Working Knowledge: How
organizations manage what
they know
Author: Thomas H. Davenport
and Laurence Prusak
Presented By:
Rahul Sharma
January 29, 2006
Agenda
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Knowledge
Knowledge Markets
Knowledge Generation
Knowledge Codification
Lessons learned
Comments
My opinion
Reviews and references
CH-1 What do we talk about when we talk
about knowledge
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Data
Information
Knowledge
These are all transformation from one to another.
Data
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Set of unorganized and unprocessed facts
but highly objective
Used mainly in organizations like Banking, Insurance and other
governmental organizations as structured records for transactions
No judgment and no sustainable basis of action
Data is essential for information creation
Data Management is evaluated in terms of Cost, Speed and Accuracy
Information
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Information has impact on receiver's judgment and behavior
It has a sender and receiver
Information has its relevance and purpose
Information means to shape the person who gets it, to make some
difference in his outlook or insight
Information moves through Hard and soft Networks.
Data transferred into information in
following ways
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Contextualized
Categorized
Calculated
Corrected
Condensed
Knowledge
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Essential component of Human Progress
Knowledge is a fluid mix of framed experiences, values, contextual
information that provides a framework for evaluating and incorporating new
info.
Knowledge is a mixture of various elements, intuitive, hard to capture in
words
Delivered through structured media such as books, documents and contacts
Comparisons, connections, consequences, conversations helps in
transformations to knowledge
Knowledge in Action
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Better knowledge can lead to efficiency in product development and
production
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Knowledge moves down value chain to information and data
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Knowledge has key components as experience, truth, judgment and rules of
thumb
Knowledge Components
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Experience
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Refers to things done in the past and happened previously.
They have been tested and trained by experience
Firm hire experts with experienced based thought
Knowledge born of experiences make familiar connections
between what is happening in present and past
Ground Truth
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Real Life Knowledge and real situations experiencing close up
“After Action Review Program” which helps in examining what
happened in a mission and what can be learned from disparities
Knowledge Components
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Complexity
 Knowledge can deal with complexity in a complex way
 Knowing what is important leads to better decisions
Judgment
 It judges and refines itself in response to new
situations and information
 When knowledge stops evolving, it turns into opinion
or dogma
Knowledge components
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Thumb and intuition rules
 It gives shortcut solutions to complex problems that
are solved by experienced workers
 It gives “compressed expertise”. Phrase describing
how knowledge works
 E.g. Skill of experienced driver drives series of
complex actions without thinking about them
Knowledge Components
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Values and Beliefs
 Organizations have history, value and beliefs derived
from people’s action and words that express corporate
values and beliefs
 Integral components to knowledge serving as “seeing”
aspects of organization
 Power of knowledge comes from values and beliefs
as much as from logic and information
Knowledge as a corporate asset
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Companies hire for experience in spite of intelligence or
education
Managers get two third of info. And knowledge from
working mass
Organizations hire expert people for a particular subject
Knowledge as Corporate
asset
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Changing global economy
 Companies are fiercely competitive and competition is
for every marginal dollar of profit
 Companies require quality, value, service, speed to
market. e.g. Outsourcing
Product and services convergence
 Knowledge based intangibles are part of “products”
firms offer
 Intangibles that add value to product’s are part of
product’s firms offer
Knowledge as Corporate
asset
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Sustainable competitive advantage
 Trade secrets are not difficult to find with use of
reverse engineering, information flow, technology
 Knowledge assets value increase and provide a
sustainable competitive advantage
 Networked computers are not difficult to find as
knowledge source
Case Study: British Petroleum
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BP’s virtual Team work program
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42 separate business models
Goal :Agility of small company with resources of large
one
Implementation:
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Stressed Corporate behavior vs. technology
Coaches and Teams
Knowledge Management Teams
Emphasis was on Person to Person interaction and
system requirements
Results
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4 of the 5 Pilot groups have great success
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Great savings
Better Enthusiasm
Case in Point:
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Equipment failure on mobile driving ship
Utilized communication media to localized
communication expert to solve problem in few hours
for localized savings
Ch-1 Summary
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Data, Information and knowledge are forms of
transformation
Knowledge originates and resides in people’s mind
Technology enables new knowledge behaviors
Knowledge sharing must be encouraged and rewarded
Knowledge initiatives should begin with a Pilot program
Knowledge sharing requires Trust
Chapter 2: The promise and
challenge of Knowledge Markets
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Composes of buyers and sellers who use their market
knowledge to create power bases
Knowledge is bartered, bought, found, generated, and
applied to work
People rarely give their valuable knowledge without
something in return
Recognizing markets of knowledge is very important
Political Economy of Knowledge
markets
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Social, Economic and Political realities must be taken
into consideration
Cultural Norms restrict knowledge to be shared
Buyers, Sellers and brokers are people in KM
Buyers
 Knowledge seekers looking for insight, judgment and
understanding
 15-20 % of knowledge time is spent in knowledge
search and responding to Knowledge requests
 Complex answers embed with emotional subtexts
important to our decision making
Political Economy
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Sellers:
 People are skilled but unable to articulate their tacit knowledge
,they need specialized knowledge
 Knowledge sharing is rewarded more than Knowledge hoarding
Brokers:
 Make connections b/w buyers and sellers, hence act as
gatekeepers
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Corporate librarians are natural knowledge brokers
Informal Knowledge Brokers set out to become
experts on knowledge and its exploitation
Price System
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Markets have a price system so that value exchanges
can be efficiently rendered and recorded
Within the organizations, the medium is money but there
are agreed upon currencies to drive the KM
Factors affecting Price System
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Reciprocity
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Within the organizations, the medium is money but
there are agreed upon currencies to drive the KM
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Time, energy and knowledge are valuable resources
unless they bring valuable return
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Related to Repute
Factors for Price System
Repute:
 Value of knowledge depends upon political and social
structures of organization
 Many Consulting firms, bonuses are tied to knowledge
generation and transfer
 Likelihood of cooperation leading to future tangible
benefits will increase
 Length of service and loyalty erodes in most businesses,
hence it is important
Factors
Altruism
 Nice people who want to help others
 Likelihood of cooperation leading to future tangible
benefits will increase
Factors
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Trust: Most important factor that can positively affect the
efficiency of KM
Established in 3 ways i.e. :
 Trust
must be visible
 It should be ubiquitous
 It should start at the top
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Firm’s KM should be established upon mutual trust
Knowledge Market Signals
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Position and education
Most common frame signal for indicating who has
valuable knowledge, not consistent signal
Informal Networks
Informal chats like chats in Cafeteria, water cooler
Disadvantage is undocumented and ramble, hence not
readily available to market
Communities of Practice
Self organized groups to share knowledge with one
another, hence share work practice, interests
Knowledge Market Inefficiencies
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Clear Pricing system is very essential for efficient markets i.e.
consumer info, classifieds.
Efficient markets generate most good at least cost
3 key factors:
Incompleteness of information:
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Location of existing knowledge
Absence of explicit information about pricing structure
Inefficiencies
Asymmetry of knowledge
 Prepares knowledge from getting where it is needed
Localness of Knowledge
 KM depends on trust and trust is very important for
people you know
 People get knowledge from their organizational
neighbours
Knowledge Market pathologies
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Monopolies
 Knowledge will come at higher price
 They establish that fact to establish position of power
 Knowledge won’t be their when people need it the
most
Artificial Scarcity
 Hoarding culture keeps scarce for departments and
groups
 It walks out of the door during downsizing
KM Pathologies
 Trade Barriers
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Refusal to accept new knowledge
Status difference b/w seller and buyer
Hampers organizational markets by hoarding
departments
Downsizing and reengineering ends to damage KM
Infrastructure
Effective KM
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Using IT widely
 Technical developments change IT Structure
dramatically
 Trying to force fluid knowledge into rigid data
structures
 Focusing more on the system
Building Market places
 Knowledge transfer is to create market place for
physical and virtual spaces
Effective KM
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Talk rooms are formalized and sanctioned locations for
conversations
Creating and defining KM value
 Employees rewarded for sharing knowledge proves
that value exists for knowledge
Peripheral benefits of KM
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Higher workforce morale
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Employees see that their work is valuable .
They may be more satisfied with their work
Greater corporate coherence
Shared Awareness of Corporate goals and strategies
Richer Knowledge stock
Constantly refined and validates the organization knowledge
Stronger Meritocracy of Ideas
Genuinely open KM will test official beliefs and expose flaws of faulty ones
before they can do any damage
Ch-2 Summary
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Knowledge Markets exists and should be recognized
Buyers, Sellers and brokers are important for KM
Price System depends upon reciprocity, repute, altruism,
trust
KM pathologies like monopolies, artificial scarcity and
trade barriers should be removed
Knowledge market benefits are higher workforce morale,
greater corporate coherence, richer knowledge stock
Ch-3 Knowledge Generation
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Hire smart people and leaving them alone
Modes of Knowledge generation
Knowledge Acquisition
Dedicated Resources
Fusion
Adaptation
Networking
Acquisition
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Knowledge focused firm needs appropriate knowledge
available
Effective way to acquire knowledge is to buy it
Determining the value of knowledge is hard to quantify
Cultural and political barriers to accepting and absorbing
acquisition's knowledge
Knowledge Generation Modes
Rental
 Renting knowledge means to take steps to retain it too
 Knowledge can be leased or rented
 Knowledge rentals involve Knowledge transfer
 Make sure to take steps to retain knowledge
Knowledge Generation Modes
 Dedicated Resources
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Establish units or groups for this purpose
Many R & D groups use these
Fusion
Brings people together with a joint answer
Combining people with different ideas, skills and values
Group members find some common ground to
understand one another
Adaptation
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Imposing various environmental threats
New products from competitors, new technologies drive
Knowledge generation
Most organizations are incapable of changing attitudes of
lifetime.
Employees who are willing to learn new things are vital to
adapting company
Networks
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Knowledge is generated by informal, self organizing
networks within organizations
Conversation often generates new knowledge within
firms
A particular practice can become part of knowledge
capital of the firm
Common Factors
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Need for adequate time and space
Time is the most important factor
Recognition by managers that Knowledge Generation is
important factor for success
Firms that fail to generate new knowledge will cease to
exist
Ch-3 Summary
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Modes of knowledge generation are acquire, dedicated
resources, fusion, adapt and network
Organizations needs to focus more on time, not on
physical storage
Ch-4 Knowledge Codification and
Coordination
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Basic Principles
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Business goals for codified knowledge should be
identified
They should evaluate knowledge for usefulness in
codification
Managers must be able to identify knowledge for
reaching goals
Codifiers must identify appropriate medium for
codification
Labor intensive and company knowledge are
successful for codification knowledge
Codifying different knowledge
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Codifying Tacit Knowledge
Tacit, complex knowledge is impossible to reproduce in
database
Knowledge incorporates accrued and embedded learning
that it is impossible to separate from individual acts
We simply can’t represent knowledge outside the human
mind
Codifying different knowledge
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Providing access to people with tacit knowledge is difficult to capture
and modify
Mapping and modeling knowledge
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It is a guide not a repository
Locating important knowledge in organization with
picture to find it
Employee with good knowledge base has access to
knowledge sources
A good Knowledge map goes beyond boundaries
Technology of Mapping knowledge
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Creates an organizational wide map, better for individual
mini-maps
Improves search speed
Electronic map can be revised more frequently
Value of map is quality and depth of info.
Politics of Mapping knowledge
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Map has a picture of status and success as well as a
knowledge locator
A limit should be made to see if politics exceed the good
sign of maps
Capturing Tacit knowledge
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Substantial value of tacit knowledge makes it worth effort
for codifying it
Difficult to locate dividing line between Tacit knowledge
and fully embedded knowledge
Transfer maximum knowledge through mentoring or
apprenticeship
A good story is best way to convey meaningful
knowledge
Codifying tacit knowledge
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Expert system represents explicit attempt to capture
human knowledge using rules
Evaluating codified knowledge and making it available is
integral part of process
Evaluation of existing knowledge is classification based
on quantitative, structured, unstructured, qualitative
contents
Codifying Knowledge
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Structured content is made by database and
unstructured by web
Codification provides permanence to knowledge
Knowledge codification is vital to human beings more
than anyone else
Ch-4 Summary
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It is difficult to codify Tacit knowledge
Always the principles for codifying knowledge should be
kept in mind
Mapping and modeling knowledge is essential for
codifying knowledge to give access to impossible
knowledge resources
Human Mind is vital to knowledge codification
Lessons Learned
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It addresses the key managerial and behavioral issues for managers
Effective KM for any company is key to competitive edge
Knowledge derives from people’s mind
Recognize markets for knowledge
Time is the most important corporate resource given to knowledge
activists
Codification gives permanence to knowledge
Comments
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Upside Ron Hagan, editorial review
http://www.amazon.com/gp/product/productdescription/0875846556/ref=dp_proddesc_0/103-81438137933421?ie=UTF8&n=283155&s=books
Author provides simple overview of knowledge Market and its
potential obstacles
Includes numerous examples of successful knowledge projects like
British Petroleum
PC week, editorial review
It provides strong, fundamental ground in concepts critical to KM
Knowledge Point site review
http://www.knowledgepoint.com.au/knowledge_management_tools/b
ooks.html
Excellent resource for managers who want to harness wisdom and
experience in their organizations
My opinion
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Provides practical and realistic template for initiating a
KM system with wealth of content on KM systems
Ch-1 to 4 provides deep insight to many basic concepts
which are important for any beginner in KM
Reviews and References
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Reviews from Book “KM” by Elias Awad
KM is newly emerging, interdisciplinary business model that has
knowledge within the framework of organization. It has disciplines
like business, economics, information management.
Types of knowledge are shallow and deep knowledge, procedural
and episodic, explicit and tacit, expert knowledge
KM System Development Life cycle: Evaluate existing infrastructure,
form the KM team, knowledge capture design, KM blueprint, test the
KM system, implement the KM system, manage change and reward
structure, post system evaluation. So better than the Davenport’s
one
Approaches for Codifying knowledge are Knowledge maps, decision
tables, decision trees, frames, production rules, software agents
Reviews and References
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According to site for IT, for IT n/w
http://products.watchit.com/20010207.pdf
This program is excellent resource for managers to harness their
experience and wisdom
According to metapress article
http://mesharpe.metapress.com/(pvhl4o45jbkisa55yzfsaw55)/app/ho
me/contribution.asp?referrer=parent&backto=issue,2,9;journal,22,26;
linkingpublicationresults,1:106046,1
According to metashape, this provides pragmatic approach to
knowledge, information technology, knowledge management,
practice and research
According to article, “Sharing expertise beyond KM”
http://books.google.com/books?id=M8hDpBWOFQMC&dq=working+
knowledge+by+davenport
The field of KM focuses on how organizations effectively store,
retrieve and enlarge their Intellectual properties
References
According to IBM systems journal article for KM,
 http://researchweb.watson.ibm.com/journal/sj/404/marwick.html
Selected technologies that contribute to KM solutions are reviewed
using nonaka’s model of organization knowledge
 According to Journal of American information science and
technology,
http://www3.interscience.wiley.com/cgibin/abstract/97516011/ABSTRACT
KM is based on knowledge creation and transfer
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Questions?