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Supplemental Slides to Chapter 3

Supplemental Slides to Chapter 3. Knowledge Strategies Knowledge Markets January 21, 2004. Review from Last Week. Types of IS What is KM? Drivers of KM What is Knowledge? Data Information Knowledge “The medium is not the message”

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Supplemental Slides to Chapter 3

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  1. Supplemental Slides to Chapter 3 Knowledge Strategies Knowledge Markets January 21, 2004

  2. Review from Last Week • Types of IS • What is KM? • Drivers of KM • What is Knowledge? • Data • Information • Knowledge • “The medium is not the message” • “The thing delivered is more important than the delivery vehicle.”

  3. Strategy for Managing Knowledge HBR, 1999 Hansen, Nohria, Tierney

  4. Codification Strategy • Extracted from a person, made independent of person, reused. • Create “knowledge objects” from interview guides, work schedules, benchmark data, market segmentation analysis, presentations, estimates, programming documents, technical specs, training material, change management documentation • Achieve scale in reuse • Ernst and Young, Accenture

  5. Personalization Strategy • Focus on dialogue between individuals not knowledge objects • Knowledge that hasn’t been codified and probably couldn't; brainstorming, one-on-one • Bain, BCG • McKinsey: fosters networks of people between offices, consultants are expected to return calls from colleagues quickly, directories of experts.

  6. How Consulting Firms Manage Knowledge

  7. Choice? • Most firms use both but to be successful, firms focus on one and use the other supportively • KM strategy should support competitive strategy - how the firm creates value for customers.

  8. Dell vs. HP • Dell: • strategy is to assemble inexpensive PCs made(build) to order. Sophisticated KM system; 40,000 possible configurations (100 for competitors) each configuration is used 275 times. Reuse allows lower costs. • HP: • Strategy is to develop innovative products. Technical knowledge must get transferred to development teams. Company uses person-to-person exchanges; don’t limit travel budgets for engineers.

  9. Which Strategy is Right for You? • Do you have a standardized or customized product? • Do you have a mature or innovative product? • Do your people rely on explicit or tacit knowledge to solve problems?

  10. Knowledge Markets

  11. Knowledge Markets • Knowledge is exchanged, bought, bartered and moved by market forces • Knowledge is the most sought after remedy for uncertainty • Knowledge market transactions occur because they provide utility

  12. Knowledge Markets • Buyers want insights, judgments, understanding • What is this client like? How did we win that sale? 15-20% of manager’s time is spent in knowledge search and request • Sellers have an internal market reputation for knowing about a process or subject • Some aren’t skilled at articulating knowledge, some have specialized knowledge, some like to hoard • Brokers are the gatekeepers, boundary spanners. Understand the big picture • Managers, librarians

  13. The Pricing System • How are value exchanges efficiently rendered • We can purchase knowledge externally (consultants, lawyers). Internally, money doesn’t work as well.

  14. Internal Pricing System • Reciprocity: • “the favor bank” • Repute: • Reputation seems intangible but it can produce tangible results: bonus, promotion, reward of guru, security • Altruism: • “nice guy” • Passionate about my knowledge, mentor

  15. Knowledge Market Inefficiencies • Incompleteness of information • Where do we find knowledge • Lack of explicit information for pricing • Asymmetry of knowledge • Knowledge “feasts and famines” • Knowledge at the top may not be available to middle managers • Localness of Knowledge • Knowledge markets depend on trust and we trust the people we know • Satisfice: we’ll take the knowledge of the person next door rather than incur cost of finding better knowledge

  16. Developing Effective Knowledge Markets • Use Information Technology Wisely • Build Marketplaces • Physical and virtual spaces dedicated to knowledge exchange; talk rooms; knowledge fairs. Texas Instrument's Share Fair. • Creating and Defining Knowledge Market Value • Provide evidence of recognition, reward, promotion

  17. The Peripheral Benefits of Knowledge Markets • Higher workforce morale • My expertise is valuable, less wasted effort, better communication, less uninformed decision making, less employee cynicism • Greater corporate coherence • Shared awareness of corporate goals • Richer Knowledge Stock • Ever sell increases total stock of knowledge • Newly acquired knowledge interacts with existing knowledge to create new ideas • Stronger Meritocracy of ideas • Test official beliefs and expose the flaws of the faulty ones. Ken Olsen at DEC

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