Knowledge management

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The value of knowledge

It is not unusual today for companies to be worth ten, or more, times their net assets (divide the total value of your shares by the net assets as stated on your balance sheet). Over 90% of the total value of the Coca-Cola Corporation is intangible. In many consultancies, the vast majority of their assets go up and down in the lifts every day, and walk out of their offices at night.

Therefore, the process of optimising these assets is becoming a critical issue for most organisations. This process is generally referred to as knowledge management. Brand management is one aspect of KM.

Knowledge management has many complexities, not least the nature of knowledge itself. For knowledge to pass from one person or machine to another, each has to have a similar understanding of that knowledge and to accord it similar implications. This rarely happens, especially between people from different cultures, whether geographical, professional or personal.

Some categorise knowledge as "explicit" knowledge, which can be encoded and distributed, and "tacit" knowledge, which people may not know they even have. The classic example of tacit knowledge is the guy who has been doing the same job for 30 years and, when he retires, the whole system breaks down because no-one knows how he did it.

Another categorisation of knowledge is as knowledge that, how and why.

The ultimate goal of KM is often to reduce tacit knowledge to explicit knowledge, without losing its richness, and embed, encode, embrain, embody, and enculture it within the organisation, its people and all its operations.

IT is not the solution

While information technology is an important part of the knowledge management process, it is only one building block among many. Beware of the consultant who says that your KM problem can be solved by a computer system.

Computers are becoming increasingly intelligent in a human sense, but they are still best at handling explicit knowledge. Tacit knowledge is still primarily the preserve of human beings and any KM program must recognise this.

If you want proof of this theory, phone most call centers.

Implementing a KM program

The requirements for implementing a KM program look very similar to those for a change management program because, in both cases, you are above all trying to persuade people to behave differently.

The key issues you should consider are:

• Leadership - it must be amongst the top 2 or 3 issues top managers ask about as they tour the organisation
• Vision - creating a compelling vision of the end result of the change
• Organisational design - ensuring that the organisation is design in alignment with KM objectives
• Culture - ensuring that the organisational culture is supportive of the KM objectives
• Processes, tools & techniques - developing processes to underpin the objectives of the KM program
• Networks - KM programs usually work best within a so-called "community of practice" where each member has a common interest in the generation, use and distribution of the knowledge. What networks are available, and how can they be accessed?
• Market opportunities - identifying opportunities to use the knowledge directly as a source of revenue for the organisation
• Financial resources
• People resources - ensuring the right level of resourcing, competencies & skills, development and rewards & recognition
• IT resources - systems and software

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