Transcript Document 7249902

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Introduction: The Problems and
Importance of Knowledge Management
By
B. Nugroho Budi Priyanto
Ref. [Tiwana chapter 1 & 2]
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Long before terms
•
•
•
•
•
Expert system
Core competencies
Best practices
Learning organizations
Corporate memory
• The only sustainable source of competitive
advantage is their knowledge.
• Drucker: “those who wait until this challenge
indeed becomes a ‘hot’ issue are likely to fall
behind, perhaps never to recover.”
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Eras of knowledge management
Era
Expert
Systems
Document
Management
It's On
The Web
Managing
Knowledge
Work
Scarce
Expertise
Leveraging
Dispersed
Content
Connecting
Scattered
Community
Coordinating
Distributed
Talent
Metaphor
Expert
in a box
Library
Yellow
Pages
Commonplace
Book
Iconic
Technology
Rules
Based
System
Document
Repository
Portal
Weblog
Knowledge
Engineer
Librarian
Webmaster
Individual
Knowledge
Worker
XCON
Knowledge
Exchange
Yahoo
Scripting News
Gating Factor
If...Then Rule
Taxonomy
Search
Newsfeed
Metaphorical
Quote
"Only the
Shadow Knows"
"The Bible says..."
"Where is...?"
"Look what
I'm doing"
Experts can't
decode tacit
knowledge
Libraries are a necessary
but not sufficient
condition for effective
knowledge use
Signal/noise ratio
overwhelms search
engines.
Self-organizing isn't
Augmentation works
better than
automation
Motivating
Issue
Key Role
Archetypal
Example
Lesson
Learned
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Why knowledge
• Knowledge management is evident.
• 98% of senior manager of KPMG survey
believe the reality of KM
• London Times calls it the “fifth discipline”
after business strategy, accounting,
marketing and human resources
• 40% of the US economy is directly
attributable to the creation of intellectual
capital
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What’s knowledge?
• Working definition of knowledge by
Thomas Davenport and Laurence Prusak:
– Knowledge is a fluid mix of framed experience,
values, contextual information, expert insight
and grounded intuition that provides and
environment and framework for evaluating and
incorporating new experiences and information.
It originates and is applied in the minds of
knowers. In organizations, it often becomes
embedded not only in documents or
repositories but also in organizational routines,
processes, practices, and norms.
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What’s Knowledge Management
• According to Kirk Klasson
– KM is the ability to create and retain greater value from
core business competencies.
• KM address business problems particular to your
business:
– Whether it’s creating and delivering innovative
products or services
– Managing and enhancing relationships with existing
and new customers, partners, and suppliers
– Or administering and improving work practices and
processes.
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KM’s value proposition
• Why we have to manage the knowledge in very
competitive era?
– Companies are becoming knowledge intensive, not
capital intensive
– Unstable markets necessitate “organized abandonment”
– KM lets you lead change so change does not lead you
– Only the knowledgeable survive
– Cross-industry amalgamation is breeding complexity
– Knowledge can drive decision support like no other
– Knowledge requires sharing; IT barely support sharing
– Tacit knowledge is mobile
– Your competitors are no longer just on your region.
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Managers’ tools through the decades
• 1950s: PERT
– Focus shifts toward distributed expertise & knowledge
• 1960s: Centralization & Decentralization
– Tacit knowledge becomes a part of the picture
• 1970s: The Experience Curve
– Cultural specificity is recognized
• 1980s: Corporate culture
– Learning, unlearning and experience are taken into
account
• 1990s: The Learning Organization
– KM emerges as the unifying corporate goal
• 2000s: Knowledge Management
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In a global economy
• Davenport and Prusak suggest:
– Knowledge may be your company’s greatest
competitive advantage”
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Why should KM
• Two types of companies:
– Realized the need to keep up with its
competitors and remain legitimate player
– One step ahead: it already has the core
knowledge necessary
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What’s behind the Buzz?
• KM is not technology problem; it is a
process problem
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What KM is not about
• KM is not about knowledge engineering
• KM is about process, not just digital
networks.
• KM is not about building a “smarter”
intranet.
• KM is not about a one-time investment
• KM is not about enterprise-wide
“infobahns”
• KM is not about “capture”
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The growth of KM
• Tom Davenport’s 1998 bestseller, “Working
Knowledge: How Organizations Manage
What They Know”, Havard Business
School Press.
• Ikujiro Nonaka, 1995 “The Knowledge
Creating Company”, Oxford University
Press. (in 1991 Havard Business Review
paper)
• Peter Drucker, 1993 “The Post Capitalist
Society”, Harper Business Press
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The 10-Step Roadmap
1.
2.
3.
4.
5.
6.
7.
8.
Identify Knowledge that is critical to your business
Align business strategy and KM
Analyze knowledge existing in your company
Build upon, not discard existing IT investment
Focus on processes, and tacit, not just explicit knowledge
Design a future-proof, adaptable KM system architecture
Build and deploy a result-driven KM system
Implement reward structures, leadership, and cultural
enablers needed to make KM work
9. Calculate ROI and apply Knowledge Metrics
10. Learn from war stories
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The Knowledge Edge
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Getting to why: The New World
• Market value of company is not related to
their assets & annual sales, eg
– MS: $14B+$12B, have MV $400B
– Far exceeding than GM, Ford & Mitsubishi
combine (with rank < 10 in Fortune 500)
– Intel: $28B+$25B, have MV $130B
• Accounting for Abnormal Differences
• Market valuation: the measure value that
investors and market associate with a
company
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Top 15 US Companies
#
Company
Market Val. ($ B)
1
Microsoft
$375
2
General Electric
$335
3
Intel
$200
4
Merck
$195
5
Wal-Mart
$194
6
Pfizer
$172
7
Exxon
$161
8
IBM
$159
9
Coca-Cola
$158
10
Cisco Systems
$155
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MCI WorldCom
$152
12
AT&T
$149
13
American International Group
$141
14
Lucent Technologies
$134
15
Citigroup
$133
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• Ford, Chrysler, nor Mitsubishi even appear
on the list.
– Neither investor nor the markets perceive these
capital intensive, production-oriented
companies as having more value than even
Citigroup, which comes last on the list.
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Market Valuation some New Company
#
Company
Market Val. ($ M)
1
eBay
$24,000
2
Amazon.com
$18,024
3
Priceline.com
$15,000
4
eToys Inc.
$6,000
5
Broadcast.com
$4,00
6
Infospace
$2,300
7
Go2Net (formerly MetaCrawler)
$1,400
8
Value America
$1,034
9
Marketwatch.com
$712
10
Xoom
$700
11
eFax
$139
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A common theme
• One common theme that brings all these
companies and their very different reason for
successful. Its their intangibels:
–
–
–
–
–
–
–
–
Brand recognition
Industry-driving vision
Patents and breaktroughs
Customer loyalty, their reach
Innovative business ideas
Anticipated future prouduct
Past achievements
Ground-breaking strategies
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The 24 Drivers for KM (1)
•
Knowledge-Centric Drivers
1. The failure of companies to know what they
already know
2. The emergent need for smart knowledge
distribution
3. Knowledge velocity and sluggishness
4. The problem of knowledge walkouts and high
dependence on tacit knowledge
5. The need to deal with knowledge-hoarding
propensity among employees
6. A need for systematic unlearning
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The 24 Drivers for KM (2)
•
Technology drivers
7. The death of technology as viable long-term
differentiator
8. Compression of product and process life cycle
9. The need for a perfect link between
knowledge, business strategy, and information
technology
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The 24 Drivers for KM (3)
•
Organization structure-based drivers
10. Functional convergence
11. The emergence of project centric
organizational structures
12. Challenges brought about by deregulation
13. The inability of companies to keep pace with
competitive changes due to globalization.
14. Convergence of products and services.
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The 24 Drivers for KM (4)
•
Personnel drivers
15. Widespread functional convergence
16. The need to support effective cross-functional
collaboration
17. Team mobility and fluidity
18. The need to deal with complex corporate
expectations
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The 24 Drivers for KM (5)
•
Process focused drivers
19. The need to avoid repeated and oftenexpensive mistakes.
20. Need to avoid unnecessary reinvention
21. The need for accurate predictive anticipation
22. The emerging need for competitive
responsiveness.
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The 24 Drivers for KM (6)
•
Economic drivers
23. The potential for creating extraordinary
leverage through knowledge; the attractive
economics of increasing returns.
24. The quest for a silver bullet for product and
service differentiation.
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KM Wagons, Contents and Horses (1)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Knowledge-Centric
Awareness
Distribution
Emergence
Preservation
Application
Creation
Validation
{1,2,3,4,5,6}
[7,13,14,19,20,23,24]
{ } : Primary drivers
[ ] : Secondary drivers
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KM Wagons, Contents and Horses (2)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Technology
Pressures
Failures
Influence
Strategic Use
{7, 8, 9 }
[8, 23, 24 ]
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KM Wagons, Contents and Horses (3)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Organizational
Structure
Convergence
Structural emergence
Effects on structure
Moderating influence of IT
Impact of knowledge flow
Deregulation
Globalization of divisions
Strategy
{ 10, 11, 12, 13, 14 }
[ 15, 17, 22 ]
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KM Wagons, Contents and Horses (4)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Personnel
Cross-functional
collaboration
Functional convergence
Mobility
Fluidity
Levels of management
Levels of employees
Decision hierarchies
{ 15, 16, 17, 18 }
[ 22, 10, 11, 2, 3, 5 ]
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KM Wagons, Contents and Horses (5)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Process
How-to
Know-How >> Know-what
Reuse and accuracy
Responsiveness
Strategy implementation
{ 19, 20, 21, 22 }
[ 24, 23, 14, 8, 9 ]
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KM Wagons, Contents and Horses (6)
Wagons
(Category)
Contents
(Factors)
Horse
(Drivers)
Economics
Bottom line effects
Extraordinary leverage
Increasing returns
Long-short-term
consideration
Long-short-term goals
{ 23, 24 }
[1, 2, 4, 7, 8, 12, 16,
19, 21 ]
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