Combining the COST model and the PDCA – within a knowledge management context, we obtain the matrix in Figure 5.2. This matrix helps in obtaining a deeper understanding of how knowl- edge management affects the organization as a whole and it also prompts practitioners to look at the various aspects of imple- menting knowledge management. It forces the practitioner to consider all factors, ‘soft’ as well as ‘hard’, and it also forces man- agers to link knowledge management to the organization’s overall policy and strategy. It will also allow managers to list out the important functions that support knowledge management and to prioritize them. The measures suggested are by no means com- plete, but we list them as a catalyst for mangers to think of meas- ures which suit their organization’s current environment.
Customer matrix
Customer measurements have been suggested which include
market share, number of customers and annual sales/customers (Edvinsson and Malone, 1997). These are some measures of intellectual capital that aid in managing knowledge, e.g. if the organization is interested in measuring and capturing its effec- tiveness in the customer support department. Counter-produc- tive measures are often used during the analysis, e.g. number of completed calls per hour. Though these efficiency measures do have their uses, it encourages throughput rather than satisfied customers. For example, employees are ‘incentivized’ to finish with customers as quickly as possible irrespective of whether customer problems have really been solved or not. This results in a dissatisfied customers. Short-sighted measures create envi- ronments where employees will not have the time or interest to add their own experiences, discoveries and solutions to the firm’s knowledge repositories.
By moving horizontally across the matrix, managers will be prompted to think of further measures that would indicate the success or failure of knowledge management activities.
Organization matrix
The organizational matrix involves looking at the people as core components of the organization. Professor Hirotaka Takeuchi of the Harvard Business School (speaking at the First Annual University of California Berkeley Forum on ‘Knowledge and the firm’) said, ‘The natural place for knowledge to reside is in the individual. The important question is how to convert individual knowledge to organizational knowledge. The Japanese view is to give people a process to create new knowledge’ (Cohen, 1998) The Japanese have long viewed knowledge to be an integral part of their work, and hence have been using quality circles (QCs) and job rotation as part of their knowledge programme. Measures Fig. 5.2 The matrix structure
that could be monitored in this part of the matrix include metrics such as number of workers participating in QCs, number of work- ers rotated, etc. These can be supplemented by other broader measures. For instance, metrics could be constructed to focus upon obtaining specific types of behaviours and attitudes, which facilitate an environment of trust and collaboration.
Supplier matrix
Suppliers are often mistreated in current working environments.
Supplier partnerships have only recently come to light and been acknowledged to be an integral part of the success of an organi- zation. Suppliers’ knowledge is often of vital importance to com- panies. For example, a supplier’s knowledge of raw materials can be passed on to the customer, allowing for a more informed deci- sion to be made. This is evident in the workings of Japanese manufacturing companies, such as Matsushita who often hold meetings with their suppliers to exchange views and to discuss new projects. This is part of the knowledge dialogue that forms the foundation of knowledge management.
Measures which maybe useful include:
● number of supplier meetings
● number of supplier development programmes
● number of benchmarking activities between suppliers.
Technology matrix
This matrix effectively defines the type of system a company needs to obtain in order to improve their management of knowl- edge. Capture defines the needs of the organization as in how many people will be linked into the system and in what form will the information be stored. Information captured will then have to besharedand this determines the interaction media to be used.
As for effectiveness, decisions which were made based on the knowledge transmitted using technology need to be calculated, either in the form of outcomes such as the contribution to the profit levels of the business or in more direct forms such as the number of times the knowledge base was accessed to supplement the decision-making process. Finally, the improvements which can be learnt using technology are those such as, is there an over- load of information? Is all of it relevant? How can we ‘police’ the information posted out, in terms of the accuracy of information?
Not all ‘suggested’ knowledge will prove to be useful. It is
important, therefore, to ensure that the quality of information held within the knowledge repositories is preserved. One way of addressing this is to use human editors and knowledge quality- checkers to police the knowledge capture process. High-quality knowledge repositories can only be achieved through consider- able investment in humans. That is, of course, until technology evolves to give us a ‘thinking computer’.
Hence, it is important that knowledge managers define clearly the requirements for any technology they intend to employ.