The ABCs Of Knowledge Management

What is knowledge management?

Unfortunately, there's no universal definition of KM, just as there's no agreement as to what constitutes knowledge in the first place. For this reason, it's best to think of KM in the broadest context. Succinctly put, KM is the process through which organizations generate value from their intellectual and knowledge-based assets. Most often, generating value from such assets involves sharing them among employees, departments and even with other companies in an effort to devise best practices. It's important to note that the definition says nothing about technology; while KM is often facilitated by IT, technology by itself is not KM.

Think of a golf caddie as a simplified example of a knowledge worker. Good caddies do more than carry clubs and track down wayward balls. When asked, a good caddie will give advice to golfers, such as, "The wind makes the ninth hole play 15 yards longer." Accurate advice may lead to a bigger tip at the end of the day. On the flip side, the golfer — having derived a benefit from the caddie's advice — may be more likely to play that course again. If a good caddie is willing to share what he knows with other caddies, then they all may eventually earn bigger tips. How would KM work to make this happen? The caddie master may decide to reward caddies for sharing their tips by offering them credits for pro shop merchandise. Once the best advice is collected, the course manager would publish the information in notebooks (or make it available on PDAs), and distribute them to all the caddies. The end result of a well-designed KM program is that everyone wins. In this case, caddies get bigger tips and deals on merchandise, golfers play better because they benefit from the collective experience of caddies, and the course owners win because better scores lead to more repeat business.

What constitutes intellectual or knowledge-based assets?

Not all information is valuable. Therefore, it's up to individual companies to determine what information qualifies as intellectual and knowledge-based assets. In general, however, intellectual and knowledge-based assets fall into one of two categories: explicit or tacit. Included among the former are assets such as patents, trademarks, business plans, marketing research and customer lists. As a general rule of thumb, explicit knowledge consists of anything that can be documented, archived and codified, often with the help of IT. Much harder to grasp is the concept of tacit knowledge, or the know-how contained in people's heads. The challenge inherent with tacit knowledge is figuring out how to recognize, generate, share and manage it. While IT in the form of e-mail, groupware, instant messaging and related technologies can help facilitate the dissemination of tacit knowledge, identifying tacit knowledge in the first place is a major hurdle for most organizations.

What benefits can companies expect from KM?

Some benefits of KM correlate directly to bottom-line savings, while others are more difficult to quantify. In today's information-driven economy, companies uncover the most opportunities — and ultimately derive the most value — from intellectual rather than physical assets. To get the most value from a company's intellectual assets, KM practitioners maintain that knowledge must be shared and serve as the foundation for collaboration. Yet better collaboration is not an end in itself; without an overarching business context, KM is meaningless at best and harmful at worst. Consequently, an effective KM program should help a company do one or more of the following:

• Foster innovation by encouraging the free flow of ideas
• Improve customer service by streamlining response time
• Boost revenues by getting products and services to market faster
• Enhance employee retention rates by recognizing the value of employees' knowledge and rewarding them for it
• Streamline operations and reduce costs by eliminating redundant or unnecessary processes

These are the most prevalent examples. A creative approach to KM can result in improved efficiency, higher productivity and increased revenues in practically any business function.

What are the challenges of KM?

• Getting Employees on Board
  The major problems that occur in KM usually result because companies ignore the people and cultural issues. In an environment where an individual's knowledge is valued and rewarded, establishing a culture that recognizes tacit knowledge and encourages employees to share it is critical. The need to sell the KM concept to employees shouldn't be underestimated; after all, in many cases employees are being asked to surrender their knowledge and experience — the very traits that make them valuable as individuals. One way companies motivate employees to participate in KM is by creating an incentive program. However, then there's the danger that employees will participate solely to earn incentives, without regard to the quality or relevance of the information they contribute. The best KM efforts are as transparent to employees' workflow as possible. Ideally, participation in KM should be its own reward. If KM doesn't make life easier for employees, it will fail.
• Allowing Technology to Dictate KM
  KM is not a technology-based concept. Don't be duped by software vendors touting their all-inclusive KM solutions. Companies that implement a centralized database system, electronic message board, Web portal or any other collaborative tool in the hope that they've established a KM program are wasting both their time and money. While technology can support KM, it's not the starting point of a KM program. Make KM decisions based on who (people), what (knowledge) and why (business objectives). Save the how (technology) for last.
• Not Having a Specific Business Goal
  A KM program should not be divorced from a business goal. While sharing best practices is a commendable idea, there must be an underlying business reason to do so. Without a solid business case, KM is a futile exercise.
• KM Is Not Static
  As with many physical assets, the value of knowledge can erode over time. Since knowledge can get stale fast, the content in a KM program should be constantly updated, amended and deleted. What's more, the relevance of knowledge at any given time changes, as do the skills of employees. Therefore, there is no endpoint to a KM program. Like product development, marketing and R&D, KM is a constantly evolving business practice.
• Not All Information Is Knowledge
  Companies diligently need to be on the lookout for information overload. Quantity rarely equals quality, and KM is no exception. Indeed, the point of a KM program is to identify and disseminate knowledge gems from a sea of information.

Who should lead KM efforts?

Since KM is not a technology-based concept but a business practice, enterprisewide KM efforts should not be lead by the CIO. (The CIO is a suitable choice to lead KM efforts within the IT department, however.) Some companies have dedicated KM staff headed by a chief knowledge officer or other high-profile executive. Other companies rely on an executive sponsor in the functional area where KM is implemented.

What technologies can support KM?

KM tools run the gamut from standard, off-the-shelf e-mail packages to sophisticated collaboration tools designed specifically to support community building and identity. Generally, tools fall into one or more of the following categories: knowledge repositories, expertise access tools, e-learning applications, discussion and chat technologies, synchronous interaction tools, and search and data mining tools.

Senior Editor, Opinion, Megan Santosus can be reached at santosus@cio.com and Web Writer, Jon Surmacz can be reached at jsurmacz@cio.com.