Page 21 -

4 Chapter 1

Knowledge management is the deliberate and systematic coordination of an organization ’ s
people, technology, processes, and organizational structure in order to add value through reuse
and innovation. This is achieved through the promotion of creating, sharing, and applying
knowledge as well as through the feeding of valuable lessons learned and best practices into
corporate memory in order to foster continued organizational learning.
When asked, most executives will state that their greatest asset is the knowledge
held by their employees. “ When employees walk out the door, they take valuable
organizational knowledge with them ” ( Lesser and Prusak 2001 , 1). Managers also
invariably add that they have no idea how to manage this knowledge! Using the intel-
lectual capital or asset approach, it is essential to identify knowledge that is of value
and is also at risk of being lost to the organization through retirement, turnover, and
competition.. As Lesser and Prusak (2001, 1) note: “ The most knowledgeable employ-
ees often leave fi rst. ” In addition, the selective or value-based knowledge management
approach should be a three-tiered one, that is, it should also be applied to three orga-
nizational levels: the individual, the group or community, and the organization itself.
The best way to retain valuable knowledge is to identify intellectual assets and then
ensure legacy materials are produced and subsequently stored in such a way as to make
their future retrieval and reuse as easy as possible ( Stewart 2000 ). These tangible by-
products need to fl ow from individual to individual, between members of a commu-
nity of practice and, of course, back to the organization itself, in the form of lessons
learned, best practices, and corporate memory.
Many knowledge management efforts have been largely concerned with capturing,
codifying, and sharing the knowledge held by people in organizations. Although there
is still a lack of consensus over what constitutes a good defi nition of KM (see next
section), there is widespread agreement as to the goals of an organization that under-
takes KM. Nickols (2000) summarizes this as follows: “ the basic aim of knowledge
management is to leverage knowledge to the organization ’ s advantage. ” Some of
management ’ s motives are obvious: the loss of skilled people through turnover, pres-
sure to avoid reinventing the wheel, pressure for organization-wide innovations in
processes as well as products, managing risk, and the accelerating rate with which new
knowledge is being created. Some typical knowledge management objectives would
be to:
• Facilitate a smooth transition from those retiring to their successors who are recruited
to fi ll their positions
• Minimize loss of corporate memory due to attrition and retirement
• Identify critical resources and critical areas of knowledge so that the corporation
knows what it knows and does well — and why