The Knowledge Management Stage and Organizational IQ
Albert Einstein's hypothesis that an average person uses only 10 percent of his or her brainpower is still faced with great amazement. Pondering on what an extra 1 to 5 percent of brainpower will produce, scientists starting with Einstein tried to unlock the mystery of how the brain works, with very little luck. Knowledge management (KM) practitioners, however, seem to have more luck when it comes to the organizational brain. Observing that organizations use only 20 percent of the knowledge available to them,1 KM practitioners set out to find ways for organizations to recognize and leverage their knowledge. This is the quest of knowledge management. KM is the art of managing the knowledge accumulated in an organization's databases, practices, and routines (explicit knowledge) and that contained in the heads of its employees (tacit knowledge) to create value. To some, KM is one and the same thing as intellectual capital management(ICM), where innovation processes and intellectual property (IP) are seen as knowledge resources. This, however, is not the view taken in this book. Although, theoretically speaking, the management of any intellectually based asset or resource is a management of the knowledge underlying that asset, from the practical perspective, managing innovation and IP (though knowledge based) is very different from managing the raw knowledge resources. To classify and manage innovation and IP as knowledge resources under the same stage of KM runs the risk of confusing the objectives that management should aim for in managing each of these stages.
Knowledge management is presented in this book as the stage at which the knowledge resources of an organization are deployed and reconfigured to create value, to form the platform for achieving the organization's mission through action, innovation, or commercialization. Above all, KM is the stage at which the organization knows itself by knowing what it knows, where it recognizes the value of the tacit knowledge, as the basis for decision making and hence the real source of value creation. Only when that happens will the organization use more of the knowledge available to it, learn from its mistakes, and not reinvent the wheel. Before outlining the main concepts of the discipline of KM, it is important to elaborate on the main problems facing business management and that KM promises to solve.
The most obvious problem is dissipation of an organization's knowledge resources, which directly affects performance and hence the bottom line. In particular, two main problems will be highlighted: organizational memory loss and brain drain. At the heart of organizational memory loss and brain drain is an organization that does not know what it knows and lacks the capability of leveraging the tacit knowledge of its employees. To that we now turn.
This article is part of eBook. To read the rest of the eBook (full version) please look at: capital basics
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The Knowledge Management Stage and Organizational IQ