Knowledge and Process Management Volume 6 Number 1 pp 37–40 (1999)
" Research Article
Key Ingredients to the Success of an
Organization’s Knowledge Management
Strategy
Jay Liebowitz*
University of Maryland-Baltimore County (UMBC), USA
Knowledge management is a key strategy that organizations are embracing to manage their organizational
knowledge for strategic advantage. Unfortunately, like any new and maturing field, overexpectations are being
created by so-called knowledge management consultants and vendors. This paper describes the six essential
ingredients in order for knowledge management to have a chance of succeeding in an organization. Copyright
1999 John Wiley & Sons, Ltd and Cornwallis Emmanuel Ltd.
INTRODUCTION isolated knowledge bases to form the bridges between them
(Liebowitz, 1997; De Hoog and van der Spek, 1997). By
Knowledge management is the process of creating value doing so, knowledge sharing can be better facilitated to
from an organization’s intangible assets. In the author’s create ‘the sharing of knowledge is power’ instead of simply
view, knowledge management (KM) is the amalgamation of ‘knowledge is power’.
concepts from the applied artificial intelligence, software Liebowitz and Beckman (1998) propose an eight-stage
engineering, business process reengineering, organizational process for knowledge management:
behavior, and information technology fields (Liebowitz and
Stage 1: Identify—Determine core competencies,
Wilcox, 1997; Liebowitz, in press). It deals with creating,
sourcing strategy, and knowledge domains.
securing, combining, retrieving, and distributing knowledge
Stage 2: Capture—Formalize existing knowledge.
in the organization, both internally and externally.
Stage 3: Select—Assess knowledge relevance, value, and
With the previous focus being on the ‘collection’ of
accuracy. Resolve conflicting knowledge.
information and knowledge, web-based and intranet tech-
Stage 4: Store—Represent corporate memory in knowl-
nologies can now provide the ‘connectivity’ between these
edge repositories with various knowledge schema.
Stage 5: Share—Distribute knowledge automatically
to users based on interest and work. Collaborate on
knowledge work through virtual teams.
Dr Jay Liebowitz is the Robert W. Deutsch Distinguished Professor of Stage 6: Apply—Retrieve and use knowledge in making
Information Systems at the University of Maryland-Baltimore County
(UMBC). He was previously Professor of Management Science at George decisions, solving problems, automating or supporting
Washington University. He is the Editor in Chief of Expert Systems With work, job aids, and training.
Applications: An International Journal (Elsevier/Pergamon Press) and Failure Stage 7: Create—Discover new knowledge through
and Lessons Learned in Information Technology Management: An International
Journal (Cognizant Communication Corp, New York). He is the Founder research, experimenting, and creative thinking.
and Chair of The World Congress on Expert Systems, and served as Stage 8: Sell—Develop and market new knowledge-
Chaired Professor in AI at the US Army War College. Dr Liebowitz has based products and services.
published over 25 books and about 200 journal articles, and has consulted
worldwide for industry and government. He was also selected as the In order to implement such a knowledge management
International Computer Educator of the Year 1996 by the International
Association for Computer Information Systems. process, several important elements are needed:
*Correspondence to: Dr Jay Liebowitz, Department of Information Sys-
tems, University of Maryland-Baltimore County (UBMC), 1000 Hilltop (1) A Knowledge Management Strategy with support from
Circle, Baltimore, MD 21250, USA. E-mail: liebowitz@umbc.edu senior leadership
CCC 1092-4604/99/010037-04$17.50
Copyright 1999 John Wiley & Sons Ltd and Cornwallis Emmanuel Ltd.
RESEARCH ARTICLE Knowledge and Process Management
(2) A Chief Knowledge Officer (CKO) or equivalent and Knowledge Repository—determining the technology
a knowledge management infrastructure within the for storing the knowledge, persuading employees to
organization contribute to the repository, creating a structure for
(3) Knowledge ontologies and knowledge repositories to holding the knowledge
serve as organizational/corporate memories in core Knowledge Transfer—identify, develop, and monitor
competencies both human and electronic channels for knowledge
(4) Knowledge management systems and knowledge sharing
management tools Knowledge Asset Management—calculating knowledge
(5) Incentives to motivate employees to share knowledge valuations, negotiating with holders of desired intellec-
(6) A supportive culture for knowledge management. tual capital, managing a knowledge asset portfolio
Infrastructure Development—analyzing financial needs,
Each of these six ingredients will be discussed in turn.
working with external vendors of technologies and
services, developing human resources management
approaches.
INGREDIENT 1: KM STRATEGY WITH SENIOR
Another strategy is to provide the framework, knowledge
LEADERSHIP SUPPORT AND ACTIVE
repository ontology, and knowledge management tools to
INVOLVEMENT employees throughout the organization to let their groups
or departments develop their own knowledge repositories.
One of the key elements for KM success is to develop an
The World Bank is using this approach where they are
overarching enterprise-wide KM strategy for the organiz-
spending about $50–60 million in 76 sectors of knowledge
ation, with senior leadership support in moral and financial
to develop knowledge-based help desks for lesser
terms. This KM strategy can take various forms. One
developed countries.
strategy may be to first focus on a particular core compe-
tency of the organization (which may have a ‘graying’
employee base) to best leverage knowledge internally
within the organization’s employee base and externally to INGREDIENT 2: NEED A CKO OR EQUIVALENT
the customers. Dow Chemicals used this strategy in lever- AND A KNOWLEDGE MANAGEMENT
aging their knowledge in the patent area first, and then used INFRASTRUCTURE
Intellectual Capital Asset Management teams to leverage
knowledge in other key areas in their organization. The second ingredient for knowledge management to be
A second strategy is to create Corporate Knowledge successful is the need for a Chief Knowledge Officer (CKO)
Centers or Centers of Expertise (CoE), like used by or equivalent (Director of Knowledge Management,
American Management Systems. Liebowitz and Beckman Intellectual Capital Director, etc.) and a knowledge manage-
(1998) and Liebowitz and Wilcox (1997) believe there ment infrastructure within the organization. For example,
should be a Center of Expertise for each knowledge domain, Buckman Labs recognized in 1992 that knowledge was their
discipline, or subject matter speciality with several roles: critical asset and competitive edge. Under their CEO and a
newly appointed CKO-equivalent, a Knowledge Transfer
Create, research, improve, and manage the domain
Department was established which developed the K’Netix
Knowledge Repository
(knowledge management and transfer system) in Buckman
Set and enforce standards, methods, and practices for
Labs. According to an Arthur D. Little study, 41% of the
domain discipline
Fortune 500 companies already have a CKO or equivalent.
Establish partnerships and align/coordinate interests
This is certainly evident in the Big 5 and major consulting
with related COE specialities, projects and processes, as
firms.
well as negotiating conflicts between these entities
The CKO needs to be the advocate for knowledge and
Assess workforce competency and performance, identify
learning. In many ways, the CKO is a cartographer in
gaps, and remedy deficiencies
mapping expertise to skills in the organization and a
Support, develop, and enable the workforce by provid-
geologist in mining for knowledge. The CKO should be the
ing educational and consulting services, as well as
designer and overseer of an organization’s knowledge
coaching and tools
infrastructure, and take the leading role in the design and
Supply competent workers to staff projects and pro-
implementation of an organization’s knowledge architec-
cesses through assignment, hiring, outsourcing, and
tures. It is extremely helpful if the CKO has expertise in the
developing.
disciplines of business reengineering, innovative IT, change
Davenport and Prusak (1998) indicate that KM Project management, as well as knowledge management.
Offices could be used as a strategy in the organization. There is a question as to where to put the CKO in the
They identify four types of KM projects and related organization. The author’s opinion is that the CKO should
activities: be a staff position next to the CEO. Other organizations
38 J. Liebowitz
Knowledge and Process Management RESEARCH ARTICLE
have positioned the CKO within the IS/IT, Human K’Netix as their knowledge management system, and
Resources, or Business Management directorates of the Arthur Andersen has KnowledgeSpace, Price Waterhouse
organization. has Knowledge View, and the list goes on. The knowledge
repositories described in the previous section form part of
these knowledge management systems. Careful attention
INGREDIENT 3: NEED KNOWLEDGE must be given to user interface design issues.
ONTOLOGIES AND KNOWLEDGE Many of these knowledge management systems are
REPOSITORIES using tools such as Lotus Notes, Infofinder (by Arthur
Andersen—an intelligent agent that learns about a user’s
According to O’Leary (1998), ontologies are explicit speci- information interests in a document repository), GrapeVine,
fications of conceptualizations. Within the context of knowl- Topic, Autonomy, Magic Solutions, Open Text, Perspecta,
edge management systems, ontologies are specifications of and InXight. Lotus Notes is a groupware-based tool. Auton-
discourse in the form of a shared vocabulary. They provide omy, Infofinder, Topic, Open Text and Magic Solutions are
the structure, terminology, and relationships in which to search tools. Perspecta and InXight are visualization tools.
build the knowledge repositories. Organizations need to The key idea to remember is that these tools are not, by
have these knowledge ontologies defined to ensure stand- themselves, knowledge management. These tools assist in
ardization and integrity of the development of the reposi- the development of the knowledge management systems.
tories as well as to facilitate maintenance and controlled However, knowledge management is not simply ‘tech-
growth of these repositories. nology’. It involves a combination of people, technology,
Abecker et al. (1998) feel there should be an enterprise and culture to create a ‘system’ for knowledge management.
ontology, information ontology, and domain ontology. The
enterprise ontology provides the context for the infor-
mation ontology and the domain ontology provides the
content for the information ontology. INGREDIENT 5: NEED INCENTIVES TO
These ontologies are applied to building the knowledge ENCOURAGE KNOWLEDGE SHARING
repositories. Methods for building these knowledge reposi-
tories can take several forms. These forms are combinations Many people don’t want to give up their competitive edge
of active/passive knowledge collection versus active/passive and share their knowledge with others. Although, a recent
knowledge analysis and dissemination. For example, passive benchmarking study of 150 companies indicated that the
collection and passive analysis/dissemination is in the form reason for this was not due to wanting to hold one’s
of using a knowledge repository as an archive which is knowledge close to one’s heart (i.e. the selfish, competitive
consulted when needed—i.e. the individuals workers enter edge reason). Rather, people didn’t want to use other
their lessons learned and no analysis or dissemination of people’s knowledge because then they couldn’t put their
these lessons learned is actively done. Another approach is thumbprint on it.
active collection but passive analysis/dissemination where In order to get knowledge management systems to be
the organization is actively trying to create a knowledge used, incentives will invariably need to be given to at least
repository. Passive collection and active analysis/ encourage initial use of these systems. Buckman Labs
dissemination is called the knowledge publisher approach initially offered monetary incentives to use their knowledge
whereby the entering of lessons learned is left to the management system. Gradually, the use of their K’Netix
individual workers but there is a group which analyzes these became a daily occurrence because the CEO would use it on
lessons and sends them to appropriate individuals (who a regular basis and the employees felt that it must have
could benefit from these lessons) in the organization. The value if the CEO is using it. Additionally, over time, its use
last approach, called the knowledge pump, is active collec- became part of the ‘knowledge culture’ of the organization.
tion and active analysis/dissemination. The Center for US Other organizations have given frequent flyer mileage to
Army Lessons Learned applies this technique where web- the first ‘x’ number of individuals to use their knowledge
based electronic observation forms are used and entered, management system. Companies like Andersen Consulting
and the Center analyzes the lesson learned and then sends it and Lotus evaluate their employees, as part of their annual
to appropriate individuals. job performance review, on how much (and the quality) of
knowledge that they provide to the knowledge repositories
and how they have applied the knowledge from these
INGREDIENT 4: KNOWLEDGE MANAGEMENT repositories.
SYSTEMS AND TOOLS Strong incentives and a healthy culture are needed to
encourage knowledge sharing and innovation. The organi-
Knowledge management systems and knowledge manage- zation must think about their reward, compensation,
ment tools to create these systems need to be part of the and motivational systems in order to make knowledge
overall knowledge management strategy. Buckman Labs has management successful.
Success of an Organization’s Knowledge Management Strategy 39
RESEARCH ARTICLE Knowledge and Process Management
INGREDIENT 6: BUILD A SUPPORTIVE SUMMARY
CULTURE
This paper tried to synthesize important lessons learned
In many organizations, especially bureaucratic ones, from organizations in terms of the six major ingredients
employees and managers are discouraged from sharing for making knowledge management successful in an
knowledge and expertise. Knowledge is often considered a organization (Liebowitz, 1998). By paying close attention
source of power, and hoarding it from others is not only to these critical elements, knowledge management will be
expected but is often rewarded (Liebowitz and Beckman, a key competitive strategy to the organization in the
1998). Additionally, the Not Invented Here syndrome is future.
often evident in many organizations, so it may be difficult to
get employees to use and apply expertise developed by
someone else.
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