MIT Alumni Knowledge: A New Source of University Wealth
By Debra M. Amidon, ENTOVATION International Ltd.

The Challenge
The 1980's provided an explosion of industrial education programs, including institutes, distance learning, center for leadership and learning and corporate universities. Most organizations have launched programs under the Chief Learning Officer (CLO) or Chief Knowledge Officer (CKO) or reasonable facsimile. The 1990's represent evidence that the concept expanded with learning theories, cross-functional teamwork, electronic media and virtual organization structures.

Advancements in technology have revolutionized education delivery systems enabling Intranets and the Internet to provide 'real-time' links to both archived and newly created knowledge. With the dawn of the knowledge economy comes the realization that learning occurs - must occur - continuously with every interaction, both human and electronic. The challenge is two-fold: How best to elicit the tacit knowledge which often is dormant in individuals; and (2) how to catalyze the collective organizational knowledge across functions, business units and stakeholders outside the enterprise. And so, now the spotlight is on intellectual capital, learning and prosperous innovation.

What, then, is the evolving role for the University in the knowledge economy? It is only a node - albeit important node - in the learning network. Faculty members are becoming mentors, coaches in the learning process - not necessarily the content experts in a given field. Students are gaining increased exposure through industrial placements and research and are bringing insights back to the campus often before research findings can be published in the traditional academic press. Even the action research activities of major consulting firms, intelligence organizations and professional societies resemble the framework and methodology of academic research.

The knowledge movement has progressed significantly such that students - both matriculated and on-the-job learners - have access to a plethora of informative Web sites, electronic dialogue forums, topical seminars and conferences, on-line training courses, and more. The Knowledge Ecology Fair, the Open University) and the Knowledge Ecology University were inevitable outgrowths of the critical mass of theorists and practitioners represented in the 'community of knowledge practice.'

Innovate the Academic Community
In response to the opportunity, MIT administration and faculty have developed a rigorous approach to bringing the experienced alumni back to the campus and bringing the campus to the learners. In the 1998 Executive Education Convocation, the Sloan School of Management reconvened graduates from around the world in a 3-day event entitled "The Networked Society: Implications for Management Practice." In the welcoming address, Richard L. Schmalensee, the new Dean, that this meeting was to produce 'your return on your investment - deepening a shared network and an endearing partnership.' It is intended to help executives keep pace with a volatile environment, to encourage connections across the time bonds and to solicit suggestions as possible changes in what is taught, how it is taught and how we might better use technology.

The Sloan population represents 16,000 graduates in 86 countries. Through a variety of traditional alumni programs (e.g., clubs, directory, career services, magazines et al), the Institute keeps alumni up-to-date. This year, things were different. Through the launch of their Web site producing free e-mail forwarding service for all MIT alumni, the Institute now seeks to learn from and link alumni and their organizations worldwide. The strength is in the exponential growth of the connections. It is not just a matter of doubling or even tripling the numbers.

The innovation does not stop there, however. This year's program included presentations from two CEO's and former Sloan Fellows who articulated the concepts of the knowledge worker, the knowledge enterprise and the knowledge economy.

Mr. Bruce Bond (SF '83), President and CEO of Boston-based PictureTel, Inc used a series of classic books to illustrate his core messages. For instance, he referenced 'A Wrinkle in Time' as he described the transition period between one era to another in which the old rules do not apply and the new ones have yet to be invented. He suggests that the change is three-fold: evolutionary (taking time, revolutionary (happening swiftly) and devolutionary (the compounding effect of people working together). Using another book - The King's Chessboard - he described the 'power of the double'- Moore's Law taken to 2015, we will have gigaburst computers. Indeed the technology is enabling the network, thus equal to the square of the number of people who are connected. Imagine the power of the Sloan alumni network if properly harnessed and leveraged.

Bond closed by celebrating the individual, as did Ayn Rand in 'Atlas Shrugged'. In previous economies, land, capital and people were valued as commodities. In the Knowledge Age, the 80/20 rule applies and must be factored into the new value proposition. The knowledge worker does not work for you, is an individual entrepreneurial entity, knows more than the boss, owns the means of mass production and is not motivated by money alone. How, then, does an organization value and reward in ways that create economic results? In the end, it is the ability of people to interact with others. "The future is not foreseeable. It is unknown - you forge it - putting in place paradigms and metrics to move the world forward."
Gerhard Schulmeyer (SF '74), President and CEO, Siemens Nixdorf AG, outlined the operational challenge in a session entitled "Organizing for the Knowledge Business." All participants received copies of The Roadmap to Success - the corporation's guidepost for the transformation. He scoped on the factors forcing a new balance between institutions: Liberalization, Velocity, Globalization leading to Rising Complexity.

He suggested a 6-Step Process:
Starting with customers - working outside in.
Changing the way we work together - through culture change.
Laying the foundation - baselining the units.
The matrix organization - the new structure.
The SNI vision - sets the strategic framework.
Paradigm shift in HR - individual initiative is what counts.

The knowledge Age is one of managing uncertainty - not managing certainty. He detailed the changing needs of a knowledge-based business transitioning from a focus on normative and routine to connectivity and competence. The economic value of knowledge is not based in ownership, but in transaction (i.e., how the knowledge is applied or put to use). He described the shift toward a more 'relational' organization structure as opposed to patriarchal, hierarchical, or even entrepreneurial. He did not underestimate the importance of - or the difficulty in - establishing a shared vision across the enterprise.

Dr. Rudi Dornbusch, MIT Professor of Economics and International Management, provided a timely economic analysis commenting on the Japanese recession, the backlash of economic reform in Russia, the budget deficits of Brazil and the current success in the US. He forecasts that Europe - in spite of their current problems and because of their rigorous programs to address the issues (e.g., the Euro currency) - will rise to world leadership in the next 10-15 years. They are asking the right questions and dealing with the right issues positioning themselves as a formidable region in the global economy. He also projects the rise in China's leadership thereafter in the next 20-30 years. Although he is an economist by trade, his projections are based largely upon what might be considered 'intangible value' by today's knowledge practitioners - such as the ability to integrate in a world economy, the changing political systems, revamped organization structures and more.

Several other academic professors and Sloan Fellow graduates provided seminars on various facets of the knowledge innovation community. Examples include: "Visualizing Opportunity in the Knowledge Economy (Debra M. Amidon, SF '89, "Adaptive Management" (Arnoldo Hax), "Innovation in an Increasingly Dynamic World (Rebecca M. Henderson), "Entrepreneurship at MIT" (Kenneth P. Morse), "Using Strategic Alliances and Corporate venture capital" (Edward B. Roberts, "So You Want to Change Your Corporate Culture?" (Edgar H. Schein), "Rethinking Leadership" (Peter Senge), "Strategies for a New economic Game in the 21st Century" (Lester C. Thurow), "Survival Strategies in Fast Changing Industries" (James M. Utterback), "Emotional labor and Identity" (John Van Maanen) and "Methods for Developing Breakthrough Products and Services" (Eric von Hippel). Audiotapes are available through Cambridge Technologies in the United States (617.547.5690).

In fact, Jay Forrester in his presentation - "System Dynamics: Present and Future" announced that there is Web site at MIT (http://sysdyn.mit.edu) where one can find a Road Map Series, including a self-study guide to systems dynamics, designed by the Creative Learning Exchange. They have discovered that although designed for K-12 age group, 2/3 of the 7,000 visitors each week is using it for corporate education!

Finally, the MIT Sloan Management Review provided copies of the recent issue featuring articles on transforming IT, product platforms, virtual office, IT outsourcing, a leveraged learning network and managing information as a product. Several classic reprints were available (e.g. Senge's "The Leaders New Work: Building Learning Organizations") in addition to articles from other publications and working papers - all in the interest of knowledge sharing. In fact, alumni were encouraged to make submissions to the Review for publication.

There are a variety of ways that alumni can be reconnected to the Institute - electronically, through multiple conversations, involvement in research projects and through the print media. Perhaps this is one way for academic leaders to learn real-time about learning innovations that will service their constituency.

The academic environment of tomorrow is certain not to look like today. In fact, it may not even resemble today. But where might collaborative learning take us all?

Knowledge management: Are you too busy to think?

Knowledge management: Are you too busy to think?

By Gerry McGovern

There are certain words you need to ban the use of, and "busy" is one of them. In knowledge-driven economies, "busy" is an outdated word that reflects a manual labor approach to work. Instead of "busy" you need to use words such as "effective" and "productive".

I have spent my working life telling people how busy I am. Sometimes I'm just busy, sometimes I'm really busy, and sometimes I'm so busy I don't have time to think. But what do I really mean when I tell someone I'm busy? It's basically that I'm doing a lot of stuff. I could be busy doing it well or badly, but that's not the point; the point is that I'm busy, I'm active.

I grew up on a farm and we were very busy during the summer. I'm certain that the saying "make hay while the sun shines" comes from Ireland. The reason is that the sun doesn't often shine in Ireland, so when it does you make as much hay as you can. Of course, the cows need to be milked and other basic chores done, so the making of the hay is a very busy time.

Have you ever done an all-nighter? I know quite a few people who see that as a badge of honor. For years I at least partly judged my own success based on the number of hours I put in per week. I felt that the more hours I was able to work per week the more successful I would be. I remember being constantly tired during the dotcom era, and being surrounded by people who were also tired.

I am certain that some of the mistakes that were made during the dotcom era were made because people were too tired to think clearly. That era of frenzy is over now but that same old tired ideas are hanging on.

Working longer hours is no longer the point. Sure, the longer I stay out baling hay the more bales I will bale. However, I for one know that if I spend much longer than an hour writing, the quality severely diminishes. I need to take a break and when I come back I tend to have a freshness and clarity.

Being busy is often an excuse for not doing something you should be doing. For me it has often been an excuse for not thinking, managing, and planning properly. Working hard is no longer the route to success it once was perceived to be. In an era of outsourcing and offshoring, success definitely does require hard work, but what is way more important is smart work. Basically, all the hard work will be outsourced, with just the smart work remaining.

If you want to have a successful future, you must learn to become a better manager, both of yourself and other people. The rise in offshoring, for example, leads to a rise in the need for clear planning, and precise project management.

The world is full of busy people, but there is a definite lack of quality planners and project managers. Stop measuring yourself on how busy you are. Start measuring yourself on how effective you are

One million UK employees admit to losing confidential data

One million UK employees admit to losing confidential data
21 November 2007 10:

HMRC is not alone in failing to protect confidential information. According to a new survey from Navigant Consulting, conducted by YouGov, more than one million employees in Britain (four per cent of all working adults) have lost, or had stolen a laptop computer; personal digital assistant; thumb-drive; CD; or floppy disk containing confidential information about customers, suppliers, staff or financial information, and a further 12 per cent – almost three and a half million people – claim that this has happened to a work colleague.

Navigant Consulting warns that employees’ work habits and lack of awareness about security are increasingly putting companies and organisations’ confidential information at risk from opportunistic identity thieves. Andrew Durant, managing director in Navigant Consulting’s Fraud Investigations team, urges employers to make sure that basic measures are in place rather than obsess about complicated IT security.

"Our survey shows that 17 per cent of the British work force now uses a company laptop at home – that’s nearly five million people – and indicates that working from home is an established working practice rather than a trend," says Andrew Durant. "Yet only 25 per cent of these said that their laptops are encrypted to protect the confidential information they contain".
"In addition, more than 11 million employees - 39 per cent of workers and/or their colleagues – save data onto a PDA, thumb-drive, CD, or other device, to work from home. It is unrealistic to expect employees to stop using technology to work more flexibly, and frankly reckless for companies not to put measures in place to protect their confidential information in view of this change in working habits.

"Information security is a complex and expensive area, and I can understand why businesses want to bury their heads in the sand. But most frauds perpetrated using stolen confidential information can be prevented by taking some simple, common sense measures," claims Durant.
In the first half of 2007 reported stolen data included:
confidential information found in a skip outside a bank
computer back-up tapes stolen from a contractor’s van
confidential information stolen from an employee’s laptop following a house burglary
payroll and pension data from three stolen laptops
mortgage details in documents stolen from an employees briefcase in a theft from a car.
"Companies should have a policy regarding what information should and shouldn’t be stored on laptops and other devices and communicate this clearly to staff. Many employees will be unaware that information is confidential or could be used to perpetrate a fraud against the company or individuals connected to it.

"Laptop hard drives should be encrypted so that data is protected if it is stolen or mislaid. This can equally apply to specific files that contain sensitive data stored on a server to prevent them being copied or read by unauthorised people. Companies can also prevent electronic data containing confidential information from being stored locally on an individuals’ PC or laptop, instead forcing them to be stored centrally - this, greatly reduces the threat if a computer were lost or stolen," advises Durant.

Other work practices which are considered risky include employees sending documents containing confidential information to their own or other people’s personal web mail accounts such as Yahoo! or Hotmail for work reasons - 15 per cent of British workers, approximately 4.3 million people admit to doing this; and allowing company laptops to be used by friends and family. As many as 29 per cent of employees who use a company laptop at home are happy to let others use their work laptops – more women than men are content to let this happen (37% and 25% respectively).

"Both of these practices illustrate how organizations are losing control of their confidential information as data flows out of the organization and into the hands of individuals who may have no relationship or loyalty to the owner of the information," says Durant.
Basic security is also failing in the work place according to Durant: "Identity fraudsters and organised criminals place bogus employees, and bribe temporary staff or even disillusioned employees to steal information from the inside.

"Yet 23 per cent of British employees know other employees’ computer passwords; 14 per cent claim that colleagues know their password; four per cent write their password down; four per cent all use the same password and five per cent don’t have one at all. It would be child’s play for a fraudster to sit down at a colleagues’ computer and access confidential information if there wasn’t a system of restricted access in place or data encryption that would prevent an unauthorised person from gaining admission to computer files.
"This practice also negates the value of audit logs as it would direct an investigation towards an innocent person."

TACIT KNOWLEDGE

© Karl E. Sveiby Dec 31 1997 All rights reserved
Index
Main Thesis
Tacit and Focal Knowledge
Action Oriented Knowledge
Articulated Knowledge
Knowledge is a Tool with Rules
To Know is to Do
A Hierarchy of Knowing
Skill, Know-how, Expertise and Competence
Intellective and Agentive Doing
Tradition of Knowledge
Human knowledge articulated through language is essentially metaphoric in character. "Knowledge about knowledge" is therefore a question of which metaphors one chooses to express one´s knowledge in.
Michael Polanyi (1891-1976) was a Hungarian medical scientist whose research was mainly done in physical chemistry before he turned into philosophy at the age of 55. He accepted a personal chair in social studies at the university of Manchester in 1948. His lectures were collected in his opus magnum Personal Knowledge, Towards a Post Critical Epistemology in 1958. Although very influential in the background he was never recognised as a "true" philosopher by his contemporaries.
Tacit Knowledge is of particular interest for those who are interested in how to manage Knowledge Oragnizations or those involved in Intellectual Capital.
The concept also explains some of the paradoxes on the Information Markets. Michael Polanyi called his book Personal Knowledge because he wanted to underline that the intellect also in science is connected with a "passionate" contribution of the person knowing. Emotions are a vital component of the person`s knowledge. But this does not make our understanding subjective.
Knowing is objective in the sense of establishing contact with a hidden reality.
Main Theses
Polanyi`s concept of knowledge is based on three main theses: First, true discovery, cannot be accounted for by a set of articulated rules or algorithms. Second, knowledge is public and also to a very great extent personal (i.e. it is constructed by humans and therefore contains emotions, "passion".). Third, the knowledge that underlies the explicit knowledge is more fundamental; all knowledge is either tacit or rooted in tacit knowledge.
Knowledge is thus not private but social. Socially conveyed knowledge blends with the experience of reality of the individual.
Both Quantum Mechanics and the theory of relativity are very difficult to understand; it takes only a few minutes to memorize the facts accounted for by relativity, but years of study may not suffice to master the theory and see these facts in its context. At all (these) points the act of knowing includes an appraisal; and this personal coefficient, which shapes all factual knowledge, bridges in doing so the disjunction between subjectivity and objectivity.
New experiences are always assimilated through the concepts that the individual disposes and which the individual has inherited from other users of the language. Those concepts are tacitly based. All our knowledge therefore rests in a tacit dimension.
When we are tacitly involved in a process-of-knowing we act without distance. This describes how and why we take things "for granted". The individual changes, "adapts", the concepts in the light of experiences and reinterpret the language used. When new words or concepts are brought into an older system of language, both affect each other. The system itself enriches what the individual has brought into it.
Tacit and Focal Knowledge
In each activity, there are two different levels or dimensions of knowledge, which are mutually exclusive:Knowledge about the object or phenomenon that is in focus - focal knowledge. Knowledge that is used as a tool to handle or improve what is in focus - tacit knowledge.
The focal and tacit dimensions are complementary. The tacit knowledge functions as a background knowledge which assists in accomplishing a task which is in focus. That which is tacit varies from one situation to another. For instance, when reading a text, words and linguistic rules function as tacit subsidiary knowledge while the attention of the reader is focused on the meaning of the text.
Inspired by Gestalt Psychology, Polanyi regards the process of knowing as fragmentary clues, senso-motoric or from memory, which are integrated under categories. We make sense of reality by categorising it. The patterns of categories contain, theories, methods, feelings, values and skills which can be used in a fashion that the tradition judges are valid. We attend from the particulars to the focus upon which they bear. This act of integration is an informal act of the mind and can not be replaced by a formal operation.
This integration of knowledge is a personal skill in itself and can not be disposed of. A special kind of meta knowledge is required for integration; knowledge about knowledge as integrated. It is possible to have this meta-knowledge without knowing its details.
Action Oriented
Polanyi`s theory is about how human beings acquire and use knowledge, it is action oriented and about the process of knowing. In his earlier works he frequently uses the verb "knowing" and the noun "knowledge" as synonyms. In his later works (Tacit Knowing) he emphasises the dynamic properties, i.e. the verb:
Knowledge is an activity which would be better described as a process of knowing. Polanyi thus regards knowledge as both static "knowledge" and dynamic "knowing". When the dynamic properties are emphasised, He uses verbs like knowing or learning. The dynamic properties describe how human beings strive for acquiring, coming to know, new knowledge.
Subsidiary awareness and focal awareness are mutually exclusive. If a pianist shifts the attention from the piece he is paying to the observation of what he is doing with his fingers while playing it he gets confused and may have to stop.
When I read an article or book I am vividly aware of the meaning conveyed by the text, still I may know none of its words. I have attended to the words but only for what they mean to me and not as the objects they are. The message of a letter is therefore remembered even after the symbols of the text is forgotten. I might not even remember what language it was written, if I know several languages.
Polanyi emphasises that the human being is knowing all the time, we are switching between tacit knowing and focal knowing every second of our lives, it is a basic human ability to blend the old and well-known with the new and unforeseen, otherwise we would not be able to live in the world.
Articulated Knowledge
Polanyi also sometimes describes knowledge as an object that can be articulated in words. When tacit knowledge is made explicit through language it can be focused for reflection.
The process of articulation has rendered immense effective assistance to our native mnemonic powers. Man is not much superior to a rat in finding his way in a maze; and it is not clear that he possesses much greater native intelligence than the animal for reorganizing remembered experiences. But the bare unaided memory of animals can only collect scraps of Information, unsystematically; nor could man do much better but for the power of systematization dependent on speech. Not until the invention of printing enormously speeded up the reproduction of records could descriptive zoology and botany expand from the Aristotelian and medieval history covering a few hundred types to a systematic science comprising millions of species. (About drawings)Articulation pictures the essentials of a situation on a reduced scale which lends itself more easily to imaginative manipulation than the ungainly original; it thereby makes possible a science of engineering.
But words convey nothing except a previously acquired meaning which may be somewhat modified by their present use, but will not as a rule have been first discovered on this occasion. Our knowledge of the things denoted by words will have been largely acquired by experience in the same way as animals come to know things, while the words will have acquired their meaning by previously designating such experience, either when uttered by others in our presence or when used by ourselves.
Therefore when I receive Information by reading a letter and when I ponder the message of the letter I am subsidiarily aware not only of its text, but also of all the past occasions by which I have come to understand the words of the text, and the whole range of this subsidiary awareness is presented focally in terms of the message. This message or meaning on which attention is now focused is not something tangible; it is the conception evoked by the text. The conception in question is the focus of our attention in terms of which we attend subsidiary both to the text and to the objects indicated by the text. Thus the meaning of a text resides in a focal comprehension of all the relevant instrumentally known particulars, just as the purpose of an action resides instrumentally used particulars.
By distancing the actor from the knowledge and articulate it in language or symbols, the knowledge becomes possible to distribute, criticise and thereby increase.
Polanyi`s emphasis on the dynamic properties makes articulate propositionary knowledge (facts) - metaphorically speaking - only the top of the iceberg.
Because we can know more than we can tell it follows that what has been made articulate and formalised is in some degree underdetermined by that of which we know tacitly. Language alone is not enough for making knowledge explicit.
While the correct use of medical terms cannot be achieved in itself, without the knowledge of medicine a great deal of medicine can be remembered even after on has forgotten the use of medical terms.
All articulated propositionary knowledge has originally been constructed in someone`s mind, be it in my own or somebody else`s. Facts are thus personal, not objective in a positivistic scientific sense. Facts can be tested for their truth content by an act of assertion but the act of assertion contains a tacit part too.
Knowledge is a Tool with Rules
Polanyi also emphasises the functional aspect of knowledge, i.e. he regards knowledge as a tool by which we either act or gather new knowledge. This tool is unreflected knowledge that we take for granted in a situation.
When we use a hammer to drive a nail, we attend to both nail and hammer, but in a different way....The difference may be stated by saying that the latter (hammer) are not, like the nail, objects of our attention, but instruments of it. They are not watched in themselves; we watch something else while keeping intensely aware of them. I have a subsidiary awareness of the feeling in my palm of my hand which is merged into my focal awareness of my driving the nail.
Whether an object is a tool or not depends on the actor's attitude. If a stone is used as a hammer it is a physical tool. Methods, rules, beliefs and theories are intellectual tools. Polanyi uses the notion of rules. A "rule" is tied to the result of an action. The knowledge of the rules also functions as a tacit knowledge, i.e. a kind of tacit "tool of tools".
A rule is a standard for correctness, a norm. The difference is that the norm is entirely static whereas a rule can be changed. The rules develop in the process of knowing or come from tradition. Mastery of the rules also brings with it the ability to change them or extend them. Rules are generally tacit but they may be articulated into explicit rules-of-thumb, maxims.
When the static properties are emphasised, Polanyi thus use nouns like knowledge, or emphasise the function of knowledge, tools or criteria for standards like rule or value. The static dimension describes the functional properties of knowledge; how knowledge as an object can be used in various contexts. The nouns however need the dynamic verbs for describing how new knowledge is acquired, created or made obsolete.
Polanyi maintains that craftsmen, "makers", use the same kind of methods as other practitioners "doers". They both follow rules and exemplars and they rely on experience for making judgements in their work just like scientists have to do in their work. Polanyi makes no clear distinction between practical knowledge and other kinds of knowledge, like theoretical propositionary knowledge. Polanyi therefore makes no difference in principle between the analytical skills of a Bertrand Russel or the blind man`s rod. The process-of-knowing is the same.
To Know is to Do
The medical diagnostician's skill is as much an art of doing as it is an art of knowing.
Intellectual tools are however different from physical tools in that they are based in a social context. A person needs to be confident in that social context in order to be able to use intellectual tools. It is an important distinction as regards the rules and the tools.
The scientist`s and the professional`s tools and rules are more intellective than the craftsman`s or the practitioner`s more agentive tools and rules. This distinction is important to add to Polanyi because intellective tools are a main feature of professions involved in Information processing. One important feature is that experts working with physical tools can detach themselves from their tools. Intellective tools can not be disposed of that easily.
A common notion is that thinking is not doing and a common distinction is made between "thinkers" and "doers". A more appropriate distinction is between agentive and intellective doing. To focus one`s thoughts as in writing an article can be seen as an intellective act, thus = "intellective doing". To move one`s body or to "get things going" through other people can be seen as an agentive act, "agentive doing".
A Hierarchy of Knowing
If one regards the dynamic properties of knowledge the most material, the notion Process-of-Knowing probably gives a better description than the word "knowledge". Bertil Rolf suggests in his book Profession, Tradition och Tyst Kunskap (1991) a hierarchy of knowing based on how the rules are followed: The lowest level of knowing is to follow rules which can be controlled by the subject itself, Skill The next level is to follow rules which are established by a social context outside the individual, Know-How The highest level is to be able to (and be allowed to) change the rules, competence or perhaps better in contemporary English expertise. Each level contains both tacit and focal knowing.
Skill is the ability to act according to rules which depend on feedback from a non-social environment. Polanyi: Skills combine muscular acts which are not identifiable, according to relations that we cannot define. Skills might be the ability to chop wood or type on a typewriter. The actor him/herself is able to judge whether the action has been successful or not.
Know-how includes skill and is the ability to act in social contexts. Other actors, like a professional institution or the tradition (the fourth level) establish the rules. Know-how implies problem solving. The ability of reflection on the rules, however, is of a higher order and should not be a part of skill or know-how. The British philosopher Gilbert Ryle (1949) points out that the boxer or the surgeon or the poet all apply their special criteria when they accomplish their special tasks. And they are regarded (by others) as good or bad or creative - not because of their ability to reflect over what they are doing but because of the result of their performance. The label "Know-how" has been used by many authors, Ryle probably being one of the first. Polanyi seems very close to Ryle`s concept Knowing-How but in fact he argues against Ryle. Ryle`s knowing-how does not imply a subsidiary awareness as Polanyi`s tacit knowing does. Polanyi does not use the label at all, probably because he argues against his contemporary Ryle. The Know-How label might thus lead to unfortunate confusion.
Expertise is know-how + the ability of reflection. Expertise orCompetence in Polanyi`s sense implies the ability of know-how within a certain domain and the ability not only to submit to the rules but also by reflection influence the rules of the domain or the tradition. Expertise is thus not a property but a relation between individual actors and a social system of rules. A person is an expert within a tradition: In a competent mental act the agent does not do as he pleases, but compels himself forcibly to act as he believes he must.
Polanyi also makes an illustration of incompetence: We draw here a distinction between two kinds of error, namely scientific guesses which have turned out to be mistaken, and unscientific guesses which are not only false but incompetent.
An individual is thus not competent per se, rather it is the individual in a role and in a context who is competent or not. In order to change the rules a competent individual needs a social or interpersonal communicative knowledge in addition to know-how. It is the expertise of mastering the rules of the profession so well that they no longer need to be obeyed. A characteristic of expertise compared to know-how and skill is that the actor has power over his own knowledge, i.e. over the rule system which decides quality standards. Only when an individual has this kind of power is the system in the position to learn from the experience of the individual.
Knowing can be both tacit and focal. It depends on the situation whether it is used tacitly or being focused and/or as articulated knowledge. Tacit and focal are not categories or levels in a hierarchy but are more like two dimensions of the same knowledge. Skills which are very difficult to articulate and to transfer between individuals thus have a large proportion tacit knowing, whereas a competent person must be able to focus more of his/her tacit process-of-knowing in order to articulate and communicate in a social context.
Intellective and Agentive Knowing
As I suggest in this Paper, work also has an Intellective and Agentive Knowing dimension. Agentive knowing is more oriented towards using the body as a tool whereas intellective process-of-knowing is oriented towards using the mind as a tool. Agentive skills are therefore more emotional and body oriented than intellective skills. Intellective abilities tend to be more analytical. Agentive skills are more oriented towards the syntetical. The distinction is made because these two dimensions are important in the Information processing professions and in organisations employing mainly professionals. It is not possible to be too distinct, however, since knowing includes always usage of both mind and body. The border between the two is thus fuzzy. One might see the categorisation as a family of abilities with biases towards one of the two categories.
Tradition of Knowledge
. One of the central concepts in Polanyi`s concept of knowledge is tradition. Tradition describes how knowledge is transferred in a social context. The tradition is a system of values outside the individual. Both language and tradition are social systems which take up, store and convey the knowledge of society. "Personal" knowledge is thus not the same as subjective opinions. It is more like the knowledge of a judge who within the framework of the law and praxis (= tradition) gives a judicial decision based on his judgement in a particular situation. Another judge should in principle be able to take the same decision.
An art which cannot be specified in detail cannot be transmitted by prescription, since no prescription for it exists. It can be passed on only by example from master to apprentice. This restricts the range of diffusion to that of personal contacts. We find accordingly that craftsmanship tends to survive in closely circumscribed local traditions. While the articulate contents of science are successfully taught all over the world in hundreds of new universities, the unspecifiable art of scientific research has not yet penetrated many of these.
To learn by example is to submit to authority. By watching the master and emulating his efforts in the presence of his example the apprentice unconsciously picks up the rules of the art, including those which are not explicitly known to the master himself. A society which wants to preserve a fund of personal knowledge must submit to tradition.
Polanyi is mainly interested in transfer of a process-of-knowing from one person to another(s) and he identifies three tacit psycho-social mechanisms for this: Imitation, identification and learning-by-doing. They are mechanisms for direct knowledge transfer. Facts, rules and exemplars are transferred without intermediate storage in a medium. The term I use - Knowledge "transfer" - is therefore not quite appropriate, since knowledge is not moved as goods. The "receiver" reconstructs his/her version of the "supplier`s" knowledge.
A tradition transfers its patterns of action, rules, values and norms. They create a social order because people can foresee both the action of others and the implied expectations on themselves. The tradition also tells what attitudes one should take. The individual defines him/herself as someone by submitting to the tradition. The formation of knowledge within a tradition is done both locally (by master/apprenticeships) and in a larger context through professional bodies.
Values are not subjective but part of a professional tradition outside the individual self. In the value an individual's experience is integrated with a claim of being general within the tradition of a profession. Personal knowledge contains elements from how reality is perceived by the tradition. The individual lets the lingual forms and cultural patterns of the tradition form his own idiosyncrasies into an image of reality, irrespective of whether his tools are patterns of thought, patterns of action or social institutions. As time passes, some of the values are validated and transformed cognitively into beliefs about how things are. They are therefore no longer in need of being tested so they become a taken-for-granted tacit knowledge shared by the members of the group.
Even if Polanyi does not discuss this particular aspect one might use his concept for identifying traditions of a particular industry, organisation or department, the latter being the "tradition within the organisation".
There is an important distinction between organisation and tradition. Tradition is a dynamic unarticulated process by which a process-of-knowing is transferred between individuals, it has no purpose, no written rules and no power centre. Tradition exists independent of organisation boundaries.
Polanyi`s notion of tradition is based on the psycho-social context of scientific professions, which have procedures for enforcing compliance of unwritten rules. He therefore sees the older professional as having authority over the younger (= socially sanctioned knowledge). The apprentice lacks the ability to question what he learns, tradition thus implies submission. In addition credibility, trust and confidence are necessary. Credibility carries the social exchange of views between equal individuals within a tradition.
Tradition of knowing thus takes place only if the combination of legitimacy (on behalf of the sender) and trust (receiver) exists. When the relation between master and apprentice is shifted to the ideals nurtured by the tradition the apprentice becomes liberated.
I distinguish some limitations in Polanyi`s concept of tradition of knowledge: Polanyi seems to regard tradition as a process in which the master is always the older. This notion fit most profession fairly well until the 1970s. It does not fit fast moving computer professions like computer programming very well.
Tacit knowing and tradition function as a taken-for-granted knowledge, which in its turn delimits the process-of-knowing and sets boundaries for learning. Polanyi does not problematise this aspect.
Polanyi does not distinguish the implications of the difference between interactive knowledge transfer (as in a tradition) direct from individual to individual and indirect knowledge transfer via a medium like information. Organisations involved in production and selling of information rely on more indirect vehicles like massmedia, manuals, books, or computer programs. Articulated rules (maxims) for guiding behaviour like texts in manuals or accounting procedures, check lists, handbooks, guidelines for salesmen etc. are also examples of indirect knowledge transfer.
Email: karl-erik@sveiby.com

Knowledge Management

Today’s business environment is characterized by continuous, often radical change. Such a volatile climate demands a new attitude and approach within organizations—actions must be anticipatory, adaptive, and based on a faster cycle of knowledge creation.
Knowledge Management (KM) provides the processes and structures to create, capture, analyze, and act on information. It highlights both the conduits to knowledge, as well as the bottlenecks. The emphasis in Knowledge Management is on human know-how and how to exploit it to bring maximum return for an organization.
The Benefits of Knowledge Management
Whether to minimize loss and risk, improve organizational efficiency, or embrace innovation, Knowledge Management efforts and initiatives add great value to an organization. Knowledge Management:
Facilitates better, more informed decisions
Contributes to the intellectual capital of an organization
Encourages the free flow of ideas which leads to insight and innovation
Eliminates redundant processes, streamlines operations, and enhances employee retention rates
Improves customer service and efficiency
Can lead to greater productivity.
Knowledge Management does not have a beginning and an end. It is ongoing, organic, and ever-evolving.
Understanding Knowledge Management
The challenge of Knowledge Management is to determine what information within an organization qualifies as "valuable." All information is not knowledge, and all knowledge is not valuable. The key is to find the worthwhile knowledge within a vast sea of information.
KM is about people. It is directly linked to what people know, and how what they know can support business and organizational objectives. It draws on human competency, intuition, ideas, and motivations. It is not a technology-based concept. Although technology can support a KM effort, it shouldn’t begin there.
KM is orderly and goal-directed. It is inextricably tied to the strategic objectives of the organization. It uses only the information that is the most meaningful, practical, and purposeful.
KM is ever-changing. There is no such thing as an immutable law in KM. Knowledge is constantly tested, updated, revised, and sometimes even "obsoleted" when it is no longer practicable. It is a fluid, ongoing process.
KM is value-added. It draws upon pooled expertise, relationships, and alliances. Organizations can further the two-way exchange of ideas by bringing in experts from the field to advise or educate managers on recent trends and developments. Forums, councils, and boards can be instrumental in creating common ground and organizational cohesiveness.
KM is visionary. This vision is expressed in strategic business terms rather than technical terms, and in a manner that generates enthusiasm, buy-in, and motivates managers to work together toward reaching common goals.
KM is complementary. It can be integrated with other organizational learning initiatives such as Total Quality Management (TQM). It is important for knowledge managers to show interim successes along with progress made on more protracted efforts such as multiyear systems developments infrastructure, or enterprise architecture projects.

case study in the knowledge management

Knowledge Leverage : The Ultimate Advantage By Touraj Nasseri
Read More in...A Case For Knowledge Management: Rethinking Business Technology Management for the New World of Uncertainty "...the first book on knowledge-driven organizations and knowledge workers that can survive and thrive in the new world of uncertainty and risk...." at www.kmbook.com Case Studies in Knowledge Management
Just imagine that your company is suddenly struck by a knowledge blight that erases all your corporate knowledge from the storage media including the employees' minds. The difference between the market values of the company before and after the blight struck is the value of the company's intellectual capital. Organizations fulfill their purposes and maintain their raisons d'être by what they know and how well they harness their knowledge. This fact should be a compelling reason for organizational governance and management to nurture most diligently the people and the systems that create, preserve, disseminate, renew and deploy knowledge. Is this so?, or are organizations squandering their supreme resource: the power and the product of the human mind? Is the advent of the knowledge economy thrusting the knowledge factor into the cores of corporate strategies?In a company, as in an economy, physical and mental or intellectual capital generate all the economic wealth and value. Intellectual capital is made up of human and knowledge capital. Human capital comprises individual talents and knowledge that is acquired through education, training, experience, and cognition. Knowledge capital is the documented knowledge that is available in such forms as research papers, reports, books, articles, manuscripts,patents and software. Knowledge capital consists of the artifacts of the human mind that are also stored outside the minds of their authors, and can therefore be available to whoever seeks them.The effective interaction and integration of the two kinds of intellectual capital is essential for maximizing its productivity.Clearly intellectual capital is the fundamental input to all wealth generating processes. Without knowledge natural resources could not be developed, and most of the value of manufactured goods consists in their knowledge contents. So physical assets owe most of their value to intellectual capital, and yet most companies are not organized to benefit fully from leveraging intellectual capital. The challenges to capitalizing on the knowledge advantage include: integration of intellectual capital with strategy; and monetary evaluation of intellectual capital.Knowledge and Business StrategyOnce a business has conceived its strategic intent, it must determine the capabilities, and the management systems it needs to achieve them. Strategic intents typically endeavor to explicate and communicate corporate ambitiousness: being the number one in providing certain customer benefits; being the world leader in a specific technology; delivering products with the best performance-to-cost ratio; and delighting stakeholders beyond their wildest expectations. The ambitious differentiation that drives strategies requires relentless innovation to improve every aspect of business: product development, engineering & manufacturing, business processes, marketing , learning, product delivery, customer relations, and sales & distribution. Innovation in a company is nourished and driven by knowledge-based capabilities and by management systems that leverage the capabilities. The potential inherent in well managed intellectual capital extends its impact well into the future as it adapts, renews, and replaces capabilities so that strategies remain responsive to rapid change and much uncertainty. Intellectual capital is therefore a company's most important strategic resource for competing and winning, and its management must match its importance. Dynamic and effective intellectual capital management determines a company's intellectual gap as the difference between its current and needed intellectual capital. It examines how effectively the current intellectual capital is used. It then designs and implements the most efficient mechanisms to close the gap in both intellectual capital and its management. As business conditions and strategies change new gaps are created and the system needs the dynamism to anticipate and respond appropriately . Intellectual capital management strongly influences many strategic decisions involving allocation of considerable resources of a company. These include :• The kind , quantity and quality of information that should be gathered . Information needs, in general, to be processed before it becomes knowledge that directly enlightens decisions. Information acquisition should therefor serve the knowledge needs of the company; this will also prevent information pollution.• What learning systems and environments should be created to encourage building and renewing human capital.• What kinds of knowledge and talent should the prospective employees command to support the human capital development strategy.• What information infrastructure should be installed so that it can best facilitate creation, tracking, storage and sharing of knowledge to support strategic and operational objectives .• What systems should be installed to safeguard intellectual capital ,and to ensure its quality and reliability. • What processes are to be implemented to mobilize intellectual capital for developing distinctive corporate capabilities that are essential to the strategy of the company. • What R&D programs to fund so that they can create the future knowledge that is needed.• What part of the R&D should be done in house, what part should be outsourced, and what part should be done collaboratively with competitors, suppliers and customers.• What kinds of business relationships and alliances should be established with external providers of strategic knowledge and technology.• What incentives and corporate culture are needed to foster and inspire efforts to enhance corporate intellectual prowess.Much confusion and waste of resources can result if companies do not have an intellectual capital management system to provide a coherent process for making decisions on questions of the kind listed above to yield the highest strategic value.Knowledge And Its Monetary WorthThere is difficulty in evaluating intellectual capital by the prevailing accounting rules that are used to evaluate physical capital. It seems that this difficulty has regrettably discouraged investment in intellectual capital. Not withstanding this,there cannot be any reasonable doubt that intellectual capital is very valuable. Just imagine that your company is suddenly struck by a knowledge blight that erases all your corporate knowledge from the storage media including the employees' minds. The difference between the market values of the company before and after the blight struck is the value of the company's intellectual capital. You might wish to continue the thought experiment by estimating how much will it cost to recreate the lost intellectual capital and to restore it to its original functionality, and you will have a measure of the lost value. Worthy efforts are underway to ascribe monetary value to intellectual capital. The difference between market value and asset value as recorded on the balance sheet has been used as a measure of the intangibles which include corporate knowledge. Brands, another intangible asset, are routinely evaluated and paid for handsomely in business transactions. The experience with "brand" evaluation may be helpful to the efforts to put a monetary price on intellectual capital. Intellectual capital manifests its value by how it is managed to enhance the performance and development of a company on the route to achieve its strategic intent. For any company it is possible to assess the contribution of intellectual capital to increased market share and profits through new products and faster product developments,through cost reduction,and by positioning the company for seizing future opportunities. The management system that is in place to leverage intellectual capital can measure continually its effectiveness by company-specific metrics, and demonstrate the real business worth of intellectual capital . Emerging Trail BlazersRecognizing the critical importance of intellectual capital to sustainable business success, a few notable companies have taken the leadership in launching considerable and serious efforts to understand and enhance intellectual capital management. The members of this select club include Sweden's Skandia, Canadian Imperial Bank of Commerce,and Hughes Space & Communications, to name but three. Some organizations have created chief knowledge officer or equivalent positions to provide stewardship and management for knowledge, as the chief financial office was established for financial capital. They are also designing processes for measuring and enhancing the business value of their intellectual capital. Some companies have installed systems that facilitate networking and information diffusion. Even though a holistic approach to intellectual capital management has not yet been applied , these pioneering efforts are commendable and inspiring. Enlightened self interest and survival instinct will encourage other companies to follow this lead and focus management attention on intellectual capital. After all business would seem to have given information technology,which is but a tool for managing intellectual capital , a good deal of attention and resources. The difficulties of accounting for intellectual capital as if it were physical capital is no excuse for a lackadaisical approach to intellectual capital managment. Senior executives might wish to start the process of heightening awareness of the knowledge factor in their companies by finding out what proportion of their intellectual capital has been mapped and what proportion of it is being productively used to achieve strategic objectives.

KM The Art of Enhancing Productivity and Innovation with HR in your Organization

Knowledge Management: The Art of Enhancing Productivity and Innovation with the Human Resources in Your Organization
Stephan Kudyba
DM Review Magazine, April 2003

The focus has intensified and the trend is set for corporations to enhance the efficiency in which they operate in the marketplace. Years ago, organizations seemed to concentrate more on the acquisition of innovative technologies to provide the means to streamline operations, communicate with customers and more effectively compete in the new information economy. There is no doubt that these new technologies are essential components to corporate infrastructures; however, recent strategic initiatives have turned from merely acquiring these technologies to using them more intelligently in order to achieve success. A major part of this focus entails the utilization of information technologies to help organizations better identify, develop, access and apply the skills and experiences of their employees to augment business processes and drive innovation. This is called knowledge management.

Firm-level productivity or efficiency has largely been attributed to technological capital within corporations; but, in reality, productivity comes from the strategic use of a combination of an organization's entire resource base which includes capital, IT capital, labor, etc. Knowledge management addresses this concept as it involves the incorporation of management policies including strategic decision making, technological implementations and firm- level cultural issues with the intent to identify, develop, communicate and utilize the skills and talents of the employee base within the firm. Organizations are increasingly realizing that one of the most important resources, perhaps the most important, is the people that make it tick. Each employee has a set of skills and talents that needs to be appropriately allocated within a firm's operations. Additionally, with proper training, guidance and collaboration, employee skills can be enhanced to better suit the continuously evolving corporate structure. How is this achieved? Well, it's not easy because it involves the management of complex resources (people).

As is the case in any quest for increased organizational efficiency, key decision making as to resource allocation is a prime requisite. Knowledge-management initiatives are no exception. A knowledge-management initiative is a strategic plan that seeks to develop and utilize the existing assets of knowledge and experience of individuals within an organization in order to enhance a business process. It attempts to make employee knowledge and experience more accessible and available to those that require it in a timely manner. Managers at all levels and across functional departments must make accurate decisions as to which business processes to address, the type of technology to acquire, the personnel needed to support the cause and, ultimately, to determine the effectiveness of a given plan. More specifically, in relation to knowledge-management projects, decision-makers must decide the project scope to be addressed (e.g., particular business process such as enhancing sales call success rates) or a larger initiative (e.g., customer relationship management). Each of these projects leverages existing information technologies available in the organization and may require additional investment. Managers must also consider the complementary scope of employee participation relative to proposed initiatives (e.g., potential need of employee participation across functional areas), especially with regard to an enterprise project such as customer relationship management (CRM).

Decision-makers must not ignore a key fundamental requirement for achieving an effective knowledge-management project – the creation of a positive collaborative, trustworthy and supportive culture for those involved with the initiative. A positive corporate culture plays a vital role in the success of any strategic plan. A trustworthy and collaborative environment is required for employees to more seamlessly share knowledge and experiences relative to proposed business strategies. This cultural aspect opens an entirely new strategic process, however, which is beyond the scope of this article. Regardless of the strategic and cultural complexities of a knowledge-management project, there is little doubt that knowledge-management philosophy has grown dramatically over the past decade. One of the main underpinnings to this heightened popularity has been the introduction of innovative information technologies that have increased the efficiency by which organizations can store, retrieve and communicate information, experiences and knowledge.

New Dimensions
As mentioned, the concept of knowledge management is a widely encompassing initiative. The process of identifying, developing and communicating employee skills, experiences and knowledge in order to drive innovation and corporate efficiency involves a gamut of supportive activities. Fortunately, new information technologies have simplified some of the tasks that are involved. More specifically, there are a number of IT systems that can facilitate knowledge-management initiatives. These include intranet-based knowledge maps or directories that provide locations and contact information to expert employee resources throughout an organization. In order to increase the efficiency of a business process (e.g., provide clients with vital product or process information), employees often need timely insights from company experts. Knowledge maps enable employees to locate experts more quickly and gain best practices information, enabling them to overcome obstacles they face in carrying out an activity. Document repositories accessible through portals contain value-added information and knowledge sources about products, services and general activities. These documents can involve technical specifications of new products, presentation materials, best practices literature for particular initiatives and more. A well-designed document repository with portal access helps spread the available captured knowledge and experience existing within the firm to those in need of this information. Other IT attributes such as search engines in some initiatives also augment the process of retrieving vital documentation or expert contacts. Even more simple IT systems such as e-mail and online internal chat systems facilitate informal networking channels for employees to correspond and share experiences, information and knowledge which can help reduce redundancy of errors and lead to innovative techniques for processes and product development. Finally, the spectrum of business intelligence also plays a significant role in enhancing the knowledge-management initiative.

Transforming Data into Information
Organizations continue to capture vital data corresponding to almost every activity. There is a wealth of information in this data; and with better information comes enhanced knowledge and hopefully more accurate decision making. Data repositories provide the baseline source to the knowledge-enhancement process. With the use of extraction and reporting components, data is transformed to information, which is communicated to appropriate functional areas. The knowledge-enhancement process is further augmented by the utilization of online analytical processing (OLAP) which facilitates an interactive analytic methodology where decision-makers can identify elements of failure or success corresponding to business processes (sales, CRM, supply chain, marketing or production). The business intelligence (BI) implementation is then extended by data mining which provides perhaps the most significant knowledge enhancer by enabling decision-makers to perform "what-if" simulations and identify reliable relationships among business variables. The final result is a better informed decision-maker who uses the corresponding information along with experiences in the marketplace to formulate strategies. Is BI (reporting, OLAP, data mining) the real driver to corporate efficiency? The answer is simply no. Strategic cubes, insightful reports and complex models all require effective collaboration among individuals affiliated with corresponding business processes. In order to achieve enhanced knowledge from BI, decision- makers at all levels must communicate needs, provide feedback on initiatives and direct the process that creates value-added BI systems. (For more information on the BI knowledge connection, see Information Technology, Corporate Productivity and the New Economy by Kudyba and Diwan, Greenwood Publishing, 2002.)

Results – Competitive Advantage
Knowledge management reflects the shift of corporate enterprises from focusing merely on investment in new forms of technologies to enhance productivity to concentrating on combining all the available resources within an organization in order to become more efficient. Firms are realizing that perhaps the most important of these resources is something in which it has already invested – the labor force. As prominent business theory has proven, one of the most reliable components of an organization's competitive advantage in the marketplace is not its technology but the chemistry that exists among the people who work with this technology to bring products and services to the market.