Koulopoulos, Thomas: Knowledge Management - Toward creating the "knowing enterprise", Delphi Consulting Group 1997.

THEMES: Koulopoulos, Thomas
META STRUCTURES: CH\...\Wissensmanagem...
YEAR: 1997
Login Login
User: Anonymous


LABEL: e-Enterprise | Knowledge Management | White Paper
ORGANIZATIONS: Delphi Group
PEOPLE: Koulopoulos, Thomas
TIME: 1997
 

Comments/attachments: Close
 
Database 'WI2 IM Library & Materialien', View 'Berichte', Document 'Delphi Research: Hompage & Summaries about White Papers' RoadMap Delphi Group
Knowledge Management

- Toward creating the "knowing enterprise"



By Thomas Koulopoulos,
Delphi Consulting Group

The evolution of knowledge management

Leveraging knowledge

Hooking into the Knowledge Chain

Learning to forget:
From corporate memory to corporate instinct

The pieces of the
Knowledge Management puzzle




Have your organization's information systems, processes and habits shackled you like a waterwheel to a single stream of innovation? Is your most valuable competitive differentiator--the transfer of knowledge from knowledge worker to knowledge worker--locked away in dark synapses of your employees minds?
Does your company have a sixth sense
about new opportunities and markets?

Is Knowledge Management the key to releasing the shackles, unlocking the power of innovation, and creating corporate instinct?

Read on -- the answers begin here.




Creating a knowing enterprise:
The evolution of knowledge management


Over 130 years ago, Karl Marx revolutionized political and economic thought with the publication of his manifesto Das Kapital. In it, he called for a world economy in which the workers owned the factors of production. Today, his vision of a grand communist society lies in tatters. It is supremely ironic, then, that at the end of the 20th century, the most competitive bastions of capitalism have surrendered ownership of their most valuable factor of production--knowledge--to the workers.

This was not entirely intentional. It just so happens that knowledge has become the most important factor of production for the information economy, and knowledge resides primarily in the minds of the workers. This is a dramatic change in thinking for most economic models, and requires a fundamental reappraisal of the way that organizations manage this newly empowered resource.

Knowledge has emerged as the key differentiating factor for organizations in the late 1990s. In decades past, companies relied on economies of scale, marketing and sales proficiency, or the "quality" and "customer service" movements to drive their competitiveness. Technology, however, is leveling the playing field. Parity in quality and service is increasingly becoming the norm across all industries.

The remaining bastion of competitive differentiation is
innovation. The companies which are most successful are the ones that can continue to obsolete their own products before their competitors do. They must assume that competitors will always be able to emulate what they do over time, and the only way that they can stay ahead is to innovate before their competitors, leaving them to play catch-up. These companies have developed a sense about themselves, their competencies, and their intellectual assets that sets them apart. Call them "Knowing Enterprises," due to their ability to "know" when and how to make the right moves in rapidly changing markets, and their vigilance in learning new ways to turn competency into an endless stream of new product.
* * *
Little wonder, then, that the world's attention has shifted to the knowledge which exists in corporations, and on ways in which that knowledge can be nurtured and used most effectively. Massive attention has shifted toward Knowledge Management, and the proliferation of knowledge management users and providers bears testimony to its promise.

Yet the sudden attention focused on knowledge management has also drawn skepticism, of the sort that inevitably accompanies any new management or technology phenomenon. It seems that the rate of turnover in new management fads and new technology panaceas runs neck to neck.

Knowledge Management is not a fad. It is common sense. At a time when digital information is not only increasingly available but increasingly personalized and portable, knowledge represents a resource that can be an organization's greatest asset or its greatest nemesis. A crisis looms for many organizations who have not yet realized this. With innovation being the only true competitive differentiator it has become nearly impossible to protect the value of an organization without also managing its knowledge. Organizations who do not understand this are setting themselves up for a jarring awakening.

Admittedly, Knowledge Management seems amorphous. It deals with the intangible nature of intellect. It is not a simple matter of applying a new technology. It is clearly an issue that involves much more than technology--not unlike the complex issues of developing and nurturing a corporate culture.

Richard Hamermesh talks about a call he once received when he was teaching at Harvard Business School, shortly after Tom Peters' and Bob Waterman's
In Search of Excellence was published. The caller, from a Fortune 100 company, asked Hamermesh if he could help them create a corporate culture. If only developing corporate culture and managing corporate knowledge were that easy!

Knowledge Management, as much as culture, cannot be reduced to a simple formula. And it is clearly more than information management.

* Information management is the structured organization of predefined data.

* Knowledge management is the ability to link structured and unstructured information with the changing rules by which people apply it.



Knowledge Management requires more than the conveyance of information. It must also provide the basis for learning and the compounding of learning; that is, the ability to create longer term intelligence and ultimately "instinctive" behaviors. (See "Hooking into the Knowledge Chain.")

Knowledge Management is rooted in the idea that mobilizing an organization's intellectual resources is essential in breaking free from the organization's rigidly held, yet seldom questioned, suppositions about its competitive touchstones of the past, and instead exposing it to compete based on innovation. *




Leveraging knowledge

Consider this: information always increases, it doesn't regenerate on its own. In fact, when it takes days, weeks and months to sift through, more information can actually lead to less knowledge.

Knowledge, on the other hand can continually increase, even with a static information base. Knowledge depends less on the amount of information than on the number of connections that link the information. A knowledge management system allows you to navigate and make sense of these connections easily.

Think of a strand of DNA. The complete information store of a DNA molecule is determined by only four bits of data--the molecular basis of thymine, adenine, guanine and cytosine (TAGC). The information built by these basic elements is a code, unique to specific instructions about the behavior of a cell. The knowledge conveyed through DNA, however, is only evident over time as it is communicated through the behavior of multiple cells in a living organism.

Knowledge management does not obviate information management. Instead it builds on it. Simply put, an enterprise is only as effective as the information it learns from is accurate. Information and information systems in a Knowing Enterprise must be accurate, timely, available to those who need it and in a format that facilitates their use. In most organizations, the tests of information and information systems are simple:

* How does this information add value to the decision process?

* How can it get to the people who need it?

But don't be mislead. Few organizations have the luxury of resting on their laurels. Most are constantly challenged by new competitors. Their strength must come from more than a knowledge of what has worked in the past--it must involve the ability to continuously regenerate their knowledge of themselves and their markets.

Today's Knowing Enterprise must regard knowledge as a fragile and volatile asset since it is no less so than the basis of its most important asset, intellectual capital.

It is regeneration that ultimately leads to the imperative for knowledge management. There is little doubt that the springboard for the popularity of Knowledge Management was the painful realization that many organizations came to as the result of the massive reengineering initiatives that swept the business world over the past decade. Finally aware of the discontinuity between their environment and their traditional response, these organizations initiated radical initiatives, destroying the implicit repositories of their corporate memory, and rebuilding processes and strategies to address the new environment.

While this served to rejuvenate these companies, many made a fatal mistake--they replaced an outdated, invalid corporate memory with a new, soon-to-be invalid corporate memory. Only those organizations which were able to break free from the shackles of corporate memory altogether, by building a base of corporate intelligence for the future, could be assured that they would not need to repeat reengineering initiatives ad infinitum--or until the company collapsed under the weight of the past.

Stop and name the companies who are able to lounge in an industry which is changing slowly or even moderately. It's much easier to come up with the names of corporate legends that illustrate how once mighty giants have become extinct in the face of a radically changing environment, deposed by smaller, nimbler, smarter competitors. It appears ironic at first, and all too often it is barely considered, but an organization relying on true knowledge management has reached the stage where its knowledge of the past plays less of a role in guiding its future than its understanding of current circumstances and an innate ability to process and respond to these circumstances.

The organization makes a subtle yet profound shift--from relying on its
experience (or knowledge of the past), to relying on its skills (or resourcefulness to handle the future). Knowledge of the past is only valuable inasmuch as it provides a perspective on the future. Skills, on the other hand, equip the organization to respond to as-yet-unknown forces for change. These skills must include "metaskills"--skills which enable an individual, and a corporation to rejuvenate their abilities at critical times; for example, an ability to question assumptions, to learn new techniques, and to thrive in the face of uncertainty.

Simply managing old knowledge is not the objective of Knowledge Management. A knowledge management system, like an ecosystem, cannot be constantly depleted of its resource without constant replenishment. It is here that the most important benefit of knowledge management--the speed of innovation--becomes obvious. *

Gaining sustainable competitive
advantage through knowledge managment


Researchers in the area of sustainable competitive advantage have concluded that "the only thing that gives an organization a competitive edge ... is what it knows, how it uses what it knows, and how fast it can know something new!" (Laurence Prusak, in
"The Knowledge Advantage," Strategy & Leadership, March/April 1996, p. 6.)

Managing information resources effectively is far from trivial in this era of information overload.

The problem of accessing information is made more complicated by organizational trends. The restructuring exercises of the past decade created small business units within larger companies, each with separate business goals and a separate bottom line. The organizational barriers to information flow were compounded by technological barriers, because business units began to make their own IT decisions.

The solution to information overload: Intelligent access

The first step in implementing a knowledge management solution is to provide seamless access to an organization's entire collection of information. Previously, information retrieval focused on extracting relevant information from targeted repositories, but stopped short of delivering a connected view of the collection.

In evolving into knowledge management, advanced information retrieval has a new, expanded role to play. Now, innovations like an enterprise Knowledge Map, allow users to extract all relevant information from various repositories and view it as one logical collection. The result is a "virtual document warehouse."

The next frontier: Intelligent analysis

The logical progression for organizations that have implemented intelligent access software will be to extend it to deliver additional value to knowledge workers. Now that entire collections can be viewed, sophisticated modeling techniques can be applied. Whereas phase one focused on accessing the information as a means to optimize investment, phase two focuses on analyzing the information in order to maximize return on that investment.


As we move toward the next millenium, it is inspiring to think how the job of knowledge workers will be transformed by this advanced software.
--Fulcrum Technologies, Ottawa, ONT
Link people to knowledge for bottom line results

Knowledge professionals are finding that vendors of various information technologies are now relabeling their products for "knowledge management." These technologies are well suited for creating, processing and managing particular knowledge assets; however, they rarely meet the needs of organizations implementing proven knowledge management techniques.

Accomplishing this task requires an enterprise knowledge management system, defined as the group of technologies that facilitate the collection, organization and transfer of knowledge among employees. Its core component should function as a "knowledge warehouse" and offer users seamless access to the knowledge contained in disparate information systems as well as the ability to contribute valuable knowledge assets through a web browser.

Knowledge professionals know that knowledge assets are more than merely documents. They require tools to create rich metadata structures that capture information about the knowledge asset; for example, whether a proposal was successful and what the worker learned. This enables capture of the tacit knowledge which is often much more useful than merely reading an archived document. It also allows the creation of forms to capture knowledge in a more structured form that allows users to perform fielded searches on classes of knowledge assets and enables uniform presentation of the resulting information.

However, organizational knowledge goes beyond mere documents, Web pages and other explicit forms. Finding "who knows what" in an organization has always been a time-intensive process. A knowledge management system should include a way to find people based on their skills and areas of expertise, so employees can quickly find the experts they are looking for.

As global competitive pressures continue to increase, organizations that implement knowledge management practices, enabled by effective technologies, will add to their top and bottom lines through reduced cycle times, greater efficiency, and greater use of superior solutions across the enterprise.
--Dataware Technologies, Cambridge, MA
A major differentiator between knowledge and information is the individual's perception. Knowledge promotes understanding and propones action. Medical references are information to non-medical persons, they provide knowledge to doctors. Intelligence is the efficient use of information to produce knowledge and the efficient association of knowledge to produce further knowledge.
--Dr. Bisher Abaza,
President,
ByteQuest Technologies

Knowledge is a level higher than information. It uses information as its raw material, but transforms that information into a more valuable asset: intelligence that can be acted upon. We must also recognize that knowledge management is not a product, nor a solution, that organizations can buy off the shelf or assemble from various components; it is a process, implemented over a period of years, which has as much to do with human relationships as it does with business practices.
--Dan Agan,

VP World Wide Marketing,
Excalibur Technologies






Hooking into the Knowledge Chain
"They copied all that they could follow but they
couldn't copy my mind,


and I left' em sweating and stealing and a year and a half behind."

--Rudyard Kipling
The most salient characteristic of companies that use Knowledge Management is the incredible velocity of their people's and processes' adaptability--what we have termed the "Knowledge Chain."

If there is an end-game or an ultimate manifestation for Knowledge Management it is the creation of "Corporate Instinct." Corporate Instinct is a company's collective sixth sense regarding its ability to overcome its own memory and respond instantaneously and effectively to market opportunity, customers and competition.

In studying more than 350 companies, a handful of which demonstrated strong Corporate Instinct, we identified the basic characteristics that were strikingly similar among these companies. The most striking was the adaptability of their people and processes to change ahead of the market. The framework for such adaptability is an organization's "Knowledge Chain."

Corporate Instinct stems from four definitive stages in the Knowledge Chain. In each of these areas specific knowledge management tools can be used to enhance the velocity of the Knowledge Chain. It is this velocity that determines a company's competitive advantage. To use the genetic analogy, these are the four building blocks that determine the uniqueness, innovation and longevity of any organization. They are also the factors that allow an instinctive organization to mutate successfully, while extinction claims its competitors. These four stages are:

*
Internal Awareness

*
Internal Responsiveness

*
External Responsiveness

*
External Awareness

The four stages of the Knowledge Chain define the flow of knowledge through four quadrants, as shown in the illustration below left.

The four quadrants represent an organization's ability to develop fully its internal and external awareness and responsiveness. The counterclockwise circle represents the continuous flow of information within the Knowledge Chain. In any organization, and industry, success is ultimately measured by the ability to best meet the requirements of Cell #3, External Responsiveness. In each of the cells, however, there are specific tools, methods, organizational structures and qualities that support or impede external responsiveness.

Look at the two knowledge chain diagrams on the opposite page.

In organizations with strong Corporate Instinct, all four cells are permeable, allowing the immediate transfer of knowledge between the cells. This permeability is the basis of Corporate Instinct. For example, information about the market is translated into new products and services based on the permeability of the top two quadrants.

Internal Awareness

Corporate Instinct is foremost about an organization's ability to understand itself, to have an organizational awareness. It is not only having your house in order, but also knowing what order your house is in. In its simplest terms it is the answer to the question: "What do you do?"

For either an individual or an organization the answer can take two basic forms: what you make or what competencies you use to make it. For example, an architect's job can be described as either to design buildings or to translate human needs into beautiful structures. It's a lot easier to say that the architect designs buildings, or more specifically, that an industrial architect designs offices or factories. But what happens to the architect if demand for factories and office buildings declines, or even disappears? Internal awareness is answering the question in terms of what competencies the architect has. It is more complex and time-consuming, but also more valuable and much more durable. However, this understanding must be an ongoing process since markets will require the products that result from competency to change often and quickly.

There's no point in responding quickly, though, if it's too late. Reengineering, for example, is often little more than over-compensation for a company's initial insensitivity to a market shift. Like the numbed hand placed on a hot stove, such companies may only become aware of the extent of the damage after they smell their own burning flesh. Instinctive organizations, on the other hand, are "wired" with high levels of continuous awareness and perception through all levels and functional areas. This enables them to draw much closer to other parts of themselves and, as a result, closer to the market.

The overly strong emphasis on functional organization structures that often permeates traditional companies inhibits the development of such an internal awareness. Organizations with a rigid functional structure most often define their core competency as their products and services, not their skills. As James Brian Quinn recounts in the
Intelligent Enterprise, "The question usually posed is, 'How can we position our products (or product lines) for competitive advantage?' not, 'What critical skills should we develop to be best in the world from our customers' viewpoint?' The former builds current profits, the latter builds long-term preeminence."

It is this long-term preeminence that organizations need most if they are to weather changing markets. But the systems and institutions in place in many organizations undermine this objective. This is especially true in functional organization structures where, as Quinn notes, "each functional group has a psychological and political need to see itself as the company's special source of strategic strength. In neither event are there strong incentives to build the cross-divisional corporate skills that would lead to enterprise preeminence. Corporate effectiveness is undercut to satisfy personal or divisional goals."

Instinctive organizations not only offer incentives for building cross-organizational skill sets, they also make the collective whole aware of these skills, thereby creating high levels of internal awareness.

A Knowing Enterprise maintains this level of awareness because it always has the knowledge of itself necessary to respond. This is no small feat for typical large organizations that are fragmented, populated by professionals who zealously protect their knowledge, and undercut by information systems that isolate information and prevent collective creation or access to knowledge.

Creating a Knowing Enterprise is indeed the principle challenge of Corporate Instinct. Once the organization has established its own awareness it can proceed to the remainder of the Knowledge Chain. Until then it is relying far more on the temporal success of its products than on its core skills and competencies.


Internal responsiveness

Awareness of an organization's competencies does not, however, guarantee a clear path to successful products or services. An organization may be well aware of its strengths and market demand, yet not be able to adequately effect change within itself quickly enough to meet the market requirement. In our Corporate IQ test, respondents indicated that they had a 30% greater external awareness than internal responsiveness. In other words, "we are better at understanding the market then we are in rallying and coordinating our own resources to prepare for a response." No wonder so many of our survey respondents indicated that a good idea had more chance of resulting in a new startup or ending up at a competitor before their own organization acted on it.

Internal responsiveness considers how quickly competencies can be translated into teams with the skills and tools to bring a product to market. During the first iteration of the Knowledge Chain (the Knowledge Chain is a continuous process) these are almost always small teams of no more than a dozen or so individuals who collaborate closely with a beat-the-clock attitude. These small teams are essential to internal responsiveness. A good knowledge management systems allows them to quickly share knowledge and reconfigure themselves as the market demands.

External responsiveness

When all is said and done, an organization's ability to better satisfy this cell in the Knowledge Chain than its competitors will determine its success or failure. Instinct is ultimately about the ability to respond to turbulence outside of the organization by making decisions without having to coordinate and consider all of the factors in a complex business and market environment. This means that organizations should set their strategy in terms of broad goals and guidelines, and rely on their ability to "turn on a dime" when the crosshairs of the organizational environment comes into focus with the requirements of the market. This is the essence of Corporate Instinct--a level of responsiveness to environmental conditions that is significantly faster and more intelligent than in the past and the current competitors.

This is not just serendipity, but a prepared organization ready to strike when it senses opportunity. The instinctive organization is, in this regard, as removed from traditional marketing as a Patriot Missile is from a Scud--the former has an internal awareness of its target and control over its trajectory, the latter is lobbed at its target, with fingers crossed, like a cannon ball.

External awareness

External awareness represents an organization's ability to understand how the market perceives the value associated with its products and services as well as the changing directions and requirements of its markets. When coupled with internal awareness, external awareness may lead to entirely new markets.

For example, when the overnight shipment business began to take off in the mid 1980s, major air carriers recognized an opportunity to couple their awareness of an internal competency to transport objects of any sort with the need for fast same-day package delivery services. The result was a new business that today accounts for a significant revenue stream for many large commercial airlines.

In part this also goes back to the question of products vs. skills. AT&T for example ran a series of ads during the mid 1990s showing people using telecommunications to work in all sorts of nontraditional settings-- for example, working with their laptops on the beach. The ads were emblazoned with the title, "YOU WILL." They were the brunt of many jokes because they effectively promoted workaholism. AT&T's perception of itself, as portrayed in those ads, was driven by product: extensive visuals of videoconferencing, computer graphics on remote laptops, business around the world, around the clock. But what is AT&T to the market? A source of burden in an already overburdened workforce? Perhaps, but that's not a pretty picture. No, AT&T is in
the business of bridging time and space in order to make life easier, not harder. Its current ad campaign looks like anything but a telecommunications revolution. Instead it portrays that competency. In one television spot, set to the soothing tones of Elton John's "Rocket Man," a weary traveler uses an airline phone to meet his wife under the stars on their front porch for a late night rendezvous. The message here, implied with subtlety, is "YOU WANT," not "YOU WILL." You will talks the talk of industrial-age barons who defined their markets. You want talks the talk of the externally aware organization that listens to its markets and puts its skills on display rather than its products.

External awareness is not simply a function of extensive focus groups and market research. These often provide false clues. They provide testimony to what the market needs today, or yesterday, rather than what it will need in the future. In the worst case, it provides only the answers that the market expects you want to hear. The "classic" example is that of New Coke, which despite heavy market analysis proved the ultimate folly of most focus groups.
* * *
When you apply the Knowledge Chain as a framework for the implementation of Knowledge Management, the benefits, as well as the specific applications of Knowledge Management become abundantly clear. For example:

Internal awareness is facilitated by knowledge management tools that provide access to disparate pools of knowledge that may not have been considered relevant in the current market context, or which were not even known. Basic search and retrieval technology is often used as the basis for this sort of knowledge management.

Internal responsiveness can be accelerated by using collaborative tools that allow teams to reconfigure themselves quickly into communities of practice. Imagine a sophisticated knowledge management agent that can sift through the digital work of employees and infer the competencies and skills of an organization. The knowledge management tools, often called "digital dragnets," can obviate the hierarchical constraints that stifle communication across an organization's knowledge in its human capital.

External responsiveness can be enhanced by using intelligent push/pull technologies that deliver products to customers who may not have thought to even ask for your products or services.

External awareness can be heightened through extranets, knowledge visualization tools and other methods that increase the intimacy of your organization with the market.

All of these are forms of Knowledge Management that collectively enhance an organization's responsiveness and ability to innovate. *


Building a seamless
knowledge management solution


Expertise hinges upon the knowledge workers' ability to access information regardless of format and location. These assets are analog (paper/microform) and digital (image/text/web/reports). Documents today are often unmanaged in drives and filing cabinets, or are managed in a fragmented way (faxs in fax servers, images in imaging systems, reports in COLD systems.) Documents are also a component of knowledge. Part of managing knowledge is the building of knowledge maps that cluster documents in logical and hierarchical structures. Knowledge management systems must allow users to capture knowledge items from multiple sources and provide access to them irrespective of format/location. They must also allow the knowledge map to integrate with business applications.

ByteQuery is a knowledge management system that provides a unified classification and security for all knowledge items (analog/digital documents, database records). Documents are organized in a logical hierarchy that features folders and sub-folders, and cabinets. The folders are Compound Folders and contain documents located within multiple servers and in any format.

Users can capture objects from the UIs of applications, Explorer, and Web browsers; and can place them at the appropriate location within the classification. Users can set "capture rules" defining how objects are captured and classified. Through its inheritance scheme, tacit knowledge can be classified in the knowledge map thus becoming explicit.

ByteQuery allows users to navigate the filing structure, search through it, retrieve objects from it without knowing their location and format. When implemented with ByteQuest (Object Manager), it provides advanced management capabilities for a variety of object formats. ByteQuery can also reference in its knowledge map objects not in its custody; and with its API it allows database, workflow, and groupware applications to integrate with the knowledge map: documents, folders, cabinets.
--ByteQuest, Ottawa, ONT
Knowledge management is a collaborative work environment in which an individual's knowledge is automatically collected, structured and made accessible organization-wide in order to support rapid decision-making and reduce duplication of effort. The goal isn't to capture all knowledge in people's heads; rather, it's to do a better job of using individuals' knowledge to run the business more effectively.
--Ian Hersey,
Inxight Software,
A Xerox New Enterprise Company

Middle managers who have been socialized in hierarchial, rules-based organizations become desperately insecure about the shift of power implied by Knowledge Management from power-of-position to highly situational power-of-knowing.

The biggest Knowledge Management implementation challenge is to manage the evolution of middle management roles.
--Gordon Stone,
President,
GroupWorX

Information life cycle management

Today, Knowledge Management may appear to be a huge consultant's "sand box"--an ill-defined business solution holding great promise, but with immature technology and products. Actually, the potential of knowledge management can be realized right now if organizations look for specific opportunities in so-called knowledge-intensive, high-value business processes. These opportunities exist everywhere in today's commercial and government operations--for example, insurance policy underwriting, loan origination, customer service operations, product design and regulatory compliance management.

Document management and workflow software are two of today's tools to enable the "what" and the "how" of a knowledge management strategy.

Document management software provides the substance for an organization's knowledge management infrastructure. It enables organizations to capture and share knowledge buried in all types of documents and other media not easily encoded in today's enterprise databases of structured information. With integrated document management, intelligent searching, delivery of information throughout an enterprise, and work collaboration become practical and affordable. The goal users seek is to increase the value of information and improve organizational effectiveness, not just improve efficiency and reduce costs.

Workflow software is the "how" of knowledge management. If we can deliver information to knowledge workers at the right time, they can leverage it to make a decision or advance the progress of a business process. Workflow software is the catalyst for putting information to work and creating value. It allows an organization to more easily deploy flexible business processes, make continuous process improvements and create new work environments such as intranets and extranets to tie together an enterprise's employees, customers, suppliers and business partners in a collaborative team. Intranets and extranets are changing the basic economics of corporate computing--allowing faster application development, lower costs of deployment, and rapid access to accurate information.

Perhaps the time has come to embrace this new term, knowledge management, that connotes the business value that these products can deliver to users and replace the fragmented, technical words we've been using for individual software products.
--FileNet, Costa Mesa, CA
Knowledge Managment is the synthesizing and leveraging of an organization's information assets and experience to drive business performance. Although we have made progress with technologies such as "thinking computers," the challenge is still to find a systematic way to convert information into knowledge that can be re-used. The process is still a case-by-case art rather than a routinized science.
--Mitchell Gross,
President,
Mobius Management Systems

Knowledge retrieval:
a true advancement over text retrieval


Search engines such as AltaVista, Yahoo and Lycos use simple word matching to locate words in target documents that match the words contained in a user's query, without regard to the
meaning of the words in the query. These techniques can narrow the amount of information a user can find, but more often add to the problem of information overload by returning thousands of irrelevant query results.

Information/text retrieval technology, like Verity and Fulcrum, improves on basic search engines by applying both Boolean and context-based search techniques. This approach arguably increases the relevancy of returned results, but it also typically fails to search across all data types, thus limiting effective exploitation of all the information assets in the organization and contributing only partially to comprehensive and robust knowledge management.

Knowledge retrieval technology uses advanced algorithms and sophisticated processes to enhance queries, then access all data formats, and then accurately sift the information it finds to return only the most relevant results.

The specific advantages that Excalibur brings to the problem of knowledge retrieval are two-fold:
semantic networks and pattern recognition.

Semantic networks are built-in knowledge-bases, derived from dictionaries, thesauri and other lexical resources. These networks can even distinguish among the multiple meanings of a single word, such as "stock," which can mean shares of ownership in a corporation, inventory, ancestry or soup, depending upon context.

Pattern recognition (also known as Adaptive Pattern Recognition Processing, or APRP) provides robust "fuzzy spelling" to recognize query terms even if hit words within a document are misspelled due to OCR errors, errors made by the author, errors made when transcripting foreign or other proper names, or errors made by the searcher or spelled differently than the query terms. -- Excalibur Technologies, Vienna, VA






In order for thought to become knowledge, it must be shared, distributed and challenged. Knowledge is not personal, it is the shared communal font from which each successive human generation drinks, eventually adding back more than it takes. Knowledge is the result of accessed information that enables action on the part of the knowledge worker.
--Bill Bennett,
general manager,
Folio Product Division of
Open Market

With high turnover, due to an aging workforce and downsizing, part of the "corporate memory" leaves with each employee departure. So it's critical that organizations capture their tacit knowledge. The capabilities required to leverage knowledge include providing simple and fast access to meaningful information; and manipulating the information resident in unstructured formats using modeling and business intelligence concepts. The end result is that as tacit knowledge becomes explicit it can then be managed.
--Eric Goodwin,

Chairman and CEO,

Fulcrum Technologies
The knowledge advantage

With the increasing interest from organizations regarding information management, the benefits of incorporating the next wave of knowledge management solutions are now beginning to be understood. While controlling information as documents (document management) is good, the ability to capture knowledge from documents for decisioning (knowledge management) is proving even more attractive and profitable.

Traditional information management harnesses an organization's information resources and availability to promote organizational efficiency. It supports an organization's processes and information needs by organizing and storing the appropriate information for immediate or later use. Today's typical use of information management would be a mainframe or client-server application that allows any customer's account profile to be accessible at the desktop of every person in a company.

Knowledge management solutions are another level of capabilities that go beyond storing and delivering information. They identify what information is important, make decisions upon it and add value to the information in making it error-free and useful to an organization to fulfill its objectives and/or solve problems.

An exemplary use of knowledge management would be an order entry system which can automatically extract line items from faxed order forms, fix errors the customers made in filling them out, determine customers' appropriate creditworthiness, and feed all of the information straight to the warehouse for immediate shipment. Customers get the right product faster, with less effort.

At Wheb Systems, our IFPS (Intelligent Forms Processing System) software automatically identifies, captures and
perfects information coming into an organization. We call this front-end process "intelligent data capture"; the beginning and perhaps most important aspect of knowledge management. Organizations now require less effort to get the accurate information they need, faster than ever before.

Whether it be signing up new customers or processing orders faster, Wheb believes the more intelligent the information, the wiser and quicker the decisions an organization can make. And in today's business world, the right knowledge at the right time is a big advantage.
--Wheb Systems, San Diego

PART 4


Learning to forget: From corporate memory to corporate instinct
The greatest difficulty lies not in persuading people to accept new ideas,
but in persuading them to abandon old ones.

--John Maynard Keynes
For all its promise, Knowledge Management is only a first step on a long road toward building an instinctive organization. As the pace of environmental change increases, as competition becomes more intense and the array of technological, financial and strategic options available to respond to these competitive forces continues to grow, Knowledge Management will be insufficient as a glue to manage this change. Corporate Instinct extends Knowledge Management in two ways:

* It decreases the organization's dependence on its memory of how things were done in the past, and enhances the organization's ability to respond based on intelligence.

* It diffuses this intelligence from centralized positions of authority across the entire organization, making this intelligent responsiveness universal within the organization--thus the responsiveness becomes instinctive.

We can visualize the transition from Corporate Memory to Corporate Instinct as different levels on a continuum. The graph above shows how the rate of change in an organization's business environment dictates the type of responsiveness which is required. The faster the business environment is changing, the more complex is the responsiveness required of the organization.

This complexity of responsiveness depends on two things:

* The organization's memory. This refers to the organization's knowledge of, and dependence on, its multitude of past experiences, practices and attitudes. When an organization's environment changes slowly or not at all, this memory can help it decide how to approach future problems. However, when the environment is changing rapidly and profoundly, memory may serve to mislead the organization, trapping it into a mode of thinking which it believes is applicable, but which in fact does not hold water in the new environment. Thus, the greater the rate of change, the less the organization is able to depend upon its memory.

* The organization's knowledge. Knowledge refers to an organization's ability to create new responses to new circumstances, based not on its memory of the past, but on its ability to understand the causes of current circumstances, and to use its insight and reason in generating the most effective response to them. Knowledge is particularly useful where memory is unsuitable to guide thinking in new circumstances. Thus, as the business environment changes more and more rapidly, so an organization's reliance on its knowledge increases.

How do some organizations handle change more effectively than others? The secret lies in applying the most suitable response given the rate of change in the business environment.

Corporate memory

When a company exists in an environment that is changing slowly or not at all, the most effective responsiveness can be achieved by simply applying the same or similar strategies that were previously applied in the same situation. All the information required to deal with the situation is at hand; it need merely be extracted and re-applied. As a result, we speak of memory (or a library of corporate information) as being the most effective approach. "Intelligence" is not involved at this point, since there is little decision-making to be done. There is a close mapping between the information required to address the present situation, and that required in previous situations. Processes, strategies and industries that operate at this end of the knowledge continuum gain no competitive advantage from the content of their knowledge. As a result, the driving factors tend to be efficiency and cost.

Corporate memory was widely used as an approach in the more placid business environment of the past. Industries which evolved slowly were able to dedicate themselves to fine-tuning their products and abilities, safe in the knowledge that the rules of the game would remain steadfast. Today, few companies have that assurance, and thus this approach is applicable to but a small number of companies and industries. Some heavily relationship-oriented industries are still dependent on their corporate memory, such as legal firms--here, the nature of the relationship is key to the product, and is not likely to evolve quickly.

Knowledge management

When an industry or a company begins to experience change, one of the early warning signs is that the age-old rules which have ensured success for so long seem insufficient to stop a gradual slide in profitability. The past becomes less and less of a mirror for the future, and corporate memory as an approach to dealing with the business environment begins to lose effectiveness. In fact, it may even inhibit an open-minded willingness to consider alternative approaches. However, as long as the pace and extent of change remain moderate, these companies can succeed by using the knowledge garnered in the past as a point of departure for new approaches in the future.

Knowledge Management is the term given to this decision-making approach, which emphasizes the re-use of previous experiences and practices, with modifications to meet present circumstances. A line of cars, for example, which is no longer selling well may illustrate a shift in consumers' perceptions of the car. While an updated replacement model will need to be technologically and aesthetically more advanced than its predecessor, the manufacturer can rely on some basic truths about the product and its market, truths which have not changed even though consumers' taste for the product has. There is thus a marriage of a knowledge of the past with a fresh approach to the use of that knowledge.

Knowledge Management is the force behind the current popularity of "knowledgebases"--central repositories for an organization's knowledge of its past. Knowledge Management, however, implies that this information must constantly be contrasted with that derived from present circumstances, and the "gaps" filled in by organizational intelligence.

Corporate instinct

Intelligence has enabled companies to respond to the present by making decisions based partly on a knowledge of its past, and partly on a rational analysis of the future. However, in the most rapidly changing environments, where products, markets and rules change on a month-by-month basis, the intelligence of a centralized group of decision-makers may be too slow to translate intention into action, and may thus be as ineffective as no response at all. Huge new markets can be born very quickly, and die out as suddenly, especially as the market as a whole becomes saturated with sophisticated products and satisfied needs. We need to be able to decentralize this knowledge, so that its entire force can be drawn upon by nimble teams tasked with meeting a particular challenge. Corporate instinct is the only approach which combines intelligence and speed with enough vigor to ensure survival.

Intelligence, then, is the responsibility of the entire organization, since this approach is the only way to strip away the layers between the environment and the point of decision-making *.




The pieces of the
Knowledge Management puzzle


If we use the term Knowledge Management then it must be in the context of continuous renewal. There are at least three steps to establishing a knowledge management system that can support such renewal and also provide the cornerstone for Corporate Instinct. You are unlikely to ever get to Knowledge Management if you do not first progress beyond each of these:

1.
Knowledge Capture

2.
Knowledge Inventory

3.
Knowledge Transfer

The implication of this hierarchy is that Knowledge Management does not really exist until a great deal has been done to support it. The term is widely used and widely misunderstood and underestimated. That the foundation of Knowledge Management requires each of these four prerequisites should be no more intimidating than the fact that an accounting system requires certain generally accepted principles of accounting be followed if it's to be considered reliable.

Understanding each requisite provides a sense of how close an organization is to knowledge management and what tools, methods, or cultural issues it must address.

Knowledge capture

Far too many organizations focus their efforts on how to get knowledge out of their knowledge management systems and too little, if any, effort getting it in. The capture and collection of knowledge occurs in every organization without regard to formal mechanisms. But a knowledge management system requires constant replenishment. This tacit knowledge represents the unique advantage of most small companies or companies in incipient markets where staff turnover is low and informal information sharing occurs naturally between a relatively small group of people. However, there are three obstacles to capturing knowledge:

* Mobility

* Half-life

* Threat to specialists

Mobility. Especially in larger organizations and mature or maturing markets, mobility is the daunting challenge of conveying tacit knowledge as the cerebral assets of the organization when employees and their gray matter are constantly moving in and out of the organization.

Half-life. Because tacit knowledge has a limited life span, people who use it should constantly reevaluate the validity of the tacit knowledge on which they base decisions. The problem, though, is that tacit knowledge by definition is not overt or easily accessible. Because it's below the surface, it's not examined often. Individuals may assume that a certain process or business method is correct because it has precedent, even if that precedent is based on out-dated knowledge.

Confusing information with knowledge further exacerbates this phenomenon because we tend to believe that more information creates greater stores of knowledge with which to uniquely differentiate our organizations. In fact, the inverse is true. Greater amounts of information in today's markets tend to level a playing field, since the information is unlikely to be solely available to one organization. Information is simply too easy to replicate and distribute. Knowledge, however, is much harder to replicate outside of an organization's Knowledge Chain because of the many connections it entails.

Threat to specialists. Many individuals who have become specialists in their areas of expertise are obviously reluctant to part with their knowledge for fear that it will make their skills less valuable.

While the work force is becoming increasingly mobile, not just in terms of geography but more importantly its velocity of change from job-to-job and company-to-company, the intellectual value of an organization need not be tied exclusively to the intellectual capital of its workers. This is especially true when you consider the degree to which many market leaders will outsource core business processes to other organizations that are only temporal participants in the intellectual value chain of the organization.

Where then does the intellectual capital lie? The second and third obstacles, half-life and threat to specialists, are based on the fact that knowledge is not a static source--unlike an information base of static contracts, documents or practices, which can be captured with relative ease. True knowledge is, in large part, found in the sophistication of the methods and attitudes by which that knowledge can be consistently renewed.

What this means is that knowledge cannot be preserved for very long without losing its inherent value--namely timeliness.

For the insecure knowledge worker, knowledge is only limited power. Of course, the degree of power still depends on the specifics of the industry. The accounting profession changes little in the course of five years, whereas the knowledge base for engineering and designing integrated circuits changes monthly.

For the organization trying to create a knowledge management system, the challenge is often misstated as simply "knowledge capture" when it is, in fact, "knowledge obsolescence." Having instant access to yesterday's best practices does nothing for a large consultancy like Arthur Andersen if the knowledge is outdated.

Replacing knowledge is much more important--and more difficult--than its simple capture. And doing this stumps most organizations. They realize too late that all their efforts to capture knowledge are nothing more than a casual accumulation of information. Most organizations have been collecting information for some time--but that is not Knowledge Management.

Knowledge inventory

Once an organization has mastered the ability to replace knowledge on an ongoing basis, it must find a means of cataloging the knowledge. This, too, appears much easier than it is.

First, because we have become so accustomed to indexing information, in the form of documents, databases and structured forms, we immediately revert to the same techniques for knowledge. But if knowledge is not information, but the more complex task of making connections between information, consider how much tougher it is to create elaborate hypertext systems of the sort that links documents on the World Wide Web.

These links form the essence of the navigation through a knowledgebase, yet they also compound the problem of navigating because they exponentially increase the possible interpretations of any single document. Cataloguing information used to mean searching and finding a set of documents. With knowledge links, any single document can lead to an indeterminate number of other links, making navigation nearly impossible.


In addition, the links themselves must change, as must the documents, if the knowledge base is to be kept up-to-date. Not only is the job of the knowledge user made more difficult, but the maintenance of the knowledge requires significant added resources.

The only way to resolve this is to rely on intelligent inventory systems that catalog knowledge as it is needed, not in advance. Again, recall that we are not categorizing information that can be stored in predefined categories and standard hierarchies, but instead knowledge that is changing continuously.

Knowledge transfer

Up until now we have talked about how information needs linkages to be considered knowledge. But both the links and the information need to follow certain rules in order to convey knowledge. In other words, providing a document and a link to two more documents is necessary but not sufficient in conveying knowledge. It is also crucial to convey the processes or business rules that govern the use of the knowledge, in order for the information to be transferable to people in the organization.

Delivering business rules or application tools with the knowledge is not far-fetched, especially given the rapid proliferation of the Internet and its ability to deploy small customized applications as part of a typical information transfer.

Knowledge transfer always means transferring the implicit nature of not only
what but also how work is to be done. The latter is a difficult thing to transfer in knowledge work.

Information systems put the onus of asking the right question on the user of the system. Knowledge management systems, correctly implemented, shift that burden to the system.

Yet at the same time, the knowledge management system provides users with the ability to expand their understanding of the organization over time, as they discover new information about their organization that they did not think to ask.

Having put in place knowledge capture, inventory and transfer, a company can truly claim to have developed a system for Knowledge Management and in the process laid a significant cornerstone for creating a knowing and instinctive organization. *

Toward an industrial
strength document warehouse


The body of available information continues to grow at ever-accelerating rates. Only one hundred years ago, the concept of a "Renaissance Man" with knowledge of all the arts and sciences was still realistic. Today, the best you can hope for is to know how to find information when you need it. With 80% to 95% of corporate information located in paper and electronic documents and with intense competition raising the bar for customer service, there is growing demand for an integrated document warehousing architecture with powerful, intelligent indexing and retrieval facilities.

Storing low volumes of similar documents for occasional access is easy. The real challenge is storing an ever-growing number of diverse documents in a high-demand environment. A robust document warehouse must be able to store and present not only traditional computer-generated reports, word-processing documents and spreadsheets, but any records of business transactions, such as check images, customer statements, credit card transactions, photographs and audio recordings of customer calls. Indexing must be multi-level, multi-keyed and able to cross-reference and group related documents no matter where or in what format they are stored. Documents must be linked across time, across platforms, and across applications. For example, when a customer calls questioning an account balance, the customer service representative must be able to quickly access and simultaneously view the statement, deposit slips, canceled checks and transaction reports.

An "industrial-strength" document warehouse will scale to support billions of documents on any computing platform and make them instantly available to authorized users across the enterprise and, via the Internet, to customers and suppliers. It will store documents in a device-independent format, so they can be directly migrated across a hierarchy of storage media as they age. And it will generate such significant savings in paper and microfiche expenditures that implementation can be cost-justified even without accounting for service and productivity improvements.
--Mobius Management Systems, New Rochelle, NY
Knowledge Management--transforming work

Theory says that Knowledge Management is about making businesses work better--much better. But how does that happen in practice? It comes from structuring every part of the business to support knowledge
creation and knowledge sharing. And it's about much more than just databases. It's a completely new methodology.

This process is very different from the way things work today. It means that "by the book" is no longer enough, that each of us helps to write the book every day.

The first practical step is looking at the essential, core business processes through a strategic Knowledge Management lens. From this point, we answer: What do we need to know? Where does insight and knowledge get created? How can we best capture it? How can it get us to our destination?

Then, with a map of the "knowledge landscape" in hand, we can shape the organization structure, the business process, how people are rewarded, the customer promise, and, oh yeah, the technology, to create and take advantage of knowledge throughout the organization.

But the design alone is not enough. Everyone must change how they work--at the profound level of their assumptions, their habits and their connections with other people. No small matter. And it requires an integrated, full-scale mobilization campaign.

GroupWorX clients are telling us that this is the big insight about implementing Knowledge Management--it requires coordinated changes throughout the business. They use words like "holistic" and "systems thinking" to describe it. Only when all the changes reinforce each other can you expect to see a Knowledge Transformation that leads to competitive gains.
--GroupWorX
Knowledge has a life cycle -- a time when it has the most value within a business process. Knowledge Management is simply delivering the right information, to the right person, at the right time and place, to make a business decision of value to the enterprise. Too many people think that you need advanced technology products to implement a knowledge management solution, when in fact, it can be realized today with many existing products and methodologies.
Jordan Libit

Senior VP, Business Development and Strategy

FileNet
Traditional hierarchical models [of knowledge management] have presented either a pyramid or a funnel metaphor where data was distilled into Information of which a few drops became knowledge. These models imply that knowledge is scarce. Knowledge management professionals now realize that the problem in most corporations is not a lack of knowledge, but the lack of processes for capturing, managing and sharing it.
--Steve Offsey,
Director,
Knowledge Management Products,
Dataware Technologies

Knowledge extraction

Knowledge Management solutions often integrate a variety of off-the-shelf products--E-mail, groupware, document management systems, relational databases, search engines, workflow--with business process analysis and/or reengineering in order to form a complete package. Essential to capturing and making individuals' knowledge available to the entire organization is the ability to deal with heterogeneous data. Data warehousing projects collect all manner of structured information in an enterprise; however, the largest amount of information in an organization resides in unstructured text--e-mail messages, documents, presentations, etc.

Other than laborious manual mining of such text, the only way to make this information structured and readily accessible--in other words, to turn it into organizational knowledge--is to identify and extract important content from text automatically.

Knowledge extraction from text involves several underlying phases of document and linguistic analysis:

* break the document into units (titles, paragraphs, sentences and words)

* determine the linguistic role of each word in each sentence (e.g., noun, verb, adjective)

* normalize different surface representations of the same word (e.g., bought, buys
and, finally,

* identify and classify patterns within the analyzed, normalized text that constitute content-rich structures--noun phrases ("stock market decline"), people ("President Clinton") and organizations ("Treasury Department," "apple").

These extracted objects can then be indexed by, for example, search engines in order to support better retrieval, categorization of topic area, and message routing and filtering.

The challenge for providers of knowledge extraction tools is to provide a product that is very fast, accurate and extensible. Organizations deal with hundreds of gigabytes of textual information, so system throughput is critical, as are precision (correctness) and recall (completeness). For many enterprises, knowledge extraction tools must deal with text in several languages. Finally, the tools must be able to be tailored to the customer's domain and to his systems environment.

Inxight's LinguistX product line, a result of 20 years of research and development at Xerox PARC, provides multilingual natural language processing components for knowledge extraction that operate at very high speeds. It supports a range of functions, from automatic language and character set identification to phrase extraction to automatic summarization, in 11 European languages and Japanese, with others to follow. LinguistX is incorporated into major applications from companies such as Infoseek, Excite, Oracle, Textwise and Verity
--Inxight, Palo Alto, CA
Companies that ignore the Knowledge Management imperative shackle themselves to the past. Although they may be perched high in their industry today, their organization's innovative capacity resembles the mechanics of a waterwheel; immobile, inflexible, slow and driven by a single stream of soon-to-be-outdated ideas.
Thomas Koulopoulos

Delphi Consulting Group