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An Illustrated Guide to Knowledge Management

Contents

Basics

Objectives and Benefits 1

Basic Concepts 2

Types of Knowledge 3

Experience 4

Knowledge Management 5

Operative Knowledge Management

The Role of the Employee 6

Knowledge Logistics 7

Changing the Knowledge Base 8

Integration into Projects 9

Transfer of Experience 10

Closing a Project with a Lessons Learned Workshop 11

Lessons Learned Workshop 12

Organisational Learning

Experiential Learning 13

From Individual to Organisational Learning 14

Procedure and Analysis 15

Design and Development 16

Strategic Knowledge Management

Corporate Culture and Strategic Knowledge Management 17

The Knowledge-based Network Organisation 18

Strategy Implementation with the Intellectual Capital Report 19

Knowledge Markets as Strategic Interfaces between Organisations 20

Information and Communication Technologies

Relevance and Overview of Technologies 21

Selection Procedure 23

Knowledge and Innovation Management

Linking Innovation and Knowledge Management 24

Supporting Innovation With Knowledge Management 25

Optimising Problem-solving Processes 26

Evaluating Problems 27

Measuring Knowledge

Basics of Measurement 28

Measurement Methods 29

Intellectual Capital Report Model 30

Learning Effects 31

Implementation

Knowledge Management Assessment 32

Approaches to Introducing Knowledge Management 33

The Individual Working Environment 34

Initiation Phase 35

Analysis Phase 36

Design Phase 37

Lessons Learned in Implementation 38

Glossary 39

http://www.wm-forum.org

Recommended ReadingArthur, B. (1996): Returns and the New World of Business. In:Harvard Business Review, Jul.-Aug., pp.100-109Drucker, P. (1994): Post Capitalistic Society; New York: Harper

Basics

Page 1


Objectives and Benefits

The modern business world is characterised bydynamic, changing markets and continuoustechnological advance. To cope with these trends,organisations must become more flexible, andone certain way for them to do so is tostrengthen their potential to learn asorganisations (see Fig. 1).

Thus, "knowledge" becomes an essentialorganisational driver and a key factor in valuecreation. Increased focus must be placed onexpanding the organisational knowledge base,either by learning from others (e.g. colleagues,partners, third party content, etc.) or by creatingnew knowledge through innovation. Bothprocesses help secure sustainable competitiveadvantage (see Fig. 2).

Knowledge management can be seen as anintegrated approach to achieving organisationalgoals by placing particular focus on"knowledge", now widely considered as the newfactor of production.

Knowledge management supports andcoordinates the creation, transfer andapplication of individual knowledge in valuecreation processes. This can only be realised in acorporate culture that promotes knowledgemanagement and actively supports informationand documentation processes (e.g. through thesystematic application of innovation and qualitymanagement tools and methods).

However, to manage an organisationalknowledge base, it must also be measured. Theinclusion of intellectual assets in thismeasurement adds a further dimension to theassessment of traditional factors of production.In this way, other factors (including traditionallyelusive "soft factors") become more readilyavailable for value creation processes.

Comprehensive knowledge management should

ensure that "knowledge" is used as effectivelyand efficiently as traditional factors ofproduction in achieving organisational goals.Added benefits include an improved capacity fororganisational learning and a greater potentialfor action.

The major benefits of knowledge managementfor organisations include:

• Greater transparency of knowledge potentialand gaps

• Knowledge-based value creation processes• Increased motivation through staff

involvement• Increased competitiveness• Long-term security and survival

Management SummaryKnowledge-intensive value creation requires areassessment of the weighting of factors ofproduction and increased recognition andunderstanding of the economic influence ofknowledge.Effective knowledge management not only forms thebasis of successful innovation processes, it also greatlyenhances an organisation's ability to innovate.

Changing the corporate

environment

Organisational Learning

Learning appropriate corporate behaviour

Fig. 1: The cycle of organisational learning

advantage ensures corporate longevityCompetitive

is the driving force behind long-term competitive advantage

Innovation

is the basis for innovationKnowledge

Knowledge Management

Alliance Management

Management of IC Technologies

Learning Organisation

Quality Management

Business Process Management

Innovation Management

Fig. 2: Knowledge as basis for competitive advantage

Fig. 3: Knowledge management as integrative management approach


Recommended Readingvon Foerster, H. (1995): Cybernetics of Cybernetics. 2nd edn;Mineapolis: Future SystemsPiaget, J. (1980): The Psychogenesis of Knowledge and itsEpistemological Significance. In: Language and Learning: The DebateBetween Jean Piaget and Noam Chomsky, Piatelli-Palmarini, M. (Ed);Cambridge, Mass.: Harvard University Press, pp.23-24

Basics

Page 2


Basic Concepts

People use their memories to carry out physicaland mental actions. They actively experience theirenvironment through sensory perception. Theperception of individual stimuli continuouslytriggers off cognitive processes in the brain,which, in turn, result in changes to the memory.This interaction between perception and action isknown as individual learning, with the memoryacting as human cognitive subsystem(see Fig. 4).

Based on these assumptions, individualknowledge can be defined as the set of allpossible memory states (i.e. possible actions) anindividual is able to perform at any given time.Knowledge represents an individual's potentialfor action and is thus always intrinsically linkedto people.

Organisations need to harness the individualknowledge of their members and apply it inbusiness processes to create economic value.Combining these individual memories to form acollective organisational knowledge base playsa decisive role in this process. This is far morethan just a corporate database: It represents theinteraction and communication betweenindividual employees. Thus, organisationalknowledge can be considered as the set of allpossible actions (or business processes) anorganisation can perform at a given time. Thisincludes its ability to perceive its environmentand react to changes. In analogy to individualmemory, the collective knowledge base can beseen as the cognitive subsystem of the socialsystem "organisation" (see Fig. 5).

There are two essential parts to a collectiveknowledge base: the individual knowledge of themembers of the organisation and the frameworkthat connects them, with interaction andcommunication structures also playing a decisiverole. Consequently, one of the central tasks of

knowledge management is to shape anorganisational culture that supports effectiveknowledge exchange.

Organisational learning is the process ofchanging the organisational knowledge base andtypically refers to learning by individual membersand groups. This involves continuous perceptionof the environment (e.g. market changes,technology trends) and appropriate reaction tochanges (e.g. new strategies or improved businessprocesses). Despite its obvious advantages, thesystematic combination and transfer of this newknowledge can be very time consuming, and aneffective information and communicationinfrastructure will be required to ensure allconcerned have the necessary time, space andtools to do so.

All members and groups in an organisationcontribute to the collective knowledge base. As aresult, the knowledge it contains comes from awide range of different projects, tasks andbusiness processes. To accommodate thisdiversity, a knowledge base should be organisedin individual knowledge domains, each dealingwith a specific subject or area.

Management SummaryThe organisational knowledge base contains theknowledge of the individual members of theorganisation applicable to the value chain.A learning organisation is capable of changing itsknowledge base through systematic perception of theenvironment and adoption of appropriateinformation, documentation and communicationprocesses.

Individual

Sensory perception

Action

Memory (cognitive subsystem)

Perception

Action

Organisation

Sensory perception

Action

Knowledge base (cognitive subsystem)

Knowledge domain AKnowledge domain B

Knowledge base

Fig. 5: Organisational knowledge

Fig. 4: Individual knowledge

Types of Knowledge

In general, the following characteristics can beattributed to knowledge:

• it is created dynamically (through changes to cognitive structures),

• it is intrinsically linked to people, and

• it is a prerequisite for human action.

One possible – and often useful – categorisationof knowledge (Fig. 7) is by:

• knowledge psychology,

• articulability, and

• knowledge holder.

Knowledge psychology differentiates betweendeclarative and procedural knowledge. Whilstdeclarative knowledge refers to facts (issues,processes, etc.) and objects (persons, things, etc.),procedural knowledge concerns the waycognitive processes and actions are performed.Declarative knowledge is also described asknowledge of something (knowing), or "knowwhat". Procedural knowledge is also described asprocess knowledge, or "know-how".

Structuring knowledge according toarticulability focuses on whether or not theknowledge holder is consciously aware of theknowledge and can thus articulate it. This resultsin a differentiation between explicit and tacitknowledge. Explicit knowledge is knowledgethat is consciously understood and can bearticulated. In other words, knowledge the"knower" is aware of and can talk about. Tacitknowledge, on the other hand, is knowledge the“knower” is not aware of. It can only – if at all - beelicited, and thus articulated, with great effortand the use of special observation or interview

techniques.

A categorisation according to knowledge holderdifferentiates between individual and collectiveknowledge. Individual knowledge is knowledgeheld by one person. It is not dependent on aspecific context and is controlled by theindividual concerned. Collective knowledge isknowledge that is relevant in a specificenvironment (e.g. company, club). It can includeindividual knowledge that only reaches its fullpotential when combined with that of others (e.g.an orchestral musician who plays better in agroup than as an individual). It can also includeknowledge shared by everyone, i.e. knowledgecommon to all members of a collective (e.g.everyone in the company knows who to contactif they have a problem with their PC).

Management SummaryKnowledge is intrinsically linked to people and enablesthem to act. Categorising knowledge only really makessense if it is done with a specific purpose in mind.

An Illustrated Guide to Knowledge Management Basics

Page 3http://www.wm-forum.org

Recommended ReadingPolanyi, M. (1983): The Tacit Dimension; GloucesterRyle, G. (1960): The Concept of Mind; New York

Knowledge...

... is intrinsically linkedto people

... is the result of acognitive process... is createddynamically

... is the basis for allaction

Fig. 6: Basic characteristics of knowledge

Fig. 7: Types of knowledge

Collective knowledge

Individual knowledge

Explicitknowledge

Tacitknowledge

Procedural knowledge("know how")

Declarative knowledge("know what")

Articulability

Knowledge holder

Knowledge psychology

Experience

The term experience is often used in connectionwith knowledge and learning. Experience as astate (having experience) is a subset of humanknowledge and is referred to as experientialknowledge (Fig. 8). If, on the other hand,experience is seen as a process (gainingexperience), it must then be seen as a learningprocess, namely experiential learning. Thefollowing central characteristics of experientialknowledge are relevant for knowledgemanagement:

1. Experiential knowledge is often createdthrough observing or carrying out actions andis therefore closely linked to proceduralknowledge (Fig. 10). Repeatedly carrying out aparticular action or actions will lead to arefining of procedural knowledge. For example,the speed and accuracy of a particular skill iscontinuously improved. An experienced grinderwill make a far more sophisticated assessmentof a cylinder’s composition or differences indiameter than an apprentice. Experientiallearning processes also help us to structure andlink existing knowledge. This is whyexperienced employees are able to interpretnew situations quickly, make appropriatedecisions and initiate any action required. Adriving instructor interprets the overall picturein a particular traffic situation, whereas alearner driver still notices the individual details(pedestrians, traffic lights, cars turning left, …).

2. Experiential knowledge is primarily tacit(Fig.10) and, in most cases, transferring thisknowledge requires a huge amount of effort.Experiential knowledge comes from personalexperience of situations. It has far strongerlinks to a specific situation than universallyvalid knowledge (e.g. a2+b2=c2). The limiteddegree of universal validity in experientialknowledge can, however, be meaningful in

other situations. No practical applications canbe derived directly from universal knowledge(Fig. 9).

3. Experiential knowledge is primarily individualknowledge (Fig.10), since it is by naturestrongly linked to subjective feelings andemotions. We don’t experience objects, peopleor situations simply as useful/impractical ornew/familiar; we also experience them asbeautiful/ugly or pleasant/repulsive. Indeed,the phrase "to act on instinct" clearly indicatesthe close links between experiential knowledgeand feelings.

Management SummaryExperiential knowledge is a subset of humanknowledge and is by nature strongly linked tosituations and people. Experiential knowledge ischaracterised by its practical relevance.

An Illustrated Guide to Knowledge Management Basics


Recommended ReadingDewey, J. (1983): Experience and Education; New YorkPolanyi, M. (1983): The Tacit Dimension; Gloucester

ProcessExperience in the senseof "gaining experience"is seen as a process andreferred to asexperiential learning.

StateExperience in the senseof "having experience"is seen as a state andreferred to asexperiential knowledge.

Fig. 10: Classification of experiential knowledge

Fig. 8: Experience as state and process


Individual knowledge

Explicitknowledge

Tacitknowledge

Procedural knowledge("know how")

Declarative knowledge("know what")

Articulability

Knowledge holder

Knowledge psychology

Experientialknowledge

Fig. 9: No direct applications result from universal knowledge

Mathematics a2+b2=c2

ISO Standards

Corporate standardsSalesman's talent

Experiential knowledge

Universal knowledgeUniversality

CategorisationGeneralisation

Abstraction

Gap betweentheory and practice

Conflict with contextPersonalisationPractical relevance


Recommended ReadingDavenport, T. / Prusak, L. (1998): Working Knowledge: HowOrganizations manage what they know; BostonDierkes, M./Berthoin-Antal, A./Child, J./Nonaka, I. (Eds) (2001):Handbook of Organizational Learning & Knowledge; New York:Oxford University PressNonaka, I. / Takeuchi H. (1995): The Knowledge creating company.How Japanese Companies create the Dynamics of Innovation; NewYork: Oxford University Press

Basics

Page 5



Knowledge Management is the targetedcoordination of "knowledge" as a factor ofproduction and the management of theorganisational environment to support individualknowledge transfer and the subsequent creationof collective knowledge, two essential factors inthe value creation process. Knowledgemanagement is therefore not the management of"knowledge" itself, but rather the managementof the organisation with a particular focus on"knowledge".

To simplify this process, we differentiate betweentwo fundamental levels: the data level and theknowledge level. This is based on the traditionaldifferentiation between knowledge on the onehand and data and stimuli on the other.

There are three main aspects to knowledge:individual knowledge, action and data. The first,individual knowledge (i.e. the sum of anindividual's capabilities and experience),determines the possible actions open to anindividual and, consequently, the contributionsthey are able to make to a particular project ortask. The second aspect, action, includes bothphysical and mental actions (e.g. problemsolving). The actions required to complete anindividual task often result in large amounts ofdata, the third aspect to knowledge. This includesboth internal data (e.g. from other projects) andexternal data sources such as libraries or onlinedatabases.

These aspects form the operational layers in theknowledge management model illustrated inFig.11:

• Knowledge level• Data level• Action level

The knowledge level is made up of the

knowledge of the individual members of theorganisation and their interaction with eachother. The data level consists of all availabledocumented knowledge (e.g. in databases or asprinted documents). The knowledge and datalevels provide input for the action level. This iswhere business processes are enacted andrepresents the organisation's value creatingprocesses.

These three levels are linked with the five coreknowledge processes (information,documentation, communication, application andlearning) to form a basic model of knowledgemanagement.

Management SummaryKnowledge management places particular emphasison the role of "knowledge" in organisationalmanagement. One of the main aims of knowledgemanagement is to establish an appropriate frameworkto support the optimal development and applicationof knowledge in value creating processes.

Action level

Application Learning

Knowledge level Knowledge domainsCommunication/

Interaction

Social subsystem

Documentation

Information

Data levelTechnical subsystem

Team buildingTeam knowledge

Documented knowledge

ProjectTeam learning


Documentation

Data level

Knowledge level

Fig. 12: Projects as framework for knowledge creation and application

Fig. 11: Basic model of knowledge management

The Role of the Employee

Knowledge management can take many differentforms, depending on the actual goals and/orindividual actors involved (Fig. 13). The majorityof common approaches deal with knowledgemanagement by and for groups of employees(organisational knowledge management).However, this can be extended by considering theknowledge management activities that take placeat the action level of individual employees.

This does not imply that personal knowledgemanagement should be seen as diametricallyopposed to a knowledge management focus oncorporate goals. Indeed, many of the conflicts ofinterest that come to the fore in knowledgemanagement activities have far deeper roots. Asimple example of this is training. Most peoplealso have an interest in improving their value onthe employment market and, as a result, may wellput in requests to attend training courses thathave no direct relevance to corporate goals.Another classic example is the hoarding ofknowledge by experts to protect their personalinterests.

A closer look at the links between these twoforms of knowledge management reveals thatdifferences in corporate and personal goals makedifferent knowledge relevant (Fig. 14). Wherecorporate and individual knowledge interestsoverlap, there is no immediate conflict ofinterests. However, from a knowledge perspective,there are often no clear boundaries betweenpersonal and work-related interests. The amountof effort a person is prepared to invest inknowledge that is important for the organisation,yet of no personal interest, is primarily a questionof motivation, and can thus only be influencedindirectly. On the other hand, the extent to whicha person can utilise their time at work to furthertheir own knowledge interests (not necessarilyrelevant to the company) depends greatly on the

amount of autonomy their employer is willing togrant. Both these factors can also influence ashift in boundaries (Fig. 14). Greater autonomyboosts motivation. Motivated employees aregenerally more productive and can be given moreautonomy. Whilst there is no denying thatgreater autonomy might also result in a slightreduction in capacity, this should be more thancompensated for by the benefits that come withincreased motivation.

Management SummaryTo avoid unnecessary conflicts of interest, knowledgemanagement must also consider the perspective ofthe individual employee. Motivation and autonomyestablish the boundaries between company relevantand personally relevant knowledge.

An Illustrated Guide to Knowledge Management Operative Knowledge Management


Recommended ReadingBarth, S. (2000): The power of one. In: Knowledge ManagementMagazine, Dec.,URL:http://www.destinationkm.com/articles/default.asp?ArticleID=615Slade, A.J./Bokma, A.F. (2001): Conceptual approaches for personaland corporate information and knowledge management. In:Proceedings of the 34th Annual Hawaii International Conference onSystems Sciences, HICSS-34, pp.418-425, IEEE Computer Society; LosAlamitos, CA, USA

Focus onpersonal goals

Focus oncorporate goals

Group level

Individual level

Collectiveknowledge management

Organisationalknowledge management

Individualknowledge management

Personalknowledge management

Fig. 14: Dealing with company and personally relevant knowledge

Fig. 13: Actors and goals in knowledge management

AutonomyMotivation

Companyrelevant

knowledge

Personallyrelevant

knowledge


Recommended Readingvon Krogh, G. (2000): Enabling knowledge creation: How to Unlockthe Mystery of Tacit Knowledge and Release the Power ofInnovation; Oxford Univ. PressSenge, P.M (1994): The Fifth discipline: The Art and Practice of theLearning Organization; New York


Page 7


Knowledge Logistics

Knowledge logistics handles knowledgerequirements, available knowledge andknowledge transfer. Knowledge requirementsform the starting point in the sphere of influenceof knowledge management processes (see Fig.15).

Available knowledge is represented by thecompany’s knowledge holders and corresponds tothe organisational knowledge base.

Knowledge transfer is the process of linkingknowledge requirements and availableknowledge. This can occur either via humannetworks or via information and communicationtools (Fig.16) as illustrated in the Basic Model ofKnowledge Management on (see Fig.11).

To enable effective knowledge transfer viahuman networks, knowledge seekers andproviders must have access to suitablecommunication methods (e.g. meetings, coachingsessions). Face-to-face communication is themost valuable and, at the same time, most time-consuming form of knowledge transfer and isparticularly suitable for complex issues (e.g.clarification of R&D problems).

Knowledge is transferred via information andcommunication networks when a knowledgeseeker accesses relevant stored data and turnsthis into knowledge. This requires priorknowledge of a particular knowledge domain(context). Special mention should also be given toknowledge transfer via telecommunications tools(e.g. telephones, video conferencing, …), whichenable communication across geographicalboundaries. The possibilities now offered by videoconferencing tools are very similar to thoseoffered by face-to-face communication.

The above examples illustrate the mainrequirements for effective knowledge transfer ina business environment. Care should be taken toselect a form of knowledge transfer that best

meets the organisation’s business requirements.Human networks are an excellent way oftransferring knowledge on complex issues. Forsimple issues, knowledge transfer can also beeffectively achieved using information andcommunication tools.

The context and background available to theknowledge seeker plays a key role in the selectionof the appropriate form of knowledge transfer.Face-to-face communication provides knowledgeseekers with the added benefit of being able toincrease their contextual knowledge, whereas forinformation- and documentation-basedknowledge transfer, they must already have therelevant contextual knowledge (although this canbe acquired separately).

In addition to the selection of the right form ofknowledge transfer, a suitable infrastructure andenvironment is also required (information andcommunication infrastructure, time, ...).

Management SummaryKnowledge logistics handles knowledge requirements,available knowledge and knowledge transfer.Knowledge can be transferred via social networksand/or via information and communicationtechnologies (data level).

Corporate strategy

Business processes

Knowledge requirements Knowledge transfer

Internal expansion

Available knowledge

(organisational knowledge base)

External expansion

(knowledge creation)

(outsourcing)

Fig. 16: Knowledge transfer between knowledge seekers and knowledge providers

Fig. 15: Sphere of influence of knowledge management processes

Action level

Knowledge level Data level

Action level

Knowledge level

Knowledge level

Data level

Data level

Social subsystem

Social subsystem Technical subsystem

Technical subsystem

Learning

Learning

Application

Application

Knowledge seeker

Documentation

Documentation

Information andcommunication systems

Social network

Knowledge provider


Recommended Readingde Bono, E. (1990): Six Thinking Hats; LondonHamel, G. (1999): Competing for the future, 11th edn; Boston:Harvard Business School Press


Page 8


Changing the Knowledge Base

If an organisation cannot meet its knowledgerequirements from its available knowledge, thegap will have to be filled either by developingknowledge internally or buying it in (in theform of external services). The method chosenwill depend on the company’s existing or plannedcore competencies (Fig. 18).

A company’s core competencies are the basis ofits success and are generally more durable thanend products or services. Core competencies canbe described as entrepreneurial excellence in aparticular field, and are generally the result ofextensive interaction between (groups of) expertsand/or knowledge holders. This combines theknowledge in the corporate knowledge base andother resources to form a unique combination ofskills and expertise (see Fig. 17). Corecompetencies also form the basis for thedevelopment of core products and core servicesand can generally be applied in different businesssegments. Customer requirements in differentbusiness segments ultimately determine whichend products and/or services are developed.

Knowledge is developed internally throughknowledge creation, one of the tasks ofinnovation management. This can only beachieved in an appropriate environment (see Fig.18) and requires both teamwork and the effectiveuse of creative potential. A wide range ofcreativity techniques are available (Fig. 18) tosupport these efforts. The participants increativity workshops, for example, should comefrom as wide a range of professional backgroundsas possible and always include experts notdirectly involved in the actual problem orknowledge domain.

To enable a break with familiar methods andsolutions and open up new possibilities, it may beappropriate in some cases to also include externalknowledge holders and experts. The interaction

and communication between participants inthese workshops unearths new solutions, as aresult, for example, of considering approachesused in other internal or external knowledgedomains.

There are a number of reasons for includingexternal knowledge sources in internalinnovation processes, including:

• Economic/time restraints mean no internalresources are available to cover the knowledgedomain

• It does not make strategic sense to develop theknowledge internally.

The knowledge base can be expanded externallythrough outsourcing. This involves buying inspecific services, skills and expertise outwith thecompany’s core knowledge domain(s), and caninclude both routine tasks and specific tasks thatcan only be accomplished by appropriate expertsor knowledge holders. It also involves enlistingthe support of external partners to establishand/or develop knowledge domains relevant tothe company.

Management SummaryAn organisation develops its core competencies bycombining internal and external resources and, inparticular, knowledge.The ability to expand or change its knowledge basethrough knowledge creation and the inclusion ofexternal knowledge sources determine anorganisation's ability to act and innovate.

Drive chain for sports utility vehicle xy

Example:

Business segment 1 Business segment 2 Business segment 3 Business segment 4 Sports Utility VehicleHGV

Core product 1 Core product 2

Core competency 1 Core competency 2

Drive componentsLightweight body

Diecast technologyGearbox technology

KD 1

KD 2KD 3

KD 4

KD 5

KD = Knowledge domainPF = Production factor = Knowledge holder= End product and services

Kinematics, Materials Technology, Acoustics

Fig. 18: Requirements and methods for knowledge creation

Creative environment

No distractions (telephone, other interruptions, ...)

Creative skills as prerequisite

Sufficient time

Target-oriented methods

Constructive communication culture

Pleasant physical environment (calm, furnishings, lighting, …)

Technical equipment (flipchart, overhead projector,

podium, moderation kit, ...)

Top management supports creativity

Morphological box

Bionics

635 Method

Synectics

Functional analysis

TRIZ as specific tool for innovation and creativity

Knowledge creation methods

Fig. 17: Core competencies for a strategically oriented knowledge base

Integration into Projects

One aim of projects is to complete a complex taskor problem in the most efficient manner possible.The more complex the task or problem, the morecomplex the required project organisation andknowledge system will be (Fig.19). The inherentcomplexity is demonstrated, for example, in thedegree of interdisciplinarity required in theproject team.

Integrating knowledge management into projectimplementation processes involves three basicknowledge management functions:

The first is to establish an efficient knowledgesystem for the project. Any knowledge-orientedactivities or interventions are relevant to thatspecific project and are based on the definedproject goals. One way of improving theefficiency of the knowledge system is to payincreased attention (Fig. 21) to communicationprocesses (e.g. the way status meetings areprepared and wrapped up) and reflection (e.g.reviews at the end of individual project phases).This extends the direct steering of projects at thedata level through planning and monitoringprocesses to include indirect steering throughcommunication and reflection processes at theknowledge level.

The second function concerns knowledgetransfer between projects. This aims to re-useknowledge from similar projects in new projectsand thus avoid "reinventing the wheel" (e.g.checklists). Transferring knowledge betweenprojects has obvious benefits for the companybehind the projects. One way of ensuringknowledge transfer is to integrate knowledgegoals into individual project phases or finalproject goals. The inclusion of mandatoryknowledge goals creates a necessity forknowledge transfer in projects.

The third function is the transfer of experience

between projects. By transferring experience,systematic use can be made of prior learningprocesses in subsequent projects, thus avoiding“making the same mistakes twice” (e.g. LessonsLearned Workshops). Repeated learning by "trialand error" can be extremely costly fororganisations, particularly since these areuncoordinated learning processes and canhappen time and time again. The integration ofmandatory learning goals into individual projectphases or project goals will also help ensure thatexperience is transferred.

Project team members are usually fully aware ofthe importance and necessity of transferringknowledge and experience. However, theygenerally allocate a lower priority to theseactivities than to primary project goals (deadline,costs, quality). The integration of mandatorylearning and knowledge goals into project goalsplays a key role in the project-orientedknowledge management process.

Management SummarySuccessful knowledge management in projectsmust resolve the conflict of interests betweenprimary project goals and learning/knowledgegoals.



Recommended ReadingGareis, R. (1990): Management by Projects; ViennaSchindler, M./Eppler, M. J. (2003): Harvesting Project Knowledge: AReview of Project Learning Methods and Success Factors. In:International Journal of Project Management, Vol. 21/3;Kidlington/Oxford: Elsevier Science Ltd., pp.219-228

Complexity of problem Inherent complexity of knowledge system

Fig. 20: Paradigm shift in project steering

Fig. 19: The complexity of problems and their knowledge systems

++ ++ ++...

++ ++ ++...

✔ ✔✔

Planning

Monitoring

Communication

Reflection

Transfer of Experience

It is not possible to transfer experience throughcommunication and/or documentation andinformation processes, all that can be transferredis a description of what was experienced and anyinsights gained. Experiential knowledge can onlybe created through the process of experientiallearning and not through transfer processes.

The transfer of experience is a special form ofknowledge transfer and, as part of a corporateknowledge management strategy, has two basicaims: Firstly, the transfer of experience shouldprovide individual employees with a broaderspectrum of decision-making options andpossible courses of action in business situations.This avoids unnecessary effort and repeatedlearning through "trial and error". Secondly, thetransfer of experience supports individual andorganisational learning processes and helps tobuild up individual expertise and develop thecompany’s capacity to learn. Two basic strategiesplay a role in the transfer of experience:

A codification strategy attempts to documentthe parts of experiential knowledge that can bemade explicit (i.e. can be written down), thusdetaching it from the individual employee andmaking it available to others in a codified form(Fig.22). Other employees who encounter similarsituations can refer to and apply thesedocumented learning experiences (e.g. LessonsLearned Reports) whenever appropriate withoutdirect contact to the expert.

A personalisation strategy, on the other hand,focuses on transferring experience through directcontact (Fig. 22). The intention here is toencourage additional tacit knowledge transferthrough processes of communication and mutualobservation. To ensure that these contacts occursystematically, and are not just left to chance, acompany must know what expertise itsemployees have. E-mails, project documents,

minutes, reports, interviews, etc. contain goodindications of what could be included in expertprofiles.

The three levels indicated in Figure 21 serve as thebasis for the analysis, design and development ofthe transfer of experience in a company. Transferof experience will always begin and end at theindividual level. In codification strategies, theorganisational level represents the repositoryand distribution source for documented learningexperiences, whereas in personalisation strategiesit provides the necessary tools (e.g. expertprofiles) for identifying colleagues and/or expertswith the experience sought. The team level notonly delivers the required context for the transferof experience (e.g. projects), it also acts as animportant link between the individual andorganisational levels (e.g. Communities ofPractice or Lessons Learned Workshops).

Management SummaryThe transfer of experience is a special form ofknowledge transfer. This type of transfer should serveto broaden the spectrum of decision-makingpossibilities and courses of action open to employeesand avoid unnecessary repeated learning through trialand error.



Recommended ReadingArgyris, C./Schön, D.A. (1978): Organizational Learning: A Theory ofAction Perspective; Reading (MA)Hansen, M.T./Nohria, N.; Tierney, T. (1999): What's Your Strategy forManaging Knowledge? In: Harvard Business Review, March-April1999, Number 2; BostonKolodner, J.L. (1983): Maintaining organization in a dynamic long-term memory. In: Cognitive Science, Vol 7, No 4, pp.243-280Polanyi, M. (1983): The Tacit Dimension; Gloucester

Organisational level

Team level

Individual level

Personalisation Codification

Network(e.g. expertdatabase)

Distribution(e.g. Intranet)

Support(e.g. Communities

of Practice)

Support(e.g. Lessons

Learned Workshops)

Transfer ofexperience

through communication

Transfer ofexperience through

information and documentation

Fig. 22: Advantages and disadvantages of codification and personalisation strategies

Fig. 21: Transfer of experience through personalisation or codification

+ knowledge is always available+ particularly suitable for frequent re-use+ can be passed on quickly and easily; high degree

of distribution

- codification is complex and time-consuming

- documented knowledge can quickly become obsolete

- complicated wording or terminology makesknowledge difficult to absorb

- context cannot be fully described/provided

- some knowledge cannot be made explicit

- different "mental models" prevent direct use ofdocumented knowledge

Codification strategy+ -

+ -- complicated search for the right person- the right person is not available- personal aversion

+ knowledge is always up-to-date

+ complexity of knowledge transfer can be adaptedto the situation

+ creative innovation possible during transfer

Personalisation strategy

Closing a Project with a LessonsLearned Workshop

It is an extremely worthwhile exercise to close aproject by passing on any lessons learned,positive experiences and suggestions forimprovement to future projects. When a project iscompleted, the individual project team membersoften interpret what went on in different ways.These differing points of view result from theindividual roles they played in the project andtheir experiences in these roles. This leads to awhole series of different interpretations,assessments and actions. A Lessons LearnedWorkshop gives team members an opportunityto present and discuss their individual points ofview. It also encourages individual learning(personal measures) and organisationaldevelopment (recommendations).

The method described below is a useful way ofdiscussing and transferring experiences with agroup of around 30 participants. The aim is toenable effective and efficient transfer ofexperience in one day. Insight should be gainedinto the following issues:

• What was done well in the project?

• What could have been improved?

• What would be the ideal situation for points that could have been improved?

• What would I personally do differently in the next project?

• What should the organisation do differently inthe next project?

The most important stages in this procedure are:

• Defining the relevant issues (Fig. 23)

• The Lessons Learned Workshop (Fig. 24)

• Processing and applying the results

If a one-day workshop is planned, it makes goodsense to define the relevant issues in advancein a smaller group (e.g. project managers, sub-project managers, quality managers, …). Examplesof possible issues are given in Fig. 23.

Defining the issues in advance will steer theworkshop strongly in a particular direction. Thisrestriction will prevent other issues identified bythe participants during the workshop from beingdiscussed. If such issues are to be included, then itmakes sense not to define the issues in advance,but rather to do so with the whole group at thebeginning of the workshop. This will double thetime required for the workshop.

This shows the importance of includingexperienced project team members in thedefinition of issues.

Management SummaryIt is a worthwhile exercise to close a project by passingon any lessons learned, positive experiences andsuggestions for improvement to future projects.Defining the issues in advance will save time duringthe workshop.



Customers

Suppliers

Project structure

Clarity of roles

Information flow / management

Cost steering / monetary goals

Project documentation

Project team

Organisation of project specific qualification measures

Requirements / specifications

Planning of technology and methodology

Project planning (performance, deadline, costs, personnel)

Internal cooperation

Organisation/planning of projects

Project management

Project communication

Strengths and weaknesses in project culture

Cooperation in team

Cooperation with project environment / internal interfaces

Cooperation between project and line management

Continuity of key people / team members

Crisis / conflict management

External cooperation

Selection of team membersAbility of team membersCost / deadline / quality awareness

Transparency of project statusProject handbook

Responsibilities (tasks)Competencies, responsibility

Meeting structureMeeting culture

Coordination, decision-makingRisk assessmentCrisis management

CooperationCommunication and information flowCustomer satisfaction

CooperationCommunication and information flowSatisfaction as a customer

Fig. 23: Possible subject categories for a Lessons Learned Workshop

Lessons Learned Workshop

The most important stages in a workshop of thiskind are:

Background:

The introductory session should include clear anddetailed presentations of the project (from startto finish). In this way, participants will bereminded of what actually went on during theproject. Emphasis should be placed on earlyevents, since these are more likely to have beenforgotten in the meantime.

Cluster building:

The input from the brainstorming sessions iscollected and sorted into subject areas. A keyterm is defined for each subject area (cluster)that best describes its content. This abstractionsimplifies subsequent work with the individualclusters.

Lessons learned:

An ideal target situation is defined for each issuewhere improvement was considered necessary.Each participant then notes what he or she coulddo in his or her individual project roles to ensurethis ideal target situation is achieved. These aresummarised to produce a list ofrecommendations for the organisation.

Fig. 24 provides a more detailed time schedule forthis kind of Lessons Learned Workshop.

Although one of the goals is obviously individuallearning on the part of the workshopparticipants, other colleagues not directlyinvolved in the workshop or project should alsobe able to profit from any lessons learned.

After the workshop, it is vital that any insightsand proposed measures are implementedappropriately. For this to happen, the results andknowledge must be passed on in a suitable formto the appropriate places or bodies to initiate

organisational learning. The insights gained in aLessons Learned Workshop can have long-termeffects on the organisation, for example,through:

• Introduction of new training measures/programmes

• Corrections/additions to project and quality handbooks

• Presentation of results to the Board and management

• Publication in the Intranet.

This method of transferring experience includeselements of both codification and personalisationstrategies, whereby the focus is on codification.Consequently, it strives to ensure that lessonslearned are transferred through information anddocumentation processes between experts andproblem solvers.

It is also advantageous to include selected(inexperienced) employees as participants in theworkshop, since they will learn from direct (face-to-face) communication with experts(personalisation strategy).

Management SummaryLessons Learned Workshops are an effective andefficient way of transferring experience in a relativelyshort period of time (one day). The results are thenpassed on to the appropriate people in theorganisation to initiate organisational learning.



Recommended ReadingDavenport T./Prusak, L. (1998): Working Knowledge: HowOrganizations Manage What They Know; Harvard Business SchoolPressSenge, P. (1994): The Fifth Discipline; New York

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ins 1. Introduction and background

The aims and rough time plan for theworkshop are explained to all partici-pants. Relevant presentations serve torefresh memories of the project, inclu-ding all its highs and lows.

2. Brainstorming

The participants are then split up intosmaller groups (of approx. 10 people),with each group working on a particularissue. After a short explanation of theprocedure and their particular issue,group members write down their ownpersonal experiences of the project (e.g.on "Post-It" notes or cards).

3. Clustering and abstraction

The statements are then collected andsorted into subject areas (clusters) bythe group. A key term or title summari-sing the individual statements is definedfor each cluster (abstraction).

4. Cluster discussion/processing

The following questions are then askedabout each subject (cluster and title):What would be the ideal result or situa-tion for this particular subject in a pro-ject? How would this be recognised?What can I do personally as a projectteam member to ensure this ideal situa-tion is achieved in the next project?What can the organisation do to ensurethe ideal situation is achieved?

5. Group rotation

The groups then study the results pro-duced by the other groups and eitheradd their own comments to the existingsubjects, propose new subjects or di-scuss the results.

6. Presentation and closing discussion

When each group has had time to workon all subject areas, individual presenta-tions are prepared. The results are thenpresented to and discussed by all parti-cipants.

Fig 24: Lessons Learned Workshop

Experiential Learning

Experiential knowledge can only be gainedthrough the process of experiential learning.Figure 25 shows a simplified model of thisprocess.

Knowledge is a necessary basis for experientiallearning. Even a “random attempt” requires acertain amount of declarative and proceduralknowledge. Knowledge (and the knowledgeholder) should be considered as part of asituation, whereby any connection resultingfrom the situation is often described as context.

By applying their existing knowledge to asituation, people develop expectations of what itwill entail and what the results of any planned orobserved actions will be. Even the assumptionthat nothing will happen is an expectation.Action is only required in the case of directlearning through “trial and error”. No deliberateaction is required in experiential learning throughobservation.

It is the individual’s perception that makes senseof what the situation actually entailed and theconsequences of any actions taken or observed. Asubsequent comparison of what was perceivedand what had been expected will result in eitheran agreement or a deviation. Agreement confirmsboth expectations and original knowledge.

The person determines the relevance of anypositive (success) or negative (failure) deviation.This is a prerequisite for the acquisition ofexperiential knowledge. Any change to existingknowledge constitutes the end of the current andthe beginning of a new experiential learningprocess.

Knowledge, expectation, perception andrelevance play decisive roles in experientiallearning processes and all have a very stronginfluence on each other. For example,

expectations will greatly affect perception.

There are a number of possibilities open tomanagement for influencing experientiallearning processes and thus the creation ofexperiential knowledge, including:

• Placing people in situations that fosterexperiential learning (e.g. job rotation)

• Encouraging people to take or observe action(e.g. job enlargement, job enrichment)

• Creating space for reflection and systematic comparison of expectations and perceptions (e.g. regular project reviews).

• Establishing a culture that is open to change in established knowledge (e.g. where people can admit to and learn from mistakes)

Rapid advances in technology now make itpossible to create artificial situations andenvironments (virtual realities) for experientiallearning (Fig. 26).

Management SummaryExperiential knowledge can only be gained throughthe human process of experiential learning. However,companies can influence both experiential learningprocesses and the creation of experiential knowledge.

An Illustrated Guide to Knowledge Management Organisational Learning


Recommended ReadingDewey, J. (1938): Experience and Education; New YorkKolb, D.A. (1984): Experiential Learning: Experience as The Source ofLearning and Development; Englewood Cliffs (NY)Schön, D.A. (1983): The Reflective Practitioner; New York

Knowledge

Perception

Relevance Expectation

ActionComparison

Assimilation Situation

Mutualinfluence

Influence throughe.g. job rotation

Influence throughe.g. greater autonomy to reflect

Influence through e.g.job enlargement, job enrichment

Influence throughe.g. a culture open to change

Fig. 26: Experiential learning: Comparison between reality and virtualrealities (e.g. flight simulators, business simulation games)

Fig. 25: The cycle of experiential learning

Experiential learningin the real world

Experiential learningin virtual worlds

Real consequencesof action

No real consequencesof virtual action

From Individual toOrganisational Learning

A learning model for humans (Fig. 27) shows thelearning process as a four-phase cycle, withdifferent types of knowledge created in eachphase. This new knowledge then forms thestarting point and object of the next learningactivity.

Procedural learning in humans involves theperception of stimuli and the initiation ofappropriate behaviour (action). The analysis ofprior experiences (contextual placement) and thedevelopment of behavioural guidelines (cognitiveassociation) are known as declarative learning.However, this dichotomy should not bemisinterpreted: Both levels of learning (and typesof knowledge) are in fact activated in andinteract with the learning process, even if one ofthem assumes a more prominent role.

A comparison of analogies between humans andorganisations (Fig. 28) shows organisationalstructure as a procedural element andorganisational culture as a declarative element inorganisations. These analogies are based on thefollowing assumptions:

• People use procedural knowledge (know how)to interact with their environment throughaction. In comparison, organisations useappropriate structures (procedures, processes) togenerate activities and interact with theirenvironment.

• In humans, declarative knowledge (knowwhat) is the starting point for proceduralknowledge and any subsequent actions.Correspondingly, culture can be described as thedeclarative knowledge of an organisation, since itprovides the meaning and guidelines forbehaviour and thus forms the basis of all actions.

Consequently, the organisational learning processfollows comparable phases to its humancounterpart, whereby any changes in structurecan be seen as procedural learning and changesin culture as declarative learning in anorganisation. Although it is again possible thatone particular learning process will assume amore prominent role, in practice they will alwaysinteract.

Individual learning processes form the startingpoint for organisational learning. It is individuallearning that provides the impetus fororganisational change. The implementation ofany such change also requires individual learningprocesses, which can involve all members of theorganisation or smaller groups, depending on thescope of the actual change.

Management SummaryOrganisational learning can be seen as beinganalogous to individual learning. It is based onindividual learning processes and involves changingthe organisational structure and/or culture toguarantee survival in a dynamic environment.



Recommended ReadingArgyris, Ch. (1999): On Organizational Learning; OxfordKolb, D.A. (1984): Experiential Learning: Experience as The Source ofLearning and Development; Englewood Cliffs (NY)

Procedurallearning

Declarativelearning

Procedural knowledgeOrganisational structure

Declarative knowledgeOrganisational culture

PerceptionPerception

Contextual associationCultural interpretation

Cognitive associationStandards and Values

ActionsAchievements

HumanOrganisation

Fig. 28: Comparison/analogy between humans and organisations (in this case a company)

Fig. 27: Human/organisational learning model

Human Organisation

Goal/Purpose

Affects through

Motorium

Sensorium

Perception

Brain(cognitive subsystem)

Learning methods

Survival(by adapting to the environment)

Survival(by adapting to the environment)

Actions(man machine interaction)

Muscles

Sense organs

Signals

Procedural knowledge

Procedural learning

Declarative knowledge

Declarative learning

Products + Services;Financial Statement, Advertising, ...(inter-action with customers + suppliers; society)

Sales + Marketing;Press Officer, …

Market Research +Service;Company Management

Turnover, Profit, Share Price, ...;Requirements, Claims, ...;Laws, Conditions, Regulations, ...Organisational structure

Structural change

Organisational culture

Cultural change

Procedure and Analysis

A general, three-step (analysis, design anddevelopment) sequential model (Fig. 29) can beapplied to organisational learning.

The following dimensions and theircharacteristics can be used as the basis for theanalysis and design of the organisationalstructure:

• Specialisation (specialised – generalised)

• Coordination (impersonal – personal)

• Configuration (hierarchical – heterarchical)

• Delegation of decisions (centralised – decentralised)

• Formalisation (bureaucratic – unbureaucratic)

The analysis and design of the organisationalculture can be based on basic culturalassumptions. These include views on andattitudes to:

• Environment (threat – opportunity)

• Reality (facts – creativity)

• Human nature (independent – dependent)

• Human action (control – trust)

• Interpersonal relationships (competition – cooperation)

Once the impetus for organisational learninghas been given, i.e. a need for organisationalchange recognised in reactions from theenvironment, the analysis phase can begin. In thisphase, goals should be defined and the actualsituation (structure and/or culture) establishedand processed.

In addition to the goals for the entire learningprocess, sub-goals should also be defined foreach individual (sub-)stage. Sub-goals are derivedfrom appropriate main goals and can be extendedto include any requirements specific to aparticular issue. When formulating goals,attention needs to be given to the fact that theseshould be specific, measurable, ambitious,realistic and scheduled.

Any research methods used will depend stronglyon the resources available and should considercontent, human resources and economic factors.Questionnaires are a quick and easy way ofestablishing a general picture of the currentclimate, whilst semi-standardised interviews(Fig. 30) take a more detailed look at theinterviewee’s individual situation. Observationmethods are used primarily to support and/orverify other research methods.

Management SummaryOrganisational learning can be achievedsystematically through the analysis and design ofstructural and cultural dimensions.



Recommended ReadingKotter, J.P./Heskett, J.L. (1992): Corporate culture and performance;New YorkPugh, D.S./Hickson, D.J./Hinings, C.R./Turner, C. (1968): Dimensions ofOrganization Structure, ASQ 1968, Vol. 13, pp. 65 – 105Schein, E. (1992): Organizational Culture and Leadership; New YorkSiehl, C./Martin, J. (1988): Measuring Organizational Culture: MixingQualitative and Quantitative Methods. In: Jones, O., Moore, D.;Snyder, C. (Eds): Inside Organizations, Understanding the HumanDimension; Newbury Park, pp.79-103

Design DevelopmentAnalysis

Impetus fororganisational

Learning

Fig. 30: Example target/actual culture comparison for "interpersonal relationships"

Fig. 29: Towards oganisational learning

“Gaps”as basis for intervention

Target CultureActual Culture

• Analyse goals• Determine actual

situation• Synthesise and

prepare data

• Define targetsituation• Compare target/actual

situation; deriveinterventions

• Determine strategy• Establish organisational

implementationmeasures

• Prepare measures• Implementation• Verify goals have

been reached andsecure results

Competition

Information Processuncoordinated

Staff/Staff poor

Staff/Mgmt.poor

Project/Line Mgmt.complicated

Interdepartmentalpoor

Unequalgroups

Cooperation

Information Processcoordinated

Staff/Staffgood

Staff/Mgmt.good

Project/Line Mgmt.clear

Interdepartmentalgood

Good mixin groups

Design and Development

The next stage in the design process is to define adesired target situation, compare this with theactual situation and derive appropriateinterventions from the results of this comparison.The objective is not to present a finite picture ofthe characteristics of the individual dimensionsused in the analysis, but rather to identify thosethat deviate most from the defined targetsituation.

The target situation can either be establishedduring the analysis of the actual situation or inworkshops with “opinion makers” (e.g.management, staff representatives, etc.) andstaff. Graphical representations are an excellentway of presenting the results of the situationalanalysis and/or a target/actual comparison (e.g.Fig. 30), since managers often think and act “innumbers”, and show greater interest in dealingwith any shortfalls presented to them in thisform.

An appropriate strategy should now be defined toaddress these shortfalls. This will depend on thedegree of deviation between the target andactual situations and the urgency of anyidentified issues. The changes can either beintroduced slowly on a step-by-step basis(evolutionary approach) or quickly in largerchunks (revolutionary approach). One advantageof a step-by-step approach is that it allows timefor staff to be fully involved in the changeprocess, whilst a radical (less promising) changeprocess leaves limited if any time for staffinvolvement.

Utmost care should be taken in the planning andorganisation stages, since the way a project ofthis kind is handled at the start can have a majorinfluence on how any measures are subsequentlyaccepted.

The process then moves into the development

stage, where any proposed interventions areimplemented, i.e. suitable measures aredeveloped, introduced and evaluated to ascertainhow effective they have been for the goals set.

Marketing plays a particularly important role inthe preparatory stages and serves to promote theproject throughout the organisation, raise itsimage and increase acceptance among staff.

The project can either be implemented on a step-by-step basis (e.g. as a pilot project) or on acompany-wide scale (“big-bang).

Repeated analysis of the individual dimensionsserves to verify the efficiency and effectivenessof any measures introduced. In this way, theprocess can be continuously refined tosuccessively reduce or eliminate any deviationsdetermined between target and actual situations.

Management SummaryOrganisational learning takes the form of changeprojects, which must be handled differently to classicprojects. Success factors include staff involvementand management participation (e.g. as role models).



Fig. 31: Interview guidelines for culture survey (excerpt)

Environment

• Does the organisation dominate its environment?

• Is the environment considered a challenge for XY?

• Does everyone know the organisation’s goals?

• Are the goals clear, and do they match the organisational environment?

Reality (Truth, Time and Space)

• Are tried and tested solutions preferred to new (creative) ones? Will consideration be given to external solutions or only to

internal possibilities?

• What is the general approach to time? Is the focus more on the past, the present or the future?

• Is enough time allowed for asking/answering questions? Which “medium” is used?

• Is there sufficient opportunity/space for informal knowledge transfer?

Human Nature

• Who makes decisions? How are decisions made? Do people make use of any freedom they might have to take decisions?

• How is work/performance checked? (self-assessment, trust, milestones, etc.)

• How does the organisation approach responsibility? Who has responsibility? Is this consistent throughout the organisation?

• Are there any incentive systems in place? If so, do they work? Should there be incentives for knowledge sharing?

Human Action

• Is this focus more on completing tasks (routine processes) or on active learning (knowledge creation)?

• Does the organisation tolerate and how does it react to mistakes?

• Relationship between work and leisure: totally separate or a way of life?

Interpersonal relationships

• Attitude to knowledge sharing: “knowledge is power” vs. cooperative knowledge exchange? “Each to his own” vs. team

oriented approach?

• What is the relationship like between colleagues? How do they communicate with each other? Relationship/communication

between staff and management?

• How does interdepartmental communication work?

• How are groups formed? (age, experience, personality, etc.)


Recommended ReadingAnsoff, H. I. (1984): Implanting strategic management, 2nd edn;Englewood CliffsSchein, Edgar H. (1997): Organizational culture and leadership. 2ndedn; San Francisco


Page 17


Corporate Culture and StrategicKnowledge Management

Corporate culture includes all the values,traditions, rituals, standards and beliefs thatdetermine how people act in an organisation.

We know from chemistry that catalystsactivate and accelerate processes. Corporateculture assumes the role of the catalyst inknowledge management, thereby playing a keyrole in all analysis and design activities. Inanalogy to knowledge management, it cantherefore be assumed that corporate culturealso needs to be lived and constantly drivenand promoted by management.

Corporate culture can be determined bycarrying out periodic reviews of the basicelements of corporate culture illustrated inFigure 32. The resultant “gaps” between theactual culture and a target culture open toknowledge management form the startingpoint for strategic management intervention.Indeed, management is in a unique positionto create, steer and change corporate culture.

A strategic orientation in knowledgemanagement should not only ensure that allrelated activities are based on generalcorporate goals; it should also help tocontinually improve and institutionalise theknowledge management processes themselves.This requires the following steps:

• Setting knowledge management goals

• Establishing and implementing design measures

• Initiating change processes

• Periodic assessment reviews.

All these activities form part of a typicalmanagement process. To ensure knowledgemanagement activities are fully integrated

into actual working practices, managementmust continually observe any cause-effectrelationships. In practice, evaluations based onthe business indicators “effectiveness” and“efficiency” have proved highly successful (seeFig. 33).

Using effectiveness as an indicator of thedynamic relationship between knowledgemanagement goals and design measuresdetermines the strategic gap (i.e. if thecorrect measures have been implemented).

Assessing efficiency as an indicator of theeffect any measures have had on the changeprocess provides the operating gap (i.e. if themeasures have been implemented correctly).

The cycle of strategic knowledgemanagement thus allows a company to adaptappropriately to any dynamic changes in itsenvironment, yet at the same time remain trueto its knowledge-oriented goals.

Management SummaryCorporate culture assumes a central role in knowledgemanagement and requires constant impetus frommanagement. Strategic knowledge managementconsiders all corporate goals and allows continuousimprovement of knowledge management processes.

(e.g. architecture of its physical environment,

atmosphere, customs, rituals, …)

easy to observe, hard to decipher

(e.g. ideologies, company philosophy, taboos, …)

provide justification for all actions

(e.g. about the environment, interpersonal relationships, …)

ultimate source of values and actions

Artifacts

Espoused Values

Basic Underlying Assumptions


Corporate Goals


Goals

Effectiveness (doing the

right things)

Design Measures

(cause)

Efficiency (doing things

right)

Change Process (effects)


Review

Fig. 33: Cycle of strategic knowledge management

Fig. 32: Basic elements of corporate culture according to Schein


Recommended ReadingBuchanan, M. (2002): Nexus: Small Worlds and the GroundbreakingScience of Networks; W.W. Norton & CompanyCastells, M. (2000): The Rise of the Network Society; BlackwellPublishersWenger, E.C./Snyder, W.M. (2000): Communities of Practice: TheOrganizational Frontier. In: Harvard Business Review, January-February, pp.139-145


Page 18


The Knowledge-basedNetwork Organisation

One of the main requirements for effectiveknowledge management is an organisationalframework that supports the optimal acquisitionand networking of knowledge. The knowledge-based network organisation is one suchpossibility.

Since knowledge is intrinsically linked to people,location plays an equally important role forknowledge as it does for other factors ofproduction. In “topographical” terms, anorganisation can be described as the sum of itslocations and departments (see Fig. 34).

However, if the focus is placed on “knowledge“,the change in perspective yields a totallydifferent picture. The organisation now appearsas a network of individual knowledge domains.This can be seen clearly in Figures 34 and 35,which depict the same organisational structure,but in two different forms.

A knowledge domain is not a subject area in thelexical sense: It is a social system that concernsitself with a common area of interest. Knowledgedomains can also be thought of as virtualdepartments “set up” to enable collectiveknowledge creation. Since the individualmembers of a given knowledge domain can bespread across different departments or locations,they will require support to ensure effectivecommunication. This can be achieved with anappropriate organisational framework, e.g. virtualdepartments with the same status as “traditional”departments.

Knowledge domains can also encompassmembers of other organisations. These mightinclude research staff at universities and researchinstitutions, or the employees of customers andsuppliers integrated in value creation processes.

One good example of this is the innovationprocess. New, innovative products are often theresult of close cooperation work with customersand suppliers. Some innovation activities mayeven be outsourced to external partners. Forexample, companies often finance researchprojects, dissertations or doctoral theses.

The network of internal and external knowledgedomains is described as a knowledge-basednetwork organisation. The responsibility forcoordination of the individual knowledgedomains lies with management, who need tomake two decisions based on the organisation’sbusiness strategy:

• Which knowledge domains to set up and develop internally (core competencies) and which to outsource

• The knowledge goals for the individual knowledge domains (see Fig. 36).

Management SummaryNetworking knowledge adds a new dimension toorganisational design. In addition to internalnetworking and links with other companylocations, increasing importance is now beingplaced on networking with external partners.

External knowledge domains

Self-organisation

Coordination

Organisation

Management

Knowledge holder

Production factorLocation 3

Location 2Location 1

L 1

L 3

L 2

Fig. 35: The organisation from a “knowledge” perspective

Fig. 36: Model of a knowledge-based network organisation

Fig. 34: The organisation from a “topographical” perspective

Locations L1, L2

Locations L1, L3

Locations L1, L3

Locations L2

Locations L3

Knowledge holder

Knowledge domain L

Knowledge domain J

Knowledge domain GKnowledge domain B

Knowledge domain M

Strategy Implementation with theIntellectual Capital Report

The process selected for the implementation ofan intellectual capital report will depend verymuch on the way an organisation currentlyoperates (management approach, businessindicators, etc.). However, the first step willalways involve examining existing businessprocesses to identify any relevant (anddocumentable) input. Emphasis should be placedon those business processes that most affect thedefined stakeholders. The indicators selected forthese processes describe the output. The effectof this output on the stakeholders can also beillustrated using relevant indicators or qualitativedescriptions. These initial steps establish theintellectual capital report model for theorganisation in question.

When implementing strategy, it is important toevaluate the individual main areas of focus andestablish activity (efficiency index) and quality(effectiveness index) indicators. If the intellectualcapital report is to be used as a steeringinstrument, output indicators that affect thetotal result of each individual selected area (e.g.product quality, reliability) must be chosen tocalculate the activity. Activity is thus anaggregated value made up of selectedcontributory factors from the individual businessprocesses (output).

In the same way, only selected process indicatorsshould be used to determine the qualityindicator. To consolidate the indicators for eacharea, the individual business processes areweighted according to their contribution tobuilding up expertise in a particular field.

The calculated activity can be combined withdefined employee skills and plotted on aknowledge map or included in anactivity/quality portfolio (see Fig. 38).

The activity/quality portfolio provides valuableinformation on the actual situation in anorganisation and illustrates current activitiesacross all selected areas. This can be used todefine future goals and draw up a target profileof activities (see Fig. 38).

This type of aggregation offers organisations ameans of breaking down their strategic goals to adepartmental or individual employee level.Appropriate changes in the activities carried outor quality levels achieved in individual areas canalso be initiated. For example, existing staff mayneed further training or additional staff mayneed to be recruited to increase activity in aparticular area. To improve quality, customersatisfaction must be measured and the resultsanalysed to identify appropriate measures.

Management SummaryIf an intellectual capital report is to be used as astrategic steering instrument, it must be carefullyplanned and include clearly defined indicators. Anactivity/quality portfolio provides information on thespecific business activities in an organisation.

An Illustrated Guide to Knowledge Management Strategic Knowledge Management


Recommended ReadingGraggober, M. (2002): Intellectual Capital Statement an instrumentto control strategic topics of an University Institute. In: 3rdMultinational Alliance for the Advancement of OrganisationalExcellence Conference; Scotland: University of Paisley; Emerald

Processes

Identification of relevant input(quantitative and qualitative description)

Selection of relevant stakeholders

Definition of processes

Allocation of output andimpact indicators to processes

Selection ofaggregation indicators

Weighting of processesacc. to relevance for main divisions

Quality

Act

ivit

y

Input Output Effect

Fig. 38: Derivation of strategic measures through target/actual comparison of work profiles

Fig. 37: Intellectual Capital Report: Implementation Process

Act

ivit

y

Quality

Act

ivit

y

Quality

The difference between target and actual affectsboth departmental and personnel development.

Example calculationfor a main division:

ProductionSalesInnovationNetwork

actual target

Main division X

Main division Y

Main division X

Main division Y

Knowledge Markets as StrategicInterfaces between Organisations

What function do organisations perform in asociety in which mobile knowledge workers arefaced with the choice of working freelance (i.e.independence) or adapting themselves to fit in anestablished organisational structure (i.e. financialsecurity)?

Even small, highly specialised companies have tochoose between pooling their resources andusing the synergetic effects of larger (virtual)organisations, or remaining independent andretaining their flexibility.

Can knowledge really be exchanged as fairly andeffectively in this kind of (often instable andunclear) marketplace as it is in the clearlydefined, stable processes common to anorganisational environment?

Markets use price mechanisms to regulate supplyand demand. However, some of thecharacteristics of knowledge make it difficult to“barter with”. This can force a company trying toestablish a long-term position on the competitiveknowledge marketplace to have to make animportant strategic decision.

Depending on both the market situation andtheir internal requirements, organisations orindividual bidders have two alternatives: Eitherintensive, long-term cooperation with a strategicpartner (insourcing) in a stable, specialisedenvironment, or flexible cooperation and evenbuying in knowledge on a short-term basis viamarkets or outsourcing partners in a highlydynamic environment.

At least three problems arise when negotiatingnon-standard services such as knowledge:

• Describability: Buyers do not always knowwhat they want and may find it difficult to

determine whether they have received what theywanted, even after having been provided with adescription of what to expect.

• Assessibility: Due to the difficulties involved inpredetermining the quality of the services, buyerscannot assess a fair price prior to receipt of theknowledge.

• Transfer: Once knowledge has been transferred“on a trial basis”, this cannot be reversed.Transferred knowledge might then not be paid for(e.g. if it were to become clear that the “wrongproduct” had been supplied).

These problems lead to the followingconsiderations for strategic protection ofknowledge resources:

The closer the link to core competencies, thegreater the focus should lie on internalknowledge; the greater the distance, the morefeasible it becomes to acquire the requiredknowledge via the marketplace. However, itremains unclear how these kinds of marketsmight best be organised to ensure effective andfair knowledge transfer. Regulatory measures andlegal restrictions will be necessary to minimisethe risks of a loss of company-sensitiveknowledge via (free) markets.

Management SummaryFrom a strategic point of view, it would appear wise tobuild up the core knowledge an organisation requiresto remain competitive internally, and only drawsupplementary knowledge from free markets.


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Recommended ReadingSkyrme, D. J. (2001): Capitalizing on Knowledge: From e-business tok-business; Butterworth-Heinemann,URL: http://www.kikm.org/portal/page2.htm

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Relevance and Overview ofTechnologies

Information and communication technologies(ICTs) offer valuable support for knowledgemanagement activities. Indeed, many tasks inknowledge management (e.g. communicationacross geographical boundaries and time zones)only really become feasible through the use ofappropriate technologies.

However, to ensure that they provide the supportrequired, the decision for any technology-basedsolution(s) should be driven by knowledgemanagement needs and not by technicalconsiderations. Discussing specific technicalsolutions before the actual knowledgemanagement goals have been set, or evenadjusting goals to suit technical constraints (andwithout considering people-oriented alternatives)are clear warning signals.

Establishing an overview of the differenttechnologies available and the activities theysupport can be very useful in the knowledgemanagement implementation process. The examplegiven in Figure 39 considers different technologieswith a view to seven basic knowledge managementactivities. Knowledge planning activities includethe definition of knowledge management goalsand strategies. Knowledge creating focuses on thedevelopment of new knowledge, whilst knowledgeintegration makes existing (internal or external)knowledge available throughout the company. Therole of knowledge organisation is to bringstructure into all this knowledge. Knowledgetransfer includes both planned, institutionalisedtransfer as well as spontaneous knowledgeexchange. Knowledge maintenance activitiesensure obsolete, out-of-date knowledge isidentified, updated or even "forgotten". Finally,assessing knowledge provides an overview of theknowledge available and determines how it has

developed over time. It also indicates the extent towhich knowledge goals have been reached.

Figure 39 gives an overview of the support that thedifferent technologies available can provide forknowledge management activities. An overallconsideration shows that knowledge planningactivities benefit least from information andcommunication technologies, and that they alsoonly provide limited support in knowledgeassessment. They are, however, particularlyeffective in knowledge transfer activities and alsoprovide sound support for knowledge integrationand organisation.

However, if all seven knowledge managementactivities are considered as a whole, the actualdifferences in the extent of the contributions madeby the individual technology groups are lesspronounced. Furthermore, the relevance offormats, standards and content generation toolsshould not be overlooked. They play a remarkablyimportant role, yet are often neglected. Documentmanagement systems continue to play a major rolein information technology based support forknowledge management. Figure 40 describes themost important contributions each of the differenttechnology groups makes to the individualknowledge management activities.

Management SummaryInformation and communication technologies canprovide a wide range of support for knowledgemanagement activities. However, technology shouldbe seen as an enabler and any knowledgemanagement initiatives should not be primarilytechnology driven.

An Illustrated Guide to Knowledge Management Information and Communication Technologies


Recommended ReadingRollett, H. (2003): Knowledge Management: Processes andTechnologies; Boston: Kluwer Academic PublishersShariq, S.Z. (1998): Sense making and artifacts: An exploration intothe role of tools in knowledge management. In: Journal ofKnowledge Management, 2(2), pp.10-19

Fig. 39: Extent of support provided by technology for knowledge management activities

Communicationtechnologies

PlanningKnowledge

CreatingKnowledge

IntegratingKnowledge

OrganisingKnowledge

TransferringKnowledge

MaintainingKnowledge

AssessingKnowledge

Collaborationtechnologies

Documentmanagement

Adaptation andpresentationtechnologies

E-learningenvironments

Content generationtools

Personal KM tools

Artificialintelligence

Networkingtechnologies

Formatsand Standards

Hardware

… this technology can make a major contribution to this activity... this technology can often support this activity... this technology makes little contribution to this activity

Information and Communication Technologies

Recommended ReadingMarwick, A. D. (2001): Knowledge management technology.In: IBM Systems Journal, 40(4), pp.814-830Smith, R.G./Farquhar, A. (2000): The road ahead forknowledge management. In: AI Magazine, 21(4), pp.17-40

Fig. 40: Contribution made by IC technologies to knowledge management activities

Communication technologies such as e-mail andvideo conferencing are particularly useful forknowledge transfer activities. They can also make asignificant contribution to knowledge creationactivities, where success often depends oncommunication between many people and/or acrossdifferent locations.

Collaboration technologies combine differentcommunication technologies with other tools (such asvirtual whiteboard and brainstorming tools) and makethem available in one single interface. Consequently,they can also contribute significantly to knowledgetransfer and knowledge creation activities. Workflowmanagement systems support structured forms ofcollaboration, in particular knowledge maintenance.

Document management and content managementsystems play a major role in integrating content, sincethey act as a collection point for all documentedknowledge. Classification schemes are one way oforganising this content. Search mechanisms facilitateknowledge transfer. One of the core functions of thesetypes of systems is the simplified maintenance of largeamounts of data.

Adaptation and presentation technologies includepersonalisation tools, visualisation tools and automaticrecommendation tools that forward relevant content.All these tools help facilitate knowledge transfer.Visualisation techniques also help to give a betteroverview of the complex structures involved inknowledge organisation.

The strengths of eLearning environments lie primarilyin the integration of different content and in helpingusers both to understand this content andcommunicate with each other, leading ultimately tofurther knowledge transfer. The testing componentsincluded in eLearning systems make them one of thefew technologies that can help with a detailedassessment of non-explicit knowledge.

Content generation tools include authoring tools andtechnologies for automatically generating newcontent. They provide support for knowledge creationand knowledge integration. Specialised tools are alsoavailable to help with the handling of the complexstructures encountered in organising knowledge. Mostof these technologies are not only useful for generatingcontent, they also provide support for knowledgemaintenance activities.

There are still relatively few personal knowledgemanagement tools available, but solutions do existto support activities like mind mapping or bibliographymanagement. These tools focus more on thedevelopment, organisation, integration andmaintenance of knowledge for personal use than onknowledge tran

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