PATHWAYS — Volume 11, Number 2 – May, 1999

"Knowledge assets," "knowledge management," "intellectual capital," and similar terms have made their way into business and trade publications. Regardless what you call them, knowledge assets have become critical as organizations move from traditional, product-oriented structures toward less tangible, service-oriented structures.

The knowledge asset vision entails the following components:

1. Turn knowledge that an organization possesses and creates while developing and delivering its products and services into reusable assets.
2. These intellectual assets are saved, shared, enhanced, and built upon as the organization continues to grow its experience and expertise.
3. Everyone within the organization has access to all of the knowledge assets they need to supplement their own personal experience and expertise.

But, this vision faces numerous challenges:

• To date it has been difficult to find a common term and consequent definition that organizations can rally behind. When the label changes every month or so, it is difficult to convince an organization’s management and staff that the concept is valid and important.
• It takes resources (people, time, and facilities) to turn materials produced during normal business operations into reusable assets. Most organizations reward their workforce for completing work, but few provide a reward structure that encourages the conversion of completed work into reusable assets that have value and can be accessed throughout the organization.
• It takes infrastructure to provide capture, storage, and retrieval capabilities. The commitment of resources to meet this need has been difficult to achieve, especially in organizations that are waiting for concrete "return-on-investment" guarantees.
• It requires an attitudinal change within the organization. Historically, exclusive access to information was viewed as a position of power. It is difficult for many organizations to convince their work force that knowledge sharing doesn’t mean giving up more than they gain.

Significant evidence is now in. Overcoming these challenges, to create a system for sharing the organization’s experience and expertise, is key to the survival of most organizations. Organizations with robust knowledge management systems believe that these systems are a key element in helping them survive and prosper. Some of the benefits they report include:

• Better business and strategic planning, because insight into and understanding of an organization’s collective experience and expertise is enhanced.
• Improved decision-making, through the ability to access and manipulate data from across the organization.
• Cost savings, by avoiding repeated mistakes, or through the loss of key information as employees leave.
• Ability to bring new products to market more quickly, through collaboration and the use of best practices.

In the At Issue section that follows Van O. Wright, FLI’s Manager of Product Quality Control, proposes a framework for the development of a knowledge management strategy for an organization.

This issue starts with the assumption that your organization has bought into knowledge management in principle, and is trying to formulate an effective approach. The approach described here is a broad, strategic framework, not a specific, tactical solution. Some organizations will adopt quite different tactics than others, but the strategic approach described here can help any organization.

The strategic approach we suggest is:

Let’s examine each of these strategic steps in turn.

How will a successful knowledge management program bring value to your organization? What would be of significant strategic value to senior management? To employees? To customers and vendors? The following are some areas you might consider:

• Improved customer satisfaction. If those in your organization who interface daily with customers were better informed and could thus be more responsive to client needs, might it mean more repeat business, increased business revenue, or more reference accounts?
• Product/service quality. Could better staff access to critical information reduce the need for rework, result in more consistent delivery of services, or lead to fewer service call-backs?
• Employee satisfaction. What would be the effect on staff morale if programs were in place to recognize knowledge sharing and reward contributions of intellectual capital to the organization?
• Innovation. Could the organization be more innovative and responsive to customer needs if marketing and manufacturing shared information? If manufacturing had easy access to research and development databases?
• Reduced costs/Improved efficiency. Could improved information sharing among vendors and VARs reduce raw and finished goods inventories or improve responsiveness to customer orders?

These are but a few areas where better access to an organization’s knowledge assets might result in tangible benefits. You will likely find others of value to your own organization.

Here are some ideas to get started:

Develop a list of one to three benefits areas you see as having highest potential. Discuss your ideas with managers who have a vested interest in results and identify one or more managers who are interested in your ideas.

Be sure you consider all the knowledge assets of the organization. Resist the tendency to consider only existing, documented knowledge.

• Consider the knowledge which exists only in people’s heads. If you fail to do so, such "head knowledge" will go unshared and ultimately will be lost as experienced people and experts leave the organization or retire. Some organizations, such as consulting firms, find they benefit most from an infrastructure emphasizing the capture and sharing of wisdom and experience.
• Also consider the raw data that already resides in various areas of the organization … or with customers and vendors. Existing, raw data can often be analyzed and synthesized to produce new information assets. Marketing organizations often employ this technique. (For a single example, what are the ZIP codes where the most affluent among your customer base reside? How could the organization convert this knowledge into useful marketing strategies?)

Focus on one or a very few high-potential organizational units. Look for units:

• That are likely to realize significant benefit in one or more of the areas discussed in Step 1.
• Whose managers are receptive to your ideas, willing to commit to change, and prepared to introduce appropriate reward systems for information sharing.

Note: It is probably not worthwhile at this point to attempt to quantify a return on investment. For now, simply identify any opportunities that management would readily accept as having high potential return if realized.

Once you have identified ways a knowledge management program could potentially benefit your organization (or some of its sub-units), you need to begin defining key elements of an implementation strategy.

Define an infrastructure appropriate to the organization. The infrastructure you specify will be unique to your organization, but it should consider all knowledge asset sources. Consider what kind of human resources will be available for mentoring, coaching, and otherwise passing along wisdom and experience. Consider the technological tools available (or that could be acquired) to support asset storage and retrieval. How will your infrastructure support both sub-units and the organization as a whole?

Adopt a Phased Approach. Unless your organization is relatively small, attempting to introduce a knowledge management program across the entire organization is a high-risk venture. You can do much to reduce risk and insure success by adopting a phased approach. Pick one or two high potential sub-unit opportunities for your Phase One project. Then define additional phases that will be implemented across the organization based on Phase One success.

Name the Initiative. This may seem trivial, but it is important. You need to have a name for your knowledge management initiative … one you can refer to as you and other stakeholders "walk the talk."

Develop Appropriate Reward Systems. Knowledge sharing is antithetical to the basic culture of many organizations. Appropriate recognition in the form of reward systems will be critical to reversing such attitudes. Selling management decision makers on the need for appropriate rewards systems is also critical.

Structure an Implementation Plan. Formalize your analysis so that it can be presented to management as a well-thought-out, structured whole. The plan should:

• Describe planned phases
• Identify potential executive sponsors
• Overview the "to be" knowledge management infrastructure
• Estimate required resources

With the work you have accomplished during Steps 1 and 2, you are prepared to present your knowledge management strategy to management. It is now well thought out, has a structure and name, takes into consideration potential return, risks, and rewards, and has one or more sponsors. Do not start implementing until you have management buy-in and approval. Once there, press for management support to help carry the message.

To achieve success during Phase One, be sure to:

• Get the architecture for your new knowledge management system into the hands of those who will be collecting, contributing, or creating new intellectual assets.
• Train all users, at all levels of the Phase One sponsoring organization(s).
• Promote the new knowledge management system immediately. Don’t wait until the entire system infrastructure is in place. Communicate the reward system, and publicly credit those who participate and cooperate.
• Gather Information as successes occur, both quantitative and anecdotal.

This is the time to begin migrating your knowledge management initiative across the organization. Modify your knowledge management strategy as necessary, and obtain management approval to continue.

Report on your initial successes. Enlist stakeholders from the unit(s) in Phase One to help you carry the message. Be careful, however, not to assume the specific benefits and tactics that led to success with the Phase One opportunity will apply equally to other organizational units. You will need to revisit Steps 1, 2, and 3 for each new project phase.

Now is the time to get started and start benefiting. The table at the end of this article provides some other useful knowledge management sources.

Van O. Wright, Ph.D.
Manager, Product Quality Control