Does Your Company Know What It Knows? How Knowledge Management Can Change Your Business

6.30.2014
bokosKnowledge is power. In today’s information age, technology is a part of everything that we do, and management of the exponential growth of knowledge resulting from technological innovation is even more vital to an organization’s success. The term “knowledge management” (or KM) is a concept that surfaced about two decades ago, and it continues to evolve and develop as technology expands, the world flattens, and global companies are the norm. Nevertheless, a precise definition of KM remains elusive. Peter Drucker, the father of KM, defines the term as “the coordination and exploitation of organizational knowledge resources, in order to create benefit and competitive advantage.” If it sounds boring, keep reading—KM is actually a fascinating, rapidly evolving field.

We are all exposed daily to a flood of information. According to a study directed by Dr. Martin Hilbert at the University of South Carolina, humans broadcast “two quadrillion megabytes of information through televisions, radios, newspapers, posts and emails every 12 months – which is the equivalent of every person in the world reading 174 newspapers every single day.”

It is difficult to make decisions when a person is bombarded by information overload. Think back to the last time you were at a restaurant that had a 15-page menu. Was it easy for you to filter through all of that information and make a decision? For most people, it is overwhelming. It is the same with the information that we encounter daily in the workplace. On a typical day at the office, is it relatively easy for you to find an answer to an important question, or do you end up searching for hours and sifting through all sorts of data? Managing knowledge is key. Human capital is a company’s most valuable asset. With much of the boomer population retiring, more companies are beginning to realize the importance of KM. If someone takes a vacation, gets sick, resigns or retires, the company’s knowledge capital can easily walk out the door. And how effective can a company be without knowledge?

lawyers in a roomKM In Practice: Energy and Legal

For the legal profession, knowledge management contributes to a firm’s efficiency and competitive edge. Jeff Rovner, Managing Director of Information at the global law firm O’Melveny & Myers LLP, explains, “Imagine if you had all of a firm’s global personnel assembled in a single room. Whenever someone had a question, they would stand up and ask the question to the group. Questions like ‘Has anyone worked with this expert witness? Does this client have a policy on billing for internal discussions? What do we know about the new banking legislation?’ Anyone who knows the answer would provide it. However, it’s not feasible to assemble all personnel in a single room. So the next best thing is to assemble the firm’s collective artifacts -- documents, time entries, financial records, lawyer biographies, etc. -- in a single system, and query that system.”

Laura Mortensen, who is currently a KM practitioner in a large, global oil and gas company (and a former Director of Research at TAG), echoes Rovner’s emphasis on the importance of sharing organizational knowledge. “Oil and gas is a high-risk environment where mistakes and errors can result in catastrophic outcomes,” she said. “Therefore the need to transfer learnings effectively and improve processes based on previous experiences is absolutely critical.”

Mortensen adds, “One of the biggest challenges facing the oil and gas industry today is the significant shortages of STEM expertise due to the retirement of long-tenured experts. Much focus is being given to the use of KM approaches and tools to leverage the experts they have while accelerating the rate of learning for newcomers and mid-career professionals. Managing the intellectual capital of an organization is critical to the long-term business strategy.”

The Future of KM: Could It Change the Face of Business?

Law and energy aren’t the only business sectors that benefit from smart, efficient knowledge sharing. Although knowledge management is a concept that has only recently gained steam, it has the potential to revolutionize the way we do business—from working harder to working smarter.

laptopLast year, McKinsey & Company interviewed Don Tapscott, author of Radical Openness: Four Principles for Unthinkable Success, for McKinsey Quarterly. “There’s a big change that’s underway right now in rethinking knowledge management,” he stated. “We have to get rid of email.” Tapscott shared his idea of a “new collaborative suite” that housed documents, blogs, and discussion forums for relevant projects.

These strategies may seem radical, but they become more attractive when you consider all the time you spend replying to emails or performing repetitive tasks that could be automated. 

Bringing Knowledge Management to Your Company

KM’s strategic side involves motivating employees to share their knowledge. This can be difficult, because people tend to be protective of their personal knowledge. It can also be time consuming to contribute to a company’s knowledge pool, and everyone seems to be at a time-deficit these days. Here are some ideas that might help foster participation in KM and encourage knowledge-sharing:

• Ask your staff to share their experiences with recent best practices during a weekly meeting.
• Schedule monthly lunch workshops or brainstorming sessions, and encourage your staff to think creatively and contribute their suggestions on how to improve the business.
• Assign a point-person to manage collecting ideas or information relating to potentially useful experiences of employees, and designate a place to capture that information – such as on the company intranet site.
• Offer employees incentives to participate in these knowledge-sharing events.

KM’s technical side is more concrete and easier to define, but often harder to implement. The technical aspect of KM consists of the implementation of various technological tools.  These systems capture and store a company’s knowledge, and make it readily accessible to everyone. It isn’t necessary to spend an excessive amount of money on implementing new systems in order to put a basic KM framework in place. Databases, reporting and querying tools, customer relationship management software, social networks and company intranets are all examples of tools that can be helpful in storing and managing a company’s collective knowledge.

Whether your company is huge and global, or small and centralized, there are many benefits that implementing a KM system can add. Building a KM framework requires  a well-organized strategy, team participation, and a knowledge champion - someone who can lead the collection of data and channel that data into useful knowledge. These three things provide the basic framework of KM.

Though the task may seem daunting, in this age of information overload KM is essential to any company that wishes to work smarter and stay ahead of the curve. With the continual advancement and rapid evolution of technology - love it or hate it - the knowledge economy is here to stay.

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