Knowledge Management: An Emerging Discipline Rooted in a Long History Karl M. Wiig Knowledge Research Institute, Inc.­kmwiig@krii.com Draft of Chapter 1 in Knowledge Management Edited by Daniele Chauvel & Charles Despres Scheduled for publication Fall, 1999. Abstract Introduction History of Knowledge Management Intellectual Roots of Knowledge Management Different Brands of Knowledge Management Knowledge and Information: The Need for Crisp Definitions Driving Forces behind Knowledge Management External Driving Forces Internal Driving Forces Ongoing Developments What Is New? What May Lie ahead for Knowledge Management? The Changing Workplace Towards a Knowledge Management Discipline Concluding Perspectives References Notes Knowledge Management: An Emerging Discipline Rooted in a Long History Karl M. Wiig Knowledge Research Institute, Inc. ­ kmwiig@krii.com Abstract The business direction we call Knowledge Management (KM) has emerged over the last decades as a result of many intellectual, societal, and business forces. Some of its roots extend back for millennia, both in the West and the East, while others, particularly those associated with Cognitive and Information sciences, are quite recent. Globalization of business also plays an important role. Whereas KM has become a valuable business tool, its complexity is often vexing, and as a field, will still be under development for a long time to come. Significant changes in the workplace have already taken place, but changes to come are expected to be greater. As for other management directions, it is expected that KM will be integrated into the basket of effective management tools, and hence disappear as a separate effort. Introduction Knowledge, what it is, what it means, and its roles for work and spiritual life, has a long history. The abstract considerations and speculations by philosophers and re- ligious thinkers have been of particular significance. In addition, the emphasis on knowledge has always had a practical work- related and secular side. It is this aspect we pursue in this chapter. Knowledge in the workplace­the ability of people and organizations to understand and act effectively­has regularly been managed by managers, coworkers, and pro- active individuals. Those responsible for survival in competitive environments al- ways have worked to build the best possible knowledge within their area of responsibil- ity. Knowledge, and other IC components, serve two vital functions within the enter- prise.1 They form the fundamental re- sources for effective functioning and pro- vide valuable assets for sale or exchange. From business perspectives, explicit and systematic knowledge management has not been of general concern until recently, and as a result, availability of competitive ex- pertise has been haphazard. This is now changing. As we improve KM­and as our competi- tors improve­we must continue to develop of our KM practices. These efforts, which become increasingly sophisticated and de- manding, must build upon the historic roots of knowledge-related considerations. In ad- dition we must pay attention to develop- ments in technology and people-centric ar- eas like cognitive sciences. In other words, we must rediscover the power of past thinking as well as understand opportuni- ties that lie ahead. 1 See for example Stewart (1997) and Sveiby (1997). Knowledge Management: An Emerging Discipline Rooted in a Long History 2 History of Knowledge Manage- ment A historical perspective of today's KM, indicates that this is an old quest. Knowl- edge, including knowing and reasons for knowing, were documented by Western philosophers for millennia, and with little doubt, long before that. Eastern philoso- phers have an equally long documented tradition of emphasizing knowledge and understanding for conducting spiritual and secular life. Much of these efforts were di- rected to obtain theoretical and abstract understandings of what knowledge is about.2 Practical needs to know­or particularly, needs for expertise and operational under- standing­have been important since the battle for survival first started, perhaps be- fore the first human. Managing practical knowledge was implicit and unsystematic at first, and often still is! However, the craft-guilds and apprentice-journeyman- master systems of the 13th century, were based on systematic and pragmatic KM considerations. Still, the practical concerns for knowledge and the theoretical and ab- stract epistemological and religious per- spectives were not integrated then, and still are mostly kept separate. Our present focus on knowledge, par- ticularly for KM, is often explicitly oriented towards commercial effectiveness. However, there are emerging realizations that to achieve the level of effective behavior re- quired for competitive excellence, the whole 2 The epistemological considerations of the Greek philoso- phers Socrates, Plato, and Aristotle are well known. Perhaps less known in the West are the teachings of Lao Tzu and Confucius in China, also about 2,500 years ago. Indian phi- losophers also pursued similar topics. person must be considered. We must inte- grate cognition, motivation, personal satis- faction, feeling of security, and many other factors.3 The present KM focus is not driven by commercial pressures alone. A practical, often implicit, aspect of KM is that effective people behavior required for success rests on delegating intellectual tasks and authority to knowledgeable and empowered individuals. KM also represents an evolu- tion of the move towards personal and in- tellectual freedom that started with the age of enlightenment and reason over 200 years ago. One notion was that through proper education, humanity itself could be altered, its nature changed for the better. As other social movements, this has taken a long time to penetrate, particularly into the con- servative ranks and practices of manage- ment.4 The emergence of the explicit knowledge focus and the introduction of the term "KM" in the 1980s was no accident and did not happen by chance.5 Although it happened gradually and often was met with manage- ment uncertainty, it was a natural evolu- tion brought about by the confluence of many factors. The developments that have led to our present perspectives on KM come from many areas. Some are intellectually 3 See for example Boulding (1966), Cleveland (1985), Drucker (1988), Stewart (1991), and Sveiby & Lloyd (1987). 4 Managers, by necessity have been conservative. Manage- ment is not a science, and approaches to "control" the social, open systems of human and economic behavior in organiza- tions and markets are fraught with problems and uncertainty (see Austin, 1996 and Hilmer & Donaldson, 1996). Success- ful management approaches, therefore, are built on traditions and long experience. 5 A perspective of the history of KM can for example be found in Wiig (1997). Knowledge Management: An Emerging Discipline Rooted in a Long History 3 based, others are pragmatic and rooted in the need to innovate to secure real life per- formance. From our present-day perspective, in spite of increasing advances in thinking, there were little change in needs for practi- cal KM until the industrial revolution changed the economic landscape in the 17th century. The introduction of factories and the related systematic specialization be- came more pronounced to support the abil- ity to create and deliver goods in greater quantities and at lower costs. Still, KM was implicit and largely based on the appren- tice-journeyman-master model. Schools and universities mostly fulfilled a tacit mission to provide education as required for a leading minority. To some extent, this tacit perspective survives to this day. Education, be it primary, secondary, or higher, is per- ceived to be "good" and of general value, of- ten with less thought given to which knowl- edge must be developed for which specific purposes. Intellectual Roots of Knowledge Management Intellectually, broad, present-day KM has many origins. One comes from abstract philosophical thinking. Another comes from concrete concerns for requirements of ex- pertise in the workplace. Others come from perspectives of educators and business leaders. Recent perspectives come from ef- forts to explain economic driving forces in the "knowledge era" and the 20th Century efforts to increase effectiveness.6 Some of the intellectual roots include: 6 See Romer (1989) and Kelly (1996). Historic Efforts Religion and Philosophy (e.g., episte- mology) to understand the role and nature of knowledge and the permis- sion of individuals "to think for them- selves." Psychology to understand the role of knowledge in human behavior. Economics and social sciences to un- derstand the role of knowledge in so- ciety. Business Theory to understand work, and its organization. 20th Century Efforts to Improve Effec- tiveness Rationalization of Work (Taylorism), Total Quality Management, and Management Sciences to improve ef- fectiveness. Psychology, Cognitive Sciences, Artifi- cial Intelligence (AI), and Learning Organization to learn faster than competition and provide foundation for making people more effective. These and other perspectives on the roots of KM are discussed by many authors.7 Different Brands of Knowledge Management We must specify what we mean by, and include within broad KM. A few advanced enterprises pursue a central strategic thrust with four tactical foci as indicated in Figure 1. However, most tailor KM prac- tices to their needs and environments and have narrower perspectives. Of these, some focus on knowledge sharing among indi- viduals or on building elaborate educational and knowledge distribution capabilities. Some emphasize use of technology to cap- 7 See for example Cleveland (1987) op.cit., Senge (1990), Simon (1976), and Wiig (1993). Knowledge Management: An Emerging Discipline Rooted in a Long History 4 ture, manipulate, and locate knowledge and initially, many focus on knowledge-related information management rather than on KM. Others focus on knowledge utilization to improve the enterprise's operational and overall effectiveness. Still others pursue building and exploiting IC to enhance the enterprise's economic value. Some excep- tional enterprises have created "knowledge- vigilant" environments to focus constant, widespread attention on ensuring competi- tive IC to sustain long-term success and vi- ability. The presumption is that competitive IC, properly utilized and exploited, is the central resource behind effective behavior. Our definition of KM is broad and em- braces related approaches and activities throughout the organization. From this view, KM is partly practical, basic, and di- rectly aimed at supporting the enterprise's ultimate objectives. Other parts of KM are quite sophisticated and rely on under- standing of underlying processes to allow targeted KM focused on the organization's needs and capabilities. Many design sys- tematic and explicit KM practices to create enterprise-wide, adaptive, contextual, com- prehensive, and people-centric environ- ments that promotes continual personal fo- cus on knowledge-related matters. People Focus Enterprise Effectiveness Focus Intellectual Asset Focus IM & IT Focus Figure 1. Comprehensive Knowledge Management Strategy Focus Areas. Broad KM is the systematic and explicit management of knowledge-related activi- ties, practices, programs, and policies within the enterprise. Consequently, the enterprise's viability depends directly on: The competitive quality of its knowl- edge assets; and The successful application of these as- sets in all its business activities­i.e., realization of the knowledge assets' value. From a slightly different perspective: "The goal of Knowledge Management is to build and exploit intellectual capital effectively and gainfully." This goal is valid for the entire enterprise, for all of the enterprise's activities, and has considerable complexity behind it.8 8 Private communication from Fernando Simes, South Af- rican KM professional (1998). This definition was adopted by the Australian Parliament for their KM position paper. Knowledge Management: An Emerging Discipline Rooted in a Long History 5 Some aspects of enterprise-wide intelli- gent-acting behavior are indicated in Fig- ure 2. The model outlines elements that fall under the auspices of KM, such as learning, innovating, and the effective creation and application of knowledge assets (KAs). It also points to the need for permission, mo- tivations, opportunities, and capabilities for individuals to act intelligently. Customers & Outside World The Intelligent-Acting Enterprise Structural Knowledge Assets Internal Operations & "Daily Work" Personnel Permission Motivation Opportunities Capabilities Intelligent Acting Products & Services Systems & Procedures Management Practices Operating Practices Organizational Structure Technology Patents & Licences Knowledge Bases Permission Education & Training Programs Learning Innovating & Create New KAs Utilize KAs Personnel Deal Directly with Outside World Results from Intelligent Acting Personnel and from Intelligent Application of Structural Knowledge Assets Direct Sales of Structural Knowledge Assets Figure 2. Individuals, Knowledge Assets, Learning and Innovation, and Internal Operations in the Effective Enterprise. One important aspect for effective KM is the requirement to deal explicitly with the complexity of how people use their minds­that is, think­to conduct work. It concerns what they must understand and how they must possess specific areas of knowledge and have access to them to act effectively under different conditions. Similar considerations also hold on the or- ganizational level. Several aspects of effective, broad-based KM are of interest and should be empha- sized. They dispel some myths often associ- ated with KM and include: In the long run, KM initiatives and activities normally do not lead to more work. Instead, improved knowledge and its use, often far down in the or- ganization, lead to less rework and hand-offs, quicker analysis, decision, and execution, particularly of nonrou- tine tasks and other desirable and work-reducing effects. KM activities and initiatives, instead of being additional functions, must to the largest extent possible be based on, and be part of, pre-existing and ongoing efforts­often without making these more difficult, time consuming, or demanding.9 People are often afraid to share their knowledge. They believe that they will lose the advantage that their ex- 9 Lucier and Torsilieri (1997) Knowledge Management: An Emerging Discipline Rooted in a Long History 6 pertise gives them among their peers and within the organization. How- ever, under the best of circumstances, only a small fraction of an individual's applicable expertise can be elicited and shared. Frequently, only concrete, operational or routine knowledge can be communicated. Deep, broad in- sights are generally not available­and may not exist except as a capability to reason until the situation requires it. Importantly, when experts provide knowledge openly and widely, they tend to be considered important by their peers and gain status and recog- nition. Personal knowledge cannot be shared directly. Perspectives of, and informa- tion about knowledge can be commu- nicated. Recipients make sense of the received information and internalize their interpretation of the communi- cation as new knowledge. Knowledge is built by complex learning processes and result in highly individual mental models and associations that for some, may be quite different from the source knowledge. To be competitive, proactive enterprises must increasingly manage knowledge sys- tematically­although many KM activities and functions may be implicit in each em- ployee's and department's daily work and practice. Enterprises will continue to be motivated by several end-goals, to secure short-term success and long-term viability. A particular KM objective in support of whichever strategy the enterprise pursues, is to leverage the best available knowledge and other ICs to make people, and therefore the enterprise itself, act as effectively as possible to deal with operational, customer, supplier, and all other challenges to imple- ment the enterprise strategy in practice. Knowledge and Information: The Need for Crisp Definitions The intent with KM is to manage knowl- edge practically and effectively to reach broad operational and strategic objectives. That requires crystal-clear understanding of what is meant by knowledge. We must be specific about what knowledge is to ma- nipulate, monitor, and judge how it af- fects­and is affected by­people, culture, KM activities, and other factors within the enterprise and its environment. We must distinguish clearly between what we mean by "knowledge" and "infor- mation."10 At first, it may appear that there is a continuum from signals to data to in- formation to knowledge­and onwards, per- haps to wisdom. However, when examining the nature of these conceptual constructs and the processes that create them, we find discontinuities that make information fun- damentally different from knowledge. Most people think of knowledge as a rec- ipe­a defined procedure­to deal with a con- crete, routine situation. However, few situations are repeated­most situations are novel, particularly in their details. Hence, 10 From practical KM perspectives, operational definitions are: Information consists of facts and other data orga- nized to characterize a particular situation, condition, challenge, or opportunity. Knowledge is possessed by humans or inanimate agents as truths and beliefs, perspec- tives and concepts, judgments and expectations, method- ologies and know-how. Knowledge is used to receive in- formation­to recognize and identify; analyze, interpret, and evaluate; synthesize, assess, and decide; adapt, plan, implement, and monitor­to act. Understanding based on knowledge is used to determine what a specific situation means and how to handle it. Following this definition, in- formation and rudimentary knowledge may be codifiable and may exist outside a person's mind. Understanding, however, may be difficult to codify and is primarily peo- ple-based. Knowledge Management: An Emerging Discipline Rooted in a Long History 7 knowledge must provide us with the capa- bility­the understanding­that permits us to envision possible ways of handling differ- ent situations and to anticipate implica- tions and judge their effects. It allows us to improvise and "jam."11 Our knowledge­in the form of mental models, scripts, and schemata­provides us with the capability to work with novel situations by including not only concepts and predefined methods and judgments, but numerous connections with other detailed concepts, meta-concepts, and mental models.12 The discontinuity between information and knowledge, referred to above, is caused by how new knowledge is created from re- ceived information. The process is complex. To become knowledge, new insights are in- ternalized by establishing links with al- ready existing knowledge, and these links can range from firmly characterized rela- tionships to vague associations. Prior knowledge is used to make sense of received information, and once accepted for inclu- sion, internalizes the new insights by link- ing with prior knowledge. Hence, the new knowledge is as much a function of prior knowledge as it is of received inputs. A dis- continuity is thus created between the in- puts and the resulting new knowledge. The resulting knowledge and understanding is formed by combinations of mental objects and links between them and allow us to sense, reason, plan, judge, and act. A practical example portrays how infor- mation and knowledge differ. Consider the regular and supervisory control functions for an automated factory as illustrated in 11 See Kao (1997). 12 See for example Gardner (1983), Gardner (1985), Lakoff (1987), Schank & Abelson (1977), and Wiig (1995). Figure 3. In this system, information is con- tinually obtained on the operating state of the process. Knowledge from process ex- perts is embedded in the process control programs to automate operations. The ex- perts provide personal knowledge and deep understanding as general principles and specific cases on how to deal with routine and undesired operating situations. They may pool their process knowledge with that of other experts who earlier have embedded knowledge on optimization and control principles in the generic computer software used to generate the control algorithms. In addition, process operating history is analyzed (by conventional statistical meth- ods or advanced knowledge discovery in da- tabases [KDD]) to obtain selected process characteristics, including process dynamics. This information also becomes part of the control algorithms embedded in the control computer after it has been interpreted and linked to the experts' personal knowledge. Driving Forces behind Knowl- edge Management The emergence of KM may be explained by the confluence and natural evolution of several factors. The needs to manage knowledge are strong. For those who now are engaged in KM it is not an alternative or a luxury. It is a necessity driven by the forces of competition, market place de- mands, new operating and management practices, and the availability of KM ap- proaches and information technology. External Driving Forces Most organizations operate in environ- ments that they cannot control. Their vi- ability and success are subject to external Knowledge Management: An Emerging Discipline Rooted in a Long History 8 forces that they must live with and respond to as best they can to survive. Over the last decades considerable external driving forces have emerged. Among these we find the following: Routine and Normal Operation Abnormal and Undesired Operating Situations Process Dynamics and Characteristics Optimization and Special Situation Operating Strategies Control Algorithms to Regulate Process InformationKnowledge KDD Knowledge Discovery in Databases Information Knowledge Operating History Figure 3. Differences between Knowledge and Information in Process Control. Globalization of business and in- ternational competition. Interna- tional commerce has increased. Prod- ucts that were created within one company or country are now assem- bled from parts from multiple sources world-wide. Where before there were few product alternatives, there now are many. Production and service ca- pabilities that were available from limited sources in advanced countries, are frequently found in countries that were considered developing and inca- pable of sophisticated work. These de- velopments have led to cut-throat competition­where only the most ef- fective will survive by being effective in operations, marketing, and creation of products and services. Sophisticated customers. Custom- ers have become more demanding. They increasingly desire customized products and services that support their success and in turn are needed to serve their own customers better. Everywhere there are requirements for new features, better fulfillment of individual needs, higher quality, and quicker response­all at an increas- ingly feverish pace. To survive in this environment, enterprises must per- form on par with­or better­than its competition by improving their under- standing of customer needs and capa- bilities. Sophisticated competitors. Com- peting organizations are constantly implementing innovations in prod- ucts, services, and practices. They also implement "discontinuous break- throughs" by adopting new technolo- gies and practices. To keep up, these changes require constant learning to build competitive expertise. Sophisticated Suppliers. Suppliers continue to improve their capabilities Knowledge Management: An Emerging Discipline Rooted in a Long History 9 and can participate in creating and supporting innovations to deliver so- phisticated products. To take advan- tage of these opportunities, enter- prises must understand new supplier capabilities and how to integrate them with internal efforts, directions, and culture. Internal Driving Forces Within enterprises, developments of many types have created opportunities for managing knowledge better, and in some cases differently. Examples of important changes include: Bottlenecks in enterprise effec- tiveness. Typically, enterprise effec- tiveness is limited by restrictions in flows of work, information, etc. Bot- tlenecks have been removed­and relo- cated to other sites­through many improvements: investments in tech- nology and logistics; personnel work- ing harder and longer; organized work tasks and work flows; improved in- formation for decision making and other work (more accurate, complete, and timely); and increased intelligent automation of routine and simpler op- erational tasks. New requirements place demands on increased effectiveness and intelli- gent behavior. Bottlenecks have moved from visible and tangible sites to knowledge-intensive work areas require better understanding and ex- pertise. Increased technological capabili- ties. New KM approaches are made possible by advances in information management and technology and ap- plied AI. Examples include groupware for collaborative work, knowledge en- coding for knowledge bases, perform- ance support systems, natural lan- guage understanding, and advanced search engines. Understanding of human cogni- tive functions. People and their work behavior are at the center of the effective enterprise. Therefore, it is important to incorporate better pro- fessional understanding of cognitive aspects of how knowl- edge­understanding, mental models, and associations­affect decision making and performing knowledge- intensive work when deciding how to conduct KM. Ongoing Developments Many developments are underway that will affect KM further and some of these include: Economics of Ideas. Innovations and new, path-breaking ideas have brought about knowledge-driven eco- nomic changes of societal signifi- cance.13 Information Management and Technology. Information-related practices and capabilities are trans- forming the way business is con- ducted. Cognitive Science. Our under- standing of how people function has direct impact for how we manage knowledge. Shifts in Bottlenecks. Under- standing best practices and others' experiences provide information about potential candidates for streamlining operations. Customization Requirements for Sophisticated Customers. Great opportunities are available by satis- fying unique customer demands on reasonable terms. Sophisticated Competitors. Threats require agile behaviors and rapid learning to remain viable 13 Romer (1989) and Kelly (1996), op. cit. Knowledge Management: An Emerging Discipline Rooted in a Long History 10 Globalization. International busi- ness changes provide business oppor- tunities and threats that must be un- derstood to be managed. These, and other driving forces encourage companies to focus attention and efforts to areas that provide greatest pay-back. In general, it requires delivering "more with less." That, however, requires extensive understanding and ability to build and maintain competitive IC in many areas. What Is New? KM practitioners recognize that KM has brought new elements into the enterprise. Entirely new perspectives and activities are introduced. Others are not new per sé, but have taken on new roles. For example, there is little new in the concepts behind educating and training people to be able to deliver competent work. The same is true for many other KM-related activities. How- ever, perspectives, priorities, and purposes are new. Most knowledge-based organizations re- alize that the largest part of their market value is their IC, not the sum of their finan- cial and tangible assets. They find that no one have specialized in understanding the mechanisms that govern the processes that result in valuable IC. They also realize that no one is responsible for maintaining and improving the value of these large assets. What is new­certainly in the form of broadly accepted management thrusts­are the explicit, deliberate, and systematic ap- proaches to orchestrate KM efforts and to rely upon their results to achieve enterprise objectives. From management's point of view, the perspectives, coordination, facili- tation, and monitoring activities necessary for active KM require new and different in- sights, emphases, and approaches. They also require new values, insights, and pri- orities. What is more, they require a new focus on the role that knowledge and un- derstanding play in the enterprise's­and in individuals'­ability to deliver quality work. Advanced KM now start to rely on new approaches that integrates theoretical and abstract perspectives of epistemology and cognitive sciences with the pragmatic con- siderations of expertise required to conduct business and the technical directions of in- formation management and technology. Three additional conditions have also con- tributed to these developments. First of these are AI and management sciences con- cerns for how people reason and think when performing intellectual work and the effect of knowledge and understanding to deliver quality work.14 Second are learning theory, social sciences, and psychological concerns for approaches to effective learning, team- work and collaboration, and for cognitive styles.15 Third are advances in information technology that allow extending KM prac- tices into new areas by building on ontolo- gies, NLU, automated reasoning, and intel- ligent agents. New understandings of how people make decisions have made it clear that previous principles for managing knowledge may be misguided. It now is realized that most de- cisions are made based on "intuition" (strong associations) rather than on delib- erate and systematic reasoning.16 This has considerable consequences for which knowledge people must possess and how they are supported to function effectively 14 See Suchman (1995). 15 Gardner (1983) op.cit.. 16 See Bechara et al. (1997) and Klein (1998). Knowledge Management: An Emerging Discipline Rooted in a Long History 11 and deliver quality work under various conditions. What May Lie ahead for Knowl- edge Management? KM promotes development and applica- tion of tacit, explicit, and embedded IC; that is, leveraging personal understanding, or- ganizational action capabilities, and other intellectual assets to attain the enterprise's ultimate goals, such as ascertaining profit- ability, ensuring long-term viability, or de- livering quality services. This perspective of KM, and given its history, suggest that a number of developments will take place in coming years. They include: An area of increasing insight in the role that understanding­or meaning- connected knowledge­and abstract mental models play in intellectual work. The 1990's notion that "knowl- edge is actionable information" and similar early perspectives will be re- placed by more detailed characteriza- tions of both personal and inanimate knowledge. Insights from cognitive re- search and business experiences with deep knowledge will elucidate what, and how, people must understand how to handle complex challenges competently. Caused by KM's importance, future practices and methods will be pur- poseful, systematic, explicit, and de- pendent upon advanced technology for knowledge capture and codification, automated reasoning, natural lan- guage understanding, and so on. Overall, KM will become people- centric since it is networking of com- petent and collaborating people that makes successful organizations.17 17 See Terry Winograd (1988), Cannon-Bowers & Salas (1999) op.cit., and Wellman (1999). Extensive experiences will spread from many organizations about how effective KM is organized, supported, and facilitated. Obvious changes will include placement and organization of the KM effort itself, be it a Chief Knowledge Officer (CKO) or a distrib- uted effort. Changes that deal with reorganization of work and the abol- ishing of whole departments when their responsibilities are integrated into other operations, will be preva- lent but less apparent. Management practices will change to facilitate KM. Incentives will be in- troduced and disincentives eliminated to promote innovation, effective knowledge exchange ("sharing"), learning, and application of best knowledge for work. Cultural drivers such as management emphasis and personal behaviors will be changed to create environments of trust and ef- forts to find root causes of problems without assigning blame. KM perspectives and considerations will be embedded in regular activities throughout the enterprise. An exam- ple of how broadly KM may affect an organization is indicated in Figure 4. It highlights some separate and shared responsibilities for KM-related activities within research and devel- opment (R&D), human resources (HR), information management and technology (IM & IT), and a KM su- pervisory function. New practices will focus on combining understanding, knowledge, skills, and attitudes ("KSAs") when assembling work teams or analyzing require- ments for performing work.18 The em- phasis on complementary work teams will coincide with the movement to- wards virtual organizations where many in-house teams will include ex- ternal workers who are brought in for 18 Cannon-Bowers & Salas (1999), op.cit. Knowledge Management: An Emerging Discipline Rooted in a Long History 12 limited periods to complement in- house competencies for specific tasks. The present use of consultants from large consulting houses is one mani- festation but is expected to increas- ingly involve self-employed external knowledge workers. Enterprise-Wide Knowledge Management Research & Development Function Information Management & Technology HR & Competency-Based HR Management · Provide General Education and Training Programs · Institute Incentives to Motivate Personal Knowledge Creation, Sharing, and Use · Coordinate and Govern "Integrated Learning Programs" (ILP) · Understand legislation and determine the implications for Enterprise · Provide Metaknowledge to All Personnel · Hire Personnel for Businesses · Assist in Personnel Evaluation · Support Promotion Assessments · Maintain Personnel Records · Establish Knowledge Requirements for Quality Work · Conduct Succession Planning · Conduct Specific Skill Training · Determine R&D Agenda · Transfer Knowledge to Points of Action · Motivate Knowledge Creation · Promote Knowledge Use · Renew and Improve Practices · Operate R&D Information Environment and IT Resources · Deliver Business-Specific Information Services · Manage Corporate Memory · Provide KDD Capabilities · Operate Intranet Personal Homepages · Operate Knowledge-Related Personnel Evaluation & Review System · Build and Maintain Personnel Data Bases · Create IT Infrastructure · Create KBS Development Capabilities · Issue and Manage Personnel Policies · Conduct and Monitor Personnel Management · Provide General Personnel Relation Services · Identify and Conceptualize Complementary Knowledge Processes across Departments and Other Silos · Oversee Creation of Integrated Comprehensive Knowledge Capture and Transfer Program · Align Knowledge Strategies and Tactics with Enterprise Direction · Create Knowledge-Related Capabilities Shared Across Enterprise · Support Enterprise Strategy and Direction by Facilitating Effective Communication to All · Facilitate and Monitor Knowledge Management-Related Activities and Programs · Build IT Systems · Conduct Planningand Manage IT · Produce High Quality Information · Plan and Manage R&D Operations · Develop New Intellectual Capital · Build and Maintain Content Knowledge · Staff Collaborating Teams · Perform Quality Work · Provide on-the-Job Training · Maintain, Renew, and Improve Operating Facilities Figure 4. Examples of Sole and Shared Responsibility KM Activities. Most organizations will create effec- tive approaches to transfer personal knowledge to structural IC to allow better utilization and leveraging. Ex- ternal subject matter experts will lev- erage and sell their expertise to many enterprises for continued use.19 Comprehensive approaches to create and conduct broad KM practices will become the norm. For example, de- signing, implementing, and operating comprehensive multi-mode knowledge transfer programs will be common.20 Such programs include systematic approaches to integrate primary 19 See Edvinson &Malone (1997), Stewart (1991), Stewart (1997), and Sveiby (1997). 20 Wiig (1995) p. 358 discusses such programs. knowledge-related functions such as: sourcing from internal and external knowledge experts; knowledge cap- ture, codification, and organization into repositories; deployment (e.g., training and educational programs, expert networks, and knowledge- based systems [KBSs]); and functions where work is performed or knowl- edge assets are sold, leased, or li- censed. Education and knowledge support ca- pabilities such as expert networks or performance support systems (PSSs) will be matched to cognitive and learning styles and dominant intelli- gences.21 That will help workers per- form more effectively. Highly effective 21 See Kurtzman (1999). Knowledge Management: An Emerging Discipline Rooted in a Long History 13 approaches to elicit and transfer deep knowledge will be introduced to allow experts to communicate understand- ings and concepts and facilitate building corresponding concepts, asso- ciations, and mental models by other practitioners.22 KM will be supported by many AI de- velopments. Some of these are intelli- gent agents; natural language under- standing and processing functions; reasoning strategies; and knowledge representations and ontologies23 that will continue to be developed and, by providing greater capabilities, will be relied on to organize knowledge and facilitate application. To create broad and integrated capabili- ties, most of the changes introduced by these developments will not be stand-alone, but will be combined with other changes, many of which have foci different from KM. Increased specialization in enterprises to work with various KM aspects: On the Firm level: Expertise with em- phasis on managing IC. On the middle management level: Understanding the importance of managing local investments in, and coordination and application of, knowledge assets to meet operating objectives. On the KM level: Enterprise-wide co- ordination and facilitation of KM- related functions, capabilities, and ac- tivities. On the knowledge-operational level: Local hands-on capabilities to obtain and organize knowledge, automate knowledge and build knowledge-based support and educational systems, and 22 Wiig & Wiig (1999) discuss some existing approaches and the reasoning behind them. 23 For an excellent discussion of ontologies and their role in KM, see Chandrasekaran et al (1999). retrieve and communicate knowledge to end users. Realization that KM is the cornerstone of every knowledge-organization's strategy will bring about: New ways of working­collaboration, new ways of assembling expertise for special purposes. New roles for people management. New roles for training and education within the firm. New roles and methods for knowledge capture, organization, automation and deployment. New focus for management science on organization of work with knowledge perspective, change management to facilitate growth and innovation, and on KM details. New focus for strategy setting on de- veloping knowledge- and IC-related opportunities and associated devel- opment of capabilities to realize and capitalize on the possibilities. As organizations develop their KM prac- tice further, most enterprises after some time will pursue all four thrusts as part of their overall KM strategy. The Changing Workplace We do expect the enterprise to change. Advances in KM practices will continue to modify the workplace­sometimes drasti- cally. Visible changes will be evident by in- creased application of, and reliance on, technology for cognitive support compared to the information focus of the 1980s and 1990s. Less visible changes may be more important since they will improve the way people work with their minds and thereby alleviate bottlenecks. The changes that people will experience in the workplace in- clude: Knowledge Management: An Emerging Discipline Rooted in a Long History 14 Emphasis on using interdisciplinary teams with focus on best mix of com- petencies and understanding to be applied to the work at hand. Figure 5 shows an example of the proficiency profile of such a team. LEGEND I - Ignorant B - Beginner A - Advanced Beginner C - Competent Performer P - Proficient Performer E - Expert I B A C P E External Subject Matter Expert (SME) In-House Management-Corp Strategy Specialist In-House Project Leader In-House Project Content Specialist In-House Marketing - Customer Specialist External Project Staff Specialist Corporate Strategy and Direction Customer Service Models and Their Efficacies Corporate Policies and Practices Desired Customer Service Paradigm Market Place; Customer Needs and Behaviors Customer Service System Implementation and Start-Up Customer Support System Operations Project Management and System Implementation Analysis & Design of People/Technology Systems Effective Project Team Knowledge Profile Understanding of Figure 5. Knowledge Profile Example of a Virtual Team with Six Members. Temporary nature of many employ- ment situations. Emphasis will be placed on assembling short-lived teams with complementing knowledge profiles to address specific tasks. Peo- ple will improve their personal exper- tise to maintain and enhance personal competitiveness. Good understanding of the importance of relying upon strong mental associa- tions and conceptual knowledge to guide direction of work. Better understanding by knowledge workers of how to implement enter- prise strategy by the small decisions and acts that are part of their daily work. Greater willingness to collaborate with associates and coordinate with other activities. Increased personal understanding by employees of how they personally will benefit from delivering effective work. Greater job security and less hesita- tion to undertake complex tasks after employees build increased metaknowledge and professional or craft knowledge about work for which they are responsible. Increased reliance on automated in- telligent reasoning to support work. For example, when confronted with complex situations, automation may assist knowledge workers by identi- fying and making available relevant support information and knowledge, making preliminary sense of the situation, and locating and presenting suggestions for how it should be han- dled. Knowledge Management: An Emerging Discipline Rooted in a Long History 15 Intelligent agents deployed internally and externally will offload "data de- tective work" now required to locate and evaluate information required in many knowledge worker situations ranging from plant operators to ad hoc strategic task forces. New organization of the physical work environment will change the way peo- ple work together and allow greater richness and effectiveness of interac- tion. New work environments will be designed to foster knowledge ex- change through networking and col- laboration and facilitate innovations through serendipity. Improved understanding of different levels of work complexities and what that means for knowledge require- ments. A useful categorization of work complexity consists of six levels: 1. Routine worktasks (simple, repeti- tive, and well understood). 2. Logical or less common variations (transformations) of routine situa- tions. 3. Complex, yet expected extensions of known routines integrated with ex- ternal factors. 4. Unexpected challenges (conditions), but with a mix of routines and ex- ternal factors. 5. Totally unexpected situations and non-routine challenges, yet within the larger job scope. 6. Unusual challenges outside job scope. In total, KM will lead to less effort to de- liver present day service paradigms. How- ever, as Figure 6 indicates, work is chang- ing to satisfy the ever-increasing market requirements for new features and capabili- ties in products and services. Successful or- ganizations will provide better script and schema knowledge and work will expand to take advantage of the new capabilities. Even so, with increased responsibilities, knowledge workers are expected to feel more confident and have better under- standing of work to be done. They also will receive better knowledge support and more jobs will be done right the first time, adding to confidence and job satisfaction on the in- side, and better market acceptance on the outside. The nature of work is changing. Already, we have learned to prepare our workforce better, automate many routine functions, and organize work to deliver higher quality products and services more effectively. There is a shift towards more complex work as outlined in Figure 6. There are many identifiable targets for intelligent automa- tion in routine areas and potentials for ap- plication of greater understanding and ex- pertise in more demanding work. Advanced technology and experiences by sophisticated organizations motivate continued refine- ment of work in general. Hence, to stay ahead of competitors, enterprises ask their personnel to engage in increasingly complex work to deliver better products and serv- ices. Service paradigms become more com- plex. Towards a Knowledge Management Discipline The changes to manage knowledge ex- plicitly and in detail place great demands on supporting disciplines. They range from cognitive sciences and educational methods to management sciences and economics to AI and information management and tech- nology. Enterprises pay new attention to maintaining and enhancing the competitive power of their IC. They realize that man- Knowledge Management: An Emerging Discipline Rooted in a Long History 16 aging IC is complex and extensive and re- quires expertise and management atten- tion. The new profession of KM specialists, from several academic fields, is becoming a reality. As indicated in Figure 7, the disci- plines and other areas that KM relies upon include: 1. Routine (simple, repetitive, and well understood) 2. Logical or less common variations (transformations) of Routine Situations 3. Complex, yet expected extensions of routines integrated with external factors Complexity of Knowledge-Intensive and Other Work 4. Unexpected challenges (conditions), but with a mix of routines and external factors 6. Unusual challenges outside job scope 5. Totally unexpected situations and non-routine challenges, yet within the larger job scope Targets for Intelligent Automation Relative Frequency of Work Potentials for Delivering Work Requiring Greater Knowledge Conventional Distribution of Work Future Distribution of Work Figure 6. Changes Will Make Work More Complex. Disciplines in Support of KM Business Theory & Economics to cre- ate strategies, determine priorities, and evaluate progress. Cognitive Sciences to understand how best to support knowledgeworkers' mental functioning required by their work settings. "Cybrary" Sciences to bring knowl- edge-related services to everyone.24 Ergonomics to create effective and ac- ceptable work environments. Information Sciences to build sup- porting infrastructure and special knowledge-related capabilities. 24 "Cybrarians" combine expertise from library science and cyberspace to obtain and organize information and knowledge. Knowledge Engineering to elicit and codify knowledge. AI to automate routine and assist knowledge-intensive work with rea- soning and other high-level functions. Management Sciences to optimize op- erations and integrate KM efforts with other enterprise efforts. Social Sciences to provide KM-related motivations, people processes, and cultural environments. General Principles for Effective KM Systematic and explicit KM to maxi- mize the effectiveness of the enter- prise business drivers. Knowledge-Based vision to provide the long-term basis for a broad KM practice. Knowledge Management: An Emerging Discipline Rooted in a Long History 17 The Emerging Knowledge Management Discipline Information Management & IT Focus People-Centric Focus Intellectual Capital Focus Enterprise Effectiveness Focus Land Marks Key Elements Principles Disciplines Knowledge Management Practices - Business Theory & Economics - Cognitive Sciences - "Cybrary" Sciences - Ergonomics - Information Sciences - Knowledge Engineering & AI - Management Sciences - Social Sciences Historic Efforts to Understand: - The Nature and Role of Knowledge (Epistemology) - Role of Knowledge in Human Behavior (Psychology) - Economics - Work, and Its Organization Intellectual Roots of Knowledge Management - Manage Knowledge Systematically & Explicitly - Create Knowledge-Based Vision - Identify Knowledge Requirements - Determine Knowledge TOWS - Align Knowledge Efforts & Enterprise Direction - Systematize Knowledge-Related Efforts - Implement with Priority and Purpose - Documented Knowledge Management and/or Intellectual Capital Strategy - Documented Knowledge Landscape Map - Senior Management Reliance on KM - Enterprise-Wide KM Practices - Enterprise-Wide Coordination of Knowledge- Related Efforts - KM-Supportive Infrastructure - KM-Supportive Incentive Programs - Knowledge Vigilant Enterprise Focus Basic & Fundamental Need to Organize & Manage Knowledge Intellectual and Pragmatic Trajectory External Driving Forces - Globalization of business and international competition - Sophisticated customers - Sophisticated competitors - Sophisticated Suppliers Internal Driving Forces - Bottlenecks in enterprise effectiveness - Increased technological capabilities - Understanding of human cognitition Ongoing Developments: - Economics of Ideas - IM & IT - Cognitive Science - Shifts in Bottlenecks - Sophisticated Customers Require Customization - Sophisticated Competitors - Globalization - KM-Centered Strategy - IC Management - IC-Based Evaluations & Administration - Environment for Innovation - Learning Organization Approach - IT-Based Infrastructure - IT-Based Knowledge Discovery (KDD) - Knowledge Automation (KBSs) 20th Century Efforts: - Rationalization of Work (Taylor) - Total Quality Management - Cognitive Sciences & Psychology - Artificial Intelligence - Management Sciences - Learning Organization - Business Theory - Sociology Figure 7. A Perspective of the Emerging Knowledge Management Discipline. Identification of knowledge require- ments for individual functions to de- termine which knowledge to make available. Determination of Knowledge TOWS (Threats, Opportunities, Weaknesses, Strengths) to set priorities and de- velop needed KM tasks. Alignment of knowledge efforts & en- terprise direction to realize the best value of the KM practice. Systematized knowledge-related ef- forts to make the KM practice effec- tive. Implementation of KM with priority and purpose to minimize waste and maximize KM value. Key Elements of KM Practices KM-Centered strategy to achieve ef- fective, integrated KM practice and coordinate KM activities. Focused IC management to maximize overall value of building and exploit- ing IC. IC-Based evaluations and administra- tion to optimize local IC investments, utilization, and caretaking. Knowledge Management: An Emerging Discipline Rooted in a Long History 18 Provision of environment for support of innovation to build competitive IC. Learning Organization Approach to build competitive knowledge faster than competition. IT-Based Infrastructure to provide ef- fective support for KM. IT-Based Knowledge Discovery (KDD) to learn maximally from the past. Knowledge Automation (KBSs) to streamline operations. Key Elements of KM Practices KM-Centered Strategy to drive to- wards effective, integrated KM prac- tice and coordinate KM activities. IC Management to maximize overall value of building and exploiting IC. IC-Based Evaluations and Admini- stration to optimize local IC invest- ments, utilization, and caretaking. Provide Environment for Innovation to build competitive IC. Learning Organization Approach to build competitive knowledge faster than competition. IT-Based Infrastructure to provide ef- fective support for KM. IT-Based Knowledge Discovery (KDD) to learn maximally from the past. Knowledge Automation (KBSs) to streamline operations. Landmarks for Developing KM Prac- tices Documented KM and/or Intellectual Capital Strategy indicating the extent and maturity of KM preparation. Documented Knowledge Landscape Map indicating understanding of knowledge TOWS. Senior Management Reliance on KM indicating enterprise commitment. Enterprise-Wide KM Practices indi- cating extent to which KM is pursued in practice. Enterprise-Wide Coordination of Knowledge-Related Efforts indicating sophistication of KM involvement. KM-Supportive Infrastructure indi- cating potential efficiency of KM prac- tice. KM-Supportive Incentive Programs indicating realization that KM is peo- ple-centric. Knowledge Vigilance indicating reli- ance on knowledge and IC for success and viability. Knowledge Management Must Jus- tify Its Existence Most organizations still pursue KM with- out ascertaining that hard business reasons require it. This is changing­and for good reasons. The premises are that competitive knowledge backed by deliberate KM are important for sustained success and viabil- ity and that the enterprise value largely comes from IC. It may therefore be irre- sponsible to pursue KM without having ex- plicit understanding of how the efforts will be of value. There are several reasons for establishing the effects and benefits of po- tential KM actions. As the example in Fig- ure 8 indicates, the immediate effects, fol- lowed by intermediate and final effects of the KM effort should be explicated for five major purposes: To support KM planning, decision making, and priority setting, and to obtain estimates of magnitude and timeframe of potential benefits, costs, and risks. To delineate the nature of expected and desired KM-related events and agree with stakeholders about suit- able descriptions of expected events and their benefits or associated risks, and provide a graphical (visual) framework to support the collabora- tive KM planning process. Knowledge Management: An Emerging Discipline Rooted in a Long History 19 To enable the desired outcomes from KM efforts, delineate the various ef- fects that are sought or expected with identification of ancillary activities that must be considered. To promote understanding of desired effects to support implementation over the life-time of the process by de- scribing the events and associated characteristics. To monitor the KM-influenced event process to manage it appropriately, and provide sufficient understanding of the anticipated events by outlining expectations over time in sufficient detail. The proposed KM efforts­and later, KM implementation­need to be outlined in some detail to support these purposes. Knowledge Management Activities Internal Benefits & Effects - Operations Focus - Intermediate Effects and Benefits Improved Deliverables - Product & Service Focus - External Benefits & Reaction - Customer & Market Focus - Bottom-Line Benefits KBS-Related KM Effects Enterprise Profitability Enterprise Viability Knowledgeable people ­ motivated to use knowledge Improved reuse of technology & lessons-learned Lower operating costs ­ fewer operating errors Quicker decisions Less time from design to product Increased customer satisfaction Products/services with better fit to customer needs Higher quality products/services Faster responses Quicker delivery of products/services Increased products/services value to make customer succeed Increased product/ services demand Increased orders Greater & easier access to knowledge Improved understanding of relevant expertise Increased knowledge sharing & creation More effective renewal & removal of knowledge KBS to Support Production Line Workers Elicit & Codify Key Worker Expertise Greater customer product/service understanding Market Image Employee, Community, & Society Relations Improved relations between customer & enterprise Figure 8. Knowledge Management Activities Are Expected to Progress through Internal and External Events to Deliver Bottom-Line Benefits. Concluding Perspectives KM will continue to evolve and draw upon support from many theoretical and methodological areas. For instance, cogni- tive sciences will increase understanding of decision making, cognitive support needed for work, effective learning, and skills transfer processes. Research on the nature of intellectual work will explicate how dif- ferent kinds of knowledge is used, should be possessed, and accessed. Management sci- ences will provide methods for managing IC renewal, priorities, and investments. AI and advanced information technology will increase abilities to supplant and support complex work tasks. New directions such as "Economics of Ideas," "Economics of Chance," and Chaos Theory will provide new perspectives and new guidelines for effective management in the knowledge so- ciety. New models for Theory of the Firm will elucidate new tactical values, princi- ples, and judgments. Knowledge Management: An Emerging Discipline Rooted in a Long History 20 However, much needs to be done. We do not understand much about knowledge. Our understanding of the cognitive aspects of human functioning (as related to decision masking and knowledge-intensive work) is marginal. There is not an accepted eco- nomic "theory of knowledge" that is appli- cable to business or daily life. We do not have a general understanding of how to un- dertake comprehensive and systematic KM within an organization. We may need an entirely new theory of the firm to manage knowledge effectively­and to link it prop- erly with enterprise strategy, tactics, and daily operations­while recognizing that in most organizations people and their be- haviors contribute much more to the enter- prise success than the assets that conven- tionally are targets of management focus. One key learning is that we must adopt greater people-centric perspectives of knowledge. To be viable, we need constant learning­led by constant innovation. Tech- nology only goes so far. It can only provide us with rudimentary reasoning devoid of innovation and with concrete analyses of the past through approaches such as knowledge discovery in databases. People are the intelligent agents that create and act on new opportunities. It is those oppor- tunities that will bring the world forward. One doctrine of KM is the need to ar- range our affairs to avoid rediscovering what earlier thinkers have created but maximize the reuse of valid knowledge and practices. We must adopt this tenet for our own work in KM.25 General Colin Powell reminds us to "Not invent what is already 25 David Owens, a long-time KM practitioner and academic, reminds us emphatically about this point thriving!" Human history is not a history of cleverness and increasing acuity of vision. 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