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Knowledge Management
Minder Chen, Ph.D.
MBA 550
Process
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Knowledge Management
Introduction
Case Studies
KM Principles
Framework for Knowledge Management IT Enablers for Knowledge Management
Implementation of Knowledge Management
Some of the Big-Six Internal Practices
Conclusions
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Reference Books: The Know ledge-Creat ing Company : How Japanese Companies Create
the Dynamics o f Innovat ionby Ikujiro Nonaka, Hirotaka Takeuchi,Takeuchi Nonaka, Published by Oxford Univ Pr (Trade), May 1, 1995
Working Knowledge : How Organizations Manage What They Know, byThomas H. Davenport, Laurence Prusak, Published by McGraw-Hill,December 1, 1997
If Only we Knew What We Know : The Transfer of Internal Kn ow ledgeand Best Practic e, Carla O"dell and C. Jackson Grayson, Jr., Free
Press, 1998. Wellspr ings of K now ledge : Bu i ld ing and Sustain ing the Sources of
Innovat ion, by Dorothy Leonard-Barton, Published by HarvardBusiness School Press, October 1, 1995
Know ledge Management Tools(Resources for the Knowledge-Based
Economy) by Rudy L. Ruggles (Editor), Published by Butterworth-Heinemann, December 1, 1996
Intel lectual Capital : The New Wealth of Org anization s, by Thomas A.Stewart, Published by Doubleday, March 1997
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Knowledge Management (KM)
"I wish we knew what we know"
- a CEO -
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Definition of KM
Know ledge Management is the broad
pro cess o f locat ing, organizing ,t ransferring, and us ing the informat ion and
expert ise w ithin an organizat ion .
The overal l know ledge management
process is supported by fou r key enablers:
leadersh ip, cu lture, techno logy, and
measurement.
-- American Productivity & Quality Center
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Knowledge Hierarchy
Wisdom
Knowledge
Information
Data
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Information Information has meaning, relevance and purpose.
Information is organized with purpose and it can
potentially shape the receiver.
Data becomes information when its creator addsmeaning. We transform data into information by addingvalue in various ways:
Contextualized: we know for what purpose the datawas gathered
Categorized: we know the units of analysis or keycomponents of the data
Calculated: the data may have been analyzedmathematically or statically
Corrected: errors have been removed from the data
Condensed: the data may have been summarized in amore concise form
Source: Working Knowledge, p4
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Knowledge
Knowledge guides us in the process of analyzingdata and utilizing information.
Knowledge derives from information asinformation derives from data. Thistransformation happens through the followingprocesses:
Comparison: how does information about the situationcompare to other situations we have known?
Consequences: what implications does the informationhave for decisions and actions?
Connections: how does this bit of knowledge relate toothers?
Conversation: what do other people think about thisinformation?
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Wisdom Is
Unselfish
Enlightening
Insightful
Uncommon common sense Creative interpretation of patterns or
phenomenon
Applying knowledge and information for thegoodness of the world
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Information Overloading (Pollution)
"The impact of information is obvious. Itconsumes the attention of its readers.
Therefore, a wealth of information creates apoverty of attention."
-- Herbert Simon --
"Information absorbs the attention of therecipient. Therefore an overabundance ofinformation creates a deficit of attention."
-- Jeff Hire, Owens Corning Fiberglass --
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Moving Up the Knowledge Hierarchy
Where is the knowledge we have lost ininformation?
Where is the wisdom we have lost in knowledge?
Where is the life we have lost in living?
T.S. Eliot, Choruses from "The Rocks," 1934
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Buckman Labs
Buckman Labs makes chemicals - but itsells knowledge. The challenge: invent away for the global sales force to spendmore time with customers and share itsbrainpower. What CEO Bob Buckman came
up with was
Source: Glenn Rifkin, "Buckman Labs In Nothing but Net," Fast
Company, June-July 1996, p. 118
http://www.fastcompany.com/03/buckman.html
Nothing but Net
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Knowledge Network
Close the gap with the customer. Stay in touchwith each other. Bring all of the company's
brainpower to bear in serving each customer. How do we stay connected?
How do we share knowledge?
How do we function anytime, anywhere - no matterwhat?
"When you ask one person a question, youhave the power of 1,200 employees behind you."
"Our knowledge network is the pillar of ourculture. And it's there to help you (thecustomer)."
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K'Netix
Used CompuServe to set up intra-companyprivate bulletin boards and e-mail access
($75,000 in monthly access charges).
Every Buchman salesperson has an notebookcomputer with a modem.
A case in point :1 question on pitch-controlstrategies, received 11 replies from 6 countries,and secured a $6 million order from a
Indonesian mill.
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Lessons Learned at Buckman Labs Effectively engage with the customer on the front line:
To deploy knowledge at the point of sale
To win business and serve the customer By creating private forums for core customers
Knowledge sharing is power. The most powerful people are those who become a source of
knowledge by sharing what they know
Knowledge builds trust, trust build knowledge. "What happen here is 90% culture change. You need to change
the way you relate to one another. If you can't do that, you won'tsucceed."
New knowledge, new metrics. The number of people in the organization working on relationship
with the customer, relative to the total people of the organization,will determine the momentum of the organization (1979: 16%1997: 50%)
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Knowledge Management Principles KM is expensive (but so is stupidity!)
Effective management of knowledge requires hybrid
solutions of people and technology. KM is highly political.
KM requires knowledge managers.
KM benefits more from map than models, more frommarkets than from hierarchies.
Sharing and using knowledge are often unnatural acts.
KM means improving knowledge work processes.
Knowledge access is only the beginning. KM never never ends.
KM requires a knowledge contract.
Source: Thomas Davenport, "Some Principles of Knowledge Management,"
http://www.utexas.edu/kman/kmprin.htm
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Knowledge Management Principles
The more your share, the more you gain.
The knowledge acquisition process should bepart of the work process.
Integration of knowledge from multiple
disciplines has the highest probability ofcreating new knowledge and value-added.
Knowledge valuation should be conducted from
customers perspective.
KM focus should be on core knowledge criticalto sustaining companys competitive edge.
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Organizational Knowledge Management Model
Share
Create
Identify
CollectAdapt
Organize
Apply
Leadership KM Process
Technology
Source: Adapted from Arthur Andersen and the American Productivity and Quality Center
Organization
Group
Individual
BusinessProcess
Culture
PerformanceMeasurement
K l d M t C t t
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Knowledge Management Context
IT Infrastructure
Business Environment
Business Process &
Work Environment
Context & Content
IT infrastructure is a critical component of knowledgemanagement (KM); however, KM encompasses much
more than IT does.
Business strategy/goals Customer/supplier alliance Competitive factors
Collaborative processes Information sharing Process teams Reward system
Intranets/groupware/e-mail Object databases Document management Videoconferencing/EMS
Best practices External/internal knowledge
Process models/templates
K l d A t
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Knowledge Assets
Codified Knowledge Assets (Legally Owned)
PatentsCopyrightsTrademarksDocuments
Working Solutions Web of Relationships Communities of Practice Experience
Expertise and Theoretical Knowledge Database
Tip of the
iceberg
Source: The Knowledge Evolution, p. 35
K l d M t C l
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Knowledge Management Cycle
Acquisition
Storage
Dissemination
Integration
Creation
Learning
Utilization
Categorization
K l d M t C l
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Knowledge Management Cosmology
Gathering Data entry, OCR Pull Search Voice input
Organizing Cataloging Filtering Indexing Linking
Refining
Compacting Collaborating Contextualizing Mining
Disseminating
Push Sharing Alert Flow
KnowledgeManagement
Source: Adapted from Jeff Angus and Jeetu Patel, Knowledge-Management
Cosmology, Information Week, March 16, 1998, p. 59.
Th f O i ti l K l d C ti
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Theory of Organizational Knowledge Creation
Tacit Knowledge Explicit Knowledge(Subjective) (Objective)
Knowledge of experience Knowledge of rationality(body) (mind)
Simultaneous knowledge Sequential knowledge(here and now) (there and then)
Analog knowledge Digital knowledge(practice) (theory)
Source: Knowledge-Creating Company, p. 57.
Tacit knowledge is personal, context-specific, andtherefore hard to formalize and communicate.
Explicit or codified knowledge is transmittable in formal,systematic language.
Two Dimensions of Knowledge Creation
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Epistemological
Dimension
Explicit
Knowledge
OntologicalDimension
TacitknowledgeIndividual Group Organization Inter-organization
Knowledge Level
Two Dimensions of Knowledge Creation
Current
Focus
Source: Adapted from Knowledge-Creating Company, p. 57.
F M d f K l d C i
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Four Modes of Knowledge Conversion
Socialization Externalization
Internalization Combination
Tacit
knowledge
Explicitknowledge
Tacit knowledge Explicit knowledge
To
From
Source: Knowledge-Creating Company, p. 62.
1 + 1
3
F M d f K l d C i
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Four Modes of Knowledge Conversion
Socialization: A process of sharing experiences
Apprenticeship through observation, imitation, and practice
Externalization: A process of articulating tacit knowledge into explicit concepts
A quintessential knowledge-creation process involving the creationof metaphors, concepts, analogies, hypothesis, or models
Created through dialogue or collective reflection Internalization:
A process of embodying explicit knowledge into tacit knowledge
Learning by doing
Shared mental models or technical know-how
Documents help individual internalize what they experience
Combination: A process of systemizing concepts into a knowledge system
Reconfiguration of existing information and knowledge
Metaphor and Analogy for Concept Creation
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Metaphor and Analogy for Concept Creation
Product(Company) Metaphor/Analogy Influence on Concept Creation
City Automobile Evolution Hint of maximizing passenger
(Honda) (metaphor) space as ultimate auto developmentMan-maximum,machine-minimum
The sphere Hint of achieving maximum passenger(analogy) space through minimizing surface area
Tall and short car(Tall Boy)
Mini-Copier Aluminum beer can Hint of similarities between(Canon) (analog) inexpensive aluminum beer can
and photosensitive drum manufactureLow-cost manufacturing process
Home Bakery Hotel bread Hint of more delicious bread(Matsushita) (metaphor)
Osaka International Twist doughHotel head baker(analogy)
Source: Knowledge-Creating Company, p. 66.
Knowledge Spiral
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Knowledge Spiral
Socialization Externalization
Internalization Combination
Dialogue
(Collective Reflection)
LinkingExplicitKnowledge
FieldBuilding
Learning by Doing
Source: Knowledge-Creating Company, p. 71.
Contents of Knowledge Created in Four Modes
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Contents of Knowledge Created in Four Modes
To
From
Source: Knowledge-Creating Company, p. 72.
Tacitknowledge
Explicitknowledge
Tacit knowledge Explicit knowledge
(Socialization)SympathizedKnowledge
(Externalization)ConceptualKnowledge
(Internalization)OperationalKnowledge
(Combination)Systemic
Knowledge
Sympathized knowledge:Shared mental models and technical skills.
Conceptual knowledge:Analogies & metaphors of products or processes.
Systemic knowledge:Prototypes or new technologies.
Operational knowledge:Project management, production process, new
product usage, and policy implementation.
Two Dimensions of Knowledge Creation
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Epistemological
Dimension
Explicit
Knowledge
OntologicalDimension
Tacit
knowledgeIndividual Group Organization Inter-organization
Knowledge Level
Two Dimensions of Knowledge Creation
Source: Adapted from Knowledge-Creating Company, p. 73.
Two Ways of Knowledge Transfer
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Two Ways of Knowledge Transfer
Information
Transfers articulated information
Independent of the individual
Static
Quick
Codified
Easy mass distribution
Uncodified
Slow
Dynamic
Dependent and independent
Transfers unarticulated
and articulated abilities
Tradition
Difficult mass distribution
Source: The New Organizational Wealth, p. 45
Japanese-Style vs Western-Style Organizational Knowledge Creation
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Japanese-Style vs. Western-Style Organizational Knowledge Creation
Group-based Tacit knowledge-oriented
Strong on socialization andinternalization
Emphasis on experience
Danger of group thinking & over-adaptation to past successes
Ambiguous organizational intention
Group autonomy
Creative chaos through overlappingtasks
Less fluctuation from topmanagement
Less redundancy of information
Requisite variety through cross-functional teams
Japanese Organization Western Organization
Individual-based Explicit knowledge-oriented
Strong on externalization andcombination
Emphasis on analysis
Danger of paralysis by analysis
Clear organizational intention
Individual autonomy
Creative chaos through individualdifferences
Less fluctuation from topmanagement
Less redundancy of information
Requisite variety throughindividual differences
Communities of Practice
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Communities of Practice "A group of people who are informally bound to one
another by exposure to a common class of problem,common pursuit of solutions, and thereby themselves
embodying a store of knowledge."-- Brook Manville, Director of Knowledge Management at McKinsey & Co.
Shadowy groups called communities of practice arewhere learning and growth happen. Learning is social.
The shop floor of human capital.
You can't control them -- but they are easy to kill if you tryto manage them.
They have history -- they develop over time. A community of practice has an enterprise - but not an
agenda.
They develop customs, culture, and a way of dealing with
the world they share. Source: Thomas Stewart and Victoria Brown, "TheInvisible Key to Success," Fortune, August 5, 1996.
Knowledge Categorization
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Knowledge Categorization
Knowledge of products/services
Knowledge of processes/procedures
Knowledge of production technology
Knowledge of customers and markets
Knowledge of your competitors
Knowledge of your own people
Meta-knowledge
KM Enabling Technologies
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KM Enabling Technologies
Groupware
Data warehouse and data mining
Expert systems and knowledge based systems
Intranet
Electronic Performance Support Systems
CBT, WBT
Problem/Solution Database (Case-BasedReasoning Systems)
Knowledge Acquisition Sample
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Knowledge Acquisition Sample Goal:To capture the knowledge of high-performance Customer Service
Representatives (CSR)
Fosters learning
If the high-performing CSR left the firm, their knowledge wouldremain
Know ledge Needed:
What roles do the CSRs play? (expert, confidant, friend, salesman,
sympathizer?) What makes one CSR better than another?
What skills are required to be a good CSR?
What kinds of knowledge do CSRs need (procedures, regulations,products, industry trends)?
How do CSRs get this knowledge and keep it current? What knowledge and skills are not supported by current tools and
training?
What personality types tend to be more effective in this job?
APQC KM Inventory
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APQC KM Inventory1. Do you know what knowledge you have now? Who has
it? How to get it?
2. Are you systematically transferring knowledge insideyour own organization? How? Who?
3. Are you systematically acquiring outside knowledge?How? From whom? Is it being used?
4. Are you creating new knowledge? How? Where? Who?Is it being captured? Shared?
5. Are you leveraging knowledge: As a product? In yourproducts?
APQC KM Inventory
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APQC KM Inventory6. Are you measuring your knowledge assets? Your
return on knowledge? Are you investing in it? Wheredoes the investment appear in your financials?
7. Are you using technology to acquire, disseminate, andtransfer knowledge? To everyone? Everywhere?Anytime?
8. Are you encouraging...or discouraging...knowledgesharing? Are people sharing? If not, why not?
9. Do senior managers understand and supportmanagement of knowledge as a business strategy?
10. Are you looking at metaphors from the "new science"to help improve knowledge management?
Friction and Possible Solutions
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Minder Chen, 1996-2010 KM - 39Source: Working Knowledge, p. 97
Friction and Possible Solutions Lack of trust
Build relationships and trust through face-to-face meetings
Different cultures, vocabularies, frames of reference
Create common ground through education, discussion, publications,teaming, job rotation
Lack of time and meeting places:narrow idea of productive work Establish times and places for knowledge transfers:fairs,talk
rooms,conference reports
Status and rewards go to knowledge owners Evaluate performance and provide incentives based on sharing
Lack of absorptive capacity in recipients Educate employees for flexibility; provide time for learning; hire for
openness to ideas
Belief that knowledge is prerogative of particular groups not invented
here syndrome Encourage nonhierarchical approach to knowledge; quality of ideas more
important than status of source
Intolerance for mistakes or need for help Accept and reward creative errors and collaboration; no loss of status from
not knowing everything
Ernst & Youngs Framework for KM
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Ernst & Young s Framework for KM
Acquire Engagement
based Non
engagementbased
External
Input, Purge
Archive, Abstract Index, Catalog Coordinate Content
Storage
Add Value Identify needs Research Develop
proprietary
Package
Deploy On-demand Repeatable Event-based Subscription
Commercialize Monitor usage Measure
satisfaction
Provide InfrastructureOrganization - Culture - Technology - Public Relations
Source: Ernst & Young, and A Note on Knowledge Management, Harvard Business School 9-398-031, 1997
KPMG Peat Marwick U S : The Giant Brain
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KPMG Peat Marwick U.S.: The Giant Brain
Function Assurance
Tax Consulting
Line of Businesses Financial services
Healthcare & life services
Information and communication & entertainment
Manufacturing, retail, and distribution
Public services
GeographicAreas West
Southwest
Midwest
Southeast
MidAtlantic
Northeast
KPMG Intranet Categories
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KPMG Intranet Categories
Industry
Competitor
Client
Practice
Engagement
Product
News
Web
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