Knowledge Management

The current business environment is characterised by a shift from the old order of predictability in which change was occasional, incremental and linear to the new order of rapid, radical and discontinuous change. In the small world we now inhabit and the global economy in which we operate this affects all businesses, large and small. Organisations who fail to recognise this and act upon it may not survive.

All businesses need to be increasingly flexible and adaptable. They need strategies which can react to, and even predict, the changes occurring.

Unfortunately, the old command and control hierarchical structures based on military command structures are no longer relevant or effective. “Unfortunately”, because such structures are still in use in most companies and still being developed and refined. They worked well when faced with the slow, evolutionary development of the past. We could make strategic plans, translate them into tactical plans, work out operational schedules and improve efficiency steadily year-on-year; and we were successful. We could predict the future from an analysis of historical figures and the trends they indicated.

We might face some revolutionary form of product or process technology once or twice in a working life. There might be pain associated with this revolutionary change, but at least it was uncommon.

The new world is different. Technology change has accelerated massively. Global communication irons out technological advantage very quickly so we all have to run hard just to stand still. There are few breathing spaces. Even the very concepts of “organisation” and “industry” are becoming difficult to maintain. We hear of virtual corporations which are organisations, but not in the traditional sense.

New models of business are being formed, models that do not fit into the old categories, that defy the traditional boundaries. Within these organisations, product/service definitions are becoming increasingly blurred. In this uncertain world, we need to ensure that we remain creative, alert to opportunity and responsive to external stimulus. We need a good grasp of the changing environment, and we need confidence in our own ability to adapt.

Our very survival may depend on our capacity for exploiting the intellect and creativity of our employees, and our ability to create new knowledge through a continuous process of learning and sometimes unlearning.

Knowledge Management

This is the arena of Knowledge Management (KM). KM recognises the valuable resource of the collective expertise of the workforce, often called the intellectual capital, and that this asset should be valued and managed like any other.

Intellectual capital is not everything we know. Much of what we know is only of limited value. Rather, the intellectual capital of an organisation is the sum of everything everybody in a company knows that gives it a competitive edge. It is also the learning that goes on in the organisation and that takes place as a result of interactions between the organisation and its customers and its suppliers.

Re-engineering claims to be the technique to address the changed business environment. Re-engineering and business transformation models can be highly effective devices for ‘bootstrapping’ an organisation from old ways to new ways, but they are essentially one-hit models. KM is a continuous and continuing approach that can take over when a re-engineering programme has made the big hit, and address the fundamental culture changes necessary to embed change into the organisation.

There are some obvious areas in which knowledge is important; designing new products, improving manufacturing processes, establishing new procedures, examining new distribution channels, for example. Review and improvement of any area of the business will need experience, knowledge and skills. Ensuring the organisation has the requisite knowledge, maintains, grows, develops and exploits it, is KM.

Establishing KM should not result in a new division or department of the company. KM must be embedded into the company, as a part of the infrastructure. Information technology can be used to support KM – but it is not KM.

Establishing KM involves creating an Information Strategy which goes beyond an information technology strategy. Technology can help gather, analyse and disseminate information but only humans can successfully interpret and exploit it. Having state-of-the-art technology does not necessarily ensure creativity and innovation, or organisational competence. There is no necessary correlation between investment in technology and business performance. There is certainly no necessary correlation between investment in technology and KM. Effective utilisation of technology is necessary but not sufficient. It must be made part of the process of utilising the creative and innovative capacity of the human beings.

Knowledge and information are not the same. Information generated by computer systems is not a very rich carrier of reasoned argument, human interpretation or potential action. The knowledge required for all these lies in the information user’s judgement of action based on that information. Hence, knowledge can be said to lie with the individual and not in the system.

KM involves the establishing of structures, processes and procedures to ensure the communication of knowledge, the transfer and sharing of knowledge between individuals and groups and the further development of the knowledge and skills of those with the existing knowledge. t does not aim to collect their knowledge so that we can do without them.

Whereas traditional approaches to information and information provision treat those who handle the information as passive processors of that information, the whole concept of KM is based on the premise that these processors are, in fact, highly important links in the information-value chain. They have a very active part to play in turning base data into valuable information.

Pre-packaged and programmable information systems have an important part to play in a knowledge society and organisation. We should delegate to them those tasks that are suitable for such simple information processing devices, leaving the people free to analyse and interpret to add value. Similarly, such devices as expert systems should not be ignored. If it is possible, it is often beneficial to make the knowledge of experts available in a form that can be used by others.

KM is also about identifying gaps in knowledge and finding ways of plugging those gaps by accessing external knowledge sources,such as external libraries and databases, consultants, etc.

We also may need relatively lowly, conventional technologies to complete the process. The advantage of simple technologies in moving towards these increasing returns is in their flexibility. Users adopt and adapt simple technologies themselves. They do not have to wait for the systems people and the programmers to write large programs based on inflexible rules. In fact, in an era of constant change, old-fashioned rules-based software is not likely to be effective. Pre-packaged solution will fail. What we need are flexible engines that we can drive towards today’s solution but can be then adapted for tomorrow’s. We need to understand that we have to keep re-inventing the rules by our own actions.

We should use whatever help we can get but first we must be clear about the kind of organisation that we are trying to create; the kind of organisation that can grow and develop within this changing business environment. We can then set about making the organisational information and knowledge base accessible to a wide spectrum of individuals within the organisation by devolving knowledge to appropriate levels.

We can also provide staff at those levels with the confidence to submit their interpretations, and take appropriate action based on those interpretations. We then have a knowledge management system and a culture of knowledge creation, sharing and use.

For further information and analysis of Knowledge Management, see @BRINT.COM, the BizTech network at http://www.brint.com