MIS580: Knowledge Management

MIS580: Knowledge Management APRIL 9TH , 2008 Abhijit Kumar Kaijia Bao Vishal Rupani

Reading 7 The role of tacit knowledge in group innovation. Leonard, D. California Management Review, 1998. • Introduction • Relevance • Content • Additional research • Discussion by Abhijit Kumar

What is Tacit Knowledge? • Information that is relevant, actionable and based at least partially on experience. • Explicit elements are objective, rational, and created in the "then and there" • Tacit elements are subjective, experiential, and created in the "here and now” • Knowledge Spectrum1 1Michael Polanyi's original messier assumption

Knowledge Spiral COMBINATION SOCIALIZATION INTERNALIZATION EXTERNALIZATION Concept explained by Ikujiro Nonaka and Hirotaka Takeuchi

Relevance: Tacit Knowledge • Problem Solving • Mind pattern from experience • Problem Finding • Allows rejection of the “usual” solution • Overlay to quickly detect solution • Prediction & Anticipation • Anticipate & Predict occurrences “hunch”

Being Tacit: Individuals or Group? • Learning  Implicit • Much research focused on individuals • Single mind is primary interest • However, innovation is a group process • Do “creatives” bloom in isolation? • Interaction essential • Awareness of social impact of ideas ?

Nature of Innovation DIVERGE CONVERGE Divergent Thinking Convergent Thinking Shipping/ Adopting Testing Sales/ Implementation Development After Sales Service Idea Generation

Divergence in Innovation • Why Tacit Knowledge? • Intellectually heterogeneous or homogeneous ? • Experience leads to Expertise (Tacit) • Interactions “Creative Abrasions” • Explicit statements carry “weight” • Insights, Intuitions, Inspiration Innovation ?

Apple’s Innovation Process Managing Divergence Apple's design process Posted by: Helen Walters on March 08, Business Week

Convergence in Innovation • Overlapping specific knowledge • Observations & Apprenticeships “Art” • Collective tacit knowledge • Guiding Tacit Knowledge • Innovation  Tacit  ?

Barriers: Tacit Knowledge • Stimulating divergent thinking • Converging towards a common aim • Lack of mentoring • Inequality among participants • Explicit form of tacit knowledge disregarded • Creative abrasion needs subtle diversity • Distance (time and location) ?

Insight: Ageing Workforce Knowledge Transfer Practices - Documentation/ Training - Mentoring - Interviews / Reviews/ Debriefing Knowledge Recovery Initiatives Using IT Applications KNOWLEDGE RETENTION STRATEGY - Connecting People - Knowledge Mapping - Capturing Knowledge - Using retirees - Outsourcing - Regenerating • Succession planning • - Evaluating skill bases • - Retention culture Human Resources Processes Lost Knowledge: Confronting the Threat of an Aging Workforce: David W. Delong

Managerial Implications • Managing Divergence • Brainstorming: Intuitive & Analytical • Level of divergent thinking • Varying tacit knowledge bases • Managing chaos • Depersonalizing conflict • Managing Convergence • Guiding visions & Shared experiences • Assessment

IDEO: Shopping Cart

Reading 8 The Concept of “Ba”: Building a Foundation for Knowledge Creation Ikujiro Nonaka, California Management Review, Spring 1998. • Introduction • Conversion Models • Characteristics of Ba • Case Examples • Additional Research by Vishal Rupani

Introduction • Ba: Japanese concept means "place" or "interaction field” • Ba is a shared space that serves as a foundation for knowledge creation • Physical – office, playground • Virtual – email, videoconference • Mental – shared experiences, ideas • What differentiates Ba from ordinary human interaction is the concept of knowledge creation

Introduction • If knowledge is separated from Ba, it turns into information • Ba provides a platform for advancing individual and/or collective knowledge at a specific time in a specific place • It is the platform for the resource concentration of the organization's knowledge assets and the intellectualizing capabilities

Knowledge Conversion Modes – SECI Model Tacit Knowledge Tacit Knowledge Socialization Externalization Tacit Knowledge Explicit Knowledge Internalization Combination Tacit Knowledge Explicit Knowledge Explicit Knowledge Explicit Knowledge

Knowledge Conversion Modes – SECI Model Tacit Tacit Tacit Explicit Explicit Explicit Explicit Tacit

Four Characteristics of Ba Socialization Externalization face-to-face peer-to-peer Originating Ba Interacting Ba Internalization Combination on-the-site group-to-group Exercising Ba Cyber Ba

Four Characteristics of Ba ORIGINATING BA INTERACTING BA • Place where individuals share feelings, emotions, experiences • Place where dialogue and metaphors help transform tacit knowledge EXERCISING BA CYBER BA • Place of interaction in the virtual world through use of technology • Place to continuously learn by self-refinement

Creating Ba: Case Examples Ba Name: Urgent Projects Role: To expedite new technology/ product development Organization Design: Existing structure Location: Outside of the existing business organization

Creating Ba: Case Examples Ba Name: Advanced I Strategy (ADI) Group Role: Identify new market opportunities Organization Design: Existing structure Location: Inside the existing business organization

Creating Ba: Case Examples Ba Name: Independent Corporations Role: Serve unique market niches Organization Design: New structure Location: Inside each independent corporation

Management for Knowledge Creation • Top management is the provider of “Ba” for knowledge creation • Leaders must support emerging processes with visionary proposals and personal commitment • Management must realize that knowledge needs to be nurtured, supported, enhanced and cared for

Additional Research • Learning and the ‘Ba’ in the Development Network of • an Urban Region1 • In order for an urban region to learn and develop, it is necessary for its development network to learn • This article presents some potential ba for the development network including practical examples from Tampere Urban Region (located in Finland) 1 Juha Kostiainen, European Planning Studies, Vol 10, No 5, 2002

Additional Research The structure and main actors of the development network in Tampere1 1 Juha Kostiainen, European Planning Studies, Vol 10, No 5, 2002

Additional Research ORIGINATING BA INTERACTING BA • Expert exchange among developing organizations • Sauna evenings • Learning cafe • Common sports and cultural events • Discussion forums, also virtual ones • Media • Thematic meetings • Plays, stories, tales CYBER BA EXERCISING BA • Common learning programs of the developing network • Mentored projects • On-the-job learning • Learning by doing • Research and reports • Utilizing and connecting of outside experts • Virtual communities like CityWeb • Thematic summary reports The potential Ba in the development network of an urban region1 1 Juha Kostiainen, European Planning Studies, Vol 10, No 5, 2002

Summary • Ba: Knowledge creation occurs through interaction among individuals or between individuals and their environment • Four types of Ba correspond to four stages of the SECI Model • Top management support is essential for knowledge creation

Discussion • Do you think the concept of Ba can be extended to fields such as biotechnology for sharing and creating knowledge among scientists? What will be the implications on the IP? • The article primarily used 3 examples of companies in Japan that created a knowledge platform using Ba. Are you aware of any other companies that do the same?

Reading 9 If only we knew what we know: Identification and transfer of internal best practices - O’Dell, C. California Management Review, 1998. • Introduction • Growing Interests • Challenges & Approaches • Summary • Additional Research by Kaijia Bao

Introduction American Productivity & Quality Center C. Jackson Grayson, Jr. Founder and Chairman Dr. Carla O’Dell President APQC is a non-profit research organization that helps companies identify best practices, discover improvement methods and disseminate findings.1 1 APQC. (2008). About Us. Retrieved from American Productivity & Quality

Outline • Why the interest in knowledge transfer? • Why is knowledge transfer so difficult? • The 4 approaches to knowledge transfer? • Creating the environment for knowledge transfer • Summary: 7 keys to effective knowledge transfer

Growing Interests • Demonstrated success • TI was able to create extra capacity equivalent of 2 new facilities from existing fabrication plants. Saving $500-800 million for each new plant. • Chevron was able to generate $650 million in savings by sharing best practices among business units. • Recognition of Potential Gain • Benchmarking Evidence

Growing Interests • Compelling call to action • Chevron's initiatives was driven by its leaders “we have to share more, we have to share faster” (Ken Derr, CEO) • TI’s initiative was driven by its key customers, who threatened to leave if TI didn’t improve. • Decentralization and downsizing • Destroyed traditional knowledge network

Difficulties and Challenges • APQC 1994: Barriers to Knowledge Transfer • Ignorance • Source doesn’t know their knowledge is required • Recipient doesn’t know the knowledge is out there • Absorptive capacity • The ability (skills + resources) of the recipient to implement the knowledge into action • Long transfer time – 27 months on average

Organization and Challenges • Promotes “silo” behavior • Sub-optimization • Reduces • Contact • Relationship • Common perspectives

Organizational Challenges

Earlier Approaches • Functional review, internal conferences, R&D experts to try to identify and transfer knowledge. “HOWEVER, historically most effective way of transferring knowledge is the actual transfer of personnel.” ?

Author’s 4 Approaches

Benchmarking Teams • Temporary teams formed to search for best practices both in and out of the firms for a specific problem. • Example: • TI began by searching for external solutions, but found that TI’s plant in Texas out performed all external solutions.

Best Practice Teams • On going teams composed of cross functional managers to continuously look for better practices relating to a specific business area. • Example: • Chevron identified 6 areas of improvement and assigned a team for each area that led to $650 millions in saving.

Internal Assessment and Audit • Leverage the functionality of existing internal audit / assessment team to include knowledge transfer. • Example: • Team C at Xerox

Knowledge and Practice Networks • Grass-root knowledge transfer • No formal network or support • Organization need to create environment and communication infrastructure • Example: • Chevron’s Best Practice Resource Map

Creating the Environment

Technology • Technology is neither a barrier nor an incentive for knowledge sharing. It is simply a tool. (i.e. Lotus Notes, emails, etc) • Issues to consider: • Important information is too complex and too experiential to be captured electronically. • Entering information into system must be someone’s job. • Framework to classify information ?

Cultural • American school stress individuality and competition, not collaboration and sharing • Rewards: • Rewards is useful early, to build enthusiasm • In the long run, the reward should be intrinsic • Embed knowledge transfer into employee’s work method and professional development system ?

Senior Leadership • Not essential to support in the early stages • Do not squash pockets of innovation • BUT, management must be supportive if change is to occur across the organization

Measurement • Good for developing a business case • Cannot help business units to see how to achieve better results • Metrics alone does not indicate better practice • Too much measurement can lead to internal competition and reduce knowledge transfer

Summary: Seven Keys to Transfer • Use benchmarking to identify areas for change • Focus efforts on critical business areas • Ensure adequate resources • Do not over measure • Tailor reward systems to encourage sharing • Use technology as a tool, not as a solution • Leaders must take an active role in knowledge sharing

MIS580: Knowledge Management