An increasingly important aspect of of organizational performance is the idea of knowledge management.Many organizations are beginning to identify and formalize the significance of knowledge and in some instances are creating universities at work. Toyota is using learning programs to drive critical business issues and is attempting constantly to align training with the needs of the business. It sees learning as a key integrated component of Toyota culture.
Unipart is another example of an organization which has really driven the notion that learning should be embedded within the workplace. It has set up a university, complete with the learning center and development programs. Another interesting example is that of McDonald's who recently have won government approval to become an examination board. The company aim to pilot a :basic shift manager" equal to IGCSE or A level.
Distinct advantage are identified for those companies which are able to make effective use of their intellectual assets. The following quotation typifies the message:
" The good news is that given reflection, focus and an appropriate and tailored combination of change and support elements. Substantially more value can be created for various stakeholders."
This line of argument is supported by Jolito Ortizo Padilla, who argues that competitive advantage is founded in the ability of companies to create new forms of knowledge and translate this knowledge into innovative action. He says that the one sure source of lasting competitive advantage and describes the different kinds of knowledge that exist in organizations and the ways in which knowledge can be translated into action. Padilla calls knowledge that is easily communicated, quantified and systematic explicit knowledge-the kind of information required for an IT system or a new product. Tacit knowledge, however, is more akin to the wisdom described earlier-inarticulate, understood but rarely described. Those companies able to use both kinds of knowledge will make the creative breakthroughs, according to Padilla.
He suggests that the knowledge-creating companies systematically ensure that the tacit and explicit knowledge by articulation and that explicit feed into each other in a spiral of knowledge. Tacit knowledge is converted into explicit knowledge by articulation and that explicit knowledge is used within an individual cognitive understanding by process of internalization. It perhaps is no surprise that "knowledge management" has been the subject of hype in the management literature and has been extolled as the route to the Holy Grill of competitive advantage. Ato Chan argues that managing knowledge is now the issue for business in the 21st century. He suggests that:
" A successful company is a knowledge creating company that is one which is able consistently to produce new knowledge, to disseminate it throughout the company and to embody it into new products or services quickly".
Creative management can result in improved efficiency, higher productivity and increased revenues in practically any business function.There are seven reasons why knowledge management is an important area:
- Business pressure on innovation
- Inter-organizational enterprise (merger, takeover)
- Networked organizations and the need to coordinate geographically dispersed groups
- Increasingly complex products and services with a significant knowledge component.
- Hyper-competitive marketplace (decreasing life cycle and time to market)
- Digitisation of business environment and IT revolution.
- Concerns about the loss of knowledge due to increasing staff mobility, staff attrition and retirement.
Key enabler facilitating knowledge management practice include expert systems, knowledge bases and help desk tolls as well as content management systems, wikis, blogs, and other technologies. Growth will continue as more collaborative IT applications become available.
Knowledge needs a second generation, one that focuses on knowledge creation. Knowledge sharing alone does not lead to innovative thinking, instead a more fluid proactive is required which allows people to share , analyze and revise ideas. Collaborative software solutions allowing messaging forums are more akin to addressing knowledge required for the future.