Knowledge Management: A Value-Chain Approach Albert Simard presented to Interdepartmental Knowledge Management Forum October 27, 2004

An opening thought… An era in which the key economic resource is knowledge is startlingly different from an era in which the key resources were capital, raw materials, land, and labor. James Martin CYBERCORP (1996)

An era in which the key economic resource is knowledge is startlingly different from an era in which the key resources were capital, raw materials, land, and labor.

James Martin

CYBERCORP (1996)

OUTLINE Knowledge Assets Knowledge Value Knowledge Management Knowledge is different from industrial resources

Knowledge Assets

Knowledge Value

Knowledge Management

Knowledge Attributes Total knowledge is increasing; half-life is decreasing Knowledge can be in more than one place at one time Knowledge may be permanent or time sensitive Knowledge can be used without being consumed Selling does not reduce supply nor ability to sell again Buyers only purchase knowledge once Once disseminated, knowledge cannot be recalled Thomas Stewart (1997)

Total knowledge is increasing; half-life is decreasing

Knowledge can be in more than one place at one time

Knowledge may be permanent or time sensitive

Knowledge can be used without being consumed

Selling does not reduce supply nor ability to sell again

Buyers only purchase knowledge once

Once disseminated, knowledge cannot be recalled

Knowledge Costs Production cost is independent of the number of users Reproduction is controlled by users, not producers Production cost greatly exceeds reproduction cost Costs accumulate at the front-end of production The more intangible, the greater the cost discrepancy Inputs and outputs for creative work are uncorrelated Thomas Stewart (1997)

Production cost is independent of the number of users

Reproduction is controlled by users, not producers

Production cost greatly exceeds reproduction cost

Costs accumulate at the front-end of production

The more intangible, the greater the cost discrepancy

Inputs and outputs for creative work are uncorrelated

Explicit Knowledge Knowledge that has been formally expressed and transferred in a tangible form; intellectual property. databases, statistics, collections books, publications, reports, documents, correspondence photographs, diagrams, illustrations computer code, expert systems, decision-support systems presentations, speeches, lectures recorded experiences, stories materials for education, teaching, and training laws, regulations, procedures, rules, policies embedded into products

Knowledge that has been formally expressed and transferred in a tangible form; intellectual property.

databases, statistics, collections

books, publications, reports, documents, correspondence

photographs, diagrams, illustrations

computer code, expert systems, decision-support systems

presentations, speeches, lectures

recorded experiences, stories

materials for education, teaching, and training

laws, regulations, procedures, rules, policies

embedded into products

531 assets; 211 responses

Tacit Knowledge Intangible personal knowledge gained through experience and self-learning. It is influenced by beliefs, perspectives, and values. awareness skills mental models expertise judgement wisdom corporate memory The Thinker - Rodin

Intangible personal knowledge gained through experience and self-learning. It is influenced by beliefs, perspectives, and values.

awareness

skills

mental models

expertise

judgement

wisdom

corporate memory

Intellectual Capital “ Intellectual capital is intellectual material … that can be put to use to create wealth.” Thomas Stewart Intellectual Capital (1997) Intellectual capital includes both tangible, material (explicit knowledge) and intangible knowledge in the minds of individuals (tacit knowledge)

OUTLINE Knowledge Assets Knowledge value Knowledge Management If you can’t measure it, you can’t manage it.

Knowledge Assets

Knowledge value

Knowledge Management

Knowledge Value Value is very difficult to measure Value is extracted when knowledge is used Sharing increases the value of knowledge Value increases with abundance Buyer cannot judge value in advance Value can be added by filtering knowledge Value is not well related to acquisition cost Thomas Stewart (1997)

Value is very difficult to measure

Value is extracted when knowledge is used

Sharing increases the value of knowledge

Value increases with abundance

Buyer cannot judge value in advance

Value can be added by filtering knowledge

Value is not well related to acquisition cost

Knowledge Value Chains Flow of knowledge through a sequence of processes in which it’s value is increased at each stage. Creation Use Management Preservation Sharing Integration

Flow of knowledge through a sequence of processes in which it’s value is increased at each stage.

Creation

Use

Management

Preservation

Sharing

Integration

Knowledge Creation Value Chain Knowledge creation is a precursor to everything else Information Management Decision-making Knowledge Management Data Management Acquisition Data Wisdom Information Knowledge Inputs sensing facts meaning understanding judgement

Creating Knowledge is not Enough Bell Labs: lasers Xerox: graphical user interface, object-oriented programming, laser printer, Ethernet IBM, DEC: mainframe/mini computers CERN: World-Wide Web Encyclopaedia Britannica: synthesizing knowledge

Bell Labs: lasers

Xerox: graphical user interface, object-oriented programming, laser printer, Ethernet

IBM, DEC: mainframe/mini computers

CERN: World-Wide Web

Encyclopaedia Britannica: synthesizing knowledge

Knowledge Use Value Chain The value of knowledge is realized only when it is used for something Individual Opinion Compiled Targeted Recommend Reporter Analyst Advocate Author Marketer promote publish represent influence agenda

Plant Hardiness Zones Knowledge for Canadians (climate + elevation)

Knowledge for Practitioners Fire Monitoring, Mapping, and Modeling System

OUTLINE Knowledge Value Knowledge Assets Knowledge Management KM adds value by linking creation and use

Knowledge Value

Knowledge Assets

Knowledge Management

Knowledge Management Value Chain Higher-level KM goals generally have decreasing ranges of applicability Network Manager Executive Senior Manager Custodian Preservation Management Sharing Integration interface interoperability organization availability

Knowledge Management: Linking Past, Present, & Future Capture Archive Share Integrate Learn Adapt Past Present Future Infrastructure Content Processes People

Knowledge Management: A Definition Developing organizational capacity and processes to capture, preserve, share, and integrate data, information, and knowledge to support organizational goals, learning, and adaptation.

Knowledge Preservation Value Chain Preservation is the foundation of knowledge management Capture Maintain Organize Retrieve Store Librarian Systems Manager Codifier Provider access inventory map capacity continuity

Briefing Note Database

Organizing Knowledge Assets Epistemology Cognitive approaches Automated methods Classification systems Thesauri Interdisciplinary issues Linguistic issues Metadata Knowledge map Library of Alexandria – artist’s concept

Epistemology

Cognitive approaches

Automated methods

Classification systems

Thesauri

Interdisciplinary issues

Linguistic issues

Metadata

Knowledge map

Storing Knowledge Assets Information Technology infrastructure Systems for archiving and managing content Interface for entry and administration Data warehouse, distributed databases Information repository, records management Knowledge repository, knowledge map Digital libraries, traditional libraries

Information Technology infrastructure

Systems for archiving and managing content

Interface for entry and administration

Data warehouse, distributed databases

Information repository, records management

Knowledge repository, knowledge map

Digital libraries, traditional libraries

Retrieving Knowledge Assets Access to content Browser interface Search engine Extraction tools Manipulation tools Assembly tools Retrieval system Relativity - Escher

Access to content

Browser interface

Search engine

Extraction tools

Manipulation tools

Assembly tools

Retrieval system

Knowledge Sharing Value Chain The value of a network is proportional to the square of the number of users conversation letters speaking publishing hoarding networking synergy Individual Groups Colleagues Community personal synergy dialogue evolution

Sharing Knowledge: Methods Conversations, discussions, dialogue Advice, briefings, recommendations Mentoring, teaching, examples Questions & answers, knowledge extraction Presentations, lectures, speeches, stories Documents, books, manuals, instructions Education, training, demonstration Meetings, workshops, conferences, forums Networks, communities of practice

Conversations, discussions, dialogue

Advice, briefings, recommendations

Mentoring, teaching, examples

Questions & answers, knowledge extraction

Presentations, lectures, speeches, stories

Documents, books, manuals, instructions

Education, training, demonstration

Meetings, workshops, conferences, forums

Networks, communities of practice

Sharing Knowledge: Technology Talking (real, virtual) E-mail (individuals, list servers, distribution lists) Chat rooms, forums, discussion groups Communities of interest, informal networks Groupware (teams, working groups) Conferences, workshops, knowledge fairs Data bases, information bases, knowledge bases Digital libraries (repositories, search, retrieval) Information & knowledge markets

Talking (real, virtual)

E-mail (individuals, list servers, distribution lists)

Chat rooms, forums, discussion groups

Communities of interest, informal networks

Groupware (teams, working groups)

Conferences, workshops, knowledge fairs

Data bases, information bases, knowledge bases

Digital libraries (repositories, search, retrieval)

Information & knowledge markets

Knowledge Integration Value Chain The whole is more than the sum of it’s parts Coordinator Analyst Creator Synthesizer Isolated Integrated Organized Whole structure element relationships system

Soils of Canada

Land Cover Natural Resources Canada Ressources naturelles Canada Canadian Forest Service Service canadien des for ê ts

Climate Change

Distribution of Black Spruce B) climate at 1.5 X CO 2 A) present climate 0 - 10% 11 - 20% 21 - 30% 31 - 40% 41 - 50% 51 - 60% 61 - 70% 71 - 80% 81 - 90% 91 - 100% X location of black spruce sites

“ Products are physical manifestations of knowledge, and their worth largely, if not entirely, depends on the value of the knowledge they embody.” Dorothy Leonard Wellsprings of Knowledge (1995) A final thought….