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KM Past & Future 2004/ 1 Copyright © 2004 Knowledge Research Institute, Inc.
Knowledge Management Knowledge Management 20 years 20 years after ... The evolution and increasing after ... The evolution and increasing
significance of Knowledge Managementsignificance of Knowledge Management
2004
Karl M. WiigKnowledge Research Institute, Inc.
Arlington, TX 76016-3517phone: (817) 572-6254 fax: (817) 478-1048
e-mail: [email protected] –– website: www.krii.com
KM Past & Future 2004/ 2 Copyright © 2004 Knowledge Research Institute, Inc.
The Early Focus:Strengthen Operations by Improving
Knowledge and Its Availability
The Emerging Focus:Make the Enterprise More Competitive from
Strategic Perspectives“To Survive and Prosper You Need to
Innovate Faster Than Your Competitors – It is Not Enough to Learn Faster!”
KM’s Role Is Changing KM’s Role Is Changing
KM Past & Future 2004/ 3 Copyright © 2004 Knowledge Research Institute, Inc.
1950s Deming & Durant: Quality requires knowledge and understanding
1956 Kenneth Boulding: “The Image: Knowledge in Life and Society”
1966 Peter Drucker: Knowledge Worker in “The Effective Executive”
1966 Kenneth Boulding: “The Economics of Knowledge and the Knowledge of Economics”
1969 Peter Drucker: Knowledge Worker in “The Age of Discontinuity”
1970s AI Promises: Expert Systems to automate knowledge processes
1978 Peter Keen: “Decision Support Systems: An Organizational
Perspective”
WWII changed the World economy
War ravaged nations built new, efficient industrial capabilities
Global competition shifted to higher quality and lower prices
Knowledge content increased in complex products and services
Computers began to provide “Knowledge Amplifiers”
KM – The Stage Is Set KM – The Stage Is Set
KM Past & Future 2004/ 4 Copyright © 2004 Knowledge Research Institute, Inc.
KM – The Early Days – 1980s+ KM – The Early Days – 1980s+
1980s IBM & Others Personal Computer for business1981 DEC, ADL, etc. Knowledge-Based System Applications1985 Arthur D. Little “Knowledge Management and Applied AI”1986 Böhme & Stehr: “The Knowledge Society”1987 Sveiby & Lloyd: “Managing Knowhow”1990 Senge “The Fifth Discipline” (Learning Organization)
1991 Thomas Stewart: “Brainpower” article in Fortune1993 Prusak & alia: Boston KM Conference (150 participants)1993 Wiig “Knowledge Management Foundations”
AI- based Expert Systems
Knowledge Sharing
Beginning Focus on Intellectual Capital
KM Past & Future 2004/ 5 Copyright © 2004 Knowledge Research Institute, Inc.
Intellectual Capital Management (ICM) Intellectual Capital Management (ICM)
1980 1985 1990 1995 2000 2005
ValueExtraction
ValueCreation
Hall
St. Onge
Stewart
Skandia/Edvinsson
ICM Gathering
Sullivan
Teece
Petrash
Lev
Sveiby
From <http://www.sveiby.com/articles/icmmovement.htm>
KM Past & Future 2004/ 6 Copyright © 2004 Knowledge Research Institute, Inc.
The Field Is Dynamic! The Field Is Dynamic!
We continue to learn about people and knowledge with profound consequences for KM
Successful KM requires understanding of underlying knowledge-related mechanisms in people and organizations
Much more than realized, decisions are made by tacit activation of mental reference models
Mental models are often encoded stories of static scenes, dynamic episodes, procedures for work, and complex situations
People learn / remember stories and concepts better than facts
Expertise is a tacit and abstract personal capability to innovate, learn, blend mental models, see implications, and to act
KM Past & Future 2004/ 7 Copyright © 2004 Knowledge Research Institute, Inc.
Ongoing Situation
Information Information InformationNewNew New
Situation Handling Requires KnowledgeSituation Handling Requires Knowledge
Copyright © 2003 Knowledge Research Institute, Inc.
InitialSituation
SituationalAwareness
Sensemaking
Information
Action Spaceand Innovation
Decision-Making/Problem-Solving
Understandingof
Situation ExecutionCapability
Implementation
Decision
Monitoring
Governance Competence
CorrectiveAdjustment
CorrectiveAdjustment
Feedback FeedbackFeedback
KnowledgeMental Reference Models – Concepts – Understandings – Judgments – Principles – Facts
EffectiveAction
Actionsto ChangeSituation
Actionsto ChangeSituation
KM Past & Future 2004/ 8 Copyright © 2004 Knowledge Research Institute, Inc.
KM – Its Basic Nature KM – Its Basic Nature
KM Ideally, KM governs knowledge-related activities and processes in all parts of society to:
Improve effectiveness of personal actions – at work and at home
Strengthen enterprise behavior to:
Increase value to customers
Provide strong competitive position
Improve stakeholder relations
Capability to be responsible societal citizen
KM Past & Future 2004/ 9 Copyright © 2004 Knowledge Research Institute, Inc.
MakeSense
Decide &Innovate
Execute
Monitor
Apply KnowledgePersonal OperationsLevel
Effective Actions Are Needed at All LevelsEffective Actions Are Needed at All Levels
MakeSense
Decide &Innovate
Execute
Monitor
Apply Knowledge
MakeSense
Decide &Innovate
Execute
Monitor
Apply Knowledge Division Business PlanLevel
MakeSense
Decide &Innovate
Execute
Monitor
Apply Knowledge Enterprise StrategyLevel
KM Past & Future 2004/ 10 Copyright © 2004 Knowledge Research Institute, Inc.
An Important Change An Important Change
Within the Knowledge-Vigilant enterprise
most people possess an
“Asset Management Mentality”to create, maintain, exchange, and utilize
Intangible Capital
to be as effective as possible in all their pursuits
KM is cornerstone of Integral Management
KM Past & Future 2004/ 11 Copyright © 2004 Knowledge Research Institute, Inc.
Remember – KM Covers Five Domains!Remember – KM Covers Five Domains!
"What We DO"Knowledge Management
Activities & Actions(KM Work)
CONTEXTBusiness Purpose &
Environment ofEnterprise KM
RESOURCES"1001" Choices of
KM Methods, People& Technologies
UNDERLYINGMECHANISMS
Associated DisciplinesCognitive, Technical, ...
ORGANIZINGPRINCIPLES
"Meta KM"
KM Past & Future 2004/ 12 Copyright © 2004 Knowledge Research Institute, Inc.
Knowledge Management Counts! Knowledge Management Counts!
Progress and viability are driven by human capital
Most studies have been inconclusive . . .
However,
long-term effects of improved knowledge indicate:
1 % literacy score increase leads to
2.5 % personal productivity increase
1.5 % increase in GDPSource:
International Adult Literacy Survey: Literacy scores, human capital and growth across fourteen OECD countriesSerge Coulombe, Jean-François Tremblay, and Sylvie Marchand - Statistics Canada - Human Resources and Skills Development
KM Past & Future 2004/ 13 Copyright © 2004 Knowledge Research Institute, Inc.
Few Are Knowledge Vigilant! Few Are Knowledge Vigilant!
Within the enterprise, KM often pursue separate and disjointed efforts like:KM/IT Applications
Learning OrganizationIntellectual Capital Management
Advanced enterprises pursue KM as part of Integrative Management
Unconcerned Knowledge importance
is generally not consideredKnowledge is managed
sporadically and intuitively.Culture is knowledge ignorant
AwareSome employees and executives
are generally aware of knowledge importance
They can't make KM a priorityand don't know how to pursue KM
Culture and incentives are not issues
ReactiveMany employees understand KM's
value and how knowledge is created,transferred, and used
KM initiatives are pursued piecemealCulture does not support KM
Literate Many employees understand
KM's value for durable successand how knowledge is
created, transferred, and usedThey know KM is needed and
only act with outside assistanceCulture and incentives changes
are not yet supportive of KM.
ProactiveMost employees and managers
have good understanding ofhow to manage knowledge assets
to achieve enterpriseand personal goals.
KM initiatives shape a broad visionCulture and incentives are changing
VigilantAll pursue knowledge-effective
and intelligent-acting behavior as Integrative Management cornerstone
KM practices and capabilitiesare everywhere.
Culture and incentives fully supportKM and are “Knowledge-Aware” .
Relative
Frequency
KM
Sophistication
US Organizations
Weighted by Number
of EmployeesUS Organizations
Regardless of
Size
Qualitative Estimates
KM Past & Future 2004/ 14 Copyright © 2004 Knowledge Research Institute, Inc.
Personal:Improved earnings potentials
More effective personal decision makingRaised quality of life
Industrial:Greater competitive effectiveness
Better products and services Beneficial for customers and consumers
Societal:Increased progress from better educated citizenry
Improved social and economic environments More desirable society
KM – Its Significance KM – Its Significance
KM Past & Future 2004/ 15 Copyright © 2004 Knowledge Research Institute, Inc.
KM Scope Shifts to Wider FocusKM Scope Shifts to Wider Focus
OperationalFocus
TacticalFocus
StrategicFocus
Long-TermPurpose
Focus
TaskOriented
Focus
FutureKM Distributions 1990s
KM Distributions
1980sKM Distributions
Qualitative Estimates
RelativeFrequency
KnowledgeScope
KM Past & Future 2004/ 16 Copyright © 2004 Knowledge Research Institute, Inc.
KM – Its KM – Its RealReal Significance Significance
KM provides opportunities for people and organizations to make more effective and
knowledgeable decisions
You must be knowledgeable to see the implications of situations described by information
Being Informed IS NOT Being Informed IS NOT Being Knowledgeable!Being Knowledgeable!
Success in today’s global society requires beingSuccess in today’s global society requires being
Knowledgeable and Informed – Both!Knowledgeable and Informed – Both!
KM Past & Future 2004/ 17 Copyright © 2004 Knowledge Research Institute, Inc.
Strategic goal for 2010 set for Europeat the Lisbon European Council – March 2000:
"to become the most competitive and dynamic knowledge-based economy in the world,
capable of sustainable economic growth with more and better jobs and greater social
cohesion."
KM – Societal Significance KM – Societal Significance
KM Past & Future 2004/ 18 Copyright © 2004 Knowledge Research Institute, Inc.
“A Focus on Cost-Cutting and Efficiency Has Helped Many Organizations Weather
the Downturn, But This Approach Will Ultimately Render Them Obsolete.
Only the Constant Pursuit of Innovation Can Ensure Long-Term Success.”
DF Muzyka, FT Sep 17, 2004
Knowledge Management Is the Innovation Enabler by Providing the
Driving Intellectual Capital Resources!
KM and Innovation Are KeyKM and Innovation Are Key
KM Past & Future 2004/ 19 Copyright © 2004 Knowledge Research Institute, Inc.
Extra Slides
Added for Reference
KM Past & Future 2004/ 20 Copyright © 2004 Knowledge Research Institute, Inc.
Our Work Is Becoming More ComplexOur Work Is Becoming More Complex
1. Routine tasks (simple,
repetitive, andwell understood)
2. Logical or lesscommon
variations(transformations)
ofRoutine Situations
3. Complex, yetexpected
extensions ofroutines
integrated withexternal factors
4. Unexpectedchallenges
(conditions),but with a mixof routines andexternal factors
6. Unusualchallenges
outsidejob scope
5. Totally unexpected
situations and non-routine challenges,
yet within the larger job scope
RequiredKnowledge
Can BeExplicated
(Some Can BeAutomated)
Workers NeedAdditionalKnowledge
ConsiderableNew Knowledge
Is Required
PastWork
FutureWork
Some AbstractKnowledgeIs Needed
Frequency ofOccurrences
Complexityof Work
Candidatesfor
IntelligentAutomation
Potentials forDelivering Work
RequiringGreater Knowledge
KM Past & Future 2004/ 21 Copyright © 2004 Knowledge Research Institute, Inc.
ConsolidatedEnterpriseBehavior
InnumerableNano Actions
Marketand
StakeholderResponse
RealizedPerformance
CostsService QualityProduct Quality
Customer Supportetc.
Effectsof
Actions
Effectsof
Actions
Micro"Action"
Micro"Action"
Micro"Action"
Micro"Action"
Small Actions Lead to Broad Behavior Small Actions Lead to Broad Behavior
R&D-Marketing
Engineering
Manufacturing
Delivery & Start-Up
KM Past & Future 2004/ 22 Copyright © 2004 Knowledge Research Institute, Inc.
Adapted from Bechara et alia, Science 28 Feb, 1997 When Needed, New Situation-SpecificMental Reference Models
Are Created by Conceptual Blending
Most Decisions Are NonconsciousMost Decisions Are Nonconsciousand Result from Activating Mental Reference Models!
Decision
Situation ReasoningStrategies
Facts-Objectives
Options fordecision
andinnovation
Representationof futureoutcomes
Covert activation ofbiases related to
previous emotional[or meaningful]experiences ofcomparablesituations
Reference ModelLibrary
Personal MentalModels of
Wellknown Cases
KM Past & Future 2004/ 23 Copyright © 2004 Knowledge Research Institute, Inc.
Some Inter-Domain FunctionsSome Inter-Domain Functions
"What We DO"Knowledge Management
Activities & Actions(KM Work)
CONTEXTBusiness Purpose &
Environment ofEnterprise KM
RESOURCES"1001" Choices of
KM Methods, People& Technologies
UNDERLYINGMECHANISMS
Associated DisciplinesCognitive, Technical, ...
ORGANIZINGPRINCIPLES
"Meta KM"
Presents Needsto Create NewSolutions &
Methods
ProvideApplicableMethods &
Other Resources
ProvideInformation on
New Mechanisms
Determine KMImplementation
Options
Presents Needs forOrganizing Principles
Provide Understandingfor Effective KM Work
Underlying MechanismsShape Methodologies
Methods & ActionsActivate Mechanisms
Provide Understandingfor Creating Resources
Present Needs forOrganizing Principles
ProvideInformation on
Mechanisms
Provide Understanding ofRelations between OtherEntities & Mechanisms
ProvidesBusiness Value
by EffectiveKM Practices
DeterminesKM Directionfrom BusinessRequirements
Presents Needs forOrganizing Principles
Provide Understandingfor KM Governance
Business Context Shapes Which & HowUnderlying Mechanisms Are Activated
Guide Tactical &Strategic Directions
KM Past & Future 2004/ 24 Copyright © 2004 Knowledge Research Institute, Inc.
Examples of KM Domain AreasExamples of KM Domain Areas
"What We DO"Knowledge Management
Activities & Actions(KM Work)
CONTEXTBusiness Purpose &
Environment ofEnterprise KM
RESOURCES"1001" Choices of
KM Methods, People& Technologies
UNDERLYINGMECHANISMS
Associated DisciplinesCognitive, Technical, ...
ORGANIZINGPRINCIPLES
"Meta KM"Knowledge Governance
Axiomatic Basis• Systems Perspective
• Holistic Natural History
Axiological, Theoretical,Epistemological Foundations
• Integrated Value Theory• Natural Philosophy of Knowledge
• Measurement Theory
Sciences of Knowledge• Biology of Knowledge
• Psychology of Knowledge• Economy of Knowledge• Sociology of Knowledge
• Semiotics• Computation Theory & AI
• Anthropology of Knowledge• History of Knowledge
Structural Foundationsof Knowledge Systems
• Economy & Culture of Knowledge• Knowledge-Based Value Systems
• Systems of Capital
Knowledge Systems Design forHolistic Social Development
(Political KM Processes)• Theory of Holistic Social Development
• Endogenous Growth Theory• Theory of (Social) Human Capital
Knowledge Systems Designfor Organizational KM Processes
• Value-Based KM Strategy• (Organizational) Human Capital Developm
• Instrumental Capital Development
Enterprise• Strategy & Direction
• Structure• Financial Situation
• TOWS
Work Environment• Products & Services
• Infrastructure• Culture & Practices
Markets & Customers• Competitive Situation
• Customer Requirements• Economy
Stakeholders• Objectives
• Requirements
KM ProfessionalEducation
• Practical KM Work• KM-Related Theory
• Business Science (OR)
KM CapabilitiesDeveloment• KM Methods
• KM "Systems"• KM Practices
Management • Knowledge-Leveraging
Mentality• Managing from
Knowledge Perspectives
AI & Advanced ITApplications
• Active KM Capabilities• Passive KM Support
(Infrastructure)
Behavioral Systems• Learning
• Decision Making• Innovative Behavior
• Constraints
Adapted from F.J.Carrillo, "Meta-KM: A Program and a Plea,"Journal of the KMCI, Vol. 1, No. 2, Jan 2001.
Motivational Systems• Understanding Benefitsof Supporting Enterprise• Enterprise Incentives,
Practices & Culture
Social Systems• Societies
• Governments• Enterprises
• Family Units
Physical & Technical Systems
• Production Facilities• Transportation Systems
• Informatics Systems
Examples
Examples
Examples
Examples
Economic Systems• Global, National
& Local Economies• Market Mechanisms
KM Past & Future 2004/ 25 Copyright © 2004 Knowledge Research Institute, Inc.
Knowledge-Based Business DiagnosticsKnowledge-Based Business Diagnostics
U n d e rs ta n d in gB u s in e s s P ro c e s s e s ,O p e ra tio n s , P ra c tic e s ,a n d S tra te g ie sU n d e rs ta n d in gD ia g n o s tic sM e th o d o lo g ie sU n d e rs ta n d in gth e N a tu re o fIn te lle c tu a lW o rk u n d e rV a ry in gC o n d itio n sU n d e rs ta n d in gth e A p p lic a b ilityo f D iff e re n tK n o w le d g e -R e la te dIn itia tiv e s a n dS o lu tio n sK n o w le d g eD ia g n o s tic s
U n d e rs ta n d in gB u s in e s s P ro c e s s e s ,O p e ra tio n s , P ra c tic e s ,a n d S tra te g ie sU n d e rs ta n d in gD ia g n o s tic sM e th o d o lo g ie sU n d e rs ta n d in gth e N a tu re o fIn te lle c tu a lW o rk u n d e rV a ry in gC o n d itio n sU n d e rs ta n d in gth e A p p lic a b ilityo f D iff e re n tK n o w le d g e -R e la te dIn itia tiv e s a n dS o lu tio n sK n o w le d g eD ia g n o s tic s
U n d e rs ta n d in gB u s in e s s P ro c e s s e s ,O p e ra tio n s , P ra c tic e s ,a n d S tra te g ie sU n d e rs ta n d in gD ia g n o s tic sM e th o d o lo g ie sU n d e rs ta n d in gth e N a tu re o fIn te lle c tu a lW o rk u n d e rV a ry in gC o n d itio n sU n d e rs ta n d in gth e A p p lic a b ilityo f D iff e re n tK n o w le d g e -R e la te dIn itia tiv e s a n dS o lu tio n sK n o w le d g eD ia g n o s tic s
Understanding
Business Processes,
Operations, Practices,
and Strategies
Understanding
Diagnostics
Methodologies
Understanding
the Nature of
Intellectual
Work under
Varying
Conditions
Understanding
the Applicability
of Different
Knowledge-Related
Initiatives and
Solutions
Knowledge
Diagnostics
KM Past & Future 2004/ 26 Copyright © 2004 Knowledge Research Institute, Inc.
Maybe – Just Maybe –Maybe – Just Maybe –We Need to UnderstandWe Need to Understand
FinancialTimes
March 62004