Harvard Business Review on Knowledge Management Osama Solieman

Harvard Business Review on Knowledge Management

• Osama Solieman

• 2nd Year MIS Masters Student

Chapters 1-3

• The Coming of the New Organization

• Peter F. Drucker, 1988

• The Knowledge Creating Company

• Ikujiro Nonaka, 1991

• Building a Learning Organization

• David A. Garvin, 1993

The Coming of the New Organization

• Peter F. Drucker, 1988

Major Evolutions in Organizational Structure

• 1st Evolution (1895-1905):

• Management vs. Ownership

• 2nd Evolution (20 years later):

• Command & Control Organization
• Focus on Decentralization and Personnel Management

• 3rd Evolution:

• Shift to “Information-based Organization”
• “The managerial challenge of the future” (p. 19)

What is the Information-based Organization?

• Knowledge-based

• Composed of specialists -- “knowledge workers”

• Self-Discipline (i.e. self-management)

• Based on feedback from colleagues, customers, and headquarters.

Information-based Organization Structure

• Flat Structure

• Central Operation has few specialists

• Legal council, PR, Labor Relations

• Knowledge is at bottom of organization

• “in the minds of the specialists who do work and direct themselves.” (p.6)

• Task-focused teams

• Departments guard standards, train, and assign specialists

Ex: Hospitals and Symphony Orchestra

• Hospital:

• Several hundred physicians and 60 medical experts
• Head of each specialty = expert
• Work done in ad-hoc teams

• Symphony Orchestra

• Few hundred musicians = “specialists”
• Conductor = CEO
• Musicians report directly to conductor

Why do they work?

• Information-based Organizations need “clear, simple, common objectives that translate into particular actions”

• Conductor and musicians have same “score”
• Specialists in hospital share same mission

• Knowledge workers cannot be told how to do their work

• Their abilities need to be focused by leadership

Management Problems

• Developing rewards, recognition, and career opportunities for specialists

• Creating unified vision in an organization of specialists

• Devising the management structure for an organization of task forces

• Ensuring the supply, preparation, and testing of top management people

Opportunities for Specialists

• Limited advancement options

• Movement within specialty
• Few middle-management positions

• Current compensation structures favor management titles and positions

Common Vision

• Need “view of the whole” among specialists

• Foster the pride and professionalism of specialists

Management Structure and Task Forces

• Who are the managers?

• Specialist structure vs. Administrative structure

• Role of task force leader risky and controversial

Supply and Preparation of Top Management

• No longer have large pool of middle-managers to choose from.

• Hiring away top management from smaller companies

• Top management as a separate career

• Conductors and hospital administrators

The Knowledge Creating Company

• Ikujiro Nonaka, 1991

What is a Knowledge-Creating Company?

• Knowledge is the only sure source of competitive advantage

• Successful companies are able to:

• Consistently create new knowledge
• Spread it throughout organization
• Manifest it into new technologies and products

Cultural Differences

• Western View:

• Organization is “a machine for information processing”
• Useful knowledge is:
• Formal and systematic
• Quantifiable (“hard”)
• Easily measurable

• Japanese View:

• Use of slogans
• Tacit insights, intuitions, and hunches of employees
• Company is not a machine but a living organism
• “Everyone is a knowledge worker”

Spiral of Knowledge

• New knowledge begins with individuals

• Personal knowledge  organizational knowledge

• Ex: Matsushita Electric Company (1985)

• Developing new home bread-making machine
• Trouble with kneading process
• Software Developer apprenticed herself with Osaka International Hotel
• Developed product specs to reproduce kneading technique

Patterns for Creating Knowledge

• Tacit to Tacit (Socialization)

• Cannot be leveraged by organization as a whole

• Explicit to Explicit (Combination)

• Does not extend company’s existing knowledge base

• Tacit to Explicit (Articulation)

• Explicit to Tacit (Internalization)

Use of Figurative Language

• Figurative language and symbolism help articulate intuitions and insights

• Japanese companies use figurative language at all levels of the organization and in all stages of product development

Ex: Honda (1978)

• “Let’s Gamble” slogan

• New product team of young engineers and designers

• Team leader developed “Theory of Automobile Evolution” slogan

• Led to another slogan “Man-maximum, machine-minimum”

• Led to the design of the Honda City
• Revolutionary new design

Types of Figurative Language

• Metaphor:

• Fosters commitment to creative process early
• Multiple meanings
• Appear logically contradictory

• Analogy:

• Clarifies how two ideas in one phrase are similar / dissimilar
• Harmonization of contradictions

• Model Creation:

• Creation of actual model
• Contradictions resolved and concepts become transferable

Organizational Structure

• Redundancy

• Shared responsibilities
• Spreads new explicit knowledge throughout org
• Encourages communication
• Ex: Canon

• Strategic Rotation

• Employees understand business from multiple perspectives

Organizational Roles

• Front-line Employees:

• Day-to-day details (“What is”)
• Get caught up in own narrow perspective

• Senior Executives:

• Organizational ideal (“What ought to be”)
• Give business a sense of direction (“conceptual umbrella”)

• Middle Management:

• Bridge between visionary ideals of the top and chaotic reality of front line
• “Knowledge Engineers”

Building a Learning Organization

• David A. Garvin, 1993

Three Ms

• Meaning

• Clear definition

• Management

• Operational advice

• Measurement

• Tools for assessing rate and level of organizational learning

What is a Learning Organization?

• “A learning organization is an organization skilled at creating, acquiring, and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights” (p. 51)

Building Blocks

• Learning organizations need to be skilled in five main activities:

• Systematic Problem Solving
• Experimentation with new approaches
• Learning from own experiences and history
• Learning from others
• Transferring knowledge quickly and efficiently

Systematic Problem Solving

• Reliance on scientific method

• Data vs. Gut feelings

• Statistical Tools

Experimentation

• Systematic searching for and testing of new knowledge

• Ongoing Programs:
• Continuous experiments w/ incremental gains
• Require incentive system encouraging risk-taking
• Demonstration Projects:
• Larger and more complex
• Develop new organizational capabilities
• Knowing why things occur, not just how

Learning from Past Experience

• Review successes and failures

• Knowledge from failures often leads to future successes

• Make lessons learned available to employees

• Case studies and post-project reviews are cheap

Learning from Others

• Benchmarking

• Analysis and implementation of best-practices
• Disciplined process (Not “industrial tourism”)

• Customers

• Up-to-date product information
• Competitive comparisons
• Immediate feedback about service

• Receptiveness to criticism

Transferring Knowledge

• Knowledge must spread quickly and efficiently throughout organization

• Written, oral, and visual reports
• Site visits and tours
• Personnel rotation programs
• Education and training programs
• Standardization programs

Measuring Learning

• “If you can’t measure it, you can’t manage it”

• Tools:

• “Half-life” curves (p.73)
• Surveys, questionnaires, and interviews
• Direct Observation
• Ex: Domino’s Pizza

First Steps

• Learning organizations take time to build

• First step to foster environment conducive to learning

• Free up employee time
• Training in brainstorming, problem solving, etc.
• Removal of organizational boundaries (conferences, meetings, and project teams)

• Focus on the “three Ms”

Observations and Analysis

Common Theme

• Knowledge management is about people not technology

• Drucker:
• Specialists are “knowledge workers”
• Nonaka:
• Individuals create new knowledge
• Garvin:
• People need right tools to foster knowledge creation and management

Dissemination of Knowledge throughout Organization

• Drucker

• Each specialist is concerned with their own knowledge and expertise
• Managing Knowledge Means Managing Oneself, 2000

• Nonaka

• Personal knowledge needs to be transferred into organizational knowledge
• Redundancy and Strategic Rotation

• Garvin

• Transfer of knowledge in organization needs to be fast and efficient (Personnel Rotation)

Role of Middle Management

• Drucker

• Few, if any, middle managers are needed
• Serve merely as “relays” of information

• Nonaka

• Middle managers = “Knowledge Engineers”
• Bridge between vision of top and reality of bottom

• Garvin

• Five activities
• Measuring learning

Paper Critiques

• Drucker and Nonaka

• Philosophical and high-level
• Idyllic
• Do not address certain issues

• Garvin

• Presents different approaches and tools that can be implemented
• Does not claim to know all the answers

Alternative Resources

• Counter-Opinion to Drucker on Middle Management:

• Middle Managers are Back -- Carolyn R. Farquhar, 1998

• Article about KM and the “Learning Organization”

• Knowledge Management and the Learning Organization Converge – Charles H. Bixler, 2002

Q&A