Knowledge management strategies
Two approaches to knowledge management strategy have been identified by Hansen et al (1999): the codification strategy and the personalization strategy.
The codification strategy
Knowledge is carefully codified and stored in databases where it can be accessed and used easily by anyone in the organization. Knowledge is explicit and is codified using a ‘people-to-document’ approach. The strategy is therefore document-driven. Knowledge is extracted from the person who developed it, made independent of that person and reused for various purposes. It is stored in an electronic repository for people to use, and allows people to search for and retrieve codified knowledge without having to contact the person who originally developed it. This strategy relies largely on information technology to manage databases and also on the use of the intranet.
The personalization strategy
Knowledge is closely tied to the person who has developed it and is shared mainly through direct person-to-person contacts. This ‘person-to-person’ approach means providing for tacit knowledge to be passed on. The exchange is achieved by creating networks and encouraging face-to-face communication between people by informal conferences, workshops, communities of practice, brainstorming and one-to-one sessions.
Hansen et al (1999) proposed that the choice of strategy should be contingent on the organization: what it does and how it does it. Thus consultancies such as Ernst & Young, using knowledge to deal with recurring problems, may rely on codification so that recorded solutions to similar problems are easily retrievable. Strategy consultancy firms such as McKinsey or Bains, however, rely on a personalization strategy to help them to tackle the high-level strategic problems they are presented with that demand the provision of creative, analytically rigorous advice. They need to channel individual expertise and they find and develop people who are able to use a person-to-person knowledge-sharing approach. Experts can be identified who can be approached by e-mail, telephone or personal contact.
The research conducted by Hansen et al (1999) established that companies that use knowledge well adopt either the codification or the personalization strategy predominantly and use the other strategy to support their first choice. They pointed out that those who try to excel at both strategies risk failing at both.
The codification strategy
The strategies referred to above do not provide easy answers. The issues that need to be addressed in developing knowledge management practices are discussed below.
The pace of change
One of the main issues in knowledge management is how to keep up with the pace of change and identify what knowledge needs to be captured and shared.
Relating knowledge management strategy to business strategy
As Hansen et al (1999) showed, it is not knowledge per se but the way it is applied to strategic objectives that is the critical ingredient in competitiveness. They suggested that ‘competitive strategy must drive knowledge management strategy’ and that management have to answer the question: ‘How does knowledge that resides in the company add value for customers?’ (ibid: 114).
Technology and people
Technology may be central to companies adopting a codification strategy, but for those following a personalization strategy IT is best used in a supportive role. Hansen et al (1999: 113) commented that:
In the codification model, managers need to implement a system that is much like a traditional library – it must contain a large cache of documents and include search engines that allow people to find and use the documents they need. In the personalization model, it’s more important to have a system that allows people to find other people.
Scarborough et al (1999) suggested that technology should be viewed as a means of communication rather than as a means of storing knowledge. Knowledge management is more about people than technology. Research by Davenport (1996) established that managers get two-thirds of their information from face-to-face or telephone conversations.
There is a limit to how much tacit knowledge can be codified. In organizations relying more on tacit than explicit knowledge, a person-to-person approach works best, and IT can only support this process; it cannot replace it.
The significance of process
Blackler (1995) emphasized that a preoccupation with technology may mean that too little attention is paid to the processes (social, technological and organizational) through which knowledge combines and interacts in different ways. The key processes are the interactions between people. This is the social capital of an organization – ‘the network of relationships [that] constitute a valuable resource for the conduct of social affairs’ (Nahpiet and Ghoshal, 1998: 243). Social networks can be particularly important in ensuring that knowledge is shared. Trust is also required – people are not willing to share knowledge with those they do not trust.
The culture of the company may inhibit knowledge sharing. The norm may be for people to keep knowledge to themselves as much as they can because ‘knowledge is power’. An open culture will encourage people to share their ideas and knowledge.
Knowledge workers, as defined by Drucker (1993), are individuals who have high levels of education and specialist skills combined with the ability to apply these skills to identify and solve problems. As Argyris (1991: 100) commented, they are: ‘The nuts and bolts of management… increasingly consist of guiding and integrating the autonomous but interconnected work of highly skilled people.’ Knowledge management is about the management and motivation of knowledge workers who create knowledge and will be the key players in sharing it.
The contribution of HR to knowledge management
HR can make an important contribution to knowledge management simply because knowledge is shared between people; it is not just a matter of capturing explicit knowledge through the use of IT. The role of HR is to see that the organization has the intellectual capital it needs. The resource-based view of the firm emphasizes, in the words of Cappelli and Crocker-Hefter (1996: 7), that ‘distinctive human resource practices help to create unique competences that differentiate products and services and, in turn, drive competitiveness’.
HR can contribute by providing advice on culture management, organization design and development, and by establishing learning and communication programmes and systems. There are 10 ways of doing this:
- Help to develop an open culture in which the values and norms emphasize the importance of sharing knowledge.
- Promote a climate of commitment and trust.
- Advise on the design and development of organizations that facilitate knowledge sharing through networks, teamwork and communities of practice.
- Advise on resourcing policies and provide resourcing services that ensure that valued employees who can contribute to knowledge creation and sharing are attracted and retained.
- Advise on methods of motivating people to share knowledge and rewarding those who do so.
- Help in the development of performance management processes that focus on the development and sharing of knowledge.
- Develop processes of organizational and individual learning that will generate and assist in disseminating knowledge.
- Set up and organize workshops, conferences, seminars, communities of practice and symposia that enable knowledge to be shared on a person-to-person basis.
- In conjunction with IT, develop systems for capturing and, as far as possible, codifying explicit and tacit knowledge.
- Generally, promote the cause of knowledge management with senior managers to encourage them to exert leadership and support knowledge management initiatives.