Knowledge Management - A Smart Way To Get The Vantage Point
Published by MBA Skool Team, Published on February 18, 2012
The article throws light on the newly evolved concept of Knowledge Management in organizations. It stresses the importance of knowledge management from the point of view of gaining a competitive advantage over the competitors, which has become imperative for survival in today’s era of fierce competition.
Knowledge Management- A smart way to get the Vantage Point
Take a glance around – from daily work related emails to those pompous Town Halls – ‘Knowledge Management’ is the new buzzword. We may start wondering, was it the case say 10 years back? Not quite so. So what is special about this catchy phrase that has caught the fancy of corporate executives?
Over the years, there has been a great evolution in the way organizations approach their business strategies. Traditionally, high emphasis was laid on capital, machinery, land and human resources. However, the present era forces the organizations to be continually on the lookout for a vantage point, which in itself has fuelled the need to capitalize on ‘knowledge’ as a critical resource. The processing and management of knowledge is being critically reviewed as a key aspect for the organizational success, which is underscored by the fact that organizations are increasingly adopting knowledge based resources.
Firstly, it is imperative to comprehend the nuances between data, information and knowledge. Data is nothing but a record of a change of state of the parameter we are interested in observing whereas information relates to data in an organized manner and bound with a purpose. Knowledge literally refers to what people know, and usually is actionable, relevant and contextual. However, for effective knowledge management, it is essential for us to understand that it is not only the explicitly available knowledge that we refer to, but also the tacit knowledge which is confined in the mind of an individual. Here, the competency of the person imparting knowledge is of vital importance as he needs to be proficient in articulating the knowledge he possesses. It may be readily available in the form of books, audio recordings, reports, etc. or it may be purely based on the person’s understanding of the topic.
Knowledge management plays a very important role in the performance of knowledge driven organizations. It focuses on leveraging the collective knowledge in an organization to act as a key contributor for the success of an organization by acquiring the best knowledge and its intelligent application to tackle real world problems. It involves the process of classifying, sharing, and applying the knowledge in a methodical way so as to enable innovative and cost effective solutions. Initially, it was more of a top down approach and was technology centric. However, nowadays it has oriented itself to being people centric by identifying and providing the right knowledge to the right personnel at the right time. Knowledge Management aims to create a framework to facilitate a connection between people and information.
There are a few clear purposes which led to the growth and emergence of knowledge management as a concept. It assists the organizations to build a competitive advantage and maintain that ‘one-step-lead’ in comparison with its competitors. Here, the competitors also realize that merely emulating the strategies would not suffice. Since the organization is already one level higher than its competitor, by the time the competitor emulates its strategy and tries to catch up to its level, the organization has also progressed a level higher. It can, thus, easily maintain the competitive advantage over its rivals and continue to fasten its stronghold in the market.
Another important feature which makes knowledge management highly sought after is that it helps to improve the organizational effectiveness and return on investment by creating greater value. It allows the organizations to tap the opportunities and exploit them. Thus, the central idea of knowledge management is to leverage the existing knowledge resources to adopt the best practices rather than recasting old ideas.
The knowledge management process is a multi stage process which typically involves seven stages. The first stage is the identification wherein the organization seeks to determine the core competencies which are vital for the specific job or an endeavor. Every business unit in an organization possesses different pedagogical needs and therefore it is imperative to focus on identifying the right kind of knowledge to be imparted. The next stage is the collection stage and involves acquiring external as well as internal skills and knowledge which will enable the organization to have the right expertise. The selection stage deals with assessing the value of the knowledge with a clear focus on relevance and complexity.
Thereafter, the knowledge is classified and stored in Knowledge Banks mostly in the electronic form. This comprises the storing stage. Knowledge sharing forms the next stage of the process wherein the knowledge is disseminated throughout the organization based on the business requirements, capabilities of the employees and their areas of expertise. The application stage is the most crucial stage as it tests how effectively the knowledge transfer has taken place. This stage involves application of the knowledge for solving problems, performing tasks and taking informed decisions. Finally, the creation stage offers to unearth new knowledge through various means like feedbacks, experimentation, analysis and research.
Knowledge management can be best described by three different approaches – the process approach, the practice approach and the hybrid approach. The process approach involves codifying knowledge so that the end result is systematic controls, technologies and approaches to knowledge sharing. However, one drawback of this approach is that it is unable to capture the knowledge in its most tacit form. On the other hand, the practice approach itself takes a very interesting view and goes on to define that most of the knowledge is tacit and is not readily available in the form of books, audio tapes, reports, etc. It includes harnessing the informal systems like person to person contacts, communities and social events. It is really a daunting task and poses a challenge to make the tacit knowledge explicit, and further transfer the knowledge after capturing and adding the necessary details. In a novel approach called as the hybrid approach, the tacit information is primarily stored as contact information and the best practices of both the process as well as practice approach are captured. The knowledge repository is extremely helpful to store and capture knowledge so that it can be safely maintained and can be reproduced anytime.
Knowledge management has progressively relied on technology and subsequently gained from it so much that technology is now an integral part of knowledge management systems. It relies on technology for communication, collaboration, storage and retrieval. It eliminates the location constraints and allows synchronous as well as asynchronous sharing of knowledge. Nowadays, knowledge management increasingly makes use of supporting technologies like neural networks, fuzzy logic and intelligent agents which are sophisticated technologies that empower systems to learn how users work and provide assistance. It also makes us of latest technologies like data mining for extracting information and XML for standardized representation of data. The knowledge management implementation can be carried out via readily available software packages or it may be outsourced to external application service providers.
Finally, it really becomes worthwhile to look at the metrics for assessing the impact of KM on the organization’s business performance. Return on Investment is the primary metric which is used to measure the effect on overall performance. Although financial statements do not indicate intellectual capital as assets, these are the real valuables that an organization can rely upon in times of crisis and hence these metrics are more perceptual rather than absolute indicators. In addition to this, non financial metrics which include intangibles like structural, human and social capital also play a lion’s share in the overall performance of an organization.
In a nutshell, organizations are as powerful as their knowledge and capability to transform this knowledge into effective and valuable competencies, services and products. Knowledge management is thus all about wise application of the acquired knowledge to inch closer to the organizational goals and objectives.KM programs have proven to lead to path breaking innovations, consistency in best practices and great customer experiences which has revolutionized the modern approach of the business bandwagons.
Should we still believe that ‘Knowledge Management’ is a mere buzzword that will fade away with the passage of time? Certainly not, I would say.
This article has been authored by Tejas Karandikar from MDI, Gurgaon.
Image: tungphoto / FreeDigitalPhotos.net
Views expressed in the article are personal. The articles are for educational & academic purpose only, and have been uploaded by the MBA Skool Team.
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