The Importance Of Knowledge Management

Published Date: 02 Nov 2017

Knowledge must be part of the organisation’s culture. Customers and clients should be able to distinguish one organisation from the other by type, manner and the value of their service. It becomes necessary and part of business for organisations to capitalize on what they know and how they can convert that knowledge into value and profit.

Background and definitions

In their study of knowledge management practices which was fuelled by the lack of successful models that company executives could use as guides due to the practice being relatively young, Hansen, Nohria and Tierney (1999:107), found that consultancies companies do not use the same strategies to manage knowledge. The same conclusion, it was found, extends to other business industries. They found that consultancies use two very different knowledge management strategies or approaches to knowledge management. They termed two approaches or strategies Codification and Personalisation, Hansen et al., (1999:107).

According to Hansen et al., (1999:107), Codification Strategy is when the knowledge management strategy centers on the computer, where "Knowledge is carefully codified and stored in databases, where it can be accessed and used easily by anyone in the company". Hansen et al., (1999:107) further states that "Knowledge is codified using a [people-to-document] approach: it is extracted from the person who developed it, made independent of that person, and reused for various purposes". Many IT organisations have adopted this kind of approach to knowledge management. Some have created platforms where their employees as part of their duties capture and store critical new information that have been gathered from resolving an issue, a problem or a lesson learned.

Personalisation Strategy according to Hansen et al., (1999:107) is when "…knowledge is closely tied to the person who developed it and is shared mainly through direct person-to-person contacts. The chief purpose of computers at such companies is to help people communicate knowledge, not to store it." Schwartz and Te’ eni, (2011: 550) argues that "The personalisation strategy focuses on developing networks for linking people so that tacit knowledge can be shared. It invests moderately in IT."

As to which of the two approaches can organisations adopt in managing their knowledge, consulting companies pursue codification approach whereas strategy consulting firms emphasize a personalisation approach.

Where an organisation’s business and strategy is reliant on past technical experiences and technical know-how, the organisation tends to favour codification approach. This approach is highly beneficial as it allows anyone to access codified knowledge without having to extract it again from the person who originally developed it, (Hansen et al., 1999:108). Industries where their nature of business and strategies is project based will highly benefit from this approach as whatever lessons learned from project implementation, regardless of the complexity and size of the project, can be easily codified, stored and reused for future projects of the same nature.

In contrast, some organisations favour the approach where there is person to person conversation. This approach is best utilized where knowledge has not been codified. This knowledge is transferred in brainstorming sessions and one-on-one conversations, (Hansen et al., 1999:108). Organisations that need to come up with a difficult strategy or a new solution to a problem will benefit greatly from this approach. To make their personalisation strategies work, organisations will invest heavily in building relations and networks of people. Hansen et al., (1999:108) contend that "knowledge is shared by whatever means and technology is available, face-to-face, telephone, email, video conferencing."

It has been found that organisations will benefit more greatly by adopting a holistic approach to knowledge management. Staying with only one approach can have a detrimental effect on the overall strategy.

The nature and characteristics of the two main dimensions of knowledge (tacit and explicit knowledge)

According to O’Dell and Hubert, "Explicit knowledge [also known as formal or codified knowledge] comes in the form of documents, formula, contracts, process diagrams, manuals …" Explicit knowledge may not be useful without the context provided by experience, (O’Dell & Hubert, 2011:3). They also define "tacit knowledge [also known as informal or uncodified knowledge], as what you know or believe from experience. It can be found in interactions with employees and customers. Tacit knowledge is hard to catalogue, highly experiential, difficult to document, and short-lived. It is also the basis for judgment and informed action." (O’Dell & Hubert, 2011:3).

I work for Gijima, an organisation which basically delivers services to clients. Any services we deliver are project based. As an IT Service provider, our organisation relies heavily on the expert knowledge from skilled technical resources. This is explicit knowledge as it is available and coded.

There are several benefits that an organisation can gain from these two different strategies. Tacit knowledge resides in the minds and is not necessarily readily available. Another advantage is that tacit knowledge is unclear and can have several interpretations which make it ambiguous in nature difficult to copy or reproduced. The other advantage of using tacit knowledge is in terms of its contribution to innovation and "low investment in information technologies", according to Jasimuddin, Klein and Connell, (2005:105).

Using explicit knowledge approach has its own advantages. According to Jasimuddin et al., (2005:106), "explicit knowledge is easily communicable and transferred; and easy to store because such knowledge is codified in tangible material whether in documentation or electronic spaces. There is little chance of losing explicit knowledge due to employee turnover because such knowledge is articulated, codified, and available in Organisational repositories. Such knowledge can be accessed and used easily by anyone in the organisation." Also tacit know ledge is internally safe and can be easily be safeguarded by intellectual property rights. (Jasimuddin et al., 2005:106).

The two strategies are different but each one has its own unique benefits. Organisations must strike a balance between tacit or explicit approaches. It is clear from the discussion above that the choice between the two is not "either or" but rather what balances of the two strategies can be exploited for maximum benefit.

The limitations of exclusively focusing on either approach

Hansen et al., (1999:112) advices that "companies that use knowledge effectively pursue one strategy predominantly and use the second strategy to support the first".

Organisations cannot exclusively focus on either of the strategies. Some of the concerns with using personalisation strategy are that tacit knowledge resides in the minds and there can be challenges in bringing it to the fore, there might be issues with articulation or language barriers and some might simply not be willing to share it since they perceive it as being their status. Organisations and people in general like testing the boundaries in intellectual property rights. Even though the knowledge might be protected, the existence of these rights does not hinder individuals and competitors to infringe and it might take months or even years to reverse the situation and sales (for example) might not recover afterwards. The other main concern is that if employees resign or die, they go with their knowledge. Boiral (2002:296) says, "the displacement of people translates into a loss of tacit knowledge". Hall and Andriani (2003) in (Jasimuddin et al., 2005:105) contend that "The company becomes internally vulnerable when it uses tacit knowledge approach."

In codification strategy challenges are also encountered. Explicit knowledge uses technology and the cost of such systems might be too high, a lot of capital investment is required. Jasimuddin et al., (2005:106). Otherwise, a big physical space is needed to keep hard copy documents and physical files. In this case, Boiral (2002) in (Jasimuddin et al., 2005:107) argues that "codifying knowledge can involve high amount of expenditure and lead to excessive documentation". Jasimuddin et al., (2005:107) argues that "…there is high risk of imitation by competitors, leading to loss of potential or actual competitive advantage."

It is clear from the discussion that one strategy has to complement the other. Any organisation focusing solely on one approach will miss out on the benefits presented by the other.

In my work environment at Gijima, there is too much inclination towards the codification approach. For each project implementation one is required to define and create a shared space in the server which will store all project related documents. All knowledge pertaining to the project including lessons learned is coded and stored for future use. Also, the delivery engine which is the Operations Department relies on skills and experience being owned by employees. A database of all the employees’ skills is managed by the Service Delivery department to match skill with the required service. Technical and service consultants contribute and make use of the Knowledge Base to resolve whatever technical problems they encounter. There are various databases that are owned by stream leads that are being updated with new knowledge for future use. As a project manager, we also have a system - Project Portfolio Office (PPO) that we use to capture and manage knowledge about the projects we are involved in.

At the same time, there is a relatively small percentage inclination towards a personalisation strategy. Unique solutions requiring new strategy and solutions are devised and developed by brainstorming sessions, video conferences with people that are in our regions or branches. Knowledge management does not require a one solution or one strategy but it must be applied holistically for maximum benefit. Focusing on just one strategy defeats the purpose since either of the strategies is conclusive.

Discussion on people/corporate culture

Simply put, culture refers to the way of doing things. People within an organisation have a standard way of doing things. Lynch, (2006:245) defines organisational culture is defined as "…a set of beliefs, values and learned ways of managing of an organisation and this is reflected in its structures, systems and approach to the development of corporate strategy."

In my organisation, the culture of sharing knowledge is entrenched. Mostly the approach adopted is on explicit knowledge. There are some other personalisation strategies that are also being followed for tacit knowledge extraction. Our company is using Yammer for sharing ideas, issues and social networking. I don’t see it as having that of a huge impact based on its intended purpose. One of its purposes was to link people together, but it’s always the same employees commenting on the posts. Some of them use it as a chat room. I think it’s not been used fruitfully because many employees see it as a social platform with no real value to their work environment.

With the current economic climate fuelled by uncertainty about the future, many employees use their acquired skills to safeguard and secure their jobs. They prefer not to share their knowledge as that would make them like everybody else, redundant. Retrenchment threats are driving employees to a stage of being knowledge hoarders. I would say our company is a 60% knowledge hoarding to 40% knowledge sharing.

Everything has been done to encourage and facilitate knowledge sharing but there is a lot at play in our working environment that discourages employees to willingly share their knowledge.

Discussion on KM Processes

According to the Directory of KM Principles, Methods and Tools, (2006), there are 9 Steps in KM processes. These are Capture, Store, Share/Apply, Collaborate, Harvesting/Collecting, Develop Best Knowledge Bases, Develop Best People(Specialist/Experts), Measure and Maintain/Improve.

In my environment, capturing and storing knowledge is performed almost naturally. Part of this stems from the fact that employees have to produce reports and explain what has been delivered in projects whether internal or external. This has to be done in a way that anyone can understand. The rest of the remaining processes are either not performed or done when time allows. Most employees are concerned with doing what their responsibility requires of them and nothing more. All these processes will best be performed if there was some kind of responsibility or accountability allocated for them.

Discussion on Technology

Knowledge management technologies support the knowledge management strategies and implementation or processes. KM technologies are associated to knowledge management processes to show how they can aid KM processes.

(Nonaka et al., 2001; Marwick, 2001; Alavi and Tiwana, 2003; Becerra-Fernandez et al., 2004; Jashapara, 2004) in Saito et al, (2007:102) states that "…the most frequent way to present KM technologies is to associate them with knowledge processes, e.g. creation, storage and retrieval, transfer, and application; or socialization, externalization, combination, and internalization. Studies using this approach usually adopt a particular perspective of KM, identify a set of core processes, and list technologies that can be used to support them".

Saito et al, (2007:105) further states "Previous studies on technologies’ supporting role to KM have revealed three basic categories of KM technologies: component technologies, the building blocks of KM systems; KM applications, the generic KM systems; and business applications, the business-driven ones".

As an IT company, Gijima is using most of the technologies to leverage value. Technologies such as databases, repositories, wireless networking, email, chat, video conferencing, internet, intranet, and computer based training (CBT) and many others. These technologies can support KM strategies and implementation. This is part of the culture of knowledge sharing that has been adopted.

Discussion on Strategy

The knowledge management strategy adopted at Gijima is more of codification with a little bit of personalisation. This has been driven by the fact that we are a service driven company. The other reason is that we are more focused on delivering services in a project based approach where technical experiences and skills acquired previously are reused to get value and thereby save on research time and cost.

According to Hansen et al., (1999:109), "any organisation’s knowledge management strategy should showcase its competitive strategy: how it creates value for customers, how that value supports an economic model, and how the company’s people deliver on the value and the economics."

In creating value for customers, customers are the winners in that they get quality products and services from reworked solutions that have been fined tuned. In turning a profit, companies do much with less in that solutions are there; they just have to be implemented. Lastly, managing people is also handled very easily with existing knowledge depositories and knowledge bases. Even though the codification strategy is more favourable in my working environment the other approach is also been adopted to a lesser extent. On the job training is one example. New employees are given the opportunity to go with an experienced consultant to learn especially the unwritten code or method of solving problems at a client’s site.

Conclusion

Based on the arguments presented above on both advantages and limitations for both strategies, it is of essence for both approaches to be used for successful KM implementation within any organisation.

Holistic approach to KM implementation is a requirement and a necessity to KM implementation success. In my environment, a KM Strategy will have to be formulated and implemented to manage knowledge. Corporate culture plays a big role in defining organisations and culture will influence the outcome of knowledge management implementation. KM processes discussed above must be applied to have a proper KM system. In my organisation, most of it is tacit knowledge and requires careful management to retrieve and extract. Part of our business requires past knowledge and experience. Most of these experiences and knowledge have been coded and it’s available to be reused for future projects. With technology available, organisations must take full advantage to use it in all implementation steps and processes. Knowledge management is an important part for any company that wants to leverage on its knowledge assets.