Presentasi KM dan CA

(1)

Know ledge Management,

I nnovation, and Competitive

Advantage

Syamsul Arifin

Mas Wigrantoro Roes Setiyadi

Jakarta, 29 September 2006

Strategi Mengelola Aset Pengetahuan Dalam Perusahaan Berbasis Sa

(2)

Background

•

I n the new economy (knowledge economy, CA of a firm depends on I n the new economy (knowledge economy, CA of a firm depends on their ability to

their ability to:: –

– CreateCreate –

– TransferTransfer –

– UntilizeUntilize –

– Protect Protect I t must be

I t must be difficult to immitate knowledge assetdifficult to immitate knowledge asset

•

Fuelled by a free market philosophy and new information Fuelled by a free market philosophy and new information

technology, these developments have a leveling effect with CA

•

This trend is well established and is unlikely to be reversedThis trend is well established and is unlikely to be reversed

•

Managerial challengesManagerial challenges that flow from the centrality of knowledge that flow from the centrality of knowledge and intellectual property are different from those of a bygone e

and intellectual property are different from those of a bygone era ra where physical assets were key to CA.

(3)

Creating Value With Knowledge

Assets

Firms must innovate internally in the absence of a w ell

developed know ledge marke

developed know ledge markett

•

they cannot be readily bought or sold in the commoditythey cannot be readily bought or sold in the commodity--like market like market for knowledge assets: it is difficult to articulate and codify

for knowledge assets: it is difficult to articulate and codify ‘‘tacit tacit dimension

dimension’’ (Teece, 1981)(Teece, 1981)

•

the nature of knowledge assets: the nature of knowledge assets:

–

– must be built inmust be built in--house by firmshouse by firms –

– must be exploited internallymust be exploited internally

•

this condition is because of the absence of this condition is because of the absence of

–

– market for knowmarket for know--how is far from completehow is far from complete –

– if it exists, it is far from efficientif it exists, it is far from efficient

•

(4)

Personal Knowledge Different From

Organizational Knowledge

•

personal know ledge personal know ledge

–

– readily bought and soldreadily bought and sold –

– transactions occur when an individual talent is hired or firedtransactions occur when an individual talent is hired or fired

•

organizational know ledge ( organizational competent)organizational know ledge ( organizational competent)

–

– embedded in organizational embedded in organizational

•

• processprocess

•

• proceduresprocedures

•

• routinesroutines

•

• structuresstructures

–

– such knowledge cannot be moved into organization without the trasuch knowledge cannot be moved into organization without the transfer nsfer of clusters of individuals with established pattern of working t

of clusters of individuals with established pattern of working together or ogether or strategic alliance through:

strategic alliance through:

•

• joint venturejoint venture

•

• mergermerger

•

(5)

Transferring Knowledge Assets

-

1

•

• Transfer inside the firm

Transfer inside the firm

–

Though not impeded by proprietary concerns,

transfer inside the firm is not always straight forward

–

Knowledge need to be transferred is not only

technological, but also knowledge about:

•

CompetitorsCompetitors

•

CustomersCustomers

•

SuppliersSuppliers

•

Managerial experienceManagerial experience

–

Accomplishing knowledge transfer within a firm is

essential:

•

Distributed nature of competence within firmDistributed nature of competence within firm

•

Availability of tools to assist transferAvailability of tools to assist transfer

•

(6)

Float

•

• Float: the time elapsing between

Float: the time elapsing between

knowledge discovery/ creation and

transfer/ use is extremely expensive:

–

I f a company with a three year development

and manufacturing cycle and another has a

two

-

year, the company with the shorter cycle

will have better CA

(7)

Transferring Knowledge Assets

- 2

•

• External transfer

External transfer

–

External flow is protected by I PR

–

I PR law does not protect knowledge

–

External transfer of technology is frequently

aided by licensing and technology transfer

agreement

(8)

I nformation and KM

•

I nformation transfer is not knowledge transferI nformation transfer is not knowledge transfer

•

I nformation management is not knowledge managementI nformation management is not knowledge management

•

Knowledge is not primarily about Knowledge is not primarily about factsfacts and and contentcontent; rather, it is ; rather, it is about

about contextcontext

•

Example: Bloomberg or Reuters newsfeed is information. The Example: Bloomberg or Reuters newsfeed is information. The opinions of the analysts and commentators putting the news into

opinions of the analysts and commentators putting the news into

context and enabling it to be used to create values is more pert

context and enabling it to be used to create values is more pertinent inent to knowledge.

to knowledge.

•

The combination of I T and coThe combination of I T and co--aligned organizational process can aligned organizational process can enhance learning and competitive advantage

enhance learning and competitive advantage

•

The conversion of tacit to explicit knowledge helps knowledge The conversion of tacit to explicit knowledge helps knowledge transfer and sharing, hence make firm more innovative and

transfer and sharing, hence make firm more innovative and

productive

•

Once knowledge made explicit, it is easier to store, reference, Once knowledge made explicit, it is easier to store, reference, share, share, transfer, and redeploy

transfer, and redeploy

•

(9)

KM and The Design Of Firms

•

• structural issues

structural issues

–

flexible boundaries

–

high powered incentives

–

non

-

bureaucratic decision making

–

shallow hierarchies

–

innovative and entrepreneurial culture

•

• compensation and employment issues

compensation and employment issues

–

performance based

–

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Challenges To Orthodoxy

•

Development, ownership protection and utilization of knowledge Development, ownership protection and utilization of knowledge assets, not physical assets, provide underpinning for CA

assets, not physical assets, provide underpinning for CA

•

Protection and retention of firmProtection and retention of firm’’s knowledge is key challenge for top s knowledge is key challenge for top management

management

•

TodayToday’’s competitive new environment favors firms that are able to s competitive new environment favors firms that are able to protect knowledge assets from recontracting hazards

protect knowledge assets from recontracting hazards

•

Entrepreneurial function of firms in the new economy is more criEntrepreneurial function of firms in the new economy is more critical tical than the administrative ones

than the administrative ones

•

Compensation structure should be performanceCompensation structure should be performance--based and equitybased and equity- -based payments

based payments

•

Virtual structures are frequently virtuousVirtual structures are frequently virtuous

•

Managing knowledge is not the same as human resource Managing knowledge is not the same as human resource management

management

•

Firm boundaries can no longer be defined by reference to equity Firm boundaries can no longer be defined by reference to equity stake

(11)

Knowledge Caracteristics

•

• Knowledge is sticky

Knowledge is sticky

•

• Extraordinary leverage and increasing returns

Extraordinary leverage and increasing returns

•

• Fragmentation, leakage and the need for

Fragmentation, leakage and the need for

refreshment

•

• Knowledge is constantly changing

Knowledge is constantly changing

•

• Uncertain value

Uncertain value

•

• Most new knowledge is context specific

Most new knowledge is context specific

•

(12)

Key Elements in Knowledge

Management

People

Technology Process

Cultural context Strategy

(13)

The Knowledge

-

_-

Learning Spiral

_{Learning Spiral}

Learning

Knowledge Knowledge

Knowledge

Learning = P + Q

P = programmed learning that come from books, lectures or secondary sources

(14)

Stages in KM Evolution

Reactor

Adaptive

Organic

Mechanist

2.6 3.7 6.3 Time (years)

Perform

a

nce

(15)

KM Strategies

-

_-

Reactive

_Reactive

•

• Ad

Ad

-

hoc programme

•

• Piecemeal

Piecemeal

implementation

•

• Narrow

Narrow

departmental/ group focus

•

• Lacking senior

Lacking senior

management support

•

• Driven by small group of

Driven by small group of

middle management

•

• Poorly understood

Poorly understood

benefits by individual

employees

•

• Poor communications and

Poor communications and

awareness

•

• Group/ department scale

Group/ department scale

involvement

• Rigid functional structures

Rigid functional structures

•

• Benefits purely

Benefits purely

understood in technical

gains (efficiency)

•

• Little alignment with

Little alignment with

long

(16)

KM Strategies

-

_-

Mechanistic

_Mechanistic

•

• Systematic programme

Systematic programme

(explicit)

•

• Organization

Organization

-

wide

implementation

•

• Mandated by senior

Mandated by senior

management

•

• Driven by middle

Driven by middle

management

•

• Organization

Organization

-

wide

awareness

•

• Organization

Organization

-

wide

involvement

•

• Good awareness of

Good awareness of

potential gains for the

individual

•

• I T

I T

-

driven (but process

and systems led)

•

• Managed structures and

Managed structures and

processes

•

• Benefits broadly

Benefits broadly

understood (efficiency

and effectiveness)

(17)

KM Strategies

-

_-

Organic

_Organic

•

• Systematic programme

Systematic programme

(explicit)

•

• Organization

Organization

-

wide

implementation

•

• Mandated by senior

Mandated by senior

management

•

• Driven by middle

Driven by middle

management

•

• Organization

Organization

-

wide

awareness

•

• Organization

Organization

-

wide

involvement

•

• Good awareness of potential

Good awareness of potential

gains for the individual

•

• People

People

-

driven (but backed

by I T) processes and

systems

•

• Benefits broadly understood

Benefits broadly understood

(efficiency and

effectiveness)

•

• Open and evolving

Open and evolving

structures/ processes

•

(18)

Factors I mpacting KM

Demand Logic (network effects)

Appropriability regimes Cost logic

I mportance of knowledge assets to competitive advantage

Technological Opportunities/ uncertainties National

systems of innovation

Contracting environment

Levels of economic development

(19)

Organisational Flexibility

•

• Organisations must develop greater

Organisations must develop greater

organisational flexibility and must retain a

high level of system knowledge, even

when they procure (or supply)

components in intermediate markets (

Brusoni Brusoni

and Prencipe, 2001

(20)

Building Knowledge by Using

Organizational Process

I nternal state of knowledge External state

of knowledge

Assembling

Consider the difference:

- static state of knowledge, and - the process that shape knowledge

Control processes

Searching

Appropriating

(21)

Statis State of Knowledge

Characterized by:

•

• Tacitness,

Tacitness,

•

• Observability,

Observability,

•

• Rivalry in use,

Rivalry in use,

•

• Degree of which knowledge is autonomous or

Degree of which knowledge is autonomous or

systemic, and

•

• Extent of appropriability

Extent of appropriability

(Nonaka, 1994)(Nonaka, 1994)

They provide singular and temporally bounded

representation of a firm

(22)

Process That Shape Knowledge

•

• Sequence of states of knowledge that a

Sequence of states of knowledge that a

firm follows over time;

•

• Technology trajectory

Technology trajectory

•

• Each path arises from the influence of a

Each path arises from the influence of a

particular combination of control variables

–

organizational processes that influence

and change the state of knowledge of the

firm.

(23)

Punctuated Equilbrium and

Organizational Evolution

Innovation (variation)

Differentiation (selection)

Cost

(retention) Formal

organisation Culture Strategy

Critical tasks

People

Source: Burgleman et all, 2001

(24)

Two I nvisible Forces: Technology

Cycles and Evolution

Product innovation

Process

innovation Product_innovation Process_innovation

Dominant design #2 Substitution

event Time Dominant

design #1

Rate of Innovation

(25)

The I nternational Product Life Cycle

(Old Paradigm)

Stage One INNOVATION Innovative firms create new products and

processes in their country of origin; an advanced industrialised country

Stage Two

FOREIGN PRODUCTION Second-tier country

subsidiaries receive

products/ processes from innovators and produce for local market

Stage Three TRANSFER Developing country

subsidiaries receive products/ processes from innovators for local market and global

markets at low cost Innovative

(26)

Kemampuan R&D

Country type

Country type Expenditure on Expenditure on R&D per cent of

R&D per cent of

GDP

Scientists and

Engineers in

R&D (per

million people)

High

High--technology technology export $ million

export $ million

Patent

applications

“

“ResidentResident””

Low

Low--Income Income countries

countries

0.57

0.57 257257 24,47524,475 23,77223,772

Upper

Upper--middle middle income

income

1.08

1.08 607607 92,11492,114 99,11199,111

United States

United States 2.632.63 3,6763,676 170,681170,681 125,808125,808 Europe

Europe 2.162.16 2,1622,162 225,832225,832 101,097101,097 Japan

Japan 2.802.80 4,9094,909 94,77794,777 351,487351,487 World

World 2.182.18 NANA 820,617820,617 798,003798,003

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Evolution of Global R&D Activities

Central R&D

Lab

Research Lab

Central R&D

Lab

Centre of excellences

Development lab

Local adaptaion Local

adaptaion

Type of Research Centers:

(28)

Performance Evaluation Criteria

Performance

Performance MeasurementMeasurement Scientific innovation

Scientific innovation Number of patentsNumber of patents

Number of publications in research journals Number of publications in research journals Commercialisation

Commercialisation Time to marketTime to market Profitability

Profitability Research unit as profit centerResearch unit as profit center Cost

Cost Budgeting targetsBudgeting targets Collaboration

Collaboration Organisation of conferences and internal seminarOrganisation of conferences and internal seminar Internal presentation papers

Internal presentation papers

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Characteristics of Legal Forms of

Protection in the USA

Considerations

Considerations CopyrightCopyright Trade secretTrade secret PatentPatent TrademarkTrademark Mask works*Mask works*

National uniformity

National uniformity YesYes NoNo YesYes YesYes YesYes

Protected property

Protected property Expression of ideaExpression of idea Secret informationSecret information InventionInvention GoodwillGoodwill SemiconductorSemiconductor Scope of protection

Scope of protection Exclusive right to Exclusive right to reproduce, prepare reproduce, prepare derivative works, derivative works, publicly distribute, publicly distribute, display and perform display and perform

Right to make, use Right to make, use and sell secret and and sell secret and protect against protect against improper use or improper use or disclosure disclosure

Right to exclude Right to exclude others from making, others from making, using, selling using, selling

Proscribes against Proscribes against misrepresentation of misrepresentation of source

source

Effective date of Effective date of protection protection

Creation of work

Creation of work From date of From date of conception or receipt conception or receipt of secret information of secret information

Patent application Patent application date

date

Use and/or filing date Use and/or filing date of US application of US application issuing as principal issuing as principal registration on or registration on or after 16/11/89 after 16/11/89

First commercial First commercial exploitation exploitation

Cost of obtaining Cost of obtaining protection protection

Low

Low LowLow ModerateModerate LowLow LowLow

Term of protection

Term of protection Life of author plus Life of author plus 50 years or 70 years 50 years or 70 years

Possibility of Possibility of perpetual protection; perpetual protection; or termination at any or termination at any time by improper time by improper disclosure or disclosure or individual individual development by development by others

others

20 years

20 years Perpetual if used Perpetual if used correctly and correctly and diligently policed diligently policed

10 years 10 years

Cost of maintaining Cost of maintaining protection

protection

Nil

Nil ModerateModerate ModerateModerate ModerateModerate NilNil

Cost of enforcing Cost of enforcing rights against violators rights against violators

Moderate

(30)

Technology

-

organization alignment

matrix

Proper alignment

Value realized only within technology layer

No inefficient interactions

Misalignment

Can’t manage interactions Insuficient infrastructure

Proper alignment

Value realized in the system Effective coordination of undefined interactions Misalignment

Unnecessary internal coordination

Reduced scale economies

Modular Integral

Decentralized organization

(31)

Technology Phase Shift

Integral

Modular Nature of technology

Time

X X X X X X X X

(32)

Two Views Of I nnovation And

Technology Phase Shifts

T-a: Phase shift (Integral – Modular)

Integrality trap

I: Simply integral

T-b: Phase shift (Modular – Integral)

Modularity trap M: Standby modular

Integral

(33)

I nputs to I nnovation

Culture

Infrastructure Resources

Process Innovation

Sumber: Gaynor, 2002

(34)

In

Changes core design concept to new architecture

Obsolete technologies, processes, and people Dominated by societal and government regulations

Develop into major new

business or spawns an industry Brings the user a new

value proposition

Moment in history that set the stage for the future

Service Process Product _Component _Materi

al

S

ystems

Disruptive

(35)

Stages of The System Approach to

The I nnovation Process

Idea-Concept-The innovation stage – managing the unknown, the uncontrollable, and the unpredictable

Validating design parameters and preparing project plans – requesting funds many time

Innovative ends – follow project management principles – business plans

A systems approach – depends on