Implementing Knowledge Management

Implementing Knowledge Management

David J. Pauleen

Billed as New Zealand's first conference on knowledge management (KM), the Implementing Knowledge Management conference on 5-6 December 2001 in Wellington attracted some 75 participants and speakers, who presented a wide-ranging look at how their various organizations implemented knowledge management strategies.

In his keynote presentation, Petar Bielovich, Asia-Pacific KM Program Director of PricewaterhouseCoopers Consulting, explained his organization's "systems-thinking" approach to KM, explaining his view that an organization-wide KM implementation should be seen as a complex change program. He spoke of reinforcing loops, which are similar to subsystems of the main KM strategy. He explained that only reinforcing loops produce significant change, but these changes could be either positive or negative depending on implementation. He claims that a successful KM strategy should drive growth in the reinforcing loop. As an example, an organization where creating, sharing and leveraging of knowledge is perceived to be important will tend to increase employees' willingness to create and share knowledge (Figure 1). However, if this process is not supported by ever-increasing reward systems, the result could be a corresponding and dramatic reduction in employee willingness to create and share. He emphasized that reward systems are a key variable and getting them wrong will undermine all other efforts. At PwC, a consultant's annual salary increase is linked to a balanced scorecard approach where criteria such as adding value to clients, adding value to people and adding value to the firm are considered.

Figure 1. Main KM strategy with supporting reward/capability reinforcing loop

One highlight of the conference was "Implementing the vision of a knowledge bank" a joint presentation with a live international video link with Maris O'Rourke, the founder of the KM program at the World Bank, in Wellington and Bruno La Porte, Program Director of KM at the World Bank, in Washington. They covered the World Bank's implementation of its KM program over the last five years. The session covered the main dimensions of knowledge sharing at the Bank with a particular attention to how communities of practice engaged in knowledge sharing are used to gather the geographically dispersed and highly varied expertise of the Bank's staff to come up with extremely quick solutions, often within 72 hours, to local and specific problems around the world that in the past would have taken months for a response. From the presentation, it is clear that the Bank is repositioning itself from being mainly a moneylender to a "knowledge" bank. An example of this change in emphasis is the Global Development Learning Network (http://www.gdln.org/), a unique partnership of public, private, and non-governmental organizations using a fully interactive, multi-channel network with a mandate to serve the developing world through the sharing of knowledge and learning. According to the presenters, the drivers in the Bank's knowledge strategy are leadership, a business case including appropriate metrics, communities of practice, a supporting budget, appropriate organizational culture, and enabling technology.

Another highlight of the conference was a half-day workshop conducted by Mark Koskiniemi, Managing Director, Australia and New Zealand of Buckman Laboratories, one of the early and more successful organizational converts to knowledge management. Buckman Laboratories excelled in establishing an enterprise knowledge culture with support from top management. Specifically, they were able to leverage KM to drive employee productivity, address the cultural differences toward KM to build a consistent corporate culture, and to exploit the Web as the primary KM tool to provide complete knowledge access to the entire workforce. The workshop assisted participants in considering the elements that are essential in creating a knowledge-sharing organization that functions across time and space with the goal of becoming a knowledge-driven organization.

Jenny Darroch of the University of Otago in her presentation on "Understanding why sharing knowledge is the key to business success" presented the results of her groundbreaking study. In this study she investigated 440 businesses in New Zealand to assess the link between KM and innovation. Using cluster analysis, her study has found that firms with a knowledge management-orientation are more innovative and outperform other groups of companies, including those classified as market-oriented. The study also found that technology-intensive firms were more likely to develop radical innovations, particularly technology-intensive radical innovations.

Two themes seemed to run through most of the presentations and were also a key concern for the participants. These were getting buy-in and support from top management for KM initiatives and the problem of KM return on investment or as one presenter put it "show me the money". Deidre Butler, manager of Information Technology at the New Zealand Ministry of Health argued that only strong leadership can provide the direction a company needs to choose, implement and overcome resistance to a new KM strategy. She said that championing KM strategy had to come from the boardroom. However, she also emphasized that most of a KM champion's efforts should be on getting the understanding, buy-in, endorsement and advocacy from peer and middle management.

Deidre also stressed the need to use financial metrics to reinforce an organization's KM strategy, a point elaborated on by Joanne Koreman, senior consultant with RightStep Knowledge Practice, who identified that the value of knowledge has not traditionally been part of financial accounting practice, which tends to focus on tangible assets. She called this creating a picture of the "frozen past". She urged participants to take a wider perspective on assets and to consider the organizational, cultural and human criteria that are necessary for knowledge creation and management. She pointed out the development of many, and increasingly credible, methodologies that have been developed to measure intangible assets. The drivers responsible for this are the likely future opportunities to register the value of a company's intangible assets on the stock exchange (for many companies the value of intangible assets can be as much as 20 times the value of tangible assets).

Overall, the conference was a success, allowing for the exchange of ideas and strategies for a varied group of attendees looking for some answers in the wide open and still somewhat amorphous field of knowledge management.

David J. Pauleen(david.pauleen@vuw.ac.nz) teaches in the Communications Studies group of the School of Information Management, Victoria University of Wellington, PO Box 600, Wellington, New Zealand.