Knowledge management

The benefits of sharing knowledge

Companies should tap into their knowledge bases and share them across the organisation to gain a competitive advantage. by Sameer Parekh

This is the age of the 'knowledge worker'. Unless an individual has the information he needs, the chances that this person will be involved in creating wealth are slim indeed. People are questioning the four factors of production—land, labour, capital, and enterprise—and want to include knowledge as the fifth factor.

This shift has been visible across the globe thanks to the emergence of the ICE economy where a firm that is deficient in the traditional factors of production but strong in the fifth, can compete with any global giant.

All about knowledge

So what exactly are knowledge and knowledge management (KM)? Does KM exist in reality?

Before we understand what knowledge means, let us understand the knowledge hierarchy. In common parlance, it is often referred to as DIKW hierarchy. The four levels that we deal with are data, information, knowledge, and wisdom.

Data is usually a raw record. Information is data put in a relational format. New raw data can be related with existing information. For example, the growth of a firm by 20 percent in terms of sales compared to the previous year.

Knowledge is information put in a context. An appropriate and useful collection of information is called knowledge. And wisdom is the collection of knowledge.

So, for us, a working definition of knowledge can be taken as information put in a relevant context.

facets of Knowledge

I would also like to introduce two more terms—tacit and explicit. Knowledge includes both tacit and explicit facets of information. Explicit is the knowledge that can be structured and documented, whereas tacit is more people-specific and experience-oriented.

For example, a person with statistical information about scores would be informed, but someone with nuances, such as how the pitch behaves on a cloudy day is knowledgeable.

A Contextual definition

A more structured definition is given by McKinsey which says that knowledge is the understanding of relations and causalities, and is therefore essential in making operations effective, building business processes, or predicting the outcomes of business models.

Is it hype?

A KM journal, the Knowledge Praxis, has defined knowledge management as a business activity with two primary aspects. First, treating the knowledge component of business activities as an explicit concern of business reflected in strategy, policy, and practice at all levels of the organisation.

Second, making a direct connection between an organisation's intellectual assets—both explicit and tacit—and positive business results.

Managing knowledge

Elaborating KM would mean, deliberate efforts for using the company's existing knowledge and also creating, sharing and leveraging knowledge and experience.

The key words here are deliberate efforts, tacit, and explicit knowledge.

This means that in order to manage knowledge, the organisation has to put in conscious efforts on the following fronts:

1) Identify the need for KM.

2) Identify and capture the explicit and tacit knowledge bases available.

3) Create an environment or a platform where this knowledge base can be used by everybody.

Take the example of a typical software solution provider that works on customised ERP solutions for an array of verticals. There are some functional experts who work on the project team. Say, a project manager is an expert on the inventory management module. Another project head is a specialist on the pharmaceutical industry. Now, to develop an inventory management module for a pharmaceutical concern, the organisation would need to mobilise a team consisting of both these members.

This would ensure that tacit knowledge of employees is tapped for organisational benefit. Most professional organisations are good at managing this. However, just imagine a scenario if one or both these resources leave the organisation, and a new project needs to be developed?

Here's where strong KM practices come in. If the organisation follows KM practices then it would capture the explicit knowledge (from previously done projects) and the tacit knowledge (white papers) of the two employees, thereby giving a competitive edge to the organisation.

Implementing KM ideas

So, how do you go about creating a KM system to foster the environ-ment of knowledge-sharing across the organisation? The following action items or directives will help in answering the question.

KM focus starts at the top: The initiation should come in from the CEO or MD or the board of directors. Any KM endeavour, which does not have the buy-in of the top manage-ment would more often than not have a premature death.

Treat knowledge as an asset: The paradigm shift in focus required by organisations is in treating knowledge as an asset. Over a period of time, management pundits have agreed to treat brands, patents, special skills, and customer relations as intangible assets.

This essentially is the difference between the book value and the market value of the organisation. Adding knowledge as an asset actually tends to give a lot more credibility and seriousness to the KM efforts of the organisation. It has to come from the top and should be communicated to the last rung of the hierarchy.

KM comes out of the HR closet: To an extent good knowledge retention can be a by-product of leaving KM to HR, because good management and HR practices can lead to satisfied employees and hence the knowledge base can be retained.

However, to have a sustainable KM process, the entire effort has to be given a strategic focus. The KM experience is similar to that of branding. It KM requires similar efforts.

KM involves everybody: KM is all about identifying, capturing, sharing and utilising knowledge for organisational benefits. Each and every employee of the organisation has to be involved in it.

The KM endeavour has to start from the board room but eventually flow down to all the employees for it to be successful.

Provide a platform for creating, capturing, and sharing knowledge: This is where IT has a vital role to play. The IT infrastructure has to provide a platform (in most cases intranets) that can help employees capture and share knowledge. Most MNCs have geared up their IT infrastructure to support KM initiatives.

Other informal platforms should also be provided for employees to share knowledge. The key factor here is that infrastructure is the starting point for KM, it does not bring the process to an end. Employees have to be encouraged to use the same and participate in the KM initiative. The major steps are the setting-up of the infrastructure and encouraging participation.

Create communities of knowledge: The strongest concept that has emerged now is that of community building. Linux does it, Apple does it, and so does Harley Davidson. Community defined in the simplest term is an aggregation of people who share common concerns, goals, hobbies, passions, or problems. The organisation should try and create knowledge communities that get together (physically or in the e-space) and share, discuss, tear, rip, and shred ideas, which lead to a generation of new knowledge frontiers. Continuous efforts should be put in to develop and sustain these communities and then map the outcomes to the entire organisation.

KM is a long-term, ongoing endeavour: Knowledge is perishable. What is useful today would become outdated tomorrow. Sustained efforts need to be put to imbibe new information and unlearn old and outdated knowledge.

It's imperative to remember that the system once set also needs an influx of new, vibrant ideas and requires refurbishing of legacy knowledge. Once this system is self sustaining, the organisation is geared to take on any challenge.

The Knowledge-driven organisation

Knowledge exists everywhere. Even in an organisation where strong KM practices don't exist, there are islands of knowledge. Knowledge about products, customers, markets, and operational issues. But the existence is haphazard or unorganised.

Once the above directives are implemented existing knowledge would be captured. In a self-sustaining cycle, new opportunities would be presented for sharing knowledge. This would ensure that the organisation in question would become knowledge-intensive and ready to take on competition. Besides, the formally existing islands of knowledge would become an ocean, which just needs to be tapped for generating competitive advantage and drive organisational growth.

The author is the Managing Director of Intellicon. He can be contacted at sameerp@intelliconltd.com