

45
Ch4 Summary
  • Difficult, not impossible to codify knowledge
  • Explicit knowledge codification
  • Usually possible to document
  • Implicit/tacit knowledge codification
  • Difficult
  • Utilize narratives
  • Develop knowledge maps (of where the knowledge
    is)
  • Utilize electronic communication resources to
    keep the knowledge fresh.

46
Cross Cutting Themes
  • Knowledge resides within people
  • Intangibility and fluidity of knowledge pose new
    challenges for organizations
  • Organizations should be willing to pay the price
    for an intangible asset - knowledge
  • Organizations must be aware of what they
    know/dont know
  • Effective knowledge management is the key to
    success in todays economy

47
Comments
  • Authors present well rounded view of the subject
  • Plenty of examples
  • Illustrates authors expertise in the field
  • Use their own experiences as examples
  • Convincing argument for effective knowledge
    management

48
Reviews and References of Working Knowledge
  • Knowledge management is a business issue for
    competitive advantage, not just an information
    technology issue. It will become increasingly
    important, especially for large enterprises
    needing to create, share, and reapply knowledge
    on a global scale. Working Knowledge is as
    thorough and complete a book on this subject as
    exists today. --Todd A. Garrett, Senior Vice
    President and Chief Information Officer, Procter
    Gamble
  • News article in the Financial Times, The
    challenge of managing knowledge, that references
    Working Knowledge
  • http//www.sbs.ox.ac.uk/html/news_article.asp?ID6
    2
  • Presents the practical challenges that arise in
    trying to implement a system based on Working
    Knowledge and other similar books
  • Building a Knowledge Culture Whitepaper by A.
    Andrew Anderson
  • http//www.robbinsgioia.com/library/whitepapers/Kn
    owledgeMgmt.pdf
  • Presents practical steps in implementing a KM
    system

49
Additional Resources
  • Interview with the authors
  • http//www.brint.com/km/davenport/working.htm
  • Davenports website with list of latest books,
    articles
  • http//www.tomdavenport.com/

50
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