CHIPS: Please describe your study. How did you begin exploring the Knowledge Management (KM) process? Since this is a work in progress what is the current focus of your study?
Dr. Neilson: The catalyst for the study was my own interest in KM. As KM emerged into a discipline in academia as well a strategic function in organizations and the role of the CKO emerged as an important role in the process, I recognized the significance of this area as a field of study. I got together and brainstormed to come up with several key concepts with Alex Bennet (Deputy DON CIO for Enterprise Integration) and Dr. Shereen Remez (CKO for U.S. General Services Administration) who each knew something about KM. We framed the following key questions to promote innovative thinking:
- Why is KM important to your organization?
- What is the role of a CKO in a public sector organization?
- What competencies make a successful CKO?
- What are the most important personal attributes that you as a CKO must bring to the job?
We then brainstormed these concepts with senior leaders in public and private industry to form a basis to develop competency models for CKOs in the federal sector.
These models provide a basis for potential KM curriculum development. Selected classes will be offered at DoD schools and colleges to meet continually emerging KM organization needs. Private industry and private colleges will also have an opportunity to develop KM curriculum. The Clinger-Cohen Act of 1996 and the Government Performance and Results Act requirements for federal agencies forced federal agencies to focus efforts on performance-based results and agency accountability. Congress demands it and so do the taxpayers. KM has a major role to play in helping agencies meet these requirements as well as in meeting mission objectives.
CHIPS: How can an organization make sense of the onslaught of information regarding knowledge management?
Dr. Neilson: Much of the discussion surrounding the field of Knowledge Management (KM) is like stirring a vat of 'jello with a slinky' — little firms up. KM concepts seem to float in a jello-like environment without form, density, or direction making it difficult for practitioners to grasp key KM concepts.
A common refrain in corporate boardrooms and executive offices in federal agencies is that "I'd be happy to embrace KM if I only knew what it is and how it will help us meet enterprise objectives." The refrain is understandable since the theoretical basis underlying KM is unclear and still emerging. There is also little consensus regarding the competencies needed by those individuals charged with leading KM initiatives.
An alphabet soup of acronyms has sprung to life, giving organizational legitimacy to individuals who are charged with the task of valuing, leveraging or reusing tacit and explicit knowledge. CKO (chief knowledge officer), CTO (chief technology officer), CLO (chief learning officer), KA (knowledge architect), KM (knowledge manager) and KE (knowledge engineer) represent a sampling of the acronyms associated with the field of KM.
Would you recognize a third degree black belt in KM — if you saw one? I'd like to throw some 'conceptual cement' into the 'KM vat of jello' to firm up some KM concepts and contribute some thoughts and ideas regarding what competencies and skills CKOs need to survive and flourish.
CHIPS: What is the difference between a CKO and CIO?
Dr. Neilson: CIOs concentrate their efforts on managing physical versus intellectual assets. CIOs are rarely fired if they can keep the networks up and running, and deliver near state-of-the-art computer equipment and applications on a reasonable lifecycle. This is to ensure that the information technology provides a means to meet business objectives and provides a robust security to protect networks from physical and electronic destruction. The security aspect is a growing concern in public and private sectors.
These are physical assets, something you can feel and touch. But leveraging intellectual assets, intangible assets in the form of data and information—tacit and explicit knowledge are critical to a successful organizations. Unlike CIOs, CKOs concentrate their efforts on:
- Aligning KM efforts with a business value proposition or mission objectives.
- Using previous best practices or designs discovered by benchmarking studies.
- Developing and fostering a knowledge sharing culture and continuous learning environment about KM.
- Having a customer orientation.
- Creating knowledge content activities to meet enterprise objectives.
- Leveraging corporate-wide learning.
- Championing organization learning and KM.
- Creating and fostering communities of practice.
- Creating incentives to share explicit and tacit knowledge across time and space boundaries.
- Creating opportunities to promote knowledge flow.
A CKO changes the way to do business by capturing tacit knowledge and making it explicit thereby creating flows of information. I’ll give you an example: a Navy aircraft has been shot twice in the wing and needs to return quickly to the carrier. It is dark, visibility is poor, and the enemy is out there. Do you think the pilot is going to go to a best practices database to learn how to land safely?
No. The pilot wants to talk with someone who has had this experience, someone who can talk the pilot down safely. This is a flow of tacit knowledge. This is what KM is—putting the right knowledge in touch with the right people—at the right time. It is important for two reasons—saving lives and saving a very expense piece of government equipment for the taxpayer.
What we have found is that people do not always look at best practices databases. Here is an office example; an employee is having trouble with a computer application. Does he go to a database or onscreen help? No. He walks down the hall to the person he knows is the expert in this application to answer his questions. This kind of exchange is a flow of information—the key to building a knowledge-centric organization (KCO).
There are a few definitions you need to understand to build a KCO.
- Human capital is all individual capabilities, the knowledge, skill and experience of the employees and managers.
- Intellectual capital includes the intangibles, such as information, knowledge and skills, that can be leveraged by an organization to produce an asset of equal or greater importance than land, labor and capital. More on this definition later.
- Structural capital includes the processes, structures and systems that a firm owns less its people.
- Social capital is the goodwill resulting from physical and virtual interchanges between people with like interests and who are willing to share ideas within groups who share their interests.
CHIPS: How does using these capitals working within a knowledge-centric organization to propel the enterprise?
Dr. Neilson: The dynamic mixing of human, intellectual, social and structural capital provides the fuel for creating and using knowledge. A key factor in rocketry and knowledge-based organizations is to reuse components and learn from each mission. It makes no sense to discard this combination of capital in organizations when each factor of production may be in short supply. The object is to learn, reuse where applicable, and innovate ways to deliver ‘payloads.’
CHIPS: How does KM make use of this concept? How is this valuable to the organization?
Dr. Neilson: In this day and age when retention and recruitment are major concerns in both public and private sectors, an organization’s success in generating structural capital will help ensure an organization remains competitive.
The government estimates that in the next five years there will be a tremendous loss in corporate knowledge due to the great number of federal employees expected to retire. This could have a crippling effect on DON effectiveness. It is critical to capture what these employees know—know-how and know-what.
Also the trend in government today is that employees do not stay at the same agency or in the same job, as was once the norm. It is imperative that an organization captures the critical information employees possess.
Sharing best practices, processes and innovations by collaborating and learning are activities that will propel an organization forward. Simply relying on best practices will yield short-term results. Innovating new products, processes or services is critical for organizational survival. Additionally, linking business goals or mission objectives to the KM effort is very important. We are talking about constantly creating structural capital, which is digitized information, and tacit and explicit knowledge that is owned and operated by the DON.
Socialization aspects of knowledge sharing are also very important. People are more likely to share with people they know. People linked by e-mail, communities of practice, common interest, and ideas will foster sharing and the flow of knowledge.
This flow of tacit and explicit knowledge creates military advantages too. Our military won’t have to constantly reinvent a solution thereby providing knowledge superiority over enemies. KM serves as a platform and network for learning. If you go the basic definition of learning—learning really means a change in behavior. This is the basis for any organizational change.
CHIPS: What are some of the tangible results of building a knowledge-centric organization?
Dr. Neilson: Private industry has become very good at this. For example, Chevron is drilling in the North Sea and is linked by video hookup to a drilling site in the Gulf of Mexico. The roughnecks and engineers at the gulf site are able to advise the drillers in the North Sea that based on the ‘glopping and falling’ of the dredged material they can see via video and verbal interchange that the North Sea drillers will hit oil in an hour.
This sharing of tacit knowledge is saving Chevron $250 million annually in drilling costs. This video information can be shared via databases, training films, conferences, video teleconferencing, etc. But an organization must create the incentives to encourage employees to want to share what they know.
The reward has to be more than driving up the organization’s revenue. In this case, the engineers have an innate professional interest in drilling, you can call it professional pride—they want to be the best. By sharing and acquiring more knowledge it makes them more marketable for the next job. The organization, on the other hand, needs to capture this knowledge and use it so the knowledge isn’t lost if the engineer moves on.
Xerox established very good incentives to share tacit and explicit knowledge. They have an international best practices repair database for their copiers. Technicians rate the best repair practices of their peers by giving a suggestion a thumbs-up or down. This makes the process self-correcting.
Technology is now at a stage where a technician actually recorded the sound of something that was going on in a machine. He posted an .avi (sound) file to the best practice database. Another technician accessed the database and recognized the malfunctioning sound and was able to fix the machine in no time. This is an example of making tacit knowledge explicit and converting the explicit knowledge into structural capital.
The audio and video technology at Xerox creates a knowledge flow at Xerox. Most organizations have this capability. Additionally, Xerox has an annual academy of awards for best repair suggestions. Employees are recognized for innovation and sharing their knowledge.
The object here is to create incentives to share across time, space and boundaries. A best practice found on a destroyer should be shared with the carrier battle group and ultimately throughout the Navy. Employees have to know how they will benefit. If people know they will be rewarded, they will share information. You’ve got to answer the “what’s in it for me” question; otherwise, people are reluctant to share.
CHIPS: How can organizations stimulate employee sharing?
Dr. Neilson: An organization should write ‘sharing knowledge’ as part of the employee performance plan. This will work in the public sector and private industry—for military and civilian employees. Sharing information should be integral to the way an organization’s culture and it should be transparent to employees—if you want to get promoted—innovate ideas and share your tacit and explicit knowledge.
CHIPS: What do you see as the major obstacles to a successful KM effort?
Dr. Neilson: First, KM cannot be an initiative, program or the latest management fad ‘du jour.’ It has to be inculcated into the very fiber and fabric of the organization, the way we do business, the way we think. It is a business value proposition—always ask the why question and involve your stakeholders. Explain to them how they can benefit from your KM efforts. Your stakeholders can be Navy personnel, contractors, allies, if appropriate, customers—whomever.
Another obstacle is concentrating too much on technology. There is some great software out there and vendors are eager to sell it, but some organizations fall into the trap of treating the software as the end product instead of a means to an end. Steve Denning, CKO of the World Bank said that: “KM is about 90 percent cultural change and technology is about 10 percent of the equation.”
The concept of portals is probably one of the most overused and misunderstood terms in the Navy and the federal government today. Portals deal with stocks of information, i.e., databases of information.
Another suggestion—don’t use POC (point of contact) for best practice databases. People want to be known as the authors or experts of information. The best thing that can happen when a name and a phone number is attached the information in the database is that the researcher will phone that person, and ask, ‘what is really happening here?’ That will start the flow—a dialogue.
There is some collaborative software available such as Lotus Notes, Raven, etc., and may vendors will try to convince you that this is all you need. This is what I call the ‘field of dreams approach.’ If you buy it, and put it out there, people will use it. These approaches fail miserably.
CHIPS: What are some of the techniques an organization can use to promote teamwork and foster knowledge sharing?
Dr. Neilson: I’ll give you an example of a successful assignment I gave at the IRMC. The students were instructed to craft futuristic scenarios of how KM would operate in their organizations. In this scenario the students had to have a KCO in on May 12, 2004. They had to paint a vivid picture of how KM would operate in the organizations. The students backtracked from this date and crafted plans addressing what they would have to change from an organizational culture, process and technology perspective to achieve the future state described in their scenarios.
You may want to challenge your employees to brainstorm several futuristic scenarios, then take the best of each scenario and craft a consolidated one. People learn by hearing and telling stories. Scenarios are stories and people learn by stories not directives. Then the leaders in the organization should take these scenarios (stories) and ‘sell’ them to the rest of the organization—‘This is how we want to work in the future.’ This will help secure buy-in from your stakeholders, ranging from the Sailor swabbing the deck—up to the management level.
But again you have to create the incentive structure to reward the behavior and sharing. You have to encourage innovation, new ideas, and risk taking. You can’t penalize employees for taking risks; otherwise, you will kill the kind of flow you are trying to create. Management has to demonstrate that creating information and knowledge flows will be career enhancing for employees.
CHIPS: Is KM designed to work in the internal processes of an organization such as human resources, budget and other administrative functions?
Dr. Neilson: Absolutely! There is great potential to create communities of practice in all of these functions. For example, human resources specialists can share their experiences regarding best recruiting practices across agencies—departments of Defense, Labor, etc. The social capital realized as a result of interagency meetings promotes the sharing of best practices—a flow.
Additional exchanges or flows can be facilitated through electronic means. If your business value proposition is to recruit and retain quality personnel then the sharing of best recruiting practices may be appropriate for the HR community.
CHIPS: Since KM requires an organization to objectively evaluate itself, is this something it should do on its own—or should a consultant be involved?
Dr. Neilson: It depends on the organization. How entrenched is it in its way of thinking? Does the organization practice what I call the ‘prairie dog’ theory of management? This is where everyone is ‘buried’ underground and they will only risk coming out if no one is nearby for fear of being shot or dragged away by some predator. There has to be tangible incentives to change, to look at the external environment, to take risks, to stick heads out of the burrow, and try something new.
A consultant can, at least, help an organization recognize it is practicing the prairie dog approach. The organization leadership will ultimately have to decide if it wants to reward risk-taking—including knowledge sharing.
CHIPS: How does an organization leverage what people know—know-how and know-what?
Dr. Neilson: I can think of three ways. On way is to take a skills inventory of employees but this often doesn’t give you a complete picture of individual talents. Employees can be confused or skeptical about the outcome or they may not present their complete skill set because they don’t understand how certain skills may be of use to the organization. There are several private consulting firms that do a very thorough job of conducting skill inventories—if an organization has the money.
Another way is to have employees build individual Web sites, allowing employees to post their skill sets, experience and job preferences.
Lastly, the organization can foster communities of practice with the proviso that members of the communities convert their intellectual capital to structural capital so that it can be used throughout the enterprise.
All these methods assume that information must be organized in such a way that employees and managers can easily search and retrieve the information they need to contact the individuals who possess specific tacit knowledge.
CHIPS: How should organizations measure the results of a KM effort? Should outcome be measured in terms of customer satisfaction and business goals?
Dr. Neilson: Measuring results is an important part of the KM process. Before you begin this effort, you need to answer the question—why are we doing this—at the very beginning. Also determine how you will know the organization has succeeded. This is something an organization needs to identify up front in quantitative and qualitative terms.
There are a lot of intangibles realized in KM efforts but you have to be able to measure the benefits quantitatively also. As a former supervisor of mine once said to me when I was describing the intangible benefits of a process—‘OK, do you want to be paid in tangible dollars?’
For example, research initiatives are difficult to measure but it can be done. The Defense Advanced Research Projects Agency (DARPA) mission is to come up with new products or processes. You could measure the number of new ideas in the pipeline, the number of ideas that passed feasibility tests, the number of ideas that went to prototype, the number of ideas that go to implementation, full-field deployment, and to actual revenue generated.
Military and government organizations can use these measures also. Most government agencies base results on cost avoidance or time-savings. Cost avoidance and time-savings can be quantified and the money and time-savings can be estimated. These are also appropriate measures.
CHIPS: What are the intangible benefits of implementing KM and becoming a KCO?
Dr. Neilson: The World Bank held a conference of engineers. In this forum, the controller expressed great concerns because the road-building projects in Africa cost twice as much as similar projects anywhere else in the world. The budget reports and other data the controller had did not reveal why this was so. Discussing the cost differences, the engineers discovered that the road-building engineers in Africa were using a different road surfacing formula for the amounts of concrete, clay, etc., in the mix. Their formula cost more to use initially but held up better that any of the other methods for road-building because the African roads did not wash out under flood conditions.
So there was less rebuilding and ultimately, the African roads were actually less costly to build. The value of getting people together face-to-face, or by e-mail, or some other virtual method for this kind of sharing to occur can’t be overestimated.
CHIPS: Let’s talk about your presentation on the IRMC Web site regarding your statement, “Change the value proposition from delivering goods and services to delivering knowledge and expertise about those goods and services.” How does this give an organization a competitive edge?
Dr. Neilson: It is the intellectual capital that is important in business and government today. In the Wealth of Nations, Adam Smith defined the components of production as land, labor and capital. That does not hold true today. Competitive advantage depends on the smartness with which knowledge I used in an entire organization.
With the growing number of people using the Internet, coupled with the rapid expansion of the wired and wireless global information infrastructure, avenues to link people and ideas to new products and services has grown exponentially. The ease in which media in digital form can be replicated, transmitted, modified and manipulated is inherently different than the physical media that rely on traditional means of production (printing) and distribution (physical delivery).
Explicit and tacit knowledge about a product or service are as important and the product or service itself because they serve as a basis to improve or develop new products or services. So knowledge has emerged as a formidable factor of production—a capital. For example, United Airlines uses an airline reservation system called the Sabre System.
United generates more revenue from using and selling this system to other businesses than it does from flying airplanes. So even though United is actually in the business of flying airline seats, it is able to realize a profit from the intellectual capital invested in a by-product of its business operation—the Sabre System.
When you evaluate the monetary value of Microsoft, it is not measured by the land it owns or the software it sells, rather it is the intellectual capital of Microsoft that generates revenue and this is what its customers buy. This is something that organizations need to pay attention to.
CHIPS: What kinds of organizations are sending their leaders to the CKO and Advanced Management program as the IRM College?
Dr. Neilson: The smart ones—the organizations that realized the importance of IM and KM—the next generation of senior leadership. We are teaching a holistic approach to strategic planning and developing an organizational culture in concert with the technology.
Of course, we get a lot of military officers (0-4 to 0-6) but we also have students from agencies outside of DoD and private industry participation. Selected private industry students pay to attend. I like to have at least one private industry representative in a class of 20 because I think it is important for the government to learn from private industry.
Benchmarking is an area that private industry is very good at. Best practice information needs to be shared. It broadens the scope for both public and private sectors.
There is a lot private industry can learn from government too. One of the best practices the military uses is the debriefing sessions held immediately after every flight and exercise. By learning from mistakes, capturing lessons learned, developing a database of best practices and creating a flow for this information—the military fosters structural capital—a ‘smartness’ that can be used at all levels.
Dr. Neilson is the CKO and a professor at the Information Resources Management College of the National Defense University. He has taught and lectured both in the U.S. and internationally, including the Argentine War College, NATO Defense College in Rome, and the Italian Institute for Defense Studies.