Aligning Knowledge Management and Business Strategy

collardsdebonairManagement

Nov 6, 2013 (3 years and 11 months ago)

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1

Knowledge Management

Aligning Knowledge Management
and Business Strategy

B. Nugroho Budi Priyanto

2

Strategic Visioning issues


What is the industry context in which your
business operates?


What is the level and nature of turbulence
within it?


How profound is the uncertainty in your
business?

3

Knowledge transfer vs integration


Knowledge transfer assumes:


The two transacting individuals posses certain
shared knowledge in order to effectively
communicate


Sufficient time is available to engage in such
transfer


Knowledge that is transferred remains valid by
the time a transfer is completed

4

Knowledge transfer vs K. integration

5

Levels of Uncertainty

6

The responsiveness quadrahedron

7

Business models and technology
influence strategic choice

8

Codification vs Personalization


Codification:


More focused on technology that enables
storage, indexing, retrieval, and reuse.


Suited companies that repeatedly deal with
similar problem and decision.


Personalization:


Focused on connecting knowledge workers
through networks.


Better suited to companies that face “one
-
off”
problems and depend more on tacit knowledge
and expertise than on codified knowledge

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KM strategies: codification and personalization (1)

Business Strategy Question

Codification

Personalization

What type of business do
you think your company is
in?

Providing high
-
quality,
reliable, fast, and cost
effective services

Providing creative, rigorous
and highly customized
services and products

How much old material,
such as past project data,
existing documents, and
archived projects, do you
reuse as a part of new
projects?

You reuse portions of old
documents to create new
ones. You use existing
products to create new
ones. You know that you
need not begin from scratch
to deliver a now product or
service.

Every problem has a high
chance of being a “one
-
off”
and unique problem.
Although cumulative
learning is involved high
creative solutions are often
called for

What is the costing model
used for your company’s
product and services?

Price
-
based competition.

Expertise
-
based pricing;
high prices are not
detrimental to your
business; price
-
based
competition barely (if at all)
exists.

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KM strategies: codification and personalization (2)

Business Strategy Question

Codification

Personalization

What are your firm’s
typical profit margin?

Very low profit margins;
overall revenues need to be
maximized to increase net
profits.

Very high profit margins.

How best can you describe
the role that IT plays in
your company’s work
processes?

IT is a primary enabler; the
objective is to connect
people distributed across he
enterprise with codified
knowledge (such as reports,
documentation, code, etc.)
that is in some reusable
form

Storage and retrieval are
not the primary application
of IT; IT is considered a
great enabler for
communications;
applications such as email
and video conferencing are
considered the most useful
applications; conversation,
socialization; and exchange
of tacit knowledge are
considered to be the
primary uses of IT.

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KM strategies: codification and personalization (3)

Business Strategy Question

Codification

Personalization

What is your reward
structure like?

Employees are rewarded
for using and contributing
to databases such as Notes
discussion database

Employees are rewarded
for directly sharing their
knowledge with colleagues
and for assisting colleagues
in other location/offices
with their problems

How is knowledge
exchanged and
transferred?

Employees refer to a
document or best practices
database that stores,
distributes, and collects
codified knowledge.

Knowledge is transferred
person to person; intrafirm
networking is encouraged
to enable sharing of tacit
knowledge, insight,
experience, and intuition.

Where do your company’s
economies of scale lie?

Economies of scale lie in the
effective reuse of existing
knowledge and experience
and applying them to solve
new problems and complete
new projects.

Economies rest in the sum
total of expertise available
within the company;
experts in various areas of
specialization are
considered indispensable.

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KM strategies: codification and personalization (4)

Business Strategy Question

Codification

Personalization

What are your typical team
structure demographics?

Large teams; most
members are junior
-
level
employees; a few project
managers lead them.

Junior employees are not
an inordinate proportion of
a typical team’s total
membersihip.

What company’s services
do your company’s services
resemble?

Anderson Consulting, The
Gartner Group, Delphi
Consulting

The Boston Consulting
Group,

What company’s products
do your company’s product
resemble?

Pizza Hut, Dell Computer,

A custom car or bycycle
manufacturer, Boeing,

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Knowledge maps to link knowledge to strategy


Effective KM strategies using such
“knowledge
-
maps” can help companies
build a defensible competitive knowledge
position.


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Knowledge Classification


Core knowledge


Required to “play the game”


Creates barrier to entry


You must have it, distinguishes it from its competitors


Advanced knowledge


Competitively viable


Differentiate its product from the competitor


Innovative knowledge


Allows a company to lead its entire industry


Clearly differentiates it from competitor

15

A high
-
level Zack Framework
-
based strategic
knowledge gap analysis

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Creating knowledge map to evaluate corporate
knowledge

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Aligning knowledge and business
strategy

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The process of articulating the link between business
and knowledge strategies

19

A recap on strategic alignment

20

Assessing Focus


The challenge of business and KM is to
address the three
-
way strategic alignment
between:


Business


Knowledge, and


Technology used to support the first two

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Some “first” questions that often surface: (1)

1.
How can we turn the knowledge we have into something that adds
value to markets in which we operate?

2.
What do we know or think we know about different aspects of our
customers? Are we actually doing something with what we know
about them?

3.
How can we generate meaningful knowledge, rather than simply
flooding our organization with indiscriminate information?

4.
How can we create a knowledge
-
supportive organizational culture
in which everybody is convinced of the contribution that
knowledge can make to the success of the company?

5.
Can we cut costs, reduce time to market, improve customer
service, or increase margin by more effectively sharing
knowledge and leveraging what we already know? Could such
knowledge be applied to the activities of other divisions of our
company, in other locations, and in foreign manufacturing sites?
How can we ever transfer them and then make them work?

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Some “first” questions that often surface: (2)

6.
Are there any fundamental errors in what we think we know as a
company? What will be the consequences of these errors? How
can these be proactively fixed?

7.
How can we manage our people, who will increasingly become
knowledge workers or professionals, motivating them to generate
knowledge and share it with their peers?

8.
Which of these people actually play critical roles in developing
and testing new knowledge and information that gets used here?

9.
Are exciting ideas emerging within the company but failing to be
commercialized? If these ideas are not reaching the market, what
incentives, structures, or management processes seem to be
blocking them? How can valuable knowledge that exists within
the company be actually applied and benefited from?

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Some “first” questions that often surface: (3)

10.
Maybe our company has more money than ideas. Are
there opportunities to form partnerships with companies
that may be more in the flow of innovative ideas and
knowledge? Given different cultures, how can this ever
work?

11.
Is the “not invented here” syndrome so strong that we
are missing attractive business opportunities? Could
knowledge
-
based collaboration (i.e., integration of
external knowledge) with a wider range of innovative
companies increase our value?

12.
How does tacit knowledge


skills, intuitive abilities,
employee experience


affect the generation and transfer
of explicit forms of knowledge in our company?

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How business can be missing vital opportunities by
adopting the wrong high
-
level KM strategy

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Critical success factors


There is now silver bullet


A working definition of knowledge is
needed


Saleability requires value demonstration


Tacit knowledge cannot be ignored


Focus on the future, not the past


Respect confidentiality


Secure management support

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Lessons learned


An effective KM strategy begins with a vision


Shift from strategic programming to strategic
planning


Data extrapolation is a fallible predictor


Create internal competitive, and industry
-
wide
knowledge maps to give you a reality check


Focus on one but don’t choose between
codification and personalization


Balance exploitation and exploration


Determine the right diagnostic questions to ask


Mobilize initiatives to help you “sell” your KM
project internally