Contents

Preface 9

How to Get the Most Out of
this Book 11

Knowledge Management:
An Introduction 13

Introduction 13

Background 14

Understanding Knowledge
Management 16

Data, Information and
Knowledge 17

Towards Sustainable
Competitive Advantage 20

Framing a Knowledge
Strategy 21

Making Strategic Choices 23

Building Dynamic Capabilities 25

Implementing Knowledge
Management 26

Evaluating the Strategy 27

The Road Ahead 28

Managing a Knowledge
Business 29

Introduction 29

Key Features of Knowledge
Businesses 29

Leveraging Knowledge 33

Managing Knowledge Workers 35

The Road Ahead 39

The Social Dimensions of
Knowledge Management 42

How Knowledge Markets
Function 42

Building Social Networks 45

Nurturing Communities of
Practice 46

Conclusion 50

A to Z

Advanced Knowledge 51

Agent 51

Agile Methodology 52

AI 52

Application Service
Provider (ASP) 52

Argyris, Chris 52

Articulation 53

Artificial Intelligence (AI) 54

ASP 54

Asynchronous Communication 54

Automated Decision Making 54

Autonomy 55

Ba 56

Benchlearning 57

Benchmarking 57

Best Practices 58

BI 63

Blog 63

Brand Knowledge 63

Browser 64

Bulletin Board 64

Business Intelligence (BI) 64

Case Based Reasoning (CBR) 65

Causal Knowledge 66

Caves and Commons 66

Channel Integration 66

Chief Knowledge Officer (CKO) 67

CKO 68

Clusters 68

Clustering 69

Codification 69

Cognition 70

Collaborative Filtering 70

Collaborative Platform 70

Collaboration Work 71

Combination 71

Community of Interest (CoI) 71

Community of Practice (CoP) 72

Comprehension 74

Concept Mapping 75

Condensation 75

Constraint-Based Systems 76

Content Analysis 76

Content Management
System (CMS) 76

Context Sensitivity 77

Cookies 77

CoP 78

Core Capabilities 78

Core Knowledge 78

Core Rigidities 78

Corporate Amnesia 79

Corporate Culture 79

Creative Abrasion 80

Customer Capital 81

Customer Knowledge 81

Data 83

Data Marts 83

Data Mining 84

Data Slam 84

Data Warehousing 85

Davenport, Tom 85

Decision Diary 86

Decision Making 86

Decision Support
Systems (DSS) 87

Declarative Knowledge 88

Deep Smarts 88

Defensive Reasoning 88

Desktop Conferencing 89

Dialectics 89

Dialogue 90

Digital Rights 90

DIKAR Model 90

Discussion List 91

Document Management
Systems 91

Double-loop Learning 92

DSS 92

Dynamic Capability Building 92

E-learning 93

Earl, Michael 94

EIS 94

Enterprise Information
Systems (EIS) 94

Epistemology 94

Experiential Learning 94

Expertise Directory 95

Expert Systems 95

Expert Work 96

Explicit Knowledge 97

Externalization 97

Extensible Markup
Language (XML) 98

Extranet 98

Fuzzy Logic 99

Garbage In Garbage
Out (GIGO) 100

GDSS 100

Genetic Algorithm Tools 100

Gestalt 100

Group Decision Support
Systems (GDSS) 101

Groupware 101

Hansen, Morten 103

HTML (Hyper Text Markup
Language) 103

Human Capital 103

IC 105

Information 105

Innovative Knowledge 105

Insight 106

Instant Messaging 106

Integration Work 106

Intellectual Capital (IC) 107

Intelligent Routing 108

Intention 108

Internalization 109

Intranet 109

Just-in-Case Knowledge Management 110

Just-in-Time Knowledge Management 110

K-Spots 111

Knowledge 111

Knowledge Acquisition 112

Knowledge Activities 113

Knowledge Archaeology 113

Knowledge Asset 113

Knowledge Audit 113

Know-bot (Knowledge Robot) 115

Know-how 115

Know-what 115

Know-why 116

Knowing-Doing Gap 116

Knowledge Base 116

Knowledge Business 117

Knowledge Centre 117

Knowledge Champions 117

Knowledge Enablers 117

Knowledge Engineers 118

Knowledge Growth
Framework 118

Knowledge Harvesting 119

Knowledge Integration 119

Knowledge Interrogators 119

Knowledge Management
Projects 119

Knowledge Mapping 120

Knowledge Markets 121

Knowledge Metrics 124

Knowledge Networking 124

Knowledge Object 125

Knowledge Packaging 125

Knowledge Product 125

Knowledge Recipe 125

Knowledge Refining 125

Knowledge Repository 126

Knowledge
Representation (KR) 126

Knowledge Sharing 128

Knowledge Utilization 128

Knowledge Value Chain 128

Knowledge Work
Management 128

Knowledge Workers 129

Knowledge Wrapper 129

KR 129

Learning History 130

Learning Management
System (LMS) 130

Learning Organization 131

Leonard, Dorothy 133

Lessons Learned 133

LMS 134

Management Information
Systems (MIS) 135

Market-to-Book Ratio 135

Maturity of Knowledge
Management 135

Memory 135

Mental Models 136

Mentoring 136

Meta Information 136

Middleware 136

Migratory Knowledge 137

Mind 137

Mind Map 137

MIS 137

Multimedia 137

Neural Networks 139

NIH 141

Nohria, Nitin 141

Nonaka, Ikujiro 141

Not-Invented-Here (NIH) 141

Object Oriented Databases (OODBs) 142

OLAP 143

Online Analytical Processing (OLAP) 143

Ontology 143

OODBs 143

Organizational Knowledge Awareness 143

Organizational Knowledge
Creation 144

Organizational Memory 145

Parsing 146

Peer Assist 146

Personal Mastery 147

Physical Environment 147

Practice 147

Procedural Knowledge 147

Process 148

Process Networks 148

Productive Friction 149

Professional Intellect 149

Prusak, Laurence 150

Pull System 150

Push Systems 150

Radio Frequency
Identification (RFID) 151

Reciprocity 151

Redundancy 152

Report Generator 152

RFID 152

Roth, George 152

Rules of Thumb 153

Scalability 154

Schools of Knowledge
Management 154

Scripting 156

Search Engine 156

SECI Model 157

Semantics 158

Semantic Network 158

Semantic Web 159

Senge, Peter 159

Service Oriented
Architecture (SOA) 160

Single-Loop Learning 160

Skyrme, David J. 161

SOA 161

Socialization 161

Social Capital 162

Social Networks 162

Social Networking Analysis 164

Social Software 164

Spider’s Web 165

Storytelling 166

Structural Capital 166

Summarization 166

Systems Thinking 166

Tacit Knowledge 167

Tag 167

Takeuchi, Hirotaka 168

Taxonomy 168

Team Learning 169

Technology 169

Text Mining 172

Transaction Work 172

Univocality 173

Virtual Private Network
(VPN) 174

Visualizing Tools 174

Voiceover IP 174

VPN 174

Webinar (Web Seminar) 175

Web Server 175

Web Services 175

Wiig, Karl 175

Wiki 176

Willpower 176

Wisdom 176

Work Ambience 177

Workflow Management
Tools 178

XML (Extensible Markup
Language) 179

Yellow Pages 180

Zack, Michael 181

Case Studies: Knowledge
Management in Action 182

  1. McKinsey & Co 182
  2. Pfizer 185
  3. Kao 187
  4. Silicon Valley 190
  5. Toyota 193
  6. Partners HealthCare 196
  7. NTT DoCoMo 198
  8. Chaparral Steel 200
  9. Canon 202
  10. British Petroleum (BP) 205
  11. Buckman Laboratories 208
  12. Nucor Steel 210

Knowledge Management
Mantras 213

Bibliography 221

Preface

Knowledge management is an area which has interested me since the late 1990s. Having been in academics for a long time from 1996 to 2006, I was a natural believer in knowledge creation and sharing. This belief was reinforced by the strong intellectual leadership provided by Mr N. J. Yasaswy when I used to work closely with him in ICFAI. Then in 2006, I got the opportunity to head the Knowledge Management division of Satyam, one of India’s largest software companies and a consistent winner of the MAKE (Most Admired Knowledge Enterprises) awards. This marked a turning point for me.

While in Satyam, I became fascinated by the challenges involved in knowledge sharing in a large, geographically dispersed organization. Unlike academic institutions, knowledge sharing did not come naturally to the busy software engineers and project managers. But the positive side of the story was Satyam’s strengths in automation and virtualization, thanks to the vision of the company’s top management, especially Mr Ramalinga Raju, its chairman. This made it possible to use technology to scale up any knowledge management initiative quickly. I was also fortunate to work under the direct leadership of Mr Mohan Eddy, Director and Senior Vice President, and Mr Sanjiv Varma, Vice President. Both of them were intellectuals in their own right and knowing my academic background strongly encouraged me to work on a compact but useful book on knowledge management. That is how this book saw the light of the day.

Working on this book was a great experience as I was a complete novice in many of the technologies used in knowledge management. I would like to thank Arun Khan who is currently with the Satyam School of Leadership for supporting me with the research work involved in this project. I would also like to thank all my erstwhile Satyam colleagues, especially Vira Komarraju and Uma Thomas for their encouragement. And last but not the least, Kapil Malhotra of Vision Books for all the support in making this book a reality.

I dedicate this book to my mentor and PhD supervisor, Prof A. Vidyadhar Reddy, Dean, Osmania University, who is a great human being and most passionate about learning . Prof Reddy is currently recuperating from a major surgery. I pray to God, along with his many well wishers, to help him recover quickly and keep guiding the academic community in its various endeavors.

A. V. Vedpuriswar

How to Get the Most
Out of This Book

Alphabetization: All entries are alphabetized by letter rather than by word so that multiple-word terms are treated as single words. In cases where abbreviations or acronyms are more commonly used than full terms, they are given as entries in the main text. For example, XML is more commonly used than Extensible markup language, and so the concept is explained under XML. Where a term has several meanings, the various meanings are given.

Cross References: To offer a fuller understanding of a concept, sometimes it is both necessary and useful to refer to some other related entries in the book as well. Such cross references are printed in small capitals.

Italics have been used to indicate titles of publications, books, journals, etc.

Parentheses: Parentheses have sometimes been used in entry headings to indicate that an abbreviation is as commonly used as the term itself; for example, Business Intelligence (BI).

Examples, Illustrations and Tables: This book contains numerous examples to help you better understand a concept, or to relate it to the real business world. Illustrations and tables are also given at many places along with their related entries.

Knowledge Management: An
Introduction

Introduction

As the foundation of today’s global economy moves away from natural resources to intellectual assets, knowledge has increasingly become the only basis for a competitive advantage that can be sustained. Rather than land, labor or capital it is knowledge that is the key factor of production in many industries. In this “third wave,”[1] the wealth system is increasingly based on thinking, knowing — and serving customers by way of providing them a unique experience. Companies need superior knowledge to leverage their traditional resources and capabilities in new and distinctive ways to serve their customers. And they must do this more effectively compared to competitors. As a result, knowledge management (KM) is being taken seriously by companies across industries.

Information technology (IT) has been a major driver of knowledge management in recent times. But knowledge management should not be equated with information technology. It is human beings who think, experiment and learn to create knowledge. Much of the valuable knowledge that lies in people’s brains and minds can be best shared through human interaction. Information technology is only an enabler, though in the words of famous journalist, Thomas A. Stewart, “It is one hell of an enabler”. Without information technology, would be quite difficult to replicate and distribute knowledge related documents in a cost effective way across an organization that is largely geographically dispersed. As Stewart mentions,[2] “knowledge management is knowing what we know, capturing and organizing it, and using it to produce returns. Nothing in that definition says anything about computers but modern knowledge management is inconceivable without using them and in some sense they created it.”

A final point before we get into more details is that knowledge management should not be looked upon as a new mantra that can produce a magical impact on the functioning of an organization. Organizations need to take a practical, hard-nosed perspective when it comes to managing knowledge. Like any other initiative, knowledge management activities will build momentum only if they generate business value. That in turn is possible only if knowledge management helps the organization to cut costs by improving efficiency, or to innovate and come up with new products / services.

Background

Development and sharing of knowledge started from the time God brought man to this world. For millions of years, human beings had limited ways of passing knowledge to the next generation. Apart from oral narratives, knowledge died with each dying person and each dying generation. Fortunately, the pace of change was so slow that it did not really matter. As Alvin Toffler mentions in his book, Revolutionary Wealth, a major breakthrough occurred about 35,000 years ago when someone drew the first pictograph on a cave wall to mark an important event. The next turning point in knowledge sharing came when man learnt to write, enabling future generations to access the knowledge of earlier generations. The invention of the printing press, which allowed copies of a document to be made and distributed cost-effectively, was another watershed event. And lately, information technology in general and the Internet in particular have given a new momentum to knowledge management.

When we go through history books, we notice that knowledge as a subject, including knowing and the reasons for knowing, was documented by Western philosophers for millennia, and undoubtedly, long before that as well. Since ancient times, Eastern philosophers too have emphasized knowledge and understanding for conducting both spiritual and material life. The Hindu religion, for example, has laid great emphasis on gaining knowledge. Along with these efforts directed towards theoretical and abstract understanding of knowledge, practical needs for expertise and operational understanding have also been important since the battle for survival first started.

Managing practical knowledge was implicit and unsystematic at first. Later, it became more systematic. The craft-guilds and apprentice systems of the 13th century, were based on systematic and pragmatic knowledge management considerations. So also was the way owners of family businesses passed on their commercial acumen to their children. Still, the practical concerns for knowledge and the theoretical and abstract perspectives were not integrated then.

There was little change in the need for putting knowledge to practical use until the industrial revolution changed the economic landscape in the 17th century. The introduction of factories and the need for systematic specialization, gave an impetus to knowledge. Still, knowledge management was largely based on traditional approaches such as a master training an apprentice. Meanwhile, schools and universities mostly focused on providing education for the elite. Knowledge was approached from a largely theoretical perspective with little effort directed at leveraging it for making products and services needed by society.

All this has changed in recent times. Today knowledge management is increasingly being looked at from a business perspective. Many organizations have put in place systems and processes for managing knowledge to cut costs or differentiate their products and services. At the same time, there is a growing belief that intellectual development plays a key role in motivating workers and making them more productive in the workplace. As Peter Senge has mentioned, people in general have a natural desire to learn. Thus knowledge management can be seen as one more step in the evolution of the move towards personal and intellectual freedom that started with the age of enlightenment and reason a few centuries go.