Since my last blog post, the world financial market has really taken a battering as large finanical institutions in the US, Britain and in Europe collapse under the weight of poor lending practices and even poorer management and control structures. The financial impact alone is enormous.
What has this to do with knowledge management, I hear you ask?
Well, knowledge management is about enabling informed decision-making and taking action. Knowledge management facilitates the information and knowledge assets of a business to drive operational efficiencies, create opportunities for growth and innovation, and establish sound information management practices and systems for preparedness and risk mitigation.
Knowledge management is therefore about establishing the internal operational conditions for making effective and knowledgeable choices and decisions across the business domains of a firm – and those business domains are where profits and losses are created.
An organisation’s codified knowledge and information (explicit knowledge), capacity for research and analysis, and capabilitiy to locate and disseminate this information will inform a workplace and the people within it; for decision-makers and for taking action.
At the same time, knowledge management involves people - the information and knowledge exchanged, re-articulated and reformulated by humans within particular contexts. The knowledge and experiences of people are unique, co-evolving, and able to be shared to develop or create new knowledge. This is what is commonly referred to in the knowledge management literature as tacit knowledge.
Knowledge management facilitates this interplay between explicit and tacit knowledge out of which organisations make decsions and take action. Knowledge management is therefore ongoing, cumulative and regenerating.
Knowledge management also works to reduce costs through improving workflow, facilitating efficient and effective information capture, access, and dissemination, facilitates conversation and human networks, and enhances collaboration and connectivity between individuals for common purpose.
Knowledge management is therefore about providing the infrastructure and capability for organisations to make informed decisions. As knowledge managers, we like to think that the outcome of knowledge management is Innovation and competitive advantage – and sometimes it is. But just as importantly is the strategic importance of using knowledge and information assets wisely to improve operational effectiveness, decision-making and governance issues – profit making and risk mitigation.
On the cost side, knowledge management drives down the cost of doing business through more efficient and productive operations (saving time is one of the obvious manifestations). Being able to find the right information at the right time is critical, as is preparedness through awareness. Being aware and having quick access to information and the right people allows for organisational agility and responsiveness that impacts on how opportunities are found and change is managed.
A strategic knowledge management approach to organisational perfomance is an excellent way for companies to make improved decisions for profit generation and risk mitigation while also saving costs and speeding up interaction within people networks for collective thinking and collaborative advantage.
Knowledge management offers a foundation, many paths and a network. Yet it’s true that senior management and executives choose which way to jump – and the frying pan at 700 or 870 degrees is one route. Wall Street, if it’s not to late, take heed!