Access the essential membership for Modern Managers
Dr Yogesh Malhotra, is a knowledge management expert and founder of brint.com As part of his framework for knowledge management in e-business, Malhotra argues that most knowledge management models are based on the information-processing view and old business models that do not take into account increasingly rapid change in the information age.
Malhotra describes changes in business thinking, which view knowledge as a competitive asset, as a paradigm shift. That is, technological advances have been so significant that they have driven significant changes in the way we do business.
In the modern economy, customers are the driving force behind strategic decisions and consequently, information and knowledge of changes in customer preferences and tastes are becoming increasingly important assets. Malhotra argues that changes in customer preferences are occurring so quickly and regularly that modern organizations must focus more on adapting and changing, and less on traditional strategic planning. Today, traditional strategic plans are likely to be rendered obsolete before they can be properly implemented, such is the speed of change. Modern organizations must therefore be adept at creating and using new knowledge.
As part of the e-business model, Malhotra criticizes the ‘information-processing’ view of knowledge management that is championed in certain areas of the popular business press and describes it as misguided and ineffective. The ‘information-processing’ view essentially states that knowledge management is principally concerned with using technologies to process existing information. He states three popular myths about knowledge management to argue his case:
1. Knowledge management technologies can deliver the right information to the right person at the right time.
In the information economy, firms cannot predict change in the same way that firms in the old economy could. Malhotra argues that if the only constant is unpredictable change, it is impossible to develop a system to ensure that individuals receive the right information at the right time.
2. Knowledge management technologies can store human intelligence and experience.
Malhotra essentially makes the same distinction between tacit and explicit knowledge as Nonaka and Takeuchi by arguing that only explicit knowledge can be stored effectively. [1] Tacit knowledge, which includes ideas and experiences, cannot easily be codified and stored. Consequently, any attempt to store actual experiences and intelligence will be of limited use to the modern organization.
3. Knowledge management technologies can distribute human intelligence
Similarly, since it is almost impossible to codify and store tacit knowledge, it is equally difficult to distribute it. Without the interpretation of its holder, tacit knowledge that is codified and distributed is of limited use to knowledge workers. Given these three popular myths, Malhotra believes that modern organizations must rely more on developing and evolving their business models in response to information, rather than developing rigid knowledge management technologies. In a departure from modern thinking, Malhotra argues that the scarce resource is not information but quality human interaction with knowledge.
Malhotra therefore argues that effective knowledge management strategies for modern organizations must therefore make more use of human creativity and innovation in combination with information technology. Malhotra believes that this change in attitude represents a shift in the way leaders must think about:
- business strategy
- design and use of technologies
- the role of senior managers
- organizational knowledge processes
- the economics of organizational assets
- organizational design
These changes are summarized below.
Business Strategy
In Malhotra’s model of knowledge management, the need for strategic planning is not completely eliminated. Rather, Malhotra advises that organizations in the new economy should use planning activities as devices for defining the ‘limits of responsible opinion and building constituencies’ rather than rigid instructions for the future.
The demand on the modern organization’s knowledge management practices will therefore be for faster knowledge creation and application cycles.
Use of Technology
Malhotra argues that most organizations currently contain embedded technologies that enforce a fairly rigid set of processes. He believes that these rigid processes are restrictive on occasions when organizations need to respond to changes. Consequently, modern organizations should make provisions to change continually by adopting technology that discourages restrictive processes.
The Role of Senior Management
Malhotra suggests that to cope with continual change, senior management must change from a ‘command and control’ role and adopt a ‘sense and respond’ approach. To do this, leaders need to view the organization not as a hierarchical business entity but as a human community capable of providing diverse meanings to flows of information. Malhotra suggests that the first step towards this primarily involves allowing all employees access to the company information base.
Organizational Knowledge Process
Malhotra believes that organizations have to access the creativity and innovation of employees to manage knowledge effectively. Traditional organizations store knowledge in static databases without interpretation and context within the ‘information-processing’ model. The focus of organizational knowledge processes in the future should therefore be on enabling creation of new knowledge, renewing existing knowledge, and applying both to business decisions.
Economics of Organizational Assets
The paradigm shift towards the information economy has also put a new premium on knowledge as an organizational asset. The speed with which successful net-based organizations have amassed market values, despite a recent string of corrections in technology stocks, is an indication of the value that future economies will place on knowledge as a competitive asset.
Organization Design
Malhotra also argues that the paradigm shift has encouraged changes in the design of organizations. Malhotra argues that creators of bespoke knowledge management systems should attempt to encourage employees to create their own knowledge through design.
Conclusion
In conclusion, Malhotra argues that recent articles predicting the end of knowledge management are highly exaggerated. He believes that the predictions are based on a commonly used, but misinformed, definition of knowledge management. Malhotra’s definition and framework emphasize the importance of the balance between human interaction and information technologies in knowledge management and the need to constantly innovate business models to compete.
References[1] Nonaka, I., and Takeuchi,H. (1995).
The Knowledge-Creating Company. Oxford University Press. Available
here.
