Organisational Knowledge Prof Elaine Ferneley

1. Organisational Knowledge Prof Elaine Ferneley

2. A word from our sponsor… “Most activities or tasks are not onetime events. Our philosophy is fairly simple: Every time we do something again, we should do it better than the last time.” “Anyone in the organisation who is not directly accountable for making a profit should be involved in creating and distributing knowledge that the company can use to make a profit.” Sir John Browne CEO, BP Elaine Ferneley

3. Connecting Capturing Managing Knowledge? “The idea is not to create an encyclopaedia of everything that everybody knows, but to keep track of people who ‘know the recipe’, and nurture the technology and culture that will get them talking”Arian Ward, BP Communications Director Elaine Ferneley

4. EXPLICIT AND TACIT KNOWLEDGE Drucker 2003 Oral Communication “Tacit” Knowledge 85% Explicit Knowledge Base 15 % Information Request Information Feedback “Explicit” Knowledge Elaine Ferneley

5. Lecture Overview • Theories of knowledge management • Dependent on the theory of knowledge management that you adopt you will employ different technique • Principle ways of seeing knowledge • Knowledge as a corporate asset ££££ • Knowledge as a social construct ↔ • Knowledge as a value chain: create codify diffuse and use • Knowledge as a continuous cycle or spiral • Knowledge as a learning process Elaine Ferneley

6. Knowledge as a Corporate Asset Assumptions • knowledge is an objective reality • knowledge can be ‘managed’ in the same way as information can be managed • tacit knowledge can (mostly) be converted to explicit knowledge • the role of technology is to manage knowledge for the organisation • the role of people is as knowledge creators and knowledge repositories (experts) Elaine Ferneley

7. Knowledge as a Corporate Asset • Organisations seek, use and value knowledge • Hire for experience over intelligence or education – knowledge is gained over time • Experienced individuals are hired to enable access to their formal and informal networks • Managers go to people they know rather than IT • 2/3rd of mangers’ info & knowledge comes from F2F meetings, 1/3rd from documents (Davenport 2006) • Consultation circle: friend, knowledgeable peer, internal data source, external data source • How do you put a value on an individual’s knowledge re: • When to seek 3rd party advice • Who to seek 3rd party advice from Elaine Ferneley

8. Knowledge as a Corporate AssetIntellectual Capital on the Balance Sheet • Market value – price on the stock exchange, Book value – resell cost of a company’s tangible assets • The average market to book value ratios: • 1975 UK 1:1 • 1995 UK 3.5:1 • 1999 USA 5.5:1 (Microsoft 250:1, Amazon 170:1); • Intangible asset of intellectual capital is an exponentially increasing resource (there are high profile exceptions – furor over traditional industries falling out of the FTSE100) • How do you create a knowledge inventory and protect/capture this intangible asset ?? Elaine Ferneley

9. Knowledge As a Social Construction • Knowledge is emergent • Knowledge can not be understood at the level of the individual, because it is jointly constructed as social events by the members of some group through their interaction • i.e. you cannot simply take an ‘expert’ and get a brain dump of a process and assume you then have knowledge. You need to understand how (and in what context) the expert derived his/her knowledge and how he/she interpreted it. Elaine Ferneley

10. Knowledge As a Social Construction • Knowledge is local • Actions and their interpretations are constructed in some particular context, including a particular place and time. • Knowledge is contingent • The construction and interpretation of events depends upon the current situation. • i.e. knowledge may be articulated or applied differently in different situations e.g. giving directions to an adult; to a child; in the rush hour; when its raining Elaine Ferneley

11. Knowledge as Value Chain Create Codify Diffuse Use • Learning organizations • Stimulating working environments • Time to think • Trust • Reward & Recognition • Organise • Classify • Hard or soft structure – database friendly/free text • Access – who/how • Transfer • Share • Examples – email, knowledge maps (yellow pages), best practice, discussion groups • Product development • Service provision • Process improvement • Measures of success Hard Infrastructure - technology platform Soft Infrastructure - skills, processes etc. Asset Management - measure, protect, exploit Elaine Ferneley

12. Knowledge Map Example (Corporate Yellow Pages) – Assumption that it’s Web-based Create Codify Diffuse Use • Content • Searchability • Access – who/how • Transfer/push • Share • Update • For what • Measures of success • Who • Why • Reward 65% of Corporate intranets fall into disuse between 1 & 2 years (KPMG, Parlby 2006) Elaine Ferneley

13. Nonaka & Takeuchi – The Knowledge Creating Company • Knowledge Value Chain is linear – to capitalise on knowledge creation and dissemination we should close the circle Socialisation Externalisation Internalisation Combination Elaine Ferneley

14. NONAKA’S MODEL • Tacit to tacit communication (socialization). Experience among people in face-to-face meetings • Tacit to explicit communication (externalization). Articulation among people through dialog • Explicit to explicit communication (communication). Best supported by technology • Explicit to tacit communication (internalization). Taking explicit knowledge and deducing new ideas Elaine Ferneley

15. The SECI Model • Socialization: (tacit -> tacit) • converging new tacit knowledge through shared experiences • Sharing the same experience through being together – transference • E.g. F2F meetings • Externalization: (tacit -> explicit) • Articulating tacit knowledge into explicit knowledge • By making tacit knowledge explicit it can be shared with others and become the basis for new knowledge • Tacit knowledge is often articulated through metaphors, analogies, diagrams or prototypes • E.g. Q&A sessions at a meeting Elaine Ferneley

16. The SECI Model • Combination: (explicit -> explicit) • Converging explicit knowledge into more complex and systematic sets of explicit knowledge • Knowledge is exchanged and reconfigured through documents, meetings or communication networks • Emailing a report or data mining in large-scale databases are examples of this process • Internalization: (explicit -> tacit) • Embodying explicit knowledge into tacit knowledge – ‘learning by doing’ • Internalization shares knowledge throughout an organization – it broadens and changes the organizational members’ mental models • When knowledge is internalized into mental models or technical know-how it becomes a valuable asset – it has become tacit again • E.g. learning from a report Elaine Ferneley

17. Human Learning Learning occurs in one of three ways: • Learning by experience: a function of time and talent • Learning by example: more efficient than learning by experience • Learning by sharing, education • Learning by discovery: undirected approach in which humans explore a problem area with no advance knowledge of what their objective is. • How do these learning approaches map to SECI ?? Elaine Ferneley

18. Organisational Knowledge • Summary • Whichever perspective is adopted by an organization it is the creating of dynamic communities that is the overlap and it remains the biggest challenge for organizational knowledge management Elaine Ferneley