3. Knowledge Management

Business is about products and services, and about getting those products and services to customers at a sensible profit. But this proposition does not do justice to the pivotal role that knowledge has always played, to says nothing about the fact that knowledge is now the most valuable business asset.

The world economy has shifted away from traditional assets towards intellectual assets. Corporate spending on telecommunications now exceeds aggregate spending. And some three-quarters of the world's corporate market value resides today in intellectual resources. That explains why companies are increasingly judged by their knowledge assets and their use of those assets to create value.

Executives are only now learning to identify the types of knowledge which, taken together, represent a dominant asset and an organizational priority. Improved communications technology has highlighted the importance of creating pathways of clear communication among professionals within an organization. Reconsidering the role of knowledge showed what was needed: to connect the top, bottom, middle and farthest reaches of the organization more closely still, so that knowledge can be shared quickly, thoroughly, and productively. It also revealed a potential for information overload and crossed signals, absent common terms and agreed-upon strategic focus.

Today, many enterprises are implementing formal Knowledge Management initiatives, such as enterprise portals and intranets for sharing knowledge internally, and extranets for sharing knowledge directly with clients and other external stakeholders. Yet marshalling knowledge resources across an enterprise is no easy task. A powerful mix of focus, planning, development, technology and especially, education, is required.

As Knowledge Management can be applied to every function within an enterprise, implementing a Knowledge Management program involves strategy, culture, systems, and human resources. That is why the best initiatives are invariably supported from the top. The CEO must vigorously articulate the Knowledge Management vision and demonstrate its significance to the ultimate goal: usually, the creation of greater shareholder value.

Knowledge Management initiatives must be tied to specific business issues or strategies and funded for the long haul. A typical first step: find out where knowledge resides. This can lead to the development of knowledge maps to help bridge the gap between knowledge resources and work performed. Formal measures to nourish organizational knowledge further characterize winning Knowledge Management undertakings; initiatives in which full value is created only when new knowledge is created, harvested, shared and continually refined and refreshed.

In the outstanding knowledge enterprise, therefore, leadership recognizes the knowledge needs of the organization and creates both the "hard" systems and "soft" changes in culture which, taken together, signal the intent to succeed in the knowledge economy of the next millennium.

 

                                                 

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