Managing for Knowledge

Christina Evans

• Publisher: Routledge
• Year: 2012
• Print ISBN: 9781138155848
• eBook ISBN: 9781136384707
• Topic: Business
• Subtopic: Business General
• Index: Business

Whilst there are many books on knowledge management there are few aimed directly at HR practitioners and the critical role that they can play in building a knowledge-centric culture. This practical book draws on the author's own experience, as well as that of leading-edge Human Resource and Knowledge Management practitioners (including Linda Holbeche, Elizabeth Lank, and David Snowden), each of whom recognise that building a knowledge-centric culture cannot be achieved through technology alone. It covers areas such as: * Defining the key ingredients of a knowledge-centric culture * The changing structures, roles and responsibilities needed to create a knowledge-centric culture * HR's unique contribution to building a knowledge-centric culture, together with practical steps for getting started on the KM journey and for keeping the momentum going * Tools and techniques for: opening up a dialogue about why knowledge management is crucial for business and personal success; knowledge mapping; encouraging and facilitating knowledge sharing, as well as ways of identifying key knowledge players * How to help your organisation reframe its assumptions about learning in the knowledge economy * How to ensure that your HR practices are knowledge aligned

Part One

The Strategic Context for HR's Role in Managing for Knowledge

1

The changing world of business and the imperative for managing knowledge

Knowledge as a key business asset

We are living in the information age where knowledge is now considered the key strategic business asset. ‘How do we leverage the knowledge in our business?’ is a fundamental question being raised by senior business leaders, in all business sectors. The Chief Executive of Hewlett-Packard has been quoted as saying ‘If HP knew what HP knows, it would be three times as profitable.’

What knowledge assets are we talking about?

• Structural assets

• Brands

• Customer relationships

• Patents

• Products

• Operational processes

Human assets

• Employee experience

• Employee ‘know how’

• Personal relationships

So why has knowledge become such a key business asset? What are the broader economic and technological changes that have contributed to this shift?

Changes in the global business economy

A number of significant changes have occurred in the global business economy, and in society more generally over the past couple of decades (Castells, 1989; Allen, 1992). Allen (1992) points out how a ‘. . . sense of economic transformation within the western industrial economies has been present for some time, at least since the 1970s.’ While there are differing views as to what type of economy we are moving from there seems to be some converging views that information and knowledge are becoming the primary source of economic value.

Castells argues that a series of scientific and technological innovations have converged to constitute a new technological paradigm and that what differentiates the current process of technological change is that its raw material is information, as is is its outcome. He refers to this new paradigm as the ‘informational technological paradigm’, which is characterised by two fundamental features: (a) the core new technologies are focused on information processing, so its raw material is information, and (b) the main effects of these technological innovations are on processes, rather than products.

The ‘informational technological’ paradigm is having a fundamental effect on businesses since processes, as Castells points out, enter into the domain of human activity; something that affects social structures and organisational structures. Under the ‘informational technological’ paradigm information and knowledge become the primary source of economic value and competitive advantage (Castells, 1989; Drucker 1993). As Thomas Stewart points out, the old economy was about ‘congealed resources’, i.e. a lot of material held together by a bit of knowledge, but the new economy is about ‘congealed knowledge’, i.e. a lot of intellectual content in a physical slipcase¹.

Knowledge is a source of sustainable advantage given that, unlike other assets, knowledge assets grow with use:

Ideas breed new ideas, and shared knowledge stays with the giver while it enriches the receiver. (Davenport and Prusak, 1998:17)

and

Ideas are the instructions that let us combine limited physical resources in arrangements that are ever more valuable. (Paul Romer, cited in Davenport and Prusak, 1998:17)

and

Through knowledge creation, firms [and people] are able to revitalize themselves and set themselves apart from their competitors. (Bird, 1994: 328).

Other leading management writers, such as George Stonehouse et al. (2001), argue that there are three factors that influence why one business outperforms another. These are competitive positioning, resource or competitive-based positioning and a knowledge-based approach, i.e. having a focus on knowledge building and organisational learning. Sustainability, according to Stonehouse et al., comes from the level of importance that is placed on information and knowledge within the organisation. They suggest that competitive advantage only arises when an organisation is able to generate new knowledge, something that is heavily dependent on an organisation's learning environment.

The combined effects of globalisation, influenced by new technologies, and better communication and transport facilities means that consumers now have more choice over the goods and services available to them. They are constantly being inundated with new product offerings from global companies. For organisations this means that they cannot afford to be complacent about how they conduct business. They cannot assume that the products and processes that made them successful in the past will continue to do so in the future.

Davenport and Prusak argue that companies now require quality, value, service, innovation and speed to market, in order to remain successful in business; the business imperative then is one of knowing how to do new things well and do them quickly.

But businesses have also got to keep an eye on their cost base and seek new ways of managing this. One of the ways in which many organisations have done this is through reviewing their core competence, and outsourcing business activities that do not map directly onto their core competence. Over recent years we have seen an increase in the number of organisations that have outsourced their manufacturing, and in some case part of their service function, to countries where labour costs are lower than in their native country. The area around Bangalore in India, for example, is now a world centre for software production; an example of where the globalisation of knowledge is unaffected by traditional boundaries. Of course by shifting production to different continents, organisations can take advantage of different time zones, which means that they can offer a twenty-four hour service to customers in a cost-effective way.

Changes in technology

Despite the way in which changes in technology are affecting all of our lives, it is easy to forget the speed at which change is taking place. As Table 1.1 indicates, technological changes, which in the past spanned generations, now take place within much shorter timeframes.

Table 1.1: Time to market – how the world of technology is speeding up

Technology	Time to reach 10 million customers (years)
Pager	41
Telephone	38
Cable TV	25
Fax machine	22
VCR	9
Cellular telephone	9
Personal computer	7
CD-ROM drive	6
Netscape Internet browser	0.5 (i.e. six months)

Over the past couple of decades we have seen significant and rapid changes in Information and Communications Technologies. Two important technologies evolved during the 1980s and 1990s. One was a change in telecommunications technologies providing a hundred-fold increase in the amount of data that can be transmitted over computer networks. Another was the growth in the number of networked computers enabling more open communications systems and new ways of working.

These technological changes have enabled new organisational forms to develop, for example networked organisations, virtual organisations and e-businesses – all of which are based on a different set of assumptions about the way business should be organised and managed. In these new business environments, hierarchical structures have been found to be less effective as they get in the way of providing a differentiated and responsive service to customers. In addition, they are based on a different set of assumptions about the way business should be organised and managed.

These combined technological changes have also led to a number of observable changes in the way that work is structured and organised. First, information that in the past would have been restricted to individuals in certain job roles, can now be made more accessible both vertically and horizontally, within and across organisations; such a change can affect how and where business decisions are made. Second, these new technologies have enabled work to be location-independent thus transcending traditional geographical boundaries. With the relevant technologies, work, as pointed out above, can be distributed around the world in order to minimize production costs. Finally, these new technologies have opened up the possibilities for individuals to work from home thus bringing about a return to a way of living and working that existed in the pre-industrial era, in which work, family and community life were closely intertwined (Baruch and Nicholson, 1997).

Castells argues that in the knowledge economy individuals who are unable to acquire the relevant skills, or who do not invest in continuous learning, may find themselves excluded from the labour force. Continuous learning throughout all strata of the workforce is critical to survival in today's ever-changing business world (Coolahan, 1998).

Knowledge-based businesses apart, more and more jobs now involve the use of Information and Communications Technologies (ICT). ICT skills are seen as being essential in the modern workplace (Labour Market & Skills Trends, 2000). However, as more and more organisations opt to have their IT systems developed and serviced by third party suppliers, this will have implications for the skills mix within organisations. What will be required is IT literate employees wh...

Table of contents

• Front Cover
• Half Title
• Dedication
• Title Page
• Copyright
• Contents
• List of Figures
• List of Tables
• Foreword
• Introduction
• Acknowledgements
• Part One The Strategic Context for HR's Role in Managing for Knowledge
• Part Two Building a Knowledge-centric Culture
• Part Three Building HR's KM Credibility and Capabilities
• References
• Index