km 20 years later

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


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


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 – 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


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>


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


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 – 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


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


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


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"


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


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


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 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 – 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!


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


“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


Extra Slides

Added for Reference


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


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


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


Some Inter-Domain FunctionsSome Inter-Domain Functions










"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


Examples of KM Domain AreasExamples of KM Domain Areas










"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


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



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


Maybe – Just Maybe –Maybe – Just Maybe –We Need to UnderstandWe Need to Understand

FinancialTimes

March 62004

km 20 years later

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