Knowledge
Management: An Introduction
Introduction
As the
foundation of today’s global economy moves away from natural resources to
intellectual assets, knowledge has increasingly become the only basis for a competitive
advantage that can be sustained. Rather than land, labor or capital it is
knowledge that is the key factor of production in many industries. In this
“third wave”*, the wealth system is increasingly based
on thinking, knowing and serving
customers in the way of providing them a
unique experience. Companies need superior knowledge to
leverage their traditional resources and capabilities in new and distinctive
ways to serve their customers. And they must do this more effectively compared
to competitors. As a result, Knowledge Management (KM) is being taken seriously
by companies across industries.
A major driver of KM in recent
times has been Information Technology (IT). But KM should not be equated with
IT. It is human beings who think, experiment and learn to create knowledge.
Much of the valuable knowledge that lies in the brains and minds of people can
be best shared through human interaction. IT is only an enabler, though in the words of famous journalist, Thomas A Stewart
,’it is one hell of an enabler’. Without IT, would be quite difficult to
replicate and distribute knowledge related documents in a cost effective way across
an organization that is largely geographically dispersed. As Stewart mentions[1],
“KM is knowing what we know, capturing and organizing it and using it to
produce returns. Nothing in that definition says anything about computers but
modern knowledge management is inconceivable without using them and in some
sense they created it.”
A final point
before we get into more details is that KM should not be looked upon as a new
mantra that can produce a magical impact on the functioning of an organization.
Organizations need to take a practical hard-nosed perspective when it comes to
managing knowledge. Like any other initiative, KM activities will build momentum,
only if they generate business value. That in turn is possible only if KM helps
the organization to cut costs by improving efficiency or to innovate and come
up with new products/services.
Background Note
Development and
sharing of knowledge started from the time God brought man to this world. For
millions of years, human beings had limited ways of passing knowledge to the
next generation. Apart from oral narratives, knowledge died with each dying
person and each dying generation. Fortunately, the pace of change was so slow
that it did not really matter. As Alvin Toffler mentions in his recent book,
“Revolutionary Wealth”, a major breakthrough occurred about 35,000 years ago
when someone drew the first pictograph on a cave wall to mark an important
event. The next turning point in knowledge sharing came when man learnt to
write, enabling future generations to access the knowledge of earlier
generations. The invention of the printing press, which allowed copies of a
document to be made and distributed cost-effectively, was another watershed
event. And in the last 10 years, IT in general and the Internet in particular
have given a new momentum to KM.
When we go through the
history books , we notice that knowledge as a subject, including knowing and
reasons for knowing, was documented by Western philosophers for millennia, and undoubtedly,
long before that. Since ancient times, Eastern philosophers too have emphasized
knowledge and understanding for conducting both spiritual and material life. The
Hindu religion, for example, has laid great emphasis on gaining knowledge. Along
with these efforts directed towards theoretical and abstract understanding of
knowledge, practical needs for expertise and operational understanding have also
been important since the battle for survival first started.
Managing practical knowledge
was implicit and unsystematic at first. Later, it became more systematic. The
craft-guilds and apprentice systems of the 13th century, were based
on systematic and pragmatic KM considerations. So also was the way owners of
family businesses passed on their commercial acumen to their children. Still,
the practical concerns for knowledge and the theoretical and abstract
perspectives were not integrated then.
There was little
change in the need for putting knowledge to practical use until the industrial
revolution changed the economic landscape in the 17th century. The
introduction of factories and the need for systematic specialization, gave an
impetus to knowledge. Still, KM was largely based on traditional approaches
such as a master training an apprentice. Meanwhile, schools and universities
mostly focused on providing education for the elite. Knowledge was approached
from a largely theoretical perspective with little effort directed at
leveraging it for making products and services needed by society.
All this has changed in
recent times. Today KM is increasingly being looked at from a business
perspective. Many organizations have put in place systems and processes for
managing knowledge to cut costs or differentiate their products/services. At
the same time, there is a growing belief that intellectual development plays a
key role in motivating workers and making them more productive in the
workplace. As Peter Senge has mentioned, people in general have a natural
desire to learn. Thus KM can be seen as one more step in the evolution of the
move towards personal and intellectual freedom that started with the age of
enlightenment and reason a few centuries go.
In the years to
come, KM will increasingly be an integral part of corporate strategy for the
following reasons:
·
KM
helps avoid unnecessary work duplication, expensive reinvention of the wheel and
repetition of mistakes. In other words, KM improves productivity.
·
KM softens
the blow when talented people leave the firms, by ensuring that most, if not
all of their knowledge is captured in the company’s systems and processes.
·
KM
improves the agility of the firm by helping it to understand and react to the
environment better.
·
KM can
compress delivery schedules and reduce cycle time, by reuse of components.
Understanding
KM
What exactly do we mean by KM? KM does not have the same meaning across
organizations. Some companies focus on knowledge sharing among individuals or
on building elaborate educational and learning capabilities. Others emphasize the
use of technology to locate, capture, manipulate and distribute knowledge. A
few others focus on knowledge utilization to improve the enterprise’s
operational and overall effectiveness. Still others pursue building and
exploiting Intellectual Capital (IC) to enhance the enterprise’s economic value
and generate sustainable competitive advantage. (See Schools of Knowledge
Management)
While there may be different approaches, in
a broad sense, KM is the systematic and explicit management of
knowledge-related activities, practices, programs, and policies within the
enterprise. The goal of KM is to
build and exploit knowledge assets effectively and gainfully. The key challenge
in KM is to leverage the knowledge of individuals for the benefit of the organization.
By systematically mapping, categorizing, and benchmarking organizational
knowledge, KM makes knowledge more accessible throughout an organization. A
systematic approach to managing knowledge also helps a company prioritize particular
strategic areas of knowledge. This enables the company to strengthen its core
capabilities and compete more effectively in the market place.
As Amrit Tiwana
says [2],
“KM enables the creation, distribution and exploitation of knowledge to create
and retain greater value from core businesses competencies. KM addresses
business problems particular to your business – whether it is creating and
delivering innovative products or services, managing and enhancing
relationships with customers, partners and suppliers or improving work
processes. The primary goal of KM in a business context is to facilitate
opportunistic application of fragmented knowledge through integration.”
[1] Stewart, Thomas A. “The Wealth of Knowledge:
Intellectual Capital and the Twenty-first Century Organization” Currency, 2003.
