Managing Corporate Knowledge Assets
Knowledge assets are one of a firm’s most valuable assets. Knowledge is defined as information that is personalized to an individual or a collective group to support decision making. Knowledge assets include both explicit knowledge (e.g., documented concepts, procedures, laws, and routines) and tacit knowledge (e.g., experience, relationships, and know-how) that are context-bound and highly specific to a firm.
A firm’s knowledge assets evolve over time along rather unpredictable paths, and some can provide the firm with unique competitive advantages. Knowledge assets, however, are notoriously difficult to manage. Often the knowledge needed to solve a problem already exists within a firm but finding the knowledge is a challenge. Many employees have their own methods to manage knowledge: writing on a piece of paper, sketching on a notepad, or securely storing documents in filing cabinets within their offices. These primitive approaches result in countless knowledge silos that are not widely available throughout the firm. Moreover, documented procedures and best practices are often fragmented and poorly maintained.
Over the last several decades, corporations have leveraged IT to capture, store, and reuse knowledge. Technologies such as shared databases, web-based portals, and search engines are frequent staples of KM initiatives. The ultimate goal of these technologies is to introduce a standardized process to promote a more efficient and effective flow of information and knowledge throughout the firm. For example, firms use central databases to store customer data that is processed to develop sales and marketing analytics. The resulting knowledge is then transferred and shared across the organization with telecommunication technologies and communication tools such as email and video conferencing. Alternatively, retrieval tools such as query systems can be used by individuals to access these central databases directly.
Knowledge Management Challenges in the Southern California Aerospace Industry
Knowledge acquisition, sharing, and reuse are recurring and difficult problems in most industries. Within the aerospace industry, sharing knowledge within and across firms is particularly critical to success. Major aerospace projects such as the space shuttle and military aircraft leverage the expertise of numerous contractors with specialized knowledge assets. While these firms are, in some sense, competitors, they also must collaborate on multiple projects so that each subsystem seamlessly interacts with other relevant subsystems designed by other firms. Unfortunately, KM initiatives in the aerospace industry are challenged by three distinct forces: a continued reduction in resources, a knowledge-based reward culture, and a decreasing labor pool of qualified talent.
Aside from recent government spending in aerospace projects for the Iraq war, the trend over the past 20 years since the completion of the space shuttle has been a general decline in spending. With fewer resources at their disposal, aerospace corporations are asked to perform their jobs “better, faster, and cheaper.” Employees are expected to be more productive at a lower cost. One strategy to increase productivity is to focus on reusing existing knowledge assets. Yet the sensitivity and confidentiality of knowledge in the aerospace industry encourages employees to protect their specialized knowledge. Additionally, many scientists prefer to tackle problems on their own rather than to ask questions and learn from other’s experiences. Thus, there is a tendency to under-utilize lessons learned from other projects, departments, and competitors, and to continually “re-invent the wheel.”
Another challenge facing KM initiatives in the aerospace industry is that employees are often rewarded based on their specialized knowledge. For instance, knowledge in an area such as lightweight advanced materials provides an engineer with job security, access to new and exciting projects, and an established value-add to the firm. Consequently, the process of capturing knowledge for reuse across the enterprise may be perceived as a threat to job security. Therefore, many KM initiatives suffer from a constant tension between organizational goals to reuse knowledge and the tendency of individuals to hoard knowledge.
A final challenge is the decreasing supply of qualified scientists and engineers. The historical decline in government spending on space exploration, defense and other aerospace related areas contributed to a decline in the number of applicants to science-based terminal degree programs. Thus, the flow of new talent into many aerospace firms has been episodic rather than continuous. This has led to noticeable gaps in the workforce where a large percentage of scientists are either relatively inexperienced or almost ready to retire. New engineers and scientists often face the challenge of being thrust into leadership positions without adequate experience or mentoring from senior engineers.
As these three trends converge, executives in the aerospace industry recognize that the knowledge base that created the space shuttle, landed men on the moon, and designed the cruise missile may be lost as employees retire. In an attempt to capture and retain this knowledge, several aerospace firms in Southern California are exploring how information systems can aid their firms to better manage and retain critical knowledge assets.
A Knowledge Management Exchange Forum
Despite technological advances and recent experience of firms in the implementation of knowledge management systems, the practice of KM remains more of an art than a science. For aerospace firms, the additional challenges presented above only exacerbate the complexity that they face to place the right knowledge in the hand of the right decision makers, at the right time.
Since 2005, several Southern California aerospace firms and local universities have engaged in a forum to exchange best practices for knowledge management. Participating organizations include Pratt-Whitney Rocketdyne, Northrop Grumman, NASA-Jet Propulsion Laboratories, The Aerospace Corporation, and Pepperdine University, California State University-Northridge, and University of California at Irvine. Participants benefit from participation by benchmarking their own knowledge management efforts against those of other firms, and from the opportunity to share knowledge management approaches.
The Southern California Aerospace Industry Knowledge Management Exchange (SCAIKME) meets several times a year to support KM and share key lessons. Additionally, SCAIKME provides a variety of electronic resources to foster collaboration between the KM staff of participating firms. Through face-to-face and virtual networking and collaboration, knowledge management executives at participating firms have gained new insights to the practice of knowledge management. In particular, they aid each other to retain knowledge assets and reduce the potential risk of knowledge loss as experienced employees and experts retire.
Some Guidelines for Effective Knowledge Management
During several SCAIKME seminars and roundtable discussions, KM officers were asked to share best practices in leading knowledge management initiatives. The strategies they discussed can be described as focused on 1) internal strategies aimed at identifying, capturing, and reusing the knowledge assets within the firm; and 2) external strategies aimed at building, measuring, and improving organizational KM competencies.
Below is a list of the top internal and external strategies for effective knowledge management that we have identified. This list is not exhaustive, but it is rather a set of guidelines that are potentially applicable and useful to KM initiatives in many industry contexts.
- Identify business challenges related to knowledge management and then craft a response using KM solutions. Realize that the challenges more appropriate for knowledge management efforts are those that are more integrated and heavily dependent on the knowledge of the firm. It is impossible to capture every piece of knowledge, and it is easy to get distracted by trying to do so. Focus on knowledge that is important to capture and feasible to maintain.
- Obtain executive support. Executives in the organization should support knowledge management initiatives from both a strategic and a financial perspective. The probability of success increases when the knowledge management effort is a top priority. Executive sponsorship provides the resources necessary to maintain expensive and politically sensitive KM programs such as shared knowledge repositories, mentoring programs, and lessons learned databases.
- Be patient. Creating a knowledge management environment takes time. Managing knowledge is a difficult task with no hard-and-fast rules. Initially, employees may not understand the objective of the knowledge management activities or they may not have excess capacity to contribute to the effort. It is appropriate to set a realistic timeframe for the project, including opportunities to measure and readjust the project’s delivery methods and measures of success.
- Get buy-in and input from the users. A well-known precursor to success is the user’s perceptions of the usefulness and ease-of-use of a KM system. Many KM initiatives have failed because the system designers neglect user feedback. Successful KM initiatives often involve key users at early stages in the design process and iterate through several versions in order to incorporate user input on system design requirements. After all, the objective is to implement a system that users appreciate and willfully use, not one that is technically sound but remains underutilized due to lack of buy-in from potential users.
- Celebrate small wins. Small pilot projects reduce implementation risks and small successes help promote larger knowledge management implementation projects. A “Control Tower” approach, where managers are mandated to develop knowledge management action plans, is a favorable approach to ensure small wins. On the other hand, KM leaders should remember that smaller pilot projects need to contribute to the overall objective and goals of the KM project.
- Manage employee behavior. One of the signals of successful KM initiatives is evidence of change in employee behavior. Mandating new technology and business processes rarely works and often creates resentment and dissatisfaction. Rather, project leaders should champion changes in KM practices and ensure that the technology provides added value. Moreover, employees should be actively involved in the knowledge management efforts, because it is their knowledge that will be leveraged and retained for future.
- Attend KM-oriented training sessions and conferences. KM is a new frontier for many firms. Consequently, there is a steep learning curve for even the most experienced manager who is tasked to lead a new KM initiative. Attending training sessions and discussing knowledge management problems and solutions with others will serve as an introduction to the key challenges ahead.
- Establish a near-peer network. One of the best opportunities to hear of the latest and most effective knowledge management techniques and tools can be identified and found through discussions with colleagues at other firms. Establish informal conferences or technical forums, where colleagues are able to demonstrate the latest knowledge management tools and discuss the implications, consequences, and benefits of knowledge management tactics and strategies.
- Benchmark your knowledge management practices. Benchmark your own company’s knowledge management process against competitors to identify areas of strength and weakness. In addition, benchmarking may provide anecdotal evidence to support ongoing and emerging projects.
- Hire a knowledge management expert. Knowledge management experts provide credibility to the firm’s knowledge management efforts. Traditional management consultants may be insufficient because they lack the appropriate expertise needed to address KM issues. Firms should seek out consultants who specialize in knowledge management tactics and strategies.
Using information systems to manage the knowledge of the firm is often a difficult, time-consuming, and tedious task. The strategies enumerated above should help to ensure effective implementation of KM systems and make knowledge a strategic differentiator.
** The authors would like to acknowledge and thank Kiho Sohn (Pratt-Whitney Rocketdyne, Chief Knowledge Officer), Jeanne Holm (NASA-JPL, Chief Knowledge Architect), and Scott Shaffar (Northrop Grumman, Director, Knowledge Managment, Systems Support, and Integration) for access to their knowledge management exchange forums and for their contributions to this article.
D. Leonard and D. Kiron. “Managing Knowledge and Learning at NASA and the Jet Propulsion Laboratory,” Harvard Business School Case #9-603-062, (2002).
M. Alavi and D.E. Leidner. “Review: Knowledge Management and Knowledge Management Systems: Conceptual Foundations and Research Issues,” MIS Quarterly, 25, no. 1 (2001/3): 107-136.