Knowledge Management

Knowledge Management seems to be the hottest subject now a days. I am reading too many articles on this and the more I read, the more I get confused. But since this IS the most important topic these days, I thought of gaining some insight into this. My first attempt was to develop some perspective regarding this stuff called KNOWLEDGE which certainly has become a desirable object to be managed. I had read somewhere, though knowing me you would simply accept the fact that I dont remember where, that

• A collection of data is not information
• A collection of information is not knowledge
• A collection of knowledge is not wisdom
• A collection of wisdom is not truth.

What I could understand with my challenged IQ is that information, knowledge, wisdom and truth are more than simply collections of data. Collection of data is important, but not the most important activity in the making up of information, knowledge, wisdom and/or truth.

Now moving onto Knowledge management, I realized that probably Knowledge management would be hard to define precisely and crisply. The KM gurus and experts of the industry have defined KM in a varied no. of ways. Thats not surprising. Its like, how would a VP HR define "Staffing Management", or rather is there a unique definition of "Staffing Management"? Or "Compensation Management"? Each of these domains is complex with many branches of specialization. Similarly I believe Knowledge Management is also a hell of a complex domain, which we complicate even more while attempting to simplify it. Knowledge management is managing knowledge, and when there is no simple definition of knowledge in the first place, how can we even think of simplifying the definition of Knowledge Management?!

There are many thoughful and thought provoking definition of knowledge. And there are some good specifications and types mentioned as well. Say, for eg, Explicit Knowledge and Tacit Knowledge. Now KM Gurus can write epic on each of these, but given my challenged brain (which is more challenged these days for a no. of imp and unimp reasons), I would simply refer to them as formal and informal knowledge respectively, without going into further details. Explicit or formal knowledge is something that can be articulated, transmitted and presented amongst individuals with different relevant references. On the other hand tacit or informal knowledge is basically personal and is rooted in individula beliefs, valus and perspective. They may or may not have valid references.

Before the evolution of Knowledge Management in such an organised way, as it is presently being done, the perceptions of the role of knowledge in business was that tacit knowledge was more often viewed as the real key to getting things done. Thus we often experience that conservative organizations lay more emphasis on the "learning organization" and other approaches that stress internalization of information (through experience and action) and generation of new knowledge through managed interaction. With the market place becoming more competitive than ever, reductions in staffing, time crisis, eraly retirements and increasing mobility of the work force, changes in strategic directions etc lead to loss of knowledge these days. Hence over the past decade or so, we felt an enormous ggrowth in the direction of knowledge management. Tacit knwledge solwly started getting replaced by explicit knowledge . In short, knowledge and information have become the medium in which business problems occur more. And hence the need for KNOWLEDGE MANAGEMENT.

Neoclassical Economists have also equated knowledge to a product with codified knowledge or information. Earlier, knowledge, perhaps due to its non-linear nature, has played only a minor role and has been treated as a distraction in traditional economic models. However, Austrian School Of Economics has taken a deep interest in building substantial theories towards explaining the important role of knowledge in economic life. Prof Fredrich Von Hayek observes, as early as in 1945, that for the realization of equilibrium as conceptualized in the orthodox economic theories, there must be a conicidence of the objective real facts of the economy and subjective knowledge of human subjects.

Knowledge based economy or knowledge economy mark the beginning of "new economic era". These neo economists subtly began suggesting that the missing link related to success in strategic decision making is one's hidden or tacit knowledge! Many economists gradullay began to draw a parallel between The Theory of the Firm and knowledge-based perspectives. The scholars of the knowledge based view tend to "agree" that the link between asset specificity and boundary choice has little to do with oppurtunistic behavior or failed markets. In contrast to classical economic theories, the knowledge-based view regards the specificity of assets and skills as critical to the firm;s performance.

Once economics accepted the value of knowledge in the growth of the society, how can managing knowledge be left behind the scope of performance and betterment? Kowledge was slowly gaining moreimportance than before and in 1992 some of the neo-classical economists built an arguement against the Transaction Cost View, claiming that the relative advantages of the organizations arise from the superior abilities in both creating and exploiting knowledge. In 1996, C.K.Prahalad further stressed the fact that Knowledge is "independent" from the transaction economy's opportunistic considerations. ...and the list just goes on and on.

So, the acceptance of Knowledge into the "economics" has made it an object of "management" - how "money-minded" we human beings are! :-)

Being a sutdent of economics, I could contribute this much to this "hot topic" of the season! Rest, if you are still interested about Knowledge Management - please refer to hosts of blogs and wikis on this topic...all the best!

Value Proposition in the New Economy

Before 1970, information was a scarce resource and the underlying potential of facilitating decision making with information was a distant dream to the managers. The fact that information can be captured and distributed across the organization for generation of competitive advantage was evident only during mid-seventies. Information Age lasted approximately for twenty years. Information was not a scarce commodity after that; but the movement of taking the information to knowledge level started around 90s and it still continues to be.

The knowledge economy is also a network economy treating knowledge as a commodity and suggesting that professionals need to work with ideas, information and creativity and new knowledge play the parts of raw materials. Value in this economy does not mean something that the company adds to its shareholders but something that is done in favor of the customer. The performance dimension addresses the degree to which professionals collaborate with others to realize benefits. In this economy, orgnanization combine the main factor of production, human asset in an innovative way to make a profit and the central planners decide how assets are used to provide for maximum benefit to all.

Everyone has to understand value in the new perspective of knowledge economy. Value helps customers produce gain benefit. The right value proposition eliminates price as an objection; it helps in curtailing competition. It is the responsibility of the knowledge professionals to understand and develop his value from the perspective of his customer. Customer actually takes this value to customers' customers to gain profit from open and competitive market. Any activity towards the development of professionals in any organization has to be based on this philosophy. If customers don't get value that is useful to his customers, then the value the professional is now offering to his customers is not valuable to the market in future. Without properly spelling out the value, a price war has to be fought by all.

Human Resource or Human Asset

There is an established function known as "Human Resource Management (HRM)" in every organization which manages the human resources of the organization from the perspective of growth and development. The philosophy of this function is pretty clear, making use of professionals as resources with a view to achieve organizational goals. This is quite a successful formula to develop professionals in any enterprise management framework where the enterprise bound by limitations has very little scope to offer to professionals beyond the scope of the organization. However, professionals in knowledge economy have the freedom to think beyond obvious. They can contribute to the industry in any manner they want. When there is a win-win situation, both the organization and the professional have synergic effect. However, many a times it is evident in production centric environment that organizational demand gets priority over the expectations of the professionals. In this process, professionals have to compromise and forego many of their dreams for the sake of 'organizational spirit'. Knowledge economy has put the professionals ahead of the organization. The contribution of the organization is very much dependant on what the professionals can offer. In the process, a professional uses the organization as a channel to reach the customers who are located inside an industrial framework. A typical HRM framework fails to address this space. These three separate entities, the professional, the channel and the Industry are required to be continuously monitored for the assessment of the growth of any 'human resource' aspiring to become an 'human asset' . The level of priority of each creates various combinations for a professional to develop his career path.
Any person has to create his own capability to survive in any growing business situation. When the capability is acceptable by the benefactor, a customer, the initiation process for development of a human asset starts. However, at the initial stage, he needs a channel to reach the customer in the form of an organization. His capability and organizational requirement have to match for such combination to work. The customer is an entity who gets benefited by the knowledge of the professional and the organization gradually becomes a secondary entity to the customer.

Knowledge Economy

Who am I? Why have I come to this world? What role I need to play in life? At times all of us have to answer these questions raised by our own mind. Spiritual world has answers to all these questions. But I have no intention of giving you the insights of the spiritual world. Since our childhood our parents have taught us all that we need to know as a human being. I am trying to peep into the mind of a professional when he tries to seek the answers to these questions. A professional has the ability to earn his living by trading knowledge of his domain. Knowledge has a journey path. Information technology domain has a different story to tell when it traces the evolution of knowledge from data and information. Data is an entity which has otherwise no meaning to anyone unless it is converted into information e.g. a shirt hanging in a departmental store. Information is what we hold after we make a meaning out of data e.g. price of the shirt is $30, 100% cotton. We do not take any action on this information. Knowledge evolves when we digest information and take action on that, e.g. we compare the prices and purchase the one we like the most. Knowledge is taken to one step further when the shirts of the neibouring departmental store are compared with the one we have full information of. That is called intelligence. Information technology has given us the opportunity to convert knowledge into intelligence. Let's now look at ourselves when we call us 'knowledge professionals'. What is our role in the knowledge economy when communication band-width is made available to us by information technology world?
An economy is called 'knowledge economy' when information is freely traded in order to derive knowledge out of it. Here the word 'trading' has a different connotation; it means 'digestion'. Knowledge economy has provided us the opportunity to create information out of data and digest it as knowledge. As a professional, we started our preparatory work in the schools and colleges. We aspired to become someone who would like to make use of all the information coming to us as understanding; would process the information and make a decision out of that. A few walk extra steps to move in a different direction in search of intelligent decision-making. In this process, all our dreams are transformed into reality. Whatis the dream we generally have when we step into the advance stage of academic journey? We need to create something that no one else has ever thought of. We prepare ourselves for that; we sincerely listen to the discussion in the class and try to look beyond the subject for securing the dream. Some people always do it for scoring high marks in the examination. I have no intention to introspect that state of mind. I am only talking of those who want to make a difference in their professional life and our own role in the knowledge society to give them the right opportunity.
With the knowledge that we acquire in the school and colleges, we enter in the professional world and look for opportunities to convert dream into reality. Earlier in the production economy we had to find capital and skilled labour to manufacture something as a product of our choice. In knowledge economy, the product equivalence is intellectual assets. We can claim that asset as ours; we can trade that asset sitting in our drawing rooms. Band width has given us the opportunity. We can acquire any amount of knowledge from the rest of world; search engines are the magicians who throw us anything from the empty box. Are we all aware of our potential in the modern economy? Our religion as a professional in knowledge economy is to realise our potential into productivity using the band width.
I earlier started this article with three questions. Who am I? Why have I come to this world? What role I need to play in life? We need to understand the fact of our own life intelligently. We are not mere puppets in the hand of organization which would satisfy its profit-making goal by trading us as commodities and would provide us no opportunity to trade our knowledge for the creation of intellectual assets. No amount of money can lure us. In the Maslow's theory of hierarchical needs, money loses its charm after some time. When that time comes to your life, you would feel homeless. Our home as a professional is shattered by then. The prayer room seems to have done nothing in our professional life inspite of the fact that knowledge economy has given us more power to show our potential to the industry at large. Organization has only one role to play in knowledge economy; it acts just a medium for us to relise our potential to productivity, helps us reaching our dream home, the industry. An organization is a mute spectator in the whole game of transition where I am the giver and industry is the receiver. We have to understand this hard fact of the professional world around us.

Insight and Innovation

Insight is the capacity to grasp hidden nature of a situation in an intuitive manner.
The worth of a professional is enhanced only when he develops a deep, thorough, or mature analytical ability based out of the power of acute observation. Insight allows professionals to command esteem or respect from the market place; it reveals how the information leads to a state of knowledge and intelligence. Innovation, on the hand is the act of introducing something new. Innovation is the process of making changes to something established by exploiting a new idea, method or device; the outcome is developing a new dimension of performance perceived by customer. There are differing magnitudes of innovation.
Insight emerges into consciousness with a sense of discovery. It can be a slower, more gradual process where the professional undergoes a simple but intellectual comprehension. Concepts constructed in a problem solving environment is replaced by deeper insight that leads to a transition to opportunity creation state. There is continuous interaction between insight and innovation. The result of any innovation can be an insight in the form of new or improved value. Again, for innovation to occur, sometimes insight of the problem situations is required more than the generation of a creative idea.
Innovation is the basic driving force behind maturity of service delivery. A human asset has to extend normal service delivery with a new idea that has not previously been explored. Ideas with regards to internal systems and processes are the fuel that keeps a human asset grow in the potential chain. An idea can originate from anywhere at anytime but the organisation owns the responsibility of turning the ideas of human assets into reality. Innovation is still a necessary first step for professionals to succeed in knowledge economy. Successful business organisation innovate continuously in order to create and sustain a source of competitive advantage.