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Wednesday, September 28, 2005

Hopes for KM technologies

Realizing the vast potential of the knowledge they hold but often can't harness, firms are placing knowledge management and business intelligence solutions at the top of their list of technologies for achieving their strategic goals over the next three years, according to a new survey by the EIU, sponsored by Tata Consultancy Services (TCS).

When asked what were the main benefits that their companies hoped to obtain over the next three years through the more efficient generation and flow of knowledge (selecting up to three options), those surveyed responded:

- Improved customer relationships/loyalty: 65%.
- Better visibility of internal business processes and performance: 46%.
- Faster, sounder management decision-making: 44%.
- More effective product/service development: 41%.
- Smoother collaboration across teams and departments: 31%.
- Greater customization of products and services: 23%.
- Improved compliance: 16%.
- Improved corporate governance: 10%.
- Better corporate security: 7%.
- Improved employee loyalty and retention: 6%.
- Other: 1%.

Source: Adapted from “Execs recognize growing importance of KM” in the current issue of KM Review.

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TOP TIPS: Using “anti-patterns” to define KM processes

Studying best practices is an accepted way to improve KM, but best practices are difficult to implement - what worked in one organization's culture may not work in another. Here, Keshavamurthy Rajgopal explains how “worst practices” or “anti-patterns” can help in developing processes for KM programs.

Problem: Unless a KM program is defined with specific objectives, it cannot be planned, tracked or managed. In essence, the program needs to be treated as a project.

Context: The KM initiative's roadmap is defined and the deliverables from the initiative are grouped into one or more projects or phases of a project.

Solution: Since the specifications, deliverables, and resource requirements look similar to that of an IT project, treat the KM project as an IT project and manage as per established IT project management criteria. Issues surrounding short-listing, evaluating, selecting and deploying tools and technologies to accomplish KM goals weigh heavily in favor of approaching the initiative in this way.

Resulting context: Typical measurements of an IT project are schedule, cost adherence (or deviation) and defects. However, experience suggests that the measures of a KM program's success are difficult to establish and evaluate. Usual measurements of a KM project include factors that involve changes in user behavior and contributing towards improved business performance or customer satisfaction. There is a significant loss of focus while translating these objectives into technical specifications. Even if the IT project succeeds, it does not mean that the KM program has succeeded.

Refactored solution: The IT project perspective is certainly one important parameter of KM programs that helps in planning, management, and measurement of success. However, it alone cannot guarantee the success of the KM project. Treating the KM program as a combination of organizational change management, IT program (under the umbrella of IT projects) and people management will provide a comprehensive view of the initiative.

Source: Excerpted from “There's no success like failure” by Keshavamurthy Rajgopal in the current issue of KM Review.

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Monday, September 26, 2005

Opening organizational channels for effective knowledge capture

By Kevin Desouza and Yukika Awazu, The Engaged Enterprise, and Sajjad M. Jasimuddin, University of Dhaka

An organization not utilizing knowledge outside the company can’t effectively compete in the marketplace, especially when there is so much to gain – even from competitors. Here, Kevin Desouza, Yukika Awazu and Sajjad M. Jasimuddin detail many valuable sources to tap into in order to maximize knowledge potential and organizational productivity.

Organizations that fail to listen, link and leverage their external sources of knowledge make themselves vulnerable to crises attributed to poor appreciation of signals beyond the company boundaries. Here, we shed light on how organizations can better tap into external sources of knowledge and better prepare themselves for increased competition in the future.

Know your knowledge source
Most organizations need to concern themselves with external sources of knowledge from suppliers, business partners, customers, government and regulatory bodies, academia and competitors. Depending on the industry in which the organization operates, some sources of external knowledge may carry more weight than others. For example, a supplier of automobile parts to Honda has to pay close attention to the customer, Honda. In other cases, such as an R&D lab, paying attention to emerging research might be of more interest. While some organizations may emphasize one source over others, all organizations must be cognizant of each kind of source.

The right people in place
Suppliers are an important ingredient to an organization’s operations. They represent the provider of raw-materials, work-in-progress or finished goods that an organization consumes to attain its goals. Suppliers normally have focused and narrow niches, i.e. they know their slice of the work the best. For example, a supplier of automobile parts is an expert in the calibration of that part. The suppliers can be said to possess deep knowledge in their domains. The organization must then turn to these knowledge sources in their specialized areas.

For a car manufacturer, this will involve listening to suppliers about inventions and innovations in automobile parts such as the brakes or the gear box. Suppliers of products and services are seldom exclusive to one organization; in most cases they serve multiple organizations. In the automobile industry, it’s not uncommon to find a supplier of one product serve two or more organizations who may be competitors. In this case, the organization has an opportunity to gain knowledge about one’s competitors through the supplier. This is not an endorsement for unscrupulous behavior, like industrial espionage. Rather, we’re asserting that organizations must use their suppliers as an avenue to interact with other members of the value chain and competitors.

Suppliers can be valuable interaction spaces. For example, suppliers normally host conferences to showcase their products and services. These are well attended by all clients of the suppliers, are rich avenues for discussion among competitors and are positive forums for seeking ideas about innovations.

Business partners
In addition to suppliers, an organization must interact with other business partners like office equipment manufacturers, technology providers, legal firms, logistics and distribution centers and advertising houses. Each provides goods or service that enables the organization to be more effective in meeting objectives. Like suppliers, business partners have deep knowledge in their areas of focus, as this represents their bread and butter. The organization must look to these partners for knowledge about their better internal operations.
For a hospital, for instance, business partners may have cutting-edge insight on new sanitary products and disinfectants. A manufacturing firm can turn to FedEx or UPS to help them chart out effective distribution and logistic mechanisms. In the same vein, the manufacturing firm can contact Dentsu, Inc., a marketing house, to help with product promotion and advertising materials.

No organization can possibly be self-sufficient in the various activities needed to deliver on customer value. If an organization thinks it is, they’re using their resources sub-optimally due to losses in terms of opportunity costs. An organization must forge the right type of agreement with a business partner depending on the type of knowledge sought.

Remember your base
Businesses exist to serve their customers and unless an organization can understand its customer needs, transform those needs into products and services, and manage the relationship, they won’t survive in the marketplace. Knowledge about the customer is processed demographic, psychographic and behavioral information. Knowledge to support the customer is concerned with improving the user-experience through products and services. Knowledge from customers is the collective insights, ideas, thoughts and information received from them. But knowledge from the customer is not the same as just receiving complaints or queries. As such, an organization must actively seek out knowledge in order to be better prepared to conduct product changes. Customers know the products better than the organizations that produce them, so they’re an invaluable source of knowledge.

Government and regulatory bodies
Most organizations resist interacting with the government and various regulatory bodies like the Food and Drug Administration (FDA) or Internal Revenue Services (IRS). Yet such agencies have knowledge that’s rare and protected due to the nature of their work. For example, if an organization faces issues of electronic fraud or online theft, working with the Electronic Crimes Taskforce of the FBI or other agencies will provide the organization with access to valuable knowledge.

Most organizations make the mistake of working with the government and regulatory agencies after an incident takes place. For example, after a theft occurs or a fire breaks out, the organization may be willing to embrace inspections by the Police department and Fire marshals. But before the incident, these inspections may be viewed as a burden and an unnecessary chore. Rather than being reactive, we suggest being proactive. An organization must have the ability to tap into these external sources for knowledge on the environment, changes in laws, and effects of political conditions on businesses.

Foreign asset
One major Asian organization we know had an excellent relation with the tax authorities and they leveraged this relationship to help them plan for expansions in South America by learning about various taxation rules and regulations. They wanted to know how best to mobilize assets to capture a market share in South America. Lacking knowledge about issues such as currency regulations, culture and trade rules, the organization sought help from the Commerce and Revenue Departments. Surprisingly, all the organization had to do was sign-up on a list for routine lectures and seminars on how to expand to foreign locations given by the two government units. By attending these talks, government officials helped them bridge barriers and make local connections in the foreign countries.

Government organizations routinely conduct research projects on topics of interest. For example, in the US, the Government Accounting Office routinely publishes reports on topical issues. These represent viable knowledge resources; an organization can use these reports to benchmark their practices with that of the industry. It’s also common for a government organization to host forums, where private-sector enterprises are invited to participate. An organization must embrace such opportunities and actively participate in them to tap into a rich knowledge discussion. For example, it’s common to have debates hosted by various law enforcement agencies and topics addressed can help organizations bolster their own disaster and security management practices.

Back to school
Academia, especially business schools and engineering sciences, represents a viable external source of knowledge for business organizations. A computer manufacturer has vested interest in keeping abreast of developments in premier computer engineering departments, in order to get access to new knowledge and discoveries (or failures). Academic researchers generate new knowledge on a constant basis and are sometimes better at knowledge generation than the private sector. Many studies take global perspectives of the problem, and hence knowledge generated is widely applicable to any business belonging to a given industry or facing a similar problem. Some of the classical management texts have been embraced by organizations in a wide assortment of industries.

Academics have the advantage of being neutral in their analyses and can get access to normally private data, by promising non-disclosure of sensitive materials. By getting access to a wide range of data, knowledge generated can be put through greater rigor in calibration, and hopefully be of higher value. Academic knowledge must be tapped by seeking explicit and tacit sources.

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Main findings: knowledge management and knowledge transfer in CEE

The new EU member states have already performed a large part of the transformation process and can therefore be better understood using this logic. Organisations in the west, as in the east, are structured, ie hierarchical and work very strongly with the component of power. For knowledge management this means to face the same problems in several cultures.

Parallel to establishing knowledge management, organisations need to build up mutual trust if there are retentions which result from the political system or from a tense relationships. The most important aspect concerning knowledge management is the correct interpretation and understanding of these cultural differences.

Today's understanding of management transfer has to be understood as a learning process, in which concepts and practices in East European transformation countries are analysed, interpreted and modelled newly, not as simple adoptions of approved western solutions, structures, concepts, instruments and practices. Management concepts often consider implementation to be a purely technical topic. However, knowledge management implementation becomes more complex if knowledge management is understood as an intervention in the depths of the organisation, its habits and routines and as a change of communication for and in complex learning processes. A balance must be found between people, processes and technology.

Knowledge management will be successfully implemented if it is adapted to the organisational culture instead of trying to change it. Visible and invisible dimensions of organisational culture must be reconciled with knowledge management by building on visible corporate values. But this is only one task for knowledge management. Knowledge is designed socially and if the social competence of an organisation is not developed sufficiently, there is no other possibility other than adapting the instruments of knowledge management to the organisation or culture. Knowledge management needs to be tailored to an organisation's condition and stage of development and, if necessary, its complexity has to be reduced in order to do so.

Organisations in East European transformation countries tend to build up a facade that makes them appear western and modern while simultaneously they make use of their old local practices. Patterns of the old culture are confronted with patterns newly institutionalised and continue to work hidden under the surface. Two perspectives, the concept of knowledge management and the East European corporate culture, clash. Knowledge transfer is more effective if the operating organisations are integrated in national contexts with the same cultural patterns. The obstacles that can arise from communication and translation should not be under-estimated. The differing perspectives (of west and east) that have led to different KM contexts have to be understood and learned in order to act adequately. Historical and/or political backgrounds can provide an indication of why certain rules arose.

This organizational knowledge has to be acquired before knowledge can be transferred from one system to another. History and infrastructure which were built up over years cannot simply be changed. These are challenges and tasks that a knowledge management strategy has to deal with. The eastern as well as the western perspective have to be understood; only then it is sensible to select knowledge management instruments according to the context, the complexity and the social competence of the East European organizational cultures.

Only seldomly are knowledge management initiatives started by East European enterprises. But transfer from the east to the west does happen, so the question remains: what can the west learn from the East European transformation states?

Firstly, there is significant knowledge between transformation countries about dealing with transformation processes and neighbour countries and their economies. So companies that want to start businesses (e.g. in Russia) can search for specialists of the Russian market in its neighbouring countries.

Secondly, East European organisations are able to transfer implicit and systemic knowledge very effectively. Likewise, Russian companies are very flexible, with a distinctive intuition for the turbulent and unpredictable environment in which they work. In this region, companies are able to achieve a great effect with simplest means and without high demands.

Modern companies operate in a very unstable environment. In order to be successful and survive, they need to observe their environment and react to changes and information in a fast and flexible way. Within the last five to ten years, Russia has made a big step from collectivism towards a more individualistic culture. However, a national culture does not change fully in such a short time frame.

Thus, even in today's Russia, Western European companies have to be aware of former business routines that still influence business context and behaviour.

taken from Knowledgeboard editors ~

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Friday, September 09, 2005

How can knowledge management act as a catalyst for innovation?

Over the past few years a number of surveys have consistently placed the ability to be innovative in the top ten list of priorities for executives. That's not surprising when you read statistics such as those in a 1996 study of 150 major U.S. firms which found that innovative companies experienced profit growth at four times the rate of non-innovative organizations.

Knowledge management does not only act as a catalyst for innovation and creativity but also provides the means by which 'innovative ideas' can be captured, shared and leveraged, leading to more new ideas. According to Tom Peters, "Innovation comes only from readily and seamlessly sharing information rather than hoarding it.

A recent PricewaterhouseCoopers study on innovation and creativity identified "an effective ideas management process" to be an essential element of innovation within organizations. Also research by top business schools in North America and Europe suggests that creativity around the world is fostered or inhibited by a number of factors. In addition to tolerating risk-taking and rewarding creativity, the free flow of information is one of the crucial "promoters" of innovation/creativity.

This "flow of information" is at its most effective when people work in teams - the more diverse their experience, the better the creativity/innovation that ensues. A study by the Massachusetts Institute of Technology suggests that 80 percent of ideas that have led to breakthrough products and services originate from routine discussions. At MCI Communications, in addition to the technology used to capture and share ideas, the company has set up a "Hearth"-a family room setting with meeting tables, a fireplace, and 31 inch television monitors. There are also numerous whiteboards and modular furniture that can be configured to any given need. In fact there are four types of office space: offices for individual work; team rooms for collaborative work; offices for privacy; and the "Hearth."

Of course coming up with a new idea is just the start of the journey. Some ideas need to be put into practice but they also need to be captured and shared for new knowledge to be created. The people at Buckman Laboratories realize that not all innovative ideas are "right" at first. By capturing these ideas and "bouncing" them off other people the idea can be developed and perhaps used as a catalyst for new ones.

In today's global business environment, bringing people together (physically or virtually) is still the best means of knowledge-sharing. Innovation becomes less pressing when you can bring the harvested knowledge of the same people together. This is one of the ways in which some of the most successful global/virtual organizations, such as 3M, are using knowledge management practices to keep creativity alive despite the huge distances that separate their employees.

Ikujiro Nonaka and Noboru Konno touch on this issue in their latest work on the concept of "Ba" which they consider to be: "A shared space that serves as a foundation for knowledge creation."

This space can be physical (e.g. office), virtual (e.g. e-mail), mental (e.g. shared experiences), or a combination of all three - as long as it provides a platform for advancing knowledge. Of course, the new ideas or the flow of information do not necessarily have to come from within the organization.

Some companies are using KM practices to take advantage of the creativity of their customers and suppliers. At Chrysler the "SCORE" (Supplier Cost-ReductionEffort) program is such an initiative. The notion is simple - suppliers are responsible for sharing ideas with Chrysler which help them get cheaper parts. The goal for each supplier is cost-cutting opportunities that equate to five percent of its annual billings to Chrysler. The program has been a great success, with ideas flooding in at a rate of more than 100 a week, with estimated savings of over $2.5 billion to Chrysler. With these corporate innovations all being enabled by knowledge management practices, the next question to consider might be: "How can innovation be used to improve knowledge management practices?"

  1. Business Horizons, March/April 1996
  2. The Circle of Innovation: You Can't Shrink Your Way to Greatness, by Tom Peters
  3. Creativity Promoters and Inhibitors, Asian Business, Feb 1996
  4. The Concept of Ba, Californian Management Review, Spring 1998

Paul O. Pederson led Global Core Competencies and best practice knowledge sharing for PricewaterhouseCoopers Management Consulting. He was responsible for knowledge-sharing methods for the management consulting practice of over 11,000 people globally. The co-author of Better Change and Paradox Principles he has also written several white papers on benchmarking and is a charter member of the International Benchmarking Clearinghouse.

This article was taken from Knowledge Management Review.

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Knowledge-based Communities of Practice at AMS
by Rowan Wilson

Motivating people to contribute their knowledge is a challenge for anyone responsible for knowledge management. How do you get people who are already working 10 to 12 hour days to spend "just a little more time" writing something down to help someone else? American Management Systems (AMS) has capitalized on a culture in which sharing what people know has long been the key measure of success.

Through its Associate Program, the business and IT consulting firm, ranked 13th largest worldwide, has formalized previously informal communities, provided incentives for participation, and leveraged collaborative technology to provide an infrastructure for knowledge-sharing across the organization's 55 offices worldwide. With close to 8,000 workers, AMS found it increasingly challenging to leverage know-how across the company. Capturing collective intellectual capital and making it accessible to client engagement teams, no matter where or when it's needed, is vital to AMS's ability to deliver business success for clients. In short, knowledge management is a strategic imperative.

Recognizing this challenge, the company began a series of initiatives in 1993 designed to ensure that each engagement team had access to the best of knowledge. The most recent of these initiatives, the AMS Knowledge Centers, added to the existing infrastructure the concept of knowledge-based communities of practice.

Each Knowledge Center is a worldwide "virtual community" of people throughout AMS, connected by interest and expertise in a specific discipline. Members of the communities are called Knowledge Center Associates. Each community is led by a team of coordinators whom the company recognizes as leaders in their respective disciplines. AMS expert practitioners are selected as Associates for their specific expertise. Knowledge Center Associates make a formal commitment to share their knowledge in a tangible way through an annual Associates Program. This can be a research paper, a written insight into a new technology or project management technique, or a sample deliverable. Completed programs are added to a Lotus Notes-based knowledge repository and are catalogued and indexed with the help of a team of professional reference librarians. This knowledge base is accessible to all AMS employees.

Not everyone is invited or selected to become an Associate. Individuals are recognized at the level in the organization where there is a person who has direct responsibility for their performance evaluation and promotion path.

Knowledge Center Associates are also committed to solving problems "in the moment" by responding to directed e-mail and voicemail messages. All AMS personnel, not just Associates, have access to the corporate groupware system and intranet links to the Knowledge Center communities. The highly committed Associates, however, form the heart of AMS's KM program. In addition to "virtual" communication, Associates also participate in face-to-face conferences which focus on sharing best practices and lessons learned. Through these communities, AMS can leverage every bit of expertise that its employees generate every day all over the world.

Since 1996, when AMS formalized its Knowledge Centers, a lot has been learned about supporting and sustaining knowledge-based communities. These lessons-learned fall into the following basic themes: recognizing individual achievement; building group identity; motivating and rewarding participation; celebrating successes; and delivering value.

It's essential to create a strong identity and sense of community: "We're trying to create the environment that would have self-formed in the coffee room twenty years ago." Community members receive special business cards and are invited to attend meetings and workshops around topics of interest to them. A technology infrastructure facilitates communication among the members of each community: voicemail and e-mail distribution lists and a home page database for each community. These databases, which have grown in usage over time, provide a place where people can "request help" or post good ideas.

Individual successes are measured in terms of leverage - a term which is used internally to recognize the value of contributions. Promotion nomination forms use this word to describe how important leveraging knowledge is to being recognized as a company leader. The most re-used contributions from the on-line collection are publicized by acknowledging both the author and contributor (if they're not the same person). A list of the "top ten" most requested items from our deliverables collection is published in the quarterly K-News from the Knowledge Center's on-line newsletter. The re-use of individuals' contributions is also being reported, and an award is given to the Knowledge Center Associate whose example is re-used the most times.

The result for AMS is highly leveraged engagement teams who have AMS's collective knowledge at their fingertips. Through the effective use of a collaborative work environment and fundamentally, and most importantly, through people and the processes in place designed to support knowledge-sharing, AMS is able to deliver on its commitment to connect engagement teams with all global expertise - to deliver the right person or the right experience at the right time. This is knowledge management: people, processes, and technology working together to deliver value.

The Communities of Practice at AMS promote knowledge-sharing by:
  • Recognizing individual achievement: associates must be nominated to join the program; nomination criteria recognize both interest and experience.
  • Building group identity: branding through business cards and "community" events; virtual "coffee room" created for each community.
  • Motivating and rewarding participation: top contributors recognized; performance appraisal system rewards knowledge-sharing.
  • Celebrating successes: conferences and awards; reporting the top ten re-used contributions.
  • Delivering value for individual: examples libraries; AMS 'Know' Hotline; instant peer group - especially important for new hires; networking/growth opportunity.
  • Delivering value for the company: enhanced knowledge-sharing; improved client relationships; faster, more effective proposals.
  • Delivering value for AMS clients: each client engagement team leverages the collective knowledge and experience of all of AMS.
taken from Knowledge Management Review

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