knowledge management: an emerging discipline rooted in a long

Knowledge Management:An Emerging Discipline Rooted in a Long History

Karl M. Wiig

Knowledge Research Institute, Inc.–[email protected]

Draft of Chapter 1 in

Knowledge ManagementEdited by Daniele Chauvel & Charles Despres

Scheduled for publication Fall, 1999.

AbstractIntroductionHistory of Knowledge Management

Intellectual Roots of Knowledge Management

Different Brands of Knowledge ManagementKnowledge and Information: The Need for Crisp Definitions

Driving Forces behind Knowledge ManagementExternal Driving ForcesInternal Driving ForcesOngoing Developments

What Is New?What May Lie ahead for Knowledge Management?

The Changing WorkplaceTowards a Knowledge Management Discipline

Concluding PerspectivesReferencesNotes

Knowledge Management:An Emerging Discipline Rooted in a Long History

Karl M. Wiig

Knowledge Research Institute, Inc. – [email protected]

AbstractThe business direction we call Knowledge Management (KM) has emerged overthe last decades as a result of many intellectual, societal, and business forces.Some of its roots extend back for millennia, both in the West and the East, whileothers, particularly those associated with Cognitive and Information sciences,are quite recent. Globalization of business also plays an important role. WhereasKM has become a valuable business tool, its complexity is often vexing, and as afield, will still be under development for a long time to come. Significant changesin the workplace have already taken place, but changes to come are expected tobe greater. As for other management directions, it is expected that KM will beintegrated into the basket of effective management tools, and hence disappear asa separate effort.

IntroductionKnowledge, what it is, what it means,

and its roles for work and spiritual life, hasa long history. The abstract considerationsand speculations by philosophers and re-ligious thinkers have been of particularsignificance. In addition, the emphasis onknowledge has always had a practical work-related and secular side. It is this aspect wepursue in this chapter.

Knowledge in the workplace–the abilityof people and organizations to understandand act effectively–has regularly beenmanaged by managers, coworkers, and pro-active individuals. Those responsible forsurvival in competitive environments al-ways have worked to build the best possibleknowledge within their area of responsibil-ity.

Knowledge, and other IC components,serve two vital functions within the enter-

prise.1 They form the fundamental re-sources for effective functioning and pro-vide valuable assets for sale or exchange.From business perspectives, explicit andsystematic knowledge management has notbeen of general concern until recently, andas a result, availability of competitive ex-pertise has been haphazard. This is nowchanging.

As we improve KM–and as our competi-tors improve–we must continue to developof our KM practices. These efforts, whichbecome increasingly sophisticated and de-manding, must build upon the historic rootsof knowledge-related considerations. In ad-dition we must pay attention to develop-ments in technology and people-centric ar-eas like cognitive sciences. In other words,we must rediscover the power of pastthinking as well as understand opportuni-ties that lie ahead. 1 See for example Stewart (1997) and Sveiby (1997).

Knowledge Management: An Emerging Discipline Rooted in a Long History

2

History of Knowledge Manage-ment

A historical perspective of today’s KM,indicates that this is an old quest. Knowl-edge, including knowing and reasons forknowing, were documented by Westernphilosophers for millennia, and with littledoubt, long before that. Eastern philoso-phers have an equally long documentedtradition of emphasizing knowledge andunderstanding for conducting spiritual andsecular life. Much of these efforts were di-rected to obtain theoretical and abstractunderstandings of what knowledge isabout.2

Practical needs to know–or particularly,needs for expertise and operational under-standing–have been important since thebattle for survival first started, perhaps be-fore the first human. Managing practicalknowledge was implicit and unsystematicat first, and often still is! However, thecraft-guilds and apprentice-journeyman-master systems of the 13th century, werebased on systematic and pragmatic KMconsiderations. Still, the practical concernsfor knowledge and the theoretical and ab-stract epistemological and religious per-spectives were not integrated then, and stillare mostly kept separate.

Our present focus on knowledge, par-ticularly for KM, is often explicitly orientedtowards commercial effectiveness. However,there are emerging realizations that toachieve the level of effective behavior re-quired for competitive excellence, the whole

2 The epistemological considerations of the Greek philoso-phers Socrates, Plato, and Aristotle are well known. Perhapsless known in the West are the teachings of Lao Tzu andConfucius in China, also about 2,500 years ago. Indian phi-

losophers also pursued similar topics.

person must be considered. We must inte-grate cognition, motivation, personal satis-faction, feeling of security, and many otherfactors.3

The present KM focus is not driven bycommercial pressures alone. A practical,often implicit, aspect of KM is that effectivepeople behavior required for success restson delegating intellectual tasks andauthority to knowledgeable and empoweredindividuals. KM also represents an evolu-tion of the move towards personal and in-tellectual freedom that started with the ageof enlightenment and reason over 200 yearsago. One notion was that through propereducation, humanity itself could be altered,its nature changed for the better. As othersocial movements, this has taken a longtime to penetrate, particularly into the con-servative ranks and practices of manage-ment.4

The emergence of the explicit knowledgefocus and the introduction of the term “KM”in the 1980s was no accident and did nothappen by chance.5 Although it happenedgradually and often was met with manage-ment uncertainty, it was a natural evolu-tion brought about by the confluence ofmany factors. The developments that haveled to our present perspectives on KM comefrom many areas. Some are intellectually

3 See for example Boulding (1966), Cleveland (1985),Drucker (1988), Stewart (1991), and Sveiby & Lloyd (1987).4 Managers, by necessity have been conservative. Manage-

ment is not a science, and approaches to “control” the social,open systems of human and economic behavior in organiza-tions and markets are fraught with problems and uncertainty

(see Austin, 1996 and Hilmer & Donaldson, 1996). Success-ful management approaches, therefore, are built on traditionsand long experience.5 A perspective of the history of KM can for example be

found in Wiig (1997).


3

based, others are pragmatic and rooted inthe need to innovate to secure real life per-formance.

From our present-day perspective, inspite of increasing advances in thinking,there were little change in needs for practi-cal KM until the industrial revolutionchanged the economic landscape in the 17th

century. The introduction of factories andthe related systematic specialization be-came more pronounced to support the abil-ity to create and deliver goods in greaterquantities and at lower costs. Still, KM wasimplicit and largely based on the appren-tice-journeyman-master model. Schools anduniversities mostly fulfilled a tacit missionto provide education as required for aleading minority. To some extent, this tacitperspective survives to this day. Education,be it primary, secondary, or higher, is per-ceived to be “good” and of general value, of-ten with less thought given to which knowl-edge must be developed for which specificpurposes.

Intellectual Roots of KnowledgeManagement

Intellectually, broad, present-day KMhas many origins. One comes from abstractphilosophical thinking. Another comes fromconcrete concerns for requirements of ex-pertise in the workplace. Others come fromperspectives of educators and businessleaders. Recent perspectives come from ef-forts to explain economic driving forces inthe “knowledge era” and the 20th Centuryefforts to increase effectiveness.6 Some ofthe intellectual roots include:

6 See Romer (1989) and Kelly (1996).

Historic Efforts

Ø Religion and Philosophy (e.g., episte-mology) to understand the role andnature of knowledge and the permis-sion of individuals “to think for them-selves.”

Ø Psychology to understand the role ofknowledge in human behavior.

Ø Economics and social sciences to un-derstand the role of knowledge in so-ciety.

Ø Business Theory to understand work,and its organization.

20th Century Efforts to Improve Effec-tivenessØ Rationalization of Work (Taylorism),

Total Quality Management, andManagement Sciences to improve ef-fectiveness.

Ø Psychology, Cognitive Sciences, Artifi-cial Intelligence (AI), and LearningOrganization to learn faster thancompetition and provide foundationfor making people more effective.

These and other perspectives on the rootsof KM are discussed by many authors.7

Different Brands of KnowledgeManagement

We must specify what we mean by, andinclude within broad KM. A few advancedenterprises pursue a central strategicthrust with four tactical foci as indicated inFigure 1. However, most tailor KM prac-tices to their needs and environments andhave narrower perspectives. Of these, somefocus on knowledge sharing among indi-viduals or on building elaborate educationaland knowledge distribution capabilities.Some emphasize use of technology to cap-

7 See for example Cleveland (1987) op.cit., Senge (1990),

Simon (1976), and Wiig (1993).


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ture, manipulate, and locate knowledge andinitially, many focus on knowledge-relatedinformation management rather than onKM. Others focus on knowledge utilizationto improve the enterprise’s operational andoverall effectiveness. Still others pursuebuilding and exploiting IC to enhance theenterprise’s economic value. Some excep-tional enterprises have created “knowledge-vigilant” environments to focus constant,widespread attention on ensuring competi-tive IC to sustain long-term success and vi-ability. The presumption is that competitiveIC, properly utilized and exploited, is thecentral resource behind effective behavior.

Our definition of KM is broad and em-braces related approaches and activitiesthroughout the organization. From thisview, KM is partly practical, basic, and di-rectly aimed at supporting the enterprise’sultimate objectives. Other parts of KM arequite sophisticated and rely on under-standing of underlying processes to allowtargeted KM focused on the organization’sneeds and capabilities. Many design sys-tematic and explicit KM practices to createenterprise-wide, adaptive, contextual, com-prehensive, and people-centric environ-ments that promotes continual personal fo-cus on knowledge-related matters.

People FocusEnterprise

EffectivenessFocus

Intellectual Asset

Focus

IM & ITFocus

Figure 1. Comprehensive Knowledge Management Strategy Focus Areas.

Broad KM is the systematic and explicitmanagement of knowledge-related activi-ties, practices, programs, and policieswithin the enterprise. Consequently, theenterprise’s viability depends directly on:Ø The competitive quality of its knowl-

edge assets; and

Ø The successful application of these as-sets in all its business activities–i.e.,realization of the knowledge assets’value.

From a slightly different perspective:“The goal of Knowledge Management isto build and exploit intellectual capitaleffectively and gainfully.” This goal isvalid for the entire enterprise, for all of theenterprise’s activities, and has considerablecomplexity behind it.8

8 Private communication from Fernando Simões, South Af-

rican KM professional (1998). This definition was adopted

by the Australian Parliament for their KM position paper.


5

Some aspects of enterprise-wide intelli-gent-acting behavior are indicated in Fig-ure 2. The model outlines elements that fallunder the auspices of KM, such as learning,innovating, and the effective creation and

application of knowledge assets (KAs). Italso points to the need for permission, mo-tivations, opportunities, and capabilities forindividuals to act intelligently.

Customers&

OutsideWorld

The Intelligent-Acting Enterprise

Structural Knowledge Assets

Internal Operations&

"Daily Work"

PersonnelPermission

Motivation

Opportunities

Capabilities

Intelligent Acting

Products & ServicesSystems & Procedures

Management Practices

Operating Practices

OrganizationalStructure

TechnologyPatents & Licences

Knowledge Bases

Permission

Education &Training Programs

Learning

Innovating&

CreateNew KAs

Utilize KAs

Personnel Deal Directlywith Outside World

Resultsfrom

IntelligentActing

Personnelandfrom

IntelligentApplication

ofStructuralKnowledge

Assets

DirectSales

ofStructuralKnowledge

Assets

Figure 2. Individuals, Knowledge Assets, Learning and Innovation, and InternalOperations in the Effective Enterprise.

One important aspect for effective KM isthe requirement to deal explicitly with thecomplexity of how people use theirminds–that is, think–to conduct work. Itconcerns what they must understand andhow they must possess specific areas ofknowledge and have access to them to acteffectively under different conditions.Similar considerations also hold on the or-ganizational level.

Several aspects of effective, broad-basedKM are of interest and should be empha-sized. They dispel some myths often associ-ated with KM and include:Ø In the long run, KM initiatives and

activities normally do not lead to more

work. Instead, improved knowledgeand its use, often far down in the or-ganization, lead to less rework andhand-offs, quicker analysis, decision,and execution, particularly of nonrou-tine tasks and other desirable andwork-reducing effects.

Ø KM activities and initiatives, insteadof being additional functions, must tothe largest extent possible be basedon, and be part of, pre-existing andongoing efforts–often without makingthese more difficult, time consuming,or demanding.9

Ø People are often afraid to share theirknowledge. They believe that theywill lose the advantage that their ex-

9 Lucier and Torsilieri (1997)


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pertise gives them among their peersand within the organization. How-ever, under the best of circumstances,only a small fraction of an individual’sapplicable expertise can be elicitedand shared. Frequently, only concrete,operational or routine knowledge canbe communicated. Deep, broad in-sights are generally not available–andmay not exist except as a capability toreason until the situation requires it.Importantly, when experts provideknowledge openly and widely, theytend to be considered important bytheir peers and gain status and recog-nition.

Ø Personal knowledge cannot be shareddirectly. Perspectives of, and informa-tion about knowledge can be commu-nicated. Recipients make sense of thereceived information and internalizetheir interpretation of the communi-cation as new knowledge. Knowledgeis built by complex learning processesand result in highly individual mentalmodels and associations that for some,may be quite different from the sourceknowledge.

To be competitive, proactive enterprisesmust increasingly manage knowledge sys-tematically–although many KM activitiesand functions may be implicit in each em-ployee’s and department’s daily work andpractice. Enterprises will continue to bemotivated by several end-goals, to secureshort-term success and long-term viability.A particular KM objective in support ofwhichever strategy the enterprise pursues,is to leverage the best available knowledgeand other ICs to make people, and thereforethe enterprise itself, act as effectively aspossible to deal with operational, customer,supplier, and all other challenges to imple-ment the enterprise strategy in practice.

Knowledge and Information: TheNeed for Crisp Definitions

The intent with KM is to manage knowl-edge practically and effectively to reachbroad operational and strategic objectives.That requires crystal-clear understandingof what is meant by knowledge. We must bespecific about what knowledge is to ma-nipulate, monitor, and judge how it af-fects–and is affected by–people, culture,KM activities, and other factors within theenterprise and its environment.

We must distinguish clearly betweenwhat we mean by “knowledge” and “infor-mation.”10 At first, it may appear that thereis a continuum from signals to data to in-formation to knowledge–and onwards, per-haps to wisdom. However, when examiningthe nature of these conceptual constructsand the processes that create them, we finddiscontinuities that make information fun-damentally different from knowledge.

Most people think of knowledge as a rec-ipe–a defined procedure–to deal with a con-crete, routine situation. However, fewsituations are repeated–most situations arenovel, particularly in their details. Hence, 10 From practical KM perspectives, operational definitions

are: Information consists of facts and other data orga-nized to characterize a particular situation, condition,challenge, or opportunity. Knowledge is possessed by

humans or inanimate agents as truths and beliefs, perspec-tives and concepts, judgments and expectations, method-ologies and know-how. Knowledge is used to receive in-formation–to recognize and identify; analyze, interpret,

and evaluate; synthesize, assess, and decide; adapt, plan,implement, and monitor–to act. Understanding based onknowledge is used to determine what a specific situation

means and how to handle it. Following this definition, in-formation and rudimentary knowledge may be codifiableand may exist outside a person’s mind. Understanding,however, may be difficult to codify and is primarily peo-

ple-based.


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knowledge must provide us with the capa-bility–the understanding–that permits usto envision possible ways of handling differ-ent situations and to anticipate implica-tions and judge their effects. It allows us toimprovise and “jam.”11 Our knowledge–inthe form of mental models, scripts, andschemata–provides us with the capability towork with novel situations by including notonly concepts and predefined methods andjudgments, but numerous connections withother detailed concepts, meta-concepts, andmental models.12

The discontinuity between informationand knowledge, referred to above, is causedby how new knowledge is created from re-ceived information. The process is complex.To become knowledge, new insights are in-ternalized by establishing links with al-ready existing knowledge, and these linkscan range from firmly characterized rela-tionships to vague associations. Priorknowledge is used to make sense of receivedinformation, and once accepted for inclu-sion, internalizes the new insights by link-ing with prior knowledge. Hence, the newknowledge is as much a function of priorknowledge as it is of received inputs. A dis-continuity is thus created between the in-puts and the resulting new knowledge. Theresulting knowledge and understanding isformed by combinations of mental objectsand links between them and allow us tosense, reason, plan, judge, and act.

A practical example portrays how infor-mation and knowledge differ. Consider theregular and supervisory control functionsfor an automated factory as illustrated in

11 See Kao (1997).12 See for example Gardner (1983), Gardner (1985), Lakoff

(1987), Schank & Abelson (1977), and Wiig (1995).

Figure 3. In this system, information is con-tinually obtained on the operating state ofthe process. Knowledge from process ex-perts is embedded in the process controlprograms to automate operations. The ex-perts provide personal knowledge and deepunderstanding as general principles andspecific cases on how to deal with routineand undesired operating situations. Theymay pool their process knowledge with thatof other experts who earlier have embeddedknowledge on optimization and controlprinciples in the generic computer softwareused to generate the control algorithms.

In addition, process operating history isanalyzed (by conventional statistical meth-ods or advanced knowledge discovery in da-tabases [KDD]) to obtain selected processcharacteristics, including process dynamics.This information also becomes part of thecontrol algorithms embedded in the controlcomputer after it has been interpreted andlinked to the experts’ personal knowledge.

Driving Forces behind Knowl-edge Management

The emergence of KM may be explainedby the confluence and natural evolution ofseveral factors. The needs to manageknowledge are strong. For those who noware engaged in KM it is not an alternativeor a luxury. It is a necessity driven by theforces of competition, market place de-mands, new operating and managementpractices, and the availability of KM ap-proaches and information technology.

External Driving ForcesMost organizations operate in environ-

ments that they cannot control. Their vi-ability and success are subject to external


8

forces that they must live with and respondto as best they can to survive. Over the lastdecades considerable external driving forces

have emerged. Among these we find thefollowing:

Routine and NormalOperation

Abnormal and UndesiredOperating Situations

Process Dynamicsand

Characteristics

Optimization andSpecial Situation

Operating Strategies

Control Algorithmsto

Regulate Process

InformationKnowledge

KDDKnowledgeDiscovery

in Databases

Information

Knowledge

Operating History

Figure 3. Differences between Knowledge and Information in Process Control.

Ø Globalization of business and in-ternational competition. Interna-tional commerce has increased. Prod-ucts that were created within onecompany or country are now assem-bled from parts from multiple sourcesworld-wide. Where before there werefew product alternatives, there noware many. Production and service ca-pabilities that were available fromlimited sources in advanced countries,are frequently found in countries thatwere considered developing and inca-pable of sophisticated work. These de-velopments have led to cut-throatcompetition–where only the most ef-fective will survive by being effectivein operations, marketing, and creationof products and services.

Ø Sophisticated customers. Custom-ers have become more demanding.They increasingly desire customizedproducts and services that support

their success and in turn are neededto serve their own customers better.Everywhere there are requirementsfor new features, better fulfillment ofindividual needs, higher quality, andquicker response–all at an increas-ingly feverish pace. To survive in thisenvironment, enterprises must per-form on par with–or better–than itscompetition by improving their under-standing of customer needs and capa-bilities.

Ø Sophisticated competitors. Com-peting organizations are constantlyimplementing innovations in prod-ucts, services, and practices. They alsoimplement “discontinuous break-throughs” by adopting new technolo-gies and practices. To keep up, thesechanges require constant learning tobuild competitive expertise.

Ø Sophisticated Suppliers. Supplierscontinue to improve their capabilities


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and can participate in creating andsupporting innovations to deliver so-phisticated products. To take advan-tage of these opportunities, enter-prises must understand new suppliercapabilities and how to integratethem with internal efforts, directions,and culture.

Internal Driving ForcesWithin enterprises, developments of

many types have created opportunities formanaging knowledge better, and in somecases differently. Examples of importantchanges include:Ø Bottlenecks in enterprise effec-

tiveness. Typically, enterprise effec-tiveness is limited by restrictions inflows of work, information, etc. Bot-tlenecks have been removed–and relo-cated to other sites–through manyimprovements: investments in tech-nology and logistics; personnel work-ing harder and longer; organized worktasks and work flows; improved in-formation for decision making andother work (more accurate, complete,and timely); and increased intelligentautomation of routine and simpler op-erational tasks.

New requirements place demandson increased effectiveness and intelli-gent behavior. Bottlenecks havemoved from visible and tangible sitesto knowledge-intensive work areasrequire better understanding and ex-pertise.

Ø Increased technological capabili-ties. New KM approaches are madepossible by advances in informationmanagement and technology and ap-plied AI. Examples include groupwarefor collaborative work, knowledge en-coding for knowledge bases, perform-ance support systems, natural lan-guage understanding, and advancedsearch engines.

Ø Understanding of human cogni-tive functions. People and theirwork behavior are at the center of theeffective enterprise. Therefore, it isimportant to incorporate better pro-fessional understanding of cognitiveaspects of how knowl-edge–understanding, mental models,and associations–affect decisionmaking and performing knowledge-intensive work when deciding how toconduct KM.

Ongoing DevelopmentsMany developments are underway that

will affect KM further and some of theseinclude:Ø Economics of Ideas. Innovations

and new, path-breaking ideas havebrought about knowledge-driven eco-nomic changes of societal signifi-cance.13

Ø Information Management andTechnology. Information-relatedpractices and capabilities are trans-forming the way business is con-ducted.

Ø Cognitive Science. Our under-standing of how people function hasdirect impact for how we manageknowledge.

Ø Shifts in Bottlenecks. Under-standing best practices and others’experiences provide information aboutpotential candidates for streamliningoperations.

Ø Customization Requirements forSophisticated Customers. Greatopportunities are available by satis-fying unique customer demands onreasonable terms.

Ø Sophisticated Competitors.Threats require agile behaviors andrapid learning to remain viable

13 Romer (1989) and Kelly (1996), op. cit.


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Ø Globalization. International busi-ness changes provide business oppor-tunities and threats that must be un-derstood to be managed.

These, and other driving forces encouragecompanies to focus attention and efforts toareas that provide greatest pay-back. Ingeneral, it requires delivering “more withless.” That, however, requires extensiveunderstanding and ability to build andmaintain competitive IC in many areas.

What Is New?KM practitioners recognize that KM has

brought new elements into the enterprise.Entirely new perspectives and activities areintroduced. Others are not new per sé, buthave taken on new roles. For example,there is little new in the concepts behindeducating and training people to be able todeliver competent work. The same is truefor many other KM-related activities. How-ever, perspectives, priorities, and purposesare new.

Most knowledge-based organizations re-alize that the largest part of their marketvalue is their IC, not the sum of their finan-cial and tangible assets. They find that noone have specialized in understanding themechanisms that govern the processes thatresult in valuable IC. They also realize thatno one is responsible for maintaining andimproving the value of these large assets.

What is new–certainly in the form ofbroadly accepted management thrusts–arethe explicit, deliberate, and systematic ap-proaches to orchestrate KM efforts and torely upon their results to achieve enterpriseobjectives. From management’s point ofview, the perspectives, coordination, facili-tation, and monitoring activities necessaryfor active KM require new and different in-

sights, emphases, and approaches. Theyalso require new values, insights, and pri-orities. What is more, they require a newfocus on the role that knowledge and un-derstanding play in the enterprise’s–and inindividuals’–ability to deliver quality work.

Advanced KM now start to rely on newapproaches that integrates theoretical andabstract perspectives of epistemology andcognitive sciences with the pragmatic con-siderations of expertise required to conductbusiness and the technical directions of in-formation management and technology.Three additional conditions have also con-tributed to these developments. First ofthese are AI and management sciences con-cerns for how people reason and think whenperforming intellectual work and the effectof knowledge and understanding to deliverquality work.14 Second are learning theory,social sciences, and psychological concernsfor approaches to effective learning, team-work and collaboration, and for cognitivestyles.15 Third are advances in informationtechnology that allow extending KM prac-tices into new areas by building on ontolo-gies, NLU, automated reasoning, and intel-ligent agents.

New understandings of how people makedecisions have made it clear that previousprinciples for managing knowledge may bemisguided. It now is realized that most de-cisions are made based on “intuition”(strong associations) rather than on delib-erate and systematic reasoning.16 This hasconsiderable consequences for whichknowledge people must possess and howthey are supported to function effectively

14 See Suchman (1995).15 Gardner (1983) op.cit..16 See Bechara et al. (1997) and Klein (1998).


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and deliver quality work under variousconditions.

What May Lie ahead for Knowl-edge Management?

KM promotes development and applica-tion of tacit, explicit, and embedded IC; thatis, leveraging personal understanding, or-ganizational action capabilities, and otherintellectual assets to attain the enterprise’sultimate goals, such as ascertaining profit-ability, ensuring long-term viability, or de-livering quality services. This perspective ofKM, and given its history, suggest that anumber of developments will take place incoming years. They include:

Ø An area of increasing insight in therole that understanding–or meaning-connected knowledge–and abstractmental models play in intellectualwork. The 1990’s notion that “knowl-edge is actionable information” andsimilar early perspectives will be re-placed by more detailed characteriza-tions of both personal and inanimateknowledge. Insights from cognitive re-search and business experiences withdeep knowledge will elucidate what,and how, people must understandhow to handle complex challengescompetently.

Ø Caused by KM’s importance, futurepractices and methods will be pur-poseful, systematic, explicit, and de-pendent upon advanced technology forknowledge capture and codification,automated reasoning, natural lan-guage understanding, and so on.Overall, KM will become people-centric since it is networking of com-petent and collaborating people thatmakes successful organizations.17

17 See Terry Winograd (1988), Cannon-Bowers & Salas

(1999) op.cit., and Wellman (1999).

Ø Extensive experiences will spreadfrom many organizations about howeffective KM is organized, supported,and facilitated. Obvious changes willinclude placement and organization ofthe KM effort itself, be it a ChiefKnowledge Officer (CKO) or a distrib-uted effort. Changes that deal withreorganization of work and the abol-ishing of whole departments whentheir responsibilities are integratedinto other operations, will be preva-lent but less apparent.

Ø Management practices will change tofacilitate KM. Incentives will be in-troduced and disincentives eliminatedto promote innovation, effectiveknowledge exchange (“sharing”),learning, and application of bestknowledge for work. Cultural driverssuch as management emphasis andpersonal behaviors will be changed tocreate environments of trust and ef-forts to find root causes of problemswithout assigning blame.

Ø KM perspectives and considerationswill be embedded in regular activitiesthroughout the enterprise. An exam-ple of how broadly KM may affect anorganization is indicated in Figure 4.It highlights some separate andshared responsibilities for KM-relatedactivities within research and devel-opment (R&D), human resources(HR), information management andtechnology (IM & IT), and a KM su-pervisory function.

Ø New practices will focus on combiningunderstanding, knowledge, skills, andattitudes (“KSAs”) when assemblingwork teams or analyzing require-ments for performing work.18 The em-phasis on complementary work teamswill coincide with the movement to-wards virtual organizations wheremany in-house teams will include ex-ternal workers who are brought in for

18 Cannon-Bowers & Salas (1999), op.cit.


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limited periods to complement in-house competencies for specific tasks.The present use of consultants fromlarge consulting houses is one mani-

festation but is expected to increas-ingly involve self-employed externalknowledge workers.

Enterprise-Wide Knowledge Management

Research & Development FunctionInformation Management & Technology

HR &Competency-BasedHR Management

• Provide General Education and Training Programs• Institute Incentives to Motivate Personal Knowledge Creation, Sharing, and Use • Coordinate and Govern "Integrated Learning Programs" (ILP)• Understand legislation and determine the implications for Enterprise• Provide Metaknowledge to All Personnel

• Hire Personnel for Businesses• Assist in Personnel Evaluation• Support Promotion Assessments• Maintain Personnel Records

• Establish Knowledge Requirements for Quality Work• Conduct Succession Planning• Conduct Specific Skill Training

• Determine R&D Agenda• Transfer Knowledge to Points of Action • Motivate Knowledge Creation • Promote Knowledge Use• Renew and Improve Practices

• Operate R&D Information Environment and IT Resources• Deliver Business-Specific Information Services

• Manage Corporate Memory• Provide KDD Capabilities

• Operate Intranet Personal Homepages • Operate Knowledge-Related Personnel Evaluation & Review System

• Build and Maintain Personnel Data Bases

• Create IT Infrastructure• Create KBS Development Capabilities

• Issue and Manage Personnel Policies• Conduct and Monitor Personnel Management • Provide General Personnel Relation Services

• Identify and Conceptualize Complementary Knowledge Processes across Departments and Other Silos • Oversee Creation of Integrated Comprehensive Knowledge Capture and Transfer Program • Align Knowledge Strategies and Tactics with Enterprise Direction • Create Knowledge-Related Capabilities Shared Across Enterprise • Support Enterprise Strategy and Direction by Facilitating Effective Communication to All• Facilitate and Monitor Knowledge Management-Related Activities and Programs

• Build IT Systems• Conduct Planning and Manage IT• Produce High Quality Information

• Plan and Manage R&D Operations• Develop New Intellectual Capital• Build and Maintain Content Knowledge• Staff Collaborating Teams• Perform Quality Work• Provide on-the-Job Training • Maintain, Renew, and Improve Operating Facilities

Figure 4. Examples of Sole and Shared Responsibility KM Activities.

Ø Most organizations will create effec-tive approaches to transfer personalknowledge to structural IC to allowbetter utilization and leveraging. Ex-ternal subject matter experts will lev-erage and sell their expertise to manyenterprises for continued use.19

Ø Comprehensive approaches to createand conduct broad KM practices willbecome the norm. For example, de-signing, implementing, and operatingcomprehensive multi-mode knowledgetransfer programs will be common.20

Such programs include systematicapproaches to integrate primary

19 See Edvinson &Malone (1997), Stewart (1991), Stewart(1997), and Sveiby (1997).20 Wiig (1995) p. 358 discusses such programs.

knowledge-related functions such as:sourcing from internal and externalknowledge experts; knowledge cap-ture, codification, and organizationinto repositories; deployment (e.g.,training and educational programs,expert networks, and knowledge-based systems [KBSs]); and functionswhere work is performed or knowl-edge assets are sold, leased, or li-censed.

Ø Education and knowledge support ca-pabilities such as expert networks orperformance support systems (PSSs)will be matched to cognitive andlearning styles and dominant intelli-gences.21 That will help workers per-form more effectively. Highly effective

21 See Kurtzman (1999).


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approaches to elicit and transfer deepknowledge will be introduced to allowexperts to communicate understand-ings and concepts and facilitatebuilding corresponding concepts, asso-ciations, and mental models by otherpractitioners.22

Ø KM will be supported by many AI de-velopments. Some of these are intelli-gent agents; natural language under-standing and processing functions;reasoning strategies; and knowledgerepresentations and ontologies23 thatwill continue to be developed and, byproviding greater capabilities, will berelied on to organize knowledge andfacilitate application.

To create broad and integrated capabili-ties, most of the changes introduced bythese developments will not be stand-alone,but will be combined with other changes,many of which have foci different from KM.

Increased specialization in enterprises towork with various KM aspects:

Ø On the Firm level: Expertise with em-phasis on managing IC.

Ø On the middle management level:Understanding the importance ofmanaging local investments in, andcoordination and application of,knowledge assets to meet operatingobjectives.

Ø On the KM level: Enterprise-wide co-ordination and facilitation of KM-related functions, capabilities, and ac-tivities.

Ø On the knowledge-operational level:Local hands-on capabilities to obtainand organize knowledge, automateknowledge and build knowledge-basedsupport and educational systems, and

22 Wiig & Wiig (1999) discuss some existing approachesand the reasoning behind them.23 For an excellent discussion of ontologies and their role in

KM, see Chandrasekaran et al (1999).

retrieve and communicate knowledgeto end users.

Realization that KM is the cornerstone ofevery knowledge-organization’s strategywill bring about:Ø New ways of working–collaboration,

new ways of assembling expertise forspecial purposes.

Ø New roles for people management.Ø New roles for training and education

within the firm.

Ø New roles and methods for knowledgecapture, organization, automation anddeployment.

Ø New focus for management science onorganization of work with knowledgeperspective, change management tofacilitate growth and innovation, andon KM details.

Ø New focus for strategy setting on de-veloping knowledge- and IC-relatedopportunities and associated devel-opment of capabilities to realize andcapitalize on the possibilities.

As organizations develop their KM prac-tice further, most enterprises after sometime will pursue all four thrusts as part oftheir overall KM strategy.

The Changing WorkplaceWe do expect the enterprise to change.

Advances in KM practices will continue tomodify the workplace–sometimes drasti-cally. Visible changes will be evident by in-creased application of, and reliance on,technology for cognitive support comparedto the information focus of the 1980s and1990s. Less visible changes may be moreimportant since they will improve the waypeople work with their minds and therebyalleviate bottlenecks. The changes thatpeople will experience in the workplace in-clude:


14

Ø Emphasis on using interdisciplinaryteams with focus on best mix of com-petencies and understanding to be

applied to the work at hand. Figure 5shows an example of the proficiencyprofile of such a team.

LEGENDI - IgnorantB - BeginnerA - Advanced BeginnerC - Competent PerformerP - Proficient PerformerE - Expert

I

B

A

C

P

E

ExternalSubject Matter Expert

(SME)

In-HouseManagement-Corp Strategy

Specialist

In-HouseProject Leader

In-HouseProject Content

Specialist

In-HouseMarketing - Customer

Specialist

ExternalProject Staff

Specialist

CorporateStrategy and

Direction

Customer ServiceModels and

Their Efficacies

CorporatePolicies

andPractices

DesiredCustomer Service

Paradigm

Market Place;Customer Needsand Behaviors

CustomerService SystemImplementation

and Start-Up

CustomerSupport System

Operations

ProjectManagementand System

Implementation

Analysis &Design of

People/TechnologySystems

Effective Project Team Knowledge Profile

Understanding of

Figure 5. Knowledge Profile Example of a Virtual Team with Six Members.

Ø Temporary nature of many employ-ment situations. Emphasis will beplaced on assembling short-livedteams with complementing knowledgeprofiles to address specific tasks. Peo-ple will improve their personal exper-tise to maintain and enhance personalcompetitiveness.

Ø Good understanding of the importanceof relying upon strong mental associa-tions and conceptual knowledge toguide direction of work.

Ø Better understanding by knowledgeworkers of how to implement enter-prise strategy by the small decisionsand acts that are part of their dailywork.

Ø Greater willingness to collaboratewith associates and coordinate withother activities.

Ø Increased personal understanding byemployees of how they personally willbenefit from delivering effective work.

Ø Greater job security and less hesita-tion to undertake complex tasks afteremployees build increasedmetaknowledge and professional orcraft knowledge about work for whichthey are responsible.

Ø Increased reliance on automated in-telligent reasoning to support work.For example, when confronted withcomplex situations, automation mayassist knowledge workers by identi-fying and making available relevantsupport information and knowledge,making preliminary sense of thesituation, and locating and presentingsuggestions for how it should be han-dled.


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Ø Intelligent agents deployed internallyand externally will offload “data de-tective work” now required to locateand evaluate information required inmany knowledge worker situationsranging from plant operators to adhoc strategic task forces.

Ø New organization of the physical workenvironment will change the way peo-ple work together and allow greaterrichness and effectiveness of interac-tion. New work environments will bedesigned to foster knowledge ex-change through networking and col-laboration and facilitate innovationsthrough serendipity.

Ø Improved understanding of differentlevels of work complexities and whatthat means for knowledge require-ments. A useful categorization of workcomplexity consists of six levels:1. Routine worktasks (simple, repeti-

tive, and well understood).2. Logical or less common variations

(transformations) of routine situa-tions.

3. Complex, yet expected extensions ofknown routines integrated with ex-ternal factors.

4. Unexpected challenges (conditions),but with a mix of routines and ex-ternal factors.

5. Totally unexpected situations andnon-routine challenges, yet withinthe larger job scope.

6. Unusual challenges outside jobscope.

In total, KM will lead to less effort to de-liver present day service paradigms. How-ever, as Figure 6 indicates, work is chang-ing to satisfy the ever-increasing marketrequirements for new features and capabili-ties in products and services. Successful or-ganizations will provide better script andschema knowledge and work will expand to

take advantage of the new capabilities.Even so, with increased responsibilities,knowledge workers are expected to feelmore confident and have better under-standing of work to be done. They also willreceive better knowledge support and morejobs will be done right the first time, addingto confidence and job satisfaction on the in-side, and better market acceptance on theoutside.

The nature of work is changing. Already,we have learned to prepare our workforcebetter, automate many routine functions,and organize work to deliver higher qualityproducts and services more effectively.There is a shift towards more complex workas outlined in Figure 6. There are manyidentifiable targets for intelligent automa-tion in routine areas and potentials for ap-plication of greater understanding and ex-pertise in more demanding work. Advancedtechnology and experiences by sophisticatedorganizations motivate continued refine-ment of work in general. Hence, to stayahead of competitors, enterprises ask theirpersonnel to engage in increasingly complexwork to deliver better products and serv-ices. Service paradigms become more com-plex.

Towards a Knowledge ManagementDiscipline

The changes to manage knowledge ex-plicitly and in detail place great demandson supporting disciplines. They range fromcognitive sciences and educational methodsto management sciences and economics toAI and information management and tech-nology. Enterprises pay new attention tomaintaining and enhancing the competitivepower of their IC. They realize that man-


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aging IC is complex and extensive and re-quires expertise and management atten-tion. The new profession of KM specialists,from several academic fields, is becoming a

reality. As indicated in Figure 7, the disci-plines and other areas that KM relies uponinclude:

1. Routine (simple,

repetitive, andwell understood)

2. Logical or lesscommonvariations

(transformations)of

Routine Situations

3. Complex, yetexpected

extensions ofroutines integrated

withexternal factors

Complexity of Knowledge-Intensiveand Other Work

4. Unexpectedchallenges

(conditions),but with a mixof routines andexternal factors

6. Unusualchallenges

outsidejob scope

5. Totally unexpected

situations and non-routine challenges,

yet within the larger job scope

Targets forIntelligent

Automation

RelativeFrequency ofWork

Potentials forDelivering Work

RequiringGreater Knowledge

Conventional Distribution of WorkFuture Distribution of Work

Figure 6. Changes Will Make Work More Complex.

Disciplines in Support of KM

Ø Business Theory & Economics to cre-ate strategies, determine priorities,and evaluate progress.

Ø Cognitive Sciences to understand howbest to support knowledgeworkers’mental functioning required by theirwork settings.

Ø "Cybrary" Sciences to bring knowl-edge-related services to everyone.24

Ø Ergonomics to create effective and ac-ceptable work environments.

Ø Information Sciences to build sup-porting infrastructure and specialknowledge-related capabilities.

24 “Cybrarians” combine expertise from library science and

cyberspace to obtain and organize information and

knowledge.

Ø Knowledge Engineering to elicit andcodify knowledge.

Ø AI to automate routine and assistknowledge-intensive work with rea-soning and other high-level functions.

Ø Management Sciences to optimize op-erations and integrate KM effortswith other enterprise efforts.

Ø Social Sciences to provide KM-relatedmotivations, people processes, andcultural environments.

General Principles for Effective KMØ Systematic and explicit KM to maxi-

mize the effectiveness of the enter-prise business drivers.

Ø Knowledge-Based vision to providethe long-term basis for a broad KMpractice.


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The EmergingKnowledge

ManagementDiscipline

Information Management & IT

Focus

People-Centric Focus

Intellectual Capital Focus

Enterprise Effectiveness Focus

Land Marks

Key Elements

Principles

Disciplines Knowledge Management

Practices

- Business Theory & Economics- Cognitive Sciences- "Cybrary" Sciences

- Ergonomics- Information Sciences

- Knowledge Engineering & AI- Management Sciences

- Social Sciences Historic Efforts to Understand:- The Nature and Role of

Knowledge (Epistemology)- Role of Knowledge in Human

Behavior (Psychology)- Economics

- Work, and Its Organization

Intellectual Roots of Knowledge Management

- Manage Knowledge Systematically & Explicitly

- Create Knowledge-Based Vision- Identify Knowledge Requirements

- Determine Knowledge TOWS- Align Knowledge Efforts & Enterprise

Direction- Systematize Knowledge-Related Efforts

- Implement with Priority and Purpose

- Documented Knowledge Management and/or Intellectual Capital Strategy

- Documented Knowledge Landscape Map- Senior Management Reliance on KM

- Enterprise-Wide KM Practices- Enterprise-Wide Coordination of Knowledge-

Related Efforts- KM-Supportive Infrastructure

- KM-Supportive Incentive Programs- Knowledge Vigilant Enterprise Focus

Basic & Fundamental Need to Organize & Manage Knowledge

Intellectual andPragmatic Trajectory

External Driving Forces- Globalization of business and

international competition- Sophisticated customers

- Sophisticated competitors- Sophisticated SuppliersInternal Driving Forces

- Bottlenecks in enterprise effectiveness

- Increased technological capabilities- Understanding of human cognitition

Ongoing Developments:- Economics of Ideas

- IM & IT- Cognitive Science

- Shifts in Bottlenecks- Sophisticated Customers

Require Customization- Sophisticated Competitors

- Globalization

- KM-Centered Strategy- IC Management

- IC-Based Evaluations & Administration- Environment for Innovation

- Learning Organization Approach- IT-Based Infrastructure

- IT-Based Knowledge Discovery (KDD)- Knowledge Automation (KBSs)

20th Century Efforts:- Rationalization of Work (Taylor)

- Total Quality Management- Cognitive Sciences & Psychology

- Artificial Intelligence- Management Sciences- Learning Organization

- Business Theory- Sociology

Figure 7. A Perspective of the Emerging Knowledge Management Discipline.

Ø Identification of knowledge require-ments for individual functions to de-termine which knowledge to makeavailable.

Ø Determination of Knowledge TOWS(Threats, Opportunities, Weaknesses,Strengths) to set priorities and de-velop needed KM tasks.

Ø Alignment of knowledge efforts & en-terprise direction to realize the bestvalue of the KM practice.

Ø Systematized knowledge-related ef-forts to make the KM practice effec-tive.

Ø Implementation of KM with priorityand purpose to minimize waste andmaximize KM value.

Key Elements of KM Practices

Ø KM-Centered strategy to achieve ef-fective, integrated KM practice andcoordinate KM activities.

Ø Focused IC management to maximizeoverall value of building and exploit-ing IC.

Ø IC-Based evaluations and administra-tion to optimize local IC investments,utilization, and caretaking.


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Ø Provision of environment for supportof innovation to build competitive IC.

Ø Learning Organization Approach tobuild competitive knowledge fasterthan competition.

Ø IT-Based Infrastructure to provide ef-fective support for KM.

Ø IT-Based Knowledge Discovery (KDD)to learn maximally from the past.

Ø Knowledge Automation (KBSs) tostreamline operations.

Key Elements of KM PracticesØ KM-Centered Strategy to drive to-

wards effective, integrated KM prac-tice and coordinate KM activities.

Ø IC Management to maximize overallvalue of building and exploiting IC.

Ø IC-Based Evaluations and Admini-stration to optimize local IC invest-ments, utilization, and caretaking.

Ø Provide Environment for Innovationto build competitive IC.

Ø Learning Organization Approach tobuild competitive knowledge fasterthan competition.

Ø IT-Based Infrastructure to provide ef-fective support for KM.

Ø IT-Based Knowledge Discovery (KDD)to learn maximally from the past.

Ø Knowledge Automation (KBSs) tostreamline operations.

Landmarks for Developing KM Prac-ticesØ Documented KM and/or Intellectual

Capital Strategy indicating the extentand maturity of KM preparation.

Ø Documented Knowledge LandscapeMap indicating understanding ofknowledge TOWS.

Ø Senior Management Reliance on KMindicating enterprise commitment.

Ø Enterprise-Wide KM Practices indi-cating extent to which KM is pursuedin practice.

Ø Enterprise-Wide Coordination ofKnowledge-Related Efforts indicatingsophistication of KM involvement.

Ø KM-Supportive Infrastructure indi-cating potential efficiency of KM prac-tice.

Ø KM-Supportive Incentive Programsindicating realization that KM is peo-ple-centric.

Ø Knowledge Vigilance indicating reli-ance on knowledge and IC for successand viability.

Knowledge Management Must Jus-tify Its Existence

Most organizations still pursue KM with-out ascertaining that hard business reasonsrequire it. This is changing–and for goodreasons. The premises are that competitiveknowledge backed by deliberate KM areimportant for sustained success and viabil-ity and that the enterprise value largelycomes from IC. It may therefore be irre-sponsible to pursue KM without having ex-plicit understanding of how the efforts willbe of value. There are several reasons forestablishing the effects and benefits of po-tential KM actions. As the example in Fig-ure 8 indicates, the immediate effects, fol-lowed by intermediate and final effects ofthe KM effort should be explicated for fivemajor purposes:Ø To support KM planning, decision

making, and priority setting, and toobtain estimates of magnitude andtimeframe of potential benefits, costs,and risks.

Ø To delineate the nature of expectedand desired KM-related events andagree with stakeholders about suit-able descriptions of expected eventsand their benefits or associated risks,and provide a graphical (visual)framework to support the collabora-tive KM planning process.


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Ø To enable the desired outcomes fromKM efforts, delineate the various ef-fects that are sought or expected withidentification of ancillary activitiesthat must be considered.

Ø To promote understanding of desiredeffects to support implementationover the life-time of the process by de-scribing the events and associatedcharacteristics.

Ø To monitor the KM-influenced eventprocess to manage it appropriately,

and provide sufficient understandingof the anticipated events by outliningexpectations over time in sufficientdetail.

The proposed KM efforts–and later, KMimplementation–need to be outlined insome detail to support these purposes.

KnowledgeManagement

Activities

Internal Benefits & Effects - Operations Focus -

Intermediate Effects and Benefits

Improved Deliverables- Product & Service Focus -

External Benefits & Reaction- Customer & Market Focus -

Bottom-LineBenefits

KBS-RelatedKM Effects

EnterpriseProfitability

EnterpriseViability

Knowledgeablepeople – motivatedto use knowledge

Improved reuse oftechnology &

lessons-learned

Lower operatingcosts – fewer

operating errors

Quicker decisionsLess time from

design to product

Increasedcustomer

satisfaction

Products/serviceswith better fit tocustomer needs

Higher qualityproducts/services

Faster responsesQuicker delivery ofproducts/services

Increasedproducts/services

value to make customer succeed

Increased product/services demandIncreased orders

Greater &easier accessto knowledge

Improvedunderstanding ofrelevant expertise

Increasedknowledge

sharing & creation

More effectiverenewal & removal

of knowledge

KBS to SupportProduction Line

Workers

Elicit & CodifyKey WorkerExpertise

Greater customerproduct/serviceunderstanding

MarketImage

Employee,Community, &

Society Relations

Improved relationsbetween customer

& enterprise

Figure 8. Knowledge Management Activities Are Expected to Progressthrough Internal and External Events to Deliver Bottom-Line Benefits.

Concluding PerspectivesKM will continue to evolve and draw

upon support from many theoretical andmethodological areas. For instance, cogni-tive sciences will increase understanding ofdecision making, cognitive support neededfor work, effective learning, and skillstransfer processes. Research on the natureof intellectual work will explicate how dif-ferent kinds of knowledge is used, should bepossessed, and accessed. Management sci-

ences will provide methods for managing ICrenewal, priorities, and investments. AIand advanced information technology willincrease abilities to supplant and supportcomplex work tasks. New directions such as“Economics of Ideas,” “Economics ofChance,” and Chaos Theory will providenew perspectives and new guidelines foreffective management in the knowledge so-ciety. New models for Theory of the Firmwill elucidate new tactical values, princi-ples, and judgments.


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However, much needs to be done. We donot understand much about knowledge.Our understanding of the cognitive aspectsof human functioning (as related to decisionmasking and knowledge-intensive work) ismarginal. There is not an accepted eco-nomic “theory of knowledge” that is appli-cable to business or daily life. We do nothave a general understanding of how to un-dertake comprehensive and systematic KMwithin an organization. We may need anentirely new theory of the firm to manageknowledge effectively–and to link it prop-erly with enterprise strategy, tactics, anddaily operations–while recognizing that inmost organizations people and their be-haviors contribute much more to the enter-prise success than the assets that conven-tionally are targets of management focus.

One key learning is that we must adoptgreater people-centric perspectives ofknowledge. To be viable, we need constantlearning–led by constant innovation. Tech-nology only goes so far. It can only provideus with rudimentary reasoning devoid ofinnovation and with concrete analyses ofthe past through approaches such asknowledge discovery in databases. Peopleare the intelligent agents that create andact on new opportunities. It is those oppor-tunities that will bring the world forward.

One doctrine of KM is the need to ar-range our affairs to avoid rediscoveringwhat earlier thinkers have created butmaximize the reuse of valid knowledge andpractices. We must adopt this tenet for ourown work in KM.25 General Colin Powellreminds us to “Not invent what is already

25 David Owens, a long-time KM practitioner and academic,

reminds us emphatically about this point

thriving!” Human history is not a history ofcleverness and increasing acuity of vision.KM is not a result of people having becomesmarter, only more knowledgeable bybuilding on powerful concepts inheritedfrom prior generations.

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knowledge management: an emerging discipline rooted in a long

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