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Knowledge Management – A Road Map for Winning Organization

Article in SSRN Electronic Journal · May 2010

DOI: 10.2139/ssrn.1616458

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 KNOWLEDGE MANAGEMENT – A ROAD MAP FOR WINNING
ORGANIZATION

“Knowledge is like money: to be of value it must circulate, and in circulating it can

increase in quantity and, hopefully, in value.” - Louis L’Amour

1. INTRODUCTION:

In the industry era, organizations improved their efficiency, effectiveness through

automating manual labour and reducing redundancy. In this Information era, success
depends critically on the quality and effective management of knowledge which becomes
the life blood of an organization. Knowledge has been described as information
combined with experience, context, interpretation and reflection. Given the importance of
such an asset, it is not surprising that organizations everywhere are paying attention to
knowledge exploring what it is and how to create, transfer and use it more effectively.
Knowledge Management (KM) has blossomed into a strategically important area for
most organizations to gain competitive advantage. The knowledge-based perspective of
the firm (Cole,1998) postulate that knowledge assets produce long-term benefits such as
competitive advantage and sustainability in the face of a fluctuating economic climate.

According to Gartner report, from 2006 to 2010 organizations will continue to invest in
KM as one of the critical competencies in high-performance workplace (HPW)
initiativesi. A survey by Reuters found that 90 per cent of companies that deploy a
Knowledge Management (KM) solution benefit from better decision-making, while 81
per cent say they notice increased productivity. It is found that, while 26 per cent of
knowledge in the average organization is stored on paper and 20 per cent digitally, an
astonishing 42 per cent is stored in employees' headsii.

This paper discusses how to manage knowledge effectively. In its introduction part, it
gives light on the difference between data, information and knowledge. The paper gives
light on 4 C’s framework of knowledge management. It concludes with suggesting road
map for managing the knowledge effectively by identifying key success factors for
knowledge Management.

2. DATA, INFORMATION AND KNOWLEDGE:

In the literature of knowledge Management, it is often discussed that it is more significant

to distinguish between data, information and knowledge with examples. These three
terms are misrepresented interchangeably in a wide manner in the knowledge
management scenario. According to general accepted view, data has been seen as simple
facts that can be structured into information. Then, information, in turn, becomes
knowledge when it is interpreted.

Electronic copy available at: http://ssrn.com/abstract=1616458

2.1 DATA:

Data is raw. It might be symbols, letters or signs. It simply exists and has no significance
beyond its existence. Data are assumed to be simple isolated facts. When such facts are
put into a context and combined within a structure, information emerges.

Ex: 100.

This shows a number which does not reveal any useful information. This number may
represent the score taken in cricket, marks scored in exam or number of employees. So,
the number itself will not derive any meaning unless it is structured.

2.2 INFORMATION:

When data are put into content and combined within structure, information emerges.
Information is the data that has been given meaning by way of relational connection.

Ex: A human body temperature is 100°F.

When the data “100” has been combined with structure, the meaning is reveled from the
data and it becomes the information. But, still the usefulness of this information remains
questioned

2.3 KNOWLEDGE:

Knowledge is the appropriate collection of information. Information becomes knowledge

when it is interpreted, put into context or when meaning is added to it. Knowledge is
neither data nor information, though it is related to both.

Ex: A human being whose body temperature exceeds 98°F, it is inferred that he/she may
be suffering from fever.

Thus it is interpreted by comparing the information 100°F with normal human

temperature and derived the knowledge of his health condition. The usefulness of this
information is answered in the knowledge component. The overall view explains the data
as a pre-requisite for information, and information as a prerequisite for knowledge. The
following scale will exhibit the differences among those components of Knowledge
Management.

Electronic copy available at: http://ssrn.com/abstract=1616458

 Fig no: 1 Knowledge scale

3. CLASSIFICATION OF KNOWLEDGE:

Knowledge can be widely classified into two type Tacit knowledge and Explicit
knowledge. Tacit knowledge is the cumulative store of experiences, insights, expertise,
know-how, trade secrets, understanding and learning. Tacit knowledge is referred as
embedded knowledge and is unstructured. Tacit knowledge will be difficult to codify.
Explicit knowledge is the policies, procedural guides, reports, strategies etc of the
enterprise that has been codified and can be distributed to others without interpersonal
interactions. Tacit Knowledge and explicit knowledge are also known as informal and
formal knowledge respectively. The success of knowledge Management practices
depends on its ability in extracting and disseminating the tacit knowledge.

Intellectual capital is another term for knowledge. Ulrich (1998) defines intellectual
capital as the competence of an individual and the commitment of the individual to
contribute to the organization’s goals (Intellectual Commitment = Competence ×
Commitment).

4. DEFINITIONS OF KNOWLEDGE MANAGEMENT:

Knowledge Management is defined differently across academia, research firms and

industry experts.

According to Gupta (2002), Knowledge management is a process that helps organizations

identify, select, organize, disseminate and transfer important information and expertise
that are a part of the organizational memory that typically resides within an organization
in an unstructured manner. This enables effective and efficient problem solving, dynamic
learning, strategic planning and decision making. As per this definition, Knowledge
management focuses on identifying knowledge, explicating it in a way so that it can be
shared in a formal manner, and thus reusing it.

Snowden (2000) defines knowledge management as process of identification,

optimization, and active management of intellectual assets, either in the form of explicit
knowledge held in artifacts or as tacit knowledge possessed by individuals or
communities
Davenport et al. (1998) describes knowledge management systems should fulfill the
following objectives:

To create knowledge repository

To improve knowledge assets

To enhance the knowledge environment

To manage knowledge as an asset

Ellen knapp (1999), PriceWaterhouseCoopers defines knowledge management as an art

of transforming information and intellectual assets into enduring value for an
organization’s clients and its people.

According to Gartneriii, knowledge management consists of four key processes. These

key processes can be coined as 4 C’s of Knowledge Management
1. Creation of knowledge,
2. Capturing the knowledge,
3. Coordinating knowledge dissemination process (Organizing the knowledge sharing)
4. Consumption of knowledge (Access and usage of information assets, including the
tacit, uncaptured knowledge of people). This process depicted in the following diagram:

Fig.no:2 Four C’s of Knowledge Management

CREATION OF CAPTURING
KNOWLEDGE THE
KNOWLEDGE,

CONSUMPTION COORDINATIN
OF G KNOWLEDGE
KNOWLEDGE DISSEMINATION
PROCESS
Satish Joshi, Senior VP, Patni Computer Systems Limited says "For us, KM is a set of
processes and tools which give us the ability to leverage and combine the collective
abilities of our knowledge workersiv." As Sunil Kapoor, Head IT, Fortis Healthcare says,
“Knowledge Management is the process of getting customized information tailored to the
needs of each user."

Broadly, Knowledge Management can be defined as the process by which organizations

leverage and extract value from their intellectual or knowledge assets.

There is ongoing debate in the field of knowledge management about whether it is

possible to identify the key success factors for knowledge management. There are number of
knowledge management practices that appear consistently across a variety of organizations,
regardless of structure and mandate. Based on the best practices, key success factors can be
identified for the successful implementation of Knowledge Management

5. KEY SUCCESS FACTORS FOR KNOWLEDGE MANAGEMENT:

1. Solid Technical Infrastructure.

2. Defined roles and responsibilities
3. Creating and Promoting a Knowledge sharing culture.
4. Senior Management support.
5. KM efforts aligned with Company’s strategic objectives.
6. Motivation and commitment of users.
7. Effective KM metrics system.
8. Innovative KM practices based on experimentation.
9. Capturing and transferring the tacit knowledge
10. Working with Combination of strategies

5.1. SOLID TECHNICAL INFRASTRUCTURE:

A thumb rule says “If it takes more than three clicks to find the knowledge on your
systems, users get frustrated”. Organization cannot enable its employees to share
information on a large scale without a solid IT infrastructure. Knowledge projects are
more likely to succeed when they use the broader technical infrastructure. Standard
companywide architecture ensures the sustainability and scalability of KM efforts.

If a Knowledge repository has no structure, however, it is difficult to extract knowledge

from. Another factor is the continual evolution and flexibility of a knowledge structure. It
is often useful to have a thesaurus to connect the searchers' terms with the categorizers'
terms. An Extensive thesaurus of technical terms allows browsing and searching of the
expert network through terms that make sense to users; users' terms should be added
continually to the thesaurus. The structure of the knowledge, therefore, will be updated
according to the current usage. Yet the trap that most organizations fall into is technology
trap i.e. paying too much focus on technical structure of portals. A KM initiative is not a
software application; it is a platform to share information. Information Technology is
only a part of KM initiative.
Infosys manages organization-wide knowledge using three centrally operated knowledge
repositories: the Knowledge Shop (KShop), Process Asset Database, and People
Knowledge Map.

Patni solutions has the knowledge repository called “Knowledge Xchange” portal which
is based on the Web 2.0 model for social computing, and runs on the Microsoft® Office
SharePoint® Server (MOSS) 2007. This portal enables collaboration through Wikis,
blogs, individual websites and forums, and provides enterprise-wide access to Patni’s
large teams spread across geographies and hierarchies

5.2 DEFINED ROLES AND RESPONSIBILITIES:

Organizational infrastructure for knowledge management means establishing a set of

roles and organizational groups whose members have the skills to serve as resources for
individual projects. No matter what strategies are deployed, at what level of activity, roles
and responsibilities that an organization needs to define vividly. KM needs a champion at
the senior management level of an organization and that championship needs to be
sustained for the long term. Equally important, KM also needs champions at the mid-
management levels. These are the individuals who will connect knowledge needs and
flows with the operations of the organization.

Cognizant is a trendsetter and perhaps one of the very few software companies in the
country that has a senior position titled as the Chief Knowledge Officer (CKO),
exclusively for knowledge management. The company has developed different roles for
knowledge management like knowledge harvestors, and knowledge auditors, whose role
is to encourage everyone in the organization to participate in digitizing corporate memory
v
and knowledge management initiatives

5.3 CREATING AND PROMOTING A KNOWLEDGE FRIENDLY CULTURE:

"Knowledge-friendly" culture is one of the most important factors for a project's success.
At the same time it is one of the most difficult to create if it does not already exist.
Knowledge Management System (KMS) should be incorporated into everyday processes
to enable the knowledge friendly culture. The research studies on Successful KM
practices agree that the major managerial success factor is creating and promoting a
culture of knowledge sharing within organization by articulating a corporate KM vision.

The employees may be unwilling to share knowledge for two reasons. In some cases,
they were reluctant to share any information about mistakes or failures even though this
knowledge was valuable to the company and could prevent others from making the same
errors. In other cases, they didn't want to share positive knowledge, believing their value
and, therefore, their job was tied to their personal expertise.

There should be the perfect fit between the organization’s culture and its knowledge
management initiatives. Projects that don't fit the culture probably won't thrive, so
management needs to align its approach with its existing culture or be prepared for a
long-term culture change effort. If the cultural platform isn't friendly for a knowledge
project, no amount of technology or knowledge content will make the effort successful

5.4. SENIOR MANAGEMENT SUPPORT:

Strong support from executives is crucial for success of KM practices. The following
types of support will be helpful:

 Sending messages that knowledge management and organizational learning are

critical to the company's success.

 Providing funding and other resources for infrastructure.

 Clarifying what types of knowledge are most important to the company.

Nothing makes greater impact on an organization than when leaders model the behavior
they are trying to promote among employees. Leadership plays a key role in ensuring
success in almost any initiative within an organization. Its impact on KM is even more
pronounced because this is a relatively new discipline. The concept of the ‘knowledge
bank’ was articulated in 1996 by James D. Wolfensohn, president of the World Bank
Group. By 2000, the bank had a range of knowledge-sharing programmes in place:
communities of practices (CoP), helpdesk and advisory services, extensive knowledge
collections on the web, tacit knowledge debriefings, indigenous knowledge programmes,
and a platform to share knowledge with the development community through the
Development Gateway websitevi.

5.5 KM EFFORTS ALIGNED WITH COMPANY’S STRATEGIC OBJECTIVES:

KM efforts should be directed towards the strategic plan of an organization. KM practices

should be tied directly to the operations. At Texas Instruments, a strategic focus of KM
practices was increasing revenues through licensing of patents and intellectual property.
In 1995, it reportedly earned nearly $200 million -- more than half its total profit -- from
patent licensing. There should be significant association between knowledge-sharing
initiatives and the actual day-today operations of the organizationsvii.

Several knowledge management projects in the customer support process attempted to

improve customer satisfaction by reducing waiting time for phone support or providing
online knowledge. An HP support team studied the problems that dealers were
experiencing, as revealed in their phone calls. Then the company preempted any potential
calls by alerting customers to the most frequently asked questions and providing solutions
through a knowledge portal.
5.6 MOTIVATION AND COMMITMENT OF USERS:

Knowledge does not flow easily across role or functional boundaries. Therefore, the
motivation to create, share, and use knowledge is an intangible critical success factor for
all knowledge management projects. Motivational practices to encourage more effective
behavior should be long-term and should tie in with the general evaluation and
compensation structure. Consultants at both Ernst & Young and McKinsey, for example,
are evaluated partially on the knowledge they contribute to repositories and human
networks (James 1999)

5.7. EFFECTIVE KM METRICS SYSTEM:

An old business proverb says “If you cannot measure it, you cannot manage it”. It suits to
KM also. There should be a Knowledge Metric system to measure the effectiveness of
the KM practice. Regular reviews and interviews should be conducted to revamp the
existing KM practices. It might be difficult to measure the ROI like other projects.
Benefit calculations might be indirect, perhaps through improvements in measures like
cycle time, customer satisfaction. In consulting industry which is described as
"knowledge businesses”, the payoff from knowledge management projects remains
largely perceptual. Still, consulting firms attempt to demonstrate economic returns. Ernst
& Young, for example, measures the amount of knowledge it reuses in the form of
proposals, presentations, and deliverables and the contributions of its knowledge
repository to closing sales (McCampbell, 1999)

5.8. INNOVATIVE KM PRACTICES BASED ON EXPERIMENTATION:

It is important to create room for experimentation, particularly with new technologies:

blogs and online communities, with Wiki (open editing) technologies, even using
Google-style algorithms to rank community members according to their level of
participation and connectedness to other members of a community.

Employees should be motivated to speak on forum of an any idea, best practice,

experimental learning or reading from the web or other media. This helps them to think
beyond the current sphere and perhaps apply the knowledge within the company.

“Knowledge chat” is one of the emerging tools for promoting Knowledge oriented
conversations. There will be virtual environment where team members to participate in a
communication environment that is at once both intimate and geographically dispersed. It
will help the people virtually gather at the same time and place and helping to create and
communicate collaborative knowledge.
5.9. CAPTURING AND TRANSFERRING THE TACIT KNOWLEDGE:

The common mistake made in information delivery is the emphasis on explicit

knowledge. Though technology is primarily used to deliver explicit knowledge, placing
too much attention on it causes the user to lose the context in which the information was
shared and leads to misunderstanding on how to interpret the knowledge. Tacit
knowledge is the major promoter of KM success. The key of KM success lies in the
ability of KMS to identify, capture and transfer critical tacit knowledge and a good KMS
facilitates the dissemination of this tacit knowledge.

5.10. WORKING WITH COMBINATION OF STRATEGIES:

A more realistic practice may be the deployment of following two strategies that are
related, but are not dependent on the others for their success:

Internal communications strategies:

Internal Communication tools like newsletter, knowledge portals, intranet net portals,
bulletin board and knowledge yellow pages etc can be effectively used to strengthen
knowledge dissemination. These internal communication tools will be the key
instrumental in creating awareness among employees about knowledge management.

Influencing strategies:

Organizations should identify the key opinion leaders in the organization who have
influential power. Gladwell mentions in his famous book on “Tipping Point”, that tipping
point management is the process involved in recognizing and fostering specific
individuals who play important roles in starting “idea epidemics” within and beyond an
organization. He classifies key opinion leaders in to three categories: i) Mavens who are
the research experts in the specific domains ii) connectors are those with connections to
decision-makers iii) salespeople are those with the ability to craft and communicate
messages. Key opinion leaders will bridge the gap between conceptual frame work and
implementation of knowledge management.

6. CONCLUSION:
Knowledge Management connects people-to-people and people-to-information, to
develop and share learning experiences and the best practices. Knowledge Management
system works wonders and makes the dream of learning organization if the system is
properly implemented. Knowledge management is a strategic process to gain sustainable
competitive advantage in building a winning organization.
 REFERENCES:
Cole, R.E. Special issue on knowledge and the firm—Introduction. California
Management Review, 40, 3 (Spring 1998), 15–21.

Davenport, T.H., Delong D.W., & Beers, M.C. (1998). “Successful Knowledge
Management Projects”. Sloan Management Review, Vol. 39, No. 2.

Ellen Knapp, PriceWaterhouseCoopers, as reported by Firestone in his Key Issues paper,

p.18. www.allbusiness.com/technology/251704-1.html

Gupta, B., Iyer, L.S., & Aronson, J.E. (2000). “Knowledge Management: Practices And
Challenges “. Industrial Management And Data Systems, Vol.100, Nos. 1 & 2.

James W. Cortada, John A. , “The Knowledge Management Yearbook 1999-2000 By

Woods” p.102.

McCampbell, A.S., Clare, L.M., Gitters, S.H., 1999. Knowledge management: The new
challenge for the 21st century. Journal of Knowledge Management 3 (3), 172–179.
Malcolm Gladwell , “The Tipping Point: How Little Things Can Make a Big Difference,
Little Brown in 2000.
Ulrich, D. (1998). “Intellectual Capital = Competence * Commitment”. Sloan
Management Review, Vol. 39. No. 2.

Snowden, D. (2000) “Cynefin, A Sense of Time and Place: an Ecological Approach to

Sense Making and Learning in Formal and Informal Communities” conference
proceedings of KMAC at the University of Aston, July 2000

http://www.patni.com/knowledge-management.aspx

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www.gartner.com/resources/.../knowledge_management_enables_136928.pdf
ii
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iii
http://www.gartner.com/6_help/glossary/GlossaryK.jsp
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v
http://www.expresscomputeronline.com/20030818/ebiz1.shtml
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projects/3/

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