1. Organisational Knowledge Prof. Andrew Basden. km@basden.demon.co.uk with thanks to Prof. Elaine Ferneley km@basden.demon.co.uk

2. Elaine Ferneley 2 From tacit to articulate knowledge “We know more than we can tell.” Michael Polanyi, 1966 TacitArticulated High Low MANUAL How to play soccer Codifiability

3. Elaine Ferneley Organisation does not know it has it. Philippe Baumard, 1999 (Sage) 3 Tacit knowledge in organisations TacitArticulated Yes Docs, Databases Codified ? No

4. Elaine Ferneley Lecture Overview nTheories of knowledge management uDependent on the theory of knowledge management that you adopt you will employ different technique nPrinciple ways of seeing knowledge uKnowledge as a corporate asset ££££  Knowledge as a social construct  ↔  uKnowledge as a value chain: create codify diffuse and use uKnowledge as a continuous cycle or spiral uKnowledge as a learning process

5. Elaine Ferneley Knowledge as a Corporate Asset Assumptions  knowledge is an objective reality  knowledge can be ‘managed’ in the same way as information can be managed  tacit knowledge can (mostly) be converted to explicit knowledge  the role of technology is to manage knowledge for the organisation  the role of people is as knowledge creators and knowledge repositories (experts)

6. Elaine Ferneley Knowledge as a Corporate Asset nOrganisations seek, use and value knowledge uHire for experience over intelligence or education – knowledge is gained over time uExperienced individuals are hired to enable access to their formal and informal networks nManagers go to people they know rather than IT u2/3 rd of mangers’ info & knowledge comes from F2F meetings, 1/3 rd from documents (Davenport 2006) uConsultation circle: friend, knowledgeable peer, internal data source, external data source nHow do you put a value on an individual’s knowledge re: uWhen to seek 3 rd party advice uWho to seek 3 rd party advice from

7. Elaine Ferneley Knowledge as a Corporate Asset Intellectual Capital on the Balance Sheet nMarket value – price on the stock exchange, Book value – resell cost of a company’s tangible assets nThe average market to book value ratios: u1975 UK 1:1 u1995 UK 3.5:1 u1999 USA 5.5:1 (Microsoft 250:1, Amazon 170:1); nIntangible asset of intellectual capital is an exponentially increasing resource (there are high profile exceptions – furor over traditional industries falling out of the FTSE100) nHow do you create a knowledge inventory and protect/capture this intangible asset ??

8. Elaine Ferneley Knowledge As a Social Construction nKnowledge is emergent  Knowledge can not be understood at the level of the individual, because it is jointly constructed as social events by the members of some group through their interaction  i.e. you cannot simply take an ‘expert’ and get a brain dump of a process and assume you then have knowledge. You need to understand how (and in what context) the expert derived his/her knowledge and how he/she interpreted it.

9. Elaine Ferneley Knowledge As a Social Construction nKnowledge is local  Actions and their interpretations are constructed in some particular context, including a particular place and time. nKnowledge is contingent  The construction and interpretation of events depends upon the current situation.  i.e. knowledge may be articulated or applied differently in different situations e.g. giving directions to an adult; to a child; in the rush hour; when its raining

10. Elaine Ferneley Knowledge as Value Chain CreateCodifyDiffuseUse Learning organizations Stimulating working environments Time to think Trust Reward & Recognition Organise Classify Hard or soft structure – database friendly/free text Access – who/how Transfer Share Examples – email, knowledge maps (yellow pages), best practice, discussion groups Product development Service provision Process improvement Measures of success Hard Infrastructure - technology platform Soft Infrastructure - skills, processes etc. Asset Management - measure, protect, exploit

11. Elaine Ferneley Knowledge Map Example (Corporate Yellow Pages) – Assumption that it’s Web-based CreateCodifyDiffuseUse Who Why Reward Content Searchability Access – who/how Transfer/push Share Update For what Measures of success 65% of Corporate intranets fall into disuse between 1 & 2 years (KPMG, Parlby 2006)

12. Elaine Ferneley Nonaka & Takeuchi – The Knowledge Creating Company nKnowledge Value Chain is linear – to capitalise on knowledge creation and dissemination we should close the circle Socialisation Externalisation Combination Internalisation

13. Elaine Ferneley NONAKA’S MODEL nTacit to tacit communication (socialization). Experience among people in face-to-face meetings nTacit to explicit communication (externalization). Articulation among people through dialog nExplicit to explicit communication (communication). Best supported by technology nExplicit to tacit communication (internalization). Taking explicit knowledge and deducing new ideas

14. Elaine Ferneley The SECI Model nSocialization: (tacit -> tacit) uconverging new tacit knowledge through shared experiences uSharing the same experience through being together – transference uE.g. F2F meetings nExternalization: (tacit -> explicit) uArticulating tacit knowledge into explicit knowledge uBy making tacit knowledge explicit it can be shared with others and become the basis for new knowledge uTacit knowledge is often articulated through metaphors, analogies, diagrams or prototypes uE.g. Q&A sessions at a meeting

15. Elaine Ferneley The SECI Model nCombination: (explicit -> explicit) uConverging explicit knowledge into more complex and systematic sets of explicit knowledge uKnowledge is exchanged and reconfigured through documents, meetings or communication networks uEmailing a report or data mining in large-scale databases are examples of this process nInternalization: (explicit -> tacit) uEmbodying explicit knowledge into tacit knowledge – ‘learning by doing’ uInternalization shares knowledge throughout an organization – it broadens and changes the organizational members’ mental models uWhen knowledge is internalized into mental models or technical know-how it becomes a valuable asset – it has become tacit again uE.g. learning from a report

16. Elaine Ferneley Human Learning Learning occurs in one of three ways: nLearning by experience: a function of time and talent nLearning by example: more efficient than learning by experience nLearning by sharing, education nLearning by discovery: undirected approach in which humans explore a problem area with no advance knowledge of what their objective is. nHow do these learning approaches map to SECI ??

17. Elaine Ferneley Organisational Knowledge nSummary uWhichever perspective is adopted by an organization it is the creating of dynamic communities that is the overlap and it remains the biggest challenge for organizational knowledge management