Harvard Business Review ON Knowledge Management

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Harvard Business Review ONKnowledge
Management

• Yan An
• MBA and MS-MIS 2008
• February 19, 2007

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Today's Agenda

• The Coming of the New Organization
• By Peter F. Drucker
• The Knowledge-Creating Company
• By Ikujiro Nonaka
• Building a Learning Organization
• By David A. Garvin

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The Coming of the New Organization Originally
Published in 1988

• Who is Peter F. Drucker?
• Writer
• Teacher
• Social Ecologist
• Urged to give workers more control
• Argued turn governmental functions over to
  private enterprises
• Foresaw the 1970s Japan competition and
  inflation in 1940s

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In the Next 20 Years (from 1988)

• Large Businesses will Transform
• 1/2 of managements
• 1/3 of managers
• Composed largely of specialists
• Knowledge based
• Self directed and disciplined
• What Directs the Transformation
• Information Technology

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Making Data into Information

• Requires Knowledge
• Specialization
• Specialists are found in operations
• People without operating responsibilities shrinks
  drastically
• Cutting number of management levels and managers
• Information does their jobs

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Information Based Corporation

• Knowledge will be at the bottom
• Require clear, simple, common objectives that
  translate into particular actions
• Executives asks
• What information is for them, what data they
  need?
• Everyone else asks
• Who depends on me for information? And on whom
  do I depend?

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Challenges to become Information Based

• Require to change old habits and acquire new ones
• Threaten the jobs and status of the long-serving,
  middle-aged people in the middle management
• The more successful a company has been, the more
  difficult this process is to be

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Solutions to the Challenges

• Developing rewards, recognition, and career
  opportunities for specialists
• Creating unified vision in an organization of
  specialists
• Devising the management structure for an
  organization of task forces
• Ensuring the supply, preparation, and testing of
  top management people

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The Knowledge-Creating Company Originally
Published in 1991

• Introduction of Ikujiro Nonaka
• Five and a half years at UC Berkeley
• MBA
• Ph.D. In Business(1972)
• Professor of Knowledge

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What does Knowledge do?

• The one sure source of lasting competitive
  advantage is knowledge
• Successful companies are
• Consistently create new knowledge
• Quickly embody knowledge in new products
• Knowledge-Creating company

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Western Vs. Japanese views of Knowledge Creation

• West (U.S.)
• Organization as a machine for information
  processing
• Useful Knowledge
• Formal
• Systematic
• Codified procedures
• Universal principles
• Quantifiable
• Increased efficiency
• Lower costs

• Japan
• Depends on tapping the tacit, subjective
  insights, and intuitions of individual employees
• Organization is a living organism
• Inventing new knowledge is a way of behaving
• Everyone is knowledge worker - Entrepreneur

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The Spiral of Knowledge -New knowledge always
begins with the individual

• Tacit Knowledge
• Highly personal
• Hard to formalize and articulate
• Deeply rooted in an individuals commitment
• Explicit knowledge
• Formal
• Systematic
• Can be easily communicated and shared

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Spiral of Knowledge Continues

• Story Matsushita Electric Companys bread-making
  machine
• Problem Unable to knead dough correctly
• Solution an employee trained with a professional
  head baker to study his kneading technique

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Spiral of Knowledge Continues
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Building a Learning Organization Originally
Published in 1993

• David A. Garvin
• Professor of Business Administration at Harvard
  Business School

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Learning Organizations

• Continuous improvement requires a commitment to
  learning
• Many scholars including Ikujiro proposed how to
  improve an organization, however, there is no
  framework for action

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Three Ms are left unsolved

• Meaning
• Well-grounded definition of learning
  organizations is required
• Management
• Clearer guidelines for practice are needed
• Measurement
• Need better tools for assessing the rate and
  level of learning

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Definition of a Learning Organization

• A learning organization is an organization
  skilled at creating, acquiring, and transferring
  knowledge, and at modifying its behavior to
  reflect new knowledge and insights

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5 building Blocks of Learning Organizations

• Systematic problem solving
• Relying on the scientific method
• Insisting on data
• Using simple statistical tools
• Experimentation
• Systematic searching for and testing of new
  knowledge (using the scientific method is
  essential)
• Learning from past experience
• Review their successes and failures
• Access and record the lessons (Accessible)

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5 building Blocks of Learning

• Learning from others
• Benchmarking
• NOT industrial tourism
• Learn from the customers
• Up-to-date product information
• Competitive comparisons
• Immediate feedback
• Transferring Knowledge
• Must spread quickly throughout the organization

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Measuring learning If you cant measure it, you
cant manage it

• Learning and experience curves
• Half-life curve
• Time it takes to achieve a 50 improvement in a
  specified performance measure.

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Q A
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References

• Druckers Impact on Leadership Network
• http//www.pursuantgroup.com/leadnet/advance/nov05
  o.htm
• Knowledge has to do with truth, goodness, and
  beauty (From the conversation with professor
  Ikujiro Nonaka, Tokyo, Japan, 1996)
• http//www.dialogonleadership.org/Nonaka-1996cp.ht
  ml