“The data creates information, information creates knowledge, knowledge creates wisdom.”
– Diane Francis
Understanding Knowledge Management (KM)
Knowledge Management (KM) is the improvement of an organization’s performance and functioning by enhancing the structure, discipline, and practical activities for collecting and processing knowledge within a corporation and making it available for collective use. KM is also referred to as the science of turning knowledge into money.
The Concept of Knowledge Management
KM integrates the creation, accumulation, and management of both codified and uncodified knowledge. In the West, there is currently significant interest in KM. American analysts predict a multiple growth in the market for consulting services and KM technologies in the near future, while in Russia, interest in this topic is just emerging, but it is already evident. Therefore, it is necessary to contemplate today what Knowledge Management is, what significance knowledge management holds for a company, and what the mechanism of this management entails.
Knowledge as a Management Paradigm
It’s no secret that the market value of many major corporations, such as Pepsi-Cola, Microsoft, and IBM, is mainly determined by the value of the knowledge accumulated by these companies. Intellectual capital is a combination of explicit and implicit knowledge.
Classifications of Knowledge
- Embodied: physical and physiological knowledge, including skills, for example, the knowledge of a hairdresser who styles hair;
- Embrained: knowledge stored in the mind, for example, the knowledge of consultants;
- Encoded: codified knowledge contained in various information carriers such as paper, databases, etc.;
- Embedded: materialized knowledge contained in technologies, architecture, procedures;
- Encultured: shared intellectual models among colleagues.
Who Needs Knowledge Management
The first question a company should ask itself: what business problems is knowledge management aimed at solving? Despite the fact that KM currently carries some element of trendiness, and not everyone is on board, specialists argue that in any case, it is necessary to understand that knowledge is an asset of the company that should be taken seriously.
Every employee of a firm fully owns their own “means of production”: their intellect, initiative, knowledge, memory, personal, hidden experience. Business owners are concerned with how to extract this personal knowledge and turn it into “explicit”, codified knowledge. An example of possible difficulties can be seen in the story of a small Russian PR agency, which once won a large tender for a very important project in many respects. To serve the client, a team of three people was assembled. After the company became familiar with the client, the senior manager of this team left the company, leaving behind handwritten unorganized notes; after which the second manager also left the team and the company.
Since no procedures for handing over business were provided, the new employees not only did not receive any knowledge about the client but also lacked adequate understanding of what was done on behalf of the client and what promises were made to them. As a result, the important project was at risk of failure. This shows that procedures for transferring both material that can be codified and those that can only be transmitted in personal communication are necessary. Since people are the carriers of knowledge, and considering that they cannot work in the same company forever, special procedures are needed to transform individual knowledge into the organization’s asset.
At the elementary level, the culture of knowledge management should be instilled in the employees of any company. If management has decided to seriously tackle the systematization of various kinds of knowledge, then, first of all, it is necessary to clearly understand that this is not a fad but a sharp production necessity.
If you
- strive for the most effective production management;
- your company operates with large information flows;
- there are specialists in your company with different levels of training in the same field;
- large profits depend on the work of managers;
you should consider stimulating the systematization of existing intellectual capital.
It’s not easy to determine the state of intellectual capital and its attitude within your company. Here are some questions you can ask yourself to get a rough idea:
- How aware are you of the need for careful handling and effective use of intellectual capital?
- Does your company have systems for measuring intellectual assets?
- Are there established knowledge management processes?
- How is work with explicit and tacit knowledge organized?
- Does the company’s cultural atmosphere contribute to successful knowledge management?
- Are there knowledge centers (libraries, specialized departments)?
- How is the existing information bank utilized?
- What is the qualification of employees?
- Are modern technologies used in the process of collecting, processing, and utilizing knowledge?
In any case, even to start the process of systematization, you need to have at least one person in the company who has a clear understanding of what KM is.
Methods and Mechanisms of Knowledge Management
It might seem that managing knowledge is very easy: it’s enough to simply instruct employees to write down on paper the knowledge they have in their heads. But at this stage, a lot of problems arise: what is important from one perspective may not matter from another. It’s important to remember that not everyone is capable of formulating and articulating even very simple knowledge; moreover, a serious problem of volume arises both in the extraction and codification stage of knowledge, as well as in the stage of their transmission and comprehension. Therefore, one of the important tasks of KM is to determine exactly what knowledge and in what format need to be preserved. Another important mission of KM is to create an atmosphere of trust that encourages knowledge sharing, as very often employees are reluctant to share them.
Success criteria in knowledge management
- Close alignment with business priorities.
- Presence of a manager in the company who takes the initiative to systematize and transfer knowledge.
- Culture of learning and knowledge exchange.
- Continuous training.
- Approach to knowledge as a resource.
- System of procedures – components of the management process.
- Technological infrastructure that stimulates communication and interaction.
The most important elements of knowledge management strategy are the joint use of experience and the creation of “corporate memory.” In order for information to work effectively, it is necessary to create a unified mechanism for interacting with the means of its transmission, processing, and storage.
We talked about the minimum level of working with intellectual capital. This is the simplest reporting on operations performed and documenting key actions, including decision-making and justification. These are the necessary measures that will at least prevent troubles if the carrier of unique knowledge is unavailable at a critical moment.
If we take a more serious approach to the management system, it will not do without creating a database of existing knowledge. Here are the main mechanisms of knowledge management:
Generation and identification of knowledge
- Creative techniques (e.g., brainstorming)
- Detection and extraction of data and texts
- Monitoring the environment
- Document management systems
- Business modeling
- Content analysis
Knowledge exchange
- “Communities of practice” (environment of professional-social communication)
- Exchange of most successful practices
- Analysis of “flights”
- Structured dialogues
- Experience exchange in exhibition format
- Creating cross-functional teams
- Keeping journals of decision-making arguments
- Encouraging informal communication
- Tools to support decision-making (expert systems, discussion groups)
Knowledge management
- Identification and systematization of knowledge bearers
- Knowledge mapping
- “Inventory” of information and knowledge
- Creating classifiers and software
- Creating internal networks for information transmission
- Measuring intellectual capital
Content management technologies allow you to record, systematize, and organize knowledge in centralized repositories, simplifying access to information. Familiar tools like Microsoft Access and Microsoft Excel can be used to obtain and analyze data. To determine the most effective way to work with “corporate memory,” you can install document management organization applications with tracking capabilities to find out if employees are using the most effective work practices.
Some companies make maximum efforts to automate knowledge management. Others rely on more conventional knowledge exchange methods. Choosing the wrong approach or attempting to do both at the same time can ruin a business, so choosing a KM strategy is a serious task.
The Future of Knowledge Management
The concept of knowledge management is still far from its final formation, and in our country, it still sounds exotic. But it is already obvious that this novelty, as it spreads across the territory of our country’s civilized business, will become its integral part. Therefore, it is quite possible that approaches and services in this area of the market will change. The consulting market companies that provide KM services are not oversaturated. There is a good chance right now to send a competent specialist for training, so that when there is a sharp increase in demand for this type of consultancy, there will be an experienced knowledge management specialist on staff.
Finding agencies in Moscow that provide consulting and managerial support in the field of KM turned out to be not so simple. Contrary to our expectations, such well-known companies as Arthur Andersen and IBS could not give a definite affirmative answer to whether they could provide support in this area. IBM said it could provide pre-sale consultations for customers-buyers of software products used in knowledge management processes. At PricewaterhouseCoopers (tel. 967-60-00), we were told that although they had not received direct orders for knowledge management support from Russian firms, they were ready to provide consultations and participate in KM processes.
The article uses materials from an interview with the consultant of the “Ansdell” agency, Alexander Goldin.
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