As paradigms of innovation shift, so do KM

The primary R&D within organizations used to be done in the top-down fashion, with both research directions and resource allocation dominated by the headquarter. Today we are seeing new products and services developed in ways fundamentally different from the traditional method. The bottom-up approach begins with modifying an existing product by customizing it for a particular segmentation along the dimension of cost or features. Successful adoption by that segment may encourage more segments of the customer population to embrace the new product.

The "blue ocean" strategic thinking advocates looking outside the existing territory to find opportunities not yet recognized. When successful, the sidetracking approach may result in a wide open field that is rewarding to the innovators.

While each of the top-down, bottom-up and from-the-side innovation approaches has its place, the open innovation phenomenon has demonstrated its power in such areas as software (e.g., linux and appache), genome mapping, Internet protocols, and even greeting cards design. One of the results of the myriad ways of innovation interacting with one another is one surprise after another in more and more industries.

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Organizational culture shows itself everywhere in an organization

As a resesarcher and a consultant, I used to make frequent visits with managers and executives of a variety of companies. One thing that still interests me even to this day is the fact that some companies just feel so different. And the differences are so pervasive in the organization. They showed on people, products design and quality, processes, and even on minute details of the physical environment. Those companies are both teams and comunities. They are high-performing teams with discipline. They are also communities of members feeling a strong sense of belonging. The pressure is always there, but is manageble. Plenty of supports are provided to help employees grow and enjoy their life. Executives and managers are extremely concerned about the trust factor that glues the elements together. Yes, they do have to deal with crises. But they do it together, and always come out stronger that they were before. This kind of organizational culture is not easy to build, but is not more difficult than competing in the business world either. Everybody plays a certain role. But it's the executives and managers that make the most difference. Business is not nasty and boring because of thoese executives and managers.

Domain-specifc knowledge vs. domain-independent knowledge

Problem solving requires both general problem solving skills and domain specific knowledge. Logical reasoning and creative thinking, for example, are essential in finding a smart solution to a challenging problem. These skills usually can be applied to different fields. That's why some CEOs got to transfer to work in an industry that they did not have much experience. However, if they are to work in, say, a hospital or manufacturing firm, they must possess much knowledge that is unique to the industry. They must know a lot about the product/service, operational processes, and other areas in order to make good decisions. The 80/20 rule is still helpful here. The higher the rank, the more important the general (or domain-independent) knowledge and the less crucial the domain-specific knowledge. Workers and mangers at the lower and middle managerial levels usually contribute mainly by possessing and applying their domain-specific knowledge.

Where does the domain-specific knowledge come from? Some from education. A lot from working experience. Education provides general frameworks. But it's working in the field that substantiates and solidifies the working knowledge. Being in the field is critical in building the expertise in a particular domain. It is important that, if a knowledge management initiate is to be effective, the organization must develop its own implementation program. Looking to benchmarks is a good start and often inspiring. Ultimately, a successful knowledge management program must embody the unique characteristics of the organization.

Community as a form of collaboration

Bounded rationality furnishes the theoretical basis for collaboration. When problem complexity is overwhelming, divide-and-conquer is often an effective problem-solving approach. For many years before the Internet got so convenient, collaboration takes place within the department or the corporation. Communities formed within the organizational boundary, when operating with momentum, unit more brain power into a great value-producing system. The communities that involve the whole world, as radical as it seems, have been demonstrated to be a great business thinking for some companies in certain sectors.

Open innovation through various types of community has captured much attention of mass media. IBM joins effort with the open source software community and puts linux and Apache at the center of their core products. A significant portion of new products produced every year is the result of networking with people they did not hire. Counting amazon, eBay. jeep drivers, Mac users, ..., you'll notice that community, like knowledge, is everywhere. Can one imagine several years ago that community management would turn out to be a core competency of managers and organizations in the knowledge economy?

Inductive learning and deductive learning

Inductive reasoning generalizes and deductive reasoning tests the generalization on a specific case. Effective learning requires both.

Similarly, tacit knowledge and explicit knowledge are essential components of an upward spiral. One prompts the other to elevate our level of knowledge. Converting explicit knowledge to tacit knowledge involves the act of internalizing what we learn. Making tacit knowledge explicit reinforces better and deeper understanding of what vaguely and fuzzily exists in our knowledge base. Not a dichotomy, but more a continuum. It's just like water exists in both the liquid and vapor form most of the time.

Wisdom matters the most

Can one be both knowledgeable and stupid? Of course!
One can knowingly ignore the long term and opt for the short term benefit.
Or, knowingly put one factor above everything else that ought to be considered.
That is, wisdom has to to with perspective and priority. And the issue of perspective and priority is tied to the notion of significance. Significance is not a mind work. It is what one treasures out of heart. At least, it is a good blend of mind and heart.

Interesting! from knowledge management point of view, running a business requires both mind and heart. Pursuing a career also requires both mind and heart. Business world is not supposed to be hard and cold. Work is supposed to be an integral part of life. There is always something that can be done to improve the status quo. Enjoying the fun of improving harmonizes work and pleasure, and thus links work and study directly to significance. At the very basic level, one is motivated by the sense of significance.

Blog for reflective learning

When used as a study tool, blog support reflective learning. Employee can blog to keep a detailed record of what's learned and tried. Team members can blog to stimulate ach other's thinking. When practiced in a disciplined manner, blog enhances personal knowledge management and support collaboration. Blogs can be inter-linked into a knowledge network and form a community of practice. The scope of the community often extends far beyond organizational boundary.

Sounds straight-forward, and yet rarely taken seriously. Actually, most widely known habits share the same destiny: regular working out, no procrastination, planning ahead, leaving 10 minutes early to avoid traffic,...

It's hard enough for individuals, and it's even much more challenging for an organization to build collective memory using such tools as blogs. That also explains why knowledge management is a core competency for any organizations.

Knowledge appropriability and competitive advantage

While praising the act of sharing, knowledge management does not ignore the importance of the type of knowledge that is proprietary and increases the power of the product/service or process that contains that knowledge. When the knowledge appropriability level is high, it is difficult to be replicated or imitated. The benefit created by the knowledge lasts longer.

Knowledge appropriabiity is due to the very nature of the knowledge. It can also be the result of patent or copyright protection. The legal mechanism is necessary in order to provide incentive for knowledge workers to pursue innovative activities. It is clear that intellectual property right protection can hamper further innovation. From the government policy point of view, the key is to find the balance between too much and not enough.

Knowledge is power

"Knowledge is power." said Sir Francis Bacon. It is truer today than it was some 400 years ago when Bacon made the statement.

A knowledgeable firm competes better than one that is not. Knowledge is the true source of competitive advantage in the knowledge economy. To provide innovative product/service in the innovative way, firms must work diligently to replenish and deploy their knowledge stock.

The statement shouldn't be misinterpreted to justify knowledge hoarding behaviors by individual employees, however. The tricky thing about knowledge is that knowledge must get updated and upgraded to remain valuable. Sharing what you know can deepen your understanding and increases your knowledge. The notion of "knowledge is power" supports knowledge sharing, not knowledge hoarding. The organizational culture that encourages and rewards knowledge sharing as well as knowledge creation is an essential component of an innovative organization.

Wealth as an example of increasing returns

The value of an asset increases faster than the increase of the asset itself. Computer network is a typical example. Community of practice also is mentioned quite often. Innovative capability increases with the experience of innovating. Adding a complementary asset to the asset portfolio can create benefit similar to increasing returns.

Is wealth an example of IR as well?

The first $20 given to an empty-pocket person creates excitement. The fifth time $20 is given to the same person probably would not create as much excitement as the first time did. This is a typical example of diminishing return of utility in the physical world.

What about"the more you already have, the more you want to have?"

Yes, the more money you have already had, the hungrier you may be for even more money if you believe money makes you happy. That would be increasing return in a different sense.

To blog or not to blog, that is not the question

It's fun to turn the pages of a family photo album. They help bring back lots of memories long after the events happened. It's also fun to read the diary that logged your mind, your heart, and your life. It's hard to imagine a society that does not have any record of of things, big and small, that involve its members as days go by. The reality is that what's not captured is typically much more than what actually gets recorded. What a waste of "natural resource"!

To blog or not to blog? If a company executive asks me this question regarding the company policy, I would quickly say, "Go ahead, of course." The question should be how to encourage employee blogging so that everybody not only benefits as a result but also enjoys the process. This is a great new corporate ethic: perform and enjoy. Of course there are concerns. It takes time. Company secret may leak out. Well, there's no such thing that is risk-free in the real world.

The question, therefore, is how to make it work well.

Tacit knowledge and explicit knowledge

Explicit knowledge is visible and readily sharable. Tacit knowledge only resides in the head and doesn't easily get exchanged.

Knowledge expressed and represented in a certain visible form can be distributed and shared among users. Explicit knowledge can be validated and examined more conveniently than tacit knowledge. Accounting statements, for example, convey measurement information regarding various types of resources and business transactions. Ideas about new product/service design, however, are not always easy to describe in words, text, or pictures. We all have been dealing with explicit knowledge (such as this blog). We all also have a lot of tacit knowledge about the things we are familiar with (such as life).

Most people agree that, relatively speaking, explicit knowledge is no more than the part of iceberg above the water surface, and tacit knowledge is that part beneath.

Less is discussed as to which comes first.

When learning to drive, we first heard instruction spoken out and watched actions and movements demonstrated. After much practicing, we drive in a way that the vehicle seems to have been united with you. Every part of you acts in synchronization with other parts of your body and mind. Explicit knowledge get internalized and becomes tacit knowledge.

An expert strives to turn lots of explicit knowledge into tacit in developing expertise. Then they are asked to transfer what they keep in their head to a form that can be put in the systems. Upon more thoughts, I found that this is similar to chicken-or-egg problem. It's a mutually reinforcing cycle, an ongoing process of induction and deduction. I guess some specific examples would serve well on this point.

Is KM a new thing?

Everybody has been practicing knowledge management all the time. But recognizing the strategic value of knowledge and treating it as a source of competitive advantage for all companies is a recent enlightenment in organizational management. The term KM does not even have to be used to label the activities that in essence is related to knowledge management. As a matter of fact, some people deliberately avoid use of KM just to reduce confusion and controversy (not everybody agrees that knowledge can be managed).

It's less controversial that innovation is crucial in enhancing an organization's competitiveness. It's also clear that new knowledge must be constantly created and deployed to innovate. Explicit knowledge can be managed directly. But tacit knowledge can only be managed through people network. If we don't overly simplify the point of argument, there would not be so much confusion. It's like human resource management. How do you management human resource? The asnwer would depend on what you mean by managing. Right?

Increasing Return

The phenomenon of increasing return (IR) refers to a virtuous cycle in which the output of a production system increases disproportionally than input does. For example, an already very innovative company can easily get even more innovative than a less innovative one. The more knowledgeable you are about a subject, the easier for you to learn a new knowledge. The four factors driving this phenomenon are (1) standards and network externalities, (2) customer lock-in, (3) large up-front costs, and (4) learning effect.

The importance of knowledge management for a company in pursuing sustainable competitive advantage can at least partly be explained by the concept of IR. Competitive advantage does not happen automatically. It takes commited and conscious effort to build.  The people in Nucor Steel, for example, are not complacent about their success. The social ecology already working within the entire company keeps pushing their standards higher and higher. Partners Healthcare, as another example, would find it easier to build another knowledge work-supporting system once they have had experience building one. IR usually is associated with learning, experience, capability, and skill. 

Data Hierarchy

From data to information to knowledge to wisdom, data is tedious and wisdom is abstract if they are treated like they exist by themselves. However, when placed in a specific context, a business process or other situations, data is concrete because it represents facts. The meaning of wisdom would be neatly framed and understood. This is equivalent to viewing the data hierarchy from the top down:

Wisdom is knowledge viewed from an appropriate perspective. Knowledge is information related to problems or decisions. Information is data placed in and presented for a specific context. And data is the description of reality or facts relative to a specific setting.

Wisdom is knowledge placed in 

Are social networks more than social?

The hottest Web 2.0 issue is, perhaps, social network. Using web content analysis tools, one can derive much useful information about users. By targeting those who exhibit "right" personal characteristics, a business can identify a promising customer base for their products / services.

Theory and practice in knowledge management

A smart and bold entrepreneur or manager came up with a great idea and gave it a try. It worked. The idea was duplicated at other locations to produce more evidence for its value. The experiences inspired and fueled development of a new theory, which in in turn inspired practicing managers to adopt the new thinking in their department or company. This dynamic, two-way interaction process goes on until everybody seems to have taken it for granted. Then, it disappeared from the public scene. From business strategy researchers, knowledge as a strategic asset and knowledge management as a crucial value-creating activity have been taken for granted. However, a close look at their discussion quickly reveals much impact of km on most of the components in their frameworks.

This book, The new age of innovation, does not carry km in its title. Yet, km lies at the core of everything. Knowledge is the input and output of business processes. ICT infrastructure facilitates or even enables knowledge creation, dissemination, and application. Value-creating business models are driven by km activities. Innovative business strategies essentially encompasses innovative km activities.

About the online class experiment

The first experiment provides some insights for future improvement.

Students are not used to the informal nature of blogs and the fact that blogs can be edited after they are posted. Actually, they don't have to finish everything at one time. Coming back at it several times would be more fun and less burden. They should feel free to add and expand their thoughts. Lacking the spirit of freedom, blogging would not turn into anything substantial.

I wonder what'd happen if these are made clear to the students before the experiment.

Thoughts about blogging

Blogging ought to be part of daily life.

Forget about reputation. Forget about who's reading. Just concentrate on your thoughts. Not everybody is a guru about something. But everybody can write down what's in their mind. Start with a purpose. Set up as many blogs as you want. There needs to be some for school, some for work, and for life, and for anything else.

Is time a barrier? No. Passion is.
Don't know anything that you can write about? The fact is, you do know something that you can write about. At the very least, you are an intellectual, a human being that feels and thinks.

Just like with any program implementation, starting small is a good advice. Blogging is a habit worth developing.