Working Knowledge: How Organizations Manage What They Know
By: Thomas H. Davenport & Laurence Prusak
1. The goal of the book and its scope
The goal of the book is to offer a real “down-to-earth” guide for maintaining and managing what the authors call “the only sustainable source of competitive advantage going forward” which is knowledge. The book breaks down the basic steps for knowledge management into four parts that must take place one after another in order to properly and effectively manage the precious commodity known as knowledge. The book is designed to give managers of all levels the tools and insight needed to first understand what knowledge is, then find it in the company and lastly realize how to share it with everyone else.
The book uses a large number of case studies from a wide variety of companies to show the reader the different aspects and the importance of knowledge management in larger firms. The case studies are based on companies from different fields and of different sizes. Some of the case studies show successful implementations of knowledge management techniques and these case studies are used to show the benefits and the “what to do”. On the other hand many of the case studies are of companies that refused to acknowledge the importance of knowledge management in their companies. The companies mentioned in the book include: Coca-Cola, Texas Instruments, IBM, Ernst & Young, Boeing and many more.
The book deals with the theoretical side of knowledge in the company and its management. The book does not go into detail about the physical ways of technologies that can be used in order to share and mange knowledge. Although many examples are given of companies and their use of such technologies such as the internet and video conferencing, this is not the main point of the book. The book specifically talks about the fact that knowledge management projects are not IT projects but rather cross companies projects that must have support from the highest levels of management (not unlike ERP projects).
2. Summary of the book
The book is divided into nine chapters that offer a guide to knowledge management in any company. The first chapter of the book is entitled “What do we talk about when we talk about knowledge”. This chapter offers definitions for key terms that are used later throughout the book and must be understood in order to grasp what knowledge management is. These terms include: Data, Information and Knowledge. This chapter also discusses the main issues that are present today regarding knowledge management, such as complexity of the knowledge, the changing economy and the fact that the world is moving to a service based system rather than a product based system. The first chapter also offers a look into the first case study which was done on the company “British Petroleum”. The book mentions the need in the company to transfer and manage knowledge between teams that are located at different parts of the world and how British Petroleum used various technologies and management techniques in order to manage and transfer knowledge throughout the company.
The second chapter is named “The Promise and Challenge of Knowledge Markets”. This is one of the most important chapters in the book in my opinion. This chapter talks about dealing with knowledge the same way we would deal with any other commodity in an economy. The authors claim that the first step in managing knowledge correctly is to first recognize that there is a market for that knowledge. The chapter discusses the elements needed to manage a knowledge market (which are very similar to any other market). Buyers and sellers are the most important part of any market and likewise also in the knowledge market. Without knowledge sellers (people in the company that want to pass on their knowledge) the market will not exist and therefore knowledge transfer will not occur. On the other hand there has to be buyers (people interested in learning and obtaining knowledge) otherwise there will again be no transfer of knowledge.
Like all markets the knowledge market must have some type of monetary benefit for the seller of the information. The authors state in this chapter that knowledge sellers must be rewarded in some way (not necessarily money) in order to encourage them to continue to act as knowledge sellers. In order for the knowledge sellers to have something to sell they must invest time and energy into acquiring said knowledge. Therefore it is important for the companies to recognize the knowledge sellers and allow them time to acquire knowledge and also “sell” it.
“Knowledge markets are built on trust”. This is the most important thing about a knowledge market. If the company frowns upon employees reading or water cooler talk as a waste of time employees, and especially knowledge sellers, will not want to gain more knowledge. The change in the company must come from top management and works its way down to all the employees. Employees must feel that the management of the company wants them to learn and exchange knowledge.
The third chapter named “Knowledge Generation” discusses the ways in which companies today generate or acquire knowledge. The authors mention five ways in which knowledge is generated in companies. The first way is acquisition. Acquisition may happen when a company buys another company and therefore gains control over its knowledge base or it may happen inside a company when an employee uses an idea from one project on another project that is not related. It is important to mention that many companies buy other companies for the sole purpose of gaining their knowledge but this many of the times fail once the buying company realizes that the knowledge was not documented and shared between employees informally. The second method is dedicated recourses. Dedicated resources refer to the act in which companies set up dedicated teams to try and acquire knowledge, such as R&D teams. The third method is fusion. Fusion is where the company takes employees from various groups and puts them together in teams to try and come up with new ideas. The fourth method is adaptation. Companies today must adapt in this ever changing environment in order to survive. An adapting company will learn and gain knowledge while a company that fails to adapt will cease to exist. The final method for generating knowledge is through networks. It is important for the company to promote formal and informal networks for transferring knowledge. Examples are conferences about certain technologies, fun days for people with similar hobbies and even allowing employees to chat by the water cooler.
The fourth chapter is named “Knowledge Codification and Coordination”. This chapter deals with the way information flows throughout the company and how to map its flow. The chapter points out the importance of mapping the knowledge and the knowledge holders. The chapter also offers some advice on methods for mapping and coordinating the knowledge flow.
The fifth chapter is named “Knowledge Transfer”. This chapter is one of the most important in the book and rests on the idea of the second chapter that knowledge exists in a market. The chapter discusses the best way to motivate employees to “sell” their knowledge and how without the supply and demand of knowledge in the company there will be now flow. The chapter empathizes the importance of the high level management in the reshaping of how the company thinks about knowledge and it transfer from one person to another. The chapter offers some methods for encouraging knowledge transfer such as forums and fairs. The chapter finishes with a discussion about the importance of changing the knowledge culture in the company. Without a real change in the way managers and employee perceive knowledge and its transfer no technologies or forum will change the way knowledge flows.
The sixth chapter is named “Knowledge Roles and Skills”. This chapter talks about the various roles that are needed in order to have an effective knowledge transfer infrastructure in the company. It is not enough to have a small team that is in charge of knowledge management and put all the responsibilities on that one team. Knowledge management should be a part of every employee’s job in the company. The most important part of the chapter talks about a key position that should exists in every company: Chief Knowledge Office or CKO. This position should be directly under the CEO and is responsible for deciding how knowledge is managed in the company. It is not the job of the CKO to actually distribute the knowledge but to create guidelines and to create systems by which knowledge “sellers” are rewarded. It is also the job of the CKO and his/her office to map out the key knowledge people in the company.
The seventh chapter of the book is “Technologies for Knowledge Management”. This is a brief chapter that discusses the various technologies available for knowledge management in a company. This chapter is not relevant due to the fact that it was written in 1998 and all of the technologies mentioned in the chapter and very basic today and used abundantly in every company regardless of their knowledge management capabilities.
The eighth chapter is named “Knowledge Management Projects in Practice”. This is a short chapter that deals with the aspect of managing projects that deal with knowledge management in the company. The chapter discusses various types of projects and uses various case studies as examples of successful and unsuccessful projects.
The ninth and final chapter is named “The Pragmatics of Knowledge Management”. This chapter is used to combine all the information discussed in the previous chapters and offer the reader some basic pointers in how to manage knowledge projects in a company. The chapter offers practical steps that are based on the theories that were placed forward throughout the book.
3. A review of the positive aspect of the book
I think that this is a great book for any person starting to work in any company. It provides a new outlook as to what is knowledge and how and why we should share it. This book is a MUST for every CEO and will change the way they think about knowledge in their companies. The book review web paged called “Kip’s Review” had this to say about the book “One of the real winners in this arena”. (http://www.goodreads.com/review/show/2096530)
4. A review of the weaker points of the book
One of the weaker points of the book is the fact that is has not been updated in 12 years. The book has many references to companies that are no longer relevant. I would have like to have seen case studies from companies that are relevant in today’s market. The book also talks somewhat about technologies that can be used to help manage knowledge in a company. Because the book was written in 1989 all the technologies mentioned are not relevant anymore.
5. Personal view of the book
I personally very much enjoyed the book and have learned a lot from it. While reading the book and realized many things about the company that I currently work at and its problems regarding knowledge management. Since reading the book I have tried to implement some changes in my department in order to try and manage the knowledge a little better.
6. Suggestions for future revisions
There are two major revision that I would suggest be made to the book. The first is to update the chapter that deal with knowledge management technologies (chapter 7). The second suggestion would be to update the companies used as examples throughout the book in order to make it more relevant to today’s readers.
7. Summary and Suggestions to the future reader
My first and only suggestion for feature readers of this book is to read it and then pass it on to their boss who in turn should read it and pass it on to their boss and so on.
