knowledge management1 = information combined with experience, context, reflection, interpretation...

Knowledge management 1

Knowledge management= information combined with experience,

context, reflection, interpretation Davenport, DeLong, & Beers Sloan

Management Review 1998

= formal process of figuring out what information company has that can benefit others in company & developing ways to make it easily

available Harvard Management Update February 1999


Knowledge management forms Knowledge management can take many forms:

Simple procedures to archive & reuse templates, outlines “boilerplate” clauses (law firm) and project proposals

Elaborate hierarchical “knowledge bases” Customer contact histories Best practices Solutions in various contexts

Face-to-face “communities of practice”


Knowledge management in oil & gas

Learning comes from knowing where you’ve been “We can improve production and cut operating costs

by doing post-mortem work, quarterly look-backs, etc.”

“You create advantage from your history by codifying the learning process”

============= Beyond oil & gas: Buckman Labs: water treatment

chemicals Pioneer in equipping technical sales force with

laptops loaded with best practice and solutions Sales force could contribute & query via e-mail

Borrelli - Collaboration & competition in oil & gas


Knowledge management process

Creating repository of information about best practices,

Setting up networks for transferring information between employees who interact with customers and those who create the product / service

Creating formal procedures and incentives to ensure that lessons learned in projects are passed along to others doing similar tasks

Harvard Management Update February 1999


Two knowledge management strategies

1. People-to-documents Develop electronic document

system to collect, disseminate & reuse codified knowledge

High investment in IT HR strategy

Hire college grads who are suited to reusing knowledge and implementing solutions

Train in groups & DL Reward for contributing to KM

databases

2. Person-to-person Develop networks for

linking people to share tacit knowledge

Low investment in IT HR strategy

Hire MBAs who like problem solving and tolerate ambiguity

Train one-on-one by mentoring Reward for sharing knowledge

with others

Hansen, Nohria & Tierney HBR 1999


Knowledge management strategies in consulting firms

1. Codification strategy (people-to-documents) Andersen Consulting Ernst & Young

Provide high-quality, reliable, & fast solution Apply codified

knowledge (“reuse”)

2. Personalization strategy (person-to-person) McKinsey & Co. Bain & Co

Provide creative, analytically rigorous advice High-level strategy

problems Channel individual

expertise



Knowledge management strategies in consulting firms-2

1. Codification strategy Andersen Consulting Ernst & Young

REUSE LOGIC Invest once in

knowledge asset => reuse many times

Revenue generated by high volume ($600/d)

Large teams High ratio associates to

partners

2. Personalization strategy McKinsey & Co. Bain & Co

EXPERT LOGIC Charge high fees for highly

customized solutions to unique problems

Revenue through high margins ($2000 fee/day)

Small teams Low ratio associates to partners



Knowledge management strategies in other firms

1.Codification strategy codified knowledge Health

Access Health call-in center

Nurse uses “clinical decision architecture” to assess symptoms (300 algorithms)

Computers DELL

Assemble to order 40,000 possible

configurations

2. Personalization strategy tacit knowledge Health

Memorial Sloan-Kettering Cancer Center, NYC

Intense face-to-face collaboration between researchers and clinicians and between types of clinicians

Computers Hewlett-Packard

Emphasis on person-to-person exchanges to share tacit knowledge



Incentives in knowledge management strategies

Codification strategy codified knowledge Need to encourage

people to record what they know and enter documents into electronic repository

Contributions to (quantity and quality) and utilization of knowledge base need to be part of annual performance reviews

Personalization strategy tacit knowledge Need to encourage

people to share knowledge directly with others

Help to colleagues forms part of annual performance review

Up to 25% of compensation at Bain



Knowledge management pitfalls

Mixing the 2 strategies inappropriately

Ok to do 80%/20% split Excessive codification undermines

personalization strategy by delivering standard solutions

Excessive costly person-to-person interaction undermines cost-structure of codification strategy



Knowledge management pitfalls - 2

Starting too big Need pilot projects & success stories before

gearing up Overinvesting in knowledge management

Payoffs greatest if multiple locations or large number of employees

Overinvesting in the IT side for technology “fix” If you build IT, they won’t necessarily come. Often need human help desks + search engines Anecdotal stories may be more effective than IT


Knowledge management pitfalls - 3

Neglecting the cultural prerequisites of KM Pride of authorship can inhibit learning from other or

previous solutions (World Bank challenge) Experts may feel sharing threat to job, skills, power

Neglecting formal incentives to contribute & use Need to reward those who share knowledge

Neglecting need to “walk the talk” Model the desired knowledge sharing Ask people

How they’re leveraging knowledge How they’re sharing knowledge from last project


Starting too big: Africa region, World

Bank Roome’s “KM cathedral” for Africa: page 6 of

12 InformaticsPresentation:MainstreamingInformatics intoprojects andawareness raising

Funded by KLC

Regional presentationconducted.

Strategy discussed andagreed with the teammembers.

Meetings with 3 countryDirectors.

Meetings with InformaticsNetwork to create a Bank-wide strategy.

Regional presentation. Planned meetings with 2 CDs

to discuss IT portfolio andCAS review.

Planned 1-2 joint presentationwith Informatics team.

Joint retreat with IENTI toaddress common issues

Positive impact in responseto the presentation is: moreproject reviews, and projectassessments. Cost savings,and project efficiency inprojects.

Overcoming TTL's hesitationbecause of lack of funds – byincreasing upstream CAS focus.

To find ways and means ofmainstreaming the Informatics.

Management intervention forraising awareness.

Project Reviews(Portfolio, CAS,Project Reviews, ITBest Practices)IT Initiatives.

Funded by KLC

3 reviews are completed. Meetings with network.

counterparts to preparestandards, guidelines anddatabases etc.

2, IT best practices areplanned.(Social Fund MIS,Financial Sector MIS)

2 CAS Reviews are planned,

with 1 more in pipeline.These CASes will start inApril and June respectivelywith 6 expected staff weekseach for completion.

Review of IT portfolio andCASes will reveal theweaknesses and the strengthswithin the country portfolioand IT structure. This mayserve as both IT strategy forthe country, and earlydetection system for projectswith potential IT problems.Bottom line is efficiency andbetter resource managementfor Africa region.

How to make Informatics part ofCAS and portfolio review.

How to fund this activity. How to raise awareness amongst

the CT directors. How to bring best strategic advice

from across the Bank to everyassignment – through networkcollaboration

Informatics ProjectSupport.

Project Reviews(Portfolio, CAS,Project Reviews, ITBest Practices)IT Initiatives.

Funded by CD’s

7, projects are completed. Partnering with Y2K team

will work jointly onseveral Y2K and other ITissues in East Africa.

1 IT portfolio reviewcompleted.

8 IT project componentreviews are completed,some of these were fundedby KLC.

6, projects in pipeline. Discussion with CT directors

and partnering with Y2Kteam to resolve common ITissues.

Partner with anchor group toprovide larger skill pool.

2 IT portfolios are planned. At least 8 other IT

components reviews inpipeline.

Cost savings and efficiencyfor the departments, projectand our partners.

Joint efforts with otherteams to resolve issues andraise funds.

Mainstreaming the Informaticssupport.

Appropriate team training oncritical issues such as ITprocurement,. and similar topics isessential.

Long term planning may requirefor additional resources to handleInformatics.

Building a network of expertswithin the Bank and a roster ofconsultants outside – to supportsuch operations


Starting too complex

Over-engineering the KM process One firm defined organizational

learning as having 4 subprocesses

15 sub-subprocesses 53 sub-sub-subprocesses

At end of 12 months only 5 percent of project had been implemented

Davenport, DeLong, & Beers SMR 1998


Knowledge management projects

Study of 31 KM projects in 24 companies Common features

Creating knowledge repositories External knowledge (competitive intelligence) Structured (more codified) internal knowledge:

research reports, product attributes, technologies Informal (more tacit) internal knowledge: best

practices, lessons learned, discussion databases Improving knowledge access Enhancing knowledge environment Managing knowledge as an asset



Knowledge management projects - 2

Creating knowledge repositories Models for collecting, pruning, classifying,

interpreting, routing information Discussion threads (Lotus Notes or Web) for

tacit knowledge Improving knowledge access

Electronic Yellow Pages & search engines Communities of practice with help desks Video conferencing




Enhancing knowledge environment Change incentives, norms to encourage

contributions to and use of knowledge base e.g. Value time to market more than original design Formal incentives Risk of over-structuring the process

Managing knowledge as an asset Skandia, Sweden (financial services)

Intellectual capital audit included in annual report to shareholders

Leveraging patents (Dow, Texas Instruments)




Hypothesized attributes of successful KM Link to economic performance / value Appropriate technical & organizational infrastructure

(National Semiconductor: engineers on Web, sales force on Lotus Notes for laptop replication)

Standard but flexible knowledge structure Knowledge-friendly culture (downsizing hurts) Clear purpose (distinguishing knowledge from data) Change in motivation, incentives Multiple channels for knowledge transfer

Face-to-face aids KM “bandwidth” Senior management support (Wolfensohn: W&S)



Knowledge management at World Bank Changing context:

Official development assistance declining relative to private capital flows to developing countries

Down to 1/5 of total flows prior to Asia crisis But private flows highly concentrated:

China, Mexico, Indonesia etc. not Rwanda, Bhutan, Paraguay, Haiti, etc.

World Bank Strategy Become Knowledge Bank for development KM strategy launched mid-1990s


STRATEGIC CONTEXT Strategic Compact ‘97: “...Making the Bank a

premier global knowledge organization is priority.” World Bank Development Report ‘98: “Knowledge

has become...the most important factor [ in development ].”

Action Review of Knowledge Management ‘99: “Knowledge Bank [requires] mobilizing global knowledge from inside and outside the organization and applying it to solve local development problems in timely fashion.”


The vision

By 2000, the World Bank Group is the first port of call for development expertise: - good practice & cutting edge knowledge - internal and external sharing - global network - common institutional approach


Implementation

Pilot KM projects

#s of knowledge objects

Coverage of help desks

Coverage of sectors in KMS

Sep 96Yes

100

5%

5%

Sep 97Yes

2030

40%

25%

Yes

(Yes)

(30)

Governance mechanism

Budget for KM

Thematic Groups

--

--

--

--

Yes

5800

Most

Most

Yes

Yes

(100+)

Decided

(Yes)

Sep 98

KM in personnel evaluation

Staff use of KM resources

--

--

--


Knowledge management at World Bank

World Bank external advisory panel for KM: Bob Buckman (Buckman Labs) Wendy Coles (General Motors) Carlos Cruz (Monterey Tech Virtual University) Tom Davenport (Andersen Consulting) Eric Darr (Ernst & Young) Kent Greenes (BP) Brook Manville (McKinsey), plus consultants: Larry Prusak (IBM Institute for KM), etc.


Knowledge management at World Bank - Challenges (April 1999)

Top management needs to restate knowledge management strategy as route to Knowledge Bank goal Less than half of respondents thought strategy was

clear 3 of 5 “Networks” (broad groups of specialists) had

effective knowledge collections on intranet 4 of 6 Regions had knowledge management activities DEC & WBI considered all of their activities to be

knowledge management, no separate budget Key units not aware of or not acknowledging key

components of knowledge management


Knowledge management at World Bank - Challenges - 2

Thematic groups (more than 110) were found to be functioning well overall (communities of practice) but wide variation in activity & quality 70% felt thematic groups added value

Bank-wide directory of expertise (30% coverage) not linked to thematic groups, not searchable


Knowledge management at World Bank - Challenges - 3

Electronic knowledge resources highly fragmented and scattered over

Intranet Regional vs. Networks Some domains well organized but

Many empty taxonomy trees & 900 dead ends External web, and Lotus Notes

Other issues Only 13% felt there were adequate incentives for

knowledge sharing Only 37% of respondents found knowledge resources

easily accessible


Dissent on knowledge management

Knowledge management (or intellectual capital) focuses mainly on cognition rather than action

Crossman, Lane & White urge focus on organizational learning to link cognition and learning Organizational learning involves

interplay Exploration - assimilating new learning Exploitation - using what has been learned

Crossan, Lane & White (AMR 1999)


Organizational learning Organizational learning occurs at 3 levels:

individual, group, and organization, through Intuiting

individual level Interpreting

individual and group levels Integrating

group level Institutionalizing

organizational level

Crossan, Lane & White (AMR 1999)

knowledge management1 = information combined with experience, context, reflection, interpretation...

Documents

knowledge management5

reusing knowledge

knowledge asset

tacit knowledge hansen

codified knowledge reuse

tacit knowledge low

codification strategy

codification strategy