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There are a number of "cutting edge" concepts shaping the ways businesses market and sell their products and services in the New Millennium: relationship marketing, CRM, and data mining, to name only three of the most often bandied about. These closely related topics have to do with analyzing marketing and other types of data to improve the customer experience and build long-term relationships. But it's also important to take a broader view of what's going on in today's business environment, including considering the ways businesses deal with information overload and how they are learning to take advantage of the accumulated knowledge that exists within any organization. If you think about your typical organization, it is practically floating in information, including important data about: The new and exciting field of Knowledge Management (KM) seeks to harness this wealth of information and put it to use to achieve organizational objectives. KM draws on diverse disciplines, including business, economics, marketing, education, information management, psychology, sociology, expert systems/artificial intelligence (AI), and library and information science. There are significant linkages between KM and other well-known management concepts such as change management, best practices, risk management, and benchmarking. KM can also be seen as a logical extension of "business process reengineering". What all of the management "buzzwords" share in common is the recognition that information and knowledge represent key corporate assets - and that well thought out strategies, policies, and tools must be deployed to effectively manage those assets. Today's managers are increasingly aware that the effective use of knowledge represents a powerful force for organizational effectiveness. Such awareness is fueling today's rapid growth in KM, which is also driven by:
 The term "Knowledge Management" is used in many different contexts, and is often poorly defined and understood. "Knowledge" reflects the way the organization functions, the way people communicate, the way problems are analyzed, the way problems are solved. But knowledge also reflects organizational culture (internal) and the complex relationships between the company and its suppliers and customers (external). One useful definition of KM is that it represents an "integrated knowledge system" that allows systematic organization and effective use of knowledge (from whatever source). It includes insights and accumulated knowledge drawn from throughout the organization. KM identifies tacit knowledge (the part below the surface), then documents it, stores it, and makes it accessible. Ultimately, knowledge that was previously buried deep in the bowels of the company becomes available to others in the organization, giving new meaning to the term "the learning organization."
Effective Knowledge Management requires an in-depth analysis of the types of information/knowledge that exist in an organization, generally with reference to a specific functional area. To use a marketing example, consider the departmental objective of clearly differentiating a company's products in a crowded marketplace. Given that objective, key decisions need to be made with regard to (a) pricing, (b) positioning, (c) product features, (d) promotions, and (e) distribution. Analysis of these areas would identify the types of information that should be identified and made accessible, including (at least): Pricing history; customer intelligence; competitor intelligence; market intelligence; product intelligence; distribution intelligence; and technical expertise. The CKO (Chief Knowledge Officer) might focus on each of these information requirements and develop a "knowledge map" to provide guidance. Among the key questions he or she would ask:
Knowledge Management uses some of the most sophisticated software around, including:
Without getting too technical, effective KM systems require three primary components, all accessible from a standardized browser environment:
But it's a big mistake to think of KM as an IT-driven tool. Technology is simply an enabler. KM is about people, and about getting folks to share information: they should share what they know, and tap into what others know. KM involves major changes in the organization and in human behavior within the organization. The KM manager must master the fine art of balancing advanced information technology with the human dimension. Above all else, this requires an appreciation of the fact that knowledge ultimately comes from the human mind. Human beings may be expensive and cantankerous, but you can't program them like you can a computer. People do certain things very well, and the human brain is still (for a while anyway) superior to even the most powerful computers. True understanding, placing information in broader context, combining information from diverse sources to create knowledge, and synthesizing unstructured forms of knowledge are better done by people than by machines. However, computers are good at other things - in particular, capturing, transforming, and disseminating highly structured knowledge that changes rapidly. The secret of effective KM is to create a responsive human-technological system that takes advantage of the unique strengths of both humans and computers.
Ultimately, the success or failure of a KM project will come down to getting the humans involved to buy in. Successful KM implementation requires management to educate employees about the importance of creating, sharing, and using knowledge. They must overcome the natural resistance related to the tendency to hoard knowledge as a source of power. However, a well-coordinated "KM communications strategy" can ultimately convince knowledge workers at all levels of the "win-win" benefits of modern knowledge management. Resistance also comes from the top. Many hard-nosed businesspeople and old-line executives view the concept of "Knowledge Management" with skepticism. After all, management fads comes and go, and who knows how long KM will be around? Besides, management is traditionally defined as involving planning and controlling, and how can something as abstract as "knowledge" be planned and controlled? Many traditional managers see managing knowledge as a contradiction in terms. "Knowledge" is an implicitly human and highly individual activity, and not one that can be easily quantified or controlled. However, such attitudes miss the point. Today's amazing technology has empowered management to put knowledge that was formerly inaccessible to work for the company. A well-designed KM system is able to harness and manage an organization's intellectual assets and knowledge - both explicit [recorded] and tacit [personal know-how] - leading to positive business results. A properly designed and implemented KM system can:
While Knowledge Management is expensive and resource-intensive, what is the cost of ignorance? Modern companies can no longer afford to "forget" what key employees know, fail to answer customer questions quickly or at all, or make poor decisions based on faulty knowledge. And KM provides an important tool through which progressive managers, in marketing and other areas, can improve their decision making and execution.
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© Asian Business Strategy & Street Intelligence Ezine 2001
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