1. Working Knowledge: How organizations manage what they know Presented By: Rahul Sharma January 29, 2006 Author: Thomas H. Davenport and Laurence Prusak

2. Agenda Knowledge Knowledge Markets Knowledge Generation Knowledge Codification Lessons learned Comments My opinion Reviews and references

3. CH-1 What do we talk about when we talk about knowledge Data Information Knowledge These are all transformation from one to another.

4. Data Set of unorganized and unprocessed facts but highly objective Used mainly in organizations like Banking, Insurance and other governmental organizations as structured records for transactions No judgment and no sustainable basis of action Data is essential for information creation Data Management is evaluated in terms of Cost, Speed and Accuracy

5. Information Information has impact on receiver's judgment and behavior It has a sender and receiver Information has its relevance and purpose Information means to shape the person who gets it, to make some difference in his outlook or insight Information moves through Hard and soft Networks.

6. Data transferred into information in following ways Contextualized Categorized Calculated Corrected Condensed

7. Knowledge Essential component of Human Progress Knowledge is a fluid mix of framed experiences, values, contextual information that provides a framework for evaluating and incorporating new info. Knowledge is a mixture of various elements, intuitive, hard to capture in words Delivered through structured media such as books, documents and contacts Comparisons, connections, consequences, conversations helps in transformations to knowledge

8. Knowledge in Action Better knowledge can lead to efficiency in product development and production Knowledge moves down value chain to information and data Knowledge has key components as experience, truth, judgment and rules of thumb

9. Knowledge Components Experience  Refers to things done in the past and happened previously.  They have been tested and trained by experience  Firm hire experts with experienced based thought  Knowledge born of experiences make familiar connections between what is happening in present and past Ground Truth  Real Life Knowledge and real situations experiencing close up  “After Action Review Program” which helps in examining what happened in a mission and what can be learned from disparities

10. Knowledge Components Complexity  Knowledge can deal with complexity in a complex way  Knowing what is important leads to better decisions Judgment  It judges and refines itself in response to new situations and information  When knowledge stops evolving, it turns into opinion or dogma

11. Knowledge components Thumb and intuition rules  It gives shortcut solutions to complex problems that are solved by experienced workers  It gives “compressed expertise”. Phrase describing how knowledge works  E.g. Skill of experienced driver drives series of complex actions without thinking about them

12. Knowledge Components Values and Beliefs  Organizations have history, value and beliefs derived from people’s action and words that express corporate values and beliefs  Integral components to knowledge serving as “seeing” aspects of organization  Power of knowledge comes from values and beliefs as much as from logic and information

13. Knowledge as a corporate asset Companies hire for experience in spite of intelligence or education Managers get two third of info. And knowledge from working mass Organizations hire expert people for a particular subject

14. Knowledge as Corporate asset Changing global economy  Companies are fiercely competitive and competition is for every marginal dollar of profit  Companies require quality, value, service, speed to market. e.g. Outsourcing Product and services convergence  Knowledge based intangibles are part of “products” firms offer  Intangibles that add value to product’s are part of product’s firms offer

15. Knowledge as Corporate asset Sustainable competitive advantage  Trade secrets are not difficult to find with use of reverse engineering, information flow, technology  Knowledge assets value increase and provide a sustainable competitive advantage  Networked computers are not difficult to find as knowledge source

16. Case Study: British Petroleum BP’s virtual Team work program  42 separate business models  Goal :Agility of small company with resources of large one Implementation:  Stressed Corporate behavior vs. technology  Coaches and Teams  Knowledge Management Teams  Emphasis was on Person to Person interaction and system requirements

17. Results 4 of the 5 Pilot groups have great success  Great savings  Better Enthusiasm Case in Point:  Equipment failure on mobile driving ship  Utilized communication media to localized communication expert to solve problem in few hours for localized savings

18. Ch-1 Summary Data, Information and knowledge are forms of transformation Knowledge originates and resides in people’s mind Technology enables new knowledge behaviors Knowledge sharing must be encouraged and rewarded Knowledge initiatives should begin with a Pilot program Knowledge sharing requires Trust

19. Chapter 2: The promise and challenge of Knowledge Markets Composes of buyers and sellers who use their market knowledge to create power bases Knowledge is bartered, bought, found, generated, and applied to work People rarely give their valuable knowledge without something in return Recognizing markets of knowledge is very important

20. Political Economy of Knowledge markets Social, Economic and Political realities must be taken into consideration Cultural Norms restrict knowledge to be shared Buyers, Sellers and brokers are people in KM Buyers  Knowledge seekers looking for insight, judgment and understanding  15-20 % of knowledge time is spent in knowledge search and responding to Knowledge requests  Complex answers embed with emotional subtexts important to our decision making

21. Political Economy Sellers:  People are skilled but unable to articulate their tacit knowledge,they need specialized knowledge  Knowledge sharing is rewarded more than Knowledge hoarding Brokers:  Make connections b/w buyers and sellers, hence act as gatekeepers  Corporate librarians are natural knowledge brokers  Informal Knowledge Brokers set out to become experts on knowledge and its exploitation

22. Price System Markets have a price system so that value exchanges can be efficiently rendered and recorded Within the organizations, the medium is money but there are agreed upon currencies to drive the KM

23. Factors affecting Price System Reciprocity  Within the organizations, the medium is money but there are agreed upon currencies to drive the KM  Time, energy and knowledge are valuable resources unless they bring valuable return  Related to Repute

24. Factors for Price System Repute: Value of knowledge depends upon political and social structures of organization Many Consulting firms, bonuses are tied to knowledge generation and transfer Likelihood of cooperation leading to future tangible benefits will increase Length of service and loyalty erodes in most businesses, hence it is important

25. Factors Altruism  Nice people who want to help others  Likelihood of cooperation leading to future tangible benefits will increase

26. Factors Trust: Most important factor that can positively affect the efficiency of KM Established in 3 ways i.e. :  Trust must be visible  It should be ubiquitous  It should start at the top Firm’s KM should be established upon mutual trust

27. Knowledge Market Signals Position and education Most common frame signal for indicating who has valuable knowledge, not consistent signal Informal Networks Informal chats like chats in Cafeteria, water cooler Disadvantage is undocumented and ramble, hence not readily available to market Communities of Practice Self organized groups to share knowledge with one another, hence share work practice, interests

28. Knowledge Market Inefficiencies Clear Pricing system is very essential for efficient markets i.e. consumer info, classifieds. Efficient markets generate most good at least cost 3 key factors: Incompleteness of information:  Location of existing knowledge  Absence of explicit information about pricing structure

29. Inefficiencies Asymmetry of knowledge Prepares knowledge from getting where it is needed Localness of Knowledge KM depends on trust and trust is very important for people you know People get knowledge from their organizational neighbours

30. Knowledge Market pathologies Monopolies  Knowledge will come at higher price  They establish that fact to establish position of power  Knowledge won’t be their when people need it the most Artificial Scarcity  Hoarding culture keeps scarce for departments and groups  It walks out of the door during downsizing

31. KM Pathologies  Trade Barriers  Refusal to accept new knowledge  Status difference b/w seller and buyer  Hampers organizational markets by hoarding departments  Downsizing and reengineering ends to damage KM Infrastructure

32. Effective KM Using IT widely  Technical developments change IT Structure dramatically  Trying to force fluid knowledge into rigid data structures  Focusing more on the system Building Market places  Knowledge transfer is to create market place for physical and virtual spaces

33. Effective KM  Talk rooms are formalized and sanctioned locations for conversations Creating and defining KM value  Employees rewarded for sharing knowledge proves that value exists for knowledge

34. Peripheral benefits of KM Higher workforce morale  Employees see that their work is valuable.  They may be more satisfied with their work Greater corporate coherence  Shared Awareness of Corporate goals and strategies  Richer Knowledge stock  Constantly refined and validates the organization knowledge  Stronger Meritocracy of Ideas  Genuinely open KM will test official beliefs and expose flaws of faulty ones before they can do any damage

35. Ch-2 Summary Knowledge Markets exists and should be recognized Buyers, Sellers and brokers are important for KM Price System depends upon reciprocity, repute, altruism, trust KM pathologies like monopolies, artificial scarcity and trade barriers should be removed Knowledge market benefits are higher workforce morale, greater corporate coherence, richer knowledge stock

36. Ch-3 Knowledge Generation Hire smart people and leaving them alone Modes of Knowledge generation Knowledge Acquisition Dedicated Resources Fusion Adaptation Networking

37. Acquisition Knowledge focused firm needs appropriate knowledge available Effective way to acquire knowledge is to buy it Determining the value of knowledge is hard to quantify Cultural and political barriers to accepting and absorbing acquisition's knowledge

38. Knowledge Generation Modes Rental Renting knowledge means to take steps to retain it too Knowledge can be leased or rented Knowledge rentals involve Knowledge transfer Make sure to take steps to retain knowledge

39. Knowledge Generation Modes  Dedicated Resources  Establish units or groups for this purpose  Many R & D groups use these  Fusion  Brings people together with a joint answer  Combining people with different ideas, skills and values  Group members find some common ground to understand one another

40. Adaptation Imposing various environmental threats New products from competitors, new technologies drive Knowledge generation Most organizations are incapable of changing attitudes of lifetime. Employees who are willing to learn new things are vital to adapting company

41. Networks Knowledge is generated by informal, self organizing networks within organizations Conversation often generates new knowledge within firms A particular practice can become part of knowledge capital of the firm

42. Common Factors Need for adequate time and space Time is the most important factor Recognition by managers that Knowledge Generation is important factor for success Firms that fail to generate new knowledge will cease to exist

43. Ch-3 Summary Modes of knowledge generation are acquire, dedicated resources, fusion, adapt and network Organizations needs to focus more on time, not on physical storage

44. Ch-4 Knowledge Codification and Coordination  Basic Principles  Business goals for codified knowledge should be identified  They should evaluate knowledge for usefulness in codification  Managers must be able to identify knowledge for reaching goals  Codifiers must identify appropriate medium for codification  Labor intensive and company knowledge are successful for codification knowledge

45. Codifying different knowledge Codifying Tacit Knowledge Tacit, complex knowledge is impossible to reproduce in database Knowledge incorporates accrued and embedded learning that it is impossible to separate from individual acts We simply can’t represent knowledge outside the human mind

46. Codifying different knowledge Providing access to people with tacit knowledge is difficult to capture and modify Mapping and modeling knowledge  It is a guide not a repository  Locating important knowledge in organization with picture to find it  Employee with good knowledge base has access to knowledge sources  A good Knowledge map goes beyond boundaries

47. Technology of Mapping knowledge Creates an organizational wide map, better for individual mini-maps Improves search speed Electronic map can be revised more frequently Value of map is quality and depth of info.

48. Politics of Mapping knowledge Map has a picture of status and success as well as a knowledge locator A limit should be made to see if politics exceed the good sign of maps

49. Capturing Tacit knowledge Substantial value of tacit knowledge makes it worth effort for codifying it Difficult to locate dividing line between Tacit knowledge and fully embedded knowledge Transfer maximum knowledge through mentoring or apprenticeship A good story is best way to convey meaningful knowledge

50. Codifying tacit knowledge Expert system represents explicit attempt to capture human knowledge using rules Evaluating codified knowledge and making it available is integral part of process Evaluation of existing knowledge is classification based on quantitative, structured, unstructured, qualitative contents

51. Codifying Knowledge Structured content is made by database and unstructured by web Codification provides permanence to knowledge Knowledge codification is vital to human beings more than anyone else

52. Ch-4 Summary It is difficult to codify Tacit knowledge Always the principles for codifying knowledge should be kept in mind Mapping and modeling knowledge is essential for codifying knowledge to give access to impossible knowledge resources Human Mind is vital to knowledge codification

53. Lessons Learned It addresses the key managerial and behavioral issues for managers Effective KM for any company is key to competitive edge Knowledge derives from people’s mind Recognize markets for knowledge Time is the most important corporate resource given to knowledge activists Codification gives permanence to knowledge

54. Comments Upside Ron Hagan, editorial review http://www.amazon.com/gp/product/product- description/0875846556/ref=dp_proddesc_0/103-8143813- 7933421?ie=UTF8&n=283155&s=bookshttp://www.amazon.com/gp/product/product- description/0875846556/ref=dp_proddesc_0/103-8143813- 7933421?ie=UTF8&n=283155&s=books Author provides simple overview of knowledge Market and its potential obstacles Includes numerous examples of successful knowledge projects like British Petroleum PC week, editorial review It provides strong, fundamental ground in concepts critical to KM Knowledge Point site review http://www.knowledgepoint.com.au/knowledge_management_tools/b ooks.html http://www.knowledgepoint.com.au/knowledge_management_tools/b ooks.html Excellent resource for managers who want to harness wisdom and experience in their organizations

55. My opinion Provides practical and realistic template for initiating a KM system with wealth of content on KM systems Ch-1 to 4 provides deep insight to many basic concepts which are important for any beginner in KM

56. Reviews and References Reviews from Book “KM” by Elias Awad  KM is newly emerging, interdisciplinary business model that has knowledge within the framework of organization. It has disciplines like business, economics, information management.  Types of knowledge are shallow and deep knowledge, procedural and episodic, explicit and tacit, expert knowledge  KM System Development Life cycle: Evaluate existing infrastructure, form the KM team, knowledge capture design, KM blueprint, test the KM system, implement the KM system, manage change and reward structure, post system evaluation. So better than the Davenport’s one  Approaches for Codifying knowledge are Knowledge maps, decision tables, decision trees, frames, production rules, software agents

57. Reviews and References According to site for IT, for IT n/w http://products.watchit.com/20010207.pdf This program is excellent resource for managers to harness their experience and wisdom According to metapress article http://mesharpe.metapress.com/(pvhl4o45jbkisa55yzfsaw55)/app/ho me/contribution.asp?referrer=parent&backto=issue,2,9;journal,22,26; linkingpublicationresults,1:106046,1 http://mesharpe.metapress.com/(pvhl4o45jbkisa55yzfsaw55)/app/ho me/contribution.asp?referrer=parent&backto=issue,2,9;journal,22,26; linkingpublicationresults,1:106046,1 According to metashape, this provides pragmatic approach to knowledge, information technology, knowledge management, practice and research According to article, “Sharing expertise beyond KM” http://books.google.com/books?id=M8hDpBWOFQMC&dq=working+ knowledge+by+davenport http://books.google.com/books?id=M8hDpBWOFQMC&dq=working+ knowledge+by+davenport The field of KM focuses on how organizations effectively store, retrieve and enlarge their Intellectual properties

58. References According to IBM systems journal article for KM, http://researchweb.watson.ibm.com/journal/sj/404/marwick.html Selected technologies that contribute to KM solutions are reviewed using nonaka’s model of organization knowledge According to Journal of American information science and technology, http://www3.interscience.wiley.com/cgi- bin/abstract/97516011/ABSTRACThttp://www3.interscience.wiley.com/cgi- bin/abstract/97516011/ABSTRACT KM is based on knowledge creation and transfer

59. Questions?