long range planning

Long Range Planning 35 (2002) 29-48


Managing Knowledge for Innovation
Richard Hall and Pierpaolo Andriani

This paper describes a technique for identifying knowledge gaps in innovative firms. Gaps occur between existing knowledge and knowledge requirements and particularly occur when a firm is trying to introduce new processes or products. The authors were involved in a knowledge management project in a UK telecoms company and report on a framework that they developed that assists in examining the dimensions of knowledge gaps so that they may be bridged. This technique also allows the firm to measure the vulnerability of its knowledge bases. k 2002 Elsevier Science Ltd. All c rights reserved.

Many firms face the challenge of a knowledge gap, where current knowledge is not at a sufficient level. Such a gap is particularly noticeable when the firm is trying to introduce a new product or new process. This article reports on the outcome of a knowledge management research project* in a firm that was addressing innovation. The project developed a technique for managing knowledge associated with innovation; it is based in part on the concepts of Boisot’s “Social Learning Cycle”.1 The three main outcomes of the technique are: a risk analysis, an identification of the KM processes which need to be initiated and a vulnerability analysis concerning strategic knowledge capabilities. The total research project comprised the following stages: 1 An ex post case study concerning the design and development of an innovative power tool. This first case study, which resulted in a prototype KM technique, has been described by the Authors. 2 The prototype technique was further developed and tested at a UK mobile telephone operator on a minor project concerning Messaging Architecture.
0024-6301/02/$ - see front matter k 2002 Elsevier Science Ltd. All rights reserved. c PII: S 0 0 2 4 - 6 3 0 1 ( 0 2 ) 0 0 0 1 9 - 5

Richard Hall is Professor of Operations and Procurement Strategy at the University of Durham Business School. His research interests include: intangible resources, knowledge management and supply chain management. He won the internationally contested Igor Ansoff Strategy Award in 1995. Pierpaolo Andriani acted as Professor Hall’s research associate from 1996 to 1999. He is now a Lecturer in Innovation and Technology at the University of Durham Business School. His research interests include the application of complexity theory to the dynamics of geographic clusters. ∗ The project was funded by the UK government (Engineering & Physical Sciences Research Council, Ref. GR/L41509).

3 The third stage, which is the subject of this article, concerned the validation of the technique on a major General Package Radio System (GPRS) initiative at the same mobile telephone operator. This article is concerned with presenting the theoretical concepts which form the basis of the technique and with reporting the results of the application of the technique in the GPRS project. The approach is characterised with the following features: The units of analysis. These are the gaps between: the current “platform” knowledge and the required “target” knowledge, which have to be bridged in order to produce each desired innovative feature. The features used to describe knowledge. These are: —The nature of the knowledge needed to bridge each gap: does it exist or has it to be invented? If it has to be invented is it additive or substitutive? —The amount of knowledge which is needed to bridge each gap. —The nature of the platform and the target knowledge bases in terms of the degree to which the knowledge is diffused and codified. —The relationship between the knowledge held internally by the project team and the knowledge which exists outside the team. —The communities which possess the different knowledge components.

The technique involves managers carrying out analyses independently and then sharing their subjective perceptions. This process, known as perceptual synthesis, generates a productive dialogue as it provides managers with a language with which to release their tacit knowledge regarding the challenges inherent in the innovation. The process resonates strongly with the concept of “ba” described by Nonaka and Konno2 as: “According to the theory of existentialism, ‘ba’ is a context which harbours meaning. Thus, we consider ‘ba’ to be shared space that serves as a foundation for knowledge creation.” In writing about the nature of knowledge management Davenport and Marchand3 suggest that: “Whilst knowledge management does involve information management beyond that it has two distinctive tasks: to facilitate the creation of new knowledge and to manage the way people share and apply it.” The research programme was concerned primarily with helping practitioners to identify how knowledge needed to be transformed and shared; it was not concerned with information management. The authors believe that readers of this article may receive two benefits: first, new insights regarding the oper30

Managing Knowledge

ationalisation of some basic knowledge management concepts; second, new perspectives afforded by the analysis frameworks which have been developed. In addition to providing benefits in a context of innovation the authors believe that the approach also has potential in the context of developing new strategic capabilities. Some theoretical considerations about knowledge Much has been written in recent years on the subject of knowledge management. Indeed special editions of leading journals have been devoted to the subject.4 The authors whose work most informed the approach developed in this project are Nonaka,5 Boisot and Snowden. Central to their work are the concepts of tacit and explicit knowledge, and additive and substantive knowledge. This section will present the concepts, examples and analogies which were found to be useful when explaining the approach to the colleagues and practitioners who were involved in the research project.

An organisation’s culture is an example of diffused tacit knowledge

The main knowledge concepts used in the research
The significance of the concept of tacit knowledge was first identified by Polanyi.6 It has recently received much attention from those who adopt an “organic” metaphor, as opposed to a “mechanical” metaphor, when conceptualising organisations and the societies within which they operate.7 Tacit knowledge is acquired by experience, by learning by doing. Tacit knowledge is not codified, it may not be communicated in a “language”, it is acquired by sharing experiences, by observation and imitation. Prior to the early Middle Ages the knowledge of music was mostly acquired by experience—one had to hear the tune. In the early Middle Ages the code, or language, of the bass and treble clef notation system was devised and after that the knowledge of music could be communicated easily. It is not the case that tacit knowledge can never be codified: whether or not to codify will often depend on the payback anticipated from the time and resources which need to be invested in the codification process. Tacit knowledge may be held by an individual or it may be diffused throughout an organisation. An organisation’s culture is an example of diffused tacit knowledge and an individual’s assimilation of the organisation’s culture is an example of the transmission of tacit knowledge from a group to an individual. Explicit knowledge, unlike tacit knowledge, can be embodied in a code or a language, and as a consequence it can be communicated easily. The code may be words, numbers or symbols, such as those used in music’s notation system. There is not a dichotomy between tacit and explicit knowledge: rather there is a spectrum of knowledge types with tacit at one extreme and explicit at the other. In the natural science paradigm, knowledge progresses from personal tacit knowledge, through generalis-

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ations and taxonomies, to models and metaphors and ultimately to theories which have the power to predict the outcome of novel phenomena. Knowledge which is new to an organisation either has to be invented internally or acquired from external sources. This new knowledge may add to, complement or substitute the existing knowledge base. New knowledge may be categorised as either additive, complementary or substitutive. A child’s new knowledge of long division in a decimal system adds to its existing knowledge of simple division; a teenager’s new knowledge of calculus complements its existing knowledge of the decimal system; a programmer’s new knowledge of the binary system involves substituting the existing knowledge of the decimal system with a completely different knowledge system. The substitution of old knowledge with different new knowledge is described by Nooteboom8 as a process of discontinuous learning, a process of learning to do better things as opposed to learning to do things better.

Operational issues relevant to the research context
While most organisations operate with some tacit knowledge, there are disadvantages of operating with a predominantly tacit base. There are strong incentives to make explicit the bulk of an organisation’s knowledge so that: The organisation is not vulnerable to knowledge being lost when employees leave and take their personal knowledge with them. The knowledge which the organisation possesses can be disseminated to large numbers of employees over large distances and used in a wide range of applications. Theory can be formulated which allows the simulation and operation of “what if” scenarios and which will indicate appropriate corrective action to be taken when things go wrong. Knowledge may be aggregated in order to allow centralised decision making. Notwithstanding these advantages there are certain disadvantages associated with operating with a small tacit knowledge base.9 While a small tacit knowledge base renders the firm safe from employees walking away with their personal knowledge the firm may be vulnerable due to the relative ease with which competitors can identify and copy the predominantly explicit knowledge base. If a large explicit knowledge base is the source of competitive advantage, as it is with many global companies, then there is a clear need to protect the knowledge base with intellectual property rights and other legal devices. If, as Grant10 maintains, the role of the firm is “… to permit individuals to specialise … while establishing mechanisms through which individuals coordinate to integrate their different knowledge bases in the trans32

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formation of inputs into outputs”, then a major challenge for a knowledge-based firm can be the achievement of an appropriate balance between the tacit knowledge developed by individuals and the explicit knowledge needed for effective communication and integration. An organisation which strives constantly to codify its tacit knowledge base may find that this process hinders the development of both organisational routines and communities of practice,11 which are two of the four processes which Grant12 suggests are needed to integrate specialised knowledge.

The attributes of the analysis technique
Innovative features A design or development brief should define the features which are required in the new product or service. The features which are defined at the outset may be modified and added to by the project team as it interprets the brief. For example, an initial brief may be to: “Develop a supersonic airliner with a capacity of 100 passengers and a range of 4,000 miles.” As the plane takes shape it transpires that a Delta wing structure is most appropriate and the landing attitude of such a plane requires a “droop nose”; so a droop nose becomes one of the innovative features of the project. The starting point of the KM technique is a definition of the features which the innovation must possess. The units of analysis The units of analysis are the gaps between the current “platform” knowledge and the “target” knowledge which is required to deliver each feature. Categorising the components of knowledge Boisot’s “I Space” was used to analyse the components of the platform and the target knowledge bases. The “I Space” model comprises two dimensions: codification and diffusion. The model has been adapted slightly so that the diffusion dimension consists of two parts: one part relating to knowledge held within the project group and one relating to knowledge which is needed for the project but which, at the outset, is held outside the project group. The internal space contains four domains and the external space contains two. The six components are illustrated in Figure 1. There are six components of platform knowledge [P1 to P6] but only four components of target knowledge [T1 to T4], as in the case study increasing public knowledge was not an objective of the project. Project team members were asked to make subjective estimates of the distribution of platform knowledge over the six components [P1%, P2%, etc.] and over the four target components [T1%, T2%, etc.]. A description of the nature of each of the different components is given below: The Idiosyncratic Knowledge component relates to tacit knowl33

A major challenge is the achievement of balance between tacit and explicit knowledge

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Figure 1. The six knowledge components and domains

edge held by an individual or small team within the project group. The Specialism component relates to explicit knowledge held by an individual or small team within the project group. While it is codified and in consequence easy to diffuse, its diffusion is restricted; it may be restricted by security or it may be that only a few people understand the language, e.g. a community of Java programmers. The Protocol component relates to explicit knowledge spread throughout the project group, e.g. a Quality Assurance procedure. The Habitual Knowledge component relates to tacit knowledge diffused throughout the organisation, e.g. automatic organisational response routines which are triggered in emergencies. The Public Knowledge component relates to explicit knowledge held outside the project group, this knowledge is needed for the project but the project team does not have it at the outset. The External Tacit Knowledge component relates to tacit knowledge held externally to the project group, this knowledge is also needed for the project but the project team does not have it at the outset.

The seven knowledge management processes
Following the identification of the distribution of the platform and target knowledge components it is possible to consider the KM processes which must be initiated in order to bridge each knowledge gap. There are seven knowledge management processes. They are illustrated in Figure 2. The seven knowledge management processes are described below: 1 Externalisation: This is the process of codification, the transformation of knowledge from tacit to explicit. It is called externalisation because it involves taking the knowledge out of the person.

Managing Knowledge

Figure 2. The knowledge management process

2 Communication (of Explicit Knowledge): This is the “stuff” of Information Management. 3 Internalisation is the process of learning by doing, of making the knowledge second nature, of creating habits. 4 Socialisation involves the communication and possibly enhancement of tacit knowledge. 5 Locating & Acquiring External Explicit Knowledge New to the Group: The process of scanning (to locate), accessing, and acquiring external explicit knowledge. 6 Locating and Acquiring External Tacit Knowledge New to the Group: The process of scanning (to locate), accessing, and acquiring external tacit knowledge. 7 Inventing Knowledge New to the Group: The process of invention, of creating new original knowledge, is usually achieved by one person or a small group. Initially the new knowledge is of a tacit nature, e.g. a composer’s first ideas about tune and rhythm. (In the case study invention was the responsibility of the project group).

Risk analysis
In addition to the identification of the knowledge management processes which need to be initiated the technique produces a risk analysis and a strategic vulnerability analysis for each knowledge gap. Where a knowledge gap has to be bridged with a large amount of substitutive knowledge there is a higher risk of failure than when the gap has to be bridged with a small amount of additive knowledge because the substitutive knowledge requires the difficult unlearning of old knowledge. The knowledge gaps may be positioned on an Innovation Plot, see Figure 3. If, in addition to needing a large amount of substitutive knowledge the consequence of failing to bridge a gap is serious, then one has identified a risk “hot spot”.

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Figure 3. The Innovation Plot

The strategic vulnerability of key capabilities
When a knowledge base represents a key capability it is possible to identify two types of strategic vulnerability. If the ratio of tacit knowledge to total knowledge is low, the capability is “Externally Vulnerable” because the predominantly explicit knowledge base can be identified and copied by competitors; the position is “Internally Safe” because if employees leave then their knowledge is not lost. When the ratio of tacit knowledge to total knowledge is high the opposite conditions apply: the position is Externally Safe because the knowledge is difficult to identify and copy; it is Internally Vulnerable because employees may leave and take their personal knowledge with them; see Figure 4. The analysis technique is not concerned with the mapping of the total existing knowledge base,13 nor with the way in which knowledge is integrated into organisational competencies,14 but with the process of identifying and communicating the nature of the challenges inherent in bridging the gaps between the current platform knowledge and the required target knowledge for each

Figure 4. The strategic vulnerability map


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specific feature. The structure of the technique is illustrated diagrammatically in Figure 5. The GPRS project and the results of the application of the technique in this context will be described in the next sections.

The research setting
Telecommunications in the UK, as in much of the developed world, has experienced rapid and radical changes in recent years, including the following: From incremental adaptations in response to slowly-evolving technological trends to a rapid succession of radical changes. From a business dominated by a tangible asset base with massive investment in physical network infrastructure, to businesses dominated by knowledge and innovation. From cumulative/additive learning processes to substitutive learning processes which require the unlearning of much old knowledge. From long to short product lifecycles and from long to short concept to market times. From a low variety of product to a proliferation of product variety with increasing incompatibility between a slowly changing infrastructure and a rapidly changing product range. From a low risk, low uncertainty, environment to a high risk, high uncertainty, environment. In 1999 some of the major companies operating in Europe decided to move some way towards a Universal Mobile Telecommunications System (UMTS) by introducing General Packet

Figure 5. The structure of the knowledge management analysis technique

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Radio Switching.b The rationale behind the GPRS development was twofold: To partially bridge the gap between traditional circuit switching and UMTS in order to gain knowledge and expertise in packet switched technology. To possess a fully operational packet switched network in case a bid for a UMTS licence was unsuccessful. The GPRS project constituted an excellent case study for validating the technique. This was for the following reasons: 1 the complexity of the project resulted in a large number of features and knowledge gaps; 2 the size of the project team and the variety of the members meant that the communicability of the different analyses was well tested; 3 the radical nature of the innovation meant that much of the new knowledge was substitutive and the risk analysis delivered immediate benefit; 4 the project team members were highly motivated to trial a technique which would facilitate the progress of their project. The research method and the results of the research will be reported in the following sections.

This process of knowledge sharing generated productive dialogues

The research method
The researchers were invited to explain the nature of their research project at the initial project group meeting after which eight team members volunteered to participate in the research. Further explanation of the knowledge management concepts was given to each of the volunteers who then carried out the analyses in the presence of a researcher but independently of their colleagues. Each person carried out his/her subjective analysis in terms of how (s)he saw the challenges in the total project from his/her standpoint. Finally those involved in the process presented their perceptions to the other members of the project team. This process of knowledge sharing generated productive dialogues which resulted in effective action with respect to: risk avoidance, identification of both the strategic vulnerabilities and the knowledge management processes which needed to be initiated. The validation of the KM technique terminated at this stage. Time and resources did not allow extended engagement to the end of the GPRS project. The researchers fulfilled different roles as the project developed: Educator: to impart the concepts of knowledge management in group sessions. Coach: to act as a facilitator during the individual analyses.

GPRS is a standard for wireless communications which runs at speeds up to 150 kilobits per second, compared with current Global System for Mobile Communications of 9.6 kilobits per second. GPRS is particularly suited for sending and receiving both small bursts of data such as email as well as large volumes of data.



Managing Knowledge

Observer at the sharing of perceptions sessions, and Scribe and summariser throughout. Once the knowledge management concepts had been grasped the project group members had little difficulty in carrying out the analyses. It was stressed throughout that there were no right or wrong answers as the analysts were always dealing in subjective perceptions. Clearly different specialists had different perspectives: much of the benefit was derived from the sharing of the different perspectives.

The case study findings
The results presented in this section are the results of the managers’ analyses. There are two ways of reporting the results of the case study: At the level of individual analyses. This approach is instructive only if there is a detailed understanding of the technology and the workings of the organisations involved. or At the aggregate level to highlight pervasive features, emerging patterns and common problems. As many readers will not have detailed knowledge of the technology the findings will be presented in aggregate form.

The brief
The GPRS innovation involved “technology push”. The project was triggered by the need to grasp the opportunities offered by new technologies. The brief which was generated shortly after the start of the project was: To be the first network operator to launch a GPRS-based commercial mobile data service in the UK thereby protecting and gaining market share, reputation and profits. The solutions generated must be scalable and the service should represent the first step in the evolution of 3rd generation telecommunications.

The innovative features
The features generated at the start of the GPRS project covered a variety of aspects; many were concerned with the changes which would be required in management practice to develop, implement and operate the new systems; issues such as communication, co-ordination, etc. The main features were: Features to do with Integration A redefinition of the company’s internal architecture around the new set of competencies required by GPRS. Thus two innovative features were:

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New procedures and increased cross-functional integration. An initial absence of established practices. A redefinition of the value chain orientated around the new central role of IT suppliers, software developers and internet companies. This represented a change in the traditional operations of telecommunications industry. Innovation now required the management of a network of suppliers and external resources. Thus an innovative feature was: Innovation achieved by means of a network of interdependent suppliers. Features to do with services The new technology creates new markets with new users of new services. Thus an innovative feature was: The new product will comprise a new package of value-added services. Features to do with technology The new technology transforms the concept of a telephone call. With the new protocol the user is always connected, as a consequence tariffs can be volume-based instead of timebased. Thus two innovative features were: A totally new billing system. Always connected, always on line. Features to do with the business model The new technology impacted the fundamental business rationale. Thus an innovative feature was: A new self image: are we a telephone company, an integrated service provider, or an internet server?

The knowledge gaps
Each feature generated knowledge gaps. For example the feature “Always connected, always on line” generated the following knowledge gaps which had to be bridged: Switched virtual circuit: No longer a call, but a context New core network (TCP/IP) Understanding how new services based on new core network capabilities will be used by customers.

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Figure 6. The Innovation Plot

The nature of the innovation and the risk analysis
The risk hot spots concerned knowledge gaps that required a large amount of new knowledge which was of a substitutive nature. These gaps are usually characterised by a small amount of platform knowledge. Typically much of the target knowledge had to be invented, sometimes with the additional difficulty of unlearning familiar internalised tacit knowledge. The Innovation Plot shown in Figure 6 indicates 14 knowledge gaps which have a degree of risk. If, in addition to a gap being risky, the consequence of failing to bridge the gap is serious, then a risk hot spot has been identified. Three examples are given in Table 1. Table 1 also shows the elements of knowledge which had to be unlearned, typically these concerned the elements of technological knowledge that characterised telecom industry in the previous era. Unlearning
Table 1. Examples of risk hot spots Innovative Feature Associated Knowledge Gaps Unlearning Failure Risk

Probability score: Low 1, High 5 Data volume based tariffing Time-based vs volume-based billing Link between price and time Existing billing system Existing quality of services metrics Circuit switched telephone theory Existing platform 4

Consequence score: Low 1, High 5



Quality of services What do we measure and how? Always connected, TCP/IP network always on line







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Figure 7. Innovation Plot of process knowledge gaps

some of this old knowledge meant abandoning established practices and routines. In the GPRS case study most of the risk hotspots were associated with process gaps. It was interesting to find that even in a project dominated by “hard” technology most of the learning challenges were connected with “soft” process issues.

The nature of the knowledge gaps
The knowledge gaps identified may be divided into two categories: Gaps to do with process issues, e.g. communication, relationships, and other management issues. Gaps to do with content issues, e.g. inventing and implementing a new technology. The distributions of these two types of knowledge gap, i.e. process and content gaps, on the Innovation Plot are shown in Figures 7 and 8. The content and process knowledge gaps were also analysed

Figure 8. Distribution of content knowledge gaps


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in terms of the explicit/tacit content of the required target knowledge. The analysis is presented diagrammatically in Figure 9. The bulk of the content target knowledge bases comprised explicit knowledge, whereas almost half of the process target knowledge bases comprised tacit knowledge such as that to do with new ways of behaving. This meant that much of the new knowledge associated with bridging the process gaps had to be acquired by a time-consuming process of socialisation.

Analysing the platform and the target knowledge bases
Figure 1 illustrated how a knowledge base could be analysed in terms of codification and location, specifically in terms of the four components: “Idiosyncratic Knowledge”, “Specialisms”, “Protocols” and “Habitual Knowledge”. In the case study described here there was little external platform knowledge to be located and acquired as the project group was a network of collaborating companies which held most of the required platform knowledge. The practitioners who participated in the research had little difficulty in making subjective estimates of the distribution of knowledge components and in assigning proportions to the components for both the platform and the target knowledge bases. In view of the subjective nature of the analyses there was not always agreement but the differences usually produced a productive dialogue resulting in a better mutual understanding. A comparison of the distribution of the knowledge components of the platform knowledge base with the distribution of the components of the target knowledge base (Figure 1) allowed the identification of KM processes which had to be initiated (Figure 2). The composition of both the platform and the target knowledge bases in terms of the four categories of knowledge component is represented graphically in Figure 10.

Figure 9. A comparison between the tacit and the explicit proportions of content and process target knowledge bases

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Figure 10. Components of platform and target knowledge bases

The front row of columns shows the knowledge components of the platform knowledge, the back row shows the components of the target knowledge. The bulk of the platform knowledge was identified as residing in the Idiosyncratic Knowledge and the Specialisms components; i.e. undiffused knowledge. In contrast much, but not all, of the target knowledge base was envisaged as diffused knowledge. This result is not surprising as all the project managers were specialists and it follows that a major challenge of such a project would be concerned with diffusing some of their specialist knowledge so that effective co-ordination and integration was possible. The composition of the platform and the target knowledge may be represented in terms of diffusion and codification; Figures 11 and 12. Figure 11 confirms the previous finding that the platform knowledge is almost entirely undiffused, the knowledge is con-

Figure 11. Diffusion analysis


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Figure 12. Codification analysis

centrated in the individual experts’ heads or in their records; while the target knowledge indicates a need to diffuse much, but not all, of the platform knowledge. The analysis shows that project team members anticipated that approximately one third of the specialists’ knowledge should stay with them. Figure 12 shows the significant increase in codification which was needed to facilitate the knowledge diffusion. Whilst there were areas where invention was needed, particularly with respect to some of the new substitutive knowledge, the main knowledge management processes which needed initiating were codification and diffusion.

The knowledge communities
A key part of the analysis was the identification of which community owned which component of knowledge. This in turn allowed the identification of the communities which needed to share their knowledge and those which needed to acquire it. In the case of incremental innovation involving new additive knowledge these communities mapped on to the existing organisational structure; however, where the nature of innovation was more radical the relevant communities were more difficult to identify.

The strategic vulnerability analysis
This analysis aims to identify those important knowledge bases, i.e. capabilities, which are either internally or externally vulnerable. Figure 13 shows the strategic vulnerability plot for both the platform and the target capabilities associated with risk hot spots. The positions of the platform capabilities are indicated by the boxes containing the descriptions and the positions of the target capabilities are indicated by the circles. The plots illustrate three types of movement from platform to target positions (from box to circle):

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Figure 13. The strategic vulnerability of capabilities which are risk hot spots

Predominantly from right to left; this indicates a need to reduce the tacit content, i.e. a need to codify knowledge. Predominantly from bottom to top; this indicates a need to acquire more external explicit knowledge. From both right to left and bottom to top. There is no case where an increase in tacit content is envisaged. This analysis identifies the need for some external codified knowledge (new to the group) to be acquired and it confirms the results of previous analyses concerning the need for existing tacit knowledge to be codified so that it can be diffused. Six of the seven target capabilities shown in Figure 13 lie in the upper left-hand quadrant; as a consequence they may be externally vulnerable as the largely explicit knowledge base may be relatively easily identified and copied. On the other hand they are internally safe as employees leaving would not take irreplaceable tacit knowledge with them. While it is clear that these capabilities should be protected with intellectual property rights, ownership issues can be difficult to establish when the innovation involves the collaboration of a number of different companies. This was so with this case study and we observed considerable management attention to this issue.

Summary and conclusion
The messages which emerged from this case study were as follows:

Managing Knowledge

While the independent subjective analyses carried out by different individuals produced a variety of perceptions the variety did not pose a problem as the dialogues which ensued when the perceptions were shared were productive. The identification of substitutive categories of new knowledge, allied to wide knowledge gaps and serious consequences of failure resulted in the identification of risk hot spots. Many of the challenges identified were associated with process, as opposed to content issues. The KM processes which needed to be initiated were largely concerned with codification and diffusion, i.e. with integrating specialists’ knowledge into the organisation. Notwithstanding the significant need for codification and diffusion it was recognised that not all the experts’ knowledge should or could be codified and diffused. The codification which was needed to facilitate diffusion had the tendency to increase external vulnerability. The vulnerability of the new capabilities created by a network of suppliers resulted in a need to address complex knowledge protection and exploitation issues. Since the completion of this case study the analysis technique has been incorporated in softwarec which has been tested with a group of 18 practitioners. The results of this subsequent work indicate that the technique can deliver benefit in areas of sophisticated innovation, such as that witnessed at the telecommunications company, but is considered to give insufficient payback in less sophisticated situations.

Many of the challenges identified were associated with process rather than content issues.

1. M. H. Boisot Information Space: A Framework for Learning in Organisations, Institutions and Culture in Routledge, New York (1995). 2. I. Nonaka and N. Konno, The concept of ‘ba’: building a foundation for knowledge creation, California Management Review 40(3), p. 40–54 (1998). 3. T. H. Davenport and D. A. Marchand, Is KM just good information management?, Financial Times Mastering Information Management Supplement, Financial Times, London, 8 March, p. 2–3 (1999). 4. Knowledge and the firm, Strategic Management Journal 17, p. 5–214(1996). The management of intellectual capital” Long Range Planning 30(3), p. 327–421 (1997). Knowledge and the firm, California Management Review 40(3), p. 15– 292 (1998). 5. I. Nonaka A dynamic theory of organisational knowledge creation, Organisation Science 5(1), 14–37 (1994). 6. M. Polanyi Personal Knowledge: Towards a Post-Critical Philosophy in University of Chicago Press, Chicago (1948). 7. D. Snowden, Liberating knowledge, CBI Business Guide 6– 19 (1999).

The software incorporating the Knowledge Management analysis technique described in this paper can be made available for research purposes. Interested parties are invited to contact the principal author.


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8. B. Nooteboom, Globalisation, learning and strategy, EMOT Workshop, University of Durham (1996). 9. D. Leonard and S. Sensiper, The role of tacit knowledge in group innovation, California Management Review 40(3), p. 112–122 (1998). 10. R. M. Grant, The knowledge-based view of the firm: implications for management practice, Long Range Planning, 30(3), p. 451 (1997). 11. R. R. Nelson and S. G. Winter An Evolutionary Theory of Economic Change in Harvard University Press, Boston (1982). 12. R. M. Grant, Toward a knowledge-based view of the firm, Strategic Management Journal 17, p. 109–122 (1996). 13. E. Oma Practical Information Policies: How to Manage Information Flow in Organisations in Gower, London (1990). 14. M. Boisot, T. Lemmon, D. Griffiths and V. Mole, Spinning a good yarn: the identification of core competencies at Courtaulds, International Journal of Innovation Management, Special Issue on the 5th International Forum on Technology Management 11(3/4), p. 425–440 (1996).


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