People have always been central to organizations, but their strategic importance
is growing in today`s knowledge-based organizations. An organization`s success
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increasingly depends on the knowledge, skills, and abilities of employees,
particularly as they help establish a set of core competencies that distinguish an
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organization from its competitors. When employees` talents are valuable, rare,difficult to imitate and organized, an organization can achieve a sustained
competitive advantage through people. Advanced technology has given rise to
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reduced number of jobs that require little skill and has increased the number of
jobs that require considerable skill, thus a shift is taking place from touch labour
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to knowledge work. This displaces some employees and requires that others beretrained. In addition, information technology has influenced HRM through
human resources information systems (HRIS) that streamline the processing of
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data and make employee information more readily available to managers.
Both proactive and reactive change initiatives require HR managers to work
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with line managers and executives to create a vision for the future, establish anarchitecture that enables change, and communicate with employees about the
processes of change. In order to contain costs, organizations have been
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downsizing, outsourcing and leasing employees, and enhancing productivity.
HR`s role is to maintain the relationship between a company and its employees,
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while implementing the changes. The workforce is becoming increasinglydiverse and organizations are doing more to address employee concerns and to
maximize the benefit of different kinds of employees. Demographic changes,
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social and cultural differences, and changing attitudes towards work can provide
a rich source of variety for organizations. But to benefit from diversity,
managers need to recognize the potential concerns of employees and make
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certain that the exchange between the organization and employees is mutually
beneficial. Through strategic planning, organizations set major objectives, and
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develop comprehensive plans to achieve those objectives. Once the strategy isset, executives must make primary resource allocation decisions, including those
pertaining to structure, processes, and human resources.
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Companies such as Domino`s Pizza, Sony, Southwest Airlines, and Wal-Mart
revolutionized their industries by developing skills ? core competencies ? that
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others didn`t have. These competencies helped them gain advantage over theircompetitors and leverage this advantage by learning faster than others in their
industries. Underlying a firm`s core competencies is a portfolio of employee
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skills and human capital. In any given organization, different skill groups can be
classified according to the degree to which they create strategic value and are
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unique to the organization. Core knowledge workers. This group of employeeshas firm-specific skills that are directly linked to the company`s strategy e.g.,
R&D scientists in a pharmaceutical company, computer scientists in a software
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development company. These employees are typically engaged in knowledge
work that involves considerable autonomy and discretion. Companies tend to
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make long-term commitments to these employees, investing in their continuoustraining and development and perhaps giving them an equity stake in the
organization.
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Traditional job-based employees. This group of employees has skills that are
quite valuable to a company, but not unique e.g., sales people in a department
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store, truck drivers for a courier service. These employees are employed toperform a predefined job. As it is quite possible that they could leave to go to
another firm, managers frequently make less investment in training and
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development and tend to focus more on paying for short-term performance
achievements. Contract Labour. This group of employees has skills that are of
less strategic value and generally available to all firms e.g., clerical workers,
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maintenance workers, staff workers in accounting and human resources.
Individuals in these jobs are increasingly hired from external agencies on a
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contract basis, and the scope of their duties tends to be limited. Employmentrelationships tend to be transactional, focused on rules and procedures, with very
little investment in development.
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Alliance/partners. This group of individuals has skills that are unique, but not
directly related to a company`s core strategy e.g., attorneys, consultants, and
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research lab scientists. Although companies perhaps cannot justify their internalemployment, given their tangible link to strategy, these individuals have skills
that are specialized and not readily available to all firms. As a consequence,
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companies tend to establish longer-term alliances and partnerships with them
and nurture an ongoing relationship focused on mutual learning. Considerable
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investment is made in the exchange of information and knowledge.An increasingly vital element of strategic planning for organizations that
compete on competencies is determining if people are available, internally or
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externally, to execute an organization strategy. Managers have to make tough
decisions about whom to employees internally, whom to contract externally, and
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how to manage different types of employees with different skills who contributein different ways to the organization. Human resource planning plays an
important role in helping managers weigh the costs and benefits of using one
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approach to employment versus another.
Changes in the external environment have a direct impact on the way
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organizations are run and people are managed. Environmental Scanning is thesystematic monitoring of the major external forces influencing the organization.
Managers attend to a variety of external issues; however, the following six are
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monitored most frequently :
Economic factors, including general and regional conditions.
Competitive trends, including new processes, services, and innovations.
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Technological changes, including robotics and office automation.
Political and legislative issues, including laws and administrative rulings.
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Social concerns, including child care and educational priorities.Demographic trends, including age, composition, and literacy.
By scanning the environment for changes that are likely to affect an
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organization, managers can anticipate their impact and make adjustments
proactively. In a rapidly changing environment, it is extremely dangerous to be
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caught off guard. The labour-force trends illustrate the importance of monitoringdemographic changes as a part of human resource planning. Such changes can
affect the composition and performance of an organization`s workforce.
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In addition to scanning the external environment, organizations such as Syntex,
Lotus Development, and Southwest Airlines are careful to also scan their
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internal environments. Because these companies view their employee-orientedcultures as critical to success, they conduct cultural audits to examine the
attitudes and activities of the workforce. Sears has found that positive employee
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attitudes on ten essential factors ? including workload and treatment by
superiors ? are directly linked to customer satisfaction and revenue increases.
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Cultural audits essentially involve discussions among top-level managers of howthe organization`s culture reveals itself to employees and how it can be
influenced or improved. The cultural audit may include such questions as :
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How do employees spend their time?
How do they interact with each other?
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Are employees empowered?What is the predominant leadership style of managers?
How do employees advance within the organization?
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By conducting in-depth interviews and making observations over a period oftime, managers are able to learn about the culture of their organization and the
attitudes of its employees. Cultural audits can be used to determine whether
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there are different groups, or subcultures, within the organization that have
distinctly different views about the nature of work the quality of managers, and
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so on. Any knowledge management strategy designed to improve businessperformance must address three components : the work processes or activities
that create and leverage organizational knowledge; a technology infrastructure
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to support knowledge capture, transfer, and use; and behavioral norms and
practices (organizational culture) that are essential to effective knowledge use.
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Even though the economic incentives are becoming clearer and technologicalcapabilities now exist to support knowledge-based organizations, pioneers in
knowledge management are finding the behaviours supported by their existing
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organizational cultures to be a major barrier to this transformation. In short, the
organizational knowledge and culture are intimately linked, and that
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improvements in how a firm creates, transfers, and applies knowledge are rarelypossible without simultaneously altering the culture to support new behaviours.
CONCEPT AND CHARACTERISTICS OF KBOs
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The definition of the knowledge-based organization is centered around three
attributes : its principal mission is to acquire, manipulate and deploy information
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and knowledge; it strives to be a learning organization in which its members,both individually and collectively, are continuously enhancing their capacity to
produce results and adapt to changing circumstances; and it is guided by a
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commitment to organizational excellence through such pursuits as bench-
marking, best practices and the fostering of collaborative relationships among its
various stakeholders. Knowledge organizations have been characterized as
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enterprises in which the key asset is knowledge. Their competitive advantage
comes from having and effectively using knowledge. Examples include the law
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office, accounting firm, marketing firm, software company, most of thegovernment agencies, universities, the military, and significant parts of most of
the manufacturing companies, whether they make cookies or cars.
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A knowledge-based organization has four characteristics which can be
summarized in terms of process, place, purpose and perspective. Process refers
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to the activities within an organization, some of which are directly involved withmaking a product or selling a service and others that are ancillary but no less
important. Place refers to the boundaries of the organization, which for the
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purpose of sharing and creating knowledge often go beyond traditional legal
boundaries. Purpose refers to the mission and strategy of the organization ? how
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it intends to profitably serve its customers. Perspective refers to the worldviewand culture that influences and constrains the decisions and actions of an
organization. Each of these elements forms a basis for evaluating the degree to
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which knowledge is an integral part of the organization and the way it competes.
Executives who understand how the four elements interact will be able to start
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changing their companies to take advantage of the vast intellectual assets hiddenbellow the surface.
Process : Knowledge Sharing and Creation
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Most organizations are primarily focused on the concrete and observable
activities that make up what they do on a day-to-day basis. A knowledge-based
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organization attends to two related processes that underlie these direct processes:the effective application of existing knowledge and the creation of new
knowledge. The goal is fourfold: to ensure that knowledge from one part of a
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company is applied to activities in other parts; to ensure that knowledge is
shared over time so that the company benefits from past experience; to make it
possible for people from various parts of the organization to find each other and
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collaborate to create new knowledge; and to provide opportunities and
incentives for experimentation and learning.
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Consider how a company whose process for making its main product has beenessentially unchanged for more than 100 years ? Holcim, one of the world`s
largest suppliers of cement ? took on this challenge. The company operates
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more than 100 cement-manufacturing facilities, 240 quarries and 600 mixed-
concrete facilities in over 70 countries. Although it functions in a highly
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decentralized manner (country managers have the authority to make manydecisions on their own), Holcim realized several years ago that the exchange of
knowledge and expertise is the glue that holds the company together. It now
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explicitly regards knowledge as its key resource and learning as its key
capability.
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In order to make that view operational, an internal group, Holcim Managementand Consulting (now Holcim Group Support), was reorganized in 1996 to
develop, identify, transfer and apply strategic knowledge among all Holcim`s
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entities worldwide. The group reports directly to the executive committee, a
clear indication of its strategic importance. In addition to facilitating interaction
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among managers worldwide, Holcim Management and Consulting is itself arepository of knowledge, expertise and best practices that it shares and reapplies
by consulting to the company`s various units. For example, energy costs are the
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most expensive part of cement production, and Holcim Management and
Consulting helped plants improve process efficiency by diffusing knowledge
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about how to use cheaper and more efficient fuels. A related problem facingHolcim has been the need to reduce carbon dioxide emissions, as part of its
strategy to be a responsible corporate citizen promoting worldwide sustainable
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development.
Holcim Management and Consulting helps Holcim to document and transfer
new energy-related technologies and manufacturing methods among the
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company`s plants worldwide. Company engineers and managers have, therefore,
invested effort in learning more about alterative fuels. For example, Holcim
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Switzerland developed the use of waste plastic, used tyres, and dried seweragesludge as replacement fuels alongwith the technologies to burn them cleanly. In
addition, the company has enjoyed product innovation (possible even with
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cement) as plants experimented with various admixtures to vary and improve the
properties of cement for different local market applications. Even though it
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makes a simple, industrial-age product, Holcim is clearly operating as aknowledge-based organization.
Place : Knowledge Boundaries
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Knowledge creation and sharing in today`s economy are not bound by the
traditional physical and legal limits of the corporation. Companies are
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increasingly realizing that knowledge is often produced and shared as a by-product of daily interactions with customers, vendors, alliance partners and even
competitors. The knowledge-based organization, then, is a collection of people
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and supporting resources that creates and applies knowledge via continued
interaction. Its boundaries are blurred, malleable and dynamic. At some point,
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the knowledge-based organization stops worrying about who works for whomand focuses instead on who needs to work with whom. For example, the field-
service technicians at Buckman Labs, an international specialty chemicals
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company, spend more time on the premises of their customers than at Buckman
offices.
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Similarly, when Procter & Gamble was creating a new supply chainmanagement process with Wal-Mart, it sent several of its information
management people to work with their counterparts at Wal-Mart`s headquarters
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so that they could mutually learn how to implement their vision of better salesmanagement via the sharing of information. Holcim built knowledge
communities within its global organization that transcended formal boundaries;
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it also made the necessary investments to learn from customers. The knowledge-
based organization recognizes that the dangers of failing to share knowledge
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across traditional boundaries outweigh any potential benefits that may comefrom hoarding it.
Purpose: Knowledge Strategy
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Even a highly effective set of knowledge management processes does not
guarantee that an organization will perform well or better than its competitors.
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Only a few years ago Polaroid, for example, had generally effective processes inplace to capture and share knowledge about products, customers, applications,
technologies and the competitive environment. The culture was conducive to
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sharing and cooperation, and the company had implemented a reasonably good
information system for supporting virtual collaboration. All in all, it appeared to
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be managing knowledge well. The knowledge being created and shared,however, was entirely focused on analog film and cameras. Polaroid knew little
about digital imaging and this contributed to its eventual bankruptcy.
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Companies that succeed over the long term align their knowledge management
processes with their strategy. The knowledge-based organization recognizes that
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knowledge is a key strategic resource, and asks what do we need to know toformulate and execute our desired strategy? What do we know? And what do
our competitors know? The gap between what an organization knows and needs
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to know focuses attention internally, just as the strengths and weaknesses
components of a SWOT analysis does. The gap between what it knows and what
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its competitors know focuses attention externally on the opportunities andthreats. Companies must seek to close those knowledge gaps, both external and
internal, faster and more effectively than their competitors.
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Holcim clearly recognized the strategic nature of its knowledge. Given itsstrategy to provide the best quality and most innovative cement-based products
using the most efficient, sustainable and environmentally friendly processes, it
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engaged the hearts and minds of its entire organization in managing the
knowledge and learning to support that strategy.
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Perspective: The Knowledge Point of ViewThe knowledge-based organization, regardless of whether its products are
tangible or not, holds a knowledge-oriented image of itself. That is, it takes
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knowledge into account in every aspect of its operation and treats every activity
as a potentially knowledge-enhancing act. It uses knowledge and learning as its
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primary criteria for evaluating how it organizes, what it makes, where it locates,who it hires, how it relates to customers, the image it projects, and the nature of
its competition.
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Buckman Labs has the knowledge perspective. The company started in 1945
manufacturing chemical microbicides ? products that would kill or control the
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growth of microbes in pulp and paper manufacturing and leather treatment. Overtime, however, it realized that its products were becoming commodities and that
to stay competitive it would need to deliver knowledge-based services. To
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support that strategy, Buckman implemented processes, technologies, training
and incentives to promote the development, sharing and delivery of knowledge
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about how to actually apply microbicidal chemicals to solve customers`treatment problems.
The company has continually refreshed its strategic knowledge and directs all
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activity toward learning as much as possible about its customers. This approach
culminated in the decision to learn more about how to manage the chemistry of
their customers` plants than even its customers knew. In the late 1990s,
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Buckman undertook to learn about customers` operations in detail, the
economics of their businesses, and their strategic direction ? a tall order for a
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bunch of chemists.To accomplish this learning, the company first implemented a business-oriented
training program tailored to the specifics of their customers` industries. It then
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entered into a learning partnership with a major paper manufacturer. For a fixed
fee, Buckman became the exclusive provider of all chemicals and treatment
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services the manufacturer needed. Though sales technicians were formerlyrewarded for selling as much chemical products as possible, now they were
rewarded for minimizing chemical use. They were free to use any product,
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regardless of who made it, that created the most efficient and effective customer
operation. In return, Buckman gained exclusive access to the customer and thus
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the opportunity to learn more about how to service that segment of the marketthan any of its competitors.
Buckman now considers itself to be in the knowledge business : Chemicals are
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merely the tangible tip to their knowledge iceberg. Many other companies in
recent years have made a similar transition in perspective by redefining their
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fundamental mission from one based on selling traditional products and servicesto one based on exploiting knowledge.
If knowledge is a raw resource, who should benefit from it? A close link
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between knowledge and power has widely been recognized. For example, the
World Health Organization states that as a knowledge-based organization in an
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environment where knowledge has become a raw material, serious considerationshould be given to how such knowledge is managed, disseminated and used.
Integrity and value-based leadership are recurring themes in the case of
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knowledge-based organizations. Also relevant in this context is the attention
paid by the organizations to the pursuit of excellence in their work. In the
majority of cases, this involves a commitment to engage in research and
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programming which is of a supervisor quality, and addresses the actual needs
and priorities of the target population.
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In a May 1997 report prepared for the International Institute for SustainableDevelopment, Geoffrey Oldham and Rob McLean suggested that knowledge
activities encompass five distinct dimensions : knowledge creation, knowledge
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acquisition, knowledge assimilation, knowledge use, and knowledge
dissemination. Turning to issues related to knowledge creation and acquisition,
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the organizations dedicate considerable resources either to the execution ofresearch, thereby generating new knowledge, or to scoping exercises designed to
identify and gather relevant information generated elsewhere. However, the
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means by which they pursue these activities vary considerably from organization
to organization. In a large measure, this variance can be explained by differences
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in funding base and mandate.Knowledge creation is not the only challenge facing the organizations.
Knowledge assimilation, which might also be termed knowledge management,
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is arguably of equal importance, since this is what allows one to exploit the
information generated, and ensure that it is accessible when and where it is
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needed. For example, International Development Research Center (IDRC) actsprincipally as a sponsor of research carried out by outside experts, though it also
engages in a range of information gathering activities. The latter includes the
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maintenance of an extensive library collection along with the development of
information systems to document and evaluate center activities, and to preserve
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a corporate memory. Deployment and use of new information technology is oneway in which organizations can effectively manage their knowledge base, and
the International Development Research Center in particular has been a world
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leader in this area.
Not surprisingly, knowledge creation and acquisition is also a priority for the
World Health Organization. A particularly noteworthy example in this area is its
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Evidence and Information for Policy (EIP) Cluster, a programme established in
1998 with a mission to strengthen the scientific and ethical foundations of health
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policies and programmes so that they respond better to the needs of populations.With an emphasis on building effective partnerships, the EIP cluster compiles,
analyses, and disseminates an evidence base on the major dimensions of health
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and health systems. Organizational learning is an important dimension of
knowledge assimilation. In short, if an organization is to continue to generate
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new knowledge, or put existing knowledge to work, its members must have anunderstanding of key issues and be able to relate them to the organization`s
mandate. In the case of United Nations Development Fund for Woman
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(UNIFEM), for instance, it prides itself on having put into place a feedback
process of pioneering, learning, information-sharing and advocacy.
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Closely related to the issue of knowledge assimilation is knowledge use anddissemination. While the organizations exploit their knowledge resources in a
wide variety of ways, they can nonetheless be categorized in the following
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manner:
Dissemination of knowledge resources (e.g., research reports,
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activity or status reports, policy statements) to a general audiencethrough mass media channels e.g., Internet, wide circulation
publications.
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Dissemination of knowledge resources to a limited audience e.g.,
policy makers, politicians and experts through selective channels
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e.g., narrow circulation journals, conferences.Use of knowledge resources for the purposes related to advocacy or
to the development of policies, programs or projects; and
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Use of knowledge resources for the purposes related to thegeneration of new knowledge.
Dimensions of HRM in KBOs
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Conventionally, acquisition, development, motivation and maintenance of
human resources are seen as four major dimensions of human resource
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management with quality of work life, productivity and readiness for change asoutputs. In 1983, American Society for Training and Development identified
nine human resource areas, which were considered by them as spokes of the
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Human Resource wheel. Each area affected the outputs which were placed in the
center of the wheel. The human resource areas identified by ASTD were :
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Training and Development, Organization Development, Organization/JobDesign, Human Resource Planning, Selection and Staffing, Personnel Research
and Information Systems, Compensation/Benefits, Employee Assistance, and
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Union/Labour Relations. Although line managers and HR managers need to
work together, their responsibilities are different, as are their competencies and
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expertise. The dimensions of human resource management can also beunderstand in terms of the major activities for which an HR manager is typically
responsible, such as Advice and Counsel, Service, Policy Formulation and
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Implementation, and Employee Advocacy.
1.
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Advice and Counsel : The HR manager often serves as an in-houseconsultant to supervisors, managers and executives. Given their
knowledge of internal employment issues (policies, labour
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agreements, past practices, and the needs of employees) as well as
their awareness of external trends (economic and employment data,
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legal issues, and the like), HR managers can be an invaluableresource for making decisions. As in-house consultants, HR
managers should be concerned with the operating goals of the
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managers and supervisors. In turn, these managers must beconvinced that the HR staff is there to assist them in increasing their
productivity rather than to impose obstacles to their goals. This
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requires not only the ability on the part of the HR executive to
consider problems from the viewpoint of line managers and
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supervisors but also skill in communicating with the managers andsupervisors.
2.
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Service : HR managers also engage in a host of service activities,
such as recruiting, selecting, testing, planning and conducting
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training programs and hearing employee concerns and complaints.Technical expertise in these areas is essential for HR managers and
forms the basis of HR program design and implementation.
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3.
Policy Formulation and Implementation : HR managers generally
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propose and draft new polices or policy revisions to cover recurringproblems or to prevent anticipated problems. Ordinarily, these are
proposed to the senior executives of the organization, who actually
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issue the policies. HR managers may monitor performance of line
departments and other staff departments to ensure conformity with
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established HR polices, procedures, and practice. Perhaps moreimportantly, they are a resource to whom managers can turn for
policy interpretation.
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4.
Employee Advocacy : One of the enduring roles of HR managers is to
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serve as an employee advocate ? listening to the employee`sconcerns and representing their needs to managers. Effective
employee relations provides a support structure when disruptive
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changes interfere with normal daily activities.
In the process of managing human resources, increasing attention is being given
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to the personal needs of the participants. Increasingly, employees and the public
at large are demanding that employers demonstrate greater social responsibility
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in managing their human resources. Complaints that some jobs are devitalizingthe lives and injuring the health of employees are not uncommon. Charges of
discrimination against women, minorities, the physically and mentally disabled,
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and the elderly with respect to hiring, training, advancement, and compensation
are being leveled against some employees. Issues such as comparable pay for
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comparable work, the high cost of health benefits, day care for children ofemployees, and alternative work schedules are concerns that many employers
must address as the workforce grows more diverse. All employers are finding
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that privacy and confidentiality of information about employees are serious
matters and deserve the greatest protection that can be provided.
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Top management generally recognizes the contributions that the HR programcan make to the organization and thus expects HR managers to assume a broader
role in the overall organizational strategy. In view of this, HR managers need to
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acquire a complementary set of competencies. HR professionals need to know
the business of their organization thoroughly. This requires an understanding of
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its economic and financial capabilities so that they can join the team ofbusiness managers. It also requires that HR professionals develop skills of
external relations focused on their customers. HR professionals are the
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organization`s behavioral science experts. In the areas, such as staffing,
development, appraisal, rewards, team building and communication, HR
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professionals should develop competencies that keep them abreast of changes.HR professionals have to be able to manage change processes so that HR
activities are effectively merged with the business needs of the organization.
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This involves interpersonal and problem-solving skills, as well as creativity and
innovativeness.
HR professionals must establish personal credibility in the eyes of their internal
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and external customers. Credibility and trust are earned by developing personal
relationships with customers, by demonstrating the values of the firm, by
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standing up for one`s own beliefs, and by being fair-minded in dealing withothers. The ability to integrate business, HR and change competencies is
essential. By helping their organizations build a sustained competitive advantage
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and by learning to manage many activities well, HR professionals are becoming
full business partners. Forward-looking CEOs make certain that their top HR
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executives report directly to them and help them address key issues. At lowerlevels in the organization, a rapidly growing number of companies assign HR
representatives to business teams to make certain that HR issues are addressed
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on the job and that HR representatives, in turn, are knowledge about business
issues rather than simply focusing on the administrative function.
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NEW ROLES AND CHALLENGE FOR HRM IN KBOsRoles of the HR Function
How is the HR function being affected by the growing importance of knowledge
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capital, and why should HR managers be concerned about it. One reason is that
people-related issues are the key to knowledge capital. No organizational
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function is better suited to spearhead the maximization of knowledge capitalthan the HR function. Cultivating knowledge capital requires concerted action
in all areas of the HR function at once. In the context of this trend, compliance-
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oriented practitioners resist change, supporting the old command-and-control
structures of the past, which only frustrate the development of knowledge capital
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by creating a work environment that diminishes the value of individualcreativity and motivation. Supporters are passive, doing only what they are told.
Since line managers are not usually as knowledgeable about the formal
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processes related to people issues as are HR practitioners, HR practitioners
operating from a supporter role will only continue to do what has been done in
the past.
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Performance consultants are analytical, applying skills to specific situations in
which they troubleshoot problems or discover opportunities. They can create
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situations that will develop individuals and groups, but their approach is oftentoo tactical to be felt by the organization on a strategic level. They must be
cognizant of the business issues facing the organization and the capabilities of
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people to confront them. This requires more than a tactical approach. HR
leaders are proactive, taking initiative to influence others to achieve competitive
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advantage through the human side of the enterprise. HR leaders are thus bestsuited to encourage managers and other stakeholders to think about people as
creators of wealth rather than as expenses. HR leaders may also involve top
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managers or other key stakeholders in group activities that can help them think
about how the growing importance of knowledge capital affects the HR
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function, components of the organization or the organization as a whole, thecauses of those changes, their likely consequences, and HR action plans or
strategies needed to address those changes.
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What Business Needs Require Change from the HR Function? To remain
competitive in the future, businesses need to find ways to make the most of
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human talent and creativity. While this goal certainly requires flexible andadaptable HR systems and processes, business trends facing organizations are at
the centre of this HR change endeavour. By understanding these trends, HR
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practitioners can develop processes that enrich the knowledge capital of their
organizations.
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What Changes are Needed from Each HR Functional Area? It needs to be
examined that how each HR functional area can make an impact on business
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operations while dealing with the growing importance of knowledge capital.Rewards and Recognition: People must be rewarded for cultivating knowledge
that is useful to the organization. That may mean that decision makers will need
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to explore such strategies as pay-for-knowledge programs in which individuals,
and groups, are rewarded for cultivating valuable competencies of use to the
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organization. In addition, non-pay-related incentives can be used to reward theattainment and use of knowledge capital, such as promotion, title differentiation,
access to or membership in special teams or task force efforts, and nomination to
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attend special development programs.
Employee Relations: Employee communications programs, vital to employee
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relations, should be launched to show employees and managers alike what ismeant by knowledge capital, how it applies to them individually, why it is
important to the organization, what happens when knowledge capital is not
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cultivated or developed, and how knowledge capital can be developed and
evaluated. Above all, employees must be informed that developing work-related
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knowledge is key to the success of the business, and to their career security at atime when jobs are disappearing. Employees have a self-interested and self-
directed role to play in their own development, and they should be told what that
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is ----- and, when necessary, how to take proactive steps to develop themselves
for future career growth inside or outside the organization. Job security can best
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be enhanced by profitability and growth. To work toward this security,employees need information about the business environment, the industry, and
the organization`s finances for informed decision making.
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Organizational Effectiveness: Organizations need to launch programs that
encourage learning and knowledge acquisition. By pursuing efforts to create
learning organizations and high-performance workplaces, decision makers can
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set the right tone to support continued individual and team growth and
development. Changes in company culture do not occur overnight, so it is
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important to establish a track record of experiences in the organization to showthat development and creativity do matter and are considered in pay raises,
promotions, work assignments, and other issues of importance to employees.
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Organizational effectiveness is enhanced when people have targets of focus.
What a better target than effectively servicing a customer or beating the
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competition? Knowledge attainment centered around such endeavours canchange a corporate culture.
Professional Development: Training and development is a key means by which
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to groom individuals for the future. Training is, of course, an individualized
change effort that is designed to narrow gaps between what people know or do
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and what they should know or do to be successful. Training has also beenassociated more recently with efforts to generate creative solutions to difficult
problems farcing organizations. Training-related activities are likely to lead
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organizational efforts to build and maintain competitive knowledge capital. HR
will be responsible for maximizing the productivity of the workforce through
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initiatives that build organization community. Well-educated and well-trainedworkforce will be deployed, and HR practitioners will be required to function as
consultants, not as police officers. Training can be used to build a sense of
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community by facilitating cohesive performance by work teams. It can also be
used to enhance communication by providing information about the reasons to
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take action and by articulating approaches to individual development.Training can be used to show people how to become more self-directed in their
approaches to learning on their own, and to fostering the development of others
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in the organization. Training can be used to direct attention to a broad array of
human performance improvement strategies that can be used to develop bench
strength, troubleshoot human performance problems, and seize human
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performance improvement opportunities. Money spent on professional
development efforts has increased over the past decades. Yet, expectations by
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organizations have changed concerning the return on investments of suchefforts. Professional development providers are thus having to take both an
individual and organizational view of these development efforts.
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Resource and Productivity Management: Although defined differently by
various experts, HR planning is often characterized as long-term planning for
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the people needed by an organization. It is perhaps the single most importantissue to consider in building knowledge capital. While HR planning has
traditionally been focused on identifying and closing current and projected gaps
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in headcount, shortfalls between labour demand and supply, it can also be
focused on identifying and acting to close present or future gaps in talent,
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shortfalls between present and future talent demand and supply. One way thatHR can lead the way towards building human capital is to introduce and use a
systematic approach to HR planning in the organization. Too many
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organizations many needs from vacancy to vacancy. But with HR planning, an
organization`s decision makers can link corporate core competencies directly to
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individual competencies and work to build them over time.An effective HR planning process can also be useful in conducting strategic
planning for HR, bringing a systematic approach to succession planning,
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integrating HR functions horizontally around meeting desired HR needs, and
providing information about current or anticipated overdrafts in human
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capital. In order to tap into the knowledge capital of an organization, seniorleaders first need to know where and with whom it resides. This is the job of
HR function ? to track and identify knowledge communities and match them
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with the needs of the business. This task must be done for both current and
future knowledge capital requirements. Once the task is accomplished, only
then can the HR function be deployed appropriately within the organization to
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address both now and then business issues.
Recruiting and Staffing : Recruiting and selecting people are also central to
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building knowledge capital. After all, the individuals chosen by theorganization affect its supply of knowledge capital, the competencies on which
it can draw to meet business objectives. HR practitioners must find ways to
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achieve the following:
Recruit and select the right talent to meet pressing organizational needs.
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Retain the right talent once it is availableLeverage the talent through appropriate uses of rotations, temporary and
permanent team assignments, transfers, and promotions so that the
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organization`s knowledge capital is brought to bear on the most pressing
challenges.
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These goals may require focusing on specific universities, competitors, or othertalent pools to attract people with the specific competencies needed to help
address business trends.
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Challenges and Opportunities
In an era of globalization and rapid technological change, the prospects for
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knowledge-based organizations would appear to be bright. Certainly, Internetbased communications and plummeting information processing costs provide
ample opportunities in such areas as research, networking and information
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management. However, by the same taken, the organizations face challenges in
a number of areas.
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How can funding affect the vision of a knowledge-based organization? Fundingavailability is a case in point. Stability of funding remains a concern. Funding
that pushes institutions from crisis to financial crisis works against the
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development of a strategic posture and leads to weaker rather than strongerinstitutions.
How do information overload and uncertainty affect the viability of a
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knowledge-based organization? With the rapid growth of Internet and computer
processing power, another challenge often facing knowledge-based
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organizations is the over-abundance of information, or information of anuncertain quality.
How does data quality affect the vitality of knowledge-based organizations?
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Also relevant in this regard is the issue of data quality. That is to say, for an
organization to remain credible, it must be assured of the accuracy,
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comprehensiveness and relevance of the information it is using to implementprojects or formulate policy options. For example, the Australian Indigenous
Health Info Net addresses quality assurance in two main ways. First, they have
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documented procedures for all aspects of their day-to-day operations. These
procedures ensure that all materials have been subjected to quality control
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checks before being added to their site. To complement their internalprocedures, they have established a network of Health Info Net Consultants,
whose functions include peer review of any substantial academic material to be
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added to the site.
How does a knowledge-based organization maintain its visibility? While the
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publication of such material on the Internet may be extremely useful toacademics, policy makers and other experts, its relevance is somewhat less
obvious to an individual living in a remote community without access to
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adequate shelter, sewerage or health services. Accordingly, knowledge-based
organizations must grapple with the challenge of remaining relevant to their
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constituencies at the risk of alienating them and losing their support. On onehand, good leadership is critical in this regard, both in fostering constructive
relationships with community members, and in focusing organizational energies
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in the ways which reflect constituents` concerns. On the other hand, feedbackmechanisms also provide a valuable means of ensuring that organizational
priorities are in harmony with community needs.
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QUESTIONS FOR DISCUSSION
1.
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Can different skill groups be classified in an organization? Discussvarious such groups to highlight the life in organization.
2.
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What is environmental scanning? What are the external issues that
are frequently monitored by the managers? Discuss with appropriate
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examples?3.
What is cultural audit? Discuss its importance in a knowledge-based
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organization.
4.
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Discuss the characteristics of a knowledge-based organization interms of process, place, purpose and perspective.
5.
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What are the dimensions of Human Resource Management in KBOs?
Discuss in detail.
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6.Discuss the roles of HR function in KBOs.
7.
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Discuss the challenges faced by a knowledge-based organization.
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Unit ? II
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MANAGING KNOWLEDGE FOR ORGANIZATIONAL
EFFECTIVENESS
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Process and MethodsOrganizations face a number of important competitive challenges such as
adapting to global business, embracing technology, managing change,
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responding to customers, developing intellectual capital and containing costs.
With these competitive challenges very important employee concerns, such as
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managing diverse workforce, recognizing employee rights, adjusting to newwork attitudes and balancing work and family demands have emerged. Best
organizations go beyond simply balancing these sometimes, competing
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demands; they create work environments that blend these concerns to
simultaneously get the most from employees, contribute to their needs, and meet
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the short-term and long-term goals of the organization. For organization to beeffective, they need to identify the primary principle that support high
performance work systems. There are four powerful principles :
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Shared information
Knowledge development
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Performance ? reward linkageEgalitarianism
These principles have become the building blocks for managers who want to
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create high-performance work systems for organizational effectiveness.
The Principle of Shared Information : The principle of shared information is
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critical for the success of empowerment and involvement initiatives in anorganization. Traditionally, employees were not given and did not ask for
information about the organization. People were hired to perform narrowly
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defined jobs with clearly specified duties. Today organizations are relying on theexpertise and initiative of employees to react quickly to incipient problems and
opportunities without timely and accurate information about the business.
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Employees can do little more than simply carry out order and perform their roles
in a relatively perfunctory way. They are unlikely to understand the overall
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direction of the business or contribute to organizational success. On the otherhand, when employees are given timely information about business performance
plans and strategies, they are more likely to make good suggestions for
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improving the business and to cooperate in major organizational changes. They
are also likely to feel more committed to new courses of action, if they have
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input in the decision making. The principle of shared information typifies a shiftin organizations away from the courses of command and control towards
employee commitment. If executives do a good job of communicating with
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employees, and create a culture of information sharing, employees are more
likely to work towards the achievement of goals for the organization.
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The Principle of Knowledge Development: In today`s scenario number of jobsrequiring little knowledge and skill is declining while the number of jobs
requiring greater knowledge and skill is growing rapidly. As organizations
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attempt to compete through people, they must invest in employee development.
This includes both selecting the best and brightest candidates available in the
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labour market and providing all employees opportunities to continually honetheir talents. In the contemporary work environment employees need a broad
range of technical, problem solving and interpersonal skills to work either
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individually or in teams on cutting-edge projects. Because of the speed of
change, knowledge and skills requirements must also change. Employees must
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learn continuously. Stop gap training programs must not be enough. Employeesneed to learn real time, on the job, using innovative new approaches to solve
novel problems.
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The Principle of Performance ? Reward Linkage: In an organization peoplemay intentionally or unintentionally pursue outcomes that are beneficial to them
but not necessarily to the organization as a whole. Things tend to go more
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smoothly when there is some way to align employee and organizational goals.
When rewards are connected to performance. Employees will naturally pursue
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outcomes that are mutually beneficial to themselves and the organization.Supervisor may not have to constantly watch to make employees do the right
thing. In fact employees may go out of their way above and beyond the call of
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duty, to make certain that co-workers are getting the help they need, systems and
processes are functioning efficiently and customers are happy. Connecting
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rewards to organizational performance also ensures fairness and tends to focuson employees in the organization. Equally important, performance based
rewards ensure that employees share in the gains that result from any
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performance improvement.
The Principle of Egalitarianism
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Status and power differences tend to separate people and magnify whateverdisparities exist between them. The US versus them battles that have
traditionally been there between managers, employees and labour unions have to
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be replaced by more cooperative approaches for managing work. More
egalitarian work environments eliminate status and power differences and in the
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process, increase collaboration and teamwork. When this happens, productivelycan improve if people who once worked in isolation begni to work together.
Moving power downward in organizations that is, empowering employees
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frequently requires structural changes. Managers often use employee surveys,
suggestion systems, quality circles, employee involvement groups that work in
parallel with existing organizational structure. In addition work flow can be
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redesigned to give employees more control and influence over decision making.
Job enlargement, enrichment and self managing work teams are typical methods
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for increasing the power. Employees can influence decisions and makesuggestions for change. With decreasing power distances, employees can
become more involved in their work, their quality of work life is simultaneously
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increased and organizational performance is improved. One cannot claim that
there is a fool proof list of best practices that can be implemented by every
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organization for every work situation, yet there are clean trends in work design,HR practices, leadership role and information technologies that can increase
organizational effectiveness.
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Work-Flow Design and Teamwork: Total Quality Management (TQM) and
reengineering have driven many organization to redesign their work-flow.
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Instead of separating jobs into discrete units, most experts now advisemanagers to focus on the key business process that derive customer value
and then create teams that are responsible for those processes. Federal
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Express, for example, redesigned its delivery process to give truck drivers
responsibility for scheduling their own routes and for making necessary
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changes quickly. Because the drivers had detailed knowledge of customersand routes, Federal Express managers empowered them to inform existing
customers of new products and service. In doing so, drivers also filled a type
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of sales representative role for the company. In addition, FedEx drivers also
worked together as a team to identify bottlenecks and solve problems of
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slow delivery. To facilitate this, advanced communications equipment wasinstalled in the delivery trucks to help teams of drivers balance routes among
those with larger or lighter loads.
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Complementary Human Resource Policies and Practices: work redesign,
in itself, does not constitute a high-performance work system. Other
supportive elements of HRM are necessary to achieve high performance.
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Several studies suggest that both performance and satisfaction are much
higher when organizations combine their changes in work-flow design with
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HR practices that encourage skill development and employee involvement.By selecting skilled individuals with the ability to learn continuously and
work cooperatively, organizations are likely to make up for the time and
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expense they invest in selection. Talented employees come up to speed more
quickly and take less time to develop. Organizations that do not adhere to
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this are often seen at the risk of taking wrong people and spending more ontraining and/or out placement, severance and recruitment and replacement.
Emphasis on Teamwork : involvement and continuous improvement
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requires that employees develop a broader understanding of work processes
performed by others around them rather than rely on first knowing their own
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jobs. To accomplish this, organizations increasingly use cross-training, thatis the training of employees in jobs in areas closely related to their own.
Another Important factor is the Compensation Package : Many
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organizations experiment with alternative compensation plans. In order to
link pay and performance, high-performance work systems often include
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some type of employee incentives. Organizational incentives such as gainsharing, profit sharing, and employee stock ownership plans focus employee
efforts on outcomes that are beneficial to both themselves and the
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organization as a whole. Some organizations also incorporate skill, based
pay plans. By paying employees on the basis of the number of different job
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skills they hope to create both a broader skill base among employees and amore flexible pool of people to rotate among interrelated jobs. Both of these
qualities are beneficial for organizational effectiveness and may justify the
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added expense in compensation.
Management Processes and Leadership : With fever layers of management
and a focus on team based organization, the role of managers and
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supervisors is substantially different in a environment of knowledge based
organizations. Managers and supervisors are seen more as coaches,
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facilitators and integrators of team efforts. Rather than imposing theirdemands on employees and closely watching to make certain that the
workers comply, managers share responsibility for decision making with
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employees. Typically the team manager is replaced by the term team
leader`. And in growing number of cases leadership is shared among team
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members.In the literature of knowledge management, four components of knowledge
management architecture have been described. The analysis, plans and actions
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are usually formulated in terms of the four basic operations of knowledge that
can be found in organizations` development, distribution, consolidation and
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combination. The four basic knowledge processes are :Developing Knowledge : Companies survive by the continuous
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deployment of new knowledge based on creative ideas, the analysis of
failures, daily experiences and work in R&D departments. Corporate
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memories can support these processes by recording failures andsuccesses.
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Consolidating Knowledge : Knowledge must be safeguarded against loss
due to different cause (e.g., people retiring, documents that cannot be
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accessed any more, etc). Consolidation could be supported by, forinstance, corporate memories, knowledge transfer programmes etc. The
knowledge, thus stored, must be available at the right time and place.
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Distributing Knowledge : Knowledge must be actively distributed to
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those who can make use of it. The turnaround speed of knowledge isbecoming crucial for the competitiveness of companies. To support this
process, corporate memories need a facility for deciding who should be
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informed about a particular new piece of knowledge. Actions to improveknowledge distribution include the installation of help desks and use of
intranets.
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Combining Available Knowledge : An organization can only perform at
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its best if all available knowledge areas are combined in its newproducts. If an organization is unable to combine the knowledge
available, it will miss opportunities and eventually lose market share.
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Products and services are increasingly being developed by multi-
disciplinary teams. Corporate memories may facilitate this by making it
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easier to access knowledge management system in knowledge basedorganization should involve the continuous streamlining of the above
four basic knowledge processes to improve the organization learning
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capability.
KNOWLEDGE
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KNOWLEDGEGOALS
ASSESSMENT
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KNOWLEDGE
KNOWLEDGE
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IDENTIFICATIONRETENTION
KNOWLEDGE
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KNOWLEDGE
ACQUISITION
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UTILIZATIONKNOWLEDGE
KNOWLEDGE
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DEVELOPMENT
DISTRIBUTION
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Figure 1. Knowledge Management Framework
Source : Mohan Tanniru and Tom Lauer; Knowledge Audit and Knowledge
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Management System; Infovision; New Dehli, Tata Infotech Limited; January2002; pp 2-3.
Supportive Information Technology : Technologies of various kinds create an
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infrastructure for communicating and sharing information vital to business
performance. There are the information needs for business plans and goals, unit
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and corporate operating results, incipient problems and opportunities andcompetitor`s performance.
Careful planning helps to make certain that the processes fit together and are
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linked with the overall strategic goals of the organization. Horizontal fit occurs
when all the internal elements of the work system complement and reinforce one
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another. For example, a first rate selection system may be of no use if it is notworking in conjunction with training and development activities. If a new
compensation program reinforces behaviours that are directly opposed to the
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goals laid out in performance planning, the two components would be working
at cross-roads. Horizontal fit means testing to make certain that all the HR
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practices, work designs, management processes and technologies complementone another. The synergy achieved through overlapping work and human
resource practices is at the heart of what makes organization system effective.
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To achieve vertical fit the work system must support the organization`s goals
and strategies. This has to begin with an analysis and discussion of competitive
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challenges, organizational values and the concern of employees and results in astatement of the strategies being pursued by the organization. Efforts to achieve
vertical fit help focus the design of performance work systems on strategic
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priorities. Objectives such as cost containment, quality enhancement, customer
services and speed to market has a direct impact what is expected of employees
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and the skills they need to be successful. Words such as involvement, flexibility,efficiency, problem solving and teamwork are not just buzzwords. They get
translated directly from the strategic requirements of today`s organizations.
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However, for all their potential, implementing is not an easy task. The systemsare complex and they require a good deal of close partnering among executives,
like managers, HR professionals, union representatives and employees.
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Ironically, it is the very complexity that leads to competitive advantage.
INTELLECTUAL CAPITAL AND LEARNING ORGANIZATION
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Intellectual CapitalDriven by changing technology, the increasing globalization of business,
increasing speed in market change, continuing cost containment and increasing
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rate and magnitude of change itself, the need for intellectual capital is a key
trend facing businesses. The competitive environment requires that companies
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levrage the knowledge and expertise of their employees to create and sustaincompetitive advantage. The business world is moving too fast to rely on the
traditional command and control management style. Human creativity and talent
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has to be realized to have quantum break through in innovation, productivity,
product and service quality and customer satisfaction.
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Intellectual capital means the collective experience of an organizationworkforce. It is the sum of information and linking generated by the human
resources in the organization. It includes the collective experience of an
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organization workforce called institutional memory (what people remember
about what the organization has done in the past); the current mix of know-how
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available to the organization, known as the talent pool (who is available to meetthe organization`s current challenges); and the future prospects of the
organization`s workforce to come up with innovative solutions to problems,
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known as creativity (how well people in the organization are positioned to come
up with break through ideas to address past, present or future problems faced by
the organization. According to Peter Drucker (1997) knowledge capital is
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important since it is different from all other kinds of resources. It constantly
makes itself obsolete, with the result that today`s advanced knowledge is
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tomorrow`s ignorance and knowledge that matters is subject to rapid and abruptshifts from pharmacology to genetics in the health care industry for example,
and from PCs to the Internet in the computer industry. There can be little doubt
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that knowledge capital, more than financial capital is growing in importance
(Bondreau and Ramstad, 1989). There are three major consequences that stem
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from the growing importance of intellectual capitalThe need to distinguish between technical and management compliancy
The increasing business and worker mobility
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Increasing need for training
Need to Distinguish Between Technical and Management Competency
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Successful manager must now possess several capabilities : technical expertise,understanding of the dynamics shaping the market environment, ability to build
relationships inside and outside the company and ability to identify new
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opportunities to enhance the company`s offerings (Vicene and Fulmen, 1996). If
companies hope to rely on knowledge workers to create competitive advantage,
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then the decisions those workers make must be consistent with the company`svalues and purpose. Otherwise, these empowered employees will not make
decisions leading to company success. The challenges confronting executives
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then, is to communicate the company`s values and purpose underlined. In
addition executives must hire and retain employees who demonstrate the ability
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and willingness to act within the company`s values system. Only technicalproficiency is not sufficient to generate a good employee.
Increasing Business and Worker Mobility
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Business goes where skills and knowledge are available, the new capitalism.The decisive factor for industries in the developed world will be the productivity
of knowledge and knowledge workers because organization will be competing
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based on knowledge and not on capital or technology. Because knowledge
workers are extremely mobile and the knowledge needs of an organization will
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change rapidly, an increasing number of the most valuable people will identifymore with their own knowledge rather than with the organization. Many of these
people will not be employees of the organization but will serve as contractors,
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consultants, experts and joint venture partners and the organizations are to be
defined for a specific task, time, place and culture and therefore, management of
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knowledge resources will become the most important area of focus andconsequently management will have to extend beyond enterprises.
Increasing Need for Training
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Another consequence of the trend toward the growing importance of knowledge
capital is an increasing, incessant need to educate workers. But education in a
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business environment that prizes knowledge capital takes on new dimensionsthat go beyond what training has meant in the past. Employees at all levels must
be educated to understand the market environment, the company`s strategy, and
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their role in influencing the organization`s financial performance. Employee
education and training will become a forum to create broader perspectives and to
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give employees a broader perspective in which to operate. The importance oftraining in developing knowledge employees is underscored by the dramatic
increases in expenditures linked to all forms of training. In the midst of ever
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increasing dynamics, people are required to do more, do it faster and do it with
less-resources. It is imperative for employees at all levels to possess a broad,
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general management perspective and the ability to think strategically. Therefore,companies are using education to derive strategic initiatives. Custom?designed
programming affords tailoring to the needs of the organization. Companies are
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increasingly demanding immediate applicability resulting in the growth ofaction learning and on the job techniques, any where, anytime asynchronous
distance education and less time away from the job for training and education
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while organization understands the need to educate the workforce to enhance
knowledge capital. Many organizations want to ensure that they are getting a
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quick nature on training investments.KNOWLEDGE AND ROLE RELATED ISSUE
The greatest opportunity resulting from the growing importance of knowledge
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capital is the possibility that organization can seize competitive advantage by
finding ways to leverage and exploit worker`s knowledge. Those organization
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which are best able to collect market intelligence, harness and unleash workercreativity, translate startingly innovative ideas into valuable product and service
offerings and get these products and services quickly to dynamic market do
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definitely succeed. Organizations that cannot meet these challenges and cling to
the bureaucratic, controlling, un-imaginative and (for employees) frustrating
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approach of the past will fail and go bankrupt or will be merged with other,more successful firms.
Today, business Organizations face a number of issues relating to the effective
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sourcing, storage and dissemination of knowledge. According to Shermon
(2002), these issues include.
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Loss of knowledge as job requirements change rapidly and personnel
move across department. Knowledge moves with such personnel and is
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not captured at a control place for future use.
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Lack of organizational culture for sharing of knowledge employees areoften reluctant to share information with in the organization Why
should I part with my knowledge? Knowledge gives me power. Clearly,
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the mindset of employees need to undergo a significant change towardsknowledge management.
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Absence of adequate knowledge systems that capture and store tacit
knowledge residing in the minds of personnel (having technical/scientific
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or other expert knowledge. For example, when technical servicepersonnel do not file reports after field visits, the next team that goes out
for the same work has to start afresh and reinvent the wheel.
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Absence of an effective learning organizational culture is another issue.
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Many organizations have inadequate filing and database managementsystem. There is a need to setup common knowledge domains (e.g.,
power point presentations, preliminary questions, training materials,
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suggestion scheme inputs, computer programmers, library research
results, patents and relative publications, internal publications etc. This
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also includes establishing effective content management and knowledgedelivery systems.
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Inadequate to and fro dissemination of knowledge between the
knowledge center and other key stakeholders including manufacturing,
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logistics and marketing divisions, institutional customers, academicinstitutions, quality standard institutions and equipment builders.
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Developing and sharing best practices across various centers an well as
access to external best practices and continuously evaluating and
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upgrading best practices.Searching for knowledge resources, organization need to establish
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mechanisms for tapping internal and external resources (including
personal search) and developing communities of practice setting up
technology bulletin boards and identification of experts.
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Ragnekar (2001) has identified the following challenge for the implementation
of knowledge management systems in organizations
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Motivating employees to search, accept and adopt best industry practices
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Developing metrics towards appraising the effectiveness of a knowledge
management programme and measuring its results
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Motivating employees to share knowledge
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Identifying and representing the organization`s existing knowledge.
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Lack of common understanding of the company`s business model andstrategic drivers.
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Changing the bureaucratic culture and organization structure.
Learning Orgnaizations
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Peter Senge (1990) introduced the notion of the learning organization, which hasbecome the ideal for companies desiring to compete in the age of knowledge
capital. Senge has defined learning organizations as those whose people
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continually expand their capacity to create the results they truly desire, where
new and expansive patterns of thinking are nurtured, where collective aspiration
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is set free and where people are continually learning how to learn together. Theorganizations that truly excel in the future will be the organizations that discover
how to tap people`s commitment and capacity to learn at all levels in an
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organization (Senge, 1990). Learning organizations are typified in several ways.
First, personal mastery forms the spritual foundation of the learning
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organization. Individuals become committed to life-long learning, continuallyclarifying personal vision and focusing energy. Personal mastery is important to
organizations because of the reciprocal commitment between the organization
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and the individual. Second, building shared vision is essential. It is the commonsense to identify and view future that motivates the individuals in the
organization. Third, team learning occurs when the collective results and
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learning of the team far exceed what could have been achieved individually.
Fourth, mental models are explicitly articulated and constantly analyzed. Mental
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models are deeply ingrained assumptions, generalizations, or ever pictures orimages that influence how we understand the world and how to take action. By
recognizing, scrutinizing and challenge the organization`s view of what can and
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cannot be done, management teams can collectively change their view of the
world and engage in institutional learning. Finally, systems thinking integrates
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the other four disciplines. By taking a systems view, organizations can focus onthe interrelationships of all functions, activities and individuals in an
organization. Systems thinking is essential for building a whole that exceeds that
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sum of its parts to build a system which can capture, utilize and leverage
external information in a way that constantly directs the experiences toward
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improving organizational performance. Towards that end, it is essential toestablish the following :
A Sense of Purpose : a clearly articulated, shared view of the future
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direction of the organization.
Information Flows : a systematic method to capture and disseminate
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knowledge and experience throughout the company to provide real timeinformation to those who need it.
Decision Processes : Processes for making decisions that question
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previous assumptions about the business and encourage those involved
to move beyond the status quo.
Communication : An organizational communication style that
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encourages the sharing of knowledge, innovation and calculated risk
taking and catalyzes employees around the common purpose.
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Culture : Once barriers to learning have been removed, a culture isencouraged were each individual continually learns and facilitates the
growth of the organization.
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Knowledge capital may not have precisely the same definition in every
organization, every division, every department, every function or every work
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unit. The key to understanding knowledge capital is understanding whatmakes an organization competitive that is its core competence and the
collective knowledge, talent and marketability of the people working in the
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organization. So the definition of knowledge capital varies by the nature of
the business and the collective knowledge, experience and creativity of the
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individuals who make the business operate.Business Strategy
Knowledge Management Strategoy
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Culture
Organization
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InfrastructureIntellectual
and
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Development
and
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AssetsPeople
Process
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Facilities
Figure 2. Knowledge Management Strategy
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Source : Angela Abell and Nigel Oxbrow, 1999, People Who Make Knowledge
Management Work.
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Action Plans or Strategies for Growing Importance of Knowledge CapitalPrepare for the Realities and Need to Educate the Workforce :
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Employees should be shown how each individual`s efforts impacts
corporate success. Employees should also be given tools to support
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appropriate decision making and they should be rewarded in ways thatare matched to desired organizational results. According to Peter
Drucker (1992) because of the vastly expanding corpus of knowledge it
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is imperative that member learn how to learn.
See People as a Competitive Advantage and Invest : Asset Leadership
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should be encouraged at all levels. Leaders must fulfill a role of creatinga learning organization that stimulates and challenges people by
providing strategic directives, encouraging learning and facilitating the
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transfer of experience. Leaders can determine that learning takes place
by the questions they ask and by the approaches they use. Leaders must
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actively participate in capturing and transferring learning inside theorganization.
Look at Long-term Plans for the Workforce : There has to be a long term
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planning for the workforce skills and talents needed by the organization.
Planning for talent is different from planning for production. It requires
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careful consideration of the competencies required at each level and ineach function of the organization. It also requires state-of-the art
approaches to succession planning that go beyond the simple
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replacement plans of the past or even the talent pools of the present to
build competitive bench strength throughout the organization over the
long term (Rothwell, 1994). That is, in fact, a powerful way for the HR
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function to contribute to developing knowledge capital for an
organization (Kelley, 1997).
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Support Ways to Deploy Knowledge Assets : Organization`s strategicplanning process should be revamped so that it encourages creativity and
information sharing within and across functions. The strategic planning
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process should be used to reexamine the organization acting in a
dynamic environment and create a dialogue with the company`s leaders
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and employees so that people are constantly thinking about what theyshould do and how it would affect the organization in a changing
environment.
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Determine Skills and Competencies of the Workforce (Skills Inventory) :
The focus on identifying and developing leadership as well as technical
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competencies should be given. These leadership competency modelsclarify how the organizations expects decisions to be made and how
individuals should demonstrate leadership. These models can also be
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used during selection and promotional processes to determine what
characteristics and behaviours indicate that an individual is likely to be
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successful in any leadership position.Revisit Matrix Management : By using matrix management,
organizations can avoid the turf battles that can stem from more
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traditional
command-and-control
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structures.Moreover,
matrix
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management is well suited to application in setting where many
temporary project teams come together and work quickly to address
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problems tapping the talent of many specialists. Another benefit ofmatrix management is that it gives employees exposure to differing
management styles, which can help to develop them for dealing with the
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future challenge they face by seeing the effects of those styles in action.Develop Teams : Another action to build on the growing importance on
knowledge capital is to develop teams, defined as cohesive groups
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assembled to address a problem, manager a process compare steps in a
process, or work to improve productivity. Teams may be temporary or
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permanent; they may be formed form individuals doing the same work(functional teams) or different work (cross-functional teams); they may
be led by one or more people (directed teams) or by team members (self-
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directed teams). A key advantage of most teams, however, is that they
help organizations and individuals depart from traditional and
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bureaucratic, motions how work is organized, who is responsible fordoing it and how people work together to achieve common goals and
carry out similar activities.
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Develop Reward Systems for Sharing Information : Ways should be
developed for rewarding people for sharing information. The balanced
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scorecard is one way that organizations have been attempting to do that.This approach is based on the philosophy that effective measurement is
an integral part of the management process, the balanced score card
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provides a framework to translate a company`s strategic objectives into
performance measures. Four critical areas of employee and
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organizational performance are measured : financial results, performancefor customers, internal processes and innovation and growth. By using
internal and external measures, these four areas discourage managers and
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employees alike from making unfavourable trade-offs among critical
success factors (Kaplan and Norton, 1993). The balanced score card
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facilitates rewards for information sharing because it measures success ineach area. Within each area, relevant knowledge that must be shared can
be identified, measured and appropriately rewarded.
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Developing Strategies for Building Knowledge Capital Experiences andAssignments in Succession Planning : Development experiences are
planned to build individual competencies and can be linked to the
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competencies required for success of the organization with a strategy.
Peter Drucka (1992) emphasized that are way of educating people is to
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view the whole, of course, is through work is cross-functional taskforces. The real challenge lies in the building on experience and leverage
knowledge quickly and widely throughout the organization.
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The role of HR function goes well beyond value recognition. For knowledge
capital to add value to organizations, key people should be identified, and made
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to transfer the information to others, use it in HR strategic planning processesand to spark innovation and creativity among the workforce.
Use and leverage
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knowledge
To act intelligently for
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success and viabilityDeploy knowledge
Create new knowledge:
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Learn, Innovate and
Research
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To improveprocesses,
products and
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Using prior knowledge
services
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and importsOrganize and
Capture and store
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transform knowledge
knowledge
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To re-use and buildTo make it broadly
upon it, and to
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available and to
leverage it in other
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embed itways
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Figure 3. The Knowledge Life Cycle
Source : Knowledge Research Institute, Quoted in Business Today, May 7-21,
1999, p. 86.
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PERFORMANCE APPRAISAL
Knowledge based organizations have to be adept at engaging their workforce to
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achieve goals that benefit the organization as well as the individuals. In acontinuing effort to monitor the pulse of the market place, more organizations
are trying operational yard sticks to the traditional financial gauges. It is a
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common view among managers that staff will perform better if they understand
the contribution that their work makes to meeting the written objectives and
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goals of the organization. It follows, therefore, that anything that makes thisconnection cleaner to employees should enhance performance. This insight
encourages organizations to publish documents that show through the medium
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of a programme structure, how all the myriad jobs undertaken contributed to
meeting the organization`s objectives. Feedback is as important as
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understanding the significance and contribution of one`s work. Many managersbelieve that feedback should be based on measurement (Watson, 1994(a)) and
consequently much of the effort under the heading of performance management
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is used to develop system for measuring performance. Most measurement
methods are based on a systems model that attempts to measure the input to an
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organization, the uses to which those resources are put and the services andbenefits that arise from that activity. Performance measures only have value, as
information rather than data, if they are constructed as ratio that put one piece of
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statistical data into the context of another. There are a number of issues that
arise out of the use of performance measure. For instance, there are four basic
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types of processes that may require differing emphasis in the measuresOperational
Developmental
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ManagerialSupport
Each measure has to have a reasonable standard of performance. The individual
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measure must directly support and align with the next higher level of measures
well aligned with the objectives and the ultimate strategic goals. Measures
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provide focus, quantify objectives and set standards. Objectives have to bequantified by developing measures to adequately express each dimension.
Detailed measures are combined and can be summarized on dimensions of
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higher level objectives.
Management in partnership with the workforce, must find opportunities for
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development, empowerment and performance that meet both organizational andpersonal interests and objectives. Management must provide opportunities for all
employees to develop skills, experience and knowledge that can improve their
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performance and increase their capabilities. Without developmental knowledge
and experiences, performance will be disappointing. In addition to
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developmental opportunities, management must provide opportunities foremployees to demonstrate, practice, perform, learn and improve their
performance and capabilities. Monitor and assess measures provide for both
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internal and independent monitoring and assessment. Measure of performance
should be monitored by external groups with interests in the outcomes, or
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groups that are at least impartial. For example customers, peer groups, seniormanagement are likely candidates for monitoring. This is what is called 360?
appraisal.
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The intention of 360? appraisal is to give a broader and more objective
assessment of people`s competence, although from another angle these systems
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must multiply the biases and distortions of judgement to which all appraisal isproof. Stewart (1998) pointed out that much assessment procedure in
organizations accepts a logical fallacy that the sum of many subjective
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judgements is an objective one. Managers are often willing to accept multi-rateappraisal within certain constraints. They accept its use for developmental
purposes, but are less willing to see it to be used as a basis for judgement
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concerning pay, performance or promotion. Multirater feedback is often only
used when a manager has, in different cases, four, five or eight people reporting
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to them. With small numbers it may be difficult to maintain the raters`anonymity and the judgements made be sweetened to avoid any danger of
reprisals. In a fully 360? system, there is also a problem of the weightage to be
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given to the various perspectives; should the views of subordinates have the
same value as those of senior colleagues and how seriously should the
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assessment of customers or clients be taken. It can be argued that upwardappraisal (if not the full 360?) is an appropriate balancing of the power relations
between management and non-management staff.
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It is essential to measure what you reward and reward what you measure.
Otherwise, no strong motivational effect will be created. If new measures are
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needed, or if existing measures need modification, create fix them as soon aspossible. Rewards should take many forms, including money, recognition time
off, empowerment, work selection, advancement and development. And rewards
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should celebrate successes, as well as desired behaviours such as collaborating,
experimenting, risk-taking and learning. One interesting aspect is that results
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and outcomes are the objectives being managed, not processes. First byemphasizing outcomes that is product, services and financials, the organization
focuses on meeting customer needs and business needs, not internal functional
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or political needs. Second it gives managers of each organizational unit the
flexibility to organize the processes and enabling business system components to
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best fit their local needs and personal management style, but holds themaccountable for meeting the outcomes. Third, the work force is primarily
rewarded for results, not for internals. What is most important thing you can and
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must do to change the existing culture and mindsets so that they are receptivesupportive and committed to the precepts of the knowledge organization?
Motivate everyone by providing equal opportunities and development, as well as
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just appraisal and rewards.
Management must measure and reward the performance, behavours and
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attitudes that are needed and desired. It is essential to measure what you rewardand reward what you measure. Kaplan and Norton`s Balanced Scorecard
approach both measures and rewards. This approach is then combined with core
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values of providing good values to the customer, servicing the customer, high
performance, leading with expertise, innovation and sharing and cooperating.
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Therefore following should be rewarded :Customer satisfaction
High performance
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Personal knowledge and expertise
Team work and sharing of expertise and knowledge
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Creating new and extending existing knowledge and expertiseUsing and applying the knowledge and expertise in the knowledge
repository
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Proactive problem solving and problem prevention
The balance score and approach has following basic measurement dimensions:
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1.Customer
Value (Product, Service, Price)
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Satisfaction
2.
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FinancialExpenses
Income
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Net EarningsNet Worth
3.
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Process
Quality
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TimeCost
Capacity
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Flexibility/Adaptability
4.
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Workforce (added by many organizations)Development
Empowerment
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Motivation
Collaboration, Sharing, Team Work
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5.Learning
Core Capability
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Expertise
Knowledge
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InnovationCONCLUSION
The knowledge based organizations will have to use integrated approach in
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doing business. Through the use of employee knowledge profits, they will
assemble to best internal, multidisciplinary teams to handle their business
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transactions and client engagements. They will tap into their knowledgerepositions and global case bases to learn how similar assignments were handled
and solved. They will use their company intranets and knowledge management
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exchange tools to access, store and retrieve important information, knowledge
and heuristics relating to their situation or business activity. Expert systems also
will play a major role in providing an active advisory component to the
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organization`s knowledge repositories and corporate memory. Integrated
performance support systems supported by knowledge repositories can turn out
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to be the break through concepts needed to implement this integrated approach.Organizations need to cure their corporate amnesia in order to maintain their
competitive edge. Organizations will continue to merge, reengineer, downsize,
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and flatten. As a result, a turnover of employees will be created which could
result in a brain drai effect. To overcome this potential problem, knowledge
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repositories must be created, and maintained to capture the expertise beforepeople leave. To cope up with these trends, future organizations may well need
to be more focused and specialized in their business strategies, relying on
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alliances and partnerships to produce products and deliver services that would
have been previously performed internally. According to Robert Dunham of
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Enterprise Design, the power of incorporating action into our interpretation ofknowledge is that it puts the focus on the actions to be produced, not just on
understanding or information that requires another step to get to action.
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Understanding and information are still aspects of knowledge, but they are no
longer the end product.
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Organizations need to be proactive, and put knowledge into action. Their actionsshould produce value for customers. The only thing that gives an organization a
competitive edge, the only thing that is sustainable is what it knows, how it uses
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what it knows and how fast it can know something new. This knowledge
advantage will be a major competitive advantage for the organization in years to
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come.According to Brook Manville, Director of Knowledge Management at
McKinsey and Company, and Nathaniel Foote, McKinsey`s Director of
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Knowledge and Practice Development.
Knowledge ? based strategies begin with strategy, not knowledge. A
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company has to know the kind of value if intends to provide and to whom.
Only then it can think of its knowledge resources in ways that make a
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difference.Knowledge-based strategies aren`t strategies unless you can link them to
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traditional measures of performance. If knowledge can`t be connected to
measurable improvement in performance, including improvements on the
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bottom line then the knowledge revolution will be short lived.Executing a knowledge-based strategy is not about managing knowledge,
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it is about nurturing people with knowledge. Also, people will not
willingly share it with coworkers if their workplace culture does not
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support learning, cooperation and openness.Organizations leverage knowledge through net works of people who
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collaborate.
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People networks leverage knowledge, through organization pull rather thancentralized information push.
Above all organizations need to continue developing their organizational
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intelligence. Organizational intelligence is an organization`s capability to
process, interpret, encode, manipulate and access information in a purposeful
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goal directed manner so that it can increase its adaptive potential in theenvironment in which it operates (Glynn, 1996).
QUESTIONS FOR DISCUSSION
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1.
What is organizational effectiveness? How can high performance
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work systems improve organizational effectiveness?2.
Discuss the various principles underlying high performance work
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systems.3.
Discuss the various components of knowledge management
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architecture. How can they contribute to the organizational
effectiveness?
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4.What is intellectual capital? Discuss its growing importance in
changing business scenario.
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5.
What is performance appraisal. How can it be made effective in a
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KBO.6.
Discuss various strategies used for the growing importance of
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knowledge management.
7.
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Discuss various issues relating to the knowledge management inorganizations.
SUGGESTED READINGS
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1.
Drucker, P. (1992). Managing For the Future : The 1990s and
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Beyond. New York : Dutton.2.
Drucker, P. (1995). Managing in a Time of Great Change. New York :
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Dutton.
3.
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Kellay, B. (1997). King Makers. Human Resource Executive, 11(2).4.
Rothewell, W. J. (1994). Effective Succession Planning : Ensuring
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Leadership Continuity and Building Talent From Within. New York
: AMACOM.
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5.Rothwell, Willian J.; Prescott Robert K. and Taylor, Masia, W. (2005).
Strategic Human Resource Leader. Mumbai : Jaico.
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6.Kaplan, R. and Norton, D. (1993). Putting the Balance Score Card to
Work. Harvard Business Review.
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7.
Glynn, M.A. (1996). Innovative Genies : A Framework for Relating
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Individual and Organizational Intelligences to Innovation. Academy ofManagement Review, 21(4).
8.
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Liebowitz, Jay and Beckman, Tom (1998). Knowledge Organizations
What Every Manager Should Know. New York : St. Lucie Press.
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Unit III
KNOWING WHAT THERE IS TO KNOW
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The world is changing fast and the world of business is changing faster. In the
new millennium, business corporations will have to deal with entirely new
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challenges to meet customer demands, move from competition to collaborativereconfiguration, dovetail supplier and subcontractor processes to the corporate
goals and empower employees to be able to meet and surpass customer
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expectations.
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The challenge of meeting higher customer expectations is not something that hasemerged suddenly. This evolution has been happening over the last 30 years,
accelerated in this last decade because of rapid expectation pulls, like the impact
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of the information explosion and entry of global brands into all international
markets. This revolution has been further fortified by the push of new
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technologies like pervasive Computing and the Internet, which have allowed thepromise of Net-Centric Computing to extend into the work and life styles of the
next generation of prospective buyers in the world`s new economics.
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In the relentless competitive search for new business, the customer today
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is seen by breathless marketers as a fickle and mercenary shopper, who respects
no brand, has no loyalty and demands higher value for money with every
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transaction. They also expect new products and services to be available everyday. This has brought in the concept of the market facing enterprise, where
every process and activity within the organization is pointed towards increasing
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customer value. Business process re-engineering, which was once seen as a
euphemism for downsizing, has taken its rightful place as a tool for simplifying
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customer interaction with the organization. Information Technology has begunto pervade all activities within and beyond the physical boundaries of the firm
and the focus of Total Quality Management initiatives and benchmarking
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initiatives have all become oriented to the stated and implied needs of
customers.
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This has resulted in changes in the expectations and profile of employees
too, who have to become customer rather than task focused, exhibit high
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capabilities in the use of technology to maximize their own productivity and
significantly cut down learning times for any new task or role.
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New paradigms are also emerging in the organization`s relationship with
its suppliers and subcontractors. They are now seen as key partners in the new
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virtual corporation, providing the ability for the entire supply chain to be fine
tuned towards changing market needs.
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Take the case of the transnational European Insurance Corporation. In
early 1998, it realized that its profit margins were being eroded by two factors.
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First, the inability to command the right price for its services, because of
inadequate knowledge of customer expectations and competitive scenarios; and
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second, repeated failure of attempts to train new employees well enough and fastenough to respond to customer needs for information and new services. This
corporation, like many others in the service delivery business today is faced with
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three key challenges.1. How to change its method of attracting customers and servicing their
needs in the new world of Internet and Electronic Commerce.
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2. How to transform its processes and implement Information
Technology Enablement to build the market facing enterprise.
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3. How to re-engineer the mindsets of its employees and enableindividual and corporate learning to happen in an institutionalized
manner.
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The challenges themselves are not new and in an organization with a
long and successful history of delivering customer services all over the world,
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there is no doubt that enough capability exists to address each challenge with thecollective wisdom of generations of managers and leaders, and emerge
successful. But in this statement of the solution lie the problems that face,
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schools, universities many organizations and even governments. These are the
problems of identifying the sources of knowledge that exist within the
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organization. These are issues of finding the correct method of sharing anddisseminating knowledge across the enterprise and to transform the customer
satisfaction capabilities of each and every member of the organization through
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timely availability and use of the collective knowledge base.
This is the dilemma that has moved the concept of knowledge from the
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conceptual third stage in a continuum of data-information-knowledge-wisdominto an addressable and important component of an organization`s customer
satisfaction arsenal. The realization that knowledge can be sourced, stored,
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disseminated and used has today spawned multiple research projects, led to the
development of a number of tools, become part of the agenda of over ninety
percent of the global corporations and has even taken knowledge management
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to the very peak of the present day Information Technology Hype Cycle. The
nascent state-of-the-art and science of KM can be gauged from the fact that less
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than half a dozen enlightening books exist on the subject today ? we hope thisbook will add to that body of knowledge. But the interest in the subject is
evident from the scramble of consultants building knowledge management
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practices, the gaggle of information technology tools and products that are being
rechristened as knowledge management, and of course the numbers of
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information management strategists and researchers of the 1980`s and early1990`s who now claim to have over a decade of expertise in knowledge
management as their claim to fame.
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UNDERSTANDING THE IMPORTANCE OF KNOWLEDGE
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Before delving into the esoteric and still fuzzy art and science ofknowledge management, let us understand the term knowledge itself in an
organizational context. The difference between the ordinary and the
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extraordinary handling of any task, process or interaction ? between employees,
with customers or with any other stakeholder of the firm ? has always been the
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explicit and tacit usage of knowledge by the person guiding the transaction.This knowledge has often been confused with information and sometimes with
wisdom because of the somewhat blurred boundaries that exist between the
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three. While we shall analyse these differences in detail in a later chapter, it is
important to understand that information is nothing but the result of the
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processing of large amounts of data that are created during the regularoperations of any organization. This information in the form of Management
Information Systems, Decision Support Systems or just through the picking up
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of a telephone, is available to all who are authorized to access it. When the
component of experience in handling similar situations is added, including the
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ability to use images, text and transactional intelligence for taking more enricheddecisions, true knowledge is brought to bear on every transaction. The
continuous practice of the art of using knowledge can add to the collective
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capability of the individual, a workgroup and a function and can eventuallybecome the collective wisdom of the organization.
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The application of knowledge and the practice of knowledge
management as a precise science can create wonderful results in any
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organizational context. The work of every employee can become richer throughaccess to Best Practices at any stage of a business process or customer project,
the suppliers and subcontractors to the organization can become part of a close
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working group where early involvement is possible in all the business thinking,
particularly in the highly competitive business situations. Customers can be
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delighted with every transaction, becoming richer and more productive. Thus,the transition form being an aorganizatin that is invwardly focused to becoming
a true market facing enterprise can be achieved. Most important, in the current
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environment of value addition measurement at all a levels, and shareholder
value creation, the conscious capture, storage and archiving of knowledge can
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lead to the creation of invaluable intellectual property that has both practical andlong term strategic value for the organization.
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Managing knowledge is becoming a business imperative for those
corporations who want to protect their present market share, build future
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opportunity share and stay ahead of competition. Knowledge will also be thekey driver for those firms who are keen to innovate and change the rules of the
game. It is no secret that many consumer electronics firms already have two or
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three future models ready even as they are introducing today`s model into the
marketplace. This ability to create the future rather than try to predict it
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accurately has often been the result of knowledge about the present and futurecustomer needs that preempt the customer`s own ability to visualize the future.
And in large organizations, this is best done not by seeking external help, but by
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using the explicit and tacit knowledge of the entire employee and partnercommunity. To quote the CEO of Hewlett Packard, one of the world`s most
successful corporations, Successful companies of the 21st century will be those
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who do the best job of capturing, storing, and leveraging what their employees
know.
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In business corporations, effective and timely usage of knowledge can
also result in the reduction of cycle time and assist in the business process re-
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engineering and organizational delayering process.
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The ability to enable academics, students, bureaucrats or citizens toquickly identify and resolve problems will be the key to successfully managed
institutions and E-Governance in the new millennium. The benefits of applying
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knowledge are truly universal and are imperative for success in the new
millennium.
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THE TECHNOLOGY PUSH FOR KNOWLEDGE MANAGEMENTThe concept of knowledge itself is not new, because theneed and
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importance of knowledge has been the basis for the development of various
cultures, philosophies and religions. What has really made it possible for people
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and even organizatins today to even contemplate harnessing knowledge energiesfor better management has been the rapid evolution in technology that we have
seen over the last decades.
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The role of technology, particularly information technology in defining
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and reviatalizing corporate strategy has evolved over the last forty years or so.In the 1960s and 70s, computers were confined to glass cabins and sometimes
as departmental number crunches. Information strategy was always seen as
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something that would come in after the corporate strategy had been defined. It
was only with the introduction of the personal computer in the early 1980s and
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the subsequent spread of the networking phenomenon that changed the role ofinformation technology from being a passive consequence of corporate strategy
to a pre-requisite to the development of strategy.
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The pull factors exerted on the corporation by its external environment
are compounded by the push given by rapid advances in information technology,
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particularly in the area of intro-organization and inter-organization
communications.
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This push, largely driven by the rapid proliferation of the Internet and the
usage of associated Internet technologies within corporations in the form of
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intranets and extranets has resulted in the emergence new paradigms of business.
A case in point is amazon.com, the virtual bookstore that has caught the fancy of
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shoppers and stock market analysts alike and zoomed to a revenue run rate of abillion dollars and a market capitalization many times that, this company has
proved that the traditional model of business is slowly but surely giving way to
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new methods of planning and developing business opportunities that will change
the face of marketing strategy in the new millennium.
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Other significant players are also beginning to generate significant
revenues in the other three segments. FedEx, Cisco and Intel are reporting
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multi-billion dollar business-to-business transactions. Another popular internet
startup, eBay, has brought the concept of the Virtual Auction to the consumer-
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to-consumer space. Pioneers like priceline.com are turning the entire marketingparadigm on its head. It has made consumer-to-business transactions the new
way of booking airline tickets, hotel rooms and soon, every form of service
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where the customer is keen to name his price rather than ask for discounts. All
these phenomena are changing the every organizations deal with customers and
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even customer expectations from organizations.While E-Commerce is one visible usage of the Internet phenomenon,
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another internal innovation that is happening in many business corporations
worldwide is that of knowledge management. The ability that the Internet
provides to seamlessly integrate the business processes of organizations with
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activities spread all over the globe is encouraging organizations to look at
knowledge capture, archival, dissemination and usage as the logical method of
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improving customer response through institutionalized and technology-enabledprocesses. Through the deployment of data and knowledge capture, storage and
mining tools on knowledge networks, the objective seems to be to capture every
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form of explicit and tacit information and knowledge and build ongoing
corporate learning.
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The Corporate Portal is the logical culmination of technological
advances in the areas of knowledge archival and dissemination, the internet,
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intranets and extranets and managerial innovations in the areas of shared
learning and corporate experience building. In its early deployment in many
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organizations, the corporate portal is nothing more than a customized computingfront-end for each and every employee in an organization which permits a
customized user interface with the large storehouse of data, information and
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knowledge that exists in departmental, corporate and industry databases and data
warehouses. It combines many evolutions like the electronic mail, GroupWare
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computing capabilities, personalized information retrieval and collaborativeworking with the new science of knowledge networks which enables the
conversion, storage and on-tap availability of erstwhile tacit knowledge in
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explicit and accessible formats.
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The early beginnings of the corporate portal actually happened in thebusiness to consumer space. This caught the fascination of consumers and the
global investor community alike, sending many Internet stocks into stratospheric
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levels. Front runners like Yahoo were the early pioneers in moving from
generic portals, which provided a launching apad for surfers and information
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seekers alike, to customized individual access points like My Yahoo, one oftoday`s most popular personalized internet services. The reason why more and
more consumers find this concept fascinating is that it avoids the clutter of
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searching through multiple web sites for information, education andentertainment, that is most commonly accessed by creating a template for
capturing only those information elements from the internet that one is actually
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interested in. This is enabling the concept of the customized newspaper,
selecting scanning of high interest web sites and pull-based access of
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information on new products and services. In the consumer segment, thepersonal portal is already sounding alarm bells for traditional marketers who
have been used to traditional push forms of advertising and product promotion.
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The formation of virtual communities consisting of groups of internet users with
similar interests across countries and continents is being accelerated by this new
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portal concept.The corporate portal will go one step further in integrating the work style
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of every individual into the information strategy of the organization. With the
current trend in the US and Europe towards telecommuting and hot desking, an
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employee can start working anywhere in the world by sitting at a computer inany airport or hotel or business center or even at home and getting his individual
working environment conjured up in seconds to enable him to commerce work.
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With many of the world`s leading technology firms including Microsoft, Oracle
and IBM as well as some of the most innovative Silicon Valley startups putting
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billions of dollars of investment monies into new tools and technologies for Net-centric hardware, software and communications capabilities, the next few years
may change the entire paradigm of the business corporation.
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FROM ART TO SCIENCE : KNOWLEDGE MANAGEMENT
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A knowledge management initiative is best taken up if an organizationfinds value in building an institutional memory or a comprehensive knowledge
base for the firm to enable better application, sharing and managing of
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knowledge across the various entities within and outside the organization.Let us revisit the case of the European Insurance Corporation that was
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mentioned earlier in this chapter. The size of the knowledge challenge can be
estimated by the parameters of its operation ? a network of nearly two million
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customers with over tow thousand new enrolments every week. Call centeroperators are inundated with nearly 10,000 calls every day ranging from simple
policy queries to membership changes and a host of unexpected demands for
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information from pleasant as well as irate customers. With an annual volume of
over 30,000 insurance claims and payouts in excess of a million-and ?a-half
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pounds, any improvement in the efficiency of the operation could have asignificant impact on the customer satisfaction levels as well as the overall
profitability of the enterprise.
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Compounding the problem for the organization was the fact that one of
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the toughest categories of people to hire, train and retain in the call centeremployee. With call centers becoming one of the most popular customer
servicing mechanisms across Europe and the USA, attrition level of employees
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is very high with the result that the company was spending enormous time and
effort on training and retraining its employees on an ongoing basis.
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The European Corporation set for itself one major objectives as its
knowledge management initiative-to achieve a five percent improvement in
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claims processing accuracy with a resultant ten percent improvement in overall
profitability, which would be possible since both underpayment and
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overpayment of claims was resulting in major cash losses through waste on onehand and expensive law suits on the other. Three strategies became the focus
for achieving these goals.
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Get new employees trained on all aspects of Call Center operation in theshortest possible time with new technologies applied for pre-requisite,
skills and reinforcement/remedial learning. This would eliminate the
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need for expensive and time-consuming classroom based training of new
recruits and refresher training for existing employees.
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Have knowledge available on tap about company policies, frequentlyasked questions and explicit and tacit customer knowledge.
Improve quality of customer response as well as capability to process
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customer claims efficiently and accurately on an ongoing basis.
The eventual outcome for the knowledge management initiative had
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been defined in clear business terms and the strategies clearly defined before thetechnologists were put on the job. Very often, knowledge management
initiatives fail simply because the reasons for embarking on the project are not
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clear and the critical strategic issues are not identified. Today, this company is
on the verge of achieving its objectives of just-in-time training, claims
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processing accuracy and customer satisfaction and will soon see a knowledgeworkstation with a customized enterprise knowledge portal on the worktable of
every knowledge worker.
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But it takes a lot to get there and the organization will have to grapple
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with a range of technological and behavioural challenges before it sees fullsuccess. Many of these are presented and analyzed in detail in subsequent parts
of this book.
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Knowledge management has enabled many organizations of worldwide
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repute to comprehensively change their approach and service deliverycapability, both towards their internal employee community and towards
external stakeholders. Many large European and American banks are focusing
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on the task of building and institutionalizing organizational memory.Knowledge is being built about vital processes and practices. Models are being
developed to describe tasks, processes and customer relationship functions that
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employees are engaged in with detailed objectives and best practices that are
oriented towards achieving them.
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Chase Manhattan Bank has developed a comprehensive relationship
management system by using the visual basic programming environment
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wherein bank employees have complete customer knowledge available on tap,
including information on loan histories, deposits, investments and other explicit
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and tacit knowledge that facilitates better customer relationships.In the oil industry, Chevron has been successful in deploying a
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comprehensive knowledge management framework. It uses Lotus Notes in a
comprehensive Group Ware solution that is deployed on a corporate intranet.
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This establishes communities of best practice and enables sharing of bestpractices across the company. The company holds regular internal conferences
for best practices exchange and provides access to corporate and industry news,
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human resources information, financial and library services on the same
knowledge network. A variety of on-line training courses enrich the information
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and knowledge available on this network.Dow Chemicals has a comprehensive intellectual asset management
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system. It includes the management of know how, copyrights, patents,
trademarks and trade secrets. Pharmaceutical giants like Glaxo and Welcome
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are setting up intranet-based executive information systems which enableknowledge sharing on people, key business activities and best practices. It
enables internal and external benchmarking on an ongoing basis. Various
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financial institutions like bankers trust are deploying collaborative computing
technologies to enable sharing of knowledge of financial markets between
employees to create in-house knowledge bases that catalogue and share the
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knowledge acquired in various parts of the firm. They also plan to extend the
in-house knowledge base to key customers, which will not only increase
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customer satisfaction but also minimize the time that would need to be spent onactual one-to-one interaction with the customer in any transaction.
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The real difficulty in implementing knowledge networks is the ongoing
intellectual effort that will be required to ensure that real benefits accrue to the
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organization. The cost itself may be only of an incremental nature, sincecorporate intranets are now a common feature in many companies. It is only the
software that will need to be procured and implemented to get the knowledge
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network functional. One major challenge to implementing knowledge
management successfully is the tendency for many corporate chieftains and even
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functional heads to disbelieve the notion that it is really possible to capture,store, analyse and disseminate knowledge for shared usage. Until this
realization sinks in and CEOs take the first few steps to establishing a
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knowledge performance index for the critical and repetitive activities of the
organization, knowledge management will remain a topic for magazine articles
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and intellectual seminars.However, the business environment demands it, technologies are
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enabling it and effective knowledge management will be the difference between
the winners and the also-rans in the corporate world of the new millennium.
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Implementing KM in your OrganizationAt the end of a talk by a leading international speaker at a recent seminar
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on knowledge management, there was some unexpected feedback from a rather
agitated gentleman in the audience. Surprising because, the session by any
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yardstick had been an interesting one and gave some useful insights on thesubject. The cause of his concern, however, was the fact that the world already
knew that knowledge management is a clear business imperative. However,
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most thinkers on the subject resort to talking about rather abstruse theories andbroad generalizations and tend to take umbrage under the assertion that specific
answers have to be figured out by each organization. How does one ensure that
--- Content provided by FirstRanker.com ---
knowledge management is seen as anal pervasive way of life rather than a pilot
project that lost its luster after an overdose of hype and unrealistic expectations?
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What is required is an unambiguous action plan, clear guidelines on what is tobe doen, how, when and by whom. Mere pontifications are no longer enough.
Hard-nosed businessmen would rather depend on a scientific approach to
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success than leave it to the probable brilliance of a few believers who practice
knowledge management as an art form.
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Aspiring practitioners of knowledge management primarily have two
major questions:
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How can knowledge management be interwoven into the organizations`s
mainstream activities and functions rather than be looked upon as a
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discrete experiment.For an organization to embark on a sustainable and successful
knowledge management program, is there a clear implementation
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methodology that can be followed.
Both these are very real concerns. For KM to get institutionalized it
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requires not only organizational conviction but clear processes andmethodologies for achieving the same. However strong the intuitive conviction
about an initiative may be, its longevity can be ensured only by :
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(a) a clear correlation to business objectives and strategies.
(b) Identification of quantifiable milestones and outcomes towards the
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achievement of these objectives.There are any number of examples where knowledge solutions have been
implemented without any questions asked because the CEOs saw it as an
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absolute necessity. The ability to derive an organization`s knowledge strategyout of its business strategy lends clarity to this intuitive conviction, enables a
sounder approach for prioritizing various activities of knowledge acquisition and
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provides for setting up of processes and metrics to enable an ROI justification.
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Knowledge management and more specifically knowledge sharing isextremely depenent on the organizational ethos. However, implementation
cannot be an open ended exercise whose fate is determined by the employees.
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For any initiative to get institutionalized it need to be supported by clearly
defined processes, individual responsibilities and technological enablers.
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While it is not our instent to over-simplify the issue by purporting to provide asolution to the last teail, our experience in various KM engagements leads us to
believe that it is indeed possible to arrive at a well-defined approach to go about
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such initiatives. It is both feasible and beneficial to clearly link knowledge
management with business strategy and planning. That way one can associate
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some quantifiable outcomes from KM towards achieving business objectivesrather than merely seeing it as a desirable initiative. Moreover, while KM as a
subject has reahed nowhere near the maturity of, say defining a software
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engineering process (for perhaps the simple reason that it is to do more with
people than with software) it is possible to chalk out a clear implementation
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methodology. Hopefully, what has been shared here will give on (of many)possible approaches that could translate into a clear plan of action of the
organization.
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LINKING KNOWLEDGE STARTEGY TO BUSINESS STRATEGY.
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In chapter 5 we examined the process of identifying KM solutions fromthe business strategy perspective as one of the possible approaches. This can be
viewed as the top down approach to knowledge initiative. There are
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organizations that have started knowledge initiatives in areas that seemed to bethe obvious choices are possibly represented only the low hanging fruit. This has
the obvious advantage of being able to embark on a KM project without much of
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a premble and time lag and also ensure an initial success. However, the not so
obvious disadvantage of this approach is the difficulty in identifying similar
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projects, prioritizing them and ensuring that they can be retrofitted into somekind of a cohesive knowledge strategy in future. The initial project has the
distinct possibility of being a lone initiative, albeit being a much-acclaimed and
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talked about one. It does not necessarily snowball into an organization-wide
phenomenon that can yield business benefits, on reaching a certain critical mass.
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The top down approach on the other hand ensures that there is a clearly definedknowledge strategy in place. Pilots can then be chosen and projects can be
chosen and projects can be prioritized based on various techno-cultural issues.
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It ensures that there are some clearly defined goals in the knowledge domain
that are not lost sight of irrespective of initial successes or failures. In fact, the
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feedback from such initiatives can become valuable inputs for refining businessstrategies.
THE K-GAP ANALYZER AS A TOOL
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An organization needs to be able to identify what are the knowledge
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assets required to meet its business strategy. Obviously, the business strategywould be dictated by an organization`s core competence. ,[s has been elucidated
by Hamel and Prahalad1 in their path-breaking work, core competence has to be
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looked at in the context of building competitive advantage. This means that
business strategy has to be based not merely on current activities and existing
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knowledge assets, but on the way the organization can build on its current corecompetence towards achieving competitive advantage. This in turn would
decide what would be the knowledge assets that need to be acquired.
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Business strategy has got to be broken down into a comprehensive list of
key business drivers, with milestones and time linmes for each business activity.
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For each KBD, the complete set of knowledge assets (K-sets) required to
achieve that KBD need to be identified. This forms the starting pint for
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evolving an organization-wide knowledge strategy.It is in this context that the use of a tool christened the K-Gap Analyzer
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is likely to be of immense help. This is a deceptively simple tool which when
used iteratively has multiple utilities. Some of the processes it aids are:
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Building the knowledge strategyAiding a K-Need analysis
Evolving a learning strategy as a well integrated subset of the knowledge
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strategy
Synchronizing a top down knowledge strategy with a bottom up skills
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acquisition planProviding a basis for a quantitative analysis of investments in knowledge
acquisition versus realization of business objectives
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We will examine each one of these facets as we go along. But right now
we will see how this tool can be used in the context of business strategy. Once
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the knowledge sets for each business function have been arrived at, the next stepwould be to perform an As-Is Analysis. This entails pegging the current
knowledge levels of the organization as high, medium or low. While some
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organizations might like to do this exercise based on the collective judgement of
their key personnel, the K-Gap Analyser, when used in the K-Need analysis
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phase, helps to yield some quantifiable results by breaking down each activityinto sub-activities and cumulating the knowledge scores.
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Simultaneously, one needs to arrive at a similar rating for key
competitors that is based on market intelligence reports and expert judgement.
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By plotting the organization`s skill levels against those of the competitors, it
gives a quick pictorial summary of:
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Where the organization currently standsWhat kind of skill acquisition plans need to be contemplated
What are the requisite timeframes, based on the knowledge gap between
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the organization and its key competitors.
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It also serves as a reality check` to figure out whether the businessstrategy is indeed feasible, given the current knowledge base of the organization
and how far and how quickly it has to go.
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An analysis of the nature and extent of the knowledge gap can enable topmanagement to take certain strategic decisions, depending on whether the gap
can be bridged through incremental knowledge acquisition or requires quicker,
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more comprehensive strategies through tie-ups, mergers or acquisitions. A
classic case in point was the example discussed in Chapter 2, where a
knowledge gap analysis clearly revealed the existing holes in the overall product
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offering from Lotus Learning Space, prompting a tie-up with Macromedia.
THE FOUR PHASE KM METHODOLOGY
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We have described here a four-phase methodology for KM projects,
Obviously this methodology does assume a certain chronology of processes in
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implementing KM solutions. A number of KM initiatives have succeeded
without adhering to well defined methodologies or processes. It is equally true,
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though, that these organizations have been unable to answer the What next?question that crops up immediately after implementing the first project. While
quick initiatives are certainly worth encouraging simultaneously, following a
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more systematic and rigorous methodology for evolving a knowledge strategy
ensures that there is a sense of direction in the overall approach, this also
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aoolws the retrofitting of the gains and learning from the first few projects intothe future course of action.
The four phases are as follows:
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1. K-Need Identification
2. K-Acquisition Framework
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3. K-Net Design4. K-Net Implementation
K-Need Identification
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At the business strategy level one can look at broad groups of knowledge
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categories or K-Sets for being able to take some strategy decisions. However, inthe K-Need Identification and Analysis phase, a more rigorous analysis is called
for. The K-Gap analyzer comes in handy during this phase too.
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The underlying principle behind a knowledge strategy is that an
organization needs to know how the presence or absence of specific knowledge
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entities is affecting its overall business. Towards this end the following
correlations have to be established:
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1. Translate Business Strategy to KBDs.2. Identify those KBDs that pertain to new areas of operation. For these, a
fresh analysis of knowledge requirements needs to be done. For current
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areas, an as-is analysis as described below, needs to be done.
3. Translate each KBD into Key Business Processes (KBP). This assumes
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that the organization has already gone through an exercise of optimizingits business processes. It is best to do it at this stage if it has not been
done. This will prevent the organization from investing its time and
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resources to supplement knowledge levels for activities that might be
redundant.
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4. For each KBP, identify all the activities involved.5. Depending on the size and complexity of the organization, each activity
might have to be broken down into several levels.
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6. Each activity (or sub-activity) would be executed by one or more
individuals. In the need identification` phase, each employee will need
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to establish this reference in terms of linking his activity to thecorresponding KBP and KBD, besides the regular process of identifying
the department or project that they are working in. This exercise by
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itself will help to identify redundancies within the system. It aso, in a
subtle way, gives each employee a sense of participation and
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responsibility towards the overall business endeavor.7. The employee then identifies their knowledge needs to perform their
specific activity. These are listed as a comprehensive list of knowledge
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entities and are highly specific to the nature of the task being performed.Examples of such entities could be the previous marketing proposals for
a marketing executive, manpower resource availability for a project
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manager, patient referrals for a sales person in a pharmaceutical
company or Java application development skills for a programmer.
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8. Once the knowledge entities` are identified, the employee would have torate each of them on a scale of low, medium or high along two
dimensions. These two dimensions are the knowledge level required for
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executing that particular job and the knowledge level currently available.
The knowledge entity would get a score of 1,2 or 3 (for low, high and
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medium respectively) and of course a score of 0 if it is non-existent.Hence the required knowledge score` as well as the current knowledge
score` can be arrived at. It needs to be understood that the current
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knowledge score should connote the knowledge immediately available
so that is also reflects the time lag, if any, to obtain it and the ease or
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difficulty in being able to access it on time. For instance, access toprevious proposals of a similar type would constitute a knowledge
element of a high rating for a marketing executive in their ability to put
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together high quality proposals quickly. If they find that a similar
proposal was made elsewhere in the organization, but it takes a
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considerable amount of effort to contact the right people and access thecontent, then obviously the current knowledge availability (or rather
accessibility) to the marketing executive is low. It is important to
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understand that a good knowledge strategy has to take cognizance of
both availability and dissemination of knowledge assets. Depending on
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the nature of the organization, a facility can be provided for employees`assessments of their knowledge scores, to be refined by their superior
who is likely to have a more holistic understanding of organizational
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activities.This seems like an involved and complex procedure that would take up a
lot of time and effort. Actually, this is not so. If the K-Gap Analyzer is
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available as an automated tool on the company`s intranet, it would take each
employee barely 15 minutes to file the required details on-line, once the
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organization level details of business strategy, objectives and processes areworked out as an initial, one-time effort. The gap analyzer is then capable of
analyzing these inputs and scores at multiple levels of consolidation to yield
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some extremely useful insights. Let us look at some of them.
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The total knowledge score can be computed as :--- Content provided by FirstRanker.com ---
Total Knowledge Score = K
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ij
ij
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Which gives the total knowledge scores of all knowledge entities K (i = 1 to m)
i
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across all organizational activities (j = 1 to n).The differences between the knowledge score required and the current
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knowledge score gives the extent of the knowledge gap. The number of
knowledge entities, when clubbed into homogenous knowledge sets, is
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indicative of the range or diversity of skill sets required.On another dimension when scores of a single K-set are cumulated
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across activities, processes or projects, it gives the relative score (compared to
other K-sets) of both the criticality and extent of the K-gap. Since the scores are
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consolidated from individual assessment, if more people experience aknowledge gap, it correspondingly increases the overall knowledge gap in the
organization, thereby automatically prioritizing itself. This acts as a facilitator
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for prioritizing various knowledge initiatives on the basis of the actual need. Of
course there would be other issues like cultural and technological factors and
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overall business priorities that might influence the final decision.
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The knowledge gap analyzer can be used to consolidate scores at either a
project or departmental level to be able to find patterns of knowledge
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distribution and adequacy.
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Depending on the criticality of the knowledge gap, decisions can betaken regarding what kind of investments would be justified for knowledge
initiatives. If figures of opportunity costs because of delayed availability or
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non-availability of knowledge or skills are also captured when employees fill the
K-Gap analysis forms, it greatly helps in an ROI analysis at a later date.
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The K-Gap Analyzer therefore prepares the ground for identifying areas
in which KM initiatives need to be undertaken. These probable KM projects can
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then be prioritized depending on overall business needs, technical feasibility,
costs, expected benefits, required timelines, visibility and current work group
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culture. Even if all other parameters strongly drive the need for a knowledgeinitiative, the current organizational culture could very often tilt the balance in a
feasibility exercise of this kind. If the knowledge is more tacit than explicit in
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nature, and the current organizational climate is just not conducive to knowledgesharing, it might be well worth postponing the KM project until such time that a
comprehensive Change Management initiative can be undertaken to create an
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environment that can sustain a knowledge sharing culture.
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However, it needs to be kept in mind that most of the early KM projectsin any organization are bound to entail change management issues. This phase
would be the right time to create the Change Vision`. Behavioral changes
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especially in an organizational context cannot be expected to happen overnight.
The process has to start right at the beginning of the project so that by the time
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the technical solution is ready for a rollout, significant progress has also beenmade to create the right culture for implementation. Towards this end, at this
stage the change management agents` either by way of external consultants or
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internal leadership or both have to be identified.
K-Acquisition Framework
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Once the knowledge gaps have been established and the KM project(s)
identified, the next step is to figure out how and from where these knowledge
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components have to be acquired and disseminated. The following need to be
achieved at this stage:
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Knowledge codificationIdentification of sources for acquiring these knowledge inputs
Creation of knowledge maps by linking source and destination for
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knowledge elements
The starting point for this is knowledge codification` as discussed in
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Chapter2. Our experience has been that knowledge codification in virtuallyevery context has been simplified if we keep the Dual Knowledge Solution
Model in mind. Broadly speaking, the Transformation model deals with explicit
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knowledge while the Independent model attempts to find solutions to sharing oftacit knowledge. Detailed classification of knowledge is something that can be
determined by each organization depending on what typology it is most
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comfortable with and suits the needs of the organization best. For each K-Set or
K-Entity, the source for acquisition can broadly be classified as under:
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I to K Transformation Category- from structured databases
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- from information repositories ? both text and multimedia (existing)
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- from information repositories ? existing but non-digitized
Independent Knowledge Category
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- skill enhancement programs (training)
- external resources (people/organizations/sites)
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- internal expertise (people / products)For creation of knowledge maps, a knowledge need as represented by a
K-Set or a K-Entity has to be associated with corresponding knowledge objects
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(K-object) which are going to be the knowledge source for acquiring that piece
of knowledge. A K-Object could be an individual (expert), book, document, e-
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mail, manual, web content, website address, project reports or any multimediacontent. So, in our example of the marketing executive, the K-entity would be
previous proposals` and the K-Object to provide him with those inputs could be
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say a list of Word or PowerPoint files available at a certain remote server or
even the names of his counterparts working elsewhere in the same organization
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with details of their clients.--- Content provided by FirstRanker.com ---
Having identified the sources for K-Objects, the probable destinationswould also need to be identified to complete the K-Map at a conceptual level.
(Creating K-Maps ar the time of implementation has other aspects to it as well,
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like providing an on-line guide, a complete catalogue of K-Objects customized
for every knowledge worker, a navigation aid and so on). The K-Acquisition
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Framework phase thus provides the blueprint for identifying, capturing andtagging all the required sources of knowledge. Simultaneously, the blueprint for
managing the soft or behavioral issues should also be in place. A clear action
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plan has to be drawn up by the change agents.
K-Net Design
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The stage is know set for the technical design of the KM solution. The
following activities are done in this phase:
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Identification of the KM application portfolio
Selection of appropriate technology for implementing the solutions
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Specifying the infrastructure requirements in terms of hardware, networkand software
Choice of the appropriate KM tool or framework, should any be required
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Detaining the technical specifications for the KM solution
One of the advantages of viewing KM projects through the Dual Model
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approach is that it lends itself to an easy delineation of the software applicationportfolio that needs to be developed for the KM project. Once the knowledge
sources for the required knowledge sets are classified under the two models, as
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we saw in the acquisition phase, it becomes simple to identify the application
layer. A representative sample is illustrated here:
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K-Solution
K-Sets
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K-SourcesApplication Layer
Model
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Transformation
(As
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StructuredDatamining/knowledge
identified in
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Model
databases
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extraction applicationsthe
Need
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Analysis
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Interface and gateways
phase)
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to bedrock systems
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Text
mining
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and
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Existinginformation
retrieval applications
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repositiories
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Workflowand
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messaging applications
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Non-digitized
Document capture and
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management,
search
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sources
and
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retrieval
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applications
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Skill
Web-based
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trainingenhancement
solutions with Learning
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Independent
programs
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Management SystemsModel
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External
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Yellowpaging
resources
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applications
-People/
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Webcrawler
and
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organizations
broadcast applications
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-Web sites--- Content provided by FirstRanker.com ---
Communities
of
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InternalPractice (using expert
expertise
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locators, collaboration,
virtual
work
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space
- People
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applications)Best Practice Sharing
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(using
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knowledgerepositories
and
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-
products/
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Discussion Group basedprocesses
applications)
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The application portfolio would determine what technologies are to be
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used as discussed in detail in Chapter 4. This analysis also makes it relatively
simpler to determine the associated technology costs of developing these
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applications. Depending on the relative criticality of these knowledgecomponents or sets, it could even be decided to start with certain simple`
applications within a KM project. For instance, technologically speaking,
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setting up some collaborative frameworks would be relatively easier and less
expensive compared to an extensive data warehousing/mining application. A
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quick cost benefit analysis usually helps to take certain operational decisions.Simultaneously, one would have to determine the infrastructure requirement in
terms of the network connectivity, bandwidth requirements, servers, etc. based
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on data and content volumes, the number of employees and their geographic
spread. Of course, more often than not, companies might already have an
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intranet infrastructure which means there would be no incremental investmentsexcepting perhaps for additional servers and some upgrades, besides purchase of
commodity software.
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If the application portfolio consists of solutions to be developed in the
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Independent model category, then it might warrant a choice of either a KM toolor a WBT tool or both. We have already discussed, the approach that can be
followed for making an informed decision on these issues, with the help of
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consulting aids like a Tool Retrieval Engine.
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At this stage the detailed functionality and technical specifications of theproposed solution would need to be worked out. Processes and procedures for
knowledge capture, storage, dissemination, retrieval, updation and archiving
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have to be clearly spelt out. In KM projects, it definitely helps to use the
Prototyping and Rapid Application Development methodologies adhering to
standards like UML that ensure a constant interaction between the developers
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and knowledge workers. This is important to ensure buy-in by knowledge
workers at an early stage by providing GUIs that are intuitive and users are most
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comfortable with. Where knowledge or skill enhancement through on-linetraining is concerned, this too needs to be elaborated out in terms of both
features and content. It is important to customize content as closely as possible
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to the knowledge worker`s requirement. Interestingly, the K-Gap Analyzer,
because of its innate ability to be used at any level of detail, can actually be used
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to even structure the contents of a learning session. Fig. shows how learningobjectives can be prioritized and structured based on an actual analysis of
specific skill gaps.
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This diagram depicting the use of the gap analyzer shoes that merely
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because a project team is working on an E-Commerce project, it is not right tocome to the conclusion that putting the entire team through a standard training
program will suffice. Although a standard training program on E-Commerce
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may have all the components enumerated above, a particular project team might
require specific content to be sourced and provided as dictated by the K-Gap. In
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this example for instance the project does not require much skills based onTCP/IP concepts. So it does not have to be a part of the learning objectives.
While the project does require javascript and HTML skills, the current skill
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levels are more than adequate. Hence the course can be structured in such a way
that it lays additional emphasis on issues like firewall and security, OOAD and
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EJB and perhaps gives the latest updates on topics like VRML and Active X.This analysis can be done either at a group level, based on the cumulative scores
of the entire project team versus the overall skill requirements, in case a regular
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instructor-led training program is being contemplated; or it could be done at the
individual project member level in case the personalized web-based learning
systems are available. This is a very strong mechanism of ensuring that the
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inputs being given are exactly tailored to project requirements.
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Training therefore could be an important dimension in the overall K-acquisition process. However, it still has to be viewed as a subset of a larger
knowledge initiative for an organization. This issue needs to be clearly
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understood. For, in our interactions with people about to launch KM projects,
we have very frequently encountered concerns about whether a K-Need
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identification process does not turn out to be a mere Training Need Analysiswhich their human resource department is already carrying out anyway. The K-
Gap analyzer clearly establishes the linkages between learning programs and the
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overall knowledge strategy in both conceptual and quantitative terms.
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By the end of this phase, therefore, all components of the knowledgesolutin would be worked out to the last detail. The technical solution for the
knowledge initiative would have been completely developed and tested, and the
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necessary infrastructure (hardware, software, network, etc.) for the eventual
implementation would have to be in place. Equally important is the change
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management initiative, which needs to be well underway. Top managementalong with the change agents need to ensure that employee buy-in is ensured at
an early stage (at around the time that the technical solution is being rolled out).
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Creating a positive environment of preparedness and eagerness among the
prospective knowledge workers to be a part of the knowledge sharing activity is
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an extremely vital ingredient to a successful KM implementation.K-Net Implementation
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This is perhaps the most critical phase of any KM project. It is perhaps a
misnomer to call it a phase, thereby suggesting that it has a start and end point.
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Unlike in most other projects, where KM is concerned, implementation has tolead to internalization and assimilation of the knowledge processes as part of the
mainstream activities.
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The activities and processes thus far are fairly simple to execute, but it is
during implementation that the best skills of all people concerned have to come
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to the fore. The infrastructure is in place, the technical solution has been
developed and validated, what is left to achieve is the buy-in from people. It is
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precisely this heavy dependence on people that gives a larger-than-lifeimplication to a KM project. If it has the power and backing of all the people
behind it, a KM implementation can lead to benefits that are most often much
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larger than what was contemplated at the outset. There are tangible and
intangible spin-offs that are seldom foreseen at the beginning of the exercise.
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On the other hand non-acceptance by the people can make such projects anunmitigated disaster as well. Unlike software projects, success does not depend
merely on clearly quantifiable and measurable parameters like how technically
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robust the solution is, whether it has been adequately tested and meets the
performance requirements. It depends on that highly subjective and
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unpredictable parameter called people involvement`. As Davenport2 has saidwhile talking about Information Ecology, the right balance of IT and cultural
factors is necessary: From where I sit, successful knowledge management
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always occurs through a combination of technological and behavioural change.
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It is the subjectivity on account of the people and culture component thatmakes it difficult to come up with standard solutions for KM implementations.
People and culture specific issues make it difficult to make generalizations even
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within a single organization, leave alone evolving solutions that could be applied
uniformly across organizations. It is here that an organization has to rely
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heavily on the ingenuity of its own people rather than leave it to externalconsultants who at best might have a partial knowledge of the practical realities
within an organizational set-up. External change agents or consultants can be
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used to give an initial impetus to the change management initiative. However,these need to be sustained. The only mechanism for doing this is for the
organization to internalize the process and provide tangible recognition for
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knowledge sharing efforts. Formal mechanisms like story telling are also being
increasingly used to spread awareness and share successes for institutionalizing
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KM. Story telling asn an enabler has some very strong protagonists to the extentwhere there are several story telling communities over the Net.
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There are certain activities that are necessary precursors to most
knowledge solution implementations. Some of these are:
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1. Content Population and Organization: The repositories will need tobe populated with the requisite content. In the Transformation Model,
the underlying databases or data warehouses would already be available.
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These would have to be appropriately interfaced with the overall solution
and possibly other sources of more unstructured date. If content is either
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dispersed or non-digitized, these need to be classified, organized andsupplemented with necessary metadata structures for easy retrieval.
Check-in, checkout procedures need to be followed for constant updates
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on the repositories.
2. Cataloguing of knowledge Objects: In the knowledge acquisition
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phase, the sources of knowledge and the related knowledge objectswould have been identified. Now is the time to actually catalog these
objects, arrive at a codification scheme that is often dictated by the
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nature of knowledge objects in each organization and store the details.
The automated knowledge map then uses these indexes to create an on-
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line route map for knowledge workers to locate these knowledge objectseasily.
3. Identifying the Knowledge Workers: The content access would be
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determined by several layers of security as required in the context ofeach organizational activity. Generally there would be access rights at
organizational, work group and knowledge worker levels. Therefore,
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each knowledge worker would have to identify herself into the system
and specify the work group or special interest groups that she might
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belong to. In a knowledge organization, it would be important toremember that the system should enable as much free flow of knowledge
and content as possible, unless they deal with sensitive information. The
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underlying philosophy of the knowledge network should always be kept
in mind while configuring roles and this is to enable greater interaction
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and knowledge sharing. Therefore, classifying knowledge workersshould be looked at in terms of being able to provide personalized and
relevant information, rather than a mechanism that puts artificial
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boundaries to knowledge dissemination and assimilation.
4. Setting up the Expertise Database: This is an important activity for
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being able to locate the right people at the right time. In most cases theuse of an automated tool for K-Gap analysis, automatically provides the
skills inventory of the employees and helps to populate the expertise
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database. However, this basic layer needs to be supplemented with
additional information on the availability of expertise that might be
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external to the organization, yet accessible to it through its network ofconsultants or business partners. In addition it is important to
substantiate a perceived level of expertise in people (either through self-
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assessment or by the assessment of the superior) by more quantifiable
mechanisms. Intel (which was rated second worldwide in MAKE`99-
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Most Admired Knowledge Enterprise) for instance, has been exploringways of identifying experts through an analysis of e-mails. In Aptech,
on the other hand, we have had a fair measure of success in identifying
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capabilities even among the more reticent employees by theircontribution in solving problems addressed to the Helpdesk.
5. Processes, Roles and Responsibilities: In our consulting engagements,
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we have often perceived a strange dichotomy when it has come to
defining mechanisms and roles in a knowledge solution. On the one
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hand is the though that any kind of rigidity in a system could discouragespontaneity and creativity, two very fundamental pre-requisites for
sustaining a knowledge culture. On the other hand is the harsh though
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undeniable reality that everybody`s responsibility` is nobody`s
responsibility`. We believe that defining at least some fundamental
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processes, roles and responsibilities area virtual pre-requisite for beingable to effectively institutionalize a system. However, while doing so, it
is extremely important for all those who are involved in the exercise to
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remember the guiding principle that these are meant to be used as
enablers rather than a set of rules. For instance, there should be
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guidelines that are clearly spelt out for checking documents in and out ofthe knowledge repository, for removing dated content, for monitoring
discussions, specifying who should be the knowledge integrators for
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different groups, fr administration services including enabling and
disabling access and so on.
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A lot of the activities mentioned above are generic in nature and would bevalid for a number of situations. It is in this context that it is useful to have
automated knowledge frameworks as a quick start to an overall solution.
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The correlation between the requirements as described above and the
functionality provided by such frameworks (such as the Aptech KMF)
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described on KM Tools are quite obvious. These provide a quickmechanism to understand both the processes and activities involved, besides
being able to quickly start some basic initiatives and providing a quick ramp
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up of the overall solution.CREATING THE KNOWLEDGE
ORGANIZATION ? DOES IT REQUIRE A CKO?
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However, the job of making the solution work just about starts here. As pointed
out earlier a KM implementation is not really about the success of a single KM
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project. It is about setting up a knowledge organization. This means addressinga whole array of issues from organization structure, values, managerial systems,
employee satisfaction levels and formal and informal communication systems.
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For KM to become a way of life it has to be presaged by creating a conducive
environment for the same. This is something that is much easier said than done.
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Where sharing of information or explicit knowledge is concerned, people areamenable to the idea much more easily. However when it comes to the transfer
of tacit knowledge, the barriers for acceptance are much higher. In a
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competitive world where the indispensability and therefore the worth of people
is determined buy the amount of knowledge they possess, the natural tendency
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to part with knowledge is rather low. This compounded with the fact thatexperts very often are not the best of communicators, makes it virtually
impossible to even attempt a knowledge capture exercise. In such cases the best
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that a K-Net solution can do is to enable the expert to be tracked quickly, so that
his services can be used through technology like audio/video conferencing. It is
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indeed a reality, although even in the Internet era, it is often only the traditionalmethods of knowledge transfer through on-the-job training or working as an
understudy, which are most effective.
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However, it is impossible to belittle the significant gains that are feasible
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through setting up Communities of Practice or sharing of Best Practices. Fororganizations to be able to truly elevate themselves to a position where its
people can have knowledge enhancing interactions rather than mere information
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transfer practices, it is important to set up meaningful Communities of Practiceand enable sharing of tacit knowledge, however arduous the task may be. This
is where an organization needs a knowledge evangelist. There has been a lot of
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debate about whether the role of skill should she possess and what should be her
responsibilities.
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It is our firm belief that an organization cannot make a knowledge
culture a reality and knowledge sharing to be an all pervasive endeavor unless it
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is carried forward with single-minded devotion and zeal. Whether this is
achieved by the CEO or a CKO or a group of CKOs is a matter of detail. At
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least in the initial years it is important for a group of individuals to makeenablement of knowledge sharing their sole priority. The magnitude of the task
would require a CKO (or the knowledge evangelist) to be supported by a
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committed group of knowledge officers` and knowledge integrators`. Often
these two terms are used interchangeably. However, they clearly have different
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roles to play, knowledge integrators (KIs) are responsible for ensuring that thecontent that goes into the repositories is validated, collated, stays updated, is
relevant and worthy of being there.
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Some companies prefer to entrust the responsibility of administration to
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their KI`s while others might want it to be centrally administered by aknowledge administration. Knowledge officers can be seen as the catalysts
within each division or work group who ensure that the benefits and importance
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fo a knowledge sharing exercise are understood and internalized by every
member of the group. These knowledge officers have to belong to and be an
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integral part of each of these divisions or groups and not be seen as an outsideelement. These are the people on whom the success of the entire project
depends. Hence, they have to be the people with a great degree of conviction
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about its need. It helps tremendously if these knowledge officers happen to be
highly placed in the division`s hierarchy. This way the activity is seen as being
relevant not merely because the top management sees it as an imperative, but
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because the people at the operational level see it as something beneficial to their
activities. Positive signals sent in this manner tend to have a snowballing effect,
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with people actually being anxious to contribute as much as they can.In the case of the Aptech Education Division, there was a significant
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amount of skepticism towards the first knowledge initiative from some quarters.
Though the stated objective of the CRS (Customer Response System) was to
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provide an enhanced level of customer satisfaction through a knowledgesolution, there were those who actually though that it would entail parting with
information that was theirs`. The head of one of the regional offices during a
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prototype validation session actually wanted to ensure that the system had
adequate controls so that complaints pertaining to his region could not be
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viewed by others. His concern was that this could be used either a s policingmechanism by the head office or for other regions to try to make some unfair
comparisons depending on the number of complaints. No implementation
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rulebook can ever give guidelines on how to deal with individual idiosyncrasies.
In this case, however, the management made a very concerted effort towards
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ensuring that the solution was understood in its right spirit. No attempt wasmade to link this to any performance appraisal systems. What was more, it was
decided that knowledge sharing would be subtly encouraged by measures such
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as a T-Shirt that carried the logo I am a Knowledge Enricher for those
knowledge workers who contributed actively to discussion forums and helped
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resolve a good number of complaints. The proof was when the regional head inquestion was among the first to significantly enhance his connectivity
infrastructure for better access to knowledge repositories. There is a very thin
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line between unhealthy comparisons and healthy competition. The transition can
be made through the effort of an enterprising CKO and a supportive and a
supportive management.
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THE DUAL SOLUTION MODEL AND THE IMPLEMENTATION
STRATEGY
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While tools like the K-gap Analyzer could help in carrying out an objective ofknowledge requirements and therefore prioritize the KM projects, the eventual
implementation strategy to be followed might once again be determined by the
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nature of the knowledge solution. A transformation model solution relying more
on explicit knowledge has fewer ramifications in terms of organization culture
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and change management issues. A pilot implementation, followed by solutionfine-tuning and subsequently spreading the solution to encompass all work
groups could be a pattern that could easily be used for solutions where the
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imponderables on account of acceptance by the people are far lesser. This is
certainly not so in the case of most independent model solutions ( with the
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possible excepting of web-based learning solutions), which rely heavily on tacitknowledge. An organization might have a preponderance of solutions based on
either one of the models or in some cases it could have an equal mix of both. In
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arriving at an overall implementation strategy and determining which projects
should be undertaken first, each organization would have to use a good measure
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of its own judgement.In organizations where employee morale is low and there is a perceptible
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degree of insecurity among employees, solutions based on the transformation
model are more likely to succeed. One needs to understand though that even for
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the transformation model solutions to be really effective, there has to be a goodmeasure of value addition to the information layers from the people concerned.
Initial successes on these kinds of projects may well pave the way for a more
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ambitious tacit knowledge sharing exercise. Besides just the technolofy isues
and culture issues, there could be other parameters as well, which might
influence the overall strategy.
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The same organization could even start with both strategies
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simultaneously. A case in point is Aptech itself. The training division startedwith the transformation model initiatives primarily on account of the following
reasons:
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1. Its customer base is extremely large.
2. The division is one of the oldest in the company where business
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processes have been clearly identified and streamlined.3. The information flow is fairly structured.
4. These have already been automated through bedrock systems.
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5. While existing information systems have only looked at capturing and
analyzing data, there is a clear case (at least in the case of student
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complaints), where it was felt that these systems house an enormousamount of knowledge. Knowledge in terms of how problems have been
resolved sometimes through the exceptional trouble ? shooting skills of
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certain individuals ? knowledge that is rarely recognized and probably
never re-used.
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6. The division follows a well-delineated organizational hierarchy andcommunication channels are formally defined since it entails interaction
with a very large number of business partners (franchisees).
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On the other hand, take the software division of the same company that
is characterized by the following features:
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1. It is a relatively new division.2. processes are still evolving and have not really reached a great level of
maturity.
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3. The division has a very loose and non-hierarchical structure.4. Information flow is not really streamlined and uses more informal rather
than formal channels.
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5. The key strength of the division is the sheer brilliance of some of its
people and not so much the maturity of its processes.
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6. there is not much that has been done currently by way of automatedsystems.
Did this division wait for basic systems to fall in place to follow the
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transformation approach from information to knowledge? No. It went right
ahead with several knowledge initiatives that had nothing to do with IT
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initiatives that were being evolved. One of them was the Help Desk and ExpertPanel facility. Every knowledge worker is assigned to one or more knowledge
groups depending on her area of work/previous experience/interest. Each
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knowledge worker publishes her skill areas. In case of a problem where any one
would wish to request for help, it is logged in through the intranet based help
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desk facility. It can either be logged as a general request or it can be directed toa specific person. In the latter, the person concerned is automatically notified.
The person either sends in a response or could redirect it to a discussion forum.
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Resolved problems get achieved for future reference. In a very short time this
solution has resulted in significant time saving on projects. With multiple
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projects working with similar skill-sets, this has facilitated a very vibrant cultureof knowledge sharing . Of course, it has to be gently but surely encouraged by
the management, too. In this case anyone who attends to a number of help desk
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requests in a particular area becomes a defacto`guru`. There is nothing like peer
recognition to nurture and encourage knowledge sharing.
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KNOWLEDGE MANAGEMENT IN THE ORGANIZATIONAL
CONTEXT
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Let us first profile the corporation of the new millennium to understand
the role that various initiatives and information technology tools play in building
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it up. Then we would conduct an analysis to see how these initiatives could be
approached in an evolutionary manner or as a co-existing set of projects.
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The profile of the millennium corporation can be built by looking at its
ability and its arsenal to address each of the five imperatives mentioned earlier.
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IMPERATIVE
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SOLUTION
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Customer focused business processes - Aligning processes to E---- Content provided by FirstRanker.com ---
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Business
Highest quality at lowest prices
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- Enterprise-wide integrationIT playing a transformational role - A whole array of tools
Best in class performance measures - Knowledge capture
Right people for the right roles
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- Learning / Knowledge
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integration
Organizations all over the world have already embarked on a number of
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initiatives to achieve these objectives which will enable them to become leaders
in the global marketplace. We will briefly examine some of the major ones and
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see what tools are being deployed in each area. We will then see how an overallknowledge management initiative links up many of these initiatives
Improved Customer Service
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The current trend in this area, pioneered by early Internet and E-
Commerce adopters, is Customer Self Service. Giving customers the
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ability to access information themselves has resulted in quantum jumpsin customer satisfaction and also significantly reduced the cost of
employing large numbers of customer service representatives. Web
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Technologies, the integration of internet systems with corporate intranetsand the use of Group Ware and collaborative computing systems to
enable the customer to dig deep into the knowledge bases of the
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organization within a designed security network have been the key
technology enablers in this area.
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Customer care and managing relationshipsCustomer Relationship Management is emerging as the new Gold
Standard application of the new millennium with new consulting firms
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like 12 Technologies leading the way with products that extend the
virtual organization into the office of the business customer and the
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hoem of the retail customer. On the organization side, CRM tools helpin linking the customer orders and queries into the legacy systems for
order processing and enquiry or link directly to the Enterprise Resource
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Planning implementation of the organization.
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E-Business is also becoming a popular way of managing relationshipsboth at the business-to-business level and at the business-to-customer
level. While legendary successes like the virtual bookstore amazon.com
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and the auction site ebay.com have created waves in the business-to-
consumer market space, it is widely believed that the biggest potential of
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the Internet and electronic commerce will lie in enabling business-to-business transactions. International technology majors like CISCO and
Intel are already transacting a major percentage of their business with
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partners and corporate customers through these electronic transactions
and even professional communities like doctors and lawyers and
governments all over the world are now embracing this new medium of
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interaction.
Enterprise-wide integration
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What is expected to be complementary in an organization that enables itscustomers to interact and delve deep into its internal business processes
is the ability to provide quick response through a set of business
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processes that are re-engineered for quick response and the ability to be
truly market facing`. The process of Internal Integration has been
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addressed in the past two decades by waves of solutions ranging fromMaterial Requirement Planning to Manufacturing Resources Planning to
the now ubiquitous Enterprise Resource Planning with tools like SAP
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and Baan now becoming market leaders in their chosen segments. In
addition, collaborative computing enables information and decision-
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making to be shared across corporate networks. Tools like Lotus Notes,Microsoft Exchange and GroupWare systems support and enhance the
capability of both ERP and legacy systems in organizatrions. Business
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intelligence, data warehousing and data mining capabilities are also
being brought into organizations to further tighten the capture, sharing
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and usage of data and information to benefit internal as well as externalbusiness transactions.
Tighter integration across the Supply Chain
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With more and more focus on core competencies, the need for
outsourcing non-essential services and even large portions of the
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manufacturing or service delivery process has become the order of theday. This has consequently led to the imperative of managing the entire
supply chain tightly to ensure that the customer does not suffer on
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account of the handoffs from the organization to its partners. Supply
Chain Management tools are now becoming as popular as CRM products
and are inevitably finding linkages to the ERP systems that most
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organizations have implemented. These also link to the internal
collaborative systems, making seamless interfaces within and across the
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organization, one of the key features of the millennium enterprise.Inducting and Retaining Talent
In most industries today, attracting and retaining human resources is one
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of the most crucial activities. It is the focus of considerable attention at
all levels.
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This is one area where information technology has probably contributed
the least. Evolutions in technology-based training, performance support and
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knowledge networks have enabled organizations to speed up the training
processes and reduce costs. Even relatively mediocre employees are
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empowered to perform at peak levels through finely crafted performance supportsystems. These initiatives help primarily in induction and training. Retention
mechanisms are being built through information technology in the form of
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career planning and tracking systems. They also provide for Internet and
intranet enabled environments which allow free sharing of ideas across
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organizational hierarchies and geographies. With every mentor andboss beingjust a mouse click away, behavioral scientists are being continuously forced to
reassess organization development initiatives, and design newer and newer
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means of keeping high performers motivated and intellectually challenged.
INTEGRATING
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KNOWLEDGEMANAGEMENT
INTO
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THE
MILLENNIUM ENTERPRISE
Some Imperatives and Challenges
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Knowledge management presents an opportunity to integrate all the people and
processes that exist within an organization towards stated corporate objectives.
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These objectives have already been defined and range from employees tosuppliers to subcontractors and to the customers. And today`s tools range from
the array of information technology solutions ? Business Intelligence,
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GroupWare, ERP, SCM, intranets, the Internet ? to every possible form of E-
Commerce. The question is whether each of these is disparate and independent
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optional initiatives or whether knowledge management can provide a thread ofcontinuity to integrate and align all these initiatives towards the common goals
of the millennium enterprise.
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All corporations today are faced with enormous challenges that threaten
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their supremacy even in relatively unchallenged domains. This fiercelycompetitive environment has been created by a combination of competitive pull
factors like globalization and privatization, and technology pushes, primarily
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caused by the rapid proliferation of the Internet. The ease of the crumbling of
the Berlin wall has brought down many erstwhile entry barriers. In an
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environment where product superiority is transient and brand loyalty isbecoming an anachronism, the only differentiator will be the quality of the
organization`s processes and its ability to attain and sustain customer intimacy`.
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Once the customer intimacy objective has been translated into specific consumer
to business electronic interfaces and customer service and response mechanisms,
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the next stage is to ensure that the enterprise`s business processes are alloriented to the needs of the customer. A true market facing enterprise ensures
that customer needs flow quickly down to the last level of response in the
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organization and the needs and actions are captured in the legacy systems or
ERP bedrock of the organization. The quick capture, storage, dissemination and
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use of data, information and knowledge is essential to ensure that quick actions
and responses are facilitated by information technology at all levels. This
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process energy` needs to be supplemented by the third imperative ? that ofPeople Empowerment.
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This is where a knowledge-centric approach can really enable a
corporation to succeed beyond the expectations of its customers and the
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capabilities of its competitors. A true knowledge Corporation will be one wherethe principles of knowledge management are applied as an underlying
philosophy for all strategic initiatives, ranging from customer interfaces to
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internal integration of systems to business-to-business Interfaces. Included of
course is the full continuum of the learning organization from learning systems
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to performance support to knowledge management.An analysis of the potential of knowledge management tools and
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techniques to transform the implementation of each of the initiatives will put the
real potential of knowledge management in perspective. These are discussed at
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great length . Consumer-to-business and businee-to-consumer transactions canrange all the way from simple customer queries and feedback through a Web
Storefront to comprehensive Customer Relationship Management (CRM) tools.
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The trends in Business-to-Consumer (B2C) E-Commerce point towards more
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and more self-help for the customer to enable customers to access deep down
into the innards of the organization and conduct secure transactions with very
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little interaction with the employees of the firm. Thinking through theknowledge interventions required to facilitate these self-help environments will
call for a deeper understanding of customer buying patterns and psychology so
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that all the intelligence derived form significant customer interactions can
become part of the institutional memory of the enterprise. This will ensure that
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every future interaction of the customer with the firm becomes richer and willenable the concept of customer intimacy to really come alive.
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Consumer to business transactions would be meaningless if the
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organization did not build processes to quickly enable the flow of expressed andimplied customer needs through the enterprise. Collaborative computing
involves the implementation of Group Ware and messaging solutions and tolls
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like Lotus Notes have become synonymous with knowledge management. The
ability to build communities of best practices` and shared ideas is one of the
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key capabilities of any significant knowledge management initiative and willcatalyze the development of a Quick Response and Reflective Organization.
Added to this are collaborative knowledge capture and usage capabilities
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provided by business intelligence tools which again ensure that processes
respond more creatively to customer issues and a true market Facing Enterprise
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is built.Legacy systems and enterprise resource planning applications are
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typically complete in themselves. The role of knowledge management in the
integration of GroupWare or business intelligence tools with these larger
segments of applications would be to ensure seamless interfacing. This ensures
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that the results of discussions and intelligence built over a period of time are
able to enrich the data or context-specific information stored and also enable
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customers to get better Reponses. In the Insurance Company, the real cuttingedge to customer response comes when the Call Center employee`s interface is
able to give in real time not just the data about policies or information about the
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customer`s queries, but also tacit guidance on the best behavioural stance to
adopt with the customer based on previous interactions.
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Knowledge management also needs to be integrated with the data
integration strategy of the enterprise. When this is achieved, it will also enable
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the business to business transactions from the firm to its virtual enterprise
parterners ? suppliers, sub-contractors, distributors and agents ? to be energized
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through knowledge-based interactions. Picture an extended ERP situation wherea comprehensive customer contract has to be executed, involving significant
outsourcing and subcontracting and delivery to be made in installments.
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Synchronization of all business processes across the supply chain and
intelligence and knowledge sharing across the virtual organization will ensure
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minimum hiccups and maximum customer and partner satisfaction.--- Content provided by FirstRanker.com ---
And the knowledge Continuum itself? There is no doubt that knowledge
management tools are the best way of making Peter SEnge`s concept of the
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Learning Organization come true. While purists argue that there is a lot more tolearning and knowledge than just technology, there is no doubt that the
availability of learning, electronic performance support and knowledge bases on
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tap for ready access are the great potential areas for improving corporate
knowledge capabilities. As we move deeper into the new millennium and
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knowledge processes, tools and technologies get internalized at every stage ofbusiness interactions. Knowledge management will provide the visionary
organizations with a capability level that will prove a major source of
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competitive advantage in the new Information Society.DISSEMINATION TECHNOLOGIES
Dissemination can either be through pull-based or push-based technologies.
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Pull-based technologies would include the regular IR technologies that we have
looked at earlier including query and search. Push technologies include
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broadcasting, alerts and triggers, channels, software agents, etc. Most solutionswould use a combination of push and pull technologies.
KBMS
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One would be loath to call knowledge Base Management Systems (KBMSs) a
separate technology. There are some that believe DBMSs are to Information
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Systems what KBMSs are to KM. it is not so. A knowledge base` is more of aconceptual entity than a technology by itself. What we need to understand is
what a knowledge base really connotes. To recap from the last chapter:
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A knowledge base is information along with inter-relationships and
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contexts.Technologically, this translates into a database or an information
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repository with advanced search capabilities.
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Therefore, any set of technologies that would enable the above wouldalso facilitate creation and maintenance of a knowledge base. It is more
important to understand the conceptual implication of a knowledge base as
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being different from a database or an information repository, rather than add to
the technological muddle by classifying it as a separate technology all together.
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So which technologies should an organization settle for?
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It is always easier for any organization to leverage onits existing
technological skill-base to implement solutions. An information to knowledge
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Transformation model will need to build on the technologies used in its bedrock
systems, whether it is through RDBMSs, data mining/data warehousing or
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Document management applications and enable knowledge sharing andgeneration by supplementing it through technologies like collaboration search.
An independent knowledge solution model does not have to be built bottom
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upwards. Several quick solutions can be built by merely ensuring the necessary
connectivity between people and the use of powerful collaboration and
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conferencing mechanisms. This is not to say that the latter should not use whatare commonly designated as IS technologies. Conversely, most transformation
model solutions may also use some of the independent model technologies. The
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functionality provided by a number of these technologies is complementary in
nature and can be judiciously used to evolve a suitable solution.
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The key technological elements that are driving knowledge management
forward according to a Delphi research note2 are:
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The broad acceptance of intranets and extranets as the network backbone
for automated business processes
The growing sophistication of object technologies and their deployment
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in new software applications
The arrival of practical standards for data integration and metadata
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management in the I-net environment, specifically the XML standard;and
The merging of knowledge management priorities into the competition
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among the major software platform developers, specifically IBM/Lotus
and Microsoft
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Further, according to a Delphi User Survey in 1999, respondents haveidentified
Intranets,
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Text
Search
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andnavigation.
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Tools,
GroupWare/Collaboration Software, document management and the
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Internet/World Wide Web as the most significant technologies in their KMinitiatives. The respondents current efforts are focused on organizing, leverging
and sharSearch and navigation. Tools, GroupWare/Collaboration Software,
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document management and the Internet/World Wide Web as the most
significant technologies in their KM initiatives. The respondents current efforts
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are focused on organizing, leveraging and sharing exiting efforts are focusedorganizing, leaveraging and sharing existing corporate knowledge. They feel
that the next round of technologies will help them generate new knowledge and
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uncover hidden knowledge. This runs congruent to our earlier hypothesis that
the Transformation model calls for a higher degree of effort and technological
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maturity. Hence, both an analysis of the relevant technologies, as well as harddata from existing organizations who have undertaken KM initiatives, seem to
reveal that starting with the relatively simple Independent model technologies
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with an initial focus on explicit knowledge might be a good starting point for
organizations embarking on a KM journey.
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Reference
1. Managing Knowledge Workers, Frances Horibe John Wiley & Sons,
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2. Knowledge Management ? Enabling Business Growth GaneshNatarajan and Sandhya Shekhar, Tata McGRAW ? Hill Publishing
Company Limited.
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3. Management by Consciousness, Edited by Dr. G.P. Gupta. Sri,
Aurobindo Society, Pondicherry.
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Unit IVContent Outline
1. HRIS for KBOs
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2. Performance Management in KBOs with special reference to balance
score card
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3. Software requirements for the performance managementTeams in IT projects have traditionally involved two parties: end users and IT
staff. However, for a knowledge management system, teams need to be more
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comprehensive to be effective. A knowledge management system is built on
expertise, knowledge understanding, skills and insights brought into the project
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by a variety of stakeholders who might have little in common from a functionalstandpoint. The quality of the collaborative relationship between these
stakeholder and mines the ultimate success of the system. Having the world`s
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best knowledge management system still does not guarantee successful
management of knowledge: That success comes come from KM`s
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implementation and cultural embodiment by both the knowledge workers andthe employees who will ultimately use it. This relationship is complex and often
highly problematic. Therefore, selecting the right blend of team members to
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lead the knowledge management project is a critical step.The fifth step on the KM roadmap involves design of the knowledge
management that will build, implement, focus, and deploy the KM system. In
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this chapter we identify sources of internal and external expertise needed,
prioritize stakeholder needs, evaluate member selection criteria, and examine
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team life span and sizing issues. We identify characteristics of the KM projectleader to determine mechanisms to streamline internal dynamics and maximize
users` participation. Next, we identify tasks for the KM team and fit them to the
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risk evaluation matrix to circumvent common points of failure.
SOURCES OF EXPERTISE
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Companies implementing knowledge management must draw their expertisefrom several different sources:
? Internal, centralized IT departments
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? Team local experts
? External vendors, contractors, partners, and consultants
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? End users and front-line staffAlthough we cannot undermine the importance of IT staff who will actually
build a system, the most important part of this team member set is the set of
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local team ? based expert(s). The burden of balancing counteracting
requirements falls on the shoulders of the knowledge management ream.
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Drawing from a variety of functional groups within and outside your company isessential. If done properly, this approach will become the strength of your
knowledge management team and a major contributor to the success of such an
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endeavor.
LOCAL EXPERTS AND INTRA-DEPARTMENTAL GURUS
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Active end-user involvement throughout the knowledge management project is
critical to its success. In most companies, there are the early adopters of
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technology--the so-called gurus within your company. These are the peoplewho come in early or stay late to play with new tools that become available.
Even though many of these folks tend to be non-technologists,
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They are the best people to gauge the possible usefulness of each feature thatyour system has. These local experts are often the first to notice the limitations
of existing systems, and to think of possible upgrades and changes to meet the
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evolving needs of their group. Examples of such workers include marketingpeople who realize that existing technology could possibly be used to deliver the
latest sales figures and data needed by traveling salespeople in remote locations.
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INTERNAL IT DEPARTMENTS
Relying solely on local experts, of course, has its limitations. Even though local
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experts might possess a fairly high degree of technical knowledge besidesknowledge of their own job, they might lack an understanding of the
interdependencies between complex systems, networks, and technology that
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pure technologists like the IT staff might be able to bring in. While the local
experts will bring in the business case and ideas, it is IT staff who will bring in
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knowledge of:Infrastructural capabilities and limitations
Connective and compatibility among the team-based systems and the
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overall organizational technology infrastructure
Standardization issues across different platforms, applications and tools
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Technicalities underlying the adaptation of these tools by variousknowledge worker groups within the company
When you are selecting team members from the internal IT department within
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your company, it is critical that you select personnel with credibility in the
eventual user group. This helps ensure that the relevant set of stakeholder needs
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are adequately represented. With increased emphasis on customer service, it iseasy for internal customers to outsource their development services to external
consultants. Therefore, delegates selected from the IT department must have a
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more expansive view of who the customer is. This must include the internal
customer at the same level of significance, as they would view an external
customer or buyer. Technical skills, of course, are a priority in making these
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decisions.
NON-LOCAL EXPERTS AND EXTRADEPARTMENTAL GURUS
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Non local experts and extra departmental proponents promote team laterality.Laterality refers to the ability to cut across functional boundaries and relate to
people from different areas. People who exhibit this characteristic are best
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suited to be on a knowledge management team. Such members can:
Act as a bridge and as interpreters between people from different
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backgrounds, skill areas, and specializationsLearn faster than the average person in your company and are not
defensive about
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Their lack of understanding or knowledge in areas other than their own
Bring value to the overall team synergy as they tend to be confident but
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not egoistically constrainedLearn the basic lingo and understand the frameworks that their
collaborators refer to
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Have the ability to deal creatively and rationally with the problems that
the aforementioned differences can, and often do, lead to
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Groups of such people have also been referred to as communities of practice;they ate charac- terized by
Multifunctional groups that incorporate diverse viewpoints, training,
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ages, and roles
Enacting a common purpose by engaging in real work, building things,
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solving problems, delivering service, and using real tools
Developing intellectual property, knowledge, firm culture, internal
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language, and new skillsMaking lasting changes in the people and the competency that they
embody
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CONSULTANTS
Even though most of the technical, design, and soft skills needed for the
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knowledge management project might be available in there might be some areasthat are no one`s strength within the company. These shortcomings can often be
overcome by bringing in external consultants. Internal participants might have
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slight cultural differences owing to their differing departmental and functional
affiliations, but they are still tied together by a common frame of reference built
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around the overall company culture, dominant values, and image. However,extern consultants do not always fir into this frame of reference. Because
external participants often lack this common frame of reference, it is essential
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that other binding mechanisms, such as their personal characteristics be strongly
matched with those of internal team members.
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Nevertheless, this lack of shared culture can often be turned from a liability intoan asset. These external participants can bring balanced, unbiased our
perspective into the entire design process.
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In such cases, rust becomes another significant issue. Give the nature of the
consulting business; it should come as no surprise if the consultant is developing
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exactly the same typeOf system for your competitor a few months down the road. Selecting a
consultant should therefore be partially based on the extent to which die person
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(or consulting company) is willing to transfer existing skills to your company`semployees. Some of the other issues that must be considered while selecting a
consultant include:
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The consultant`s reputation for integrity
The consultant`s history that demonstrates the ability to maintain
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confidentiality about past projectsWhether the consultant has worked successfully for your own company on
earlier projects
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Whether the consultant (or consulting company) is working on a similar
project for a competitor.
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Whether your internal team trust and has confidence in the consultingcompany.
In any case, highly specialized and capable consultants are often hard to find.
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Since knowledge management projects are strategically oriented, the level of
confidentiality must be based up with specific, legal nondisclosure agreements.
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Where highly confidential material is involved, it might be a better idea to havean employee trained in the deficient area rather consultant from the consulting
position to a permanent job within your company. However, corporate budgets
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can often restrict this option.
KM stakeholders should typify the group that they represent. For example, the
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person representing your company`s human resources department should be onewho is typical (where the meaning of typical is highly subjective) of the HR
department, and has had a sufficient level of experience within your own
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company.
The human resources and project sponsors or senior management provide
overall stability to the knowledge management project team.
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The human resources and project sponsors or senior management provide
overall stability to the knowledge management project team.
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MANAGERSThe status and influence of senior managers would make one assume that they
are the least likely group to be left out of the development process. However,
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several studies have shows that this exclusion is not only possible but one that
also frequently does happen. As teams become too deeply engrossed in the
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user/developer relationship, senior managers tend to be left out of the loop. Aswe understand that the managers should be kept active in the knowledge
management project; and without their active involvement the entire project may
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end up on shaky ground.
STRUCTURING THE KNOWLEDGE MANAGEMENT TEAM
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Focus
Shareholder
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Role in the knowledge
--- Content provided by FirstRanker.com ---
Characteristics--- Content provided by FirstRanker.com ---
Group
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Management ProjectStrongly
Desired
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Teams
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User teamsProvide functional
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Must
understand work
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--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Expertise.--- Content provided by FirstRanker.com ---
Processes in
their area.
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--- Content provided by FirstRanker.com ---
Finance
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Provide businessMust have
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good inter-
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
expertise in their
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personal and
team skills.
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Specific area.--- Content provided by FirstRanker.com ---
Other functional
--- Content provided by FirstRanker.com ---
Participate in theMust have a
--- Content provided by FirstRanker.com ---
certain
--- Content provided by FirstRanker.com ---
areas with which
process design stage
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degree of
credibility
--- Content provided by FirstRanker.com ---
knowledge
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--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
within other
participating
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management--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
groups.--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Help in the implementation Must bewilling to see
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--- Content provided by FirstRanker.com ---
stages of the systemfrom other
functional
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--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
viewpoints.--- Content provided by FirstRanker.com ---
Technology IT experts/
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Provide technologyMust
understand
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Information systems expertise.--- Content provided by FirstRanker.com ---
technology
in depth.
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Internal IT staff
Participate in the actual
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Must havegood inter-
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
implementation and
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personal
skills.
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--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
design.--- Content provided by FirstRanker.com ---
External Consultants Represent the internal
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Must bewilling to
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--- Content provided by FirstRanker.com ---
and internally proficient
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understandthe per-
technologists.
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Specialities
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brought in by--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
other teammembers and
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--- Content provided by FirstRanker.com ---
actually
incorporate them
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--- Content provided by FirstRanker.com ---
into the design.
--- Content provided by FirstRanker.com ---
Bring in a perspective
--- Content provided by FirstRanker.com ---
Must bewilling to learn
on functional capabilities
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and limitations of existing. Must be
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credible.--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Must have an
expansive
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customerorientation.
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STRUCTURING THE KNOWLEDGE MANGEMENT TEAM (Cont.)
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Focus
Shareholder Role in the knowledge
--- Content provided by FirstRanker.com ---
Characteristics
--- Content provided by FirstRanker.com ---
OrganizationalSenior
Support the legitimacy of the
--- Content provided by FirstRanker.com ---
Understand the
--- Content provided by FirstRanker.com ---
Management/ project.
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
Management and
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sponsors/
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
strategic processes
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knowledge
--- Content provided by FirstRanker.com ---
Bring in vision that correlates
--- Content provided by FirstRanker.com ---
--- Content provided by FirstRanker.com ---
champion(s) with the overall company wideMust
be credible
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/CKO
vision.
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--- Content provided by FirstRanker.com ---
Serve on steering committees Must have a clear (if
needed)
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idea of the bigger Picture of where Commit theresources
Knowledge needed leveraging should take the
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company.
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Must eat their Own dog food, that is, they must themselves believe what theysay.Need to be thoroughly convinced of the worth of the project.
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TEAM COMPOSITION AND SELECTION CRITERIAAs with most other technologically driven enterprise-wide teams, functional
diversity in knowledge management teams should be taken as a given
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characteristic. Teams need to be designed for effectiveness. While there is not
straightforward formula for designing a good knowledge management team, the
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team`s design has much to do with the nature of the project itself. Functionaldiversity can lead to only two possible outcomes, depending on how its handled.
The first, and very common, outcome is destructive conflict and tension. The
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second, more desirable, outcome is characterized by synergy, creativity, and
innovation. This happens only when laterality among team members is high and
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there is sufficient room to accommodate different backgrounds, values, skills,perspectives, and assumptions that the members bring into the team. Summarize
the major team design considerations.
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TEMPORARY VERSUS PERMANENT TEAM MEMBERSKnowledge management is not like a typical business restructuring or
technology introduction project. Those projects are temporary and depend on
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temporary teams, whereas a knowledge management project needs at least a
small portion of the group to be permanent. A knowledge management project
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is not over once a knowledge management system is implemented; it must go onand continually improve and change with changing external and internal
environments. While some members might be needed on the team only during
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the initial stages, others are not as temporary. Core team refer to this
permanent, essential group. Team members can be dedicated to the project
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either full time or part time. The size of the core team must be kept to thesmallest size possible-the smallest member count that can actually do the to
work. Temporary team members often belong to specific user groups. The core
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team should consist of only the following participants:
Knowledge champion or a senior manager.
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IT staff.User delegates representing the core business area that is going to depend
on the knowledge management system. This could be engineering staff in
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case the knowledge management system is built to support research and
development; it could be marketing if the KM system is for sales force
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enablement, etc.The remaining participants, in most cases, should be involved in the startup
phases of the project and can be called in later for further input as and when
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needed.
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TEAM LIFE SPAN AND SIZING ISSUES
There are two schools of thought on the future of knowledge management: One
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school believes that knowledge management will continue to depend on peopleto manage knowledge throughout the lifetime of the organization; the second
and more convincing school believes that knowledge management is a self-
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eliminating field. This means that as a company begins to accept knowledge
management practices, they should, over several years, become so second nature
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to employees as the company evolves that eventually there should be no needfor a knowledge manager or CKO to manage knowledge. Knowledge workers
themselves should be able to handle all KM tasks once KM becomes embedded
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in the company culture and in work practices.
One would argue why the knowledge management team would, in the first
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place, do their job so well that it would eliminate their very need! That is a hardquestion to answer. Though there is a lot of ongoing research to find an answer
to this question, there is little other than very strong financial and promotional
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incentives that can help here. For that matter, team members on the knowledge
management team should be promised strong rewards and promotions should
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the knowledge management initiative truly succeed. A team that sets out towork with the fear of losing their job by performing too well is bound to be
under motivated, if not unmotivated.
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PROTOTYPES:
Systems developers have long realized the value of prototypes. A prototype
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provides both the developers, in this case the knowledge management team, andthe users with an idea of how the system in its final form will function.
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By using such a prototype, even if it is incomplete, users can see the possibilities
of the knowledge management system under construction, and this improved
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understanding of the final product can lead to, or trigger, highly desirable
refinement of its features, interface, functionality, and design. Tweaking the
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system`s design based on user feedback in the prototype stages can save yourcompany much headache and unnecessary rework-related expenses at a later
date. Other ways the project manager can link to the final user.
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THE KM TEAM'S PROJECT SPACE
One of the first tasks that the knowledge management team needs to undertake
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is that of understanding the project`s strategic intent, organizational context,technological constraints, monetary limitations, and short-term as well as long-
term goals. Members of your knowledge management team should be able to
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provide adequate answers to these questions collectively;
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1. What is the company`s strategic goal ?2. What is the company`s performance goal? Knowing where the company
stands before the project provides a healthy basis for answering this
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question in specific terms.
3. Where does the knowledge management team fit in the organizational
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hierarchy?4. Does the knowledge management project fit vertically or horizontally in
the value chain?
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5. What are the financial constraints?
6. What are the technical limitations in terms of existing platforms,
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company-wide network standards, etc. ?7. What are the critical missing elements in terms of skills, people, and
knowledge that are still missing in the team? Can consultants help? If
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so, which ones and how
8. What is the time frame within which the project must be delivered?
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9. What are the immediate payoffs? If there are none, when will the payoffsbegin to show up? If that is not viable either, how will the value of the
project be demonstrated and tested?
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10. What level of commitment does the team have from the senior
management and from the users? If it`s poor, what can be done about it?
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Are there representatives from both these camps on the knowledgemanagement team?
11. What are the cultural bloakades that should be expected? Does the
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company culture actually fit with the knowledge-sharing attitude that is
needed to make a knowledge management system work? If not, what
changes in reward structure are necessary? Who has the authority to
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make such changes? Are they willing to make them?
12. Has any competitor or non competing firm implemented a project like
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this? What do we know about it? If it was successful, is there some wayto get a key participant to switch jobs? Should we call that transfer of
experiential knowledge?
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Judging the true value of the project is a critical issue. If the project costs more
than the long term value that it adds to the firm, it`s probably not worth the
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investment. Therefore, exploring these initial questions is critical before thenext step can be taken. If there are no direct answers, surrogate measures might
be adopted. If your knowledge management team cannot collectively answer
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these questions, revisit its structure and constituents. For example, if the
primary objective of the knowledge management project is to improve product
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quality by managing past and current knowledge about product qualityproblems, it might be valuable to question quality quantitatively. How much
quality and at what costs? Can the customers tell the difference. Will they be
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willing to pay say, 7 percent more for the same product if higher quality is
guaranteed?
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MANAGING STAKEHOLDER EXPECTATIONSThe second task, after the knowledge management team has decided on an
initial set of objectives for the knowledge management initiative, is to formally
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present this work to various stakeholders groups. The biggest advantage of such
an interaction is that it can help the team compare the projects objective with
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stakeholder expectations and perceptions. Resolving differences at this point isa more efficient approach than trying to fix basic design assumptions and errors
after the fact ? when the project is ready for implementation.
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TEAM CONSTITUTION VALIDITY. SUMMARIZING THE PROCESS
The initial process that the knowledge management team must go through
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before the initial design effort is organized well enough to proceed to the next
stage. Examine this process flowchart and determine if your team, as
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constituted, is collectively able to elicit these requirement and design goals forthe knowledge management system.
POINTS OF FAILURE
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Lets take a quick look at the key points of failure in systems-oriented KM
projects. Perhaps the most important study of project risks is by some
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colleagues, who examined software project risks in several internationalcompanies. In the United States alone, almost $60 billion was spent in cost
overruns and another $80 billion in canceled projects in 1995 alone. Although
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other, more recent figures abound, this is perhaps one of the most rigorous
studies done in this area, and the figures proposed here are depressing! An
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informal study of a group of 2,600 CEOs, CIO, and technology managers by theCambridge Information Network in 1999 revealed that approximately 90 percent
of IT projects exceed their budgets and over 20 percent exceed their budgets by
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more than 100 percent.
THE BREAKPOINT. BUY-IN-FAILURE
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Lack of an active role of the top management has been identified as the primaryreason why many projects fail; and the second reason is failure of the users to
buy in to the project. If you decide to invest in a knowledge management
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project, and either your top management remains unconvinced of the value of
the idea or the users you are building it for fail to see why they need the system,
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CATEGORIZING RISKS
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The below figure, illustrates the four categories in which knowledge
management project risks can be classified. This framework describes four
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quadrants on which project risk can be classified the level of risk (high/low) and
the level of control that a project manager has on each category. Customer
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mandate, the shaded quadrant, is a high-risk area over which you have littlecontrol.
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Customer mandate refers to the level of buy-in from the ultimate users, who is
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effect are your system`s customers. Unless they buy in to the whole notion ofthe knowledge management system that you are building or planning to build,
they will have neither the inclination to use it nor support it.
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Similarly, initial commitment from the top management is a necessary but
insufficient condition for your project`s success. This support must be ongoing
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and active throughout the project. The problem with many of the companiesthat we have studied often falls into one of these two areas. Once a project has
been initiated, the project leader must gauge the level of commitment from both
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senior management and the end-user community to avoid being caught in a
situation where support for the project suddenly evaporates.
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CONTROLLING AND BALANCING REQUIREMENTSAs shown in Fig, there are some areas where you, as the knowledge champion or
knowledge management project manager, have significant control. However,
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there are some areas in which you have little or no control. Not having control
over an area does not, by any stretch of imagination, mean that it will not
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contribute to the potential failure of your project. Customer or end-user buy-inand the environment in which the knowledge management system will be used
are two such factors. The only thing you can do about customer buy-in
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problems is to try selling the project harder, and gauge end-user needs more
appropriately; the operating environment is a wholly different story. That is
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where the cultural aspects of a knowledge management system and the peoplearound it come into play. While all these risks must be thought be together
rather than independently, a strong focus must be on the risks over which you
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have little control.
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TRADITIONAL METRICS
FINANCIAL ROI AND TOBINS
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Albert Einstein, very thought provokingly, reminds us that what can bemeasured is not always important and what is important cannot always be
measured. It does not take an Einstein to conclude that the value of knowledge
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management cannot be fully measured in terms of financial return on
investment.
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A relatively old measure that has been in use for many years within business andacademic circles is Tobin`s q. This metric essentially measures the ratio
between the firm`s marker valuation and the cost of replacing its physical assets.
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While Tobin`s q provides a snapshot of the firm`s state of intellectual health at a
given point in time, it provides no direction for knowledge management strategy
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development. It does not tell you what you are doing wrong or what to focus on.What is needed is a more dynamic view of knowledge performance that can help
a firm trace both the growth and decline of its knowledge assets and the reasons
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underlying such changes. Traditional metrics like Tobin`s q do not tell a firm
how it can create further value, prevent imitation or substitution, and leverage its
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knowledge assets to gain a sustainable competitive advantage.Nevertheless, when it comes to measuring returns on investment in knowledge
management, two conventional approaches are in common use: putting a dollar
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figure on intellectual assets, and determining the dollar amounts saved or earned
by using existing knowledge.
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TOTAL COST OF OWNERSHIPCurrent methods of measuring and evaluating information technology
investments do little justice to information technology itself. How, then, can we
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expect those methods to be able to give us a clear picture of how our knowledge
investments- which stretch far beyond pure technology alone- are faring? Out
interviews and studies show that companies do not always demand solid
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business cases for IT investments but have trouble handling decisions based on
soft gains and benefits. Maturity of judgment becomes a distinctive inhibiting
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factor that prevents them from making decisions where limited quantitative dataexists.
Many companies have responded by falling back on a total cost of ownership
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approach, which is much touted by Microsoft`s release of windows 2000. This
methodology identifies and measures components of IT expense beyond the
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initial cost of implementation. While TCO can be a useful tool to reduceongoing costs by improving IT management practices, it does not provide a
sound foothold for decision making. TCO does not cut it as a sufficient
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knowledge metric for several reasons:
It leaves out significant cost categories, such as complexity costs.
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It ignores benefits beyond pure costing.It neglects strategic factors.
It provides little or no basis for comparison with other departments and
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other companies, such as competing firms operating in the same markets.
Lifecycle costs are difficult to gauge.
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Applying TCO blindly can lead to bad and highly impolitic decisions. Forexample, the decision to switch vendors to get the lowest prices does not capture
the implicit cost of supporting multiple vendors, the cost of dealing with
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compatibility issues, or the benefits of high volume purchasing. Total cost of
ownership (or a similar measure fails) to do justice, comprehensively or
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completely, to the decisions made.LEARNING MORE FROM THE TELEPHONE
Just as a telephone is hard to cost-justify and evaluate, knowledge management
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is something firms often find difficult to cost-justify in the face or other neededinvestments, but is something they want to and should have. Even though
middle managers feel the need for a strong knowledge management initiative,
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convincing senior management to shell out the couple of million dollars for an
initiative with intangible results can be a hard sell. However, there are ways and
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means to measure the short-term gains to demonstrate the need for, the extent ofthe longer-term guestimations of value added by knowledge management to the
firm`s bottom line and competitive standing.
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THE METRIC IS THE LIMITATION
A recurring problem in knowledge management is the problem posed by a lack
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of standard metrics for measuring the impact of KM. Two of the most widelycited research projects relating to knowledge management and organizational
learning are the case descriptions provided by DeGeus at Shell Corporation and
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by Ray Stata at Analog Devices. DeGeus approach at shell used scenarios in the
strategic planning cycle that encouraged managers to revisit and challenge
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commonly accepted assumptions. The underlying belief was that learningwould not take place unless managers exposed the hidden and embedded
assumptions with which they approached new problems.
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Similarly, Stata found that focusing on activities, such as improving response
time in external changes and utilizing planning and quality improvement as
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learning tools rather than purely administrative tools, could accelerate learning.Chaparral Steel, a large U.S. steel producer, similarly found that there was a lot
to gain by emphasizing problem solving, constantly integrating internal and
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external knowledge into daily work-related activities of employees, and
allowing the time and resources needed to make this integration happen. In
addition, a good reward structure helped further.
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COMMON PITFALLS IN CHOOSING METRICS
No metric is better than one that is absolutely wrong. A choice of a wrong
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metric can have more ill effects than positive ones. Metrics, when applied toknowledge work, or in general, are vulnerable to seven common pitfalls.
USING TOO MANY METRICS
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A few robust are better than a number of marginally significant ones. A good
rule of thumb is about 20 metrics. They need to focus on the past, present, and
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future simultaneously to be able to relate past performance, present processes,and future results. The common problem that many measurement programs
become victims of is that of putting too much emphsis on the past. Knowing the
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past is good, but it rarely is sufficient to give you a concrete idea about where
your present efforts are leading your company. As John Naisbitt put it, We are
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drawning in a sea of information and starving for knowledge. Make sure youdo not add any further to that glut of information by introducing more metrics
than can be effectively, accurately and efficiently tracked. Forget quantity;
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focus instead on linking measures to strategic capabilities, competitive
positioning, customer expectations, and financial indicators.
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As John Billings once said, Knowledge is like money, the more he gets, themore he craves. Nothing perhaps captures the essence of manger`s rush to add
more metrics once they figure out that they have found something that affects
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their company`s bottom line. In this rush, many finally end up with more
metrics than they can simultaneously keep track of.
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Robert Kaplan and David Norton have an interesting discussion between a pilot
and a passenger on the opening page of their book. The pilot says that he need
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to work on air-speed, so he ignores the altitude and fuel gauge altogether. It isnot what I am focusing on, he says. Amused at their own interesting analogy,
they think that you would not want to fly in his plane, ever! Isn`t this very close
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to what companies do when they focus on a single metric such as a bottom line
or market share? On the other hand, some hand, some go to the opposite
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extreme and try to track too many at the same time. This is where lean metricsfit in. Lean metrics are the few but essential metrics that can be simultaneously
tracked.
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Some metrics might seem reasonable, but when they are put into action, they
result in counterproductive consequences. A good lean metric must be precise,
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tied to overall value (not just profits), applicable, and designed to motivate extranormal effort from employees.
.DELAYED AND RISKY REWARD TIES
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Rewards that are tried to metrics with a relatively longer term focus should be
robust and structured in a manner that allows employees to reap short-term
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benefits by successfully achieving them. Job mobility is a fact of life. Delayedrewards will only bias employees to work toward metrics that deliver short-term
payoffs to them. To keep the long view, select metrics that can be measured
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today but impact future outcomes. Alternatively, the long-term gains of the firm
should be tied closely to the compensation of the employees (Stock options are a
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good example)CHOOSING METRICS THAT ARE HARD TO CONTROL
Companies often make the grave mistake of implementing metrics that are
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beyond the control of their employees. Phrases such as Build a $2 billion
browser market by 2001, Let every hand in America hold a Palmtop by the
dawn of the next millennium, or Put a Net PC on every desktop are
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visionary ideas but almost impossible to control or achieve even through
systematic efforts. There are exceptions of course: Microsoft`s Internet strategy
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and Netscape`s browser business are a few of those. But these are exceptionsrather than examples of what can be normally achieved. Similarly for
knowledge management systems, you cannot have metrics that cannot be
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controlled. Statements such as Build the largest knowledge repository of
Website design solutions look good on paper, and that`s about it.
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CHOOSING METRICS THAT ARE HARD TO FOCUS ONPerformance of a company is not solely based on internally generated ideas. 3M
and Xerox are leaders in innovation. But the difference is that 3M has actually
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commercialized more ideas than Xerox. The result has been that Bill Gates and
Steve Jobs built entire industries on a few ideas that Xerox created (in its Palo
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Alto Research Center, PARC) but never used.If you think that the Palm Pilot family of plan PCs are surprisingly successful
products coming out of 3COM`s bag of tricks, remember that the product was
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externally acquired from US Robotics (which had previously bought out Palm
Computing, the commercial originator of the device). The key idea is that the
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metrics that you select must encourage decisions that also move your companyin the same direction as its long-term goals.
CHOOSING METRICS THAT EMPHASIZE HARD RESULTS AND
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NEGLECT THE "SOFT STUFF"
Many companies emphasize hard (often financial) results while neglecting or
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totally ignoring soft ones. A national survey of U.S. organizations revealed thatabout 60 percent of the organizations studied never officially set any soft goals
related to managing people, suppliers, customers, and innovation even when the
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hard goals were clearly laid out. Inspite of all the windy rhetoric about loving
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customers, empowerment, and learning, not many executives are willing to put
measures where their mouths are. It is dangerous for top management to focus
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on hard results and expect lower-level managers to take care of the rest.Financial success, for example,
as many research studies have shown, is highly dependent on soft employee
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attitudes and behavior. Make sure that your hard and soft measures go hand in
hand and are well balanced.
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CHOOSING METRICS THAT ARE TOO REAR-VIEW ORIENTED
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Too often, measurement is not used to anticipate the future but to record thepast. One way to avoid this trap is to ask yourself this question: Do we have
metrics that can serve as early sorting signals for future problems and signal
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future opportunities?
MEASURING THE WRONG THINGS
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Companies can run into troubled waters when they decide to measure things thatare precisely wrong. This is very different from the notion that a few good
measures today are better than
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a perfect one tomorrow. One lousy metric tomorrow is better than a wrong one
today. If that happens tomorrow might never come!
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Wrong metrics can often prove more damaging than helpful. Not all metrics,such as calls answered per hour or sales pitches per week, that can be measured
easily and cleanly are
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necessarily good. Similarly, for knowledge work, measuring aspects such as
time spent reading tw1edge reports or intranet screens are poor metrics. I could
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as well be sipping coffee (God forbid vodka!) while playing Quake II on mylaptop while my desktop is connected to the knowledge management system at
work! A poor metric would still create a perception of productivity The number
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of contributions by employees to a knowledge repository is an equally worthless
measure. Employees then try to maximize the number of contributions, and then
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the due of those contributions takes a second place! There is something to belearned from McKinsey; McKinsey places value on the number of times its
consultants` contributions are by other consultants.
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ALL THE RIGHT THINGS NOT MEASURED
The other side of the coin is not measuring all the right things. Without getting
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into Ito complexities of agency-agent conflict theory, a manager or employee
will tend to maximize
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William Schienmann and his colleagues point to the serious gulf between whatshould be measured and what actually is measured. See Schienmann, William,
and John Lingle. Seven Greatest Myths of Measurement, IEEE Engineering
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Management Review, Spring (1998),
...tomorrow might never coma, from a song by Janis Joplin, in The Best of
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Janis Joplin, Warner Music.The metrics that are actually measured. If a manager is told that a high market
share for a product indicates brand value, he will try to maximize the market
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share of that product, even though quality (not measured) might be equally
important. John Hauser and Gerald Katz explain this concept, which is further
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illustrated in fig.Let A, B,C, Y and Z be some arbitrary metrics. If all five of these are important,
but only three of these, A,B and X, are actually measured, employees will focus
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only on those and simply ignore Y and Z, however important they might be.
Managers and employees who maximize A, B and X will be rewarded for their
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performance even if Y and Z go to the dogs. Soon the entire company ordepartment is focused on improving the metrics that are actually measured, as
they alone provide an indication of the quality of their work, If A,B and X lead
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to productive results, then the metrics are considered effective. If they fail to
produce good results, they are considered ineffective. Hauser and Katz suggest
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that the chosen metrics gain tremendous inertia and that employees who havepainfully learned to maximize the chosen metrics fear to change course. The
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Knowledge sharing and creation often tend to be akin to metric Y-ignored and
little rewarded. Knowledge-intensive companies, on the other hand, have
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included knowledge sharing and creation in their repertoire of critical metrics.
Every employee`s compensation is, in part, determined by the amount of
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knowledge that the employee adds and the frequency with which otheremployees refer back to that contribution. Choosing the right metrics is
therefore critical both to evaluate the performance of your knowledge
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management strategy and to make it work in the first place.THREE WAYS TO MEASURE
We met Roger Bohn`s Stages of Knowledge Growth framework in the
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preceding Thanks to its simplicity and ease of use, it provides a more readily
usable method for the measurement of process and technological knowledge.
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However, the biggest strength of this work is also its primary weakness. TheStages of Knowledge technique is good at providing a15,000-foot view and a
clear bigger picture, but it does not let you examine progress improvements at a
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lower level. While we began with that model, we will need to some technique
that is better suited for a micro level analysis.
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Let us examine three possible approaches to measuring edge work and theefficacy of the knowledge management system. The first is as ward
benchmarking methodology; this can be a good starting point, but in the long
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term this technique loses value and flexibility The second technique is the House
of Quality. That competes with the third technique: the balanced scorecard
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approach. The advantage the House of Quality (QFD) methodology is that it hasbeen widely used and a number of low cost software tools can partially automate
its application.
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BENCHMARKING
Robert Camp aptly describes benchmarking as the search for industry wide best
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practices that lead to superior performance. In plain English, this simply meansthat benchmarking is an undertaking of companies that aim to emulate the ways
things are done best, anywhere in or outside their firm, industry, or sector. Many
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large firms have adopted bench a significant, systematic technique for
measuring the company`s performance toward its strategic goals. This concept
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was popularized by Carla O`Dell and her colleagues at the AmericanProductivity and Quality Center (www.apqc.org). One argument for
benchmarking is that there are existing best practices within different parts of
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the same company. So we should begin by identifying those skills andcapabilities within our own organizations before we look outside. Companies
repeatedly end up solving the same problems that have already solved in other
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offices or locations of the same company; they expend time and money building
solutions to issues that have already been addressed: If only we knew what we
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know! Texas Instruments, Harris Corporation, AMP, UNISYS, and Rank Xeroxhave tried this approach and reaped substantial benefits and cost savings.
The benefits of benchmarking are not limited just to process improvement or
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reuse; they extend far beyond and promote both the growth and acceptance of a
learning culture through out the organization. Benchmarking efforts can often
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provide insights into various areas.Anecdotal evidence suggests that managers do not buy into ideas that strain
finances of a company without short-term payoffs for too long. Even though a
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comprehensive knowledge management strategy might be at work in the
background, show your senior management some short-term outcomes.
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Make it rare. Focus on the areas of knowledge that give you an edge overcompetition. Through benchmarking studies, you can easily figure out the areas
in which your com petition is not strong. If any of those areas are a possible
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source of competitive advantage, by all means, support them!
Gateway for example, is known for its customer service. If you have a problem
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with a computer you bought from them, you know that you will probably find aknowledge able customer support representative on the other end. Almost all PC
manufacturers have some kind of customer support, but Gateway decided to
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strengthen this over any thing else. Most Gateway`s customers tend to be repeat
buyers simply because of their excellent customer service. Gateway also uses a
customer knowledge repository to be able to track all previous problems that a
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customer might have had in the past.
Some companies build a competitive advantage by taking one of the given
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metrics to a level that is rare and that customers value. NEC has built on thisrarity as well. NEC`S printer division provides an overnight replacement
warranty for all its laser printers for two years from the date of purchase. By
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being able to track customer information through a sophisticated knowledge
retrieval system, NEC provides overnight replacements after asking little more
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than one question (the printer`s serial number) on the phone.Make it hard to copy. Customer data is an excellent example of a resource that
is very hard to copy. Benchmarking can help you figure out the resources that
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you have and your competition does not. If you focus on resources that can be
copied, it will, at best, buy you a temporary competitive advantage. However, if
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you focus on knowledge areas in which your employees possess skills, you canmake it immensely difficult for your competition to copy those without luring
away your employees. Consulting companies have known this for a long time,
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and it`s about time you thought of applying the same idea to the knowledge
assets within your own company.
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Make it hard to substitute. Whatever categories of knowledge that you focus on,make sure that straightforward substitutes do not exist. Companies that thought
they had gained an edge by outsourcing a part of their manufacturing operations
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to firms in Third World countries did not take long to realize that everyone else
could do the same. And they did.
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Knowledge relating to skills, reputation, and experience cannot be easilysubstituted with close equivalents. Make sure you focus on such areas when you
begin.
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Benchmarking is unlikely to reveal such areas unless a high level of jobdiversity in the employee pool that is involved in the effort).
Benchmarking practices often reveal anecdotal evidence and impressions about
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competition
It`s dangerous to rely on such impressions because they cannot be generalized in
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anyBenchmarking is most useful when you know what your expectations and
objectives are and
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the process itself is closely tied to your firm strategic knowledge drivers.
HOUSE OF QUALITY AND QUALITY FUNCTION DEPLOYMENT
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The House of Qua1ity approach was developed by Hauser and Clausing in anoriginal paper that appeared in the Harvard Business Review. This methodology
has been successfully adapted to link customer needs to business processes and
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internal decisions.
HOUSE OF QUALITY METRICS MATRIX
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Figure shows the basic House of Quality metrics matrix. We begin by listingthe desirable outcomes on the left wall of the house. As the quality function
deployment (QFD) method incorporates an increasing number of these desired
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outcomes, the outcomes house begins to build up.
Be careful to select outcomes that are that observable without much delay and a
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seen clearly. Being able to see outcomes clearly does not imply that they mustbe easily measurable quantitatively. Outcomes can be high level or low level.
Examples of such target out- comes include:
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? Improve knowledge sharing to a level where 20 percent of an average
employee`s work is based on existing knowledge.
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? Speed up problem solving by a factor of 5 percent over the next six months.
? Improve quality such that the rate of failure of product X decreases by 15
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percent within the next 12 months.? Generate more conversations among employees in our Atlanta and Barbados
offices (a relatively vague but measurable outcome).
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? Increase customer satisfaction levels by 50 percent
? Create a comprehensive knowledge repository on our Winblows 2004
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(fictitious product) operating system for use by support representatives withinthree years, etc.
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Although these should not exactly be your own goals, the point is that even
though some of the objectives might be high level, the outcomes are observable.
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On the other hand, an objective like create new knowledge or dominate theSouth American coffee markets (where the coffee market is a vague definition,
domination is not articulated, and the extent of what is considered South
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American is unclear) is too vague. You`ll never know when you get there, and
when you get there you`ll never know that you are already there!
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To attach relative priorities to each of these objectives, we attach weights toeach of them. These weights form the right-hand wall of the house and indicate
the importance of the issues in question. See Fig, for an example.
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? Overall productivity of knowledge investments
? Service quality
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? Customer satisfaction and the operational level of customer service? Time to market in relation to other competitors
? Costs, profits, and margins Distribution
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? Relationships and relationship management
Even though the term benchmarking probably did not exist when Aristophanes
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made the above quote in 414 B.C., he said something very profound about it! Bybenchmarking your own business against your competitor`s, you get information
on how to tweak your company`s performance goals to stay competitive in
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relation to your competitors. Arthur Andersen, an international consulting firm,
perhaps took the first strike at the intimidating problem of measuring knowledge
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work. Andersen developed a tool in association with APQC called theKnowledge Management Assessment Tool (KMAT); it contained a series of
questions on a scale. Answers to these questions could then be compared to the
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industry-specific and cross- industry averages of the responses. This process is,in essence, benchmarking.
By using such a relative measure, all companies stand to gain. By knowing
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where they stand on the intellectual forefront in relation to their competition,
companies can focus on improving processes and process knowledge in areas
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where their scores are below average. Benchmarking, like any other businessprocess, is most likely to produce a payback when strategic business objectives
and goals drive it.
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Benchmark Targets
Possible targets against which you can benchmark your company`s knowledge
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management initiatives. You can identify other relevant targets from your owncompany, from rival firms, from nonrival firms, or from averages representing
your industry or sector, Each has its own benefits and downsides, and the
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choice, finally, is one of subjective judgment and weighted costs.
Stephen Drew proposed the original version of the target set that this table is
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built upon. He also suggested that a possible target was international firms. Idisagree with this stand and have not included that as a potential target, since the
preceding options, by themselves, encompass international firms. Rarely do
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American firms compete solely with domestic rivals.
There are companies that represent the ideal firm within each industry. Lacking
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any other options. this is usually the best place to begin. These firms haveperformance levels that other
WHAT DO YOU BENCHMARK AGAINST?
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Benchmark TargetUpsides
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Downsides
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Other units within
This breaks down internal Internal policies might come into
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your company barriers to communication
play; the measures are not
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and conversation between
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indicative of what is considered
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various divisions and
performance in your
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industry--- Content provided by FirstRanker.com ---
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offices of your company;targets are easily accessible
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Competing firms
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Your company is measuredLegalities can make
this
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against its direct competition; difficult; if a trusted
third party
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you get a fair understandingsuch as a consulting
firm
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of the knowledge assets of
is brought additional
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costsyour competitors as an are imposed.
aggregate; partners can easily
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be identified.
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Industry--- Content provided by FirstRanker.com ---
All of the above; this also
This can be very
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expensive;lets you gauge your
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privacy issues begin tosurface.
company`s standing in the
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overall market.
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Cross-industry
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You might be able to gain
All of the above; this
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does not letvaluable insights from you gauge your company`s
noncompeting firms and
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standarding in relation
to your
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apply them to your own competitors; the sample popu-company.
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lation is not truly
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representativeof your own industry
or sector; it
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is often difficult
participate in
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such an effort; the costof such an
effort is rarely worth it
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firms aspire to achieve. In the software industry arguably, every firm aspires to
be a Microsoft. In terms of customer loyalty every firm aspires to be an Apple
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Computer Other examples, including some provided by Stephen Drew, of suchrole models can be listed.
Although benchmarking can be a good starting point, you need to be aware of its
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limitations.Benchmarking, by itself, cannot be used as a strategy for knowledge
management. The best that it can do is provide a relative set of measures that
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can help gauge what your efforts are leading to. Many companies, including
Xerox, have successfully used in their 10- steps program; however, it is not a
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sufficient metric for knowledge work in and of itself.THE BENCHMARKING PROCESS
On the lines of Xerox`s benchmarking program, M.J. Spendolini` has suggested
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a five- procedure thy benchmarking efforts. An adapted version of this process.
applied to knowledge work is shown in Fig
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Prevalent Role Models in the Benchmarking ProcessSpeed of product development
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Netscape Corporation
Knowledge management integration
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Buckman LabsKnowledge management technology
implementation
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Platinum Technology
Software development and marketing
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Microsoft Corporation
Innovation and new product development 3M
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Apple Computer
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Disney
JIT manufacturing
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Toyota
Logistics and enterprise-wide It leverage
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Wal-MartKnowledge management measurement
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SkandiaMail order
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Dell, L.L. Bean, Lands End, GatewayFranchising
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McDonald`s
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Quality ManagementMotorola
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Product line recognition
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O`Reilly publishersStrategic planning
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General Electric
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Cost-based competition throughE-machines Inc., Airtran, Southwest
Airlines, Apollo logistics and market demand
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Printers
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VolumeThe benchmarking process can be used for self-comparison as well. That is, you
can use the benchmark to obtain an initial benchmark value before you
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implement a knowledge manage- ment system or program. You can then, at a
later stage, run the same benchmark to see if any- thing improved from last time.
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For example, you might want to see if your knowledge sharing network andcustomer support repository have a positive effect on the average level of
customer satisfaction. You can benchmark the level of customer satisfaction
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both before and after the new system is implemented and see if any changes
occurred. Be cautioned, however, that this is a slippery road: If you select the
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wrong benchmark, you will end up focusing on the wrong set of processes.--- Content provided by FirstRanker.com ---
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BENCHMARK LESSONS
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If you consider your company`s knowledge management system as a
competitive resource, then build into the four things that benchmarking teaches:
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1. Make it valuable. Focus on including knowledge that is most valuable andthen expand the coverage to less valuable knowledge. The key phrase is
valuable knowledge with rel
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The balanced scorecard can also be used to evaluate the impact of the
knowledge management system on four complementary criteria. The four
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processes involved in using the balanced scorecard approach for managingknowledge are described in Figure. These processes specifically put in the
context of knowledge management, involve the following steps.
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1. Translate the knowledge management vision. As Figure describes, this is the
first process in the balanced scorecard strategy. At this stage, managers need to
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reach consensusas to why knowledge is being managed or needs to be managed. What are the
firm`s visions for the knowledge management investment? The vision needs to
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be translated into concrete goals and objectives before any actions can be
measured. The beauty of the balanced scorecard is that it can be used to create
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short-term, specific go individual employees, all of which feed to theorganizational vision.
While we are on the subject of vision, let me make it very clear that this rarely
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comes by copying the mission statement! Mission statements often carry too
much fluff or are at too high a level to be actually useful. They need to be
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brought down to the level where two people can agree on what it says afterreading the same documents and that is rarely the case with mission statements
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that most companies have. That`s probably the reason why most mission
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statements are updated only when the next year`s annual reports are due.
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2. Communicate and link. This lets you measure as you go along your objective
of selling the idea to your company`s employees. You can gauge how well your
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employees are being trained to use the system as a part of their work. You canalso measure how well you have linked rewards to both the effective use and
contribution of knowledge. Here, the KM champion must communicate the
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strategy along the entire rung of employees and demonstrate the links between
individual employee goals, and the departmental/organizational goals in terms of
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leveraging knowledge.3. Do a reality check. This part of the balanced scorecard strategy determines
how well your chosen metrics, explicated goals, targets, and allocated resources
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align with the initial ideas you had in mind for the knowledge management
system.
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4. Incorporate learning and feedback. The balanced scorecard lets you evaluatethe goals, metrics, and targets that you have chosen for your knowledge
management system and then analyze how well they are actually working.
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In summary, the balanced scorecard approach lets you track the current health of
the knowledge management strategy that you have chosen for your company.
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By replacing the original four perspectives with measures successfully used bySkandia, a knowledge-based version of the balanced scorecard can be obtained.
The underlying implementation and use would be akin to the conventional
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balanced scorecard method, but the measures provided will be those relating to
knowledge management. This way, the financial, customer-related, process-
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capability-related, and employee-performance-related gains coming from theknowledge management system can be simultaneously tracked.
The actual implementation and use of the balanced scorecard approach is
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beyond the intended scope of this chapter. Now, you have a starting point for
applying the balanced score card to knowledge management. For
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implementation level details, I recommend reading The Balanced Scorecard
(Harvard Business School Press, 1996) by Kaplan and Norton.
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As Kaplan and Norton state, a balanced scorecard need not just have four
dimensions. It can have five, six, or seven. The only concern of going beyond
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seven is that you have too much to keep track of and a lot of it isn`t even critical.KPMG, for example, uses five different dimensions for its scorecards.
Although these choices seem reasonable, I recommend that you initially try
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using the dimensions similar to those suggested in Fig, which are based on
Skandia`s Navigator and which the company has used very effectively. The
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choice of dimensions is not set in stone. As long as you are sure about what youare measuring and why you are measuring it, that variable has a justifiable place
on the balanced scorecard that your company adopts.
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KPMG'S CHOICE OF DIMENSIONS FOR ITS BALANCED
SCORECARD
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Balanced Scorecard DimensionsQuestions
Client Orientation
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What do I want to achieve with my
existing Clients?
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Market orientation
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What am I going to do to decrease
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existing client turnover and find new clients? What am I
going to do to strengthen my position
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in thebusiness?
People orientation
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What am I going to do to enable the
team that I
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am managing to function better and to
help my
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employees gain strongercompetencies?
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Result orientation
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How can I attain better results with the
same
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inputs? How can I increase the added
value of
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my teams and myself?Personal effectiveness
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What am I going to do in the comingyear to
improve weak points and strengthen
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strong
points?
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Professionalism
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How do I keep abreast of the newest
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developments?How do I collaborate with my peers
more
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extensively?
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ADVANTAGES OF KM BALANCED SCORECARDSThe balanced scorecard has some characteristics that the other approaches
discussed in this chapter do not have. These characteristics make it especially
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useful as a knowledge metric.
? Ability to provide a snapshot of the intellectual health of your firm at any point
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in time.? Built-in cause-and-effect relationships that can help you guide your knowledge
management strategy.
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? Sufficient (neither too many nor too few number of performance drivers and
metrices.
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? Capability to communicate the knowledge management strategy throughout
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the firm.? Capability to link individual goals with the overall knowledge strategy of the
firm. This implies that each employee can k his own and continue to contribute
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toward the goals of the knowledge management system and strategy without
even realizing it!
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? A direct, and often missing, link between long-term knowledge andcompetence goals of the firm and its annual budget.
? Translation of the lofty visions of a firm into more doable, realistic,
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manageable, and specific performance goals.
? Logical integration into the overall strategy of your business, and still make
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sense.? Objective measurement of the contribution of knowledge to the more
intangible sources of competitive advantage, such as customer satisfaction and
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employee skills and competencies.
The selected objectives are grouped and listed on the left-hand side of the house
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matrix.The relative weights are assigned to each of these objectives on a scale of 1 to 5.
Some other tools let you attach weights on a percentage scale of 0 to 100, as
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originally proposed in the House of Quality approach. A simple 5-point scale is
easier to track. than a 100-point scale, which only makes some decisions and
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weight assignments both arbitrary and confusing.Appropriate performance metrics can then be listed and clustered on the top of
the matrix (the ceiling). The matrix itself indicates the levels of correlation
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between the metrics and the performance outcomes. Figure, for example, uses
three different symbols to rep resent these levels of correlation (high, medium,
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and low). Alternatively, a numerical value can be used, The decisions and
metrics that also improve the outcome are said to have a high level of
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correlation. The interrelationships between all these parameters are represented
on the roof of the house: By looking at the correlations within the body of the
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matrix, we can accurately focus on those areas of knowledge management thatare most likely to affect overall company performance and help us move toward
preset goals.
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SOFTWARE TOOLS FOR QFD ANALYSIS
A variety of software tools can help automate the QFD analysis process. One of
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the more popular tools is QFD Designer (by Qualisoft Corporation) shown inFigure. Software tools allow real-time evaluation of the percentage of fills along
different dimensions.
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Skaridia`s Intellectual Capital (IC) annual report also provides indicators of
some other parameters that can be added to the House of Quality outcomes for
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analysis of knowledge management effectiveness. Some ideas, including somefound in Skandia`s annual IC report, for such parameters are the following:
? Competence development expenses per employee in dollars
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? Employee satisfaction
? Marketing expense per customer
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? Time spent on systematic packaging of know-how for future use, after aproject is completed
? Research and development expense to overhead expense ratios
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? Training expenses per employee
? Payback on development activities
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? Average development time per new product? Expense per dollar earned (e.g., in consulting)
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? Renewal expense per existing customer
? Level of customer attrition
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? Expense of business development (new customers) per dollar spent onoverheads
? Training expenses per customer per year in dollars
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? Information-gathering expenses per existing customer
? Total competitive intelligence expense per year
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? Expense (dollars) of distribution of new sales material and data? Time spent per unsuccessful business bid
? Total number of patents held
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? Number of patents pending
? Average time of approval for pending patents
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? Employee attrition rate? Dollar figure value of losses per employee lost
? Dollar figure value of tosses per employee lost to a competing firm
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? Expense of reinventing solutions per year
? Success ratio of new products and/or services
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? Number of ideas implemented from the suggestion box? Total production capacity or internal production capacity (this can be applied
both to production and service firms)
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? Capacity utilization
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? Delivery time deviation rate
THE BALANCED SCORECARD TECHNIQUE
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The third approach that is a viable method for measuring knowledge-centric
performance of your organization is the balanced scorecard approach. Kaplan
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and Norton originally proposed the balanced scorecard in their landmark articlepublished in the Harvard Business Review. The balanced scorecard provides a
technique to maintain a balance between long-term and short; term objectives,
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financial and non-financial measures, lagging and leading indicators, ad between
internal and external perspectives. The basic scorecard for translating vision
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? Direct link to financial measures and your knowledge management system`seffect on the company bottom line.
LIMITATIONS OF KM BALANCED SCORECARDS
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On the downside, a well-designed balanced scorecard is more difficult to levels
a similar QFD/HoQ (House 0 Quality) model. It is rarely possible to directly
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adopt another firm`s balanced scorecard because subtle differences exist evenbetween very similar However, there are some software tools that can make the
initial ride lesser bumpy, such as the balanced scorecard tool, Gentia Balanced
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Scorecard, sold by Gentia Inc. (http://nee tia.com).
CLASSIFYING AND EVALUATING PROCESSES
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This section touches on a very useful taxonomy that can help you classify sort,and processes by their category. Understanding and classi5`ing processes helps
firms manage these processes as well as the knowledge that drives them. The
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sales process, fore pie, might have very little to do with the sales department in
some high technology companies where primary customer interaction is with the
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engineering staff. What can be readily used here is a taxonomy of processes thathas been developed by the American Productivity, and Quality Center (APQC)
benchmarking clearinghouse.
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The process classification framework (PCF) was originally developed as a
collaborative effort across 80 organizations and envisioned as a taxonomy of
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business processes in 1991. A primary issue with the PCF continues to be theenablement of process benchmarking across industry boundaries. The utility of
this process taxonomy is not just limited to benchmarking. It can be used to
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better structure the clustering of processes and functionalities your own
company. The biggest strength of this framework comes from the fact that it was
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built by the joint effort of almost 100 U.S. organizations, many 0 which had aninter al presence.
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The APQC process classification framework serves as a high-level, generic
enterprise model that encourages businesses and other organizations to see their
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activities from a cross-industry process-oriented viewpoint rather than from anarrow, functionalist viewpoint. The process classification framework supplies a
genetic view of business processes often found in multiple industries and sectors
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and service companies, health care, government, education, and. others, thereby
allowing companies to compare processes meaningfully to other, different
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organizations.The process classification framework represents major processes and sub
processes, functions, through its structure and vocabulary. The framework does
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not list all processes found within any specific organization. Likewise, not every
process listed in the framework present in every organization.
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THE APQC PROCESS CLASSIFICATION FRAMEWORK1.0
UNDERSTAND MARKETS AND CUSTOMERS
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1.1
Determine customer needs and wants
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1.1.1 Conduct qualitative assessments1.1.1.1
Conduct customer interviews
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1.1.1.2
Conduct focus groups
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1.1.2 Conduct quantitative assessments1.1.2.1
Develop and implement surveys
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1.1.3 Predict customer purchasing behavior
1.2
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Measure customer satisfaction1.2.1 Monitor satisfaction with products and services
1.2.2 Monitor satisfaction with complaint resolution
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1.2.3 Monitor satisfaction with communication
1.3
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Monitor changes in market or customer expectations1.3.1 Determine weaknesses of product/service offerings
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1.3.2 Identify new innovations that are meeting customer needs
1.3.3 Determine customer reactions to competitive offerings
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2.0
DEVELOP VISION AND STRATEGY
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2.1Monitor the external environment
2.1.1 Analyze and understand competition
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2.1.2 Identify economic trends
2.1.3 Identify political and regulatory issues
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2.1.4 Assess new technology innovations2.1.5 Understand demographics
2.1.6 Identify social and cultural changes
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2.1.7 Understand ecological concerns
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2.2Define the business concept and organizational strategy
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2.2.1 Select relevant markets
2.2.2 Develop long-term vision
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2.2.3 Formulate business unit strategy2.2.4 Develop overall mission statement
2.3
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Design the organizational structure and relationships between
organization al units
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2.4Develop and set organizational goals
TABLE THE APQC PROCESS CLASSIFICATION FRAMEWORK
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(CONT.)
3.0
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DESIGN PRODUCTS AND SERVICES3.1
Develop new product/service concept and plans
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3.1.1 Translate customer wants and needs into product and/or
set requirements
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3.1.2 Plan and deploy quality targets3.1.3 Plan and deploy cost targets
3.1.4 Develop product life cycle and development timing
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targets
3.1.5 Develop and integrate leading technology into
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product/service concept3.2
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Design, build, and evaluate prototype products and services
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3.2.1 Develop product/service specifications3.2.2 Conduct concurrent engineering
3.2.3 Implement value engineering
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3.2.4 Document design specifications
3.2.5 Develop prototypes
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3.2.6 Apply for patents3.3
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Refine existing products/services
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3.3.1 Develop product/service enhancements3.3.2 Eliminate quality/reliability problems
3.3.3 Eliminate outdated products/services
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3.4
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Test effectiveness of new or revised products or services3.5
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Prepare for production
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3.5.2 Design and obtain necessary materials and equipment3.5.3 Install and verify process or methodology
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3.6
Manage the product/service development process
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4.0
MARKET AND SELL
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4.1
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Market products or services to relevant customer segments4.1.1 Develop pricing strategy
4.1 .2 Develop advertising strategy
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4.1.3 Develop marketing messages to communicate benefits
4.1.4 Estimate advertising resource and capital requirements
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4.1.5 Identify specific target customers and their needsbefore you begin the process externally. Remember that benchmarks do tell you
what to do next, but not how to do it.
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QEDs relate high-level goals to discrete actions. QEDs let you link goals,
relationships, perceived significance, and outcomes for each strategic step
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that you take with your knowledge management system. QFDs integrateinputs from all stakeholders and provide explicit direction for enhancing
your company`s knowledge management strategy. QFDs can be automated
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to a fairly high degree with readily available soft ware. You can translate
high-level goals to specific tasks, and these tasks can further be
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decomposed into measurable and manageable actions.The balanced scorecard links strategy, technology, competitiveness, and
knowledge management. The KM BSC method helps you translate the
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knowledge management vision into action, communicate the KM strategy
bottom up validate your choice of metrics, and analyze results of knowledge
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management in the long run. It will provide a robust direct link between
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knowledge management, the system, your company`s clients, markets,people, results, and profitability.
Do not ignore the soft stuff Metrics must take both hard and soft results into
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account to present a true picture of your firm`s intellectual health.
Metrics in the rearview minor appear more significant than they are. Ask
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yourself: Do we have metrics that can serve as early warning signals forfuture problems and those that signal future opportunities?
In conclusion, we need to take a closer look at the cases of some companies
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representing a diversity of industries. All of them have one thing in common:
They are immensely successful both from a competitive standpoint and a
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financial one because they realized the value of knowledge management andappropriately put their idle knowledge to work, and work hard.
Review Questions
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1. Discuss the contributions of team managers in implementation of HRIS
in the organization.
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2. Discuss the concept of Balance Score Card in detail.3. Discuss the APQC classification framework.
4. Discuss the contribution of experts and consultants in managing the
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HRIS of an organization.
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Unit - V
CASE STUDIES
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OBJECTIVESUnderstand how high performance companies manage knowledge.
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Understand process distribution in successful knowledge management
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projects.analyze HRM in KBO and km case studies from the aerospace ,
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software, consumer technology, telecommunications, publishing, consumer
products, pharmaceuticals and consulting industries.
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understand the strategic alignment of a successful knowledge
management project with existing business processes.
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understand how your knowledge management project can build both
upon the failures and success of these companies.
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Introduction
In this unit we will take a closer look at some companies that have implemented
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knowledge management system. Their outcomes have had mixed results. Somehave fallen flat while others have provided their organizations with an
unprecedented competitive advantage. There is a lot to learn from these early.
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Pionee5rs who dared to make that leap of faith in the face of analyzing the
HRM in KBO and rewarding the compensation.
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HRM performing knowledge management projects how focused on activitiesinvolving delivery and production of services, customer support, competitive
intelligence and external knowledge integration, project management in virtual
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teams, sales enablement and intellectual asset management.
This unit will give you an idea about the areas on which you must focus your
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knowledge management investments. The common failure points in a--- Content provided by FirstRanker.com ---
knowledge management system was found to be the lack of commitment orresources for managing the system once it was implemented.
Case 1
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Knowledge management in the aerospace industry the case of rolls Royce
Introduction ? rolls Royce was founded in 1906. in addition to making
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expensive cars. Rolls Royce is also a market leader in the long- haul aircraftengines market. As of 1999, rolls Royce was serving about 300 commercial
airlines where its competitive stance was the total cost of ownership.
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The problem ? the problem with rolls Royce was that everything that was done
to maintain engines was time sensitive. However 20 million pages of paper.
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documenting a variety of aspects of aircraft engine parts ( refer table 1) wereproduced by the company. Each engine model had over 20 variants. Each
variant needed to be serviced differently about a 100 airlines with which rolls
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Royce had active relationships were based in other countries. Even with several
gigabytes of data in the companies mainframes it was often difficult to get the
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right piece of information in time. The consequences were not just limited toproductivity and financial health of the company but also linked to safety of the
aircraft that company employees worked on.
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Problem scope ? rolls Royce decided to scope the problem down to the critical
issues that had immediate paybacks for the firm. They decided that the key
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players to be considered would be limited toAirlines
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Airframe manufacturers
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Engine and engine part manufacturers
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Component manufacturers
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It was also decided that the scope of the initial knowledge management project
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would be restricted to enabling different levels of reuse. mechanisms that wouldallow workers to find use reuse and reintegrate knowledge related to servicing
long haul commercial engines.
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Such scooping is essential to place reasonable limits on the expectations from a
knowledge management system. scooping helps firms figure out if the targets of
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their knowledge management investments are the one that need immediateattention both in terms of business sense and strategic urgency.
Rolls Royce and referential sources of knowledge.
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Air craft
Referential knowledge
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Trent 700Engine maintenance manuals
Trent 800
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Illustrated catalogs of parts
RB 211 - 524
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Supply diagramRB 211 ? 535
Service bulletins
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Time limits manuals
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Standard practices
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Overhaul manuals
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Maintenance manualsTay
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IAE V2 500 A1A5
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IAE V2500 ? D5--- Content provided by FirstRanker.com ---
Knowledge management project goals
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Rolls Royce was very good at laying out realistic and achievable goals up front.
The initial set of goals specified for the KM systems were classified in two
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broad categories.Customer oriented goals-these were goals that would accrue benefits for
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the customer
1.
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reducing equipment downtime for maintenance2.
doing it right for the first time
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3.
improving maintenance quality
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4.improving maintenance scheduling
5.
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reducing data handling as well as access and search costs.
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Internal goals ? these were the benefits in terms of improved internalefficiency that were expected from the rolls Royce knowledge management
system. The knowledge management team hoped that the new system would
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help the company in the following ways.
1.
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improve customer data access across multiple platforms2.
deliver applications that required little or no training
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3.
reduce publishing costs, ensure security and comply with ATA( air
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transport association )Measurement ? lacking any other mechanisms for measurements, rolls Royce
measured its return on investment by using surrogate financial measures.
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Most of these figures were translated into dollar figures as shown below.
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Paper costs saving of $3 millionCustomer productivity savings worth $1 million
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5% improvement in maintenance time
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un measured savings in data processing costs.Solution ? this system resembles the improved version of an intranet. It had user
specific table of contents a customizable interface, the ability to add
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annotations, provided dynamic updates and delivered notifications.
Case 2 knowledge management in sales and marketing ? the case of platinum
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technologyPlatinum technology inc based in Oakbrook terrau. Illinois is a company on the
first track with close to $ 800 million in revenues in 1997 lane platinum has
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been on an acquisition war path since 1994. between 1994 and 1998 the
company brought out 70 other companies.
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The series of acquisitions resulted in a 500 percent growth I n its portfolio ofproduct offerings. Platinum has almost 7000 employees and has been a six fold
growth in its sales force head count since 1995. these employees are distributed
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across platinum`s 120 offices world wide.
Platinum realized early on that managing the companies knowledge assets was a
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critical enabler that would allow it to sustain this growth with strongcommitment from senior management platinum has been exploring the use of
knowledge management in the following areas of operation.
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Sales and marketing
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New product development
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Contracting and outsourcing
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Customer and partner interaction knowledge managementConsulting
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Education
In the sales and marketing division alone an employee has a number of potential
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sources that she can tap into for information needed to make a sale or to pursuea prospective customer these include
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Over 100 lotus notes databases
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Two custom developed applications35 intranet sites
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Thousands of networked disk drives
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Printed documentation
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Discussion forums
The problem
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Platinum`s marketing and sales department was faced not with informationpaucity but with information overload and redundancy. Even if an employee
making a sales call could retrieve information that see needed she would com e
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across multiple versions of it in different locations. There was no telling what
content was current and applicable. To overcome these challenges, platinum`s
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marketing and sales department took its first step towards building acomprehensive knowledge management system.
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The system
The knowledge management system that platinum built was called jaguar.
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Jaguar began with two components an intranet based system that contained
detailed documents and information and jaguar direct a machine resident bullet
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style nugget information repository. The system was built on documentersEDMS software and easy software from wisdom aware for capturing context
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and tacit forms of knowledge. The driving web servers were based in the united
states , Singapore and Europe and were supplemented with fortnightly updated
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notes databases replicated on 65 servers worldwide. Since the system was meant
to support sales and marketing staff it provided the following information
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Platinum`s products
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Current pricing
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Competitive informationEnterprise wide information including that about other divisions of the
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company
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World wide sales calendarsInformation on platinum`s partners
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Details ion mergers and acquisitions that were relevant to the company
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References to documents and manuals
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Subscription service that allowed users to subscribe to content of interest
Development stages
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Platinum started at the point where it was easy to get a stable start managingexplicit knowledge. Only later did the company proceed to manage tacit forms
of knowledge. The system made extensive use of icons to represent different
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types of content and each intent element and meta data attached to it. Easily
recognizable icons were used to identify information that was newer than two
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weeks and information that had changed in the preceding seven days. As aknowledge management team member put it, we are a very visual society sop
we made excessive use of icons. Ridiculous? Yes ! but effective ? yes !
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Through out the development process the knowledge management team asked
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the actual sales staff about what seemed to work and what did not., based on
their feedback the systems developers promptly incorporated relevant
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suggestions and features. The companies knowledge champion says that over50% of the enhancements came from end user suggestions. As a result about 40
% of the companies sales force personnel use of the system daily. With such an
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exceptionally high level of usage, platinum found that banner advertisements
with in the site were the most effective way of making company wide
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announcements.Throughout the development process the knowledge management team asked
the actual sales staff about what seemed to work and what did not. Based on
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their feedback the systems developers promptly incorporated relevant
suggestions and features. The companies knowledge champion says that over
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50% of the enhancements came from end user suggestions, as a result about40% of the companies sales force personnel use the system daily. With such an
exceptionally high level of usage, platinum found that banner advertisements
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with in the site were the most effective way of making company wide
announcements.
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At a later stage, the system introduced push content delivery. Users shouldselect content areas that were of interest to them. As new content came in users
could either opt to receive it in an e-mail message or go to a personalized page
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on the site and follow hyperlinks pointing them to new relevant information as it
became available. General updates were automatically sent every Sunday. The
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company hopes that analyzing usage statistics on jaguar it canpredict sales
activity Ahead of time. To ensure the content is relevant and up to date emails
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are sent to contributors by the system one week before an expiration date. If
they do not review their contribution, it gets archived, since the additional
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burden of validating and reviewing their own contributions was placed onemployees, platinum made sure that they were given extra time to spend on the
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task.
The initial version of the system was implemented with in four months of its
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initial approval. The system was so successful that it became the second mostwidely used application in the company next only to email.
Measurement :
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Lacking any other formal mechanisms for demonstrating a return on investment
for their knowledge management investments, platinum demonstrated the
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success of its system entirely in terms of the financial benefits. Benefitsquantified in terms of their effect on the companies bottom line are easier to sell
to senior management. the knowledge management teams quantified benefits in
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the following terms.
The system paid for itself in 1.5 months
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The knowledge management system resulted in cost savings of about $ 6million in its very first year.
Sales force productivity increased by a then current run rate of 6%
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The system reduced international FedEx shipments by 15% ( primarily
resulting from the savings resulting from not having to produce and
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distribute lotus notes and database CD-ROM updates to several dozenoffices worldwide, every few weeks.)
The knowledge management team further estimated that jaguar saved an
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average sale a and marketing person about two hours every week, created a
bottom up pull of knowledge and contributed to the competitive stand of the
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firm as a whole. Although the aforementioned benefits delivered a lot morevalue to the company, the knowledge management team initially quantified
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these benefits only in terms of FedEx savings that resulted from the introduction
of this system. by choosing such a metric the KM team was able to successfully
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demonstrate the tangible benefits of the system ( even though one might argue
that they were pessimistically underestimated)
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Case 3- knowledge management in customer support - the case of NortelNortel corporation sells a suite of design and manufacturing applications in the
united states and Europe. The global support group provides support to both
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European customers and units states. There are group of support personnel in
both the united states and Europe. Nortel is required to provide 24 hour support,
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seven days a week, with limited budgets and restricted head counts of workers.Issues ? Nortel was facing problem providing support to its customers
primarily because there was no suitable mechanism that allowed a support
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representative to check if anyone in the support organization had encountered a
citation problem before. This meant that the teams in different offices did not
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share any of their knowledge related to problem solving and ended upreinventing solutions time and again. Nortel identified several knowledge
related problems that its support group faced.
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Unclear definition of roles and responsibilities of personnel
Lack of a formal process and guiding documentation
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Informal service level agreementsInconsistent measures of customer satisfaction
Lack of formal training for support staff
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No centralized collection of repository of predefined solutions
European and US offices operating as groups of teams rather than as a
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single distributed team--- Content provided by FirstRanker.com ---
Excessive rework and reinvention of solutions ( no formal mechanism forcapturing problems and solutions existed)
Lack of knowledge sharing between teams based in the two continents.
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The three phases of organizing knowledge
The support group knowledge management team at Nortel decided to manage
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knowledge more effectively, hoping to help the support group perform better,given budget and head count constraints,, they decided to tackle the whole
process of managing knowledge in three discrete steps.
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Phase 1: capturing knowledge and processes that were being used by their
American and European support offices.
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Phase 2: consolidating these processes to provide an environment for cooperative trans pacific problem solving.
Phase 3: implementing integrated systems to enable collaborative knowledge
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intensive processes.
Nortel began by bringing in an external consultant who interviewed support
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staff both in Europe and the United States. After receiving positive feedbackfrom these interviewees, the knowledge management team concluded that it had
the support of prospective end users. to gain acceptance, the external consultants
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presented their understanding of the process to key stakeholders and support
staff. Following this feedback from employees was incorporated into the
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process descriptions that the consulting company had written. The processesidentified were then classified into different areas of process ownership. Roles
were assigned to each area on the basis of training provided to support
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employees.
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Nortel support staff members were then trained in terms of the new integrated
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process that were synthesized, as a final step, Nortel implemented an integratedprogress tracking system that allowed team members to track progress on
solving a problem s teams across the globe worked on it. The final step in terms
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of support technology was the implementation of a centralized database where
all problems and their outcomes were recorded.
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Although the implementation done by Nortel seems to be less sophisticated incomparison to some other companies knowledge systems its results were
delivered exactly where they were needed most. Remember that esoteric notions
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of organizational good cannot drive knowledge management until it is helping
the company solve critical process problems and eliminating knowledge related
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problems that are threatening to bring the company down. Nortel expendedmore effort on the people side than it did on the technology side: a perfect way
to begin when the processes themselves are not clearly understood or explicitly
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defined. The lesson here is that the problem should define knowledge
management technology, technology should define the problem. The effort paid
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strong dividends. Nortel is a leading provider in its markets and enjoys highlevels of customer loyalty.
Case 4 knowledge management in the semi conductor industry ? gasonics
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international
Gasonics is a company operating out of north America, Europe, Asia and the
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pacific rim with annual revenues in the range of $120 million. gasonicsproduces processing systems for fabrication of semiconductor wafrs. companies
manufacturing electronic chips for use in electronic equipment use systems such
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as the ones that the gasonics produces.
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Gasonics systems have for a long time enjoyed a reputation for high reliability
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and low systems downtime when compared to industry averages. The companydepends on its customers for feedback and it extensively uses this feedback to
improve both its existing systems and services. Faced with extremely low
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margin like other competitors operating in the industry, gasonicse operating
costs and improve internal efficiencies since the whole process of designing and
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building wafer processing equipment is knowledge intensive, gasonics decidedthat the answer lay in stream lining its use of internal knowledge.
The Starting Point : Technical Publications
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The technical publications department wrietes , typests, updates, provides and
support technical manuals, literature and other information that support gasonics
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products. The company found that its technical publications department was anincreasingly major cost centre for four reasons.
1.as equipment sold by gasonics was expensive, typically over $1000000 a
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piece downtime costs for customers resulted in thousands of dollar worth of
loses every time the system went down. Hence the technical publications
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department at gasonics needed to provide an increasingly high number ofcustomers custonmised version of their publications, this in effect is similar to
mass customization.
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2.updates were frequently required.
3.customers demanded electronic versions of product manuals.
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4.the cost of archiving old documentation was increasing at an abnormal rate.Gasonics realized that its technical publications department was the most logical
place to begin its knowledge management initiative. since the goals of the
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business unit and the technical publications departments were highly congruent,
improving one the company hoped would improve the other
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The below table shows the two se4ts of objectives.Technical publications department Business unit goals
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goalsSpeed up delivery of technical
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Reduce training and support costs
Documentation
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Improve usability of documentation Increase equipment uptime Reduce
and application manuals
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training and support costsImprove content and currency of Increase equipment uptime, increase
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publicationsservice revenues, reduce training and
support costs, improve customer
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service through better feedback
mechanisms.
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Link publications to other enterprise Improve customer serviceresources
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Maketechnical
literature, Improve
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product
and
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servicedocumentation and publications easily offerings, improve customer service.
accessible.
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The goal : three months to target
Gasonics planned for a knowledge management system that could be
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operational within three months. the challenges that came up included:
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The need to replace legacy data and paper based information withconsistent and accurate electronic data equivalents.
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The ability of customers to customize product and service documentation
electronically.
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Integration with other enterprise systems.
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Justification of costs involved in doing the above.
Gasonics reduced paper related costs by 50% immediately. besides this obvious
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financial benefit, the company reducing training costs used technicians insteadof engineers for providing support, and improved the quality of solutions
provided by making maintenance efforts work right the first time more
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frequently than it had done in the past.
Case 5 knowledge management pilot case : Monsanto nutrition and consumer
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productsMonsanto a Chicago based company with over 2000 employees is the owner of
leading brands of nutrition products such as nutria sweet and equal. The
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employee base consists of sales, marketing, research, manufacturing and
administrative personnel. Monsanto began its knowledge management efforts
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with a small community of analysts consisting of marketing and businessstrategy analysts. This effort served as a pilot project for the large scale
deployment of its knowledge sharing network based on plum tree knowledge
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server. As john Ferrari the process and technology manager at Monsanto aptly
puts it you do not want to focus too much time and energy into solving
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technology problems; focus on process issues and use off the shelf customizableapplications where possible.
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By using a pilot deployment, Monsanto identified the areas in which expected
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problems of deploying a large scale, organization wide knowledge management
system were concentrated. The pilot implementation led it to believe that about
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75% of the issues were concentrated. The pilot implementation led it to believethat about 75% of the issues were people, process and culture. Technology the
easy part was the remaining 25%.
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Case 6 Knowledge Management To Build Economies Of Reuse ? The Case Of
Texas Instruments
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Texas instruments the semiconductor firm that is credited withcommercialization of the integrated circuit ( also known as an electronic chip),
began its knowledge management initiatives centered on its technical literature
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and documentation. As one would expect .TI has over whelming amounts of
data relating to its semiconductor products this data needs to be managed
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updated and effectively distributed. for exampleTI has about 3100 data sheets relating to its semiconductor products. each of
these average about 12 pages in length.
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TI produces and maintains about 50 user guides each of which averages 250
pages.
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TI supports its products with 400 application notes each of which is between2 to 100 pages in length.
TI maintains 14 gigabytes of SMGL files and 12 gigabytes of meta data.
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TI revises about 90000 pages of documentation every year
TI has about 100 technical writers, 5 illustrators and 10 team leaders who
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Texas instruments decided to change these work processes so that they would
be better aligned with the ways in which documentation staff worked on these
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documents and technical literature. the focus was on creating content in a
manner that allowed ease of reuse and enabled production of multiple outputs
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from a single input or data source. By toggling all content, I hoped to be able tomanage context along with associated data. I uses the notion of a fundamental
shift to describe this process migration from document thinking to object
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thinking.
To make this shift happen the knowledge management team actually converted
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all paper documents to an electronic form. These expense of the conversionprocess was justified on the basis of the following.
Cost containment ?reusing portions of existing documents resulted in cost
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savings of up to 70% of the cost o new documents.
Value added ? by adding non textual information to documents ( such as
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code, models, executable files and demo files)additional context was addedto knowledge that was well explicated and codified.
Reduced labor cost ? it took fewer people to do the same job so savings in
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employee compensation were a direct outcome.
The important lesson to take from this highly specialized initiative that
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primarily focused on managing already confided knowledge is that a good placeis to begin knowledge management is with content that is already there.
Creating meta data for that content is the next logical step. but Jeff Barton of
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Texas instruments warns that creating such met can be the expensive part of the
process.
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Conclusion ? we looked at cases analyzing knowledge management projects insome of the most innovative pioneers in knowledge management. We examined
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the strategic drivers for knowledge management have put these programs into
place primarily as a vehicle for increasing revenues and cost containment. The
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common thread running through most of these cases was an intent to leverage
best practices, improve collaboration, profit from knowledge, strengthen
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organizational competence, widen competitive gaps and leverage expertise.Clearly identify the business objectives that drive knowledge management. All
these companies have demonstrated their ability to show tangible even if small
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returns on their knowledge management investments otherwise it is all too easy
to lose focus of what the project is supposed to actually accomplish.
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