Thomas Davenport and Larry Prusak: Working Knowledge

Davenport echoes other leading thinkers referenced within this Unit when he states that knowledge management endeavors must move way beyond the implementation of an efficient IT system. The fact that additional factors such as culture, employee behaviors and rewards systems and leadership support play an important role alongside IT solutions increases the likelihood that every organization will need to address KM issues in its own way.

Lessons from Working Knowledge

Davenport has collaborated with Larry Prusak to produce an evaluation of early knowledge management strategies, and to recommend best management tactics for success based upon these lessons from the past. The resulting book, Working Knowledge, [1] addresses the fact that although most large companies already have a KM strategy, many still find it difficult to harness the full potential of their knowledge bases. One of the main problems with existing systems is that, as Davenport had previously concluded, organizations have become over-reliant on technology as a knowledge management enabler. The authors stress that, at most, technology should take up one-third of all resources geared towards knowledge management. The remaining two-thirds should be used in addressing organizational culture, roles and responsibilities, strategy, econonomics and knowledge content.

The authors also offer an interesting perspective on the management of internal knowledge, considering groups of givers and receivers of knowledge as internal knowledge markets. The market analogy makes clear for organizations the obstacles they may have left in place of their own success in managing knowledge. Such obstacles may include knowledge ‘buyers’ and ‘sellers’ remaining unaware of each other’s existence, and people feeling that the return or reward on their knowledge investment is not substantial enough. Through this market perspective, Davenport and Prusak encourage organizations to consider the needs of their internal customers, and to reduce problems and resistance within the internal markets to create overall organizational success.

Acquiring Knowledge

Davenport and Prusak outline five key modes of knowledge generation that organizations should be aware of:

1. Acquisition

Davenport and Prusak acknowledge the usefulness of acquiring knowledge management ideas and practices from other organizations. This includes not only acquiring methods for managing knowledge, but also acquiring the knowledge content itself. The former involves benchmarking methods from other organizations. The authors warn, however, that knowledge must be acquired with a clear organizational objective in mind. Many knowledge management projects fall short of expectations when the objective is simply to have a KM strategy, and time and energy can be wasted in borrowing unsuitable ideas from other organizations that fail to address the particular needs of the benchmarking organization. Resources can be wasted, and problems left unresolved in this situation.

Acquiring knowledge content from others involves purchasing companies, or hiring individuals from elsewhere who have useful knowledge resources relevant to the organization. The value of knowledge that is embedded in the brains of an organization’s employees now accounts for a large proportion of the total value of the organization, an intangible asset that has come to dominate the capital held by the company. A commonly used example of this phenomenon is that of Microsoft, which has a market capitalization of several times the value of its physical assets, due to the high value of the knowledge retained by its innovative workforce.

2. Dedicated Resources

A significant trend that has emerged over the last 20 years is the use of resources that are dedicated to managing and generating knowledge. In the information technology and biotechnology sectors in particular, the use of research and development (R&D) units has become a standard means of developing new knowledge assets. The reasoning behind this is that by freeing the units of the usual rigid profit-seeking mandates that constrain other departments, they will be allowed to access more creativity.

3. Fusion

Fusion is the collation and synergy of new ideas and perspectives to generate knowledge. Davenport and Prusak state that although fusion is not a shortcut to generating knowledge, it is a means of generating knowledge that is difficult to obtain in other ways. They emphasize the importance of time to allow individuals and teams to develop ways of working towards this type of creative synergy.

In CIO magazine, Davenport and Prusak have outlined five principles that can help make fusion work effectively: [2]

1. Foster awareness of the value of knowledge.
2. Identify key knowledge workers.
3. Emphasize the creative potential inherent in the complexity and diversity of ideas.
4. Make the need for knowledge generation clear.
5. Introduce measures and milestones of success.

4. Adaption

Davenport and Prusak acknowledge that firms must adapt in order to compete. In today’s knowledge economy, change is more pertinent than ever and a firm’s ability to adapt is based on two principal factors:

1. existing internal resources and capabilities
2. openness to change

5. Networks

Davenport and Prusak believe that knowledge generation also occurs in organizations where informal and formal networks occur. As networked individuals communicate, a by-product of new knowledge, which is beneficial to the entire organization, is created. The authors note that in many cases, informal networks are the most effective means of spreading knowledge. Again, a significant investment in time by the organization is required to allow for the development of these networks, which are strongly dependent on an open and trusting culture.

Knowledge and Culture

Davenport notes that since human resistance is one of the main barriers to knowledge management, implementing a successful KM strategy involves developing a culture that responds well to both knowledge-sharing and strategic change. Furthermore, that KM strategy must be updated regularly and reviewed to allow for growth and evolution over time as the organization itself develops and adapts. Just as the original KM initiative must be developed in response to a specific organizational problem, so the KM system must be consistently reviewed throughout its lifespan to ensure that it continues to address the needs of the organization.

Prior to the launch of Working Knowledge, Davenport and Prusak gave an interview detailing the particular value proposition offered by knowledge management initiatives, and focusing on the role of culture alongside IT. They made several key recommendations regarding the cultural aspects of KM:

• “Knowledge works across networks and communities” which must be nourished and facilitated.
• Once these human groupings and relationships are in place, IT solutions can be used to facilitate the sharing of knowledge amongst individuals. “But don’t’ start with the technology!”
• “You shouldn’t spend more than a third of your time thinking about technology for knowledge management.”
• Don’t change the organizational culture in order to support a knowledge management initiative, as “changing the culture for the purposes of knowledge management would be like the tail wagging the dog.”
• Don’t rely on an organizational chart to tell you where knowledge lies within the organization, as it “reflects power, not knowledge”.
• To develop a culture that embraces knowledge sharing, hire those people with a predisposition toward “intellectual curiosity”. It is often impossible to train someone to be interested in the acquisition of knowledge. [3]

Conclusions

The key message from Davenport and Prusak’s seminal text, and a central theme throughout their work, is that one-size-fits-all approaches to the management of knowledge in fact fail to fit any of today’s organizations. Given that organizational culture is one of the most distinct features of any organization, and given its vital importance in the success of a KM initiative, it seems obvious that a ‘solution’ adopted wholesale without modification to the particular needs and culture of an organization will not bring it success. Yet many organizations seeking to manage knowledge, particularly those of the technology-oriented 1990s, have failed to reap great rewards from their KM efforts precisely because they failed to tailor their efforts to the needs of their people.

Davenport and Prusak contend that, whilst many organizations have found KM success in isolated sections of their organizations, relatively few have managed to make a radical organization-wide change or improvement through the management of knowledge. However, radical change is possible through KM, providing the wider cultural system of the organization is adequately addressed.

The authors conclude that for real business transformation to occur, there must be a “broad consensus” that KM is important, and in addition that organizations must “spend a lot of time on cultural and organizational issues that influence knowledge.” When launching Working Knowledge, Davenport and Prusak readily admited that the majority of organizations have thus far failed to address this broad spectrum of issues. However, they claimed, “now is a great time to get started.” [4] Their guidance has provided many organizations with a flexible road-map for making careful assessments of their organizational knowledge cultures and needs, and has undoubtedly improved the success of many organizations. Yet the persistence of the myth that IT provides wholesale solutions to KM issues means that the late 1990s thinking of Davenport and Prusak remains relevant today.