Knowledge & Innovation Mgmt

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Knowledge & Innovation Management

A Document prepared by Dr Sameh S El-Atawy and published by Kemetex.com, Alexandria,EGYPT.

Attended Readership

This document should be read by business owners, executive officers, and HR managers seeking

to understand and deploy knowledge management in their business entities.

This document addresses the needs of a business or corporation embarking on a project including

Knowledge Management.

Nota Bene

This document is by no means comprehensive and does not pretend to cover the subject at

hand. It is merely a collection of guidelines, suggestions, and an insiders view based on theAuthors experience in this area.

This document was based in no small part on the contributions of others, all of whom the Authorwishes to thank heartily.

References on the subject are vast and textbooks, conferences, and papers have beendedicated to individual topics mentioned here. Please consult the literature for details. The author

has attempted to use established nomenclature whenever possible to facilitate further

readership.

About The Author

Dr Sameh S El-Atawy has been heavily involved in training staff on various locations and at various

levels of experience. Being a veteran software and internet developer himself, he trained several

other members of staff at mess@ge, VeBIT, and is currently working at Kemetex.com.


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The Knowledgeable Enterprise

A large percentage of professional staff employed by business entities can be collectively labeledas Knowledge Workers. These include professionals who need specific know-how and relevant

information to perform their duties. Whenever a job description lays down requirements for a

specific degree, academic achievement, official coursework, membership, background, orexperience in a similar position, this is a job description for a Knowledge Worker.

This is in contrast to jobs that require skills only where you would normally see requirements for apre-placement training course, a period of in-house apprenticeship, or a probation period,

regardless of previous status. Such jobs are usually open to any willing candidate and you could

expect the duties to be manual, repetitive, or based on manual dexterity, endurance, etc.

Knowledge Workers get paid. With time, the investment made in these professionals should result

in net profit for their employer. However, most business entities fail to turn them into a financially

valuable asset; rather, they are looked upon as expenses, not an investment. They appear

traditionally on the expense side of the Profit Statement.

When accounting takes into consideration the legal implications of staff contracts and pension

plans, these are stated under liabilities. In our experience, they seldom materialize on the other

side as assets.

In traditional accounting, however, they can (and should). Investing in knowledgeable staff results

in boosting the goodwill of the entity, can be transformed into patents and similar intangibleassets, and eventually result in measurable growth of working capital. Transforming employees

into other measurable forms of capital resulted in the notion of Human Capital as opposed to

Human Resources.

In any given industry, some entities resolve to invest in their employees and thus become key

employers; leaders of their job market. Eventually, their ability to recruit and retain the most

knowledgeable professionals leads to their rise in the industry. They become market leaders.The way to become a market leader is to understand that the key to growth is to grow beyondthe limits of here and now. The best advice to give any growing business is to keep looking

ahead. When dealing with professionals, this translates into: enhancing their current know-how;

encouraging their own aspirations to grow; and eventually growing their collective knowledge

into the as yet unknown (whatever the future may bring).

It is this openness to the future that separates mediocre business entities from those that eventuallylead their industries and become global players; the willingness and desire to be innovative

through the relentless growth of knowledge.

Knowledge Management, as a practical discipline, aims to formalize this view and emphasize the

principles that fuel business entities to grow beyond conventional constrains. If growth beyond a

certain threshold is held back by market size, competition, investment, logistics, or technical limitsof feasibility, these can be overcome only by expanding the knowledge of today with what a

business can develop tomorrow.

A knowledge consultant does not aim to revamp a business in terms of industry-specific

approaches, but rather empower professionals to develop their own ideas and activities with fresh

ideas and innovative solutions. To achieve this, the consultant will introduce methods ofknowledge collection, compilation, and dissemination to guarantee that professionals have at

their disposal the latest and most informative know-how available. Next, he/she will invite and

enable enrichment of the knowledge base with constant input from the team. Ultimately, he/she

will establish protocols that ensure that team members make good use of the existing knowledgeand that high standards of quality (clarity, accuracy, reliability, etc) are maintained.


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This being said, the benefits to be gained will take place in stages:

First, the feeling of improvement and moving forward should be felt internally. Staff should feelbetter informed, appreciated, and empowered. The boost to morale and internal loyaltyshould be felt early on. Performance drops, workplace apathy, and change resistance should

all be seen to fall.

Second, career development of staff should reflect on recruitment and retention figures.Performance and efficiency improvements should be detectable on Key Performance

Indicators and industry-specific metrics. Both will lead to a stronger corporate identity and

more respectable image when seen by outsiders, particularly clients and business partners.

Third, on the long run, increase in competitiveness will raise the market share of the enterpriseas a whole. When this reaches existing limits of growth, the final and most significant benefit will

materialize; the innovation inherent in the system will expand the market vertically and

horizontally, create new needs and new opportunities, and generate new revenue through the

position of leadership itself.

"Knowledge management is a conscious strategy for moving the right knowledge to the right

people at the right time to assist sharing and enabling the information to be translated into action

to improve the organizational performance." (O'Dell & Grayson 1997)


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What is a consultant?

Any business is run by people. This human capital must be in command of a set of competenciesto be able to perform a given set of duties. Human capital consultancy has this focus and aim.

Competencies are categorized by having conceptual (cognitive) or operational (behavioral)

natures and thus recognized as either knowledge or skills. Knowledge may be called for alone or

in cohort with skill; Skill likewise may suffice or need knowledge to fulfill its value.

A teacher is a person who conveys/imparts knowledge. The whole process of education was

based on this percept for centuries. (In recent times, skills have taken the center stage in

educational thinking but we need to differentiate the comprehensive term education fromteaching.)

A trainer is a person who transfers/confers skill. Thus, most teachers can be trainers in practice but

the role of a trainer requires a set of interactive and evaluative tools different from the

instructional tools of a teacher.

A consultant is a person who can recognize and complete the missing competencies desired toperform duties. He/she may convey knowledge lacking in a group of people with adequate skill.In another setting he/she may need to transfer skills to a group with adequate knowledge.

Though this definition may look like comprehensiveness and seem like that of a modern-mindededucator, there is one difference: If your staff lack both the knowledge and skills required; you

dont hire a consultant you hire new staff (or replace them with the consultant). A consultant

can only assess gaps and fill them, not build your human capital from scratch.

What does a consultant do?

To satisfy the above definition, a consultant has to perform a defined set of duties to succeed:

Assess the Gap

1. Identify the current status of the business entity, particularly in terms of human capital.2. Identify the vision of the business (what it aspires to be or needs to do to fulfill its mission).3. Highlight the defects and mark the changes that need to be made.

Supply needed Competencies

1. The teacher role is assumed when knowledge is to be imparted.2. The trainer role is assumed when skills need to be transferred.

Evaluate the Change1. Criteria must be measured for the change in human capital terms.2. Criteria must be measured for the impact on the business entity in performance & financial

metrics.


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What makes a KM consultant valuable?

Consultants are usually hired to affect the growth curve of a business. Sometimes this is notobvious but its the underpinning fact of most consultancy efforts.

A business grows by investment size and market share. These 2 axes define the profitability,

solvency, liquidity, and stability of the business.

1. Commonly understood, an insignificant investment (in terms of finance and time) is oftennot profitable.

2. Following some growth of investment, the business starts to penetrate the market and gaina share that grows with time (assuming no defeating factors intervene).

3. It is also common to note that revenues and profitability rise higher than the increase ininvestment over the same time. This gave rise to one form of the break-even notion; we

break-even at a point in time where the curve of revenues meets and begins to surpassthe curve of investment. Liquidity now ceases to be a major concern.

4. On nearing market saturation, the growth curve of a business slows down despiteincreasing investments and passage of time. The changes of a market also come into play

eventually and the market share of any business tends to plateau and even decline.

5. While costs drive investments to rise, this eats away at the profitability and solvency of thebusiness and on feeling a decline, the firms stability itself is threatened.

Consultants are hired according to this curve to do one of 2 things:

Lower costs and hence achieve the same market share at lower investments; A noblepursuit. These are usually industry experts and focus on manufacturing, inventory control,

logistics, staff compensation, etc.

Raise market share to improve profitability at the same level of investment. These areusually sales and marketing experts and focus on customer attraction and retention,

corporate image, etc.

Human Capital Consultants focus on Knowledge and Innovation. They bear in mind the principles

of emergence, intelligence, and ambiance. They aim at extending the growth curve forwards(into the future) and upwards (into growth). Of course this effectively delays the plateau of market

saturation and prevents the feared decline of ageing.

How? Mostly through promoting and defending innovation and driving change. By innovative

thinking and a dynamic business ambiance, the entity can thrive longer as it adapts to market

changes, opens new markets, diversifies its portfolio, adds value, etc.


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Components of Knowledge Management

1. Analysis of knowledge requirementsWhat do we need to know?

As part of the competency model or in a separate format, the business needs to identifyand enumerate the knowledge areas it has need for.

This applies in timed stages. A business may need one set of topics now and another set inthe future. This will need to be marked if prudent use of resources is to be made.

This list is never complete. Knowledge is a dynamic living organism that grows and will berestructured indefinitely. Provision must be made for acceptance of change.

Who should know what?

As part of the competency model or in a separate format, the business needs to identifythe needs of specific job titles and job descriptions. Jobs may vary widely in their needs

and both recruitment and training endeavors need to keep this in mind.

This also applies in timed stages. A business may need one set of jobs now and another setin the future.

This map is tightly bound to the organizational structure. Authority granted on the basis ofknowledge is better accepted and leads to more effective leadership than any other

form of organization.

When should we know what?

From both needs and jobs, plans are written down for each phase. It would be a waste ofeffort to plan carefully for 10 years in advance. A business would rather plan ahead of

each growth cycle given the data surmised from the above studies.

2. Knowledge Gap assessmentWhat do we know?

The current state of knowledge in the collective staff body is easily measured by formalmethods such as examinations. Informal methods are more difficult but have empirically

proven to be of more value.

Objective methods can be used to indirectly assess knowledge. If an accounting firmalready goes about its everyday work successfully, the staff should have at least a given

knowledge of financial accounting. The issue then is to detect any personal defects

(deviations from the expected norm).

Who knows what?

Among the staff of a business, implicit (tacit) knowledge is often difficult to assess and isoften taken for granted. Explicit knowledge however must be measured or listed on a

personal basis.


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Knowing who-knows-what is a step to evaluate the knowledge sufficiency of the collectivebody of staff. For starters, it shows what job positions are adequately staffed and who has

missing competencies.

How can we know?

Sources of knowledge need to be declared and made public throughout the businessentity.

Quality measures may need to be declared. Even a simple ranking of the quality ofsources may suffice. Not every business needs a scholarly approach to every single piece

of know-how.

Methods of distribution (dissemination) of knowledge may be declared at this phase aswell, although they will be implemented later.

3. Tool setupOrganizational engineering for KM

Organizational charts, teams, and task forces should, for effective KM, be based on theknowledge mastered by staff members. Authority needs to be strongly based on

competency as this leads to effective leadership and a psychologically acceptable

environment for both supervisors and subordinates.

Staff authority lines should be made known to staff members with an explanation ofknowledge areas. A salesman can report to his/her sales supervisor but may request

knowledge and advice from the customer service department on product-specific issues(they know best).

Collaborative KM tools

Paper-based tools for knowledge sharing can be anything from a bulletin board to anewsletter. This form of dissemination is often a one-way communication tool and this

should be avoided. A better option could be to deploy a numbered circular system

whereby a staff member can post a comment or an idea and have it published in the

circular during the next cycle.

Software tools vary in complexity and we cannot delve into these deeply. The latest trendsfor knowledge software include personal knowledge bases that publish to online blogsand can make use of internet search engines and local repositories.

Web-based tools on the internet or corporate intranet have proven to be among the mostpopular and successful models. Wikis, blogs, forums, and even e-mail have been used as

KM tools in almost every major corporation in the fortune 500.

Innovation & development support

How will an employee access the resources he/she needs for development? Will anybodyoffer assistance? How will he/she allocate time for this activity? Can anybody guarantee

equal opportunities or will supervisors have the last word, making some positions more

supportive than others?


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By default, an organizational structure based on knowledge will take into considerationthe support needed for employees to develop themselves and their teams.

Clear guidelines need to be issued to staff (supervisors as well as their subordinates) as towhere and when personal development and innovation is to be encouraged. Limits may

be set on resources and staff time. Degrees of freedom may exist but should not seem

unfair to anyone involved.

Resources and funds may need specific allocation to innovation and development. Mostsuccessful corporations allocate funds for Research and Development. Many offer grants

to internal candidates to pursue further education and allow time off-work for official

coursework and examinations.

KM/Innovation incentive plan

What will an employee gain for his/her contribution to the collective knowledge of thegroup? Will there be a penalty for not collaborating?

By default, an organizational structure based on knowledge will encourage employees tostrive for more knowledge. Rewarding self-improvement with an opportunity for career

enhancement is a time-honored tradition in most structures and throughout the world.

Knowledge incentives may be built into compensation packages as a real-time rewardwithout long-term ill effect. If a business can afford to do this, it can be a quick and

effective way to build up a corporate knowledge base or revamp it in a timed and

controlled program.

Innovation needs to be encouraged on a personal basis. The tricky part is not to make thisoverly competitive since competition (tournament-style) may lead to poor team work on

occasions. Some situations even induce one staff to undermining or sabotage the efforts

and innovations of their colleagues.

4. Evaluation metrics Assessment of knowledge capital as a part of human capital can be conducted under

the format of competency evaluation.

A business entity may opt to evaluate collective knowledge in fixed cycles including thevolume of documentation, frequency of addition and amendment, quality ofdocumentation, coverage of target areas, etc.

Another approach - which should ideally be used in parallel with the aboveis a personalevaluation. Metrics may include frequency of contribution, frequency and diversity of

access, main areas accessed, and quality of work submitted (by peer review, access rate,

citation rate, amendments made, etc).

These metrics should, in a knowledge-based economy, be used to calculatecompensation, promotion/demotion, repositioning, etc. The least one can expect of a

KM-conscious company is to have these reported back to the employee and his/her

superiors to show recognition, boost morale, and instill a sense of pride in knowledge as an

achievement.

Documents

Knowledge & Innovation Mgmt