-

1. Creativity and Innovation
Management
Knowledge Management, Innovation, and
Business Performance

2. Innovation and Knowledge Management ….
Knowledge is a fluid mix of framed experience, values,
contextual information, expert insight, and grounded intuition
that provides an environment and framework for evaluating and
incorporating new experiences and information (Davenport and
Prisak, 1998; Gamble and Blackwell, 2001).
Knowledge management is
identifying, organizing, transferring,
and using the information and
knowledge both personal and
institutional within the organization to
support strategic objectives (Gamble
and Blackwell, 2001).

3. Source: Nonaka (2004: 12); Groff and Jones (2003: 3); Polanyi (1996).
“Tacit knowledge refer to personal knowledge embedded in individual
experience and involving intangible” (Groff and Jones, 1993: 3)
Karakteristik Tacit Knowledge:
1. Tidak dapat dibagi;
2. Lebih banyak diketahui daripada disampaikan;
3. Berupa kebiasaan dan budaya yang tidak dapat ditentukan sendiri;
4. Hanya dapat dipindahkan atau diperoleh dari pengalaman;
5. Menggambarkan know-what—fakta; dan know why—sains;
6. Melibatkan pembelajaran dan skill;
7. Terbentuk dalam kelompok dan hubungan organisasional;
8. Sulit diidentifikasi, disimpan, dihitung, dan dipetakan.
“Tacit knowledge is know-how contains people’s head. The challenge
inherent with tacit knowledge is figuring out-how to recognize, generate,
share, and manage it” (Maholtra, 2005)

4. Source: Nonaka (2004: 12); Groff and Jones (2003: 3); Polanyi (1996).
“Explicit knowledge refer to tacit knowledge that has
been documented. It has been articulated into formal
language and can be much more easily, transferred,
among individual” (Groff and Jones, 1993: 3)
“Explicit knowledge (documented,
computer) readily accessible, as
well as documented into formal
knowledge resources that are
often well organized (Nonaka and
Takeuchi, 1993: 3).

5. Source: Andriessen (2000).
Knowledge Management Integrated System ….
Market
and
Strategy
Structure
and
Processes
People and
Motivation
Knowledge
and
System
Strategic
Knowledge
Management
Operational
Knowledge
Management

6. Knowledge Management Initiatives …
o External Structure Initiatives
• Gain knowledge from customers
• Offer customers additional knowledge
o Internal Structure Initiatives
• Create new revenues from existing
knowledge
• Build a knowledge sharing culture
• Capture and store tacit knowledge
• Measure knowledge
o Competence Initiatives
• Create careers based on knowledge management
• Create microenvironment for tacit knowledge transfer
• Support education with communication technology
• Learn from simulations and pilot installations
Source: Gamble and Blackwell, 2001

7. KM: Codification and Personalization …
Source: Hansen et al. (1999), Alvesson and Karreman (2001), Hansen and Haas (2001), and Inuzuka and Nakamori (2004).
Activity Codification Personalization
Economic motivation Knowledge reutilize New explanations and knowledge development
Knowledge managed Explicit Tacit
Focus Person to documents Person to person
Use of IT IT investment: connecting people and
reusable knowledge
Simplify IT investment promote dialogue and tacit
knowledge sharing
Main tools Decision support systems Document
repositories Knowledge maps
Workflow
Mentoring groups,
Video conferencing,
E-mail
Discussion forum
Human Resources
Management
E-learning
Rewarding the use of and contribution
to databases
Mentoring
Rewarding knowledge sharing with others
Advantages Economies of scale time savings No
need of reinventing the Wheel quicker
and wider access and distribution of
knowledge
Flexible and adaptable Knowledge improvements in
task quality
Improvements in clients image Management of
uncodificable knowledge
Disadvantages High cost codified knowledge loses
richness
Unwillingness to share, Inappropriate culture

8. Knowledge Management and Customer Value ….
KNOWLEDGE
MANAGEMENT
SYSTEM
VALUE NET
ENVIRONMENT
TACIT
KNOWLEDGE
People
• Experiences
• Insights
• Collaborative innovation
Storing and Sharing
Source: Gamble and Blackwell, 2001
A knowledge management
system is a system for
applying and using
knowledge management
principles. These include
data-driven objectives
around business
productivity, a
competitive business
model, business
intelligence analysis and
more.

9. KNOWLEDGE
MANAGEMENT
SYSTEM
VALUE NET
ENVIRONMENT
EXPLICIT
KNOWLEDGE
TACIT
KNOWLEDGE
Transforming
Structured Data
Unstructured Data
People
• Experiences
• Insights
• Collaborative innovation
Generating and Capturing
Storing and Sharing
Source: Gamble and Blackwell, 2001
A knowledge
management system is
a system for applying
and using knowledge
management principles.
These include data-
driven objectives around
business productivity,
a competitive business
model, business
intelligence analysis
and more.
Knowledge Management and Customer Value ….

10. KNOWLEDGE
MANAGEMENT
SYSTEM
VALUE NET
ENVIRONMENT
EXPLICIT
KNOWLEDGE
TACIT
KNOWLEDGE
Transforming
Structured Data
Unstructured Data
People
• Experiences
• Insights
• Collaborative innovation
Generating and Capturing
Storing and Sharing
Customer Sales and
Service
Product
Development and
Marketing
Strategic Business
Decisions
• Cost saving
• Customer service
• Productivity
• Innovation
• Intellectual capital
and retention
• Speed
• Employee skills
retention
• Organizational
learning
Source: Gamble and Blackwell, 2001
Appliying Realizing Value
Knowledge Management and Customer Value ….

11. socialization
i
i
i
i
i
i
i
externalization
g
g
g
g
o
o
g
i
internalization combination
TACIT TACIT
TACIT
TACIT
EXPLICIT EXPLICIT EXPLICIT
EXPLICIT
Catatan:
• i = individu
• g = grup,
kelompok
• o = organisasi
o i
Tacit Knowledge to Explicit Knowledge …

12. Resource: Scott Isalsen and Joe Tidd (2006; John Wiley & Sons Ltd., 2009)
Climate Factor
Most
Innovative
(Score)
Leas
Innovative
(Score)
Difference
Trust and openness 253 88 165
Challenge and involvement 260 100 160
Support and space for ideas 218 70 148
Conflict and debate 231 83 148
Risk taking 210 65 145
Freedom 202 110 92
Climate Influencing Innovation at Corporate ….
“Core values are what support the vision, shape the culture and reflect what
the company values. Core values are the essence of the company’s identity–
the principles, beliefs or philosophy of values. Establishing strong core values
provides both internal and external advantages to the company” (Jim Collins)

13. • Prajogo . “The Relationship between Innovation and Business
Performance—A Comparative Study between Manufacturing and
Service Firms” at Knowledge and Process Management Vol. 3 pp. 218–
225 (2006). This finding indicated a stronger correlation existed for
manufacturing firms than for service firms between innovation and
business performance, particularly in relation to process innovation.
• Natalia Iavorska. “Does Innovation Influance Firm Performance And Is
It Worth Doing: Case of Ukraine”. Thesis submitted in partial fulfillment
of the requirements for the degree of MA in Economic Analysis Kyiv
School of Economics Ukraina, 2014. Summary: First, new product
introduction decreases return on assets in the next period since
innovation requires capital expenditures. Second, RAO, TFP and firm
size positively affect the number of the new product introduction, but
less diversified firms are more likely to innovate.
Knowledge Management, Innovation, Performance …

14. Knowledge Management, Innovation, Performance …
Source: Gamble and Blackwell, 2001
DATA INFORMATION KNOWLEDGE LEARNING
INNOVATION
PERFORMANCE
EXPERIENCES
The innovation is a process of
transforming the new ideas,
new knowledge into new
products and services
(McDaniel, 2002: 57-58; Shqipe,
Gadaf, and Veland, 2013):

15. Financial Metrics
• Profit: Gross and net profit margin must analyze to better understand how
successful your organization is at generating a high return.
• Cost: Measure cost effectiveness and find the best ways to reduce and
manage your costs.
• Revenue vs Target: This is a comparison between your actual revenue
and your projected revenue.
• Cost of Goods Sold: Determining how to outsell your competition.
• Day Sales Outstanding: Take your accounts receivable and divide them
by the number of total credit sales. Run this formula every month, quarter,
or year to see how you are improving.
• Sales by Region: Through analyzing which regions are meeting sales
objectives, you can provide better feedback for regions that are
underperforming.
• Expenses vs Budget: Compare actual overhead with forecasted budget.
Source: https://www.clearpointstrategy.com/18-key-performance-indicators;
Knowledge Management, Innovation, Performance …

16. Customer Metrics
• Customer Lifetime Value: It helps you look at the value your
organization is getting from a long-term customer relationship. Use this
performance indicator to narrow down which channel helps you gain the
best customers for the best price.
• Customer Acquisition Cost: This is considered one of the most
important metrics in e-commerce because it can help you evaluate how
cost effective your marketing campaigns have been.
• Customer Satisfaction and Retention: Make the customer happy and
they will continue to be your customer.
• Net Promoter Score: Establish a baseline with your first survey and put
measures in place that will help those numbers grow quarter to quarter.
• Number of Customers: By determining the number of customers you’ve
gained and lost, you can further understand whether or not you are
meeting your customers’ needs.
Knowledge Management, Innovation, Performance …

17. Process Metrics
• Customer Support Tickets: Analysis of the number of new tickets, the
number of resolved tickets, and resolution time will become the best
customer service department in your industry
• Percentage of Product Defects: Take the number of defective units
and divide it by the total number of units produced in the time frame
you’re examining. This will give you the percentage of defective
products. Clearly, the lower you can get this number, the better.
• Efficiency Measure: Efficiency can be measured differently in every
industry. Let’s use the manufacturing industry as an example. You can
measure your organization’s efficiency by analyzing how many units
you have produced every hour, and what percentage of time your plant
was up and running.
Knowledge Management, Innovation, Performance …

18. People Metrics
• Employee Turnover Rate (ETR): To arrive upon your ETR, take the
number of employees who have departed the company and divide it by
the average number of employees. If you have a high ETR in your
department, spend some time examining your workplace culture,
employment packages, and work environment.
• Percentage of Response to Open Positions: When you have a high
percentage of qualified applicants apply for your open job positions, you
know you are doing a good job maximizing exposure to the right job
seekers. This will lead to an increase in interviewees, as well.
• Employee Satisfaction: Happy employees are going to work harder—it’s
as simple as that. Measuring your employee satisfaction through surveys
and other metrics is vital to your departmental and organizational health.
Knowledge Management, Innovation, Performance …

19. Kolb’s Cycle of Experiental Learning
Source: Joe Tidd and John Bessant (2009)
Active
Experimentation
Reflection
Observation
Concrete
Experience
Abstract
Conceptualization
Doing/having an
experience
reviewing/reflecting
on the experience
concluding/learning
from the experience
planning/trying out
what you have learned
Knowledge Management, Innovation, Performance …

20. • Concrete Experience–the
student is an active
participant;
• Reflexive Observation–the
student consciously reflexes
on experience;
• Abstract
Conceptualising–the
student tries to
conceptualise theory or
model of what he has
observed;
• Active Experimenting–the
student tries to plan how to
test the model, or the
theory, or the plan for the
forthcoming experience.
Kolb, D. And R. Fry (1975: 33-58)
Knowledge Management, Innovation, Performance …

21. Barriers to Innovation …..
The literature suggests there are many barriers to innovation and that
these are both internal and external to a firm.
• The external barriers include the lack of
infrastructure, deficiencies in education and
training systems, inappropriate legislation, an
overall neglect and misuse of talents in society;
fear of imitation, high costs of innovation,
insufficient government support, lack of
information, lack of qualified personnel, no market
or insufficient knowledge about markets, and
shortage of support/infrastructure in the region.
Resource: The OSLO Manual (1992: 38)
• Internal barriers include rigid organisational arrangements and
procedures, hierarchical and formal communication structures,
conservatism, conformity and lack of vision, resistance to
change, and lack of motivation and risk-avoiding attitudes.

22. Barriers to Innovation …..
Resource: The OSLO Manual (1992: 38)
Barriers:
exist within the individual
and within the organization
Innovation or Creativity:
Innovation or creativity output
results from new ways of
connecting existing concepts,
processes, and materials.
Resources:
Innovation or creativity does
not start from a “blank slate”,
resources must be in place to
generate creative output.

23. Resource: Boisot and Griffith (2006; John Wiley & Sons Ltd., 2009.
Model of Knowledge Structuring and Sharing…
STRUCTURE
OF
INFORMATION
INFORMATION SHARING
Problem
Solving
Absorption
Process
Scanning
Diffusion
Diffused Undiffused
Uncodified
Codified

24. Resource: Blackler, F (1995; John Wiley & Sons Ltd., 2009.
TYPE 1 FIRMS
Don’t know what or
how to change
Group of Firms According to
Innovation Capability ….
AWARENESS
NEED
TO
CHANGE
AWARENESS OF HOW TO CHANGE
TYPE 2 FIRMS
Know they need change
but not how or where
to get resources
TYPE 3 FIRMS
Know they need change
and have some ability to
generate and absorb
techonology
TYPE 4 FIRMS
Techonologically
capable to generate and
absorb

25. The Knowledge Management for Innovation ….
Source: Transfield, Young, Bessant, and Sapses, 2006; in Tid, ed.
Knowledge Management for Innovation
Discovery Realization Nurture
Phase in
the
innovation
process
Search
Capture
Articulate
Contextualize Apply
Evaluate
Support
Re-innovate
Generic
routines
Idiosyncratic Knowledge Management Activities

26. The Knowledge Value Factor …..
The value-adding
potential of a company
depends on two
important ingredients:
1) the service level a
company provides
and the knowledge
intensity of the
company; 2) the
degree to which a
company uses
knowledge to
produce products or
services.
Source: http://www.act-consult.com
Service
Level
Knowledge Intensity
Service
Providing
Company
Production
Company
Value-
Adding
Knowledge
Company
Knowledge
Creating
Company

27. Customer Value and Strategy Corporate …
product centric model customer centric model symbiosis
Depth
Customer
Interface
Companies sell and customer buy.
Sales driven corporate. No actual
customer relationships. Example:
T-Ford
customer
company
Customer is in the very heart of the
corporate focus. Company is doing its very
best in order to meet customers
expectations and create great customers
experience. Example: Amazon.com
Customer and a company
are in solid relationships,
need eachothers and
succed together.
Example: Facebook.

28. “It is the result of hardwork, well planned
and executed and is no happening.
Innovation is work rather than genius,…
and very much a matter of discipline”
(Peter F. Drucker, 1985)