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Page 1

A P Q C S PA S S P O RT TO S U C C E S S S E R I E S

Knowledge
Management
A Guide for
Your Journey
to Best-Practice
Processes

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Page A

Additional Praise for

Knowledge Management: A Guide for
Your Journey to Best-Practice Processes
APQCs new Passport to Success series is a real hit. The format is loaded
with information that is easy to understand as well as easy to use. It is
full of actionable data. Knowledge Management is extremely helpful
I cant wait to see the next book in this series.
Jerry Gass
Director, Quality Programs
USAA

This book is an excellent reference guide for the complex world of knowledge management and will be of great value to both new and seasoned
practitioners. It furnishes the reader with real-world knowledge management examples, roadblocks to success, and recommended approaches that
can be readily leveraged within any organization. I particularly liked the
use of checklists at the end of each of the landmark chapters.
Phil Perkins, Ph.D.
Senior Director, Knowledge Management
The Pillsbury Company

Many books give me the theory on how to do something, but when I try
to implement it, I dont understand where to startmuch less which
questions I should be asking myself. Not only does the Knowledge
Management Passport book tell me how to do it, the Check Your Status
section asks all the thought-provoking questions that I must answer to be
successful. Finally a tool that really is handy!
Pat Behrens
Manager, Benchmarking
Nortel Networks

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Page B

APQCs Knowledge Management: A Guide for Your Journey to Best-Practice

Processes is unique in that it explains the topic of knowledge management in
such a straightforward way. Unlike many writings on this topic, it explains
knowledge management so that everyone can understand it. At the same
time, it serves as a helpful guide to those who are already working toward
implementing better knowledge management practices.
Wendy Finnerty
Corporate Quality Manager
BASF Corporation

APQC has built an outstanding reputation for making complex subject

areas meaningful, understandable, and actionable. APQCs Passport to
Success book on knowledge management continues this rich tradition.
Knowledge Management: A Guide for Your Journey to Best-Practice Processes
provides valuable and relevant information on various facets of knowledge
management based on practical experiences of industry practitioners.
Most importantly, it provides you with guidelines to develop your own
road map for successful implementation of a knowledge management
program within your organization. This publication is helping us
leverage the collective intellect of practitioners in this field.
Bipin Junnarkar
Vice President, Knowledge Management,
and Chief Knowledge Officer
Gateway Inc.

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A P Q C S PA S S P O RT TO S U C C E S S S E R I E S

Knowledge
Management
A GUIDE FOR YOUR JOURNEY
TO BEST-PRACTICE PROCESSES

Carla ODell, Ph.D.

Susan Elliott
Cindy Hubert

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American Productivity & Quality Center

123 North Post Oak Lane, Third Floor
Houston, TX 77024
Copyright 2000 by American Productivity & Quality Center
All rights reserved, including the right of reproduction in whole
or in part in any form.
Edited by Susan Elliott
Designed by Connie Choate
Manufactured in the United States of America
ISBN 1-928593-22-4

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Page iii

Contents
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Quiz: Where Are You Now? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Knowledge Management Landmarks . . . . . . . . . . . . . . . . . . . . . . . 9
Landmark One: Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . 11
Landmark Two: Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Landmark Three: Structure and Roles/Responsibilities . . . . . . . . 25
Landmark Four: Information Technology . . . . . . . . . . . . . . . . . . 33
Landmark Five: Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Landmark Six: Measurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Where Do You Go From Here? . . . . . . . . . . . . . . . . . . . . . . . . . . 61
About APQC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

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Acknowledgments

he American Productivity & Quality Center (APQC) would

like to thank all of the organizations we have worked with
to uncover the trends and best practices in the growing world of
knowledge management. Without the companies that sponsor
our researchand especially those that are willing to impart their
knowledge, experiences, and insightswe would not be able to
share this valuable information with the public.
We would also like to thank the APQC employees who have
spent long hours and put in much hard work to make our research
and studies successful.
Finally, a special thank you goes to the contributors of the
Travelers Tipsthose practitioners who were willing to share their
expertise in this bookand to Amy Price at Schlumberger for acting
as a sounding board for our ideas.

vi

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Page v

Preface

ver since the American Productivity & Quality Center formed

in 1977 as the American Productivity Center, our goal has been
to disseminate knowledge to help organizations perform more
effectively. Weve done that in numerous ways over the years, from
developing improvement and measurement approaches to offering
benchmarking studies, conferences, training courses, research
services, and a variety of publications.
Recently, our members and other customers have told us there is
an emerging need for easy-to-use resource guides to help them
communicate, understand, and implement programs and processes
in a variety of functional areas. As a result, weve drawn on our
experience and knowledge to produce APQCs Passport to Success
book series.
We chose the title Passport to Success because these books are
intended to guide you on what can be a difficult journey through
somewhat foreign territory. Each book in this series provides readers
with the mechanisms to gauge their current status, understand the
components (or landmarks) of a successful initiative in a specific
topic area, and determine how to proceed within their own
organization.
These books also supplement the other hands-on support
services and products APQC offers, so that we may provide you with
integrated process improvement tools. To learn what else APQC
provides in your area of interest, please visit our Web site at
www.apqc.org or call 800-776-9676 (713-681-4020 outside the
United States).

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Page 1

Introduction

PQC defines organizational knowledge as valuable information in action, with value being determined through the eyes
of the organization and the recipient. If people dont have a context
for the information or understand how to use it, the information is
not valuable and therefore cannot be considered knowledge. Todays
organizations have a wealth of information and data embedded in
them, but that information doesnt become knowledge unless a
human being or group of people can add context to it and put it
into use.
Most scholars agree that knowledge comes in two forms: tacit
which includes experience, know-how, skills, and intuition and is
most often embedded in the individualand explicitwhich is
information you can easily put into words or pictures or that is easy
to articulate and communicate. Both are essential to an organization
and must be captured and shared for others to benefit.
Knowledge management, then, becomes the conscious strategy
of putting both tacit and explicit knowledge into action by creating
context, infrastructure, and learning cycles that enable people to find
and use the collective knowledge of the enterprise. As we discovered
in our first study on knowledge management in 1996and have

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Introduction

reinforced through subsequent studies and researchthe process

usually involves several of the following stages or subprocesses in the
use of knowledge: create, identify, collect, organize, share, adapt, and
use (Figure 1).

Strategy and Leadership

Share

Create
ORGANIZATIONAL
KNOWLEDGE

Organize

Identify

Culture

Measurement

Use
Adapt

Collect

Technology
Knowledge Management Enablers
Knowledge Management Process
Developed by APQC and Arthur Andersen in 1995

Figure 1

WHY MANAGE KNOWLEDGE?

The simplest way to explain why most organizations want to

manage their knowledge is that it is a means to achieving their
mission, whatever that may be. Among those factors influencing the
increasing proliferation of knowledge management are market forces
such as:
the need for speed and cycle-time reduction;
revenue growth;
competition for customer relationships;
lost knowledge from turnover, hiring, downsizing, and restructuring;

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introduction

the fact that knowledge has a higher margin than product; and
globalization.

Other reasons for managing knowledge have to do with

infrastructure capabilities, including:
the rise of powerful network, communication, database,
and collaborative technologies;
the understanding of tacit and explicit knowledge; and
change management and process skills.
By exploring the why factor with the organizations weve
studied, weve arrived at six major strategies for knowledge
management:
Knowledge Management as a Business Strategy: This strategy is
evident in organizations that feel strongly that knowledge management and sharing are key to their ability to compete and grow.
These organizations often see knowledge as their product and pursue
knowledge management because they firmly believe it will have a
significant, positive impact on the profitability of the enterprise.
Consulting firms are one example.
Transfer of Knowledge and Best Practices: This is the most widespread strategy. It focuses on systematic approaches to the reuse of
knowledge and the transfer of best practices, with the goal of using
this knowledge to improve operations, products, or services. Sharing
this tacit and explicit knowledge enables an organization to operate
more effectively and efficiently.
Customer-Focused Knowledge: This strategy focuses on capturing
knowledge about customers; developing and transferring knowledge
and understanding of customers needs, preferences, and businesses
to increase sales; and using the knowledge of the organization to
solve customers problems. It recently has come to include enabling
customers to access the organizations knowledge to find solutions to
their problems on their own.

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Introduction

Personal Responsibility for Knowledge: Organizations operating

under this strategy believe that people are the engine of knowledge
and should be supported in, and responsible for, identifying, maintaining, and expanding their own knowledge. They also are expected
to understand, increase, and share their knowledge assets. These
organizations realize that their employees are their most valuable
asset and need to be able to use their knowledgeboth personal and
that of the collective enterpriseto benefit the customer and the
company. There also is a trend toward making teams and communities of practice responsible for critical bodies of organizational
knowledge.
Intellectual Asset Management: This strategy emphasizes
enterprise-level management of intellectual assets such as patents,
technologies, operational and management practices, customer
relations, organizational arrangements, and other structural knowledge assets. Effective exploitation of these valuable assets can help
the organization increase its competitive advantage. There is an
emerging movement to measure the value of organizational knowledge assets.
Innovation and Knowledge Creation: This strategy emphasizes
innovation and the creation of new knowledge through basic and
applied research and development. The development of unique
knowledge and expertise increases the organizations competitive
value.
No matter what your organizations reasons for managing knowledge, one statement rings true: Ensuring that the right people have the
right knowledge at the right time simply makes sense.

. . . . . . . . . . . . . . . . . . . . .

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Where Are You Now?

he following quiz is designed to help you determine the current

state of knowledge management at your organization. Answer
these questions, and then score your organization based on the scale
on page 7 to find out where youre starting from.
1. Is your organization doing anything it calls
knowledge management?

Yes

No

2. Is there a general consensus in your organization

about what knowledge management means?

Yes

No

Yes

No

4. If knowledge management is occurring, whether

at the grassroots or the organizational level, does
it have senior management support?

Yes

No

5. Does senior management understand and

support knowledge management as a key to your
organizations business strategy?

Yes

No

3. Is your organization doing something that,

although not called knowledge management, falls
under the definition of knowledge management
(either the one your organization uses or the one
presented in this book)?

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Where Are You Now?

6. Are people specifically assigned to knowledge

management activities?

Yes

No

7. Does your organization as a whole know what

knowledge it already has?

Yes

No

8. Do the people who need it know who has it and

how to find it?

Yes

No

9. Is knowledge systematically transferred from one

part of your organization to another?

Yes

No

10. Is knowledge consistently gathered from outside

your organization for internal use?

Yes

No

11. Is technology used to effectively share knowledge

within your organization?

Yes

No

12. Are people networks used to effectively share

knowledge within your organization?

Yes

No

13. Does the culture of your organization encourage

people to share their knowledge and reward them
for doing so?

Yes

No

Yes

No

Yes

No

14. Is your organization taking full advantage of its

knowledge to improve its products and services?
15. Does your organization measure the impact or
success of its knowledge management efforts?
Number of yes responses

_____

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Where Are You Now?

Score Yourself:

05 yes responses: Take out your compass and get ready to embark

on an exciting journey. While you obviously have recognized the

benefits of knowledge management, youve got a significant amount
of work ahead of you to incorporate the necessary concepts and
processes. The good news is that many people have forged this path
ahead of you, and you can take advantage of the lessons theyve
learned along the way to ensure that youre heading in the right
direction. Read on to learn more!
610 yes responses: Youre on the right path to taking advantage of

what knowledge management has to offer, but you have many areas
yet to explore. Your next step is identifying the areas in which your
organization is weakest and focusing your efforts there, and you can
use the Landmark chapters that follow to help. Once you strengthen
those areas, youll be amazed to discover how much greater the
impact of a well-rounded knowledge management strategy is.
1115 yes responses: Youre well on your way to demonstrating best

practices in knowledge management. Your no answers will indicate

the areas in which your organization needs to improve. Even if you
answered yes to all 15 questions, as you read the following
chapters, ask yourself what more you should be doing to strengthen
each of the components. The goal is not just to be able to say youre
addressing a specific facet but rather to say youre doing it well
enough that its positive impact is felt throughout your organization.
Remember, any practiceknowledge management included
must be diligently revisited and improved upon if it is to deliver its
maximum benefit.

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Page 9

Knowledge Management
Landmarks

e consider the following to be the landmarks, or key components, youll encounter and need to address on your knowledge management journey. They are defined here in general terms
and are explored in detail, as they relate to knowledge management,
in the following chapters.
i. Value Proposition: the business rationale, unique to your organization, for embarking on an initiative or instituting a process.
ii. Culture: the pervasive, yet usually unwritten and unspoken, rules
and expectations that guide the actions of an entire organization.
iii. Structure and Roles/Responsibilities: the way an organization is
set up, as that set-up relates to a process or an initiative, and the
associated positions and tasks of its employees.
iv. Information Technology: the electronic tools that help an initiative
or a process occur.
v. Approaches: the tactic(s) you take when embarking on an initiative
or beginning a process.
vi. Measurement: the process of gathering data and assigning value to
the impact of a process or an initiative.

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Landmark One

Value Proposition

haring knowledge and best practices because its the right thing
to do or because everyone else is doing it wont get you very far.
To benefit from knowledge management, you have to have a goal in
mindthat is, know why youre doing it. And that goal must link
to the growth of your entity; otherwise, the initiative stands a good
chance of being cut by upper management even if you view it as
a success.
This is where the value proposition comes in. It provides a
unique business rationale for embarking on a knowledge-enabled
change journey, and it enables organizations to ensure that they
devote valuable resources to high-payoff areas, that the right
knowledge is managed and transferred, and that they get managements attentionand funding.
APQC has studied and worked with more than 100 organizations that have defined clear value propositions for their businesses.
The focus areas have tended to fall into three general categories:
customer intimacy,
product-to-market excellence, and
operational excellence.

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Landmark One

Value Propositions
Product-to-Market
Excellence
National Security Agency
Hughes Space and Communications
Sequent Computer Systems

Dow Chemical
Texas Instruments
Kaiser Permanente

Arthur Andersen
Price Waterhouse

Skandia
USAA

Customer
Intimacy

Chevron

Operational
Excellence

Based on a model developed by Treacy and Wiersma, Harvard Business Review, Jan./Feb. 1993

Figure 2

Figure 2 shows a graphic representation of the value propositions

of the best-practice organizations examined in APQCs first benchmarking study on knowledge management.
CUSTOMER INTIMACY

Customer intimacy involves capturing and using companywide

knowledge about how to market, sell, and service customers more
efficiently and effectively. Many organizations that operate under
this value proposition arm their front-line employees with the
collective intelligence of the organization and use them to gather
information from their customers as well.

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Value Proposition

For instance, USAA, an insurance and financial service organization, has implemented a comprehensive customer feedback system
that quantifies customer feedback and improves overall knowledge of
the customer. The knowledge and transfer system performs two
primary functions:
1. It lets every service rep know all there is to know about a
customer or a problem and provides the rep with the current
best practices for addressing an issue; and
2. It tracks customer satisfaction on an ongoing basis, reveals
regional and other trends, and shares performance measures with
each employee so that everyone knows how theyre doing all
the time, every time.
PRODUCT-TO-MARKET EXCELLENCE

Speed has become a driver of business change. This means there

is less time to procrastinate on new product ideas and to rerun
experiments or try out new products before a full launch. Product-tomarket excellence focuses on three transfer strategies: 1) ensuring new
ideas and new designs from inside and outside the organization are

T r avel

Choosing your
value propositi
on is about
determining ho
w knowledge m
anagement
can help your or
ganization reac
h its goals. We
NSA see know
at
ledge managem
ent as a power
way to focus ou
ful
r extensive know
information on
ledge and
the critical mat
know, and acco
ters we must le
arn,
mplish to make
our customers
apply our know
successful. W
ledge to give ou
e
r customers th
by providing an
e decisive edge
d protecting vi
tal information.

TI

Clinton C.
Corporate
Brooks,
Knowle
U.S. Nationa dge Strategist,
l Security
Agency

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Landmark One

incorporated into product and service offerings, 2) accelerating the

product development process by reusing lessons learned from earlier
attempts, and 3) collecting and disseminating competitive and market
information internally, where speed is crucial. By reducing time to
market, designing and commercializing new products more quickly
and successfully, and staying abreast of the competition, organizations
can increase revenue, retain market lead, and grow profit margins.
For pharmaceutical corporation Eli Lilly and Company, reducing
time to market is a critical driver of success. Lillys value proposition
focuses on bringing new drugs to patients more quickly and cost
effectively by improving global sharing of knowledge among Lilly
employees. The companys Project Management Workbench contains project-specific information, cross-project perspectives, and
tools and techniques that allow anyone on a drug development team,
senior management, or line management to share product development information. Cycle time for distribution of this information
has decreased substantially through this initiative, and this, in turn,
helps decrease the time and costs associated with drug development.
OPERATIONAL EXCELLENCE

Companies following operational excellence as a value proposition

want to boost revenue by reducing the cost of production and
increasing productivityraising performance to new highs. The
transfer of operational processes and know-how from topperforming business units to those businesses performing less
optimally is critical to achieving operational excellence.
As a result of developing a repeatable process to launch new
businesses by sharing operational best practices across the companys
global business units, Skandia insurance company has shrunk the
lead time of starting a new business to seven months (vs. the prior
industry standard of seven years). Skandia reuses existing expertise
and best tricks from established business units to start up new
ones. The organization has seen a reduction in cycle time and
tremendous savings in new business start-up costs.
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Value Proposition

ROADBLOCKS TO SUCCESS
Overlooking the connection to the revenue value chainthe key
processes that make money for the organization
Goals and focus of efforts are so decentralized that everyone uses his or
her own
No flexibility built into the focus strategy
Focus is matched with the wrong knowledge management approach
Senior leaders and/or key stakeholders are excluded from focus selection

It is important to note that many organizations have more than

one value proposition that leads them to knowledge management
and sharing best practices. The focus of healthcare product manufacturer Johnson & Johnson, for instance, includes elements of each of
the preceding categories. According to Michael J. Burtha, director of
knowledge networking, Johnson & Johnson uses knowledge networking to support the creation and delivery of new products and
services to benefit its customers, as well as to support company
growth and innovation.
DETERMINING YOUR OWN VALUE PROPOSITION

Determining which one of the three value propositions is best for

your organization depends on 1) where the greatest potential for
improvement may be, and 2) your firms competitive strategy.
The easiest way to choose your focus area, or value proposition,
is to look for the highest pain or the highest gain. The classic
methodology for targeting improvement work and investment
involves identifying the highest costs, the greatest revenue potential,
and the biggest competitive threat. After you find those, youll know

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Landmark One

where to focus your knowledge capture and transfer efforts for the
biggest payoff.
But no matter what focus you ultimately pursue, keep in mind
that markets, business environment, customer preferences, and even
your own operations are dynamic. Adapting your focus when the
time comes is as critical as choosing the first course of action.

CHECK YOUR STATUS

1. What is your organizations business strategy?
2. What are your organizations core business processes?
3. Where are your organizations high-gain or high-pain
functions and/or core processes?
4. Are improvement projects under way to address these functions
and processes?
5. How could valuable knowledge or best practices enhance these
processes if they were accessible or used in a different manner?
6. Is knowledge management already explicitly part of those
processes?
7. Does your organization want to transfer knowledge and best
practices around:
customers, their needs, and their expectations;
products/services, the speed of innovation, and speed to
market; or
operational excellence, improving internal processes, and
employee skills and competencies?
8. Who are the key stakeholders for the knowledge management
initiatives?

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Landmark Two

Culture

very organization has its own culturethe unique combination

of expectations, written and unwritten rules, and social mores
that dictates the everyday actions and behaviors of each employee.
Culture is perhaps the most important factor in the success of your
knowledge management initiative, and it is definitely the most
complex to change.
Few organizations are lucky enough to start off with cultures in
which sharing and collaborating come naturally. The more likely
scenario is that people are motivated and rewarded to use their
knowledge to excel personally. While this benefits the company to
some extent, it doesnt come close to delivering the results that occur
when knowledge is collected and used to advance the organization as
a whole.
Numerous reasons related to culture account for the lack of
knowledge sharing in organizations. Participants in our 1999
Creating a Knowledge-Sharing Culture study indicated that the
biggest impediments are lack of time dedicated to transferring
knowledge and an environment that fosters the not invented here
(NIH) philosophy (Figure 3, page 18). In this chapter we explore
the somewhat difficult, but not impossible, path to overcoming
these obstacles.

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Landmark Two

Impediments to the Implementation of a

Knowledge-Sharing Approach
People do not have the time to share
knowledge.

3.4

We have a strong not-invented-here

culture.

3.1

Our organization is divided into many

divisions.

2.9

People are scattered geographically

and it is difficult to connect.

2.7

People are afraid that sharing

knowledge will make them less
valuable to the organization.

2.5

There is an unwillingness to share.

2.5

Our organization is unaware of the

importance of knowledge sharing.

2.3

Leadership does not care about sharing

knowledge.

2.1

1.8

We have significant legal constraints.

1

Scale: 1=small impediment, 4=major impediment

n=23

Figure 3

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Culture

Throughout our research, we have seen that as companies move

beyond the barriers and start sharing their knowledgewhether in a
grassroots effort to transfer valuable information on a small scale,
perhaps in a certain project, or through an organizationwide mandate handed down from top managementthey begin to discover
how profitable collaboration can be. Once communities of practice
or cross-functional teams are engaged, the norm of sharing knowledge begins to self-perpetuate.
WORKING WITHIN YOUR CULTURE

Knowledge management initiatives have little chance of changing the overall culture of your organizationnor should they be used
for such a purpose. They also dont stand much of a chance if theyre
positioned simply as a new activity or direction for the company.
Best-practice organizations have demonstrated that knowledge
management and sharing succeed most often when they link to a
pre-existing core value. When collaboration and communication
build on core values already embedded within the company, it
means less of a change and, therefore, a more natural step for
everyone involved.
For instance, the culture at software company Lotus
Development Corporation is very informal, from the way its
employees dress to the ad hoc teams that collaborate to work on a
project or a product. In addition to this informality, Lotus has other
cultural characteristics that naturally complement knowledge-sharing
activities. Employees feel free to test their ideas and then modify
them within Lotus forgiving environment. The company perceives
change as a positive and places significant value on the out-of-thebox thinking that can foster it. Finally, Lotus demonstrates a low
tolerance for reinvention and rediscovery when a solution already
exists somewhere in the organization. All these cultural aspects
combine to create an environment that is ripe for knowledge
management and transfer in Lotus. This will differ in other cultures.

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Landmark Two

So what do you do if your organizations culture isnt conducive

to sharing? No matter if youre a senior manager or a member of the
rank-and-file work force, your first step is the same: Lead by example. Every organization values success, so share your knowledge with
others as a means of attaining that goal. While your actions will have
more impact the higher up you are in the company, you have the
power to influence the culture of at least the group you interact with
most closely, be it a team, a department, or an entire enterprise.
When people around you see how much they benefit from your
knowledge, theyll naturally want to add theirs and see where the
combination can take youtogether. And remember, a grassroots
initiative that demonstrates success is one of the best ways to get
senior leadership on board and to buy in to your philosophy.
RESPONSIBILITY AT THE INDIVIDUAL LEVEL

The second step is to ensure that individuals have the tools, the
time, and the incentive to contribute to and leverage shared knowledge. Again, this is most easily achieved by those at the highest
levels of the organization, or at the head of a department or group,
because they have the most overarching influence. Therefore, if you
are starting a knowledge management initiative at the grassroots
level, you need to find an upper-level champion who can provide
these necessities. Likewise, if you are an upper-level champion, you
need to secure buy-in from those who will be doing the work.
REWARDS AND RECOGNITION

In a perfect world, the benefits of accessing and contributing

knowledge would be intrinsic. In some organizations, in fact, they are:
People who share knowledge are better able to achieve their work
objectives, can do their jobs more quickly and thoroughly, and receive
recognition from their peers as key contributors and experts.
Other companies, however, need to create more structured
rewards and recognition systems to encourage their employees to

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Culture

change their behavior where knowledge is concerned. Whether these

rewards are tangible or intangible, they are a means of acknowledging
the value of sharing knowledge, appreciating the contributions people
make, and increasing awareness about the importance of not hoarding what you know.
American Management Systems (AMS), a business consulting
firm, uses a combination of tangible and intangible rewards for
participation in its knowledge system. Employees desire to be recognized as associates, or internal subject matter experts, and therefore
strive to make contributions that present a compelling case for their
nomination and confirmation as an associate. AMS publicizes the
contributions most in demand in an online newsletter and at associate gatherings. The company also hosts a Knowledge in Action
contest, sponsored by IBM/Lotus, through which employees can
receive cash awards for showing the value of the knowledge theyve
leveraged throughout the year.
No matter how your organization chooses to reward and
recognize employees for their role in knowledge management, make

T r avel

Xeroxs Eureka
knowledge-sh
aring
system enable
s reps to share
solutions
to machine prob
lems with othe
r global service
community mem
bers. They auth
or these tips
themselves, mos
tly on their own
time. Weve
discovered the
only reward th
ey need is the pe
recognition that
rsonal
comes from be
ing identified w
leadership and
ith thought
the ultimate sa
tisfaction of po
helping a fellow
tentially
worker halfway
across the glob
e.

TI

Director, Co Dan Holtshouse,

rporate St
rategy,
Xerox Corp
oration

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Landmark Two

sure it aligns with and is supported by your culture. If knowledge

sharing isnt inherently rewarding, celebrated, and supported by the
organization, then token awards will be viewed as worthless and
may actually have a negative effect.
INTEGRATING KNOWLEDGE MANAGEMENT INTO WORK

In 1997, when we conducted our Using Information Technology

to Support Knowledge Management benchmarking study, only two
of the surveyed organizations indicated that knowledge management
was part of their actual work processes. In our most recent study,
however, all of the best-practice organizations indicated that sharing
ideas and getting help from others who have the necessary knowledge
is an integral part of their work processes.
Where these latter best-practice organizations differ, however, is
in how they integrate knowledge sharing into each workers daily
activities. Many make knowledge sharingboth accessing and
contributinga routine step in everyday work (Figure 4).

Degree to Which Capturing and Sharing

Knowledge Is Integrated in Work Processes
Highly integratedwork systems
automatically document and share.

0%

Integratedpeople are required to

document to proceed.

17%

Somewhat integratedwork
processes have sharing steps built in.
Not integratedsharing knowledge is
separate from core work.

83%

0%
0

20

40

60

80

100

Percentage

n=6

Figure 4

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Culture

At PricewaterhouseCoopers (PwC) consulting firm, for example,

knowledge sharing is part of daily activities as employees rely heavily
on each others insights to do their jobs. The success of a project
depends on the employees ability to discover who within PwC has
the information required by the client. PricewaterhouseCoopers
human networks and easily navigated information technology tools
provide this type of information quickly and efficiently. Therefore,
although PwC employees seem to find personal satisfaction in
managing and sharing their knowledge, they do it largely because it is
necessary for survival in the organization.
Several leading organizations also host knowledge-sharing
eventshighly visible gatherings during which people exchange
knowledge, insights, and practicesto shape the behavior of their
employees and make it clear that the organization values the transfer
of knowledge.

ROADBLOCKS TO SUCCESS

Lack of common perspectives

Lack of time
Non-aligned reward systems
Lack of motivation (source)
Lack of absorptive capacity (recipient)
No formal communication; ad hoc only
More emphasis placed on explicit knowledge
Technology and the knowledge to use it are not adequate

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Landmark Two

CHECK YOUR STATUS

1. What percentage of people in your organization understand and
appreciate the importance of sharing and transferring knowledge
to your business strategy?
2. Is your organization team-based?
3. Do people in your organization see sharing knowledge as an
important part of their jobs?
4. Are people in your organization given the time to interactto
share insights, experiences, and best practices?
5. Is the capture and transfer of knowledge integrated into your
work processes?
6. Do people know how to use the common tools, systems, and
technology?
7. Do your organizations work systems require people to document
(e.g., trip reports, project evaluations, and lessons learned)?
8. How often do people use the documentation produced by your
work processes?
9. What aspects of your organizations culture (values, beliefs)
complement sharing knowledge?
10. What are the top three barriers to transferring knowledge in
your organization?

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Landmark Three

Structure and
Roles/Responsibilities

uccessful organizations intuitively realize that they cannot

manage or transfer their knowledge unless they have an explicit
and institutionalized infrastructure in place. Without a structured
process, and people with well-defined roles within that process, an
organizations knowledge will not be used to its full potential.
Throughout our studies and projects, we have discovered that
knowledge management in best-practice organizations is usually
described as a management responsibility, supported by a shared
infrastructure. This infrastructure may include:
one or more knowledge champions who provide the coordination,
develop the shared vision, and offer facilitation and encouragement;
a common information technology platform;
spacephysical, cognitive, and socialto encourage sharing; and
a corporate repository, such as a library or a database.
In this chapter we focus on the roles and the organizational
structure, such as the organizational chart and reporting relationships, that facilitate the sharing and management of knowledge.
Communities, or networks, of people are explored here, as well as in
the Approaches chapter of this book. Information technology, a key

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Landmark Three

enabler of the knowledge management infrastructure, is addressed in

its own chapter.
ORGANIZATIONAL STRUCTURE

Many companies that excel at knowledge management assign the

associated responsibilities throughout the organization as it makes
sense and as required by their strategies and goals. Those that treat
knowledge management as a business strategy, for example, tend to
have extensive and widespread resources devoted to making knowledge sharing possible, and even easy, for all employees.
The organizational charts of these companies reflect their sweeping dedication to knowledge management. For instance, Fujitsu
Network Communications, a designer and manufacturer of fiberoptic transmission and broadband switching platforms, has constructed its organizational chart so that knowledge management and
work force development report to the senior vice president of quality,
customer service, and information technology. As a result, the
company views knowledge management holistically, rather than as a
specific initiative set off by organizational boundaries and therefore
limited in its success.
National Semiconductor Corporation, a developer and manufacturer of semiconductor products in the electronics equipment industry, started its knowledge management efforts at the grassroots level.
Its Corporate Information Services group introduced and rolled out
search engines and document management tools, and the Engineering
group began using communities of practice. Soon the entire organization recognized the need to share knowledge, and the Corporate
Knowledge Management and Information Access Group was formed
to formalize the organizationwide discovery, creation, and diffusion of
intellectual capital to accomplish National Semiconductors business
objectives.
The structure that works best for your organization will be
determined by what you hope to accomplish and the resources you
have to dedicate to your initiatives.
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Structure and Roles/Responsibilities

ROLES AND RESPONSIBILITIES

As knowledge management and transfer initiatives grow within

an organization, so too do the roles and responsibilities of those
involved in the process (Figure 5). Managing knowledge effectively,
especially large quantities of it, requires that people be specifically
assigned to every stage of the processincluding collecting, organizing, adding value, disseminating, and supporting its use.
People in
Knowledge Management
Creating
Knowledge
Publishers
Network Members
Analysts
External Sources

Knowledge Management
Infrastructure

Applying
Knowledge

Individuals
Publishing Coordinators
Networks (led by
Knowledge Organizers
full-time knowledge
and Architects
managers)
Knowledge Managers

Teams
Staff in Networks
Help Desks (full-time)
Information Technology
Communication Infrastructure
Figure 5

Leaders and Champions

Strong leadership and sponsorship, especially at the executive

level, is necessary for the success of a major knowledge management
initiative. While small projects, created at the grassroots level, may
succeed without senior management involvement, substantial funding and organizational change require involvement of your firms
executives. Senior leaders also must be tied to an initiative if it has
any chance of being linked to the greater organizational strategy.
The top-ranking officials of several companies APQC has
studied are zealots about the value of knowledge and sharing best
practices. Not surprisingly, it is in these companies especially that
knowledge management initiatives have flourished. For instance,

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Landmark Three

knowledge management at The World Bank began to take root only

after its president, James Wolfensohn, announced in late 1996 that it
would be a key strategy for the organization in its mission to reduce
poverty and increase quality of life in developing countries around
the world. Since that time, The World Bankwhich provides not
only loans but also advice and customized resourceshas developed
a knowledge management system that captures and organizes knowledge, making it accessible to its staff members and clients.
Aside from a highly involved CEO, the most prominent player in
a knowledge management initiative is the champion. We learned in
our second knowledge management study that champions seem to
be located at both the corporate and the business unit levels, rather
than predominantly in one or the other. Champions develop the
shared vision and provide coordination, facilitation, and encouragement. They often also are responsible for partnering with their
information technology colleagues to adapt the most appropriate
IT solutions for the initiative.
For instance, Robert Hiebeler, partner for Arthur Andersens
KnowledgeSpace, works closely with the firms CIO to ensure that
staff members get the best content, delivered by the best IT systems.
Champions can be found at any level of the organization.
Generally the more people you have in the champion role, the more
energy your knowledge initiative has and the more widespread the
impact it can have. Champions can be a major key to success,
especially with grassroots initiatives that have yet to gain the
attention and support of senior management.
Knowledge Workers

Underneath the champion are the people who make it happen

those who gather, edit, categorize, and distribute the knowledge.
For instance, at consulting firm Arthur Andersen, knowledge
managers in the Arthur Andersen Sharing Network monitor the
knowledge or divergent traffic for 80 sharing communities. They

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Structure and Roles/Responsibilities

T r avel

r
s

TI

We went out
and

found the zealot

s,
[who were able
to] create enou
gh of that
initial capacity
to get some thin
gs done.
These are peop
le who believe
d in it enough
that they were
willing to w
ork another tw
hours a day tow
o
ard our goals.
Finding these ki
among your em
nd
s
of
pe
op
le
ployees is key
to jump-star tin
g an initiative.
Todd K. Ab
Vice Presid
raham,
ent, Strate
gi
& Knowledg c Technology
e Managem
ent,
The Pillsb
ury Compan
y

identify pieces of information that have high value and then move
into the convergent process, where that high-value knowledge is
packaged for use.
Staffing service Manpower Inc.s global account managers are the
key link between the success stories and lessons learned of client
engagements and the companys Virtual Account Management
(VAM) system. The global account managers gather the stories and
data to populate VAM, and a staff of writers maintains the information. Having this knowledge accessible and organized helps
Manpower better serve its clients.
How many people your organization will have in supporting
roles such as these will depend on many factors, including the scope
of your initiative, the size of your organization, and the budget
allocated to managing or transferring knowledge. Individuals job
titles and responsibilities will vary as well.
Non-Knowledge-Specific Employees

Depending on how extensive your knowledge management

plan is, even employees without specific knowledge-related roles
may be involved in daily knowledge activities. In fact, knowledge

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Landmark Three

management guru Tom Davenport told attendees at APQCs 1998

knowledge symposium that the amateurs, not the knowledge
professionals, are the ones organizations must depend on to make
knowledge management successful. These amateursranging from
marketing planners to financial analysts to shop-floor supervisors
are the people who need knowledge to do jobs effectively on a
daily basis.
At chemical company Buckman Laboratories, for instance,
employees on the front line are expected to use the companys
knowledge to serve the customer well, generate cash flow for the
organization, and help it expand and flourish. For this to happen,
these employees need to be connected, whether in person or through
information technology, to the knowledge. Allowing everyone in the
organization direct access to knowledge has numerous benefits,
among them increasing individuals value and reducing the distortion of knowledge that naturally occurs as information passes down
the line from person to person.
COLLABORATION STRUCTURES

At least as important as the explicit structures for sharing knowledge in an organization are the tacit systems that transfer experiential
knowledge and other knowledge that is not easy to write down. Chief
among these tacit systems are communities of practice or human
networks. Whether formal or informal, these common structures in
best-practice organizations enable people with common interests to
effectively share knowledge. Most often, such networks are mainly
forums for sharing knowledge, rather than for organizing, managing,
or maintaining information. People in these groups may meet in a
physical space, if their location permits it, or they may have virtual
gatherings, using information technology to communicate their ideas.
Jim Tighe, manager of corporate quality at Chevron Corporation,
a petroleum and chemical company, has identified the following
characteristics common to his companys 100-plus knowledgesharing communities:
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Structure and Roles/Responsibilities

Members are typically functional counterparts from various parts

of the organization. The more value they see in their involvement, the more they tend to participate.
Purposes range from sharing best practices and lessons learned to
improving the individual and collective subject matter expertise
of the group.
Typical methods of interaction include face-to-face meetings, group
e-mail, Web sites, Lotus Notes, and conferences and workshops.

In general, communities of practice tend to be self-led and often

work out their purpose and methods of communicating, such as
those mentioned above, by themselves.
The virtual aspect of communities of practice has made them a
natural means of sharing information within another large organization, The World Bank. In fact, 130 communities of practice have
emerged within the banks global environment during the past two
years. The organization discovered it had some communities operating informally, so it made them official and allocated funds to
support and promote their growth. This formal support is the banks
way of saying, This is part of how we work here.

ROADBLOCKS TO SUCCESS

Senior leadership is unwilling to walk the talk

No common process vocabulary
Lack of teams and teaming approaches
No ownership of knowledge and learning
Silo mentality
No formal knowledge transfer process

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Landmark Three

Most of the best-practice organizations in our 1999 Creating a

Knowledge-Sharing Culture study made no effort to formalize their
human networks or communities. They did, however, enable these
communities to thrive by giving them a budget, information systems,
space, library support, time for networking coordinators to manage
network-related affairs, and recognition for their contribution.
No matter how your organization decides to structure its sharing
communities, or whether they structure themselves as they grow
from grassroots initiatives, they are an integral part of getting tacit
and explicit knowledge from one individual to another.

CHECK YOUR STATUS

1. Who are the primary champions of knowledge management in
your organization?
2. What do senior leaders do to champion knowledge management?
3. What roles do people in your organization play that support your
knowledge-sharing efforts?
4. How much assistance and intervention do people in your organization need to make transfers happen and get results in a timely
manner?
5. How does the infrastructure address problems with the flow and
implementation of knowledge?
6. Does your organization have human network systems that
support all aspects of knowledge management (e.g., capturing,
sharing, and transfering)?
7. Does your organization use designated people, such as facilitators
or internal consultants, to support knowledge management
initiatives?
8. How widely known and publicized are these human networks
and designated people within the organization?
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Landmark Four

Information Technology

hile communicating through technology is by no means new,

the pervasive use of groupware and Internet/intranet/extranet
technologies has had a profound effect on peoples ability to share
knowledge and practices effectively. Likewise, people play a major
role in such technologys successif they dont use it, it serves no
purpose. Technology is necessary, but not sufficient, to make knowledge transfer happen. Your goal should be Build it so they will
come.
RULES OF THUMB

If you are going to be successful, you need the technology in

place; its got to be good and its got to be easy to use. However, as
Tom Davenport says, If you are spending more than one-third of
your energy and money on the technology side, youre probably not
going to be successful.
Ultimately, knowledge and best practices are in peoples heads.
The behavioral aspects of the system are therefore more important
than its architecture. Davenport uses the stay under one-third of
resources litmus test to ensure IT does not become the be all and
end all of knowledge management. We offer two other helpful rules
of thumb:

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Landmark Four

The more valuable the knowledge, the less sophisticated the

technology that supports it. Heres how it works: Databases and
data mining tools, for example, are high on the technological
sophistication scale. They contain data. In contrast, help desks,
equipped with nothing more than humans and telephones, are
low-tech but offer high knowledge value.
Tacit knowledge is best shared through people; explicit knowledge can be shared through machines. In other words, the more
tacit the knowledge, the less high-tech the solution.

KNOWLEDGE-ENABLED INTRANETS

You have to start with an enterprisewide IT platform. Most

companies today have already figured out their basic information
technology architecture and are building intranets, through which
they offer a variety of information and knowledge (Figure 6). To
help ensure your intranet-based knowledge management solution
achieves its purpose, adhere to the following guidelines:
Understand the business purpose for what you are trying to
accomplishdefine the objectives.
Determine whether the current technology can be adapted or
new technology can be purchased off the shelf.
Assess the ability of the physical infrastructure currently in place
to handle the kind and quantity of traffic moving around on the
intranet.
Identify internal support requirements for maintenance of the
system.
Organize your content; you may need librarians.
Choose a central location for your knowledge management
portal or Web site, from which one can navigate to any other
area. Think about issues surrounding policies and procedures,
training, and redundancies in processes and information.
Design for ease of useintranet and Web-based solutions are
almost training-free in terms of the technology.

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Information Technology

Information Available Through Intranets

Judgmental
information

44%

Subject matter
expert directory

50%

E-mail

50%

Corporate employee
directory

50%

Best-practices
databases

69%

Discussion
groups

88%

Factual
knowledge

88%

Procedural
information

88%
0

20

n=16

40

60

80

100

Percentage

Figure 6

Facilitate universal access and universal use.

Consider initial costs, including shareware and software, as well
as secondary costs, which can include training, operations and
management, increased bandwidth installations, lost productivity due to obsessive use of Web content-creation tools, and
fruitless forays into Web junkyards.
Buy the best search/indexing tool you can afford.
Have a process in place for putting in, taking out, and forgetting knowledge, or deleting information that is obsolete.

Tricon Global Restaurants, which comprises Taco Bell, Kentucky

Fried Chicken, and Pizza Hut, has 10,000 corporate employees

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Landmark Four

T r avel

While some pe
ople believe in
formation
technology dist
ances customer
s from
suppliers, we fin
d that a strategi
c use of IT
brings Manpow
er closer to our
cu
stomers. Our
IT initiatives en
able us to store
about our custom
more knowledg
e
ers than we ca
n carr y around
transfer that kn
in our heads, to
owledge into th
e anticipation of
needs, and to de
customer
liver services to
them on a timel
y basis.

TI

Jeffrey Jo
erres,
President
and CEO,
Manpower
Inc.

around the globe and therefore significant opportunties for using

intranets as its foundation for knowledge sharing. When Tricon
spun off from Pepsico in October 1997, it faced the issue of how to
share brand and company information across the three functional
silos that made up the new organization. As a result, the company
created three separate intranet sites, one for each restaurant chain,
that maintained the essence of the brand personalities and harvested
the vital information each organization already was creating in Word,
PowerPoint, Excel, and other technologies. The company also
created the Triconnection site, which presents common processes
and shared services all three organizations can capitalize on.
At Buckman Laboratories, Web-based forums and the global
infrastructure provided by CompuServe have allowed associates to
access project tracking systems, customer relationship management
systems, groupware, bulletin boards, virtual conference rooms, and
databases that capture institutional memory 24 hours a day.
KNetixThe Buckman Knowledge Networkis the interconnected
system of knowledge bases used as a worldwide resource by Buckman
Laboratories associates in more than 80 countries. Through it, they can
share knowledge electronicallyand then pass it on to the customer.

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Information Technology

As a global network, KNetix enables Buckman personnel to

collaborate closely, unbounded by factors like distance and time
zones. The network encourages open, unrestricted communication
among Buckman experts and the free exchange of ideas. This culture
is critical in helping Buckman find innovative solutions to customer
challenges, as well as develop products in anticipation of future needs.
IT TOOLS AND APPLICATIONS

The following is a brief overview of some of the IT applications

being used to support knowledge management and transfer.
1. Structured document repositories (a.k.a. databases)
Structured document repositories typically contain regular,
alphanumeric data capable of being stored in conventional relational
databases. Best-practice databases are a good example. Another is
Web sites with key documents. Best-practice databases are usually
repositories of short descriptions of best practices and/or pointers to
contacts within the organization who have knowledge about these
practices.
Databases that are organized around customerswhich may
include information about customer inquiries, needs, and interactionsand databases containing competitor intelligence are also
examples of what is stored in these repositories. These databases
typically include sales presentations, reports, engagement information, competitor analysis, and external feeds.
Consider the following tips when implementing structured
document repositories:
It is important to supply magnet content that causes people to
use the database in the context of their work.
Desirable systems automatically capture content rather than
require people to take an extra step to re-enter it.
Every system needs a disciplined process for creation, evaluation,
categorization, maintenance, and forgettingi.e., people have to
be assigned these responsibilities.
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Landmark Four

Give people a reason to use the database frequently, and make it

easy to do so.
Watch search engine traffic to understand what users are looking
for most frequently.

2. Discussion databases
These are discussion groups of project or work teams (whether
e-mail bulletin boards, news groups, or Lotus Notes-based forums).
They may also support communities of practice, project work teams,
and salespeople or sales and marketing teams. Helpful implementation tips include:
Make sure you have shared norms for participation.
Provide some payback for participation (tangible or intangible).
Ensure active facilitation.
Offer a one-stop solution for e-mail and discussion.
Nourish the online community through other means as well
(e.g., face-to-face meetings).
Remember that content has to be good if the discussion databases are to attract visitors.
Use logical, intuitive structure for views.
Use library scientists who understand the technology and
technologists who understand library science.
Provide some editorial and publishing support to increase value
and accuracy.
Capture metadata as well as content.
Create automatic systems for cleaning out the closet.
3. Directories of expertise
Before todays search engines were available, companies often
used pointer system applications, such as directories of internal
experts, project managers, or interested parties that were fed by the
corporate HR system. While some organizations still do this, others
have begun to ask the employees themselves to maintain their

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Information Technology

ROADBLOCKS TO SUCCESS

Lack of great content

Lack of common platforms
Building the IT system first
Complicated technologytakes more than three clicks to find knowledge
Localized technology solutions

expertise information, using whatever terms are most appropriate.

Free-text search capabilities make it easy for others to find these
experts. The incentive for employees to keep their information up to
date is knowing that others will use it to solicit them for internal
projects and jobs.
Keep in mind the following when creating directories of experts:
Maps of experts and communities of practice are at times out of
date but are still worthwhile.
Dont create a pointer system thats basically an electronic version
of a phone book. Add value by interconnecting the directory
with other components of the knowledge management application suite, so that users can use hot links to further refine
their needs.
Experts must be motivated to supply their profiles (market
economy).
Expert may be a highly political concept. Communities of
practice may be used to help qualify expertise.
4. Transferring via document exchange and video infrastructure
E-mail is the most pervasive and effective means of electronic
communication and collaboration. It is real-time, fast, easy, and

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user-driven. Videoconferencing from the desktop is growing but not

ubiquitous like e-mail. Although e-mail is a rich source of information, there is too much of it and it is unfilteredthus, gems are
frequently lost. The creation of public folders for e-mail that contains information that may interest others or the use of collaborative
technology for threaded conversations for communities of practice
helps ensure that valuable knowledge is shared.

CHECK YOUR STATUS

1. Is the technology group supporting your knowledge management initiatives?
2. Does your organization have an information technology model
that supports your knowledge management initiatives?
3. Who are the users of your system?
4. Does your technology link all employees of the organization to
one another and to all relevant internal and external data and
information?
5. Does your organization have common IT platforms, navigation
tools, and protocols?
6. What technology platform will have the greatest ease of use and
scalability for the future?
7. Are off-the-shelf applications available?
8. Are IT users provided a standard process taxonomy for sharing
and transferring knowledge and best practices?
9. How do people contribute to and use the system?
10. Who is responsible for monitoring the inputs to your system?

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Landmark Five

Approaches

ow that we understand the reasons for knowledge managementthe business caseand many of the pieces that make
up a well-rounded initiative, its time to think about putting it into
action. As we mentioned in the introduction, knowledge is just
information unless people are using it.
While the content of the knowledge and the best practices is
important to successful knowledge management, so is the approach
taken to move this knowledge throughout the organization. Like a
lot of other things in life, transfer of knowledge and best practices
just doesnt happen because it makes good sense or because management says it should. Using the right approach(es) is critical to
ensuring the success of implementation and change.
CHOOSING YOUR APPROACH

A well-chosen transfer approach will successfully facilitate the

flow of know-how and best practices. Regardless of the size and
complexity of transfer, these approaches share some basic processes
and fall into three general designs:

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1. Self-directed,
2. Knowledge services and networks, and
3. Facilitated transfer.
The three approaches can be placed on a continuum of increasing
likelihood of identified business results and higher resources/
commitment (Figure 7). The more advanced an organizations
knowledge management initiatives, the greater the chances that its
transfer approaches will be rich and multidimensional. And the
more real value you demonstrate to your organization, the easier it
will be to move along the continuum.

Three Approaches to Infrastructure

More

Results Achieved

Tacit

Facilitated
Transfer
Knowledge
Services and
Networks
Self-Directed

Explicit
Fewer
Fewer

Resources Required

More

Figure 7

In determining which approach to use, it is important to ask

yourself what type of knowledge is being transferredexplicit or
tacit. Explicit knowledge (formal/codified) is best transferred
through technological solutions, while tacit knowledge
(informal/uncodified) is often best transferred via people.

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Approaches

Clearly understanding the type of knowledge to be transferred can

help you design the correct transfer approach.
The Self-Directed Transfer Approach

The self-directed approach to a knowledge infrastructure essentially presents people with the technology and then sets them free to
use it.
The key component of this approach is the database. No matter
the typee.g., best practices, lessons learned, or project specifics
these databases alone typically do little to transform the information
into knowledge. Rather than package the information in ways that
help users make sense of it, companies that follow this approach
usually leave the deciphering to the user.
This approach, however, often includes pointer systems, ranging
from knowledge maps to corporate directories, that simply direct the
user to someone who may know more about a particular topic. They
dont contain the actual knowledge themselves.
Who:
What:
Why:

Where:
When:
How:

The knowledge worker

Link person to information
Help people find and access know-what, know-who,
know-why, and simple know-how
Reduce cycle time, avoid relearning, reduce hassle, free up
time for creativity
Right from their desktops
In the course of daily work
Portals
Search engines
Integrated into process
Shared files/databases
Specific applications

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Landmark Five

Content:

Explicit knowledge and information

Databases
Documents
Directories and maps to information
Templates, tools, and presentations
Computer-based learning
Performance support systems (case-based
reasoning tools)
Critical Success Good technology, embedded in work
Factors:
Owner for each object to ensure quality
Feedback buttons
Help desk
Richness and relevance of information
Risks:
Useless or unreliable information
Junkyards of abandoned Web pages
Meager supply of content
Cant represent the treasure chest of
tacit knowledge
Does nothing to move information to action
Chevrons knowledge maplocated on the companys
intranetincludes names, locations, phone numbers, and other
pertinent information for people in Chevron worldwide who are
working in specified knowledge arenas. This map uses APQCs
Process Classification Framework, Malcolm Baldrige National
Quality Award criteria, and a key word list to provide ease of access
and retrieval for users.
The Knowledge Services and Networks Transfer Approach

Access to information is important, but access to people with

knowledge is more important is perhaps the best way to characterize
this approach. This approach provides, in addition to self-directed
components, a variety of knowledge management services and
organized networks to assist in the transfer process. People, such as
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knowledge managers, add value by scanning the flow of information

and organizing knowledge into a more usable format.
This approach also involves networks of people, sometimes
known as communities of practice or interest, who share with and
learn from one another in person and electronically. More information about these groups is found in the Structure and Roles/
Responsibilities chapter.
Who:
What:
Why:

How:

Rewards:

Content:

Groups of people: teams, communities of practice,

business functions
Link people by creating a shared space and context
for dialogue, advice, and work
Build relationships
Tacit knowledge transfer
Project work (across time and space)
Speed up learning
Speed up action and fast response
Build new knowledge
All of us know more than one of us
Meetings, co-location
Group systemscyber-teams
Facilitation and coordination
Internet chat and Web collaboration
Teleconferencing
Videoconferencing
Authorship, peer review
Recognition
Help
Work of project teams
Peer information exchange
New product ideas
Support networks of experts and mentors
Technical tips

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T r avel

The glue that

holds learning
communities
together is the
personal value
proposition.
To sustain the in
volvement a le
arning commun
needs, you mus
ity
t provide activiti
es that exceed
the value of othe
rs. Another key
learning comm
to successful
unity developm
ent is setting th
dynamics or en
e appropriate
vironment for sh
aring, which re
balance betwee
quires the right
n facilitation an
d knowledge br
okering.

TI

Mic
Team Leader
, Knowledghael Mahaffie,
eM
Shell Deepw
ater Devel anagement,
opment Inc.

Critical Success Shared space and community

Factors:
Common purpose
Compelling need
Strong coordinators and moderators
Content experts providing perspective, meaning
Norms and expectations
Risks:
Not enough people in the network
Not all people know how or want to work and
interact this way
Not a substitute for face-to-face interactionoften
increases meetings
Sequent Computer Systems Sequent Corporate Electronic
Library (SCEL) works on a publisher/consumer relationship. Every
employee who uses SCEL is a publisher and/or a consumer. Sequent
relies on publishers to put knowledge into the system and consumers
to use that knowledge.
Publishing coordinators representing functional or business
communities in Sequent enter information from their community

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Approaches

into the SCEL system so it is available to others. Two librarians help

organize the information and help users search for what they need.
In addition, there is a SCEL team that monitors the inputs to and
outputs from the system.
The Facilitated Transfer Approach

The third approach to knowledge transfer can be considered

full service. Its foundation is the realization that just because
knowledge and best-practice information is available does not mean
that action will follow.
This approach provides all of the previous activities and services,
plus it designates specific people to stimulate, encourage, and help
with the transfer of knowledge and best practices, and often even
assist in implementation.
The facilitated transfer approach is the most costly to design but
will yield the biggest payoff. As such, an organization using this
approach must be confident that the knowledge and best practices
are worth the effort to transfer.

ROADBLOCKS TO SUCCESS

No assessment of current state

Failure to reuse transfer approaches
Lack of scaling up a local approach (one-shot approach)
Not enough tacit knowledge exchange early on
Transfer approach doesnt achieve results and requires more resources
Transfer approach adds multiple steps to process

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Who:
What:

Unit to unit
Transfer of a successfully demonstrated, complex
practice with high return on investment
Why:
Actually transfer the process
Close gaps
Raise performance
Avoid trial and error
Shorten the learning curve
How:
Best-practice teams
Facilitator network
Incorporate new practices into procedures and
training systems
Interview/knowledge solicitation
Content:
Any process or practice with high impact and gap
closure
Focus of impact: operations, customer relationship
management, products, people/HR, suppliers
Critical Success Compelling need or pressure
Factors:
Extensive time and resources
Robust methodology
Process experts
Change management
Boundary-spanning authority
Ability to transfer people
Risks:
Redeployment of less-than-full-time resources
away from knowledge management
Limited involvement of the masses due to centralization of facilitators
Lack of trust in facilitators expertise or abilities

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Approaches

American Management Systems uses knowledge associates

(facilitators) to connect best practices with people and populate its
database. These knowledge associates are chosen because they are
leaders in the organization and agree to make tangible contributions
to the companys intellectual capital. A team of professional librarians helps catalog all of the contributions and index them for crossreferencing by all AMS employees.
In addition to sharing their knowledge through these contributions on the company intranet, the associates offer their expertise
through tools such as e-mail, voice mail, and virtual discussion
databases that facilitate expedient communication.
THERE IS NO SINGLE RIGHT APPROACH

The three design approaches discussed in this chapter are steps

leading to a multidimensional solution along which organizations
choose the mix of activities. Which is best? Each organization has
to balance the answers to key transfer questions with its resources, its
strategy, and its belief in the importance of knowledge and best
practices transfer in the years ahead.

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CHECK YOUR STATUS

1. How important is knowledge management to your organizational strategy?
2. What is the nature of the content (information or knowledge)
that will be involved?
3. Who will be using the content or participating in the process?
4. How does the process or content fit the way they work?
5. How will the content be captured and refreshed?
6. What methods will be employed to close communication,
technical, and tacit/experiential gaps between sources and
recipients?
7. What barriers in your organization hinder the transfer of
knowledge and best practices?
8. Which approach(es) will address these barriers?
9. What operational improvements will be achieved by using
these approaches?
10. What will be the external benefits (customer and market
reaction) of using these approaches?
11. What will be the bottom-line benefits gained by using
these approaches?

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Measurement

f you dont track and measure your knowledge management

activities and results, you will have a hard time understanding
what is working (or what is not) and what the payoffs are.
What you measure depends on your purpose.
If you want to know whether knowledge transfer efforts are
achieving their objectives, identify the business results that
match your original value proposition and measure those.
If you want to know which of your knowledge transfer tools and
applications are the most effective for sharing practices and
know-how, measure the level of transfer activity and ask users
how it has helped them achieve business objectives. Look for
activity measures and success stories.
A PRACTICAL APPROACH TO MEASUREMENT

Practitioners tell us it is most important to measure the success

of the projects and business processes that are being improved
through the transfer of knowledge and best practices. Hence, they
attempt to link the outcomes of these efforts to their original value
proposition. Each comes with its own set of process, and even
financial, measures (see Frequently Used Measures). We therefore
believe in measuring processes, activities, and operational outcomes.

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Most firms are using some combination of yardsticks to gauge

the success of their knowledge management projects. In fact, most
can clearly describe business improvement outcomes in projects and
processes in which knowledge management approaches and applications were used. During our Using Information Technology to
Support Knowledge Management benchmarking study, participants
indicated the most common business improvement outcomes
realized were process improvement and cycle-time reduction, business growth, and employee and customer satisfaction (Figure 8).

Outcomes Realized as a Result

of Knowledge Management Practice
38%

Increased innovation
Business growth

75%

Practice and process

improvement

88%

Increased customer satisfaction

63%

Enhanced employee capability/

organization learning

63%
0

20

40

60

80

100

Percentage

n=8

Figure 8

FREQUENTLY USED MEASURES

When measuring the impact of transfer efforts, take into account

your original goal. Each value proposition comes with a set of logical
measures that help monitor your progress toward that goal. These
include the following:

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Measurement

T r avel

r
s

TI

We used to re
ly on

anecdotal feed
back
to determine th
e success of ou
r Lessons
Learned projec
t, but we recent
ly added a
survey instrum
ent to our Web
si
te that enables
us to gather re
sults. This, com
bi
ne
d
with customer
satisfaction an
d utilization da
ta, gives us a go
the impact of ou
od picture of
r knowledge m
anagement ef fo
rts.
Victor Wah
by, M.D., Ph
Director of
.D.,
Special Pr
U.S. Vetera
ojects,
ns Health
Administra
tion

Customer Intimacy
Number of customers
Customer retention rates
Number of calls handled per day
Number of calls resolved in the first sitting
Cross-selling penetration
Revenue from existing customers
Product Leadership
Revenue from commercialization of new products
Percentage of revenue from new products
Time-to-market cycles
Ratio of successful to not-successful product launches
Number of launches per year
Operational Excellence
Cost per unit
Productivity and yields
Number of defects/poor quality
Production cycle time
Inventory carrying costs
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Landmark Six

Environmental compliance
Safety records

TYPES OF MEASURES: OUTCOMES AND ACTIVITIES

There are two general types of measures that can be used to

evaluate knowledge management and transfer activities:
1. Results: the measurable (against a benchmark or in dollar terms)
impact of the initiative on the outcomes of the projects or
processes targeted for improvement, and
2. Activities: usage and participation rates of the databases and other
knowledge management- and transfer-enabling technologies
and tools.
Measuring Results

Since most of the companies with which we work report that

their knowledge management efforts are tightly linked to business
objectives and business needs, most prefer to measure process and
project outcomes.
A good example of measuring business results is Buckmans
global measure of sales from new products. Companies like
Buckman Laboratories have implemented enterprisewide systems to
support the sharing of knowledge and practices, especially in the sales
and marketing arena. One of the value propositions behind the
KNetix knowledge-sharing communication system was improving
product commercialization by linking salespeople to customers and
R&D. To measure how successful its efforts have been, Buckman
examines the percentage of sales generated from new products (less
than 5 years old). The results speak for themselves:

19881992 (prior to KNetix): 23.6 percent

19921996: 33.3 percent

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Measurement

Other outcomes are as follows:

Sales per salesperson is up 51 percent.
Sales per associate is up 34 percent.
Operating profit per associate is up 93 percent.
The speed of response to customers is hours, not days or weeks.
The quality of response has risen all over the world.
Growth of talented people has increased, since more employees are
immersed in high-intensity projects.
The role of managers is not to manage the flow of information up
and down the organization, but to close the gaps.

In the end, Buckman believes it is impossible to put a monetary

value on the knowledge network; it is more a basis for the way the
company operates.
Measuring Activities

This second group of measures addresses how frequently users

are accessing, contributing to, or drawing on the information technology tools that enable knowledge transfer enterprisewide.
There is value in these activity measures. They can lead to a
greater understanding of how, or if, a tool or support system of the
knowledge management activity is being used. A caution: Whereas
activity-based measures provide useful information on accessibility,
utilization, content quality, and design features, they do not provide
information about the impact of these activities on results.
Common activity measures include:
user rating of effectiveness,
number of hits,
participation rates,
frequency of contribution, and
frequency of use.

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Landmark Six

Ultimately, to gain a comprehensive view of the success of

knowledge management and transfer efforts, firms rely on the
combination package of outcomes and activity measures.
MEASURING KNOWLEDGE MANAGEMENT COSTS

The actual cost of knowledge management and transfer projects

is notoriously hard to pin down. Because costs are often dispersed
throughout the organization, they can hide in places like IT,
marketing, HR, and training, as well as in elusive increases in management time and the role of knowledge managers.
However, since there are costs associated with developing support
systems, it helps to measure the costs. Here are two examples of
knowledge management cost measures:
1. At Sequent Computer Systems, the total spending on knowledge
management infrastructure (people and technology) is about
$1,000 per employee per year, including all direct costs and some
portion of the indirect costs.
2. Buckman spends about 3.75 percent of revenue on knowledge
management and transfer activities, including all information
technology. Hence, the cost per employee is about $7,500 per
year for hardware, software, telephone, network, and staff
support.
Knowledge Management People Support Costs

Obviously, the range is quite broad. The difference in peremployee charges reflects more accounting (what gets counted as
knowledge management direct expense) than effort. These support
costs include:
facilitating the formation and health of communities of practice
and discussion groups,
populating best-practice databases,
creating information technology standards for format and
information and document management,

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Measurement

ROADBLOCKS TO SUCCESS

Activities, not results, are measured

Lack of anecdotal exchange of knowledge
Measures do not reflect the value proposition
Failure to capture and publicize success stories

advertising the existence of groups and experts, and

developing policies and procedures for appropriate use of
information and dialogue.

THE COST OF NOT KNOWING (CONK)

There are lots of examples where information and knowledge

were somewhere in the organization, but not where they needed to
be to avoid a disaster. These examples sometimes become legendary;
they are certainly burned into managements memory. When the
Challenger space shuttle exploded, some engineers in NASA knew
the O-rings in the solid rocket boosters wouldnt hold at low temperatures. But the people who made the decision to launch did not. In
a less tragic context, a company launches a new service in China, but
the new team doesnt build on experience in that market and makes
all the same mistakes again. Sometimes, the cost of not managing
knowledge is easier to pinpoint than the positive contribution of
effective management. Easierbut can you afford it?
DECIDING WHEN TO MEASURE

To decide when to measure, consider which school of thought

applies to your organization: One believes it is premature to measure

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Landmark Six

knowledge management at the beginning because not enough is yet

known about the dynamics and impact of knowledge to justify
elaborate measurement systems. This school believes measurement
at this stage can be risky and misleading. The second school believes
that measurement is important for both understanding and legitimizing investment. It wants to know where and how to invest.
We believe you stand the best chance for successful measurement in the early stages of a knowledge management initiative if you
focus on the behaviors and attitudes so you can observe, monitor,
and nurture. Later on in the initiative you can concentrate on
elaborate knowledge management-unique measurement schemes.
CONCLUSION

Ultimately, knowledge about your knowledge management

initiatives is important because it helps you:
design future systems and applications,
improve the current sharing processes, and
ensure the effort stays on track (that is, delivers the value
proposition!).
Plus, as the role of knowledge managers within organizations
grows, such measures will provide the underpinning of their performance evaluation and, hence, compensation.
If you cannot measure it, can you manage it? We dont think so.

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CHECK YOUR STATUS

1

Do your organizations knowledge management measures tie

back to the organizational strategy and the value proposition?
2. Which knowledge management tools and applications are the
most effective for sharing best practices and knowledge?
3. Are you measuring the activities (level of use) of your knowledge
management initiatives?
4. What activity measures are you using?
5. How are your activity measures helping you improve your
knowledge management initiatives?
6. Are you measuring the process and project outcomes (results)
of your knowledge management initiatives?
7 Do your outcomes and business results match your value
proposition?
8. Does your measurement system capture anecdotal, or qualitative,
measures?
9. Does your organization measure the cost of its knowledge
management support systems?
10. Have you captured and publicized successes?

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Where Do You Go From Here?

y now you should have a good understanding of where you are

related to knowledge management, as well as where you want to
be and which landmarks to focus on to get there. But deciding
where and how to begin still may be overwhelming.
Whether you choose to start small or to begin with a sweeping
initiative or changes, you need to take the plunge and simply expect
to make a few mistakes. You can start off on the right path, however, by creating a broad itinerary for yourself based on the following
four steps:
plan,
design,
implement, and
scale up.
PLAN

By reading this book, youve already begun the planning

phaseidentifying where you are now makes it easier to plan where
you are going. Take into consideration your score on the quiz, your
answers to the questions in the Landmark chapters, and any ahas
that may have occurred to you during your reading.

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Where Do You Go From Here?

The next step is to focus on your value proposition. Here are

some to-dos for determining that essential part of your knowledge
management strategy:
1. Review your organizations competitive, or business, strategy. Identify
the key processes and drivers that affect the success of that
strategy.
2. Understand the current state and potential for improvement.
Determine how knowledge management can improve what
youre already doing.
3. Develop a knowledge management framework. Create a conceptual
model of how knowledge management would help this process
or project.
4. Make realistic choices. Pick a project, process, or problem that the
leadership is committed to improving. Next, describe an
approach that shows how knowledge management would help.
DESIGN

The design phase involves determining the scale of your project

or initiative and determining what resourcestechnologies, people,
etc.are required to make this happen. Relying on lessons learned
or best practices from others at this stage in the process is always
wise. If you dont have access to these within your organization,
check outside resources: Benchmark other companies, either on your
own or in a consortium like the ones APQC facilitates, or read up on
best practices and case studies in your topic area (APQCs BestPractice Reports, based on the findings from our benchmarking
studies, are an excellent resource).
This is the time to decide whether you want to begin by applying
knowledge management to a specific project or by constructing an
organizationwide architecture. Which one you choose depends on
what youve learned in this book and our other research publications
and activities about your current status and your organizations
readiness to embrace and support the initiative.

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A detailed project plan with information such as milestones,

resources, budget, and deliverable owners will help keep you on
track, no matter your desired end result.
The following should be on your to-do list for the design phase:
1. Find a champion or sponsor who understands the need and has the
clout and resources to devote to supporting knowledge management.
Based on the value proposition and the project(s) identified, it
may be obvious who that champion should be.
2. Set up your infrastructure so that someone, be it the champion or
not, has primary responsibility for making knowledge management
and sharing happen. If no one has this designation, the initiative
will soon fall by the wayside.
3. Examine the organizational structure that supports your knowledge
management efforts. Make sure you have the resources you need
to meet your goals. These resources should have widespread
contact throughout the organization rather than have influence
limited to a specific area.
4. Locate any communities of practice or sharing networks that already
exist in your organization. These structures can be helpful in the
implementation phase.
5. Establish standards for technology; they are the key to scale-up.
6. Match the knowledge management system with your knowledge
management objectives. Remember, there is no single right way to
design a technology architecture to support knowledge management and transfer. By and large, the more tacit and high-value
knowledge transfers often involve pointer systems or help desks.
A loose interchange and brainstorming session in the conference
room may be more productive than using groupware.
7. Maintain a pragmatic rather than a perfectionist approach.
Emphasize practicality in knowledge structures, desired behaviors, and technology.

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IMPLEMENT

Once youve done your planning and design, youre ready for the
action phase of your initiative. To successfully launch the project,
youll have to ensure that the people involved have the proper support they needbe it time, technology, human support, etc. Youll
also want to be sure that whatever project or initiative you undertake
will demonstrate early, visible results. This will provide the justification your project needs for sustenance and growth.
Again, youll want to turn to others, either inside or outside your
organization, for examples of how theyve implemented their own
projects and for lessons theyve learned. Theres no reason to make
your own mistakes when you can learn from the successes and
failures of others.
The following list of actions will help you in the implementation
phase.
1. Create a structure for classifying knowledge. This structure specifies
the categories and terms for the knowledge in which the organization is interested. It will help people contribute to and use the
knowledge system.
2. Get people to meet face to face at the beginning. Since early
exchanges of knowledge often are heavy on the tacit side, its
helpful to allow those involved to interact, rather than to simply
access recorded information of what others know and have
learned.
3. Create an environment that encourages sharing. This means
establishing trust among the participants and giving them a
reason to contribute.
4. Empower people to create and add to the knowledge management
system.
5. Allay peoples fears about losing their competitive edge by sharing,
rather than hoarding, what they know. Measurable results are
perhaps the best way to show how everyone benefits.

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6. Remain flexible. Any knowledge management system or

approach must be treated as provisional and temporary since
both knowledge and the technology for managing it change
rapidly.
7. If you want to know if your knowledge transfer tools and applications are useful, measure the level of use (activities) and ask users
how the tools have helped them achieve business objectives.
8. If you want to know whether your knowledge transfer efforts are
achieving their objectives, identify the business results that match
your original value proposition and measure those.
9. Celebrate successes early and often.
SCALE UP

Once youve demonstrated the success of your initial project,

youre ready to take on additional initiativesor perhaps one substantial project designed to capture and use the knowledge of your
whole organization. To do this, youll want to incorporate all the
steps in your implementation phase, but on a larger scale. In addition to the actions listed above, consider doing the following as you
expand the influence of your project(s):
1. Capture success stories and use them to sell others on what youre
doing.
2. Make the whole organization aware of the benefits of sharing
knowledge. If you cant make the process part of peoples everyday work, create an event that will draw attention to what youre
doing and will jump-start the sharing behavior.
3. Heavily market your knowledge-sharing applications and ensure
they meet users daily needs. If we build it, they will come works
only with substantial attention to marketing.
4. If training in knowledge management or the knowledge management system is necessary, make sure its available to everyone.

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CONCLUSION

One of the most important lessons weve learned from all the
organizations weve studied over the years is that you cant undertake
something of this magnitude on your own. Whether you turn to
APQC for help from our advisory services, research services, training, benchmarking studies, or other publications or discover other
ways to make the contacts and gather the information you need,
dont go it alone! After all, learning from others is what successful
knowledge management and sharing are all about.

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About APQC

ounded in 1977, the Houston-based American Productivity &

Quality Center provides the knowledge, training, and methods
that empower businesses and other organizations to maximize their
potential with a focus on productivity, quality, and best practices.
APQC is a nonprofit organization and an internationally recognized
leader in benchmarking and best-practice information, serving its
500-plus members and other customers in all sectors of business,
industry, education, and government.
Over the years APQC has built a distinguished list of achievements, including providing private-sector input into the first White
House Conference on Productivity and spearheading the 1987
creation of the Malcolm Baldrige National Quality Award, which
we jointly administered for its first three years. In 1992 we created
the International Benchmarking Clearinghouse, a comprehensive
service co-designed with customers to facilitate benchmarking.
Our most recent venture is the APQC Education Initiative, a
special program designed to integrate business best practices into
educational institutions.
Today, APQC continues to work with organizations to improve
productivity and quality by providing the tools, information, and
support they need to discover and implement best practices and
obtain results in dozens of process areas.

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Knowledge Management: A Guide for Your

Journey to Best-Practice Processes
As one of the titles in APQCs Passport to Success series, this book
provides readers with a comprehensive understanding of the components
of a successful knowledge management program. Based on years of
research of leading-edge organizationsand supported by examples of
best practices and tips from actual practitionersthis book will guide
readers through their own knowledge management endeavors.

If you have grown weary of abstract discussions and theory about knowledge
management, you will do well to read this guide of practical steps to achieving
a working-level capability to put knowledge into action. This guide is an easyto-follow blueprint to implement knowledge management programs that work
and lead to competitive advantage. It is a must-read for knowledge leaders and
practitioners.
Dan Holtshouse
Director, Corporate Strategy
Xerox Corporation

This is a straightforward, well-written guide to understanding what knowledge management is and how to use it to get results. APQC has condensed the
experience of leading organizations into a set of practical concepts. The
accompanying real-world illustrations and self-assessments make this book
a must-read for those new to the field of knowledge management or looking for new ways to increase the performance of their organizations.
Sam Ireland
Director of Performance Excellence
American Red Cross

A superbly pragmatic and clear guide for addressing the vital issues involved in
implementing a knowledge management strategy. APQC again draws on its
extensive studies and experience working with organizations for this guide.
Melissie Rumizen, Ph.D.
Assistant to the Chairman for Knowledge Sharing
Buckman Laboratories
ISBN 1-928593-22-4

9 781928 593225

$19.95 U.S.