1 Understanding Knowledge management Marc Demarest, Long planning, Vol. 30, No. 3, Jeeyun Kim

POSMISAdvanced topics of MIS2 Contents Case of effective KM Six key question Commercial knowledge Knowledge economy Definition of KM Commercial knowledge management KM for creating economic value in various viewpoint

POSMISAdvanced topics of MIS3 Case of effective KM A stylized notion, maintained, shared with value chain. A set of processes and systems that support value creating activities. A set of key metrics that link the value-creation process. A set of command-and-control systems that monitor the efficiency and effectiveness of that value creation process.

POSMISAdvanced topics of MIS4 Six key question - 1 The challenge is embodied in the answer to six key questions. I.What does our culture and our actions as managers say about the value of knowledge in the firm, and what do we ourselves believe about the value, purpose and role of knowledge? II.How is knowledge created, embodied, disseminated and used in this firm, and what is the relationship between knowledge and the innovation and performance this firm requires to succeed in its strategic objectives?

POSMISAdvanced topics of MIS5 Six key question – 2 III.What strategic and material commercial benefits do we expect to gain from more effective knowledge management and the performances created by effective knowledge management? Where is our firm in terms of the maturity of its knowledge systems? How much we organize for knowledge management? What role does information technology play in our knowledge management program?

POSMISAdvanced topics of MIS6 Commercial knowledge -1 Definition Good commercial knowledge, valuable knowledge, is knowledge that works. Commercial knowledge is different in kind from philosophical and scientific knowledge. The goal of Commercial knowledge is not truth, but effective performance. Not ‘what is right’ but ‘what works’ or even ‘what works better’ where better is defined in competitive and financial contexts.

POSMISAdvanced topics of MIS7 Commercial knowledge -2 Attribute All Ck is counter-intuitive but broadly accurate. All CK is social. All Ck is traded by knowledge workers.

POSMISAdvanced topics of MIS8 Knowledge economy -1 Construction DisseminationEmbodiment Use Simultaneously performed with ‘Construction’

POSMISAdvanced topics of MIS9 Knowledge economy -2 Construction The process of discovering or structuring a kind of knowledge Embodiment The process of choosing a container for knowledge once it is constructed Dissemination The human processes and technical infrastructure that make embodied knowledge available to people Use The production of commercial value for the customer

POSMISAdvanced topics of MIS10 Definition of KM -1 Explicitly developed and managed : KM is ultimately whether it is a by-product of the firm’s operation, or an explicit objective of those operation. A network of imperatives, patterns, rules and scripts : Nodes of knowledge (each node an imperative, pattern, rule and script) are held together by ‘links’ that create specific relationship (subordination, agreement, contradiction, ambivalence, etc.) among those nodes.

POSMISAdvanced topics of MIS11 Definition of KM -2 Embodied in some aspect of the firm : When knowledge is embodied, it is typically embodied in one of four kind of things. 1. Raw materials, products and services 2. Machinery and mechanisms 3. Business practices and processes 4. Environment and culture Each embodiment is increasingly hard-durable and inflexible, long-lived and impervious to change or re-use.

POSMISAdvanced topics of MIS12 Definition of KM -3 Distributed throughout the firm : For knowledge to translate into some kind of useful commercial performance, it must be distributed from the locale of construction into other parts of an organization or value chain. Creating marketplace performances : The only reasonable purpose of an organized KM practice in the firm is to increase the quality and quantity of marketplace performances.

POSMISAdvanced topics of MIS13 Commercial knowledge management -1 Phase 0: Subterranean Knowledge Economies Phase 1: Underpinned Knowledge Economies Phase 1: Underpinned Knowledge Economies Phase 2: Observed Knowledge Economies Phase 2: Observed Knowledge Economies Phase 3: Instrumented Knowledge Economies Phase 3: Instrumented Knowledge Economies Phase 4: Optimized Knowledge Economies Phase 4: Optimized Knowledge Economies Tacit Knowledge Examined Knowledge Documented Knowledge Explicit Knowledge Firm’s knowledge economy

POSMISAdvanced topics of MIS14 Commercial knowledge management -2 The problem for CKM is not ‘how do we know what we know?’ but ‘does our knowledge work?’. We develop methods and practices to systematize construction, embodiment, dissemination, use and management, then we face the eternal problem of infrastructure. Three classes of infrastructure 1. Cultural infrastructure 2. Operational infrastructure 3. Technical infrastructure Infrastructure gets us to commercial performance.

POSMISAdvanced topics of MIS15 KM for creating economic value -1 KM and Innovation : In all cases, we can assume that innovation will occur without the support of formal knowledge management systems. Key strategic question is ‘will we innovate fast enough, often enough and efficiently?’ KM and exnovation : Exnovation(ex: BPR) is as important to a firm’s health as innovation. KM systems are the key to successful exnovation, because ‘how knowledge most quickly gets into the hands of the people in the firm who execute the exnovation’ is important problem.

POSMISAdvanced topics of MIS16 KM for creating economic value -2 KM and the cash flow cycle : KM systems applied particularly to the front end of the cycle, are likely to produce significant cycle time reductions and increased likelihood of significant positive cash flow every time. KM and cultural hygiene KM and the competition for human assets KM and re-use : Firms without KM systems will be effectively unable to achieve the re-use levels required by the business model implicit in the markets they enter, and will lose market share to those firms who do practice KM. KM and corporate memory