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ESSENTIALS

of Knowledge

Management

Bryan Bergeron

John Wiley & Sons, Inc.

ESSENTIALS

of Knowledge

Management

The Essentials Series was created for busy business advisory and corporate professionals.The books in this series were designed so that these busy pro- fessionals can quickly acquire knowledge and skills in core business areas. Each book provides need-to-have fundamentals for those profes- sionals who must:

• Get up to speed quickly, because they have been promoted to a new position or have broadened their responsibility scope
• Manage a new functional area
• Brush up on new developments in their area of responsibility
• Add more value to their company or clients

Other books in this series include: Essentials of Accounts Payable, Mary S. Schaeffer Essentials of Capacity Management, Reginald Tomas Yu-Lee Essentials of Cash Flow, H.A. Schaeffer, Jr. Essentials of Corporate Performance Measurement, George T. Friedlob, Lydia L.F. Schleifer, and Franklin J. Plewa, Jr. Essentials of Cost Management, Joe and Catherine Stenzel Essentials of CRM: A Guide to Customer Relationship Management, Bryan Bergeron Essentials of Credit, Collections, and Accounts Receivable, Mary S. Schaeffer Essentials of Financial Analysis, George T. Friedlob and Lydia L.F. Schleifer Essentials of Intellectual Property, Paul J. Lerner and Alexander I. Poltorak Essentials of Patents , Andy Gibbs and Bob DeMatteis Essentials of Payroll Management and Accounting, Steven M. Bragg Essentials of Shared Services, Bryan Bergeron Essentials of Supply Chain Management, Michael Hugos Essentials of Trademarks and Unfair Competition, Dana Shilling Essentials of Treasury and Cash Management, Michele Allman-Ward and James Sagner For more information on any of the above titles, please visit www.wiley.com.

Essentials Series

Copyright © 2003 by John Wiley & Sons, Inc. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-750-4470, or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, e-mail: permcoordinator@wiley.com. Limit of Liability/Disclaimer of Warranty:While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies con- tained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993, or fax 317-572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com.

Library of Congress Cataloging-in-Publication Data Bergeron, Bryan P. Essentials of knowledge management / Bryan Bergeron. p. cm. -- (Essentials series) Includes index. ISBN 0-471-28113-1 (pbk. : alk. paper)

1. Knowledge management. I. Title. II. Series. HD30.2 .B463 2003 658.4'038--dc21 2002155501

Printed in the United States of America. 10 9 8 7 6 5 4 3 2 1

To Miriam Goodman

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ssentials of Knowledge Management is a practical survey of the field of Knowledge Management (KM)—a business optimization strategy that identifies, selects, organizes, distills, and packages information essential to the business of the company in a way that improves employee performance and corporate competitiveness. The preservation and packaging of corporate knowledge (i.e., information in the context in which it is used) is especially relevant today, given that the majority of the service-oriented workforce is composed of knowledge workers. To compete successfully in today’s economy, organizations have to treat the knowledge that contributes to their core competencies just as they would any other strategic, irreplaceable asset. The aim of this book is to examine approaches to Knowledge Management that contribute to corporate competitiveness, and those that don’t. The book assumes an intelligent CEO-level reader, but one who is unfamiliar with the nuances of the KM field and needs to come up to speed in one quick reading.After completing this book, readers will understand how their business can be optimized using KM techniques and strategies. Moreover, readers will be able to converse comfortably with KM professionals, understand what to look for when hiring KM staff and consultants, and understand the investment and likely returns on various KM approaches. To illustrate the practical, business aspects of Knowledge Management in an easily digestible fashion, each chapter contains a vignette that deals with key technical, cultural, or economic issues of the technology.

Preface

R eader Return on Investment

After reading the following chapters, the reader will be able to:

• Understand Knowledge Management from historical, eco- nomic, technical, and corporate culture perspectives, including what KM is and isn’t.
• Have a working vocabulary of the field of Knowledge Management and be able to communicate intelligently with KM professionals and vendors.
• Understand the trade-offs between the commercial options available for a KM implementation.
• Understand the significance of Knowledge Management on the company’s bottom line.
• Understand the relationship between Knowledge Management and other business optimization strategies.
• Understand how KM professionals work and think.
• Have a set of specific recommendations that can be used to establish and manage a KM effort.
• Understand the technologies, including their trade-offs, that can be used to implement Knowledge Management in the corporation.
• Appreciate best practices—what works, why it works, and how to recognize a successful KM effort.

O rganization of This Book

This book is organized into modular topics related to Knowledge Management. It is divided into eight chapters.

Chapter 1: Overview

The first chapter provides an overview of the key concepts, terminology, and the historical context of practical Knowledge Management in the workplace. It illustrates, for example, how every successful organization uses Knowledge Management to some degree, albeit perhaps not in a

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sophisticated, formalized way. This chapter also differentiates between knowledge as an organizational process versus simply a collection of data that can be stored in a database.

Chapter 2: Knowledge Organizations

Taking the perspective of the corporate senior management, this chapter explores the implications of embracing Knowledge Management as an organizational theme. It explores the role of chief executive as chief knowledge officer, how any KM initiative is primarily one of corporate culture change, what can be expected through application of KM strate- gies in a large organization, general classes of KM initiatives—including gaining knowledge from customers, creating new revenues from existing knowledge, and capturing individual’s tacit knowledge for reuse—as well as a review of the predictors of a successful initiative.

Chapter 3: Knowledge Workers

This chapter explores Knowledge Management from the employees’ per- spective. Topics include dealing with employee resistance to the increased overhead of not only performing their jobs but taking time to document their behavior for others, addressing the potential reward for a job well done with decreased job security, the importance of creating employee recognition and reward systems to encouraging employee participation in a KM initiative, and ways to use KM techniques to enhance employee effectiveness.

Chapter 4: Process

This chapter focuses on Knowledge Management as a process. Topics include process reengineering, competency measurement, how to best apply collaborative systems, approaches to unobtrusive knowledge cap- ture, filtering and refining knowledge, methodologies for applying knowledge for decision support, and how Knowledge Management relates to traditional business processes and business models.

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culture from knowledge sequestering to knowledge sharing, employee education, realistic implementation timelines, and managing risk. The chapter ends with a look to the future of Knowledge Management as it relates to information technology, process, and organizational change.

Further Reading

This section lists some of the more relevant works in the area of Knowl- edge Management, at a level appropriate to a chief executive or upper- level manager.

Glossary

The glossary contains words defined throughout the text as well the most common terms a reader will encounter in the Knowledge Management literature.

H ow to Use This Book

For those new to Knowledge Management, the best way to tackle the subject is simply to read each chapter in order; however, because each chapter is written as a stand-alone module, readers interested in, for example, the economics of Knowledge Management can go directly to Chapter 7, “Economics.” Throughout the book, “In the Real World” sections provide real- world examples of how Knowledge Management is being used to improve corporate competitiveness and ability to adapt to change. Similarly, a “Tips & Techniques” section in each chapter offers concrete steps that the reader can take to benefit from a KM initiative. Key terms are defined in the glossary. In addition, readers who want to delve deeper into the business, technical, or corporate culture aspects of Knowledge Management are encouraged to consult the list of books and publica- tions provided in the Further Reading section.

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eaders prepared to add a powerful new tool to their arsenal of com- petitive business strategies may be surprised to discover that Knowl- edge Management (KM) has more to do with ancient civilizations than with some recent innovation in information technology (IT). Consider that, since antiquity, organized business has sought a competitive advantage that would allow it to serve customers as efficiently as possible, maximize profits, develop a loyal customer following, and keep the com- petition at bay, regardless of whether the product is rugs, spices, or semi- conductors. Beginning about 15,000 years ago, this advantage was writing down the selected knowledge of merchants, artisans, physicians, and gov- ernment administrators for future reference. Writing was used to create enduring records of the society’s rules, regulations, and cumulative knowl- edge, including who owed and paid money to the largest enterprise of the time—the government. In Mesopotamia about 5,000 years ago, people began to lose track of the thousands of baked-clay tablets used to record legal contracts, tax assessments, sales, and law. The solution was the start of the first institu- tion dedicated to Knowledge Management, the library. In libraries, located in the center of town, the collection of tablets was attended to by professional knowledge managers. An unfortunate side effect of this concentration of information was that libraries made convenient targets for military conquest. Even though war had the effect of spreading writings and drawings to new cultures, access to the information they contained was largely

C H A P T E R 1

Overview