Knowledge Management

An important topic under organizational communication is knowledge management (KM). This is a process of organizing and distributing an organization’s collective wisdom so the right information gets to the right persons at the right time. When done properly, KM provides an organization with both a competitive edge and improved organizational performance because it makes its employees smarter.

Siemens, the global telecommunications giant, recently won a $460,000 contract in Switzerland to build a telecommunications network for two hospitals in spite of the fact that its bid was 30% higher than the competition. The secret to Siemens success was its knowledge-management system. This system allowed Siemens people in the Netherlands to draw on their experience and provide the Swiss sales reps with technical data that proved that the Siemens’ network would be substantially more reliable than the competition’s.

Siemens is one of a growing number of companies including Cisco Systems, Ford, British Telecom, Johnson & Johnson, IBM, Whirlpool, Intel, that have realized the value of knowledge management. In fact, a recent survey found that 81%of the leading organization in Europe and the Unites States say they have, or are at least considering adopting some kind of KM system.

KM is increasingly important today for at least three reasons. First, in many organizations, intellectual assets are now as important as physical or financial assets. Organizations that can quickly and efficiently tap into their employees’ collective experience and wisdom are more likely to “outsmart” their competition.

Second, as baby boomers begin to leave the workforce there’s an increasing awareness that they represent a wealth of knowledge that will be lost if there are no attempts to capture it.

And third, well-designed KM system will reduce redundancy and make the organization more efficient. For instance, when employees in a larger organization undertake a new project, they needn’t start from scratch. A knowledge-management system can allow them to access what previous employees have learned and cut wasteful time retracing a path that has already been traveled.

How does an organization record the knowledge and expertise of its employees and make that information easily accessible? It needs to develop a computer database of pertinent information that employee can readily access; it needs to create a culture that supports and rewards sharing; and it has to develop mechanism that allow employees who have built up valuable expertise and insights to share them with others.

KM begins by identifying what knowledge matters to the organization. Management needs to review processes to identify those that provide the most value. Then it can develop computer networks and databases that can make that information readily available to the people who need it most. But KM won’t work unless the culture supports sharing of information.

Royal Bank of Canada, for instance, has created a KM system with customized e-mail distribution lists carefully broken down by employees’ specialty, title, and area of interest; set aside a dedicated site on the company’s intranet that serves as a central information repository; and created a separate in-house Web site featuring “lessons learned” summaries, where employees with various expertise can share new information with others.

In order to increase the effectiveness of KM, which was adopted 5 or 6 years ago, the performance evaluation of employees was linked to knowledge management. The senior executives of the company started using balance scorecards to monitor the performance of employees. TISCO also has a formal rewards and recognition system for knowledge managements. In 2003 TISCO was chosen as one of Asia’s most admired knowledge enterprises.

To summarize people who hold that power are often reluctant to share it with others. So KM requires an organizational culture that promotes, values, and rewards sharing knowledge. Finally, KM must provide the mechanisms and the motivation for employees to share knowledge that employees find useful on the job and enables them to achieve better performance. More knowledge isn’t necessarily better knowledge. Information overload needs to be avoided by designing the system to capture only pertinent information and then organizing it so it can be quickly accessed by the people whom it can help.