Chapter 3
Managing Knowledge: The Process

Once you’ve defined your knowledge assets—the ones you have and the ones you need—you will need to manage them. Whether your knowledge assets are in the form of data, information, or knowledge, whether they are expressed, expressible, or inexpressible, you will now need to apply certain processes to them to make them usable.

Managing knowledge assets involves three key processes:

1.   We create them—working with expressed, expressible, and inexpressible sources.

2.   We distribute them—making them available in the right places at the right time.

3.   We apply them. Without this step, your company cannot realize the value of the knowledge that has been created and distributed. Applying knowledge effectively is what enables an organization to succeed, through efficiency, through innovation, or by any other means.

Creating Knowledge

Knowledge has to exist before it can be used. There are several methods for creating knowledge. Knowledge can be created internally through dedicated resources or by fostering an overall climate that supports and sustains emergent knowledge wherever it arises. For example, many companies have well-resourced R&D groups. 3M, a company renowned for innovation, has as a goal in its corporate mission statement that 30 percent of its revenues are to come from products under four years old.

In the 1990s, new sales records of over $15 billion annually were set with 30 percent coming from products under four years old. In 1996 alone, $947 million went into R&D. In fact, 3M files nearly 20,000 patent applications every year, and one in eleven of the company’s 70,000 employees works for R&D. These corporate values, coupled with a culture and a system that support creativity and innovation, have contributed greatly to 3M’s reputation as a leading-edge, creative company.

Today, Nokia is the world’s leading maker of mobile telephones. Of the 165 million phones sold in 1998, 41 million were Nokia phones. Nokia has achieved its current success by redesigning its innovation process and concentrating its business on mobile phones and networks. Nokia’s R&D engineers work in closely knit teams with suppliers, production staff, and marketing people. In some instances, Nokia has brought a new product to market in as little as six weeks.¹

Knowledge can also be acquired or bought. The rate at which companies are acquiring other companies or merging with their past competitors is dazzling. In 1995, IBM bought Lotus for $3.5 billion, which was many times Lotus’ book valuation. IBM was purchasing Lotus’ expertise in the Notes software domain to fold this missing ingredient into its own portfolio of offerings. More recently, Hewlett-Packard announced its intention to buy a consulting branch of PricewaterhouseCoopers to augment its own knowledge and expertise for providing complex IT and Internet solutions to business. Many companies also use the services of consultants to add to their expertise base or to fill in holes in their internal competencies.

Knowledge can also be generated through social networks. When knowledgeable people connect with other knowledgeable people, new ideas emerge. These networks can exist within the boundaries of the organization or can extend beyond to link companies to companies, to customers, to research institutions, to analyst groups. Conferences, colloquia, roundtables, seminars, and other professional meetings are formal opportunities to gather and exchange knowledge—and are valued as much for informal, unscripted social exchanges as for what’s on the program. Many universities sponsor corporate consortiums to target their own research initiatives and to provide companies with cutting-edge research and an opportunity to interact with knowledgeable colleagues. High-tech companies locate in places like Silicon Valley, Silicon Alley, the North Carolina Research Triangle, and Route 128/Boston because they benefit from being near other companies full of people who excel at and are passionate about similar fields. In the same way, oil and chemical companies cluster around places like Houston and Baton Rouge.

Distributing Knowledge

Distributing knowledge is the process that usually attracts the most attention. Perhaps this is because technology plays a clear and central role in knowledge distribution. Creating and applying knowledge, on the other hand, depend more on social interactions and are, therefore, more complex—and more difficult to measure.

Locating Knowledge. Distribution processes are concerned with finding, packaging, and delivering the right set of data, information, and knowledge to the right people at the right time. The first step is locating the material, either inside or outside the company. It is important to remember that knowledge can reside in many places and take many forms. To find what you want, you must first find out where it lives. Knowledge can be kept in:

•   Places—recorded in an existing document or database

•   Processes—embedded in a known work process

•   People—known to an identified individual

•   Pieces—distributed in parts among several people or processes (as in a value chain)

How you extract the knowledge will depend largely on where it comes from and what shape it is in. If it is an existing document, you may be able to search for it using keywords. Search technology, information libraries, and news feeds are useful tools for finding recorded or documented knowledge. Many companies collect the documented knowledge they need—from the vast outpouring we mentioned in Chapter 2— by employing information specialists. These people (sometimes called “cybrarians” these days) often have backgrounds in library science or information resources.

If it is embedded in a work process, you may need to take the process apart, analyze it, and extract the pieces that apply to your situation. Knowledge located in processes, persons, or pieces may end up in a technologically searchable place. But much of it is gathered by people, from people, using “people” skills: networking, asking, listening, and asking some more.

Organizing Knowledge. Once you find useful data, information, or knowledge, you need to be sure it is in the right form to be transferred to new contexts. One common mistake is to take a process or best practice that works wonders in one division or region and try to apply it somewhere else. If you work in a company that has major operations on both sides of the Atlantic, you may be familiar with how “global” initiatives that seem perfect for one continent get sent back from the other riddled with objections and criticisms. If proposed knowledge processes are to get past these kinds of problems, careful attention must be paid to regional, cultural, and functional differences.

Business is full of situations in which information that is useful in one context needs reworking to be useful in others. For example, the information a product development group puts together about a new product’s specifications is perfectly suited to communications among themselves and with potential suppliers, subcontractors, manufacturers, and other technical partners. Within this mass of information, the marketing department can also find what it needs to market the product. However, for development specs to become marketing material, they must be recast in a language and format better suited to marketing needs.

Repackaging or organizing knowledge is a science unto itself. Some of the tools used in organizing knowledge include classification systems, inventories, taxonomies, summaries, and maps that show interrelationships between clusters of knowledge. The way the company organizes its knowledge is pivotal in enabling employees to find what they need when they need it. Too much structure makes the system hard to use and fragments information too much for business purposes. Not enough structure makes it difficult to navigate to a level of detail where findings are relevant and their quantity is manageable.

Take, for example, a contact management system that contains information about key customers, vendors, partners, and others.

If it is structured too simplistically in a database organized purely by regions such as Northeast, Southeast, Midwest, Southwest, West Coast, and Northwest, it might have tens of thousands of entries in Northeast alone. If it is overly structured, users would have to dig down (and sometimes backtrack) through too many layers of classification before arriving at useful information. Similarly, if a discussion database for a newly forming community dedicated to innovation has hundreds of categories, the sheer number of categories will frustrate users by making information hard to find.

Delivering Knowledge. Once knowledge has been found and packaged, it must be delivered. The delivery mechanism can either push knowledge to users or let them pull it in. “Push technologies” send information to you, such as daily news feeds and email. With some, you set up your interest parameters and the technology pushes information that fits your requirements to you. “Pull technologies” are those in which you initiate a request or a search. Search engines on the Internet or in company intranets are prime examples of pull technologies.

An effective knowledge distribution system uses both push and pull technologies. To get the balance right for employees, companies need to determine their information and delivery needs. Information pushed in excess or at the wrong time causes information overload. The need to pull information will soon frustrate and tire the searcher. The key is to discern which information needs are more constant and predictable and can be pushed (such as a daily accounting of the company financials), and which information needs are more complex or idiosyncratic and should be made available through easily accessed pull technology.

Applying Knowledge

Once knowledge is found and distributed, it needs to be applied for its value to be realized. This is perhaps the knowledge management process that has the largest social and behavioral component. Application requires that people be motivated to produce and perform in the right direction. That is a sociological imperative, not a technological one.

Knowledge must be applied in the service of company goals and objectives. For this to occur, first and foremost, employees need to understand those goals and objectives, at the corporate level and at the level of their own work unit. The application engine of any company is its people, organized into individuals, teams, task forces, communities, and project groups. Each of these units needs to be:

•   Clear and motivated about its purpose

•   Able to find the knowledge it needs to achieve its objectives

•   Able to put that knowledge to use in a work environment that suits the unit’s work needs

Technology can play a key part in creating that suitable work environment. But the technology needs to be suited to the work. Today, people rely heavily on e-mail and the phone to do their jobs—and for knowledge exchange. However, the phone doesn’t leave a record, so there’s no documentation of what was shared. E-mail works person-to-person, but tends to break down when teams of a dozen or more people try to discuss strategy or when three teams are trying to coordinate their efforts. The technology is simply not robust enough to handle the load efficiently. People have inboxes and “sent mail” boxes with hundreds of messages they dare not throw away and don’t have time to sort efficiently. Executive teams can’t function on this basis. They need tools such as web-based project spaces with virtual team rooms, shared libraries, and expertise-finding systems. These tools are beginning to emerge now.

But technology alone is not the answer. Implementing knowledge management technologies without ensuring that your staff is clear about your company’s overall goals and how knowledge technology can help achieve those goals will lead to disappointing returns on your technology investment.

Take a Moment

Let’s consider how knowledge management processes happen in your organization. Questions such as the following can help you identify how knowledge management is being conducted and what is and isn’t working.

•   How is new knowledge generally created in your organization? Is this sufficient to maintain the right level of innovation?

•   Are you finding the knowledge you need to do your job? If not, why not?

•   Is too much information being pushed at you?

•   Do you have enough direction to be able to put the knowledge to good use?

•   Are you and your group working in a space that is matched to the requirements of your work?

•   Is knowledge distribution getting the lion’s share of attention, while efforts to create and apply knowledge are ignored?

Knowledge Users: The Vital Link

In some ways, knowledge isn’t really knowledge until the user makes it so. The user must be able to understand the knowledge, in a meaningful context, and be able to put it to use. That’s why keeping the user—the knowledge customer—in mind is important in planning how to manage knowledge assets. Each customer may have different requirements for content, packaging, and delivery.

By knowledge user, we mean both individuals and groups. Users of knowledge management systems include:

•   Individuals–any employee

•   Teams—focused on a task or a project, such as researching a disease, launching a product, or selling in a new region

•   Communities—drawn together by an interest, a specialty, a shared area of knowledge

•   Organizations—formed around a purpose and encompassing many interests, specialties, and functions that contribute to achieving that purpose

Individuals and Teams. The individual and the team tend to be focused on a very specific goal, task, or project, to which they bring a specialized understanding. They need knowledge delivered in an easy-to-use form that will help them progress.

A benefits manager in Human Resources needs extensive current knowledge in her area: details of the company’s current policies, how they benchmark against industry standards, who to contact for further guidance on complex issues. An executive needs regular updates—summaries, not blow-by-blow accounts— about a key product initiative.

A product development team working to deliver a component of a large system will need to know about matters such as specifications, time frames, tool kits, and product features. The team and its members will need to have knowledge that will help them meet their objectives. In addition, they may need and want broader knowledge about impending business issues, company strategy, emerging technology trends, and related fields.

Communities and Organizations. The organization as a whole and its communities of practice (more will be said about communities later) are not only larger, but also less focused and clearly defined than individuals and teams. Individuals and teams produce a clear set of deliverables. Communities and organizations are dedicated to broader interests, goals, and objectives. As a result, their knowledge needs are harder to define and tend to change more rapidly. The company can make knowledge of general interest and use available broadly, and have systems in place for channeling more focused knowledge to particular communities. The knowledge management community at Lotus Development/IBM is a loose affiliation of employees working on many different aspects of knowledge management, including advanced technology, marketing, taxonomies, expertise networks, knowledge strategy, communities, and other areas. There are many databases and newsfeeds with pertinent information available to either all or some members of this broad community.

Many of the major oil companies have moved quickly to develop communities of practice. and specialist networks. Oil companies conduct exploration activities all around the globe. Providing many ways to access scientific and technical expertise on topics like drilling, geology, and geophysics from anywhere in the company helps teams solve often-daunting technical problems faster. Enterprise Oil, for example, uses virtual discussion groups to promote dialogue that is often launched in person at internal conferences and community-of-practice meetings. Royal Dutch/Shell has cultivated a series of specialist networks, supported by the company’s Learning Centre and corporate intranet.³

Take a Moment

A few key questions can help focus your efforts to understand and meet the needs of knowledge users in your organization:

1.   Are their knowledge needs task-specific and/or broader?

2.   Are their knowledge needs predictable over a period of time or are they more changeable?

3.   Can they understand specialized knowledge or does it need to be packaged with more explanation?

4.   Do they want full text or a summary? Would they prefer the knowledge to be pushed to them? Or would they rather pull it in?

Recap

In this chapter, we described the processes used to manage knowledge assets—processes for creating, distributing, and applying knowledge.

•   Knowledge creation can happen inside or outside the organization. It can be developed or acquired.

•   Knowledge distribution requires finding it, organizing and packaging it, determining whether to push it to individuals or let them pull it toward themselves, and pushing or pulling in a timely way.

•   Knowledge application means converting knowledge into results, outputs, and successes that align with strategy and build value for the company.

Finally, applying knowledge means understanding its users, or customers—individuals, teams, communities, and organizations—and offering them the knowledge they need in the manner they prefer. Keep in mind that while it is tempting to lavish effort on technology for knowledge distribution, your efforts should also fully emphasize knowledge creation and application processes.

Endnotes

¹ Steven Silberman, “Just Say Nokia,” Wired, September 1999; Ronald S. Jonash and Tom Sommerlatte, “The Innovation Premium: Capturing the Value of Creativity,” Prism (Arthur D. Little, Inc.), Third Quarter 1999.

² Dorothy Yu, “Seize the Knowledge Advantage: Use What You Know to Invent What You Need,” Perspectives (Pricewaterhouse Coopers LLP), Issue 1, 2000.

³ Nick Milton, “Refined Technique: Why Are the Oil Companies So Far Ahead in Knowledge Management?” Knowledge Management Magazine (UK), October 23, 2000 (on-line).