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Knowledge Management and the Learning Organisation: A European Perspective

  • ID: 42722
  • Report
  • May 2000
  • Region: Europe
  • 101 pages
  • American Productivity & Quality Center, APQC
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The attention being paid to knowledge management has been growing with dramatic speed. Business magazines, books, and journals are publishing countless theories and business cases on knowledge management and related topics; the number of conferences organised all over the world is immense and still growing. But what is at stake? Why are people interested in concepts such as learning organisations, sharing best practices, or intellectual capital (IC)? What are the main strategic tactics they use to improve the way knowledge is shared, consolidated, combined, created, and— most importantly—used to create products and services for their customers? Vast amounts of unknown, untapped knowledge, know-how, and best practices exist inside all organisations. This large reservoir of capabilities could be used much more efficiently if enterprises were able to create environments for employees in which they were enticed and facilitated to connect to other employees, to access experiences and know-how of colleagues wherever they are located or whatever their method of working.

The driving force of continuous improvement and the need for innovation have been behind the current interest in knowledge management.

WHY KNOWLEDGE MANAGEMENT?

Knowledge has always been at the heart of work and action of people. Of course, the nature of knowledge has dramatically changed because of the many scientific developments and other ongoing discovery processes. In addition, the competitive edge of individuals, enterprises, and even nations has increasingly become dependent on their ability to apply knowledge and to leverage it in a continuous way. Land, capital, and machinery are no longer decisive in a worldwide market of products and ideas. Thus, the concept of knowledge management has appeared on the management agenda and directs
explicit attention to the processes and mechanisms that are related to knowledge.

Objectives

Knowledge management has many faces based on several theories and disciplines, as well as contributions by management science, information science, educational theory, and communication science. Often these communities also claim ownership of knowledge management, while the added value should be in the synergy among disciplines. In general, there are four basic objectives for knowledge management initiatives.

1. Exploiting existing knowledge in the best possible way. Knowledge that is dispersed over several individuals working at different locations in different time regions; knowledge that is stored in various media such as paper and IT systems or audio—how can enterprises create synergy among all these resources
and improve their performance on a continuous basis? Essentially, the objective is to make existing knowledge more productive in the light of the core processes and products.

2. Renewing the knowledge of individuals and enterprises based on internal and external learning processes. The most common slogan is “to learn faster than the competitor and apply the new knowledge where needed as efficiently as possible.” This objective is closely related to the concept of learning organisation and to innovation. The time period in which knowledge can create competitive advantage is decreasing rapidly because of the increased transparency of the world.

3. Transforming individual knowledge into the structural capital of the enterprise. People are an enterprise’s main asset, but they can walk out the door at any time. Still, enterprises want to service their customers on a continuous bases. By transforming individual knowledge into collective knowledge, enterprises are not only trying to reduce the risk of knowledge erosion but also increase the speed with which knowledge can be made productive.

4. Transforming the business strategy based upon existing core competencies and capabilities. Emerging competencies and capabilities can be used to redirect the strategy and create competitive advantage for a decisive period. To grasp these opportunities, enterprises should be aware of their competencies and the underlying knowledge areas and assets.

Instruments and Interventions

To achieve these objectives, enterprises use various instruments and interventions focused on:
- management style and leadership,
- organisational structure and roles,
- cultural issues, and
- IT enablers.
Earlier studies show that every solution strategy will have to cope with all these issues. IT enablers will not work without proper attention to cultural and managerial issues. At the same time, organisational interventions and the creation of new roles are strongly supported by IT enablers such as intranets.

Focus and Measurement

Much has been said about the relationship between benefits and knowledge management investments. Pioneers have believed in the concept without asking
for a precise calculation of the return on investment. In this sense, the diffusion of knowledge management and total quality management can be compared in many ways. Most people are struggling with the question of how benefits can be predicted or even measured. The collaboration between EFQM and APQC and the knowledge management community is a major breakthrough because integrating knowledge management concepts into existing business excellence models for self-assessment is an important step toward true integration of knowledge management issues into daily operations. Of course, the influence of the intellectual capital movement, started by pioneers such as Karl-Erik Sveiby and Leif Edvinsson, on the way the financial world approaches knowledge management issues is very strong, and many efforts are being made to combine traditional accounting with new ways of visualising the organisation’s hidden assets.

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- Sponsor and Partner Companies

A complete listing of the sponsor companies in this study, as well as the best-practice (“partner”) companies that were benchmarked for their innovation and
advancement in knowledge management.

- Executive Summary

A bird’s-eye view of the study, presenting the observations made and the methodology used throughout the course of the study. The observations are explored in detail in following sections.

- Observations

An in-depth look at the focus areas of the study, with knowledge management observations in each category. The observations are supported by qualitative examples of practices employed by the partner companies.

- Partner Company Profiles

Background information on the partner companies, as well as an extensive look at their innovative knowledge management processes.
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