Harvard Business Review ON Knowledge Management

1. Harvard Business Review ONKnowledge Management Yan An MBA and MS-MIS 2008 February 19, 2007

2. Today's Agenda • The Coming of the New Organization • By Peter F. Drucker • The Knowledge-Creating Company • By Ikujiro Nonaka • Building a Learning Organization • By David A. Garvin

3. The Coming of the New OrganizationOriginally Published in 1988 • Who is Peter F. Drucker? • Writer • Teacher • Social Ecologist • Urged to give workers more control • Argued turn governmental functions over to private enterprises • Foresaw the 1970’s Japan competition and inflation in 1940’s

4. In the Next 20 Years (from 1988) • Large Businesses will Transform: • 1/2 of managements • 1/3 of managers • Composed largely of specialists • Knowledge based • Self directed and disciplined • What Directs the Transformation: • Information Technology

5. Making Data into Information • RequiresKnowledge • Specialization • Specialists are found in operations • People without operating responsibilities shrinks drastically • Cutting number of management levels and managers • Information does their jobs

6. Information Based Corporation • Knowledge will be at the bottom • Require clear, simple, common objectives that translate into particular actions • Executives asks: • “What information is for them, what data they need?” • Everyone else asks: • “Who depends on me for information? And on whom do I depend?”

7. Challenges to become Information Based • Require to change old habits and acquire new ones • Threaten the jobs and status of the long-serving, middle-aged people in the middle management • The more successful a company has been, the more difficult this process is to be

8. Solutions to the Challenges • Developing rewards, recognition, and career opportunities for specialists • Creating unified vision in an organization of specialists • Devising the management structure for an organization of task forces • Ensuring the supply, preparation, and testing of top management people

9. The Knowledge-Creating CompanyOriginally Published in 1991 • Introduction of Ikujiro Nonaka • Five and a half years at UC Berkeley • MBA • Ph.D. In Business(1972) • Professor of Knowledge

10. What does Knowledge do? • The one sure source of lasting competitive advantage is knowledge • Successful companies are: • Consistently create new knowledge • Quickly embody knowledge in new products • “Knowledge-Creating” company

11. Western Vs. Japanese views of Knowledge Creation • West (U.S.) • Organization as a machine for “information processing” • Useful Knowledge: • Formal • Systematic • Codified procedures • Universal principles • Quantifiable • Increased efficiency • Lower costs • Japan • Depends on tapping the tacit, subjective insights, and intuitions of individual employees • Organization is a living organism • Inventing new knowledge is a way of behaving • Everyone is knowledge worker - Entrepreneur

12. The Spiral of Knowledge -New knowledge always begins with the individual • Tacit Knowledge • Highly personal • Hard to formalize and articulate • Deeply rooted in an individual’s commitment • Explicit knowledge: • Formal • Systematic • Can be easily communicated and shared

13. Spiral of Knowledge Continues Story: Matsushita Electric Company’s bread-making machine: • Problem: Unable to knead dough correctly • Solution: an employee trained with a professional head baker to study his kneading technique

14. Spiral of Knowledge Continues

15. Building a Learning OrganizationOriginally Published in 1993 David A. Garvin • Professor of Business Administration at Harvard Business School

16. Learning Organizations • Continuous improvement requires a commitment to learning • Many scholars including Ikujiro proposed how to improve an organization, however, there is no framework for action

17. Three Ms are left unsolved: • Meaning • Well-grounded definition of learning organizations is required • Management • Clearer guidelines for practice are needed • Measurement • Need better tools for assessing the rate and level of learning

18. Definition of a Learning Organization A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights

19. 5 building Blocks of Learning Organizations • Systematic problem solving • Relying on the scientific method • Insisting on data • Using simple statistical tools • Experimentation • Systematic searching for and testing of new knowledge (using the scientific method is essential) • Learning from past experience • Review their successes and failures • Access and record the lessons (Accessible)

20. 5 building Blocks of Learning • Learning from others • Benchmarking • NOT industrial tourism • Learn from the customers • Up-to-date product information • Competitive comparisons • Immediate feedback • Transferring Knowledge • Must spread quickly throughout the organization

21. Measuring learningIf you can’t measure it, you can’t manage it • Learning and experience curves • Half-life curve • Time it takes to achieve a 50% improvement in a specified performance measure.

22. Q & A

23. References • Drucker’s Impact on Leadership Network • http://www.pursuantgroup.com/leadnet/advance/nov05o.htm • Knowledge has to do with truth, goodness, and beauty (From the conversation with professor Ikujiro Nonaka, Tokyo, Japan, 1996) • http://www.dialogonleadership.org/Nonaka-1996cp.html