© 2003 Dr. Nick Bontis www.Bontis.com

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© 2003 Dr. Nick Bontis www.Bontis.com

  1. 1. All Aboard! Take a Knowledge Journey Dr. Nick Bontis, Ph.D. Assistant Professor of Strategic Management, McMaster University Director, Institute for Intellectual Capital Research Associate Editor, Journal of Intellectual Capital Chief Knowledge Officer, Knexa Solutions Hamilton, Ontario, Canada [email_address] www.bontis.com
  2. 2. Entering a New Era? <ul><li>Agricultural Era </li></ul><ul><ul><li>Land as a scarce resource </li></ul></ul><ul><li>Industrial Era </li></ul><ul><ul><li>Natural resources and factory production </li></ul></ul><ul><li>Knowledge Era </li></ul><ul><ul><li>Knowledge as an abundant resource </li></ul></ul><ul><ul><li>Cumulative codification knowledge base </li></ul></ul><ul><ul><li>Industry displacement </li></ul></ul>
  3. 3. Internet Research <ul><li>Internet users: 30 to 650 million in 2003 </li></ul><ul><li>Internet traffic: doubling every 70 days </li></ul><ul><li>Canadian usage: 75% by year 2003 </li></ul><ul><li>PCs surpass TVs in # of units sold in 1997 </li></ul><ul><li>50% current storefronts closed in next 6 years </li></ul>
  4. 4. KM Research Highlights <ul><li>Canada: StatsCanada (348 organizations surveyed) </li></ul><ul><ul><li>93% have KM initiatives, 25% dedicated budget </li></ul></ul><ul><ul><li>Why have KM? </li></ul></ul><ul><ul><li>competitive advantage, human capital, IC retention </li></ul></ul><ul><li>U.S.: Conference Board (surveyed Fortune 500) </li></ul><ul><ul><li>80% have KM initiatives in place </li></ul></ul><ul><ul><li>25% have CKOs, 53% have KM staff </li></ul></ul><ul><ul><li>6% have KM initiatives company-wide, 60% < 5 years </li></ul></ul><ul><ul><li>KM owned 32% Sr. Mng, 25% HR, 16% IT </li></ul></ul><ul><li>Government at all levels </li></ul><ul><li>Institute for Intellectual Capital Research Inc. </li></ul><ul><ul><li>CKOs from 40% HR, 40% IT, plus other </li></ul></ul>
  5. 5. KM Research Highlights II <ul><li>IDC reports Fortune 500 wasted $12 billion in duplicating work </li></ul><ul><li>Ford reports $914 million savings due to KM from 1997 - 2000 </li></ul><ul><li>Chevron saved $650 million since 1991 due to KM </li></ul><ul><li>Texas Instruments saves $1 billion cumulatively since KM program launched in mid 1990s </li></ul><ul><li>Gartner Group reports </li></ul><ul><ul><li>90% of FORTUNE 500 working on KM </li></ul></ul><ul><ul><li>33% of FORTUNE 1000 had begun KM programs by 1999 </li></ul></ul><ul><ul><li>will rise to over 50% by 2003 </li></ul></ul><ul><li>World Economic Forum </li></ul><ul><ul><li>95% of CEOs feel that KM is critical to success </li></ul></ul>
  6. 6. The Perspectives <ul><li>Human Resources – absorptive capacity, balance </li></ul><ul><li>Economics – the multiplicative effect of flow </li></ul><ul><li>Accounting – disclosure of intangibles </li></ul><ul><li>Training and Development – ROI & collateral </li></ul><ul><li>Technology – evasiveness of codification </li></ul><ul><li>Finance – Tobin’s q </li></ul><ul><li>Organizational Behaviour – telecommuting + free agents </li></ul><ul><li>Strategy – CKO, business process and economic value </li></ul>
  7. 7. Importance of Phenomenon <ul><li>Bontis (2002) </li></ul><ul><li>Fitz-enz (2000), Choo and Bontis (2002) </li></ul><ul><li>Max Boisot (1998), Choo (1998) </li></ul><ul><ul><li>Knowledge Assets, Knowing in Organizations </li></ul></ul><ul><li>Sveiby (1997), Stewart (1997), Roos et al. (1997) </li></ul><ul><ul><li>Organizational Wealth and Intellectual Capital </li></ul></ul><ul><li>Nonaka and Takeuchi (1995) </li></ul><ul><ul><li>The Knowledge Creating Company </li></ul></ul><ul><li>Druker (1993), Toffler (1990), Handy (1989) </li></ul>
  8. 8. Tracing KM’s History <ul><li>Egyptians, Greeks, Monks, Knights </li></ul><ul><li>Taylor (1911) </li></ul><ul><ul><li>Evidence of codification of knowledge </li></ul></ul><ul><li>Simon (1945) </li></ul><ul><ul><li>Cognitive capacity “bounded rationality” </li></ul></ul><ul><li>Schumpeter (1952) </li></ul><ul><ul><li>Innovation from new combinations of knowledge </li></ul></ul><ul><li>Penrose (1959) </li></ul><ul><ul><li>Organization is a knowledge repository </li></ul></ul>
  9. 9. Distinguishing the Terms <ul><li>Intellectual Capital </li></ul><ul><ul><li>Stock of knowledge at one point in time </li></ul></ul><ul><li>Knowledge Management </li></ul><ul><ul><li>Flow of knowledge from stock to stock </li></ul></ul><ul><li>Organizational Learning </li></ul><ul><ul><li>Stock and flow system </li></ul></ul><ul><ul><li>Action to convert knowledge into behavioural changes </li></ul></ul>
  10. 10. Danger of KM <ul><li>Devil’s advocate says we are too busy </li></ul><ul><li>Attention is still the scarce resource </li></ul><ul><li>Balance between achievement oriented and paternalistic organizations </li></ul><ul><li>Institutionalize organizational slack </li></ul><ul><ul><li>Must send message from above that knowledge codification is important and necessary </li></ul></ul>
  11. 11. Level of Analysis: Individual <ul><li>Recruitment </li></ul><ul><li>Building competencies </li></ul><ul><li>Assessing weaknesses </li></ul><ul><li>Retention </li></ul><ul><li>Compensation </li></ul><ul><li>Satisfaction </li></ul><ul><ul><li>Level of individual knowledge organizations actually leverage is too low </li></ul></ul>
  12. 12. Level of Analysis: Group <ul><li>Sports analogies </li></ul><ul><li>Concerted team action </li></ul><ul><li>Collectively aligned mind sets </li></ul><ul><li>Individual feedback loops </li></ul><ul><li>Shared perception of the business environment </li></ul>
  13. 13. Level of Analysis: Organization <ul><li>Strategy, Continuous Improvement, Systems, Technology, Leadership, Structure </li></ul><ul><li>Culture – collective values </li></ul><ul><li>Trust – knowledge sharing versus hoarding </li></ul><ul><li>Spiritual Soul of an organization </li></ul><ul><ul><li>WE versus I </li></ul></ul>
  14. 14. IC Conceptualization <ul><li>2 nd order construct, multi-dimensional </li></ul><ul><li>3 sub-domains </li></ul><ul><ul><li>human capital, structural capital, relational capital </li></ul></ul><ul><li>Drivers </li></ul><ul><ul><li>Trust, culture, leadership </li></ul></ul>
  15. 15. Nonaka (SECI) <ul><li>Tacit to Tacit – Socialization </li></ul><ul><li>Tacit to Explicit – Externalization </li></ul><ul><li>Explicit to Explicit – Combination </li></ul><ul><li>Explicit to Tacit - Internalization </li></ul>FROM TO Tacit Explicit Tacit Explicit Socialization Externalization Combination Internalization
  16. 16. Metaphors and Analogies <ul><li>Stocks and flows </li></ul><ul><ul><li>Production system </li></ul></ul><ul><ul><li>Manufacturing process </li></ul></ul><ul><ul><li>Capacity utilization, Throughput time, Bottlenecks </li></ul></ul><ul><li>Bathtub analogy </li></ul><ul><ul><li>Tap and leak (knowledge flow) </li></ul></ul><ul><ul><li>Water level (knowledge stock) </li></ul></ul><ul><ul><li>Water system (organizational learning) </li></ul></ul>
  17. 17. Measure, Test and Evaluate KM Diagnostic <ul><li>Multi-method approach (qualitative and quantitative) IICR Knowledge Audit: survey design (Likert-type) </li></ul><ul><li>Objective proxies (www.Saratoga-Institute.com) </li></ul><ul><ul><li>E-mail direction (IICR eFlow Audit) </li></ul></ul><ul><ul><li>Knowledge sweeping (dynamic corporate yellow pages) </li></ul></ul><ul><li>Other tools to check out … </li></ul><ul><ul><li>SmartShadow.com, BrassRingSystems.com, Chrontech.com OpenText.com IntraKnexa at Knexa.com </li></ul></ul><ul><ul><ul><li>www.bontis.com/knexa/aboutintraknexa.pdf </li></ul></ul></ul><ul><ul><li>Talent websites </li></ul></ul><ul><li>Tango Simulation … www.Celemi.se </li></ul>
  18. 18. Conceptual Model Managerial Leadership Value Alignment Retention of Key People Human Capita l Depletion Business Performance Employee Satisfaction Employee Commitment Employee Motivation Education Human Capital Relational Capital Human Capita l Effectiveness Structural Capital Process Execution Knowledge Integration Knowledge Generation Knowledge Sharing 0.751 0.506 0.475 0.530 0.326 0.360 0.358 0.734 0.456 0.429 0.430 0.285 - 0.233 - 0.372 - 0.337 0.327 0.439 0.543 0.491 0.394 0.262 0.307 0.442 R 2 = 28.5% R 2 = 28.5% R 2 = 68.2% R 2 = 44.1%
  19. 19. KM Continuum D. Cotey IICR KM Diagnostic IntraKnexa Technology KM Seminars
  20. 20. Elements of KM Programs D. Cotey
  21. 21. KM Applications Matrix D. Cotey
  22. 22. Arsenal of KM Tools D. Cotey TACIT EXPLICIT EMBEDDED Simulate Scenario planning Expert systems Virtual organization KM Laboratories Disseminate Distributed e-learning Communities of practice Knowledge portals IC reporting / disclosure Communicate Apprenticeships Job rotation Organizational slack Ba design/implementation Map Workflow analysis Knowledge maps Statistical flow timing eFlow Audits Categorize Taxonomy development Intranet groupware Text mining Organizational libraries Contextualize Expertise locators Intranet yellow pages Document management Video teleconferencing Hypothesize Mathematical models Neural networks Knowledge discovery Longitudinal forecasting Gather Data warehousing Information navigation Competitive Intelligence Environmental scanning Diagnose Awareness / storytelling KM audit / survey Values assessment Customer focus groups
  23. 23. What can you do tomorrow? <ul><li>Conduct a knowledge audit / diagnostic (IICR) </li></ul><ul><li>Tie KM into HR and performance evaluation </li></ul><ul><li>Recruit and hire a leader responsible for intellectual capital & knowledge management </li></ul><ul><li>Classify your intellectual portfolio with a knowledge map (e.g., corporate yellow pages) </li></ul><ul><li>Reduce “don’t know what I don’t know” </li></ul>
  24. 24. What else can you do tomorrow? <ul><li>Use information technology tools for externalization , transfer and generation </li></ul><ul><li>Increase the ROI on training and development expenditures (spy and new reimbursement process) </li></ul><ul><li>Publish intellectual capital addendum </li></ul><ul><li>Education: McMaster, U of T, Queens, Royal Roads </li></ul><ul><li>World Congress: http://worldcongress.mcmaster.ca </li></ul><ul><li>Research: www.bontis.com/research.htm </li></ul><ul><li>Journal of IC: www.emeraldinsight.com/jic.htm </li></ul><ul><li>Develop internal markets for knowledge exchange </li></ul>
  25. 25. Knexa.com Enterprises <ul><li>World’s first knowledge exchange and auction Canadian technology company rated Top 100 in World (Stock symbol: KNX on CDNX) </li></ul><ul><li>An eBay for knowledge assets A NASDAQ for intellectual capital </li></ul><ul><li>IntraKnexa (ties in HR with IT) </li></ul><ul><ul><li>An internal knowledge exchange for corporate intranets that provides incentive and rewards for employees to share knowledge </li></ul></ul><ul><li>International partners: Europe and Australia </li></ul><ul><li>Knowledge Agents and Vortals </li></ul><ul><li>IntraKnexa - corporate knowledge exchange </li></ul>
  26. 26. Other Interesting Projects <ul><li>IICR KM Diagnostic Tool (business and government) </li></ul><ul><ul><li>Contact IICR for further information regarding causal mapping and KM audit </li></ul></ul><ul><li>IICR KM Seminars (business and government) </li></ul><ul><ul><li>Special customized presentations to managers and employees </li></ul></ul><ul><li>National KM Certification Program (Canadian Centre for Management Development) </li></ul><ul><ul><li>See: http://www.ccmd-ccg.gc.ca/events/workshops/KM/across_e.html </li></ul></ul><ul><li>KM Education (McMaster, Royal Roads, Tangonow, KMCI) </li></ul><ul><ul><li>See: www.bontis.com/p727.htm www.royalroads.ca www.tangonow.net www.kmci.org </li></ul></ul><ul><li>eFlow Audit (codified proxy of e-mail flow) </li></ul><ul><li>kFactory Assessment (capacity utilization, throughput, bottlenecks) </li></ul><ul><li>Ba best practices (office design, Steelcase), organizational slack </li></ul><ul><li>World Congress on Intellectual Capital and Innovation Hamilton Jan 14-16, 2004 </li></ul><ul><ul><li>See: http://worldcongress.mcmaster.ca </li></ul></ul><ul><li>Get 30 day free trial of the Journal of IC (http://www.emeraldinsight.com/jic.htm) </li></ul><ul><li>Books: 1 text Oxford U. Press with Choo, 2 compilations with BH KMCI Press </li></ul><ul><ul><li>See: www.bontis.com/research.htm </li></ul></ul><ul><li>Knexa.com (IntraKnexa - incentive methodology for ICUs and knowledge sharing) </li></ul><ul><ul><li>See: www.bontis.com/knexa/AboutIntraKnexa.pdf </li></ul></ul>
  27. 27. Thank you! Dr. Nick Bontis, Ph.D. Assistant Professor of Strategic Management DeGroote Business School, McMaster University 1280 Main Street West, MGD #207 Hamilton, Ontario, Canada L8S 4M4 Tel: (905) 525-9140 x23918 Fax: (905) 521-8995 Director, Institute for Intellectual Capital Research Inc. CKO (Chief Knowledge Officer) , www. Knexa.com Associate Editor, Journal of Intellectual Capital nick@bontis.com www.Bontis.com

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