David Gurteen (www.gurteen.com) has used a metaphor of making a cake to explain the difference between data, information and knowledge and also the different types of knowledge. An analysis of a cake's constituents provides data. For most purposes this is not very useful, you might not even be able to tell it’s a cake. A list of ingredients (information) is more useful as it gives the data context, an experienced cook could probably make the cake. However, the recipe is knowledge, written down, explicit knowledge, it tells you how to make the cake. An inexperienced cook however, even with the recipe, might not make a very good cake. A person though with relevant experience and skills, knowledge in their heads, tacit knowledge, would almost certainly make a good cake from the recipe. Know-who, who to ask for help, and know-why, what, for example, to do if a certain ingredient is unavailable, are also relevant.
Knowledge management (KM) matters because it is regarded as a source of increased value. Peter Drucker is credited with having said that in contemporary society, the most important source of wealth is knowledge and information.
KM refers to a multi-disciplined approach to achieving organizational objectives by making the best use of knowledge. KM focuses on processes such as acquiring, creating and sharing knowledge and the cultural and technical foundations that support them. In our daily life, we deal with huge amount of data and information. Data and information is not knowledge until we know how to dig the value out of of it. This is the reason we need knowledge management.
Knowledge Management may be viewed in terms of:
• People – how do you increase the ability of an individual in the organisation to influence others with their knowledge
• Processes – Its approach varies from organization to organization. There is no limit on the number of processes
• Technology – It needs to be chosen only after all the requirements of a knowledge management initiative have been established.
Or,
• Culture –The biggest enabler of successful knowledge-driven organizations is the establishment of a knowledge-focused culture
• Structure – the business processes and organisational structures that facilitate knowledge sharing
• Technology – a crucial enabler rather than the solution.
The enterprises start realizing the importance of "knowing what it is that they know" and of making the best use of this knowledge. Knowledge is already recognized as the most important company asset, as the "only meaningful economic resource", and this is why so many efforts are made and so many resources are invested in how to acquire it, represent it, capitalize it and manage it.
Successful companies creating knowledge sharing global culture, in which collective knowledge (the company's intellectual asset) is effectively and methodologically shared to produce a continuous and successful innovation.
Inside this company knowledge we find that what the company knows about its products, its processes, its employees, its market, its clients, etc, and about how to combine these elements to render the company competitive. Under this aspect, knowledge management seems to have the same goal of technology management but, being the former of greater importance, contains the latter one.
3M, one of the pioneers of innovation, the inventor of masking tape and post-it, had so far produce over 55,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental products, electrical materials, electronic circuits and optical films. Under the stewardship of Mr. William McKnight, 3M had grown from strength to strength. McKnight's greatest contribution was as a business philosopher, since he created a corporate culture that encourages employee initiative and innovation. To quote from him:
“As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women, to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way. Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs. Management that is destructively critical when mistakes are made kills initiative. And it's essential that we have many people with initiative if we are to continue to grow.”
McKnight’s philosophy had a profound effect on the way 3M does business. 15% of all employee’s time is allowed to be on their pet projects (the “3M Way”). Yet there is a clear a tension between innovation and efficiency. Why? because innovation usually challenges existing procedures and norms.
Persuading staff to open up to knowledge management requires a change in attitude and corporate culture. But that can be a long and arduous task.
Implementing KM is a culture-change process – but culture change is hard and takes time. However, every management system requires a supporting culture and implementation always requires a concomitant culture change. Once upon a time, there were no financial-management systems; no budgets, no forecasts, no double-entry book-keeping. Now, every company has a financial-management system and a supporting culture that sees financial management as ‘part of the job’.
People now work from the premise that managing the company’s money is something they need to do, something they are expected to do and something that will help both them and the company. They know that competent financial management is a crucial part of good business practice and behave accordingly. Can KM deliver a similar supporting culture? Can competent knowledge management become seen as a crucial part of good business practice? Can people come to realise that managing the company’s knowledge is something they need to do, something they are expected to do and something that will help both them and the company?
Changing the culture of an organisation can be done, but it has to happen in stages – and it needs time. You cannot change the whole culture of a company at one single event or intervention, you need to change the culture piece by piece, person by person, starting where it’s easiest and building momentum as you go over a period of at least a year, possibly two or more.
At first, take-up will be limited to a few pioneers or early adopters, as the implementation team starts testing KM tools and technologies and piloting the knowledge-management system. Then the majority will begin to adopt the new approach as the proven system is rolled out across the organisation, and finally only a few laggards will be left still clinging on to old approaches.
Born as a tabulating company originally founded in 1888, IBM became incorporated in 1924 as a result of the merger of several companies of the same business sector – International Time Recording Company, Computing Scale Company, and the Tabulating Machine Company (C-T-R Company) – and renamed International Business Machines under the direction and leadership of Thomas J. Watson, Sr. At the completion of the merger, IBM had less than 3500 employees on record and enjoyed the privilege of listing company stock for the first time on the New York Stock Exchange.
Through the 1970s and into the 1980s, IBM’s research team continued making breakthroughs in computer processing unimaginable during the era. IBM appeared unstoppable in the market of raw computing power, storage and support for the systems to include development of software code and system architectures. IBM’s reputation for being on the cutting-edge of computer hardware and technology made it a very appealing company to the very best in electrical and the evolving field of computer engineering. IBM continued to grow.
The four business goals of the 1980’s were growth, product leadership, efficiency and profitability. As IBM was structured, success in the goals of growth and product leadership would naturally support profitability. But with no change in or scalable strategy to address the efficiency goal in light of the remarkable global growth, efficiency was easier to excuse as a lower priority. Without the alignment of goals and strategy that supported this growth and globalization, inefficiencies began to accumulate which over time affected the bottom line, and the company’s profitability began to evaporate. The company, its leadership and employees, gradually lost touch with external realities of the market place.
IBM began to lose market share and lose it fast. IBM also began to collapse under the weight of a management structure characterized by independent business units with redundant process and disconnected information systems. Stock prices hit 20 year lows and the company posted an $8.1 billion loss. Something had to change.
IBM is no stranger to change and experienced a remarkable transformation whereby the company returned to a position of preeminence among IT companies after nearly facing extinction because of its initial unwillingness to change. The change came in the form of knowledge management and recognizing that the company’s survival depended upon harnessing the knowledge its employees and getting relevant, innovative ideas to market.
IBM, though certainly a front runner in industry, does not hold the answers to knowledge management but for a company with over 350,000 employees spread globally and stationed in most countries throughout the world, they must be considered one to watch when it comes to harnessing the innovation of those employees and delivering products and services well ahead of the competition.
In my earlier story, I have shown the example of how 3M created a corporate culture that encourages employee initiative and innovation. This is at the very heart of what knowledge management is all about. People willing to learn (acquire explicit knowledge)......people willing to share their knowledge (contribute tacit knowledge).....and people (from the very top all the way down) willing to put everything into action to attain a certain goal.
In my other story, I have chosen IBM, its rise from a humble beginning to be one of the world's powerhouse in electronic computing, but almost drowned by its own success. This story highlights the importance of any company to embrace change within their organisation, no matter how big they are. In this very competitive environment, we cannot take for granted new developments that are happening around us. Not even IBM, a behemoth in computing business, already considered an institution, and have survived two world wars, is immune from such change.
I believe that the implementation of a robust knowledge management strategy, and programme, coupled with harnessing the knowledge of its employees, can help an organisation to become more adaptable to the ever-changing competitive environment in which all businesses operate today. There's no other way around.
