Managing Knowledge @ Work An Overview of Knowledge Management Knowledge Management Working Group of the Federal Chief Information Officers Council August 2001II Acknowledgments This document is the result of the commitment of the U.S. General Services Administration to the Federal Knowledge Management Working Group of the Federal Chief Information Officers Council. Although many books and articles have been written about knowledge management, relatively few people truly understand its concepts and potential. This lack of understanding has limited its acceptance and implementation. This document summarizes and condenses the work of experts with the aim to make the concepts of knowledge management more accessible to a wider audience. It will be a success if non-practitioners come away with a solid conceptual understanding of KM. Patrick T. Plunkett of the General Services Administration and Chairman of the Special Interest Group for KM Strategies and Best Practices authored this document. The following members of the KM Strategies and Best Practices Special Interest Group identified the need for this document and provided initial input: Theda Bagdy, Department of Energy Beverly Compton, Indian Health Service Carolyn K. Offutt, Environmental Protection Agency Lisa Markowski, Social Security Administration Bao T. Nguyen, U.S. Air Force Ron Raborg, Social Security Administration Elsa Rhoads, Pension Benefit Guaranty Corporation The following people provided valuable feedback and input: John Andre, General Services Administration Mike Burke, Federal Highway Administration Harriet Riofrio, Office of Secretary of Defense Bob Turner, Federal Aviation Administration The Department of the Navy provided Rachel Sedeen of RM Vredenburg, Inc. who designed the cover.IIITABLE OF CONTENTS EXECUTIVE SUMMARY 1 INTRODUCTION 5 DEFINITIONS OF KNOWLEDGE MANAGEMENT 7 BENEFITS OF KM 8 DISTINCTIONS BETWEEN KNOWLEDGE, INFORMATION AND DATA 9 TYPES OF KNOWLEDGE: EXPLICIT AND TACIT 10 MANAGING ORGANIZATIONAL KNOWLEDGE 10 IMPLEMENTING KNOWLEDGE MANAGEMENT 20 ISSUES FACING KM 24 GLOSSARY 28 ENDNOTES 341Executive Summary Many of us simply do not think in terms of managing knowledge. But we all do it. Each of us is a personal store of knowledge with experiences, training and informal networks of friends and business acquaintances whom we seek out when we want to solve a problem or to explore an opportunity. Essentially, we get things done and succeed by knowing an answer or knowing someone who does. Yet until recently, managing knowledge has been exclusively a personal endeavor. Now, organizations are discovering that managing knowledge creates value by increasing productivity and fostering innovation. What is knowledge? It’s neither data nor information. Knowledge is understanding, and one gains knowledge through experience, reasoning, intuition and learning. Individuals expand their knowledge when others share their knowledge and when one’s knowledge is combined with the knowledge of others to create new knowledge. Knowledge management (KM) involves systematic approaches to find, understand, and use knowledge to achieve organizational objectives. Managing knowledge creates value by reducing the time and expense of trial and error or the reinvention of the wheel. KM creates value when shared knowledge is put to use and reused. Not all knowledge takes the form of a best practice. Indeed, the most valuable knowledge is the knowledge people have in their minds. This tacit knowledge is also the most difficult to access, because people are often unaware of the knowledge they have or of its value to others. By making tacit knowledge explicit, it can be shared and used by others. Some people mistakenly assume that knowledge management is about capturing all the best practices and knowledge that workers possess and storing it in a computer system in hopes that one day it will be useful. “Knowledge is an emergent property of interpersonal relationships, and the only way to manage it is to create an environment in which open collaboration is the norm, not the exception,” emphasizes the president of a knowledge management consultancy.1 Knowledge management consists of three fundamental components: people, processes and technology. Knowledge management focuses on people and organizational culture to stimulate and nurture the sharing and use of knowledge; on processes or methods to find, create, capture and share knowledge; and on technology to store and make knowledge accessible and to allow people to work together without being together. People are the most important component, because managing knowledge depends upon people’s willingness to share and reuse knowledge. Many people see knowledge as power. And their fear is that if they share their knowledge they will lose their importance, their marketability. Organizations can try to overcome this deep-seated concern by providing incentives to workers to share their knowledge. Incentives are not enough however, to overcome a culture that rewards and promotes workers who hoard knowledge or one that fosters competition among employees or business lines.2 Trust plays an important role in the sharing and use of knowledge. If people believe they will benefit from sharing their knowledge, either directly or indirectly, they are more likely to share. Whether people use the knowledge of others depends if they know and trust the source of the knowledge. For example, people are more likely to believe and use the equation e=mc2 knowing that it came from a renowned physicist then from the young intern just hired. This is why KM efforts that focus primarily on technology seldom pay off. Studies show that people more frequently than not will contact someone they know before searching the corporate database or data warehouse.2 Technology is an important enabler to the success of KM. But people make or break it. KM is an amalgam of concepts borrowed from the artificial intelligence/knowledge-based systems, software engineering, business process reengineering, human resource management, and organizational behavior fields.3 Large management consulting firms and other companies began to manage knowledge internally in 1989 and the early 1990s. In 1994, large management consulting firms first offered KM services to clients. KM is evolving and being refined through implementation. Knowledge management is in large