5 Strategy
Scenario 1. If an organization so far has applied an exclusive market-oriented strategy, then external determinants such as customers’ demands, the organiza-
5.2 Goals and strategies
5.2.1 Strategic goals
There are many goals that companies can direct their KM efforts to. Generally, in the literature there are three different approaches to determine goals of KM initia- tives all of which are based on empirical studies:
Business justification for knowledge management. These abstract KM goals are usually high-level, knowledge-related challenges that should be addressed with the help of KM. Examples are (Earl/Scott 1999, 31193):
x correct the inattention to the explicit or formal management of knowledge in ongoing operations,
x leverage the hidden value of corporate knowledge in business development, x correct the inability to learn from past failures and successes in strategic deci-
sion making,
x create value from knowledge embedded in products or held by employees (sell knowledge).
193. Earl and Scott found the first four of these goals in a survey of 20 chief knowledge officers (CKO) in the US (Earl/Scott 1999, 31). The CKOs were appointed to correct one or more of the perceived knowledge-related problems. Apart from these four goals the CKOs primary tasks were: to develop a corporate “knowledge management pro- gram” and to “sell” the idea of knowledge management throughout the organization to gain acceptance and commitment for the program and to reduce resistance. The last KM goal has been identified by many authors (e.g., Davenport et al. 1998, 44ff performed an empirical investigation of 31 KM projects).
x manage knowledge as an asset the aim of which is to treat knowledge like any other asset on the balance sheet.
However, supposedly most of the organizations will address all of these issues at the same time. Thus, these justifications are not suited to characterize organiza- tions’ KM initiatives.
Strategic knowledge management activities. Many authors simply present a list of strategic KM activities which an organization can invest in. These activities can be used as instruments to achieve KM goals, or to implement KM strategies194. Detailed knowledge management goals. These goals address certain aspects of an organization’s way of handling knowledge and are detailed enough to provide a means to distinguish different KM initiatives from each other.
Consequently, this last alternative was selected as the basis for the description of the question “What are the main aims of KM initiatives?” in the empirical study (part C). The list of goals is based on:
x case studies documented in the literature195,
x empirical data found in studies on (aspects of) knowledge management196, x knowledge management life cycle models which were used in order to determine
completeness of the list of goals197, as well as
x expert interviews with CKOs and KM project managers conducted by the author.
Most of the studies and also the interviewees mixed KM goals and instruments to achieve KM goals. For example many authors list “create knowledge repository”
as a KM goal, though repositories are instruments to e.g., the goals improve the documentation of existing knowledge and improve access to knowledge sources.
Additionally, the authors list high-level goals such as “manage knowledge as an asset” which has to be detailed, e.g., by the goals improve management of innova- tions and sell knowledge. The following consolidated list of goals gives a good overview of what goals KM initiatives could aim at and will be used in the empiri- cal study:
Identify existing knowledge. The aim is to make existing knowledge transparent, to give an overview of the knowledge existing in the organization. This goal is the basis of or at least supports many other goals and thus can be seen as a prerequisite,
194. See section 5.2.2.5 - “Strategic knowledge management activities” on page 125.
195. See e.g., Davenport et al. 1998, who derive a list of objectives of knowledge manage- ment projects.
196. See e.g., APQC 1996, ILOI 1997, Bullinger et al. 1997, Ruggles 1998, 85f, Earl/Scott 1999, 31.
197. See sections 4.1.4 - “Definition” on page 52 and 6.3.1 - “Knowledge management tasks” on page 207.
a “conditio sine qua non” of systematic knowledge management. Thus, it is likely that most, if not all organizations will pursue this goal.
Improve documentation of existing knowledge. Knowledge is captured as an entity separate from people who create and use it. Knowledge is supposed to be embedded in (enhanced) documents and/or forms of discussion data bases. The goal includes the improvement of the quality of the contents (of knowledge ele- ments) and the structure of knowledge (ontologies, e.g., Staab et al. 2001). Easier maintenance, refinement and repackaging are also part of this goal.
Change (parts of) the organizational culture. The aim is to establish an environ- ment conducive to more effective knowledge creation, transfer, and use. Aware- ness is built and organizational norms and values are changed to improve people’s willingness to share knowledge and their willingness to reuse existing knowledge (or their willingness to accept help).
Improve communication and cooperation. This goal is about facilitating knowl- edge transfer between individuals. Communication is supported both, within and between formal work groups, teams or projects with an emphasis on peer-to-peer, bilateral communication as opposed to the distribution of knowledge in the sense of a broadcast to every employee interested198.
Externalization (explication). Externalization means to turn implicit, “subjective”
knowledge into explicit, “objective” knowledge. This goal thus addresses a trans- formation of the existing knowledge to make it more visible. According to many authors, there is a general trend towards the handling of more explicit knowledge in organizations (“scientification of organizations”, e.g., Wingens 1998).
Improve training, education and networking of newly recruited employees.
The integration of newly hired employees into the organizations’ work processes as well as their socialization to the organizations’ norms and values should be acceler- ated. It targets job starters, such as trainees, apprentices, graduates, as well as newly hired experienced employees, experts or, especially recently, formerly self- employed founders of start-up companies that now turn to established organiza- tions.
Improve training and education of all employees. This goal comprises the clas- sic function of personnel development as part of the HRM. Approaches of knowl- edge management can extend the traditional instruments, e.g., by supporting men- toring, learning from “peer groups”, tele-teaching, communities, best practice groups.
Improve retention of knowledge. Some organizations see one of the biggest threats to their competitiveness in retaining knowledge from experts that are facing
198. See “Improve distribution of knowledge.” on page 117.
retirement or otherwise leaving the organization. The goal is to capture knowledge before it leaves the organization, e.g., through reserving time for employees facing retirement to externalize knowledge and to socialize with their successors or peers, or through retaining alliances with employees after they have left, e.g., through consulting.
Improve access to existing sources of knowledge. The aim is to provide access to documented knowledge and/or to connect knowledge seekers and knowledge pro- viders. The yellow pages or expert directories serve as the metaphor to improve accessibility of experts that can be used to share tacit knowledge.
Improve acquisition or purchasing of external knowledge. In this case, knowl- edge external to the organization is targeted. Organization-external knowledge is provided e.g., by research institutions, professional services companies or knowl- edge brokers or on-line data bases, but also by business partners, customers and suppliers, alliances as well as competitors.
Improve distribution of knowledge. This goal aims at a better support for the transfer or broadcasting of knowledge to interested (known and also unknown) other members of the organization (knowledge push).
Improve management of innovations. This goal targets primarily a better man- agement of the results achieved by the organizations’ departments for research and development, e.g., more innovations leveraged faster, more patents, but also the avoidance of unwanted multiple developments of the same concept.
Reduce costs. Some KM concepts, especially the use of technology, also provide opportunities for cost reductions, e.g., by reduced organizational redundancy due to double developments, by reduced time of standstills in production plants, by reduced costs for the acquisition of knowledge or the use of commercial knowl- edge sources, by reduced use of paper due to electronic storage and transfer of doc- uments or by reduced travel expenses due to tele-consulting.
Sell knowledge. Organizations that hold patents might want to improve earnings from licensing, or otherwise sell their knowledge, e.g., by consulting or by charg- ing for the access to organization-internal KMS.
In addition to these goals specific to KM, organizations investing in a KM initia- tive expect a positive influence on the achievement of business goals. However, at this point the link between these KM goals and the business goals as cited in the lit- erature (e.g., ILOI 1997, 15199) or stated by the interviewees is rather weakly
199. The business goals as stated by the respondents of the ILOI study were partly taken over, e.g., improve productivity, and partly broken down in order to give a more detailed picture of the suggested contributions of KM to business goals, as in the case of the business goals improve an organization’s position in a market, secure competitive- ness and make more systematic and efficient use of resources and synergies.
defined. There is a m:n-relationship between these two concepts with many KM goals contributing to a number of business goals. The list of KM goals is related to business goals according to their primary contributions to the goals. For example, the goal change (parts of) the organizational culture is an underlying goal which in turn should lead to improvements with respect to all of the following business goals:
x reduce (non-labor) costs: reduce costs, improve communication and coopera- tion, improve acquisition or purchasing of external knowledge, improve distri- bution of knowledge,
x improve productivity: improve education, training and networking of newly recruited employees, improve training and education, improve communication and cooperation, improve distribution of knowledge,
x improve the speed of innovation: improve management of innovations,
x develop new business fields or topics: improve management of innovations, sell knowledge,
x reduce business risks: improve the ability to react to environmental changes, especially the ones stemming from fluctuation, improve retention of knowledge, improve training, education and networking of newly recruited employees, iden- tify existing knowledge, externalization, improve documentation of existing knowledge, improve access to existing sources of knowledge,
x improve employee satisfaction and motivation: change (parts of) the organiza- tional culture,
x improve growth of the organization: improve management of innovations, x improve product quality: improve documentation of existing knowledge, x improve customer satisfaction and/or service quality: improve communication
and cooperation, identify existing knowledge, improve distribution of knowl- edge,
x improve scheduling, reduce throughput/running time, improve meeting of dead- lines: improve communication and cooperation, improve distribution of knowl- edge.
Organizations differ not only with respect to what goals they aim at with their KM initiatives. There are also differences in the level of management of the KM goals. Many organizations experience difficulties in answering the questions how to turn strategic KM goals into operational KM goals and also how to assess the level of achievement of KM goals (e.g., Probst/Deussen 1997, 8f, Probst et al.
1998, 63ff and 317ff). The following aspects have to be considered concerning the level of management of strategic KM goals200:
200. The economics of the application of knowledge management systems, the analysis of costs and the estimation of benefits, will be discussed in section 8 - “Economics” on page 395.
x the process of goal setting: Who sets the goals? Are the goals well documented and precisely defined?
x the process of goal evaluation: Who evaluates the goals? What level of mea- surement is applied?
In the literature, a large number of approaches and instruments to the assessment of knowledge in general and the achievement of KM goals in particular exist. How- ever, most of these approaches lack practicability. As a consequence, as the expert interviews conducted before the empirical study showed, it is likely that only a small portion of the organizations have clearly defined and documented KM goals and established procedures to their measurement201. Thus, the following three lev- els of documentation of KM goals are distinguished:
General statements/declaration of intent. Many organizations simply take over some general, abstract goals from the literature. These goals are e.g., part of a pre- sentation to senior management showing the general advantages of a KM initiative.
Examples are: “We want to become a learning organization”, “We want to improve the learning from our failures”, “We want to hire only the best employees”, “We want to install an Intranet to support knowledge sharing”.
Well documented and described. This level of documentation details the general statements about KM goals. The goals are selected according to the organization’s needs, documented and accessible by all participating employees. The goals are also described well so that their achievement can be assessed at least subjectively.
Precisely defined. This is the most detailed definition of KM goals. For every goal, there are a number of variables which can be measured quantitatively or semi-quantitatively. For each goal, there is a goal object (the domain), characteris- tics of goals (the variables to measure the goal achievement), a goal dimension (rules for the measurement and evaluation), planned values of goal achievement, a relation to time (when should the goal be achieved) and an evaluating person or an evaluation team (e.g., Hauschildt 1993, 205ff and 315ff).
Additionally, the process of evaluation will be studied by a distinction between the following three classes (Hauschildt 1993, 317ff):
Subjective assessment. This qualitative approach involves the valuations of indi- viduals which can be participants, the project manager or individuals not involved in the process, individuals with a technical or a business background etc. Regu- larly, in case of subjective assessment, it is the senior management, the project manager or a sample of participants who assess the KM initiative.
201. See the overview of the related empirical studies as described in chapter 10 - “Related Empirical Studies” on page 439.
Audit/evaluation team. In this case, a group of individuals assesses the KM initia- tive on the basis of a structured evaluation process. Audits usually use so-called semi-quantitative techniques which convert the judgements of a selected group of people into some measures using statistical methods, such as factor analysis or cluster analysis. Thus, the result is a small set of interesting factors which are in turn subjectively assessed by a number of individuals using a number of variables.
Measuring. Quantitative techniques are based on precisely defined variables which can be repeatedly measured rendering consistent results.
Most of the organizations probably use a combination of these measures, e.g., quantitative measures such as the number of accesses to a KMS and a semi-quanti- tative audit202.