By Vivek Joshi
By Vivek Joshi
Adam Smith enunciated land, labor & capital as the three factors of production in an economy. In the 21st century, Knowledge could be considered as the fourth factor, as it drives innovation & productivity which are two crucial enablers for growth. Management of knowledge in a systematic and structured manner has become as important as the management of the three conventional factors of production. Knowledge Management (KM) is becoming a key enabler for enhancing production & improving productivity, a balance highlighted Stephen Covey in his well-known publication on habits of highly effective people. Knowledge is an intangible asset and needs to be actively managed. ISO 30401 is an international standard for Knowledge Management. This article is a primer summarizing Knowledge and key principles in its management. Subsequent articles will examine KM in various industries.
Information – Knowledge Conundrum
The generation and transmission of information, counted now in zeta-bytes, is set to grow exponentially for the foreseeable future. It is, therefore important to appreciate the “continuum” of Knowledge, as shown below:
Results of computer-based search engines, newspaper headlines or television tickers at best yield Information. For the evolution of such Information to Knowledge, the following features about the Information need to be understood:
- Context of the Information (view of the current state)
- Content (what it is about)
- History (view of the past & subsequent evolution)
- Cognitive processes of Reflection & Rumination, and Pattern forming
The first three of the above can, of course, be gleaned from ubiquitous computer search engines and media. A prudent user will be cognizant that a quick search on a small smart-phone screen will only yield Information. Combining results of several such information searches, appreciation of the Context & History and subsequent cognitive processes to “put the pieces together” are required for the Information to become Knowledge. This diligence is essential for Knowledge-driven economies & societies.
Progression of Knowledge
Knowledge progresses through a series of steps, commencing from Observation, developing through several steps, and finally becoming useful and demonstrable.
The steps in the progression are mapped below:
The famous example of Sir Newton “Observing” an apple falling to the ground leading to the postulate of the theory of gravity is an example of Observation of physical events leading to the development of Knowledge (theory of gravitational attraction). The thought experiments of Einstein, which cannot be comprehended in physical terms, are captured in “Sensing”. Initially, events or thoughts present themselves as mysteries, in which the knowledge seeker is as yet unable to understand the event or thought. Through the process of reflection and “thinking through”, Heuristics are developed, which may not have well developed rigorous explanations, but are nevertheless useful in practice. Engineers and businessmen frequently use various such “rules of thumb”. The Knowledge then progresses through hypothesis, experiments & analysis, and then is codified in Algorithms & Standard Procedures. The final stage is when the Knowledge becomes highly reliable and repeatable to be Coded, becoming automated and machine-driven. It is important to note that the first three stages require the application of the human mind, as they involve both analytical and creative cognitive capabilities. Machines can then progressively take over. The advent of a high level of machine learning and intelligent machines will probably smoothen and expedite the progression, but it is unlikely to lead to the replacement of the need for the human mind, especially where the judgment or ethical considerations are important.
Knowledge Management (KM)
KM refers to the identification, creation, acquisition, collection, codification, dissemination, maintenance, storage and retrieval of Knowledge in an organization. Successful organizations increasingly incorporate formal KM plans as part of strategy formulation & implementation. A good KM program helps in achieving many objectives, some of which are:
- developing sources of competitive advantage
- pooling functional knowledge to improve offerings to the market
- improving financial performance
- building business continuity
Skills erode over time, and Competencies become outdated at a rapid pace.
Therefore, KM is essential for organizations that depend on the individual or on
collective Knowledge. Select consulting companies and leading engineering
organizations have robust systems for maintaining and upgrading their inventory of
Knowledge. Relatively few Indian companies have been cited for good KM programs.
At a broader level, an important gap in ancient cultures based around the Indus River
has been the lack of systems for codification, storage & transfer of Knowledge in its
various forms.
Types of Knowledge
Knowledge can be categorized in many ways, like general, functional, locational, subject & sector knowledge, ranging in levels from “novice” to “expert”.
Various types of Knowledge will reside in an organization in one of the following classifications:
a) Explicit Knowledge: Can be seen and shared in a tangible manner and hence is easier to manage
b) Tacit Knowledge: Cannot be seen and separated from the knowledge holders. This type of knowledge can be particularly useful and is subject to attrition or loss readily
c) Application-centric Knowledge
d) Abstract Knowledge: This is often misunderstood as purely theoretical knowledge. It is the knowledge that is not related to a particular instance and arises from the ability to come up with general principles. The popular frameworks used in management practice are examples of abstract knowledge. Tacit & Abstract Knowledge contributes to the development of managerial “intuition”.
Critical parts of the inventory of Knowledge are stored within an individual as Tacit Knowledge, and the bearer may even be unaware of the type, quantity & quality. Getting the bearer to be willing & able to identify the resident tacit knowledge is a key step in its enhancement, storage & transfer.
Transfer of Knowledge
Key stages in a robust KM program are:
- Generation or Acquisition of Knowledge
- Transfer of knowledge (described below)
- Coding, Storage & Retrieval of Knowledge
- Utilization & Improvisation
For the sake of brevity, this article dwells only on aspects of the transfer of Knowledge, comprising transfer pathways & conversion.
a) Knowledge transfer pathway:
b) Knowledge conversion:
- Conversion from Abstract Knowledge to Application-centric Knowledge: Achieved through projects in “real-life” situations
- Conversion from Application-centric Knowledge to Abstract Knowledge: Through Reflection, Hypothesis, Validation, and Review. The often-quoted method of stepping back from the trees to see the forest helps in this conversion. Development of well-known management frameworks are examples of such transfer
An interesting point to note is that the transfer pathway described above does not include self-generation of Tacit Knowledge within a User. Examples of this pathway will include Einstein coming up with the Theory of Relativity, or formulation of complex mathematical formulae by Srinivasa Ramanujan. This pathway is not adequately understood by the author, and hence not dwelled upon.
Processes for Transfer of Knowledge
Processes & practices which are enablers for the transfer of Knowledge are given below.
a) Transfer of Tacit Knowledge of Giver to Explicit Knowledge of Giver:
- Market/customer & Manufacturing area visits and interactions with participants
- New product development forums
- Brainstorming exercises
- Encouraging the giver into the role of teacher or trainer at training centers
- Activities repeated a number of times to identify areas of expertise
b) Transfer of Explicit Knowledge of Giver to Explicit Knowledge of Receiver
- Publications (visual transfer)
- Presentations at Conferences, Teaching & Training (audio & visual transfer)
- Specific objectives related to defined business problems in an MBO program (transfer through demonstration)
- Informal get-togethers (open communication, & Active Listening)
- Mentoring & Role modeling (which can even help in direct Tacit – Tacit Knowledge transfer, which is otherwise more challenging)
- Significantly enabled by Coding, Storage & Retrieval systems
- Networking
c) Transfer of Explicit Knowledge of Receiver to Tacit Knowledge of Receiver
- Spending extended time living the market with consumers
- Repeated applications
- Cross-functional assignments for an extended period
- Training to develop the power of observation
- Reflection & report writing
- Travel & exposure to various types of experience
- Pattern Recognition
It is important to note that the culmination of the competency development pathway shown below requires the successful transfer of Tacit Knowledge of Giver to the Receiver:
Business Benefits
A robust KM program is very important for small businesses due to their inability to duplicate resources, a smaller pool of Knowledge, and relatively fewer Knowledge-based sources of competitive advantage. A small or medium scale business can start with a first-generation program suggested below, which can then be developed into a more robust program:
Knowledge Acquisition Activities:
a) Expert-Speak: Invite speakers who are experts, knowledgeable, empathetic, & good communicators through a structured speaker series program
b) Training, Courses & Conferences: First level input for this could be the formal appraisal process that needs to map competencies for a position, profile the competencies of a manager against such a competency map, & identify competency gaps in the manager. Other inputs are informal interactions with peers or a self- understanding of strengths & weaknesses.
Tacit Knowledge Identification: Every individual has a few areas in which he/she will perform well without putting in a lot of effort, originating from interest, expertise or experience. A self-appraisal or 360- degree program will highlight these.
Application-centric Knowledge: This comes from activities & experiences directly connected with the business value chain. It is important to codify & capture these to build the Economy of Learning (distinct from the economy of scale or scope).
Knowledge Coding / Sharing program: Without developing complex systems to capture, retrieve and share knowledge, given below are steps which are easier to implement:
a) The manager returning from Courses/Training can circulate a one-page bullet point note on overall key learnings, including those which could be useful at work. Research suggests that such reflection improves the assimilation of Knowledge while contributing to team learning.
b) Informal interactions within the team. This is a common practice.
c) Project Knowledge: At the end of each project, a summary by a team on lessons learned (not on financial results). These could cover surprises, the gap between initial expectations and result, what was done well, what could have been better, and comments on how to get better value from partners.
Summary
Knowledge is a factor of production like land, labor & capital and needs to be managed appropriately. A robust KM program can deliver several benefits to an organization. The program dovetails into the basic competency development program in an organization. It is critical for business continuity. Building up of Tacit & Abstract Knowledge contributes to developing “intuition”. Finally, it helps to build & protect competitive advantage.
About the Author:
Vivek Joshi is an Advisor to A-Joshi Strategy Consultants Pvt Ltd based in Mumbai, India. He has international experience in various sectors and is an A-Joshi Strategy Consultants (OPC) Private Limited www.expertstrat.com P a g e | 6 expert in Strategy, Innovation, and Venture Capital. Vivek has several publications listed on https://expertstrat.com/publications-videos/ and is an invited speaker on Strategy, 21st Century Challenges, Venture Capital and Management. He has a Bachelor’s Degree in Engineering, an MBA from India, and a Master’s Degree in Engineering from the USA. He can be reached at https://www.expertstrat.com.
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