Managers need to reward people for sharing knowledge directly with other people. That means, first, that the ratio of consultants to partners in these firms is relatively lowthere are approximately seven consultants for each partner at McKinsey and Bain. data, and market segmentation analyses out of documents and Specialists write reports and analyses that teams use. In the end she connected with nine partners and several managers who had developed growth strategies for financial services institutions. Marcia Blenko, for example, a partner in Bain's London office, Junior people are hired from top university residency programs and trained as fellows. He knew other Ernst & And they understood that writing answers to the many questions that would come from HPs divisions would take an extraordinary amount of time. The two knowledge management strategies require different IT infrastructures as well as different levels of support. financial institution. strategies for financial services institutions. Earn badges to share on LinkedIn and your resume. that person, and reused for various purposes. The process of sharing deep knowledge is time consuming, expensive, and slow. Knowledge management captures the knowledge communicated, often involving data, documents, and manuals. 58% of Were living in a knowledge economy. We call this the codification strategy. Managers sometimes try to turn inherently tacit knowledge into explicit knowledge. And second, it means that its difficult to hire many new consultants in a short period because every new person needs so much one-on-one training. Naturally, people-to-documents is not the only way consultants Your business strategy is based on mature offerings. The codification strategy opens up the possibility of achieving scale in knowledge reuse and thus of growing the business. It includes scientific expertise, operational know-how, insights about an industry, business judgment, and technological expertise. Although the implications of the answers may seem obvious, it is important for managers to make the explicit connection between their companys competitive strategy and how they use knowledge to support it. And this is smoothly carried out through Models of Knowledge Management. Although it is important to avoid straddling, an exclusive focus on one strategy is also unwise. Knowledge that has not been codifiedand probably couldnt beis transferred in brainstorming sessions and one-on-one conversations. The client wanted Bain to help it expand As the CEO of a major U.S. company told us, I have been using a particular consulting company for over a decade now. In 1997, Dell shipped 11 million PCs. This makes it possible to achieve scale in knowledge reuse and the ability to grow the business. An example of knowledge base software is our own Document360. However, management consulting firms have been leading the way for decades and they provide excellent examples for other companies to follow. But companies that isolate knowledge management risk losing its benefits, which are highest when it is coordinated with HR, IT, and competitive strategy. as well as value propositions that helped him estimate how She met with a He knew other Ernst & Young teams had, however, so he searched the electronic knowledge management repository for relevant knowledge. Eventually she connected with nine partners and several managers who had developed growth strategies for financial services institutions. the team tapped into a worldwide network of colleagues' At firms that reuse knowledge and solutions, the opposite is true: such firms exploit an approach as it matures. When an employee asks if a specific type of content is available, another employee can reply with links to instances in the repository. Those that pursued highly customized service offerings, or a product innovation strategy, invested mainly in person-to-person knowledge sharing. Dr. James Dougherty, its deputy physician in chief, describes this collaboration as follows: We coordinate intensive face-to-face communication in order to ensure that knowledge is transferred between researchers and clinicians and between different types of clinicians. Employees work together in 17 disease-specific teams. Most companies should use a blend of these strategies. Examples of web conferencing software are Microsoft Teams, Slack Calls, or Zoom. experience. It creates directories of experts and has consulting directors assemble project teams. The system drives the operation: customers choose configurations from a menu, suppliers provide components based on their orders, and manufacturing retrieves orders from the system and schedules assembly. Knowledge management strategies Increase the absolute level of codification across all dimensions of codification and organizational knowledge. For each type of organizational knowledge, increase the level of codification on those dimensions of codification, which transfer knowledge fastest and most accurately. in the Harvard Business Review, March-April 1999. CSC Index began with the right matcha personalization model supporting a customized offeringbut that became a mismatch as the concept of reengineering changed. Nevertheless, their highly customized offerings allow them to charge much higher prices than firms offering more standardized services can. The firm had a choice: change its knowledge management strategy or get out of the reengineering business. Companies that isolate knowledge management in functional departments like HR or IT risk losing its benefits. The codification of such knowledge saved the team and the client one full year of work. And each of Ernst & Youngs more than 40 practice areas has a staff member who helps codify and store documents. To keep the costs of knowledge transfer low, they considered trying to codify the acquired know-how. Others have not given it the same attention as they have given cost cutting, restructuring, or international expansion. The processes for developing and selling such products involve well-understood tasks and knowledge that can be codified. objects. WebA major part of section 2 consists of questions on the important structural prerequisites of knowledge management; knowledge strategy, the type of organizational structure, 7.1 Knowledge strategy and its impact on the work of knowledge workers Literature offers two types of knowledge strategy, codification and personalisation strategy. Love was preparing an important bid for a large industrial manufacturer that needed help installing an enterprise resource planning system. An Enterprise Social Network is an internal, private, social networking platform used for communication and collaboration within an organization. It also started to recruit M.B.A.s from leading business schools. Managing Knowledge?" She left voicemails with them and also checked Bains people finder database for more contacts. four to six. The aim of diversity management is to maximize the potential of each employee, so they can contribute to the success of the organization. So they took the person-to-person approach and sent engineers from product development teams to meetings at divisions around the world and to a companywide conference. had been with Bain for 12 years, knew several partners with As a result of this, most consulting companies have developed highly sophisticated Knowledge Management systems and are widely seen as role models for other companies. This chapter offers insight into how knowledge codification has the potential to capture varying levels of tacit content in pursuit of enhanced innovation and ultimately, competitive advantage. But members of the new guard had little interest in working on commodity-like reengineering projects. Knowledge that has not been These firms have also developed electronic document systems, They call this the personalization strategy. At performance reviews, consultants are evaluated along five dimensions, one of which is their contribution to and utilization of the knowledge asset of the firm.. finder" database for more contacts. For that strategy to succeed, technical knowledge must get transferred to product development teams in a timely way. Document your codification strategy and return to it often to build the habit. Knowledge is codified using a people-to-documents approach: it is extracted from the person who developed it, made independent of that person, and reused for various purposes. Ernst & Young, for example, does just that. As the foundation of industrialized economies has shifted from natural resources to intellectual assets, executives have been compelled to examine the knowledge underlying their businesses and how that knowledge is used. expertise relevant to this particular problem. Excel in a world that's being continually transformed by technology. How does knowledge that resides in the company add value for customers? Mckinsey fosters its networks by supporting a culture in which consultants are expected to return phone calls to colleagues very quickly, by transferring people between offices, by creating directories of experts, and using consulting directors to assist teams. Top cancer clinicians are attracted by Memorial Sloan-Ketterings state-of-the-art technology and excellent reputation. Two companies that we studied have scrapped their investment in electronic knowledge databases; their existing databases are used simply to connect people. The two knowledge management strategies call for different incentive systems. Tel. brainstorming sessions and one-on-one conversations. Findings Knowledge is shared not only face-to-face but also over the telephone, by e-mail, and via videoconferences. Dells competitive strategy is to assemble inexpensive PCs that are made to order and sell them directly to customers. It can be a gateway website offering an array of services, a personalized homepage that aggregates content from different sources, or a document repository. In fact, we believe that the choice between codification and personalization is the central one facing virtually all companies in the area of knowledge management. Knowledge codification. To make their personalization strategies effective, companies like Bain invest heavily in building networks of people. For the codification model, heavy IT support is critical; for the personalization model, it is much less important. They seek advice from colleagues to deepen their understanding of the issues, but in the end they must create a highly customized solution to a unique problem. Representation of knowledge so that it can be "reused" either by an individual or an organization. Effective knowledge management is becoming a priority for decision-makers in different industries. Naturally, people-to-documents is not the only way consultants in firms like Ernst & Young and Andersen Consulting share knowledgethey talk with one another, of course. A way of managing this knowledge is by creating an expert network, where people can easily find experts to help them do their job. The company spent a lot to develop those algorithms, but it has been repaid handsomely for its investment. By signing up, you agree to from colleagues promptly; by creating directories of experts; and By continuing you agree to the use of cookies. It transfers people between offices and urges people to return phone calls from colleagues promptly. The meetings cover basic science initiatives, clinical findings, patient care, and ongoing research. To help fill that gap, we have recently studied the knowledge management practices of companies in several industries. Consider this example. Accelerate your career with Harvard ManageMentor. Access more than 40 courses trusted by Fortune 500 companies. 1. The librarys purpose was to help consultants learn from work done in the past without having to contact the teams that did the work. Specialists write reports and analyses that many teams can use. They should encourage the heavy use of e-mail and electronic discussion forums. They realized, however, that the knowledge they wanted to capture was too rich and subtle to incorporate in a written report. When we dug deeper, however, we Recent developments in the business world have increased the need to strategically manage organizational knowledge. Instead, consultants scan documents to get up to speed in a particular area and to find out who has done work on a topic. project and closed the sale in two months instead of the typical Part of Mckinseys mission statement is: As a rm, and as individuals, we are driven to be the best, to develop unrivaled knowledge and to convey that knowledge to every client, every time., Our work is founded on a rigorous understanding of every clients institutional context, sector dynamics, and macroeconomic environment. Give Document360 a try! During Over the last five years, they have developed elaborate ways to codify, store, and reuse knowledge. By contrast, strategy consulting firms such as Bain, Boston Ernst & Young have pursued a codification strategy for their Knowledge Management efforts they have devised elaborate ways to codify, store, and reuse e-mail. Ralph Poole, director of Ernst & Youngs Center for Business Knowledge, describes it like this: After removing client-sensitive information, we develop knowledge objects by pulling key pieces of knowledge such as interview guides, work schedules, benchmark data, and market segmentation analyses out of documents and storing them in the electronic repository for people to use. This approach allows many people to search for and retrieve codified knowledge without having to contact the person who originally developed it. An intranet is a private computer network that uses internet protocols and network connectivity to share part of an organizations operations with its employees. WebThe codification strategy opens up the possibility of achieving scale in knowledge reuse and thus of growing the business. But it wasnt until the 1990s that chief executives started talking about knowledge management. This chapter offers insight into how knowledge codification has the potential to capture varying levels of tacit content in pursuit of enhanced innovation and ultimately, And person-to-person knowledge sharing involves expensive travel and meeting time; those costs dilute the advantage that is created when codified knowledge is reused. director of Ernst & Young's Center for Business Knowledge, Take the example of Randall Love, a partner in the Los Angeles office of Ernst & Young. Take the example of Randall Love, a partner in the Los Angeles Since Love reused this material, Ernst & Young won the project and closed the sale in two months instead of the more typical four to six. that the codification process works efficiently. Companies that primarily adhere to the reuse model will want about 20% of their knowledge sharing to be person-to-person. In a globalized and increasingly competitive economic environment, companies must frequently adjust and restructure to survive and grow. But the two knowledge management models also apply in the industrial sector. Many consultants can be assigned to a project; big projects will have a high ratio of consultants to partners. What value do customers expect from the company? Codification can act as an aspect of knowledge management. At the same time, the rise of networked computers has made it possible to codify, store, and share certain kinds of knowledge more easily and cheaply than ever before. WebKnowledge Management (KM) is the process of creating, sharing, using, and managing knowledge and information within an organization to achieve its objectives. WebThe four core capabilities identified in this framework are physical systems, employee knowledge and skills, managerial system routines directing resource accumulation and deployment creating the channels through which knowledge is accessed and flows and the organizations values and norms. business. The 250 people at the Center for Business Knowledge manage the electronic repository and help consultants find and use information. In the 1980s, before electronic document systems became fashionable, managers at Bain developed a large paper-based document center at its Boston headquarters; it stored slide books containing disguised presentations, analyses, and information on various industries. Videoconferencing technology allows two or more locations to communicate through two-way audio and video transmissions. Diversity management is the practice of creating an inclusive and welcoming work environment where everyone feels respected and valued, regardless of their differences. Explicit knowledge relates to the capture and storage of physical data and information in specific formats, and needs to be managed using effective document management systems that enable people to find what they need. It cant truly be systematized, so it cant be made efficient. WebEffective knowledge management system typically goes through three main steps: Knowledge Creation: During this step, organizations identify and document any existing or new knowledge that they want to circulate across the company. We think of this as an 8020 split: 80% of their knowledge sharing follows one strategy, 20% the other. striking, however, is the degree of emphasis they place on the Ernst & Young executives have invested a lot to make sure In the codification model, managers need to implement a system that is much like a traditional libraryit must contain a large cache of documents and include search engines that allow people to find and use the documents they need. HBR Learnings online leadership training helps you hone your skills with courses like Digital Intelligence . Personalization happens when you give people access to codified information by encouraging active discussions and knowledge sharing. Tacitness strategies keep organizational knowledge tacit in order to prevent flows of knowledge to competitors. The true manufacturing project in this one. Unnecessary innovations are expensive: programming and then debugging new software, for instance, eats a lot of resources. WebThe Three Components of Knowledge Management: Knowledge generation. So, lets have a look at the Incentives to stimulate knowledge sharing should be very different at companies that are following the personalization approach. When they overinvest in this way, they undermine their value propositionreliable systems at reasonable pricesas well as the economics of reuse. Propelled in part by its knowledge reuse model, Dells net income for 1997 was $944 million on sales of $12.3 billion; the companys revenues have grown 83% annually over the last four years. found that effective firms excelled by focusing on one of the We started by looking at management consulting firms. In all the companies and institutions we examined, managers had chosen a distinct knowledge management strategy. HBS Professors Morten T. Hansen and Nitin Nohria and colleague Thomas Tierney of Bain & Company set out to fill the gap and found two key knowledge Dell has to invest a good deal up front to determine and specify configurations, but its investment pays off because of the knowledges reuse. By contrast, the personalization strategy relies on the logic of expert economics. Strategy consulting firms offer their clients advice that is rich in tacit knowledge. Codifying and categorizing knowledge is an ongoing process that requires continuous evaluation and improvement. We found that providers of health care and manufacturers of computers also need to choose a knowledge management approach that fits their needs and goals. Knowledge management systems hold many benefits - for employees and customers alike. Although their approaches differed slightly, there was a common pattern among them.
Another consulting firm, Bain, learned a hard lesson about relying on documents. As a result, companies like Ernst & Young have been able to grow at a rate of 20% or more. collectively arrive at deeper insights by going back and forth on CEO Joseph Tallman describes the companys strategy: We are not inventing a new way to cure disease. The executives decision didnt come cheap: by one estimate, the company spent $1 million on communication costs alone on this process. Examples of team space platforms include Box, Chatter by Salesforce, or Confluence by Atlassian. knowledge, we found that they all used both the codification and by Morten T. Hansen, Nitin Nohria, and Thomas Tierney. Randall Loves approach to implementing the information system is typical of consulting companies where the efficient reuse of codified knowledge is essential because they are dealing with similar problems over and over. codify, store, and reuse knowledge. For this reason, we invest more than $600 million of our firms resources annually in knowledge development, learning and capability building. They did not He had already directed projects for implementing information systems for several manufacturers in other industries, but he hadnt yet worked on a manufacturing project in this one. 92OLL@
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and GDPR. Codification allows Ernst & Young to close sales quickly, reduce costs and fees, and accelerate growth by taking on more projects. WebThe codification strategy focuses on collecting knowledge, storing it in databases and providing the knowledge in an explicit and codified form. In a market that grew 20% annually from 1994 to 1996, CSC Indexs annual revenues slipped from $200 million to an estimated $150 million. Thats just how Mckinsey operates, which well talk about in the next section. By better understanding the two strategies and their strengths and weaknesses, chief executives will be able to make more surefooted decisions about knowledge management and their investments in it. You offer highly customized products or services to meet particular customers unique needs. WebPremising on the conversion of explicit knowledge to explicit knowledge, this generation of KM primarily relied on codification strategy. Knowledge is shared not only face-to-face but also through the telephone, email, and videoconferences. The paper sees that a manager should be aware of the objectives and business processes of the organizational unit and chooses the knowledge management strategy and Objective in accordance to the business strategy and objective and enhances understanding about the influence of organizational environment factors on the success of knowledge Even Dell, whose assemble-to-order computers vary more than mass-marketed products, sells products that can be considered standardized. Knowledge is codified using a people to documents approach: knowledge is extracted from the person who developed it, made independent of that person and reused The company channels such knowledge through person-to-person exchanges. knowledge management projects fail to achieve their expectations and the potential problems of codification as a strategy for knowledge management. They are implementers, not inventors; the not invented here attitude has no place in a reuse firm. McKinsey, BCG, and Bain hire top-tier M.B.A. graduates to be inventorsthat is, to use their analytic and creative skills on unique business problems. A companys strategy for knowledge management should reect its competitive strategy. Member who helps codify and store documents aim of diversity management is to assemble inexpensive PCs are. New guard had little interest in working on commodity-like reengineering projects different levels of support teams in reuse! People finder database for more contacts codifying and categorizing knowledge is shared not face-to-face..., which well talk about in the past without having to contact the person who originally developed it probably... Instance, eats a lot of resources assemble inexpensive PCs that are made to order sell... 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This as an aspect of knowledge management: knowledge generation focusing on one of the we started by looking management., patient care, and slow individual or an organization years, they undermine their value propositionreliable at. For the codification and organizational knowledge reuse and thus of growing the business it infrastructures as well as different of! Are implementers, not inventors ; the not invented here attitude has no place a! Strategy focuses on collecting knowledge, this generation of KM primarily relied on strategy! Been leading the way for decades and they provide excellent examples for other companies to.! Telephone, by e-mail, and slow many teams can use a mismatch as the concept reengineering! 40 practice areas has a staff member who helps codify and store documents trying codify. Pursued highly customized offerings allow them to charge much higher prices than firms offering more standardized services.! 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Several industries effective firms excelled by focusing on one strategy, 20 % the.... Tacitness strategies keep organizational knowledge tacit in order to prevent flows of knowledge so that can! Internet protocols and network connectivity to share part of an organizations operations with its employees or.... The reengineering business business knowledge manage the electronic repository and help consultants find and use information,! Beis transferred in brainstorming sessions and one-on-one conversations webthe Three Components of knowledge.... Developments in the business into explicit knowledge to explicit knowledge within an organization representation of management... Between offices and urges people to return phone Calls from colleagues promptly knowledge economy way! Knowledge without having to contact the person who originally developed it hard about... Hard lesson about relying on documents right matcha personalization model supporting a customized offeringbut became. This the personalization strategy relies on the conversion of explicit knowledge to competitors their personalization strategies,... Of knowledge base software is our own Document360 firms resources annually in reuse. Firm had a choice: change its knowledge management approach allows many people to search for retrieve. Service offerings, or Zoom order and sell them directly to customers the last five years, they call the! Company spent $ 1 million on communication costs alone on this process Chatter by,! Practice areas has a staff member who helps codify and store documents and capability building company spent $ 1 on! Providing the knowledge in an explicit and codified form companies must frequently adjust and restructure survive! Img src= '' https: //i.ytimg.com/vi/h4ZcJZxjN1I/hqdefault.jpg '', alt= '' knowledge management '' > < /img > Managing?!, the company spent a lot of resources internal, private, Social networking platform used communication! Webpremising on the logic of expert economics of documents and Specialists write reports and analyses teams. Knowledge reuse and thus of growing the business functional departments like HR or it risk losing its benefits of... Ways to codify the acquired know-how strategies call for different incentive systems one estimate the! Ways to codify, store, and videoconferences management strategies call for different incentive systems the ability to grow a... Provide excellent examples for other companies to follow an organizations operations with its employees `` reused '' either by individual... To codified information by encouraging active discussions and knowledge sharing follows one strategy also... Base software is our own Document360 just how Mckinsey operates, which well talk about in repository! Meet particular customers unique needs their personalization strategies effective, companies like Bain invest in!, store, and Thomas Tierney two companies that we studied have scrapped their investment in knowledge! We Recent developments in the repository advice that is rich in tacit knowledge management systems hold benefits. Csc Index began with the right matcha personalization model, heavy it support is critical ; the... Each employee, so they can contribute to the success of the new guard had little interest working! Quickly, reduce costs and fees, and via videoconferences level of codification organizational! Is time consuming, expensive, and ongoing research we think of as! Online leadership training helps you hone your skills with courses like Digital Intelligence ;... Grow the business with links to instances in the business, invested mainly in person-to-person knowledge sharing csc began! Subtle to incorporate in a timely way it wasnt until the 1990s that chief executives started talking knowledge. An example of knowledge base software is our own Document360 cant be efficient... As the economics of reuse business knowledge manage the electronic repository and help consultants and. Explicit and codified form knowledge management systems hold many benefits - for employees and customers alike competitive. Individual or an organization of Ernst & Young have been able to the! Expertise, operational know-how, insights about an industry, business judgment, videoconferences. Million on communication costs alone on this process losing its benefits eventually connected... Costs of knowledge to explicit knowledge codification can act as an aspect of knowledge that... Help installing an enterprise resource planning system past without having to contact the teams that did work. The work the librarys purpose was to help consultants learn from work done in business. Studied the knowledge in an explicit and codified form possibility of achieving scale in knowledge reuse and of... Continuous evaluation and improvement product development teams in a knowledge economy on codification strategy in knowledge management knowledge storing... Projects will have a high ratio of consultants to partners 600 million of our resources... Approach allows many people to search for and retrieve codified knowledge without having to contact the person originally... Ratio of consultants to partners have not given it the same attention as they have developed elaborate ways to,. Librarys purpose was to help fill that gap, we have recently studied the knowledge management knowledge..., invested mainly in person-to-person knowledge sharing follows one strategy, 20 or. Of their differences an organization or more locations to communicate through two-way audio and video transmissions chosen a distinct management! For instance, eats a lot of resources is a private computer network that uses protocols. Use information rich and subtle to incorporate in a reuse firm many benefits for. Connect people for financial services institutions to survive and grow 1 million on communication costs alone this..., another employee can reply with links codification strategy in knowledge management instances in the industrial sector services to meet particular unique! Right matcha personalization model supporting a customized offeringbut that became a mismatch as the of... The companies and institutions we examined, managers had chosen a distinct knowledge management is to assemble inexpensive that... The way for decades and they provide excellent examples for other companies to.... The same attention as they have given cost cutting, restructuring, Confluence. Areas has a staff member who helps codify and store documents people database.
Managers need to reward people for sharing knowledge directly with other people. That means, first, that the ratio of consultants to partners in these firms is relatively lowthere are approximately seven consultants for each partner at McKinsey and Bain. data, and market segmentation analyses out of documents and Specialists write reports and analyses that teams use. In the end she connected with nine partners and several managers who had developed growth strategies for financial services institutions. 
Marcia Blenko, for example, a partner in Bain's London office, Junior people are hired from top university residency programs and trained as fellows. He knew other Ernst & And they understood that writing answers to the many questions that would come from HPs divisions would take an extraordinary amount of time. The two knowledge management strategies require different IT infrastructures as well as different levels of support. financial institution. strategies for financial services institutions. Earn badges to share on LinkedIn and your resume. that person, and reused for various purposes. The process of sharing deep knowledge is time consuming, expensive, and slow. 
Knowledge management captures the knowledge communicated, often involving data, documents, and manuals. 58% of Were living in a knowledge economy. We call this the codification strategy. Managers sometimes try to turn inherently tacit knowledge into explicit knowledge. And second, it means that its difficult to hire many new consultants in a short period because every new person needs so much one-on-one training. Naturally, people-to-documents is not the only way consultants Your business strategy is based on mature offerings. The codification strategy opens up the possibility of achieving scale in knowledge reuse and thus of growing the business. It includes scientific expertise, operational know-how, insights about an industry, business judgment, and technological expertise. Although the implications of the answers may seem obvious, it is important for managers to make the explicit connection between their companys competitive strategy and how they use knowledge to support it. And this is smoothly carried out through Models of Knowledge Management. Although it is important to avoid straddling, an exclusive focus on one strategy is also unwise. Knowledge that has not been codifiedand probably couldnt beis transferred in brainstorming sessions and one-on-one conversations. 
The client wanted Bain to help it expand As the CEO of a major U.S. company told us, I have been using a particular consulting company for over a decade now. In 1997, Dell shipped 11 million PCs. This makes it possible to achieve scale in knowledge reuse and the ability to grow the business. An example of knowledge base software is our own Document360. However, management consulting firms have been leading the way for decades and they provide excellent examples for other companies to follow. But companies that isolate knowledge management risk losing its benefits, which are highest when it is coordinated with HR, IT, and competitive strategy. as well as value propositions that helped him estimate how She met with a He knew other Ernst & Young teams had, however, so he searched the electronic knowledge management repository for relevant knowledge. Eventually she connected with nine partners and several managers who had developed growth strategies for financial services institutions. the team tapped into a worldwide network of colleagues' At firms that reuse knowledge and solutions, the opposite is true: such firms exploit an approach as it matures. When an employee asks if a specific type of content is available, another employee can reply with links to instances in the repository. Those that pursued highly customized service offerings, or a product innovation strategy, invested mainly in person-to-person knowledge sharing. Dr. James Dougherty, its deputy physician in chief, describes this collaboration as follows: We coordinate intensive face-to-face communication in order to ensure that knowledge is transferred between researchers and clinicians and between different types of clinicians. Employees work together in 17 disease-specific teams. 
Most companies should use a blend of these strategies. Examples of web conferencing software are Microsoft Teams, Slack Calls, or Zoom. experience. It creates directories of experts and has consulting directors assemble project teams. The system drives the operation: customers choose configurations from a menu, suppliers provide components based on their orders, and manufacturing retrieves orders from the system and schedules assembly. Knowledge management strategies Increase the absolute level of codification across all dimensions of codification and organizational knowledge. For each type of organizational knowledge, increase the level of codification on those dimensions of codification, which transfer knowledge fastest and most accurately. in the Harvard Business Review, March-April 1999. CSC Index began with the right matcha personalization model supporting a customized offeringbut that became a mismatch as the concept of reengineering changed. Nevertheless, their highly customized offerings allow them to charge much higher prices than firms offering more standardized services can. The firm had a choice: change its knowledge management strategy or get out of the reengineering business. Companies that isolate knowledge management in functional departments like HR or IT risk losing its benefits. The codification of such knowledge saved the team and the client one full year of work. And each of Ernst & Youngs more than 40 practice areas has a staff member who helps codify and store documents. To keep the costs of knowledge transfer low, they considered trying to codify the acquired know-how. Others have not given it the same attention as they have given cost cutting, restructuring, or international expansion. The processes for developing and selling such products involve well-understood tasks and knowledge that can be codified. objects. WebA major part of section 2 consists of questions on the important structural prerequisites of knowledge management; knowledge strategy, the type of organizational structure, 7.1 Knowledge strategy and its impact on the work of knowledge workers Literature offers two types of knowledge strategy, codification and personalisation strategy. Love was preparing an important bid for a large industrial manufacturer that needed help installing an enterprise resource planning system. An Enterprise Social Network is an internal, private, social networking platform used for communication and collaboration within an organization. It also started to recruit M.B.A.s from leading business schools. 
Managing Knowledge?" She left voicemails with them and also checked Bains people finder database for more contacts. four to six. The aim of diversity management is to maximize the potential of each employee, so they can contribute to the success of the organization. So they took the person-to-person approach and sent engineers from product development teams to meetings at divisions around the world and to a companywide conference. had been with Bain for 12 years, knew several partners with As a result of this, most consulting companies have developed highly sophisticated Knowledge Management systems and are widely seen as role models for other companies. This chapter offers insight into how knowledge codification has the potential to capture varying levels of tacit content in pursuit of enhanced innovation and ultimately, competitive advantage. But members of the new guard had little interest in working on commodity-like reengineering projects. Knowledge that has not been These firms have also developed electronic document systems, They call this the personalization strategy. At performance reviews, consultants are evaluated along five dimensions, one of which is their contribution to and utilization of the knowledge asset of the firm.. finder" database for more contacts. For that strategy to succeed, technical knowledge must get transferred to product development teams in a timely way. Document your codification strategy and return to it often to build the habit. Knowledge is codified using a people-to-documents approach: it is extracted from the person who developed it, made independent of that person, and reused for various purposes. Ernst & Young, for example, does just that. As the foundation of industrialized economies has shifted from natural resources to intellectual assets, executives have been compelled to examine the knowledge underlying their businesses and how that knowledge is used. expertise relevant to this particular problem. Excel in a world that's being continually transformed by technology. 
How does knowledge that resides in the company add value for customers? Mckinsey fosters its networks by supporting a culture in which consultants are expected to return phone calls to colleagues very quickly, by transferring people between offices, by creating directories of experts, and using consulting directors to assist teams. 
Top cancer clinicians are attracted by Memorial Sloan-Ketterings state-of-the-art technology and excellent reputation. Two companies that we studied have scrapped their investment in electronic knowledge databases; their existing databases are used simply to connect people. The two knowledge management strategies call for different incentive systems. Tel. brainstorming sessions and one-on-one conversations. Findings Knowledge is shared not only face-to-face but also over the telephone, by e-mail, and via videoconferences. Dells competitive strategy is to assemble inexpensive PCs that are made to order and sell them directly to customers. It can be a gateway website offering an array of services, a personalized homepage that aggregates content from different sources, or a document repository. In fact, we believe that the choice between codification and personalization is the central one facing virtually all companies in the area of knowledge management. Knowledge codification. To make their personalization strategies effective, companies like Bain invest heavily in building networks of people. For the codification model, heavy IT support is critical; for the personalization model, it is much less important. They seek advice from colleagues to deepen their understanding of the issues, but in the end they must create a highly customized solution to a unique problem. Representation of knowledge so that it can be "reused" either by an individual or an organization. Effective knowledge management is becoming a priority for decision-makers in different industries. Naturally, people-to-documents is not the only way consultants in firms like Ernst & Young and Andersen Consulting share knowledgethey talk with one another, of course. A way of managing this knowledge is by creating an expert network, where people can easily find experts to help them do their job. The company spent a lot to develop those algorithms, but it has been repaid handsomely for its investment. By signing up, you agree to from colleagues promptly; by creating directories of experts; and By continuing you agree to the use of cookies. It transfers people between offices and urges people to return phone calls from colleagues promptly. The meetings cover basic science initiatives, clinical findings, patient care, and ongoing research. To help fill that gap, we have recently studied the knowledge management practices of companies in several industries. Consider this example. Accelerate your career with Harvard ManageMentor. Access more than 40 courses trusted by Fortune 500 companies. 1. The librarys purpose was to help consultants learn from work done in the past without having to contact the teams that did the work. Specialists write reports and analyses that many teams can use. They should encourage the heavy use of e-mail and electronic discussion forums. They realized, however, that the knowledge they wanted to capture was too rich and subtle to incorporate in a written report. When we dug deeper, however, we Recent developments in the business world have increased the need to strategically manage organizational knowledge. Instead, consultants scan documents to get up to speed in a particular area and to find out who has done work on a topic. project and closed the sale in two months instead of the typical Part of Mckinseys mission statement is: As a rm, and as individuals, we are driven to be the best, to develop unrivaled knowledge and to convey that knowledge to every client, every time., Our work is founded on a rigorous understanding of every clients institutional context, sector dynamics, and macroeconomic environment. Give Document360 a try! During Over the last five years, they have developed elaborate ways to codify, store, and reuse knowledge. By contrast, strategy consulting firms such as Bain, Boston Ernst & Young have pursued a codification strategy for their Knowledge Management efforts they have devised elaborate ways to codify, store, and reuse e-mail. Ralph Poole, director of Ernst & Youngs Center for Business Knowledge, describes it like this: After removing client-sensitive information, we develop knowledge objects by pulling key pieces of knowledge such as interview guides, work schedules, benchmark data, and market segmentation analyses out of documents and storing them in the electronic repository for people to use. This approach allows many people to search for and retrieve codified knowledge without having to contact the person who originally developed it. An intranet is a private computer network that uses internet protocols and network connectivity to share part of an organizations operations with its employees. WebThe codification strategy opens up the possibility of achieving scale in knowledge reuse and thus of growing the business. But it wasnt until the 1990s that chief executives started talking about knowledge management. This chapter offers insight into how knowledge codification has the potential to capture varying levels of tacit content in pursuit of enhanced innovation and ultimately, And person-to-person knowledge sharing involves expensive travel and meeting time; those costs dilute the advantage that is created when codified knowledge is reused. director of Ernst & Young's Center for Business Knowledge, Take the example of Randall Love, a partner in the Los Angeles office of Ernst & Young. Take the example of Randall Love, a partner in the Los Angeles Since Love reused this material, Ernst & Young won the project and closed the sale in two months instead of the more typical four to six. that the codification process works efficiently. 
Companies that primarily adhere to the reuse model will want about 20% of their knowledge sharing to be person-to-person. In a globalized and increasingly competitive economic environment, companies must frequently adjust and restructure to survive and grow. But the two knowledge management models also apply in the industrial sector. Many consultants can be assigned to a project; big projects will have a high ratio of consultants to partners. What value do customers expect from the company? Codification can act as an aspect of knowledge management. At the same time, the rise of networked computers has made it possible to codify, store, and share certain kinds of knowledge more easily and cheaply than ever before. WebKnowledge Management (KM) is the process of creating, sharing, using, and managing knowledge and information within an organization to achieve its objectives. WebThe four core capabilities identified in this framework are physical systems, employee knowledge and skills, managerial system routines directing resource accumulation and deployment creating the channels through which knowledge is accessed and flows and the organizations values and norms. business. The 250 people at the Center for Business Knowledge manage the electronic repository and help consultants find and use information. 
In the 1980s, before electronic document systems became fashionable, managers at Bain developed a large paper-based document center at its Boston headquarters; it stored slide books containing disguised presentations, analyses, and information on various industries. Videoconferencing technology allows two or more locations to communicate through two-way audio and video transmissions. Diversity management is the practice of creating an inclusive and welcoming work environment where everyone feels respected and valued, regardless of their differences. Explicit knowledge relates to the capture and storage of physical data and information in specific formats, and needs to be managed using effective document management systems that enable people to find what they need. It cant truly be systematized, so it cant be made efficient. WebEffective knowledge management system typically goes through three main steps: Knowledge Creation: During this step, organizations identify and document any existing or new knowledge that they want to circulate across the company. We think of this as an 8020 split: 80% of their knowledge sharing follows one strategy, 20% the other. striking, however, is the degree of emphasis they place on the Ernst & Young executives have invested a lot to make sure In the codification model, managers need to implement a system that is much like a traditional libraryit must contain a large cache of documents and include search engines that allow people to find and use the documents they need. HBR Learnings online leadership training helps you hone your skills with courses like Digital Intelligence . Personalization happens when you give people access to codified information by encouraging active discussions and knowledge sharing. Tacitness strategies keep organizational knowledge tacit in order to prevent flows of knowledge to competitors. 
The true manufacturing project in this one. Unnecessary innovations are expensive: programming and then debugging new software, for instance, eats a lot of resources. WebThe Three Components of Knowledge Management: Knowledge generation. So, lets have a look at the Incentives to stimulate knowledge sharing should be very different at companies that are following the personalization approach. When they overinvest in this way, they undermine their value propositionreliable systems at reasonable pricesas well as the economics of reuse. Propelled in part by its knowledge reuse model, Dells net income for 1997 was $944 million on sales of $12.3 billion; the companys revenues have grown 83% annually over the last four years. found that effective firms excelled by focusing on one of the We started by looking at management consulting firms. In all the companies and institutions we examined, managers had chosen a distinct knowledge management strategy. HBS Professors Morten T. Hansen and Nitin Nohria and colleague Thomas Tierney of Bain & Company set out to fill the gap and found two key knowledge Dell has to invest a good deal up front to determine and specify configurations, but its investment pays off because of the knowledges reuse. By contrast, the personalization strategy relies on the logic of expert economics. Strategy consulting firms offer their clients advice that is rich in tacit knowledge. Codifying and categorizing knowledge is an ongoing process that requires continuous evaluation and improvement. We found that providers of health care and manufacturers of computers also need to choose a knowledge management approach that fits their needs and goals. Knowledge management systems hold many benefits - for employees and customers alike. Although their approaches differed slightly, there was a common pattern among them.
Another consulting firm, Bain, learned a hard lesson about relying on documents. As a result, companies like Ernst & Young have been able to grow at a rate of 20% or more. collectively arrive at deeper insights by going back and forth on CEO Joseph Tallman describes the companys strategy: We are not inventing a new way to cure disease. The executives decision didnt come cheap: by one estimate, the company spent $1 million on communication costs alone on this process. Examples of team space platforms include Box, Chatter by Salesforce, or Confluence by Atlassian. knowledge, we found that they all used both the codification and by Morten T. Hansen, Nitin Nohria, and Thomas Tierney. Randall Loves approach to implementing the information system is typical of consulting companies where the efficient reuse of codified knowledge is essential because they are dealing with similar problems over and over. codify, store, and reuse knowledge. For this reason, we invest more than $600 million of our firms resources annually in knowledge development, learning and capability building. They did not He had already directed projects for implementing information systems for several manufacturers in other industries, but he hadnt yet worked on a manufacturing project in this one. 92OLL@
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and GDPR. Codification allows Ernst & Young to close sales quickly, reduce costs and fees, and accelerate growth by taking on more projects. WebThe codification strategy focuses on collecting knowledge, storing it in databases and providing the knowledge in an explicit and codified form. In a market that grew 20% annually from 1994 to 1996, CSC Indexs annual revenues slipped from $200 million to an estimated $150 million. Thats just how Mckinsey operates, which well talk about in the next section. By better understanding the two strategies and their strengths and weaknesses, chief executives will be able to make more surefooted decisions about knowledge management and their investments in it. You offer highly customized products or services to meet particular customers unique needs. WebPremising on the conversion of explicit knowledge to explicit knowledge, this generation of KM primarily relied on codification strategy. Knowledge is shared not only face-to-face but also through the telephone, email, and videoconferences. The paper sees that a manager should be aware of the objectives and business processes of the organizational unit and chooses the knowledge management strategy and Objective in accordance to the business strategy and objective and enhances understanding about the influence of organizational environment factors on the success of knowledge Even Dell, whose assemble-to-order computers vary more than mass-marketed products, sells products that can be considered standardized. Knowledge is codified using a people to documents approach: knowledge is extracted from the person who developed it, made independent of that person and reused The company channels such knowledge through person-to-person exchanges. knowledge management projects fail to achieve their expectations and the potential problems of codification as a strategy for knowledge management. 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