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Knowledge Management and Innovation


Knowledge Management and Innovation Professor Dr. Lorna Uden Faculty of Computing, Engineering and Technology, Staffordshire University, Beaconside, Stafford, ST18 0AD. – PowerPoint PPT presentation

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Title: Knowledge Management and Innovation

Knowledge Management and Innovation
  • Professor Dr. Lorna Uden
  • Faculty of Computing, Engineering and Technology,
  • Staffordshire University,
  • Beaconside, Stafford, ST18 0AD. UK
  • Email

  • Introduction
  • Knowledge management
  • Innovation
  • KM and Innovation
  • Conclusion

  • Innovation and knowledge management are no longer
    luxury items.
  • They are means of economic development and
  • Knowledge and innovation are inseparable.
  • Innovation and knowledge management are closely

  • Knowledge is the most important resource in
    organizations and a key differentiating factor in
    business today.
  • KM can bring about the much needed innovation and
    improved business performance
  • Can also be defined as know-why, know-how and
    know-who, or an intangible economic resource
    from which future resources will be derived
    (Rennie 1999).

  • Built from data, which is first processed into
    information (i.e. relevant associations and
  • Information becomes knowledge when it enters the
    system and when it is validated (collectively or
    individually) as a relevant and useful piece of
    knowledge to implement in the system (Carrillo et
    al 2000).
  • There are various kinds of classification of
    knowledge formal (explicit) and tacit
    (expertise) knowledge foreground and background
    knowledge knowledge of business environment or
    knowledge for control activities (Carrillo et al

Knowledge management
  • Is defined as a dynamic human process of
    justifying personal belief towards the truth
    (Nonaka Takeuchi 1995).
  • Is referred to as the process creating, codifying
    and disseminating knowledge for a wide range of
    knowledge intensive tasks. (Harris et al 1998).
  • According to Brelade and Harman (2001), Knowledge
    management (KM) is obtaining and using resources
    to create an environment in which individuals
    have an access to information and in which
    individuals obtain, share and use this
    information to raise the level of their knowledge.

  • Knowledge is the key resource that must be
    managed if improvement efforts are to succeed and
    businesses are to remain competitive in global
    markets (Drucker 1993 Davenport Prusak, 1998).
  • Better management of knowledge within the firm
    will lead to improved innovation and competitive
    advantage. Sustainability requires special
    content and processes for Knowledge Management.
  • Main purpose of knowledge management is to
    enhance exploitation (i.e. where existing
    knowledge is captured, transferred and deployed
    in other similar situations) or exploration
    (i.e., where knowledge is created) (Levinthal
    March 1993).

  • According to Gloet and Terziovski (2004),
    knowledge management is the formalisation of and
    access of experience, knowledge and expertise
    that creates new capabilities, enables superior
    performance, encourages innovation and enhances
    customer value.
  • Knowledge management is about supporting
    innovation, the generation of new ideas and the
    exploitation of the organisations thinking power
    (Parlby Taylor 2000). It also includes the
    capture of insight and experience to make them
    available and usable when, where and by whom they
    are required.

  • Parlby and Taylor (2000) argue that knowledge
    management allows easy access to expertise and
    know-how, whether formally recorded or in
    someones mind. In addition it allows
    collaboration, knowledge sharing, continual
    learning and improvement.
  • du Plessis (2007) defines knowledge management as
    a planned, structured approach to manage the
    creation, sharing, harvesting and leverage of
    knowledge as an organisational asset, to enhance
    a companys ability, speed and effectiveness in
    delivering products or services for the benefit
    of clients.

  • Typically takes place on three levels
    individual, team and organisation.
  • Is also a holistic solution incorporating a
    variety of perspectives such as people,
    processes, culture and technology.
  • KM not only focuses on innovation, but it creates
    an environment conducive for innovation to take
  • According to Liebowitz (2003), knowledge
    management means creating value from an
    organisations intangible assets and how to best
    leverage knowledge internally and externally.

The Advantages of Knowledge Management
  • Can reduce risk
  • Can increase effectiveness of the organization
  • Provides added value to the organization
  • Allows better decisions to be made
  • Can learn from successful projects
  • Encourage transfer of knowledge between
  • Reduces unnecessary processes and streamlines
  • Increases employee retention rates
  • Offers better productivity.

  • Is a process through which the nation creates and
    transforms new knowledge into useful products,
    services and processes for national and global
    markets leading to both value creation for
    stakeholders and higher standards of living.
  • The difference between invention and innovation
    is that invention is a new product, whereas
    innovation is a new value (Szmytkowski, 2005).
  • To turn invention into innovation requires
    different types of knowledge, capabilities,
    skills and resources.

Definition for innovation
  • Drucker (1975) defines innovation as the process
    of equipping in new, improved capabilities or
    increased utility.
  • Innovation is the process of introducing new
    ideas to the firm which result in increased
  • According to Rogers (1998), innovation is
    concerned with the process of commercialising or
    extracting value from ideas.

  • Chan and others (2004) define innovation as the
    introduction of a new combination of the
    essential factors of production into production
  • Innovation is defined by Herkema (2003) as a
    knowledge process aimed at creating new knowledge
    geared towards the development of commercial and
    viable solutions.
  • Gloet and Terziovski (2004) described innovation
    as the implementation of discoveries and
    interrelations and the process by which new
    outcomes, whether products, systems or processes,
    come into being.

  • Schumpeter (1934) identified five different types
    of innovations
  • New product.
  • New methods of production.
  • The exploration of new market of production.
  • New source of supply.
  • New ways to organise business.

Innovation is the mainstay of an organisation
  • For organisations to remain competitive,
    innovation is essential.
  • Innovation depends intensively on the
    availability of knowledge.
  • Knowledge management has important implications
    for innovation therefore it is imperative that
    we understand the role of KM in innovation.

Knowledge Management For Innovation
  • Three main drivers of the application of
    knowledge management in innovation (du Plessis
  • The role of knowledge management in innovation is
    to create, build and maintain competitive
    advantage through utilisation of knowledge and
    through collaboration practices.
  • The role of knowledge management in innovation is
    that knowledge is a resource used to reduce
    complexity in the innovation process, and
    managing knowledge as a resource is critical in

  • The benefit of knowledge management applied to
    the innovation process is the integration of
    knowledge both internal and external to the
    organisation by making it more available and
    accessible. Knowledge integration means that
    knowledge can be exchanged, shared, evolved,
    refined and made available at the point of need.
    Knowledge integration via knowledge management
    platforms, tools and processes must facilitate
    reflection and dialogue to allow personal and
    organisational learning and innovation. Chen and
    others (2004) argue that without effective
    information and knowledge management that drives
    knowledge integration, which in turn underpins
    innovation, organisations could be
    under-utilising knowledge as an innovative

Functions that Knowledge and Knowledge Management
play in Innovation (du Plessis 2007)
  • Knowledge management enables the sharing and
    codification of tacit knowledge.
  • Knowledge management and its role in the
    innovation process through the use of explicit

  • Knowledge management enables collaboration in
  • Knowledge management enables the managing of
    various activities in the knowledge management
    life cycle.
  • The creation of a culture conducive for knowledge
    creation, sharing and collaboration.

  • The value proposition of knowledge management in
    the innovation process is as follows
  • Knowledge management assists in creating tools,
    platforms and processes for tacit knowledge
    creation, sharing and leverage in the
    organisation, which plays an important role in
    the innovation process.
  • Knowledge management assists in converting tacit
    knowledge to explicit knowledge.

  • Knowledge management facilitates collaboration in
    the innovation process.
  • Knowledge management ensures the availability and
    accessibility of both tacit and explicit
    knowledge used in the innovation process, using
    knowledge organisation and retrieval skills and
    tools such as taxonomies.
  • Knowledge management ensures the flow of
    knowledge used in the innovation process

  • Knowledge management provides platforms, tools
    and processes to ensure integration of an
    organisations knowledge base.
  • Knowledge management assists in identifying gaps
    in the knowledge base and provides processes to
    fill in the gaps in order to aid innovation.
  • Knowledge management assists in building
    competencies required in the innovation process.

  • Knowledge management provides organisational
    context to the body of knowledge in the
  • Knowledge management assists in steady growth of
    the knowledge base through gathering and
    capturing of explicit and tacit knowledge.
  • Knowledge management provides a knowledge-driven
    culture within which innovation can be incubated.

The Knowledge Management Cycle
  • Metaxiotis Psarras (2006) described the
    knowledge management cycle as follows.
  • This process consists of four key steps, as shown
    in Figure 1.

Figure 1 The Knowledge Management Cycle
  • Step 1, knowledge identification and capture
    refers to identifying the critical competencies,
    types of knowledge and the right individuals who
    have the necessary expertise and experience that
    should be captured. One approach is to conduct a
    knowledge audit or the use of intranets.

  • Step 2, knowledge creation is the most critical
    step of the knowledge management cycle as this
    involves innovation. Knowledge creation is a
    process that involves tacit and explicit
    knowledge (Popadiuk Choo 2006). Tacit knowledge
    is closely related to knowledge exploration,
    while explicit knowledge is more concerned with
    knowledge exploitation.

  • Step 3, knowledge application is concerned with
    taking the shared knowledge and internalising it
    within ones perspective and worldview.

  • Step 4, knowledge sharing culture needs to be
    created in the organisation.

  • Effective knowledge management involves
  • (a) identifying knowledge.
  • (b) creating new knowledge .
  • (c) building competence.
  • (d) effective management of innovation.
  • (Enkel et al 2002).
  • Knowledge creation is the first step to
    facilitating innovation in the company.

  • New knowledge is the most important source of
    innovation. The process of knowledge creation
    shows that it takes place in five phases.
  • These phases are
  • 1) sharing tacit knowledge,
  • 2) creating a concept,
  • 3) justifying the concept,
  • 4) building a prototype and
  • 5) cross-levelling the knowledge
  • (von Krogh, Ichijo Nonaka 2000).

  • A knowledge creating company needs to create an
    appropriate environment and offer an appropriate
    space (Nonaka Konno 1998), for creating new
    knowledge (Nonaka, Takeuchi 1995).
  • According to von Krogh and others (2000)
    knowledge creation can be enabled through the
    following activities
  • a) Instilling a knowledge vision,
  • b) managing conversations,
  • c) mobilizing knowledge activists,
  • d) creating the right context, and
  • e) globalizing local knowledge.

  • Better management of knowledge within the firm
    will lead to improved innovation and competitive
  • It is important to investigate how to create the
    desired innovation and which specific
    requirements and critical factors can support
  • Effective knowledge management can lead
    enterprises to successful innovation.

  • Thank you for listening.
  • Any questions?