Knowledge and Wisdom

Knowledge and Wisdom
Dr Sudhir Bisht
1

Contents
• Meaning of Knowledge and wisdom
• Difference between knowledge and wisdom
• Knowledge worker versus Wisdom worker
• Concept of Knowledge management and
wisdom management
• Wisdom based management
2

Meaning of knowledge
• Facts, information, and skills acquired through experience or education;
the theoretical or practical understanding of a subject.
• Human faculty resulting from interpreted information; understanding that
germinates from combination of data, information, experience, and
individual interpretation.
• "Things that are held to be true in a given context and that drive us to
action if there were no impediments" (Andre Boudreau).
• "Capacity to act" (Karl Sweiby).
• "Justified true belief that increases an entity's capacity for effective
action" (Nonaka and Takeuchi).
• "The perception of the agreement or disagreement of two ideas" (John
Locke).
• In an organizational context, knowledge is the sum of what is known and
resides in the intelligence and the competence of people.
• In recent years, knowledge has come to be recognized as a factor of
production in its own right, and distinct from labor.
3

Knowledge Worker (KW)
• The term “knowledge worker” was first coined by Peter Drucker in his book, The Landmarks of
Tomorrow (1959).
• Drucker defined knowledge workers as high-level workers who apply theoretical and analytical
knowledge, acquired through formal training, to develop products and services.
• He noted that knowledge workers would be the most valuable assets of a 21st-century organization
because of their high level of productivity and creativity.
• As per Peter Drucker, KW include professionals in information technology fields, such as
programmers, web designers, system analysts, technical writers, and researchers.
• Knowledge workers are also comprised of pharmacists, public accountants, engineers, architects,
lawyers, physicians, scientists, financial analysts, and design thinkers.
• Brief history: Before the adoption of the term “knowledge worker,” Upton Sinclair coined the phrase
“white-collar worker” to refer to workers who performed administrative and clerical roles. These
workers wore white-collared shirts that distinguished them from the blue-collar workers who
performed manual tasks in the workplace.
• Management writers such as Fritz Machlup and Peter Drucker first came up with the term
“knowledge workers” in the late 1950s and early 1960s.
• During that time, the number of information workers began to outnumber the number of workers
engaged in manual jobs. Most people worked in traditional types of knowledge work professions such
as those of teachers, ministers, and writers.
• The growth of industrialization introduced new types of workers who used information to make a
living. These workers included investors, managers, and consultants
4

Meaning of Knowledge Management
(KM)
• The classic one-line definition of Knowledge Management was offered up by Tom
Davenport early on (Davenport, 1994): “Knowledge Management is the process of
capturing, distributing, and effectively using knowledge.” Probably no better or
more succinct single-line definition has appeared since.
• Origin- The concept and the terminology of KM sprouted within the management
consulting community. When the Internet arose, those organizations quickly
realized that an intranet, an in-house subset of the Internet, was a wonderful tool
with which to make information accessible and to share it among the
geographically dispersed units of their organizations.
• Management Consulting community quickly realized that in building tools and
techniques such as dashboards, expertise locators, and best practice (lessons
learned) databases, they had acquired an expertise which was in effect a new
product that they could market to other organizations, particularly to organizations
which were large, complex, and dispersed.
• The term apparently was first used in its current context at McKinsey in 1987 for
an internal study on their information handling and).
• KM went public, as it were, at a conference in Boston in 1993 organized by Ernst
and Young (Prusak 1999). Note that Davenport was at E&Y when he wrote the
definition above.
5

...KM contd
• In the late 1950s, Fritz Machlup used statistical information to examine
work trends. In his research, he found that the share of manual workers in
the labor force was decreasing while the share of white-collar jobs was on
the rise.
• He revealed that the number of knowledge workers was growing at a
faster pace than that of manual jobs. He revised the meaning of the term
“work” as a way of managing and using knowledge.
• According to the Organization for Economic Co-operation and
Development (OECD), the number of information workers in the United
States and Canada comprised around 40% of the working population in
the early 1970s.
• Peter Drucker wrote extensively about knowledge workers, and his work is
considered an accurate prediction of the future position of knowledge
workers in society.
• He described the way automation changed how knowledge-based
positions evolved from manufacturing and agricultural jobs to more
specialized occupations. Drucker showed how the increased focus on
science and technology led to the creation of new knowledge professions
amidst a growing economy. He also predicted the demise of many blue-
collar jobs.
6

.. KM Contd
• In the words of Peter Drucker KM "the
coordination and exploitation of organizational
knowledge resources, in order to create benefit
and competitive advantage" (Drucker 1999).
• On the other hand Wellman (2009) limits the
scope of KM to lessons learned and the
techniques employed for the management of
what is already known. He argues that
knowledge creation is often perceived as a
separate discipline and generally falls under
innovation management.
7

Characteristics of Knowledge Worker 1
• KW possess theoretical and practical knowledge
& need to upgrade their knowledge:
At a minimum, most knowledge-based positions
require a college degree and their learning
process is continuous even after being hired.
For example, a pharmacist requires factual and
theoretical knowledge of various medications
before they can dispense medications and advise
patients on the use of prescriptions and over-the-
counter drugs.
8

Characteristics of Knowledge Worker II
• KWs are continuously accessing and employing
information
Knowledge workers must know how to identify
important information from a large database of
information that they need to be familiar with.
They should be in a position to weed out less
important information and focus on essential
information that will help them solve problems, answer
questions, and generate ideas.
Knowledge workers use analytical reasoning and
relevant judgment to address customer service issues
and new situations.
A common example in use of SPSS by researchers in
place of Excel in analyzing results of a survey.
9

Characteristics of KW III
• KWs possess good communication Skills to
disseminate knowledge
Knowledge work involves frequent communication
between the knowledge worker and customers, co-
workers, subordinates, and other stakeholders.
They must be able to speak, read, and write, and hold
discussions with workmates and deliver a presentation
when needed.
Modern organizations emphasize quality customer
service and continuous product improvements that
bring knowledge workers closer to the customers.
Good communication skills enable knowledge workers
to work closely with other workers in decision-making,
goal setting, and brain-storming sessions. 10

Characteristics of KW IV
• Necessary for KW to keep pace with new
development and need motivation for
continuous growth
Knowledge work requires continuous growth, due
to the need to keep up with technological
developments. Workers must be interested in
finding new information and applying it in their
work. With new technologies being released
every day, they must improve their skills to
handle complex tasks and integrate the latest
technologies into their work.
11

Characteristics of Knowledge Worker V
• Hiring and Retaining KWs in organization is a challenge
• One of the challenges relates to the hiring and retention of
knowledge workers.
• With a looming shortage of knowledge workers, employers are
forced to look for more effective ways of hiring the best talents and
retaining them for a long period of time.
• Unlike baby boomers who stick to one organization for a long
period, millennial workers, who are the majority of knowledge
workers today, often serve in one organization for just a short
period of time before moving to a more rewarding role in another
organization. Employers are forced to offer higher salaries and an
appealing work environment, and to treat these employees more as
co-workers rather than as subordinates.
12

Characteristics of KW VI
• Knowledge workers enjoy more opportunities
The shift from blue-collar jobs to knowledge-based
positions presents new opportunities for people aiming
to grow their talents and expand their creativity.
Knowledge workers enjoy greater job mobility, and
they can work in different time zones, at home, in
airport lounges and coffee shops.
Employers recognize them as assets of the company
who possess unique talents and skills, rather than as
ordinary employees who perform repetitious tasks. The
nature of the knowledge work allows the workers to
gain leadership skills since they often work as their
own bosses and enjoy greater freedom to perform new
tasks every day.
13

Sources of Knowledge
• INTUITIVE KNOWLEDGE takes forms such as belief,
faith, intuition, etc. It is based on feelings rather than
hard, cold "facts.“
• AUTHORITATIVE KNOWLEDGE based upon testimony:
This is based on information received from people,
books, a supreme being, etc. Its strength depends on
the strength of these sources.
• LOGICAL KNOWLEDGE is arrived at by reasoning from
"point A" (which is generally accepted) to "point B"
(the new knowledge). Thinking as source of knowledge
• EMPIRICAL KNOWLEDGE is based on demonstrable,
objective facts (which are determined through
observation and/or experimentation).
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Types of Knowledge (Classification) 6
main types
• A Priori and A Posteriori :
A priori: “from before” or “from earlier.” This is because a priori knowledge
depends upon what a person can derive from the world without needing to
experience it. This is better known as reasoning.
4 + 6 = ? you could find the answer without physically finding four objects and
adding six more objects to them and then counting them. You would know the
answer is 10 without needing a real world experience to understand it. In fact,
mathematical equations are one of the most popular examples of a priori
knowledge.
A Posteriori: a posteriori literally means “from what comes later” or “from
what comes after.”
This is a reference to experience and using a different kind of reasoning
(inductive) to gain knowledge. This kind of knowledge is gained by first having
an experience (and the important idea in philosophy is that it is acquired
through the five senses) and then using logic and reflection to derive
understanding from it. In philosophy, this term is sometimes used
interchangeably with empirical knowledge, which is knowledge based on
observation. For example, an answer to a question, “How many workers have
fallen sick due to inhalation of poisonous gas in your plant” can be answered
by you only after collecting the data on your plant workers. 15

• Explicit knowledge & Tacit knowledge:
Explicit knowledge is formalized and codified, and is sometimes referred to as
know-what (Brown & Duguid 1998). It is therefore fairly easy to identify, store,
and retrieve (Wellman 2009). This is the type of knowledge most easily handled
by KMS, which are very effective at facilitating the storage, retrieval, and
modification of documents and texts.
Found in databases, memos, notes, documents, etc
Tacit knowledge can be defined as skills, ideas and experiences that people
have but are not codified and may not necessarily be easily expressed (Chugh,
2015).
With tacit knowledge, people are not often aware of the knowledge they
possess or how it can be valuable to others.
Effective transfer of tacit knowledge generally requires extensive personal
contact, regular interaction and trust.
In the field of knowledge management, the concept of tacit knowledge refers
to a knowledge which can not be fully codified. Therefore, an individual can
acquire tacit knowledge without language. Apprentices, for example, work with
their mentors and learn craftsmanship not through language but by
observation, imitation, and practice.
Tacit knowledge has been described as "know-how" – as opposed to "know-
that" E.g. playing a piano, fine craftsmanship, gymnastics.
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• Propositional knowledge (also known as declarative or descriptive
knowledge) and or procedural knowledge
Propositional knowledge is simply knowing something or having
knowledge of something. So if you read and/or memorized the
textbook or manual, then you would know the steps on how to
program a computer. You could even repeat these steps to
someone else in the form of declarative sentences or indicative
propositions.
However, you may have memorized every word yet have no idea
how to actually program a computer. That is where non-
propositional or procedural knowledge comes in.
Procedural knowledge is knowledge that can be used; it can be
applied to something, such as a problem. Procedural knowledge
differs from propositional knowledge in that it is acquired “by
doing” whereas propositional knowledge is acquired by more
conservative forms of learning.
Invention of a new drug
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Situated knowledge
• Situated knowledge is knowledge specific to a particular situation.
• Imagine two very similar breeds of wild fruit, which grow on either side of a
mountain, one nutritious, one poisonous.
• If a man lives on the side of mountain where the fruit is poisionous, he would
never eat that fruit. If he crosses over to the other side of mountain he would
still rely on knowledge from his side of an ecological boundary.
• After crossing to the other side he would still never eat the wild fruit that is
nutritious unless he is convinced by people he begins to trust.
• Some methods of generating knowledge, such as trial and error, or learning
from experience, tend to create highly situational knowledge.
• One of the main benefits of the scientific method is that the theories it
generates are much less situational than knowledge gained by other methods.
• Situational knowledge is often embedded in language, culture, or traditions.
Critics of cultural imperialism argue that the rise of a global monoculture
causes a loss of local knowledge.
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Embedded Knowledge
• Embedded knowledge refers to the knowledge that is locked in processes, products, culture, routines,
artifacts, or structures (Horvath 2000, Gamble & Blackwell 2001).
• Knowledge is embedded either formally, such as through a management initiative to formalize a certain
beneficial routine, or informally as the organization uses and applies the other two knowledge types.
• The challenges in managing embedded knowledge vary considerably and will often differ from embodied
tacit knowledge. Culture and routines can be both difficult to understand and hard to change. Formalized
routines on the other hand may be easier to implement and management can actively try to embed the
fruits of lessons learned directly into procedures, routines, and products.
• IT's role in this context is somewhat limited but it does have some useful applications. Broadly speaking, IT
can be used to help map organizational knowledge areas; as a tool in reverse engineering of products
(thus trying to uncover hidden embedded knowledge); or as a supporting mechanism for processes and
cultures. However, it has also been argued that IT can have a disruptive influence on culture and
processes, particularly if implemented improperly.
• Due to the difficulty in effectively managing embedded knowledge, firms that succeed may enjoy a
significant competitive advantage.
• Embedded knowledge is found in: rules, processes, manuals, organizational culture, codes of conduct,
ethics, products, etc. It is important to note, that while embedded knowledge can exist in explicit
sources (i.e. a rule can be written in a manual), the knowledge itself is not explicit, i.e. it is not
immediately apparent why doing something this way is beneficial to the organization.
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Wisdom.
Knowledge of
what is true and right.
Wisdom tells us WHY
Information analyzed.
Knowledge tells us
HOW
Data elements with context.
Information tells us WHAT
Data. Individual elements used to create
information.
Data itself tells us NOTHING on its own.
DIKW Model
20

Why does Organizations need Knowledge workers
• KWs give competitive edge: Innovation is crucial to succeeding in the technology
sector. Usually, the more a business invests in R&D, the more innovations it creates.
Samsung operates 34 R&D centers across the world.
The company has spent US$14.857 billion on R&D in 2017, which was the 2nd largest
amount spent in the world (behind Amazon) R&D spending strongly correlates with a
company’s revenue growth and expansion into the new product markets.
• Rapid product obsolescence: Guys in R&D in 90s produced new products that lasted
many years, New models of handheld phones. 5% per month rate of product
obsolescence.
• Market demands more Products and people: earlier only 2 models of cars. Now over
300. So need for KWs
• Manufacturing and people: Manufacturing, along with virtually all other industries, is
going through a significant period of change. Driven by rapid technological
development, manufacturers are having to work smarter, operate more efficiently and
be prepared to innovate. For manufacturers specifically, relying on outdated software
when competitors are adopting Internet of Things (IoT) and embracing smart
technologies, will hold them back.
• Marketing and people: USPs for marketing. How identify new markets to be captured.
• Management Techniques and people : Lower response time. Lesser costs. Telecom
Tower industry example.
21

Wisdom definition
http://www.forbesindia.com/article/ceibs/what-does-wise-leaderhip-mean/34915/1
• What does wisdom really mean?
• A survey by Mike Thompson published in Forbes India involved 88
executives in Western countries and 94 Chinese executives – most
of our survey respondents worked in commercial organizations at
the most senior levels.
• Wisdom is manifested in wise decision making and wise decision-
making is like a three-dimensional prism of three human faculties:
1- Rational capability 2- intuitive capacity and 3- humane
character.
• Cognitive psychologist, Gary Klein, resists the idea of there being
any magical properties to intuition – he says that intuition is the
way we translate our experience into action.
• Hunches, says Gary Klein, are simply associations and connections
rather than anything more visceral (based on deep feeling and
emotional reactions rather than on reason or thought). So intuition
isn’t just same as hunch
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• Wisdom, or sapience is the ability to think and
act using knowledge, experience, understanding,
common sense and insight. Wisdom is associated
with attributes such as compassion, experiential
self-knowledge, non-attachment and virtues such
as ethics and benevolence.
• The Oxford English Dictionary defines wisdom as
"Capacity of judging rightly in matters relating to
life and conduct; soundness of judgment in the
choice of means and ends.
• Charles Haddon Spurgeon defined wisdom as
"the right use of knowledge".
• Robert I. Sutton and Andrew Hargadon defined
the "attitude of wisdom" as "acting with
knowledge while doubting what one knows"
23

Difference between knowledge & wisdom
Knowledge worker Wisdom worker
A KW think that knowledge is the ultimate
objective
Feels all knowledge is eventually subjective
Exhibits egoistic behaviour and may be less
than fully effective
Usually humble and truly effective
Primarily driven by wages to control the
external environment and persons
Focuses on self control. Influences other and
groups but not control freak. Rather tries to
lead by example
Very conscious of his rights More conscious of his/ her duties
Views life and progress linearly (A linear
process or development is one in which
something changes or progresses straight from
one stage to another, and has a starting point
and an ending point)
He views life and progress cyclically
Tends to dominate and exploits nature as a
resource
Befriends and embraces nature with love and
respect and takes nature as his partner in
progress.
Tends to get carried away by intellectual
pyrotechnics (a public show of fireworks. a
show of great skill, especially by a musician or
someone giving a speech)
steady in approach and behaviour, Focuses on
enhancing human intellectual, physical, and
psychological capacities
24

Differentiate between knowledge worker and wisdom worker. For the
position of MD in organization who would be a better choice out of
knowledge worker and wisdom worker. Support your answer with
suitable example
• Limitations of Knowledge worker, if his domain specific knowledge tends
to overwhelm other aspects of business
• Wisdom aspect key to forecasting future scenarios, making appropriate
strategy
• Wisdom helps in taking all knowledge- owners work together
• HOWEVER not true that Knowledge workers can’t have wisdom.
• In fact companies spot young knowledge leaders and groom them for
putting them in leadership profiles.
• Great knowledge workers like Bill Gates (though with little higher
education) who were domain experts proved to be inspirational and wise
CEOs
• Nandan Nilekheni another knowledge worker who shone as a wisdom
worker.
• Without wisdom, leadership position is dangerous and knowledge gaps
can at the apex leadership positions can be filled by other colleagues who
are domain specialists.
• Final conclusion knowledge leaders can make great MDs but only after
they have acquired wisdom.
25

Strategy for Knowledge Management
To gain knowledge
• Incentive Strategy: Organizations have tried knowledge capture
incentives, including making content submission mandatory and
incorporating rewards into performance measurement plans.
Considerable controversy exists over whether such incentives work
and no consensus has emerged.
• Push strategy: individuals strive to explicitly encode their
knowledge into a shared knowledge repository, such as a database,
as well as retrieving knowledge they need that other individuals
have provided (codification)
• Pull strategy, Relying on experts: Another strategy involves
individuals making knowledge requests of experts associated with a
particular subject on an ad hoc basis (pull strategy) In such an
instance, expert individual(s) provide insights to requestor
(personalization).
• Hansen et al. defined the two strategies. Codification focuses on
collecting and storing codified knowledge in electronic databases to
make it accessible. In contrast, personalization encourages
individuals to share their knowledge directly
26

Ways to achieve knowledge sharing
• Fostering a culture that encourages the sharing of information, based on the
concept that knowledge is not irrevocable and should be shared and updated
to remain relevant.
• Make knowledge-sharing a key role in employees' job description
• Inter-project knowledge transfer
• Intra-organizational knowledge sharing
• Inter-organizational knowledge sharing
• Knowledge mapping (a map of knowledge repositories within a company
accessible by all). Expert directories (to enable knowledge seeker to reach to
the experts)
• Expert systems (knowledge seeker responds to one or more specific questions
to reach knowledge in a repository)
• Best practice transfer
• Knowledge fairs (Mobile World Conference in Barcelona every year)
• Competence management (systematic evaluation and planning of
competences of individual organisation members)
• Master–apprentice relationship, Mentor-mentee relationship, job shadowing
• Collaborative software technologies (wikis, shared bookmarking, blogs, social
software, etc.)
27

KM technologies
• Groupware—Software that facilitates collaboration and sharing of
organisational information. One of the earliest successful products in this
category was Lotus Notes: it provided tools for threaded discussions,
document sharing, organisation-wide uniform email, etc.
• Workflow systems: Systems that allow the representation of processes
associated with the creation, use and maintenance of organisational
knowledge. For example, the process to create and utilise forms and
documents.
• Content management and document management systems—Software
systems that automate the process of creating web content and/or
documents. Roles such as editors, graphic designers, writers and
producers can be explicitly modeled along with the tasks in the process
and validation criteria.
• Enterprise portals: Software that aggregates information across the entire
organisation or for groups such as project teams (e.g. Microsoft
SharePoint).
• eLearning—Software that enables organisations to create customised
training and education. This can include lesson plans, monitoring progress
and online classes.
28

KM Technologies
• Planning and scheduling software—Software
that automates schedule creation and
maintenance (e.g. Microsoft Outlook). The
planning aspect can integrate with project
management software such as Microsoft Project.
• Telepresence —Software that enables individuals
to have virtual "face-to-face" meetings without
assembling at one location. Videoconferencing is
the most obvious example.
• Proprietary KM technology products such as
Lotus Notes defined proprietary formats for
email, documents, forms, etc.
• Open-source and freeware tools for the creation
of blogs and wikis are enabling tools for KM.
29

Example of KM for a manufacturing company
https://medium.com/@stangarfield/10-types-of-knowledge-management-strategies-
f947f28599a7
• KM Strategy
• Motivate: reward collaboration, submitting new ideas, and sharing and reusing
lessons learned.
• Network: enable cross-functional collaboration.
• Supply: capture lessons learned and suggestions for new products and services.
• Analyze: select best lessons learned and suggestions.
• Codify: categorize and tag selected lessons learned and suggestions.
• Disseminate: send out lessons learned in email messages, and publish blog entries
about new ideas.
• Demand: provide query capability for lessons learned database.
• Act: reuse lessons learned.
• Invent: develop new products and services through collaboration and submitted
ideas.
• Augment: implement expert systems for designing, engineering, and building new
products.
30

Class Discussion
How do
companies
acquire wisdom?
31

Knowledge and Wisdom

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