KNOWLEDGE MANAGEMENT PRACTICES FOR INNOVATION: AN AUDIT TOOL FOR IMPROVEMENT

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KNOWLEDGE MANAGEMENT
PRACTICES FOR INNOVATION:
AN AUDIT TOOL FOR IMPROVEMENT
CRIC, The University of Manchester
Professor Rod Coombs, Richard Hull
& Malcolm Peltu
CRIC Working Paper No 6
June 1998
ISBN 1 84052 005 1
Published by:Centre for Research on Innovation and Competition
The University of Manchester
Tom Lupton Suite
University Precinct Centre
Oxford Road, Manchester
M13 9QH
2
Professor Rod Coombs is Professor of Technology Management, Manchester School of
Management, UMIST; and a Co-Director of CRIC. He is a consultant to a number of large UK
firms on strategic aspects of R&D and Technology Management. He is also the organiser of an
industrial club of Senior R&D Managers: The `Technology Strategy Forum'.
Richard Hull is a Research Fellow in CRIC. His research and publications cover:- the history of
computing; IT strategy; Business Process Re-engineering; Computer Support for Co-operative
Work; the interactions between computer science and the social sciences; expertise and expert
labour; IT in education; and the philosophy of social science..
Malcolm Peltu has over twenty years experience as an editor and journalist specialising in
management and organisational issues relating to technological innovation. He has also written about
more technical aspects of IT for general audiences, as well as for IT professionals. He has edited a
variety of books and reports containing contributions from leading experts in strategic management,
organisational behaviour, IT-based innovation and the social sciences. This includes being an
editorial consultant to the Commission of the European Communities, the UK Economic and Social
Research Council (ESRC) and the ESRC Business Process Resource Centre in the University of
Warwicks Manufacturing Group. His career as a journalist has encompassed being a consultant on
International Management and New Scientist and editor of Computer Weekly. He currently
edits a newsletter aimed at industry and universities on behalf of the IT & Computer Science
Programme of the Engineering and Physical Research Council (EPSRC). He has also researched
and written management reports and business-school case studies and written popular books on the
electronic office for the BBC and National Computing Centre (NCC).
Acknowledgements
The empirical research that forms the basis for this Audit Tool was funded through the Innovation
Programme of the UK Economic and Social Science Research Council, ESRC Grant Number
L125251008, and their support is gratefully acknowledged.
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ABSTRACT
KNOWLEDGE MANAGEMENT PRACTICES FOR INNOVATION:
AN AUDIT TOOL FOR IMPROVEMENT
Rod Coombs, Richard Hull and Malcolm Peltu
Knowledge Management and Innovation are two key activities for companies. This document
provides a practical tool for improving the various forms of Knowledge Management within the
Innovation processes of companies. It is addressed principally to those companies with well-
developed and sophisticated units for innovation, such as R&D departments. The document arises
from research into the relationships between Knowledge Management and Innovation which
developed a distinct and specific focus on Knowledge Management Practices - the various activities
which are explicitly intended or utilised for creating and processing knowledge. Following a
description of the five main groups of KMPs for Innovation, the main operational element of this
Audit Tool is in the form of a detailed questionnaire which aims to act as both a discovery
mechanism and as a prompt to further reflection on the specific Knowledge Management activities
within innovation processes. This is complemented by a format for specifying action plans for
improving KMPs for Innovation.
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KNOWLEDGE MANAGEMENT PRACTICES FOR INNOVATION:
AN AUDIT TOOL FOR IMPROVEMENT
INTRODUCTION
Knowledge Management and Innovation are two key activities for companies. This document
provides a practical tool for improving the various forms of Knowledge Management within the
Innovation processes of companies. It is addressed principally to those companies with relatively
well-developed and sophisticated units and procedures for innovation, such as R&D departments.
The document arises from empirical and theoretical research into the relationships between
Knowledge Management and Innovation
1
. This research developed a distinct and specific focus on
Knowledge Management Practices - the various activities, procedures, techniques and systems
which are explicitly intended or utilised for creating and processing knowledge.
Knowledge Management Practices (KMPs) within Innovation processes include a wide range of
activities such as the writing and dissemination of technical reports, the secondment of R&D staff,
and the use of Information Technologies. KMPs are a valuable management focus for improving
performance within innovation processes:-
 KMPs can be observed, so they provide a tangible framework to help companies reflect on
knowledge management within innovation processes.
 Common features of KMPs in different companies can be identified and best practices
transferred from one setting to another.
 Regular audits of KMPs can help to broaden and continuously improve practices which
contribute to innovation performance.

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See Coombs & Hull (1998).
Amersham International, British Aerospace, Hewlett Packard, ICI and Ove Arup
participated in the cases studies. Their co-operation and active involvement in the
development of this Audit Tool is greatly appreciated.
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 An understanding of the role of KMPs can help companies to move successfully in directions
which depart radically from the paths defined by the firm's previous cultural and technical
traditions.
This Audit Tool addresses the relevance of KMPs to the management of R&D and innovation in
companies from all industrial and business sectors. It is likely to be of most relevance to
environments involving substantial R&D operations, but could also be of value to smaller enterprises
or firms without a substantial independent R&D group.
This Audit Tool was developed with feedback from the five companies which participated in the
research. Our intention is that it should be distributed and used free of charge or encumbrance, and
that useful modifications should be incorporated as easily as possible without changing this form of
distribution. Hence, whilst we retain the traditional Copyright privileges over this document there are
two alterations to those traditional privileges. Firstly, the document may be freely copied provided
that (a) no charge is levied on distributed copies, other than to cover reasonable costs; and (b) this
paragraph is included in all copies. Secondly, we recognise that useful additions and modifications
may be made during implementation and incorporated for one particular companies use: we would
be grateful for notification of any such changes, which we can then incorporate in later versions with
full acknowledgement of the source. Finally, we also welcome more detailed feedback on the
experience and outcomes of using the Audit Tool, which we will then be able to disseminate to
relevant audiences.
Section One discusses in more detail the relationships between Knowledge Management and
Innovation, and the rationale for focusing on Knowledge Management Practices. Section Two
describes the five main groups of KMPs likely to be found within R&D and Innovation processes,
together with some illustrative examples. Section Three forms the main operational element, in the
form of a detailed questionnaire which aims to act as both a discovery mechanism and as a prompt
to further reflection on the specific Knowledge Management activities within innovation processes.
Section Four enables the administrator(s) of the Audit Tool to build on the results from the
questionnaire, in setting out a format for specifying action plans for improving KMPs for innovation.
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1. KNOWLEDGE MANAGEMENT PRACTICES AND INNOVATION
Why Focus on Knowledge Management Practices?
An ability to understand and exploit the relationship between Knowledge Management and
Innovation processes is of increasing significance in today's competitive environments, where a
dynamic capability to meet rapid change is an essential ingredient in achieving sustainable business
success in volatile global and national marketplaces. The observation and analysis of Knowledge
Management Practices (KMPs) for Innovation offers important fresh insights into the crucial
relationship between knowledge management and innovation. KMPs can also help a company to
take practical steps to improve its responsiveness by breaking away from the traditional constraints
on innovation caused by a company's culture and history.
KMPs were identified as significant activities affecting business performance during research which
sought to find a bridge between what had become distinct traditions in the study of Knowledge
Management and Innovation (Coombs and Hull 1998). Knowledge Management analyses have
tended to concentrate on issues like the classification of types of knowledge. These analyses are
typified by debates about whether the 'tacit' knowledge held by individuals can be effectively
represented as 'explicit' knowledge that can be represented in ways which can be easily shared
across time and space, say through ICT databases and networks (Polanyi 1958; Nonaka 1994;
Nonaka and Takeuchi 1995). This perspective also encompasses discussions about the role of the
'whole system' of knowledge management, such as core competencies and knowledge building to
achieve competitive advantage (Leonard- Barton 1995).
Innovation Studies, on the other hand, have been particularly interested in exploring the firm-specific
routines which create a distinctive organisational 'signature' in the manner a firm deploys knowledge
to produce innovation (Metcalfe and de Liso, 1997). This indicates a dependency on the
evolutionary path determined by the bodies of accumulated knowledge and experience within a given
organisational culture, management style and set of operational routines. From this viewpoint, a 'path
dependency' is created as internal routines stabilise certain bodies of knowledge, embed them in
shared understandings within the firm, and provide standard approaches to deploying that
knowledge.
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These traditions are compatible with each other in many aspects. However, they differ sharply on the
crucial question of the degree to which an organisation is intrinsically limited by its path dependency
from modifying the content and scope of its knowledge base in ways that enable the company to
move in promising new directions.
The idea of focusing on KMPs emerged from our research as a potentially powerful means of
bridging this gap between academic disciplines. KMPs are observable routines involved directly in
the development and application of knowledge. By assessing and improving KMPs, a company can
realistically hope to modify and extend a firm's limits on innovation, thereby opening up novel
business paths. This is achieved by increasing an organisation's capability to 'generate variety' using
current practices and capabilities as a platform for exploring new opportunities.
The tangible nature of KMPs offer a realistic focus for discussions likely to lead to effective
improvements in a company's innovation performance. The KMP for Innovation Audit Tool is one
way of taking forward such discussions by reflecting on a company's innovation performance with
the aim of improving key practices influencing that performance. In contrast, performance measures
had been difficult to determine in both Knowledge Management and Innovation traditions. For
example, tacit dimensions of knowledge are critical to a firm's innovation capability, yet these are by
definition the most difficult to identify.
KMPs can also assist 'best practices' to be transferred from one setting to another because it is
possible to discern common features of routines which are capable of being adapted to different
contexts, say by being given greater or less importance or by being implemented differently in
different companies. Exploring the relationship between knowledge management and innovation
through the lens of KMPs therefore offers companies new opportunities to hone their traditional
innovation skills and to break open new routes to business success.
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What Are KMPs for Innovation?
KMPs are regular, repeated activities which process knowledge in some way. They can be formal
and informal; paper based and electronic; people-driven or system- driven; and wholly or only
partially centred on knowledge management.
KMPs encompass an enormous range of activities, such as: structuring and archiving a report on a
new technical process; placing research results on a Web site; filing documents relating to an R&D
project; discussing a new technical development at a meeting or over the Internet; sending
information by email or through the post; disseminating a project report outside the project team; or
scanning scientific journals, patent reports and general news media to highlight important technical
and competitive innovations relevant to a company.
Our main interest has been in KMPs which contribute directly to the creation of novel business
propositions. These practices are concerned primarily with the accumulation, analysis, management
and dissemination of evolving 'stocks of knowledge' in a firm, covering three main areas (see Figure
1):
Technology
Knowledge about technologies used and developed within the company, as well as those
available and under research in other companies.
Markets
Market-based knowledge concerning:
- the requirements of customers, their behaviour and the market opportunities which
might be feasible in the future;
- current offerings and plans of competitors;
- regulatory and standards developments affecting all players.
Company processes
Knowledge about internal administrative, technical and management operations through
which the organisation identifies and delivers products and services.
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New Business Propositions
Stock of
knowledge of
technologies
- internal
- external
Stock of
Market
knowledge
Stock of
knowledge of
Operations
Knowledge Management Practices
Figure 1 - KMPs, Innovation, and New Business Opportunities
The primary purpose of a KMP may be something other than its role in building or deploying these
knowledge bases. For example, the writing of a technical report is often required firstly to meet the
needs of a specific research objective within a project. It is the act of archiving such a report in a
way that can be easily accessible to people outside its initial local audience which makes it a 'KMP
for innovation'.
How can the CRIC Audit Tool help to improve innovation performance?
We developed this Audit Tool to help companies exploit the potential benefits which can be gained
by focusing on KMPs for Innovation. The tool aims to assess and enhance the practices that will
bring most benefit to a firm's business performance. It consists of two main elements:
* A questionnaire, which is the foundation of the audit. It asks for satisfaction and importance
ratings for about seventy KMPs. The full questionnaire is provided in Section 3.
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 An 'Actions for KMP Improvements' form. This offers guidance on analysing completed
questionnaires to assist in planning actions to improve key KMPs. Section 4 contains one of these
forms.
By highlighting both the importance to your organisation of each KMP and its satisfaction rating, the
Audit Tool provides a valuable picture of the areas where KMP improvements could have optimum
impacts on innovation. In addition, it can help to characterise a unique overall 'KMP Profile' that
flows from its specific history and organisational culture. Such profiles can offer valuable broad
insights into the nature of a company's R&D and innovation processes. However, a more detailed
questionnaire analysis is required to ensure effective innovation is supported by a company's KMPs.
We explored a number of other possible ways of depicting the results, for example using some form
of graphical representation which could provide a concise picture of where a company stands in
relation to key KMP for Improvement dimensions. None of these offered a meaningful encapsulation
which addresses the subtleties, complex relationships and dynamics needed to determine the best
way of improving KMPs for Innovation in a particular context. The KMP improvement actions
suggested in Section 4 therefore seek to assist companies find interpretations of a KMP for
Innovation audit relevant to their own specific environments.
What was learnt from the KMP Case Studies?
Our research identified the KMPs which form the basis of the questionnaire and their categorisation
into five groups through a variety of analyses and investigations. The most important evidence used to
develop and validate these KMPs for innovation was derived from detailed case studies at
Amersham International, British Aerospace, Hewlett Packard, ICI and Ove Arup, together with a
follow-up workshop involving representatives from these companies.
The case studies employed established ethnographic methods involving intensive interviews and
discussions in the five companies. These set out initially to describe KMPs in terms of four
components:
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 Processing characteristics, concerned broadly with the generation, transfer and utilisation
of knowledge, although many other activities emerged from the research;
 Domain of knowledge addressed by the KMP, such as a specific and well-defined
scientific discipline or problem area;
 Format of the KMP, ranging from formal to informal, and also in terms of factors like the
time or location where it takes place and the kind of medium used to communicate the
knowledge;
 Performance impact - although notoriously difficult to develop performance metrics for
R&D units, it is nevertheless useful to ask which aspects of the units performance is most
affected by the KMP.
The four components enabled a large variety of KMPs to be expressed within a consistent
framework. This was especially useful in the early stages of the research, when it was still unclear
how practices should be classified to reflect common experiences in many companies. These
descriptions then became a vital resource for creating an Audit Tool founded on real practices. Most
of the KMPs for Innovation highlighted in the questionnaire and examples quoted in this report are
based on the case studies, although commercial confidentiality prevents the association of particular
practices and KMP Profiles with individual firms.
The five groups defined in the questionnaire reflect the most significant common characteristics of key
KMPs for Innovation. This classification emerged after much discussion of the case study evidence.
Even now, we do not regard these as fixed and clearly demarcated categories and the groupings
could evolve as further evidence is gained. However, the five groups provide a strong foundation for
assessing, thinking about and enhancing KMPs for Innovation. The groups are explained in the next
section.
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2. THE MAIN GROUPS OF KNOWLEDGE MANAGEMENT PRACTICES
KMPs can be located in the following five main groups of activities. Some practices encompass
more than one area, but understanding the main innovation setting of each KMP helps in assessing its
performance and importance.
Group A: KMPs and the R&D Management Process
KMPs for Innovation are needed to build, maintain, share and manage knowledge and experience
gained from R&D activities, for example in widely disseminating outputs from project reviews. R&D
management activities can also use KMPs to encourage broad exchanges of knowledge to promote
multi-disciplinary innovation. Practices in this group are at the heart of key 'knowledge circuits' in
R&D. They grow directly out of the performance of R&D work itself and are typically embodied in
R&D scientists and their formal and informal communication patterns within and beyond the lab.
Examples of Group A KMPs for Innovation
* 'Brief Technical Reports' formatted to appeal to non-technical audiences are written and
distributed by R&D staff in one company to provide interim descriptions of project activity, outside
of specified formal reports. Technical project managers maintain the distribution lists of staff in
business units who are interested in particular areas of R&D activity.
* One company has established Technical, Customer and Competitor Stewards to act as
'gatekeepers' to update databases, answer queries and generate and disseminate topic-based
analyses, summary reports and other information relevant to their specific cross-boundary
responsibilities.
* A company involved in a number of large projects whose teams tend to be dispersed after
completion has a large group of R&D personnel whose prime responsibility is to analyse project
experience, for instance using extensive end-of-project reviews. Feedback from these analyses is
used to update current best practice through Design Guides, Feedback Notes and other
dissemination routes.
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* Personnel from different departments working on an R&D project are located in the same
physical area to help develop new domains of expertise, as well as to implement projects more
efficiently.
* A strategic Group Portfolio Review is carried out twice yearly within one company to ensure its
R&D fits well within the overall corporate strategy.
* 'Landscape studies' in a company establish the relevant 'horizon' to be scanned by each project
in terms of broad areas of technical, commercial and regulatory dimensions. These generate a focus
for Feasibility Studies, whose outcomes are subsequently used to update the landscapes.
Group B: KMPs and the Mapping of Knowledge Relationships
An important set of KMPs relate to the co-ordination of internal and external R&D capabilities,
inter-firm relationships and market requirements. This often requires spanning disciplinary,
organisational and company boundaries using 'capability maps' which identify the locations within a
company of formal knowledge bases, skills and supporting equipment and services. These kinds of
activities are of special importance in dealing with innovation at a time of great organisational, market
or technical change. It is in times of such change that many important nodes of technical expertise
and bodies of knowledge about customers, competitors and market segments are likely to arise in
parts of an organisation where they are not formally 'owned' by any department or project.
Examples of Group B KMPs for Innovation
* A picture of the technology portfolio of an R&D lab is mapped onto the requirements of the
internal divisions who are its potential customers. Similarly, the company's product portfolio is
routinely mapped onto end-user market trends.
* User studies to identify promising product characteristics and market segments involve
personnel from R&D and Product Divisions, using ergonomics, field trials, requirements engineering
and other techniques.
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* Monthly discussion groups are organised through what a company calls 'formalised informality'.
These groups share and translate knowledge between participants from different domains with the
aim of generating new ideas, solutions and approaches.
* A valuable source of knowledge on current and potential external developments in one
company comes through supporting staff who work closely with external standards and regulatory
bodies.
* One company uses Design Reviews to focus on a specific skill or discipline, as a means of
translating between project process requirements and skills/disciplines.
* New scientific, technical and commercial ideas are validated through a peer review system in a
company, which moved the review process to an intranet to reduce the 'time to decision'.
* A company's Expert Panels consisting of people with expertise in different areas meet bi-
monthly under a formal Chair to highlight and disseminate the relevance of key emerging issues and
to codify expertise in 'Design' or 'Reference' Guides.
Group C: R&D Human Resource Management
A set of KMPs for innovation are concerned with motivating and rewarding R&D personnel to
encourage knowledge sharing and the development of inter- disciplinary expertise and cross-
boundary working. These are closely tied to broader Human Resource Management policies, such
as training and career development activities, but have a particular focus on activities designed to
promote skills and expertise which will improve a company's innovation performance through the
sharing of knowledge and honing of multi-disciplinary expertise and experience.
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Examples of Group C KMPs for Innovation
* Secondments are made routinely between staff in a company's R&D Lab and Product
Divisions, typically lasting about six months. These are seen as aspects of career development, as
well as seeking to achieve productive exchanges between different knowledge domains.
* R&D personnel in one company are encouraged to offer consultancy to the companys
business units and to answer queries over the phone or face-to- face. They keep a 'day book' when
doing this to help identify emerging themes and issues. This provides important feedback from the
market and external developments and helps to build a reputation of technical excellence for the
R&D function.
* Heads of Departments in a firm maintain a 'Skills Matrix' which encapsulates the areas of
expertise of each member of that unit. This is used during induction courses to help newcomers get
assistance from specialists in a subject, as well as enabling project managers to build teams with an
appropriate mix of skills
* A company uses a policy of dual 'matrix management' of key R&D staff by project staff
supervisors and departmental line managers with the aim of translating and disseminating knowledge
between project-specific and functional departmental domains.
* 'Communication Prizes' are awarded to scientists at all levels of experience in a company to
encourage effective dissemination of results outside a specific discipline or project.
* Induction courses in one company give technical overviews of all disciplines covered in the lab,
supported by well-signposted and simple electronic access through an intranet and email to relevant
experts and knowledge. Ongoing training courses also provides opportunities for staff to learn skills
outside their prime area of expertise.
Group D: KMPs for managing Intellectual Property positions
The management of Intellectual Property (IP) has vital legal implications. However, the IP-related
KMPs of relevance to innovation management are those which also make an active contribution
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towards updating and managing corporate stocks of knowledge in order to help improve business
and R&D performance. This reflects the way in which in-house IP experts are moving away from a
more traditional role where they were expected principally to formulate patent applications and
maintaining patents. KMPs in this group are therefore likely to have a growing influence on the
direction of R&D technical activities during the course of projects.
Examples of Group D KMPs for Innovation
* Close collaboration between the IP Section and researchers and engineers in one firm provides
informed and prompt interpretations of competitors' patents and patent applications. This is used to
define the degree of 'design freedom' available to emergent technological ideas.
* IP specialist provide proactive advice to R&D and business development in one company, for
example by synthesising IP developments across a range of knowledge areas to help formulate
alternative courses of action and to identify IP 'roadblocks' and 'gaps' which could be barriers to the
commercial exploitation of an innovation. Fortnightly results of Patent Watch searches are also
disseminated to relevant R&D and business staff.
* Business IP managers or the Library in one company undertake a full evaluation of IP and
related information during feasibility studies. This process is known as 'Prior Art'.
* Competitor Stewards scans IP data of a firm's rivals, highlighting information of relevance to
current developments in a way which is understandable to non-IP specialists.
* Expert assessments are made in one company to identify relevant IP possibilities and problems
in relation to a proposed acquisition or alliance.
* Strategic Patent Searches undertaken by a company's Library staff assist Business IP managers
build a picture of external patent activity around a particular technology.
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Group E: KMPs and R&D Information Technology Management
Recent rapid advances in IT and Communication Technologies (ICTs) have offered opportunities to
transform information management practices, such as accessing databases or disseminating
newsletters, which underpin practices in the other KMP groups. The ICT-based KMPs for
Innovation relevant to this group are those which also act as a trigger to create or change KMPs.
Significant recent growth in multi- site R&D and electronically-enabled 'virtual' R&D project teams
has meant that information management specialists who had previously focused on other areas are
increasingly turning their attention to applying the rapid diffusion and refinement of ICTs to activities
encompassed by this group of KMPs.
Examples of Group E KMPs for Innovation
* One corporate library took the initiative in writing and disseminating 'Technology Overviews'
which identify and collate key technological developments in specialist areas.
* A Research Web on a firm's intranet includes 'White Papers' on key core technologies. Its
Web Co-ordinator is in the Library.
* An 'extranet' is used to format one company's intranet to allow controlled access by external
people, such as customers and R&D collaborators.
* A company's R&D staff experimented with email to create 'virtual team' interactions which
produced innovative solutions in a number of areas.
* One Library is responsible providing 'information navigation' advice at early stages of R&D
projects, for instance by discussing the retrieval, storage and other information management needs of
the project.
* The practical potential of IT systems to span boundaries is highlighted in one enterprise through
the development of computing demonstrators which create systems or interfaces that are shared
across organisational structures, including intended customers.
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3. THE KMPs FOR INNOVATION AUDIT TOOL QUESTIONNAIRE
KMPs vary considerably between firms, and often between different areas within the same
company. Nevertheless, we have identified important common elements which cover key KMPs for
Innovation in most contexts. These are the practices which provide the focus for the questionnaire
which is the foundation of the Audit Tool.
The questionnaire is designed primarily to be a self-audit aid, although it could be completed by an
external person in some circumstances. The way it is used can be modified to meet the specific needs
at different company levels, say for a complete R&D Group, departments within that group, or any
project or unit involved in business innovation which has scientific and technical R&D at its heart. A
manager could complete the questionnaire by co-ordinating a variety of relevant views, or a number
of people from the same audit area could each fill in the questionnaire for subsequent group
discussion and analysis.
Responding to the questionnaire and talking about those responses is an important process in itself,
as it brings to the fore discussions about the current effectiveness of knowledge management for
business improvement and how it can be improved in the future. It also helps to highlight a wide
'menu' of available KMPs from which a company can choose in developing an effective knowledge
management strategy. The main benefits from this process are likely to be a deepening understanding
of the nature of KMPs relevant to effective innovation, rather than as a 'magic bullet' to solve many
complex problems.
The importance ratings assigned to KMPs are of particular value in making sense of the results as a
springboard for deciding where to concentrate efforts at a particular time. These importance rating
are likely to change over time as the environment evolves, which means each audit could highlight
fresh KMPs where action is most urgently needed. At the same time, steady improvements in many
KMPs should be looked for by repeating auditing exercises periodically. Section 4 indicates how
findings from the questionnaire can contribute to developing action plans to improve KMPs for
Innovation. The full questionnaire follows.
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AUDIT OF KNOWLEDGE MANAGEMENT PRACTICES FOR INNOVATION
This questionnaire provides the basis for an audit of the Knowledge Management Practices (KMPs) that
play an important role in shaping and making available the stocks of knowledge which are used for
innovation in a firm. Each KMP should be assessed in terms of its contribution to the creation and use of
these evolving knowledge bases in the organisation or unit being evaluated.
 In the left-hand column: Rate your degree of satisfaction with the current performance of this KMP in
contributing to the organisation's evolving knowledge bases. If the KMP is not implemented currently,
leave this column blank.
 In the middle column: Identify the level of importance you attach to this KMP in supporting the
organisation's evolving knowledge bases.
 In the right-hand column: Tick this box if some significant action might need to be taken in relation to
this KMP. The document Actions for KMP Improvements offers guidelines on following up key
requirements identified from the completed questionnaire.
Group A: R&D Management Activities
This first group of KMPs focuses on the formal and informal R&D management activities which also play a
significant role in the accumulation and management of project experience, results and expertise.
Satisfaction Importance Action
Low High Low High
Technical reports from R&D projects are archived in a form that makes
them easily accessible to relevant personnel (eg in a library; within a
structured database).
1 2 3 4 5 1 2 3 4 5
A2 Controlled access to project-specific R&D knowledge is offered:

by topic-based query systems (eg using cross-project libraries)
to company staff outside the local project/department

to selected people/organisations outside the company
soon after confirmed findings have been first recorded
A3 An assessment is carried out at the end of each project to identify
factors affecting success or failure which go beyond purely technical
information (eg failures in information flows; contextual information about
suppliers, customers, collaborators, equipment, etc).
A4 Strategic cross-project reviews explicitly utilise and contribute
towards the evolving stocks of corporate knowledge (eg as source of
intelligence on internal capabilities, external technologies, markets and
competitors).
A5 The outputs of formal R&D management control activities (eg
milestone reviews; en-of-project assessments) are also actively utilised as
sources of technical, project and commercial information.
A6 Intermediate data and results, gathered before producing formal
project reports, are made available explicitly to relevant personnel (eg
through online data feeds to other projects).
A7 Intermediate and final interpretations of project findings are
distributed to relevant personnel other than local project and
departmental management (eg on an ad hoc basis using targeted
distribution list to contact individuals who are likely to be interested in a
specific finding).
A8 Quality monitoring or other auditing activities are routinely used to
provide systematic feedback on best practice (eg on maintenance of test
equipment).
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Satisfaction Importance Action
Low High Low High
A9 Training and guidance is provided to technical staff in the
communications skills needed to present and disseminate data, ideas,
interpretations and findings to a variety of audiences (eg creating and
using intranet 'Research Web' sites; writing non-technical 'White Paper'
summaries of technological innovations; creating 'value-added
intelligence' reports on competitors).
1 2 3 4 5 1 2 3 4 5
A10 Results from technical modelling and design activities (eg
diagrams; physical prototypes; software simulations) are used to improve
communications between staff from different disciplines and functions, as
well as for their specific purpose within a project.
A11 Outcomes (eg new techniques or ideas) that are additional or
peripheral to specified project outputs: A11a are explicitly identified
from project experience A11b have their potential explored A11c are
disseminated to relevant personnel (eg through Feedback notes)
A12 The physical location of R&D personnel and support staff is
arranged in groupings designed to promote knowledge creation and
transfer (eg clustering together personnel who span project, departmental
or other organisational boundaries; using a centrally-placed library as an
informal communication node).
A13 Management provides practical support (eg computer networks;
physical spaces; funding) to foster the development of ad-hoc
arrangements that also contribute towards knowledge creation and
transfer (eg creating 'formal informality' through internal special-interest
groups; 'coffee-time' discussions; topic-based electronic bulletin boards).
A14 Individuals or groups wishing to foster a novel approach or
technology have access to formal company procedures which allow them
to argue the business case for allocating fresh resources to that
innovation.
A15. Specific personnel are allocated ring-fenced time for defined cross-
boundary gatekeeping activities
A16 'Gatekeepers' in key positions gather, communicate and
contextualise knowledge across disciplinary and organisational
boundaries (eg technology, customer and competitor stewards).
A17 The work of gatekeepers inside and outside R&D is explicitly co-
ordinated.
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Satisfaction Importance Action
Low High Low High
B1 Regular analyses of the 'capabilities for innovation' (knowledge,
people, equipment/services) in the unit are made independently from
decision making about specific projects.
1 2 3 4 5 1 2 3 4 5
B2 These analyses are used to create and maintain clear capability
maps in the areas essential to the organisation's R&D success (eg
technical capabilities, staff skills, projects, products, users, market
sectors).
B3 Mapping information is disseminated widely (eg steward-run
intranet Web sites; topic-centred electronic and hardcopy newsletters).
B4 The existence of these maps and how they can be used is known
by all relevant staff.
B5 Capability maps are updated continuously to represent long-term
accumulations of knowledge (eg through a Technology Audit
procedure).
B6 Relationships and alliances between competitors are routinely
monitored to update relevant capability maps.
B7 External maps incorporate capabilities in universities and other non-
commercial sources (eg through scanning the public science base).
B8 The company's capabilities are regularly compared to those of its
competitors (eg using capability maps to guide technology sourcing
strategy).
B9 Capability maps are used regularly to rate current potential against
strategic R&D and business aspirations.
B10 Managers make strategic decisions using 'landscape' studies that
include long-term 'roadmaps' of the relationships between technological
developments and the requirements of products, customers and markets.
B11 R&D staff gain and maintain direct knowledge of customer and
market requirements (eg by providing external consultancy or online user
support).
B12 R&D staff participate in studies of the characteristics, behaviour
and needs of users and customers in order to identify promising areas of
technology and product development.
B13 Selected R&D staff are allocated the time and resources to work
closely with external standards-setting and regulatory bodies.
B14 Internal peer review is used to judge:
B14a internal developments and new ideas in science and
technology
B14b potential external sources of science and technology
B15 Specific groups and activities are arranged with the prime aim of
bringing together people from different disciplines, projects and
organisational units (eg Expert Panels with a variety of specialists;
Design Reviews covering multiple projects; regular videoconferences
spanning organisational boundaries).
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Group C: R&D Human Resource Management
These KMPs relate to the motivation, reward and appraisal of R&D personnel. They can play a key
role in creating and using the corporate knowledge bases by providing incentives to share knowledge,
develop inter-disciplinary expertise and undertake cross-boundary working.
Satisfaction Importance Action
Low High Low High
C1 Personnel involved in matrix management or dual-reporting
processes are equally rewarded for achieving both specialist
departmental goals and project targets.
1 2 3 4 5 1 2 3 4 5
C2 The secondment of R&D personnel (eg to product development
or user support units) is actively managed as a feature of both career
progression and knowledge transfer.
C3 Staff are rewarded for good performance in disseminating the
results of their research within the company and, where appropriate,
externally.
C4 Managers undertaking staff appraisals are required to give
positive weighting to successful performance outside an individual's
main discipline.
C5 Individuals' CVs are maintained and archived in a form that is
easily accessible to relevant personnel (eg for use by a project manager
in assembling a new team or a new employee looking for expert advice).
C6 Special training is provided in synthesising knowledge from a
variety of multi-disciplinary sources.
C7 Personnel who are explicitly identified as experts in a specific field
who can act as internal 'consultants' outside of project-specific
assignments:
C7a are allocated time and resources to conduct their consulting
tasks
C7b keep records of all consultancy enquiries they receive
C7c use these records to trigger future research (eg using Feedback
Notes)
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Group D: Intellectual Property Management
Legal requirements, such as the 'Priority of First Proof' in US Patent Law, demand a number of
KMPs to handle Intellectual Property (IP) issues. The following KMPs utilise and extend these
activities to contribute towards the accumulation and management of knowledge.
Satisfaction Importance Action
Low High Low High
D1 IP specialists automatically and regularly update R&D staff with
information on patents and patent applications relevant to their areas of
technical specialisation (eg a targeted 'Patent Watch' service; up-to-
date information on IP positions of competitors and potential partners
or acquisitions).
1 2 3 4 5 1 2 3 4 5
D2 IP issues are addressed explicitly at all milestones in project
progression (eg 'Prior Art' IP evaluation during the Feasibility stage).
D3 Summaries and analyses of the patent situation in particular fields
are provided pro-actively by IP specialists to assist strategic and
project decision making.
D4 IP specialists provide guidance and training on generic IP issues
and techniques to R&D project staff.
D5 Ad hoc IP searches in specialist areas are carried out quickly and
accurately (eg through search software available to all staff).
D6 Routine and ad hoc IP searches in generic or cross-project
technologies are performed quickly and accurately.
D7 IP specialists are routinely informed about the emergence of
potential novelty.
D8 Lab Books and R&D Notebooks (to satisfy IP requirements) are
written and archived in a form that makes their content easily accessible
to relevant personnel.
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Group E: R&D Information Management
The way information is recorded, stored and structured for retrieval and communication is a critical
element in supporting most KMPs in Groups A to D. In recent years, a variety of interconnected and
rapid innovations in IT and Communication Technologies (ICTs) have offered opportunities to
transform these information management practices. The following KMPs highlight the role of ICT-
based information management as a trigger to creating or changing KMPs.
Satisfaction Importance Action
Low High Low High
E1 A corporate information strategy to build and disseminate the evolving
corporate knowledge bases is continuously monitored and updated at all
appropriate levels in the company.
1 2 3 4 5 1 2 3 4 5
E2 Access to specific ICT-based services is controlled according to clearly
stated and widely known policies.
E3 The whole company uses a common IT infrastructure (eg standardised
operating system and applications; seamless transfer between different
systems).
E4 ICT systems supporting collaborative working (eg groupware) are easily
available and usable for all those involved with R&D projects.
E5 Librarians and information scientists collaborate routinely with IT
specialists in developing and implementing the information management
strategy.
E6 Resource budgeting for information management includes library and
information science requirements, as well as IT specialists and systems.
E7 Information management activities take account of the value of paper-
based and lower-tech systems (eg the telephone and fax), as well as more
sophisticated IT capabilities.
E8 Direct input from R&D staff contributes to the development of
information management activities (eg by online feedback to suggest
opportunities for new systems and applications; regular meetings between
R&D and information management staff).
E9 R&D staff are able to experiment with new ICT-supported KMPs (eg
using email or videoconferencing to build ad hoc virtual teams or special
interest groups).
E11 Software simulations and other IT demonstrators are used to encourage
cross-boundary working by making tangible the opportunities that can be
gained by improving communications between staff from different disciplines
and functions.
E12 Information management specialists routinely provide 'information
navigation' advice in the early stages of a project.
E13 The following ICT-based services are used by the organisation to build,
analyse and disseminate the organisations' evolving knowledge bases:
E13a internal unstructured email
E13b internal structured email (eg 'threaded' email discussion
groups')
E13c a company intranet (eg internal Research Web)
E13d simple remote access to internal information systems for all
R&D staff when outside the company's physical boundaries
E13e an 'extranet' allowing controlled access to specific areas of the
company intranet by external people (eg commercial and academic
collaborators)
E13f universal access for R&D staff to the Internet
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E13g tailored support for navigating the World Wide Web and
other Internet sources (eg distributing files to relevant personnel
containing 'bookmarks' to sites of interest to them)
E13h easy-to-use mechanisms for targeting information
dissemination (eg tailorable email dissemination lists)
E13i access to external databases
E13j a document management system for archiving and retrieving
knowledge
E13k videoconferencing
E13l online access to scientific journals
E13m Patent Trend Analysis software
4. IMPROVING KMPS FOR INNOVATION
Results obtained from the KMP for Innovation questionnaire can be interpreted in ways which deliver
practical improvements only if the analysis is based on sound knowledge of the specific context in
which improvements are being sought. It is therefore not possible to provide general prescriptive
advice on how these results should be treated. The 'Actions for KMP Improvements' form on the
following pages is offered as a general aid to self-auditing which companies can adapt to their own
requirements. As with the questionnaire, it has been designed so that it can be used on its own,
although it should preferably be used in conjunction with the whole of this document.
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ACTIONS FOR KMP IMPROVEMENTS
The Audit of KMPs for Innovation questionnaire identified those practices where improvements are
needed. By analysing the satisfaction and importance ratings of these, the KMPs where improvements
are most likely to deliver the major benefits can be identified. These key KMPs (usually nor more
than ten), provide an initial for developing action plans to follow up the audit. This could be done for
the organisation as a whole and/or for individual units.
The kinds of actions to be taken will probably be unique to each environment. The form overleaf
provides a termplate format for specifying action plans.
 KMP No. and Description relate to the KMPs as identified in the Audit Questionnaire.
 Start New KMP Activity highlights where a totally new KMP or knowledge
management activity within a current one should be started.
 Alter Existing KMP specifies changes to be made to an existing KMP. Typically these
will involve increasing or decreasing the degree of formality, the levels of access, and/or the
overall scope of the current KMP.
An example of how the form could be completed is provided below.
KMP
No.
Description Start New KMP Activity
(initiate full new KMP, or activity
within existing KMP)
Alter Existing KMP
(e.g. increase or decrease
formality/access/scope)
A3 End of Project
Assessment
1. Place all EOPAs on the
Research Intranet.
2. Alert Quality Team to any
project experience which
requires changes to company
standards.
1. Re-emphasise importance of
EOPAs in training and project
management guidelines
2. Redefine formal EOPA
processes to clarify feedback
procedures outside the project.
3. Extend scope of EOPAs to
include non-technical feedback
(e.g. people management).
B11 Customer/Market
experience for R&D
staff
Require all staff providing
external consultancy to keep a
day book on queries answered.
Relax constraints on when R&D
staff can be in direct liaison with
customers and users.
E2 ICT access control Revise policy to take account of
Research Web
E13c Research Intranet Start project to build internal
Research Web
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ACTIONS FOR KMP IMPROVEMENTS
KMP
No.
Description Start New KMP Activity
(initiate full new KMP, or activity
within existing KMP)
Alter Existing KMP
(e.g. increase or decrease
formality/access/scope)
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5. CONCLUSION - MAINTAINING EFFECTIVE KNOWLEDGE
MANAGEMENT PRACTICES
The KMPs for Innovation discussed in this report give a fresh impetus to the development of strategies
for dealing with Knowledge Management and Innovation. The practical focus of KMPs drives deeply
into the nature of current routines which shape the innovation paths within a company. It also, crucially,
highlights steps that can be taken to improve KMPs for Innovation to enhance a company's ability to
generate a variety of options to enable it to move forward successfully in innovative ways to meet the
unpredictable and volatile competitive environments of the early 21st Century.
This powerful innovatory potential can be enhanced by the use of this self-auditing tool, which is
designed to meet the needs of a wide spectrum of companies. The tool recognises the crucial
differences which exist between and within companies, so does not try to pose as a universal solution
to everyone. Instead, it seeks to help companies understand the relationships between knowledge
management and the innovation process in their companies in order to help sustain long-term business
success.
Companies move at different speeds in adopting new KMPs and the effects of a KMP can vary
greatly between different companies, or at different times within the same company. Different parts of
a firm could also have different levels of success with a KMP, or be moving at different paces in
evolving their innovation processes. In some cases, an apparently attractive KMP for Innovation could
actually reinforce constraining traditional practices, for example if the method of implementation uses
particular forms of Information Technologies and software which merely reinforce existing patterns,
rather than enabling new forms of co-ordination and variety generation.
The self-auditing nature of this document ensures that these kinds of variation can be taken into
account. The current combination of KMPs for Innovation in a firm can then be diagnosed and linked
to observed innovative activity. In addition to helping to improve innovatory business performance, this
self-audit process also exposes KMPs as a vital dimension affecting business performance which does
not relate mechanically to other traditional reference points for organisational performance, such as
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money, power or authority. This suggests many fruitful avenues for pursuing the use of KMPs for
Innovation to develop knowledge management, innovation and other business and R&D strategies.
CRIC is continuing to undertake research to investigate some of these opportunities. This includes
further developments of the KMPs for Innovation Audit Tool contained in this report. If you wish to
provide feedback on completed questionnaires, or comment on any aspect of this report, we would
be glad to hear from you.
30
Bibliography
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Innovation', Research Policy, In Print.
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Innovation (Boston: Harvard University press, 1995).
Metcalfe, S. J. and de Liso, N. (1997) 'Innovation, Capabilities and Knowledge: The Epistemic
Connection' in Coombs, R., Green K., Richards. A. and Walsh, V. The Organisational Dimensions
of Technological Change (London: Edward Elgar).
Nonaka, I. (1994), 'A Dynamic Theory of Organizational Knowledge Creation', Organization Science
5(1): 14-17.
Nonaka, I. and Takeuchi, H. (1995) The Knowledge-Creating Company. How Japanese
Companies Create the Dynamics of Innovation (Oxford: Oxford University Press).
Polanyi, M. (1958), Personal Knowledge (Chicago: University of Chicago Press).