© 2003 Dr. Nick Bontis

© 2003 Dr. Nick Bontis www.Bontis.com

All Aboard!Take a Knowledge Journey

Dr. Nick Bontis, Ph.D.

Assistant Professor of Strategic Management, McMaster UniversityDirector, Institute for Intellectual Capital Research

Associate Editor, Journal of Intellectual Capital Chief Knowledge Officer, Knexa Solutions

Hamilton, Ontario, [email protected]


Entering a New Era?

• Agricultural Era– Land as a scarce resource

• Industrial Era– Natural resources and factory production

• Knowledge Era– Knowledge as an abundant resource– Cumulative codification knowledge base– Industry displacement


Internet Research

• Internet users: 30 to 650 million in 2003

• Internet traffic: doubling every 70 days

• Canadian usage: 75% by year 2003

• PCs surpass TVs in # of units sold in 1997

• 50% current storefronts closed in next 6 years


KM Research Highlights• Canada: StatsCanada (348 organizations surveyed)

– 93% have KM initiatives, 25% dedicated budget– Why have KM? – competitive advantage, human capital, IC retention

• U.S.: Conference Board (surveyed Fortune 500)– 80% have KM initiatives in place– 25% have CKOs, 53% have KM staff– 6% have KM initiatives company-wide, 60% < 5 years– KM owned 32% Sr. Mng, 25% HR, 16% IT

• Government at all levels• Institute for Intellectual Capital Research Inc.

– CKOs from 40% HR, 40% IT, plus other


KM Research Highlights II• IDC reports Fortune 500 wasted $12 billion in duplicating work

• Ford reports $914 million savings due to KM from 1997 - 2000• Chevron saved $650 million since 1991 due to KM• Texas Instruments saves $1 billion cumulatively since KM program

launched in mid 1990s

• Gartner Group reports– 90% of FORTUNE 500 working on KM– 33% of FORTUNE 1000 had begun KM programs by 1999– will rise to over 50% by 2003

• World Economic Forum– 95% of CEOs feel that KM is critical to success


The Perspectives

• Human Resources – absorptive capacity, balance• Economics – the multiplicative effect of flow• Accounting – disclosure of intangibles• Training and Development – ROI & collateral• Technology – evasiveness of codification• Finance – Tobin’s q• Organizational Behaviour – telecommuting + free agents• Strategy – CKO, business process and economic value


Importance of Phenomenon

• Bontis (2002)• Fitz-enz (2000), Choo and Bontis (2002)• Max Boisot (1998), Choo (1998)

– Knowledge Assets, Knowing in Organizations

• Sveiby (1997), Stewart (1997), Roos et al. (1997)– Organizational Wealth and Intellectual Capital

• Nonaka and Takeuchi (1995)– The Knowledge Creating Company

• Druker (1993), Toffler (1990), Handy (1989)


Tracing KM’s History

• Egyptians, Greeks, Monks, Knights• Taylor (1911)

– Evidence of codification of knowledge

• Simon (1945)– Cognitive capacity “bounded rationality”

• Schumpeter (1952)– Innovation from new combinations of knowledge

• Penrose (1959)– Organization is a knowledge repository


Distinguishing the Terms

• Intellectual Capital– Stock of knowledge at one point in time

• Knowledge Management– Flow of knowledge from stock to stock

• Organizational Learning– Stock and flow system– Action to convert knowledge into behavioural

changes


Danger of KM

• Devil’s advocate says we are too busy

• Attention is still the scarce resource

• Balance between achievement oriented and paternalistic organizations

• Institutionalize organizational slack– Must send message from above that knowledge

codification is important and necessary


Level of Analysis: Individual

• Recruitment• Building competencies• Assessing weaknesses• Retention• Compensation• Satisfaction

– Level of individual knowledge organizations actually leverage is too low


Level of Analysis: Group

• Sports analogies

• Concerted team action

• Collectively aligned mind sets

• Individual feedback loops

• Shared perception of the business environment


Level of Analysis: Organization

• Strategy, Continuous Improvement, Systems, Technology, Leadership, Structure

• Culture – collective values

• Trust – knowledge sharing versus hoarding

• Spiritual Soul of an organization– WE versus I


IC Conceptualization

• 2nd order construct, multi-dimensional

• 3 sub-domains– human capital, structural capital, relational

capital

• Drivers– Trust, culture, leadership


Nonaka (SECI)

Tacit to Tacit – Socialization

Tacit to Explicit – Externalization

Explicit to Explicit – Combination

Explicit to Tacit - Internalization

FROM

TO

Tacit

Explicit

Tacit Explicit

Socialization Externalization

CombinationInternalization


Metaphors and Analogies

• Stocks and flows– Production system– Manufacturing process– Capacity utilization, Throughput time, Bottlenecks

• Bathtub analogy– Tap and leak (knowledge flow)– Water level (knowledge stock)– Water system (organizational learning)


Measure, Test and EvaluateKM Diagnostic

• Multi-method approach (qualitative and quantitative)IICR Knowledge Audit: survey design (Likert-type)

• Objective proxies (www.Saratoga-Institute.com)– E-mail direction (IICR eFlow Audit)– Knowledge sweeping (dynamic corporate yellow pages)

• Other tools to check out …– SmartShadow.com, BrassRingSystems.com, Chrontech.com

OpenText.comIntraKnexa at Knexa.com

• www.bontis.com/knexa/aboutintraknexa.pdf

– Talent websites

• Tango Simulation … www.Celemi.se


Conceptual Model

ManagerialLeadership

ValueAlignment

Retention of Key People

Human CapitalDepletion

BusinessPerformance

EmployeeSatisfaction

EmployeeCommitment

EmployeeMotivation

EducationHumanCapital

RelationalCapital

Human CapitalEffectiveness

StructuralCapital

ProcessExecution

KnowledgeIntegration

KnowledgeGeneration

KnowledgeSharing

0.751

0.506

0.475

0.530 0.326 0.360

0.358

0.734

0.456 0.429

0.430

0.285 - 0.233

- 0.372

- 0.337

0.327

0.439

0.543

0.491

0.3940.262

0.307

0.442

R2 = 28.5%

R2 = 28.5%

R2 = 68.2%

R2 = 44.1%


KM Continuum

D. Cotey

IICR KM Diagnostic

IntraKnexa Technology

KM Seminars


Elements of KM Programs

D. Cotey


KM Applications Matrix

D. Cotey


Arsenal of KM Tools

D. Cotey

DiagnoseAwareness / storytelling

KM audit / survey Values assessment

Customer focus groups

GatherData warehousing

Information navigationCompetitive IntelligenceEnvironmental scanning

HypothesizeMathematical models

Neural networksKnowledge discovery

Longitudinal forecasting

ContextualizeExpertise locators

Intranet yellow pagesDocument managementVideo teleconferencing

Categorize Taxonomy development

Intranet groupwareText mining

Organizational libraries

MapWorkflow analysisKnowledge maps

Statistical flow timing eFlow Audits

Communicate Apprenticeships

Job rotationOrganizational slack

Ba design/implementation

Disseminate Distributed e-learning

Communities of practiceKnowledge portals

IC reporting / disclosure

Simulate Scenario planning

Expert systemsVirtual organization KM Laboratories

TACIT EXPLICIT EMBEDDED


What can you do tomorrow?

• Conduct a knowledge audit / diagnostic (IICR)

• Tie KM into HR and performance evaluation

• Recruit and hire a leader responsible for intellectual capital & knowledge management

• Classify your intellectual portfolio with a knowledge map (e.g., corporate yellow pages)

• Reduce “don’t know what I don’t know”


What else can you do tomorrow?• Use information technology tools for externalization,

transfer and generation• Increase the ROI on training and development

expenditures (spy and new reimbursement process)• Publish intellectual capital addendum• Education: McMaster, U of T, Queens, Royal Roads• World Congress: http://worldcongress.mcmaster.ca• Research: www.bontis.com/research.htm• Journal of IC: www.emeraldinsight.com/jic.htm• Develop internal markets for knowledge exchange


Knexa.com Enterprises• World’s first knowledge exchange and auction

Canadian technology company rated Top 100 inWorld (Stock symbol: KNX on CDNX)

• An eBay for knowledge assetsA NASDAQ for intellectual capital

• IntraKnexa (ties in HR with IT)– An internal knowledge exchange for corporate intranets that

provides incentive and rewards for employees to share knowledge

• International partners: Europe and Australia• Knowledge Agents and Vortals• IntraKnexa - corporate knowledge exchange


Other Interesting Projects• IICR KM Diagnostic Tool (business and government)

– Contact IICR for further information regarding causal mapping and KM audit• IICR KM Seminars (business and government)

– Special customized presentations to managers and employees• National KM Certification Program (Canadian Centre for Management Development)

– See: http://www.ccmd-ccg.gc.ca/events/workshops/KM/across_e.html• KM Education (McMaster, Royal Roads, Tangonow, KMCI)

– See: www.bontis.com/p727.htm www.royalroads.ca www.tangonow.net www.kmci.org• eFlow Audit (codified proxy of e-mail flow)• kFactory Assessment (capacity utilization, throughput, bottlenecks)• Ba best practices (office design, Steelcase), organizational slack• World Congress on Intellectual Capital and Innovation Hamilton Jan 14-16, 2004

– See: http://worldcongress.mcmaster.ca• Get 30 day free trial of the Journal of IC (http://www.emeraldinsight.com/jic.htm)• Books: 1 text Oxford U. Press with Choo, 2 compilations with BH KMCI Press

– See: www.bontis.com/research.htm• Knexa.com (IntraKnexa - incentive methodology for ICUs and knowledge sharing)

– See: www.bontis.com/knexa/AboutIntraKnexa.pdf


Thank you!

Dr. Nick Bontis, Ph.D.

Assistant Professor of Strategic ManagementDeGroote Business School, McMaster University

1280 Main Street West, MGD #207Hamilton, Ontario, Canada L8S 4M4

Tel: (905) 525-9140 x23918 Fax: (905) 521-8995

Director, Institute for Intellectual Capital Research Inc.CKO (Chief Knowledge Officer), www.Knexa.com

Associate Editor, Journal of Intellectual Capital

[email protected] www.Bontis.com

© 2003 Dr. Nick Bontis

Documents

Transcript of © 2003 Dr. Nick Bontis