The learning organisation: Getting business value from knowledge

Alok Khandelwal

“An organization...learns faster and better than competitors through benchmarking...through sharing and implementing best practices...by learning from experience, and through continuous learning and personal growth.” Chevron CEO Ken Derr—CIO Magazine, September 1999.


These words bring out the importance of knowledge capital that every organisation accumulates — acquired through experience gained by employees over the years and by simply being in existence.

Every piece of work, every assignment — internal or external is a learning opportunity. In addition, knowledge is also gained through actively seeking it from external sources. Knowledge acquired through such experience is invaluable and the key challenge any organisation faces is to ensure this is retained and more importantly — it is shared and leveraged in the future — so that similar tasks can be completed in a shorter timeframe and more effectively. Rather than being dependent on individuals for specific information, an organisation must move towards establishing systems and procedures that allow knowledge to be captured, shared and acquired and used by any user.

There are many approaches for managing internal knowledge capital — ranging from simple age old “libraries” to more contemporary and sophisticated “Knowledge Management Systems”. Before elaborating upon an approach for managing knowledge, it is important to define Knowledge Management (KM). So what really is Knowledge Management?

A simple definition is: “Knowledge Management is the engine that transforms ideas into business value. It is a systematic process for creating, acquiring, synthesising, learning, sharing and using information, insights and experiences to achieve organisational goals”.

Knowledge thus gathered can be used to learn, perform, innovate and establish a collaborative work environment.

A Knowledge Management System combines processes, tools and people aspects in an organisation to enable achievement of these objectives. Establishing a Knowledge Management System (KMS) is typically a three-stage process.

Every organisation needs to first define its KM strategy — a one-size-fits-all approach does not work for KM. Two primary reasons for this are: a) different businesses processes operate under different strategic imperatives and b) individuals in different business processes face unique challenges to using and leveraging knowledge.
Accenture has defined a simple framework for categorisation of business processes based on complexity of work and level of interdependence among workers. Knowledge strategies will emerge based on the categorisation of the business process in this framework.

In a Transaction Model, KM strategies are closely related to production/delivery strategies. This model suggests embedding knowledge in the system, product or activity, rather than in the worker. For example, a manufacturing assembly line or a telemarketing operation — in these cases repetitive tasks are normally automated or made simpler to perform by providing easy access to repeatedly required information. As opposed to this, in the Collaboration Model, KM strategies foster creativity, build relationships and encourage experimentation. Typical business processes include Research and Development, Business Strategy Development and New Product Design etc.— where success is often dependent on creativity and innovation. The KM strategy would, therefore, support activities such as lab experimentation, business incubation, market testing, prototyping etc.

In an Expert Model, the performer is core to the business — KM strategies centre on accessing and leveraging personal, tacit knowledge. Organisations pursuing an Expert Model must “make or buy” individual expertise. Sustaining and retaining key performers (skilled workers or experts) is therefore the critical issue. Typical businesses that fall in this model would be Fund Management, Claims Processing and Risk Management etc.

As opposed to this, in an Integration Model, the performer is less central to the process — KM strategies centre on capturing and leveraging formal explicit knowledge. Knowledge is embedded in the process or methodologies which individuals then learn. Examples include most supply chain work, customer call centres and large-scale systems development.

Once a KM strategy is defined based on a review of the business model, the next step is to implement a set of processes, tools and people mechanisms that together form a KMS. This step is often mistakenly understood as a systems (technology) implementation. In reality, the real challenge in implementing knowledge systems is in the area of tailoring processes and managing culture/organisation change. The technology, albeit important, can be hosted in many different ways by many different tools. (Most of Accenture’s successful engagements have used base packages such as Lotus Notes or Microsoft as the primary method; however, some web-based tools are also emerging).

Implementing a KMS, therefore, means establishing a number of components such as: n Applications — such as best practices, customer management, topic based discussions forums;

* Roles — for people who will manage the KMS — community members, experts, content managers and others;

* Processes — for contribution, access, feedback, validation of information and community management;

* Content — knowledge maps, databases, directory structures, external information, home pages;

* Tools/Services — for searching, knowledge mining, profiling, workflow, security etc.;

* Knowledge Architecture — the technology solution that will support the KMS (Lotus Notes, Microsoft tools, web-based tools, document management tools);

* Infrastructure — such as hardware, communication, WAN, LAN etc.
Finally, one needs to drive usage of the KMS. For this, it is important to define metrics that KMS will enable. This could be done through establishing formal Communities of Practice (COPs) that have measurable goals and a distinct set of participants. Typically, each employee is a member of at least one COP.

The COP serves as a “virtual club” or support group where employees around the organisation are united through common job descriptions, line organisations, skills, or interests. The COP quantitatively and qualitatively measures Searching, Sharing, Capturing, and Creation of knowledge. Measurements are captured on a periodic basis and compared to overall process improvements. Often, Knowledge Sharing is also linked to incentives, rewards, recognition and performance.

As we move from an industrial economy to a knowledge economy, a number of organisations are realising the importance of having formal systems for managing their knowledge capital. In parallel, the challenge is to retain best people and to drive business value from knowledge. At Accenture we strongly encourage our clients to understand Knowledge Management, the business benefits it can provide for them and the mechanisms to implement it.

(The writer is a Senior Manager at Accenture and has wide experience in the field of information technology—planning, designing and implementing large-scale systems for reengineering business operations. He can be contacted at alok.khandelwal@
accenture.com.)