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Learning Unit 5
Strategies of Managing Knowledge
(Week 3)
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A comprehensive master plan stating
how the corporation will achieve itsmission and objectives. It maximizes
competitive advantage and
minimizes competitive disadvantage.
WHAT IS A STRATEGY?
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Strategy Development Routes
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Hierarchy of Strategy
Corporate Strategy
Business
Strategy
Functional
Strategy
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The Knowledge Strategy Development
What is it?
it identifies opportunities for improving
organizational performance through betterknowledge management. It starts with areview of current business strategies, assessesthe best knowledge levers to exploit, andreviews current KM performance, capabilitiesand potential.
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Seven Knowledge Levers
CustomerKnowledge
Developing deep knowledge sharing relationships. Understandingthe needs of your customers' customers. Articulating unmet needs.Identifying new opportunities.
StakeholderRelationship
Improving knowledge flows between suppliers, employees,shareholders, community etc. using this knowledge to inform keystrategies.
BusinessEnvironmentInsights
Systematic environmental scanning, including political, economic,technology, social and environmental trends. Competitor analysis.Market intelligence systems.
Organizational
Memory
Knowledge sharing. Best practice databases. Directories of
expertise. Online documents, procedures and discussion forums.Intranets.
KnowledgeProcesses
Embedding knowledge into business processes and managementdecision making
Knowledge inProducts andservices
Knowledge embedded in products. Surround products withknowledge e.g. in user guides, and enhanced knowledge-intensiveservices
Knowledge inPeople
Knowledge sharing fairs. Innovation workshops. Expert and learningnetworks. Communities of knowledge practice.
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KNOWLEDGE STRATEGY
Refers to the firms business strategy that takes
into account its intellectual resources and
capabilities.Involves the identification of :Knowledge gaps and surplusesThen the management of these gaps and surpluses to
enhance organizational performance (Zack, 1999)
Knowledge strategy involved aligning
organizational knowledge to a defined business
strategy (Jones, 2000)
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Strategic Drivers
MarketGrowth
OperationalEffectiveness
CustomerIntimacy
Growth through share,
market strength,
distribution external
market focus
Forging long-term, deep
relationships with
customers external
focus, growing with
customer success
Profit through productivity
and cost control internal
development focus
Traditional KM driver,but should not be the only one!
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What drives Knowledge Strategy
Business Strategy
What knowledge does it take to compete?
What are your critical knowledge gaps?
Product Innovation
Can you design breakthrough products?Spark innovation through a participatory culture?
Organizational Complexity
How can you adapt to speed & information overload?
Build a quick-learning organization?
Customers and Markets
Profound customer understanding
Radically improved time to market
Knowledge leverage in the marketplace
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Resource Sustainability
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Corporate Value Chain
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Four Enabling Dimensions
What do we know and where is it ?
How do we participatewith this know-how?
How do we support this know-how?
What processes leveragethat know-how?
Collaborative
Technology
Practices
Knowledge
Resources
Culture and
Learning
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A strategic Framework for Mapping Knowledge
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Gap Analysis
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Exploration vs. Exploitation
Internal vs. External Knowledge
Aggressive vs. Conservative
A Knowledge Strategy Framework
Source: Michael H. Zack
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Exploration vs. Exploitation
operating on a lower knowledge level than required: internalknowledge gap
-compare the own to the higher knowledge of the competitors:
external knowledge gapresult: The organinzation is an explorer- a creator oracquirer of the knowledge required
-knowledge resources and capabilities exceed significantly therequirements of a competitive position
result: The organization's requirement is to be a knowledgeexploiter
Source: Michael H. Zack
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Internal vs. External Knowledge
-knowledge generated within the firm is especiallyvaluable because it tends to be unique, specific,and tacitly held
difficult for competitors to imitate
-Knowledge from outside can provide for freshthinking and a context for benchmarking internal
knowledge
more abstract, more costly to obtain, morewidely available to competitors
Source: Michael H. Zack
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Aggressive vs. Conservative
-conservative: exploiting internal knowledge
-aggressive: unbounded innovators (knowledge-intensive industries)
unbounded
external
internal
Exploiter Explorer Innovator
aggressive
conservative
Source: Michael H. Zack
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Knowledge domains
Your company can develop
knowledgedomains to
assist your company insharing knowledge
What is a knowledgedomain?
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Knowledge gaps are often identified
A knowledge gap occurs when a problemhas been identified, but the knowledgerequired to solve it is not available
To build up a knowledge domain, however,you must push for knowledgecreationand knowledge transfer in yourcompany
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Transfer
Knowledge creation enhances thepotential of creating innovations
Processes typically take place in steps in
groups of a limited size:
ojointly experiencing new work processes
o make their collective experiences explicit
o subject becomes available to scrutinyo transformed into a prototype process
o to integrate the newly created knowledgein existing processes
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Knowledge transfer transfer with externalpartners is important
A typical knowledge transfer goes like this:
o Identify the knowledge to be transferred,o Receiver assesses the value of knowledge for local
use, and the sender assesses the potential gain orloss
o Packaging and distribution of knowledge mustoccur in such a way as to enhance the receiverspotential to act.
o Includes adoption, in which the transferred
knowledge is integrated with the local knowledge
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Four Knowledge Strategies
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Leveraging Strategy
Focus: Transferring knowledge throughout the organisation
Ensures transfer of existing knowledge througho consolidation of activitieso standardisation of taskso internal benchmarking programme
Knowledge can be shared knowledge workshopso trust between participantso creativity and entrepreneurshipo reduction of repetitive mistakes
Two types of learningo technical and process learning
Manage risk of overtaxing resources(von Krogh, et al., 2002).
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The leveraging strategy impacts on strategic goals
Efficiency Share Knowledge in the organisation,e.g. on manufacturing, productdevelopment, marketing, sales.
Innovation Share knowledge between domains toimprove innovation processes.
Managing
Risks
Share knowledge to reduce risk of
overtaxing resources.Share knowledge on competitors andregulatory environment
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The Expansion Strategy
The expansion strategy targets knowledgecreation by focusing on existing data,information and knowledge. The emphasis here
is placed on increasing the scope and depth ofknowledge by refining what is known and bybringing in additional expertise relevant forknowledge creation (von Krogh, et al., 2002).
Better understanding of key processes
Identification of knowledge gaps
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How the expansion strategy impacts on
strategic goals
Efficiency Expanding on knowledge related toexisting processes.
Innovation Creating new processes and product
innovations from existing knowledgedomain
ManagingRisk
Developing knowledge domains to reducethe risk of overtaxing resources.
Developing knowledge domains to reducethe exposure to the risk of deterioration.Developing knowledge domains on theregulatory and competitive environment
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An externally oriented strategy whereby a uniqueknowledge domain is developed by transferringknowledge from an external source as the knowledgedoes not exist in the organisation (von Krogh, et al.,
2002).
Aids in achieving operation efficiency Organizations should develop partnerships
Attain innovative goals through a partner
Capturing new knowledge
External environment
Emerging technology developments
Decrease the risk of overtaxing resources
Competitive environment
Appropriation Strategy
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Allows teams to develop new knowledge domains.This involves identifying participants and providingthem with the responsibility to generate new ideas(von Krogh, et al., 2002).
orequires identification of participantsointerest in doing something newoloose idea or visions for a future knowledge domainoimperative to the long term performance and survival
Using new data, insights, models, concepts and technologies
Business processes and tasks in a new light
Reduces exposure to knowledge deteriorationobalanced portfolioo
enabling the company to act on current business opportunities
Probing Strategy
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How the probing strategy impacts on
strategic goals
Efficiency Creating new knowledge that can improvebusiness process
Innovation Creating new knowledge for radicalproduct and process innovation and betteradaptation
ManagingRisk
Reducing exposure to risk of existingknowledge domain deterioration
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However, simplistic solutions and "one-size-fits-all" is not the way. This
approaches leave executives with little in the way of practical adviceabout how to transform the entire knowledge-management system.
What's more, this fuzziness makes it difficult for executives to see a clear
link between their knowledge-management investments and business
value.
e.g.Industry Structure:
Fragmented Industry
Many small and medium-sized local companies compete for small shares of total
market
Consolidated industryMature industry dominated by a few large companies
Product:
Do you offer standardized or customized ?
Do you have a mature or innovative products?
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Knowledge Management Framework
A framework to help management
to associates specific knowledge-
management strategies withspecific challenges that companies
face.
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Knowledge Management Framework: Work Models
Transaction Model Expert Model
Integration Model Collaboration Model
Systematic, repeatable work
Highly reliant on formalprocesses, methodologies, orstandards
Dependent on tight integrationacross functional boundaries
Routine work
Highly reliant on formal rules,procedures and training
Dependent on low-discretionworkforce or automation, andenforcement ofstrict rules
Improvisational work
Highly reliant on deep expertiseacross multiple functions
Dependent on ability to buildhigh commitment, fluid/flexibleteams
Judgment-orientedwork
Highly reliant on individualexpertise and experience
Dependent on star performers -characterized by star cultures
RoutineInterpretation /
JudgmentComplexity of Work
Levelof
Interdependen
ce
Collaboration
Individual Actors
Knowledge workers
*A one size fits all approach to developing a knowledge management system will not work
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Knowledge Management Framework: Challenges
Transaction ModelConsistent, low-cost performance
Expert ModelGetting results from stars
Integration Model
Orchestrating across functions
Collaboration Model
Achieving breakthrough innovationCreating a common big picture
Driving a common big picture
Driving toward standard methodsbased on best practices
Balancing functional objectivesagainst the good of the whole
Standardizing the inputs(people), output and processes
Creating clear operatingguidelines to control behaviors
Overcoming low worker morale
Learning through trial and error
Knowledge linking across complex
disciplines
Sense making & decision-makingunder extreme uncertainty
Attracting & motivating stars
Decreasing individual learningcurves
Reducing vulnerability toturnover
Overcoming expert tunnel
visionRoutineInterpretation /
JudgmentComplexity of Work
Levelof
Interdependen
ce
Collaboration
Individual Actors
*The barriers to success will vary with each model
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Knowledge Management Framework: Strategies
Transaction Model Expert Model
Integration Model Collaboration Model
Integrated processes
Integrated teams
Best practice benchmarking
RoutinizationAutomation
Productization
Strategic framing
Knowledge linking
Action learning
Experienced hiringApprenticeships/development
Capability protection
RoutineInterpretation /
JudgmentComplexity of Work
Levelof
Interdependen
ce
Collaboration
Individual Actors
Knowledge workers
*Each model suggests specific strategies to follow to help achieve success
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References
Von Krogh, G., Nonaka, I., and Aben, M. (2001). Making the most ofyour companys knowledge: a strategic framework. Long RangePlanning, 34(4), pp. 421-440.
Zack, M. (1999), Developing a Knowledge Strategy, CaliforniaManagement Review, 41(3), Spring, pp. 125-145.
Hansen, Morten T., Nohria, Nitin, Tierney, Thomas, (1999), Whatsyour strategy for managing knowledge?, Harvard Business Review,77(2), March/April, pp.106-116.
Haggie, Knox, and Kingston, John, (2003), Choosing your KnowledgeManagement Strategy,Journal of Knowledge ManagementPractice, June 2003.
Maier, Ronald, and Remus, Ulrich, (2003), Implementing process-oriented knowledge management strategies, Journal of KnowledgeManagement, 7 (4), pp. 62-74 .
Bell, H. (2001). Measuring and Managing Knowledge. New York, McGraw-Hill
Tiwana, A. (2002). The Knowledge Management Toolkit: Orchestrating IT,
Strategy and Knowledge Platforms. New Jersey, Prentice-Hall.