In McKinsey & Company’s 2006 Global Forces Survey, participants listed innovation in products, services and business models and greater ease of obtaining information and developing knowledge as the two most important factors contributing to the accelerating pace of change in the global business environment. Greater ease of obtaining information and developing knowledge were further cited as the single most important factor expected to contribute to corporate profitability over the next five years.
This is not surprising, with more than 40 percent of the U.S. labor now comprising of knowledge workers — the phrased coined by Peter Drucker nearly 50 year ago for whom complex problem solving is the primary component of their jobs. More than 70 percent of new jobs created since 1998 in the U.S. require significant abstract thinking and judgment. Knowledge workers are also a key source of competitive advantage companies with a higher percentage of knowledge workers are on average more profitable than laborintensive companies. However, they are also more likely to show variability in their earnings performance making the role of talent and knowledge more critical than ever.
Yet the truth is that most organizations continue to struggle with knowledge management. Significant time and money has gone into the architecting of knowledge management (KM) technologies designed to capture, codify and share knowledge within, across and beyond an organization over the past 10 years.
And further spending is expected, but with a twist. U.S. Federal government KM spending alone will reach US$1.3 billion over the next five years according to the Federal Knowledge Management Market View report. However, spending trends are beginning to reflect a shift as companies turn their focus away from technology issues and more toward KM services the people and process dimensions. According to IDC, worldwide KM services spending will increase at a compound annual growth rate of 41 percent, from US$2.3 billion in 2000 to US$12.7 billion in 2005. Additionally, KM is becoming more global. While the U.S. leads efforts in the KM market, nonU.S. regions will outpace the U.S. in KM spending growth. KM technology spending will continue to increase, but just at lower rates. An AMR Research survey of 400 IT executives in manufacturing and service companies indicated that they would spend an additional 7.6 percent of their budgets on KM software in 2006.
These statistics also reflect the situation faced by many corporations vast servers of knowledge sit underutilized with outofdate or irrelevant content that does not support current business objectives. Additionally, executives, having spent attention and resources on KM, have not experienced the promised or desired ROI from these investments. Technology is no longer a real barrier for KM in developed economies. Advances in technologies span backend content management systems, frontend user portal software and innovative usergenerated content tools.
Putting technology aside, what can be done differently to increase the value of existing and new KM investments?
First, technologyenabled KM requires a broader infrastructure to be successful in corporations or nonprofit and government organizations. Organizations cannot rely on grassroots behaviors and communities of practice to emerge informally and expect to see a subsequent impact on performance and/or productivity. Secondly, KM practitioners should shift their focus from architecting knowledge technologies exclusively to architecting both technology systems and human interactions.
A common thread in many KM discussions is the one about how we dont have a knowledge sharing culture, and if we did, things could be so different and much easier. Changing behaviors and the culture to make KM successful is less and less of a feasible option these days as companies face increasing organizational changes and turmoil from mergers and acquisitions to downsizing to offshoring. A support infrastructure that focuses on both users and authors of knowledge is far more likely to drive success of KM than trying to change the mindsets and values that shape a wellestablished corporate culture. Taking the best elements of the culture and exploit them while minimizing the negative attributes is as much flexibility as many KM professionals have.
Successful knowledge infrastructures frequently utilize a hybrid approach that combines centralized and decentralized activities and functions. In general, much of the overall support and governance are conducted centrally to engage leaders and optimize shared services.
Knowledge, however, can and should be created in two ways. In one approach, knowledge is created bottomup relying on the discretion of authors and experts to codify what they know for users who could benefit from their expertise. Alternatively, knowledge can be created topdown when leadership or a knowledge committee determines that the organization should have more expertise or capabilities in a particular area to either meet the needs of their clients or enable entry into a new business or geography for example. The combination of these two approaches ensures that an organization is capturing what is happening on the ground while directing knowledge development based on the strategic needs of the business creating a vibrant marketplace for knowledge. Facilitating a bottomup approach only runs the risk of falling into an innovators dilemma trap, just apply it to knowledge focusing and improving existing businesses and/or listening closely to customers but not seeing the bigger picture where expertise and distinctive knowledge is created based on macro trends and potential whitespace opportunities.
A KM support infrastructure the knowledge operations for a company might include one or more of the following functions:
Editorial staff who help create and edit content, set template standards and apply them,
Researcher who assist in the gathering and synthesizing of information,
Brokers who connect peopletocontent and peopletopeople,
Librarians who support the development of taxonomies, and
Domain owners/knowledge managers who work closely with businesses, practices or domains to coordinate knowledge development.
The activities of codifying knowledge, organizing it, publishing it, finding it and updating it cannot rest solely in the hands of users and authors. Users and authors will frequently argue that they have day jobs and dont have time for KM; in addition, many are unclear of the value to them personally. A support infrastructure, to any degree or size, signals the importance of KM to the organization and lets users and authors know that they will have support for these activities. This can go a long way toward driving change and perceived value.
For both bottomup and topdown innovation, the next important question becomes what knowledge is important? Since not all knowledge is created equal, defining the knowledge needed and why is an important step. For example, consider the following questions:
What public knowledge (e.g., from the Internet or subscriptions) is available and important for people to use? Are these sources wellorganized electronically and easy for users to access?
What best practices are most likely to influence productivity the efficiency and effectiveness of how people work? Which ones are most applicable across the organization as a whole? Which ones are critical to specific businesses or functions?
What distinctive knowledge must be created? How will it influence our organization and our business objectives? Do we have expertise in these areas now or do we need to create it?
By understanding what knowledge users need and from whom, resources and investments can be targeted appropriately. Subsequently, having a perspective on which of the above areas would have the most impact on performance, productivity and/or the current challenge at hand.
The role of technology for knowledge management will always be a critical dimension. However, the notion of architecture can be expanded to also include the architecture of human interactions. Typically a large amount of time is spent on the information architecture of a Web site or portal. This level of focus and attention should also be applied to interactions among people across two key dimensions:
Informal networks to locate experts on various topics, and
Formal communities of practice or networks of targeted groups that are brought together by a common project, goal or shared mission.
The importance of tacit knowledge is impossible to understate. So much happens in conversations, meeting and events, which is why the capturing of tacit knowledge has been a holy grail of sorts for years among KM professionals. As opposed to trying to codify tacit knowledge, architecting the right conversations can ensure the right knowledge and expertise is being shared at the right time. Insights and distinctive knowledge are far more likely to be created between and among people, and less so when people interact individually with technologybased content. Often, by the time tacit knowledge is actually codified and shared, it is no longer as relevant as it was at the time of inception.
Facilitating interactions might take the form of simply publishing an expertise directory to allow users to search for resources based on what they need to know and allowing them to make informal contacts as necessary. The important dimension of architecture in an expertise directory is how you define and determine expertise is it selfreported? is it captured from experiences or projects?, etc.
Additionally, the formal development of distinctive knowledge and insights requires a more structured approach that includes aligning the right talent, establishing a temporary formal structure and setting goals and objectives for the team. Creating these distinctive insights requires careful orchestration of networks and interactions along with the processes to rapidly move from insight to practice. Orchestrating these networks is strategic it requires determining where connections are required internally within groups, crossfunctionally and across silos and externally, with clients, suppliers, partners and others such as academics for example.
In conclusion, a few thought to consider during any KM implementation:
Not all knowledge should be captured; not everything people know can benefit an organization,
Technologists care about technology users care about content,
Collaboration can be unproductive and can be designed to be more productive, and
People never do what they say they will do, so dont ask them, prototype solutions as early as possible.
About the author
Marla M. Capozzi is a consultant in McKinsey & Companys Boston office.
Email: marla_capozzi [at] mckinsey [dot] com
Copyright ©2007, First Monday..
Copyright ©2007, Marla M. Capozzi.
Knowledge Management Architectures Beyond Technology by Marla M. Capozzi
First Monday, volume 12, number 6 (June 2007),
A Great Cities Initiative of the University of Illinois at Chicago University Library.
© First Monday, 1995-2013.