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Master-Thesis zur Erlangung des Grades des Master of Arts in International Business Administration an der Hochschule Rhein Main

Fachbereich Wirtschaft

Development of Knowledge Management Toolbox for SMEs

Referent: Prof.Dr. Klaus North Korreferent: Prof. Dr. Stefan Jugel Eingereicht von: Kayathiry Sivalingam Hahner Weg 4 65307 Taunusstein

Wiesbaden, den: 14. April 2010

Development of Knowledge Management Toolbox for SMEs Table of content 1. Introduction 5 2. Prerequisites for an effective KM and tools application 2.1 Corporate Culture 2.2 Typical Barriers for Knowledge Management 2.3 Incentives for applying KM-Tools 3. Knowledge Management Tools for SMEs 3.1 Knowledge Recognition 3.2 Knowledge Acquisition 3.2.1 Learning 3.2.2 Acquisition of knowledge internally 3.2.3 Acquisition of knowledge externally 3.3 Knowledge Storing and Structuring 3.4 Knowledge Sharing and Distribution 3.4.1Personal way of knowledge sharing and distribution 3.4.1non-personal way of knowledge sharing distribution 3.5 Knowledge Valuation 7 7 8 9 11 13 16 16 19 30 32 36 36 39 42

3.5.1 Tools that gives a snapshot of an Organizations Knowledge Management 43 3.5.2 Numerical evaluation of intellectual capital 3.5.3Tools for controlling Knowledge Management 46 46

3.5.4 Tools for a broader evaluation of intellectual capital 49 4. Systematization of KM-Tool to the Knowledge Ladder 4.1 The Knowledge Ladder 54 54

4.2 The Components of the Knowledge Ladder 4.3 The Dimensions for the Systematization of KM-Tools 5.Conclusion Bibliography Appendix Versicherung

56 59 64 65 68

List of Illustration Illustration 1: Knowledge Asset Road Map Illustration 2: Knowledge Intensity Portfolio Illustration 3: Balanced Scorecard Illustration 4: Skandia Navigator Illustration 5: Intellectual Capital Navigator Illustration 6: The Knowledge Ladder Illustration 7: The Components of the Knowledge Ladder 43 44 45 48 50 55 56

List of Tables Table 1: Knowledge Management Profile Table 2: Knowledge Balance Table 3: Knowledge Asset Monitor Table 4: A guideline for the Systematization of KM-tools Table 5: The KM-Toolbox for SMEs 45 52 53 61 63

1. Introduction
The todays business environment brings new challenges and factors in different degrees, combinations and sequences that impact strongly a business profitability. At the current stage the business environment is influenced and shaped by the process of globalization the intensive competition changing organizational structures and the huge progress in technology

In this respect small and medium sized enterprises (SME) play a special role in this dynamic environment.1 SMEs are companies that employ from 50 to 250 employees according to the definition by the European Commission for Enterprise and Industry.2 In general, SMEs represent the largest share of companies in the economy and count for the main economic drivers. In contrast to the larger companies SMEs are more flexible and are able to react to those changes. However, at the same time they are more vulnerable and can be hit profoundly. Therefore, it is highly important that they are alert and are strengthened to the market changes. Knowledge Management, in this context, is highly useful to make a SME capable to deal with challenges and to prepare it for turbulent times. Knowledge management includes the activities in an organization to identify, develop, share and save knowledge that comprises the insights and experiences of processes and practices. An effective knowledge management leads to efficiency and innovation which contribute substantially to an organizations competitiveness.3 The concept involves the application of methods, procedures and tools that make sure that: 1 2

Information are transformed into knowledge knowledge is transformed in actions new ideas are developed the acquisition of knowledge is structured knowledge is available at the right place

Vgl. Handzic, M. (2006): S.1-2 Vgl. European Commission (2011): Small and Medium-Sized Enterprises (SME) 3 Vgl. Handzic, M. (2006): S.1-2

mistakes are viewed as gain in experiences knowledge are developed based on experiences knowledge are reapplied, the skills of employees are known there sufficient time for knowledge sharing employees show willingness for knowledge sharing there are structure and processes for managing knowledge4

This paper sets its first focus on those tools that enables the pre-described functions in SMEs. After providing theoretical information regarding the essential prerequisite of a well-doing knowledge management tools, this work put its emphasis on the collection and description of tools for SMEs. Depending on their complexity some tools are accompanied with examples and graphical illustrations. With a large amount of tools an organization might choose one that may contribute to knowledge identification, generation, storing, sharing or evaluation but does not contributes reaching the business goals or to increase competitiveness. Furthermore organizations prefer to select a tool that covers the most of the problems. However in a selection process an organization need to consider what it wants to achieve with a tool and it should match to the companys overall context regarding the culture and the business goals. Furthermore a company should be aware of the overall effect of a tool. However, the portfolio of tools should be adapted to the companys current situation. 5 Therefore the second major focus of this paper lays on systematization of tools in a way that the requirement and the effect of their use are visible. Like in a real toolbox where number of different tools can be find in the respective the box cells that facilitate to find tools easily and gives an overview what tool can be used for which problem. In order to structure the tools it is necessary to know what functionality they have as it is done in the Chapter 3. Sequentially in Chapter 4, conditions are defined when or under what circumstances those tools can be used for fulfilling their functionalities. In the end there will be a matrix that combines functionalities and the requirements of the tools which allows an organization to select the right one.

4 5

Vgl. Herbst, D. (2000): S.29 Vgl. Roehl, H. (2002): S.80-84

2. Prerequisite for an effective knowledge management and tools application

There exist numerous tools for knowledge management. There are tools which fulfill different functions and others which fulfill quite same function. Then we will find traditional and modern tools or simple or more complex ones. Thus, an organization has a great choice of tools. Hence, there is a big risk to select the wrong one. It needs to be considered that a tool which worked well in one organization or department does not necessarily mean it works well for all. Knowledge management activities need to be derived from the organizations goals to ensure their achievement. Thus, different companies have different goals and conditions to which different types of tools are applied. However certain conditions need to be fulfilled by all organization for an efficient knowledge management. 2.1 Corporate Culture On the first place the corporate culture must be designed in a way that it supports knowledge creation, sharing and saving across the organization. The efficiency of knowledge management in an organization depends highly on the corporate culture. In general, an open corporate culture where a flat hierarchy exists is more promotional since communication between executives and their employees are realized without barriers. The attitude toward mistakes plays a key role as well. A corporate culture that does not tolerate mistakes restricts the freedom for experimenting and in turn hinders the creation of new solutions and ideas. Allowing mistakes that are credited as lesson learned contributes to risk taking and increase creativity, which fosters the innovation. Overall, tools, methods or procedures of knowledge management should be designed according to the following criteria: Easy to use Just in time Ready to connect

This approach makes knowledge easier to find and to transfer and is available in a form that it can be used straightforward. There are different information and technology tools makes all three criteria possible. 6 3M, for instance, maintains a corporate culture that is based on trust, openness, and fault tolerance. This encourages employees to use their creativity. For this 3M grants it employee to spend 15 percent of their time on projects outside of the regular work task. Furthermore, the management is exposed to follow 10 rules of innovation management that include: 1) 2) 3) 4) 5) 6) 7) 8) 9) Create spaces for employee for a free thinking Do not restrict free thinking Allow mistakes Appreciate efforts for innovations Foster intensive communication Become a coach for innovation Include important customer Innovation may come from different sources Product belongs to the sales department, technologies however belongs to the whole company 10) Counts with innovation barriers7

2.2 Typical Barriers for Knowledge Management This example demonstrates that once the organization has identified the barriers which restrict an open corporate culture it should take actions to eliminate them for realizing effective and impacting knowledge management. Typical barriers that hinder the knowledge exchange are as follows: Ignorance: Employees or the organization are not aware of how much they can impact on business processes by sharing and using knowledge and therefore do not recognize the real value of knowledge. Unawareness: Employees are not aware of the existence of their knowledge and generate it again and again, which costs valuable time. Lack of interpersonal relationship: Employees who are not maintaining interpersonal relationship do not exchange extensively knowledge as there is little trust among them.

6 7

Vgl. Probst,G., Raub, S., Romhardt, K., (2003):178-179 Vgl. Probst, G., Raub, S., Romhardt, K. (2003): S.42-43

Lack of motivation: Less interest and awareness about the significance of knowledge exchange prevent a continuous knowledge flow throughout the organization Lack of capacity, resources and flexible infrastructure: In most cases employee are in shortage of time, budget, technical equipments and back up form the management in order to share their knowledge properly. In particular, strict hierarchical structure makes the management of knowledge difficult.8

Generally, socialization contributes highly in reducing the most barriers. It involves that context rich information can be passed throughout the organization which affects the trust building. It supports the teamwork and the interaction among the employees as there are motivated.9

2.3 Incentives for applying KM-Tools Therefore, a corporate culture is a key element to motivate employees for knowledge management. However, in addition to this, some reward mechanism need to be applied as well in order to lead an employee knowledge management activities in the right direction.10 Depending on the needs of employees the organization should offer different types of incentives as different persons have different needs. Monetary rewards alone would not motivate all employees for knowledge sharing. Therefore, the organization should know what its employees motives are. There are various motivation instruments that direct the working behavior of an employee. However, the selection of certain reward system should also fit to the companys goals and context. Two major types of incentives can be differed. a) Extrinsic motives are triggers, where work is used in order to satisfy indirect needs. For instance, working hard and receiving higher salary enables to fulfill the personal wish to buy a car. b) Intrinsic motive, however, includes the wish to fulfill the work task for someones own satisfaction, because it makes him happy, or its in his interest field or because he likes to meet challenges. Material incentives can be divided into monetary and non-monetary characters. The monetary motivation tools are the classic salary increase or premium, while
8 9

Vgl. Gtz, K. (2002): S.51 Gldenberg, S., (2003), S.299-300 10 Probst, G., (2003), S.44

the non-monetary are counted as indirect financial rewards which includes company car, social benefits or pension plan, which is also called in another words Fringe Benefits. Immaterial incentives rewards can be career promotions, praise and recognition from the supervisor or the award for employee of the month. An organization should set a combination of different motivation tools that fulfill on the one hand the extrinsic and on the other hand the intrinsic motives of employees. In addition, organization may offer a basket of incentives from which the employee can select according to their needs after fulfilling certain company goals as called the cafeteria-model. In the following three major motivation systems are introduced from which finer tools can be determined to make them fit to the companys context. 11 Knowledge Market: Likewise with a trading place there is on hand a demander who request for certain information that he places on the market. On the other hand there is an bidder who provides an answer for the request. In a more practical case this might look like following: An engineer working on a concept in designing an efficient engine has a request to a special problem. This represents a knowledge demand. He places his demand in the companys intranet, which represents the market. Another colleague who sees the request and might know the answer deals with problem by responding it. The actual motivation in this concept is that the knowledge provider is able to ask for equivalent. Thus, the demander is obliged to provide him information about a certain point on later point of time. To apply the concept of the knowledge market rules framework and infrastructure need to be established.12


Jahnke,B., Anreizsystem zu Verbesserung der Wissensteilung im Unternehmen, S.13-14 URL: 12 Jahnke,B., Anreizsystem zu Verbesserung der Wissensteilung im Unternehmen, S.18-20 URL:


3. Knowledge Management Tools for SMEs

Knowledge Management is a complex process which consists of several steps. For a holistic and coordinated knowledge management every step is important. Thus the tools will be aligned according to these steps. This would additionally prevent the loss of overview among the numerous tools that are available. It needs to be mentioned that each tool does not serve one function. Generally it fulfills at least two purposes. Intranet is seen as a tool for knowledge storing and knowledge sharing. Therefore, tools can be categorized at various places. However, in this paper we focus what function the tools serves in the first place and align it in the respective category that are described below. a) Knowledge Recognition: Initially, for an effective knowledge management, it is important to scan the organization for existing knowledge in order to prevent reinvention of strategies, problem solutions or ideas. In an organization knowledge exists in different forms. Most knowledge of an organization is in employees head. The remaining knowledge can be found on papers or stored digitally.13 b) Knowledge Acquisition: After the existing knowledge is recognized the organization can identify what types of knowledge are still needed in order to develop new skills, products or to optimize processes. In order to acquire the right knowledge the organization should establish a current and a future knowledge profile based on the business process. The gap between two profiles will show where in the organization knowledge need to be created. The company has internal and external resources available.14 c) Knowledge Storing: It needs to be made sure that existing and acquired knowledge remain in the company. Storing the knowledge provides transparency of existing knowledge.
13 14

Herbst,Dieter (2000): Erfolgsfaktor Wissensmanagement, S.81-82 Herbst,Dieter (2000): Erfolgsfaktor Wissensmanagement, S.96


Leaving personal or the lack time for documentation is one of the reasons for knowledge loss.15

d) Knowledge sharing distribution: Sharing of knowledge is precondition to apply knowledge in the organization. For example, if the product manager does not have the report of market research he will not be able to develop new products. However the right knowledge needs to be shared to the right person on the right way. Thus, it needs to be considered: who needs the knowledge? What knowledge needs to be transferred? And how should be the knowledge transferred? It is commonly known that employee seek for fast access of information. Therefore they rather call or ask directly their coworker instead of doing time consuming researches. Technology is the main carrier for knowledge sharing. Typical barrier for knowledge sharing are lack of willingness that result from the restricted corporate culture.16 e) Knowledge Use: Only the use of corporate knowledge generates value for the company. Therefore, employees need to be motivated to apply their knowledge. Tools for motivation are already described in Chapter 2. f) Knowledge Valuation: Knowledge creates additional value to the company. It counts as future capital and is the most valuable asset. The value of knowledge improves the efficiency and effectiveness of a strategy implementation in knowledge management. The tools show how far knowledge management contributed for improving the business process and implies what corrective actions need to be taken. Therefore knowledge valuation has no direct impact on the business goals and thus will not be considered the in the systematization process for creating a tools box. They will be included as additional tool to measure the effectiveness of knowledge management. 17

15 16

Herbst,Dieter (2000): Erfolgsfaktor Wissensmanagement, S.114 Herbst,Dieter (2000): Erfolgsfaktor Wissensmanagement, S.124-126 17 Herbst,Dieter (2000): Erfolgsfaktor Wissensmanagement, S.152


3.1 Knowledge Recognition Knowledge map: The knowledge map gives an overview about the knowledge that exists in an organization and where they are located in the organization. The initial step to create a knowledge map is to identify important core processes of the company. In the following, those areas of knowledge are categorized that employees need to know to fulfill their task. For this employees are interviewed regarding their knowledge base and their participation in seminars, projects and training. In addition, the place and the resources of certain knowledge are recorded, which helps to limit the search efforts. An employee knows who to approach or what skills to develop. The information that a knowledge map contains serves as a basis for deriving other knowledge structure tools including expert indices like the yellow pages for internal or blue pages for external experts, which is called in general knowledge source map. Knowledge map also serves for the creation of:1819 For the organization: Knowledge Structure map shows which knowledge is needed for a certain area of knowledge. This will be established for each area of knowledge that is needed in an organization. For example, what skills are needed in the administration department Company XY? Good skills in Microsoft Word and middle ranged knowledge in Microsoft Access. Knowledge Development map records what knowledge are required to optimize the business process. For creating a knowledge development card experts are asked to list what knowledge and skills are needed to accomplish certain task or for the department or function. 2021

For the individual: Portfolio of Competencies: The portfolio of competencies is a graphical illustration of competencies of a person. With this tool the competencies are evaluated under the aspects of quality and usefulness. This offers an

18 19

Vgl. Herbst, D. (2000): S.82-86 See Appendix: knowledge map 20 Vgl. Mittelmann, A. (2011): S.66-67 21 See Appendix: Knowledge Development Map


overview about the current competencies which helps to find what skills need to be further developed. Such portfolio includes as a first step the recognition of current technical and social competencies. The second step involves the categorizing the competencies on a matrix based on quality and usefulness, in order to identify how well a skill is developed (Quality) and how relevant is this skill for the work (usefulness). The following steps further issues regarding: o What competencies need to improved? o why should it be developed ? o when it needs this level of skill needs to be achieved ? o what is the best way of learning to obtain a skill like workshops, training or coaching? o who can help to achieve these goals2223 Portfolio und ePortfolio: A portfolio in general is a collection of work, task, or project of a person like a portfolio of drawing of an art student. It helps to document learning results and learning processes, which allows following the skill development. ePortfolio is the digitized form of portfolio. The user determines the objective of his portfolio and collects his works and projects with the respective learning objectives. The portfolio gives him the overview about the learning process that he can reflect and control. In the end he can decide which of his project and tasks will be published online on the intranet or internet. The publication will be evaluated by others. One type of an ePortfolio is the language portfolio provided by the language division of the Council of Europe. 24 It helps to record the obtained language skills and the experiences during the learning process. This motivates learners to develop and expand their skills. The language Portfolio of the Council of Europe can be accessed under the following link: Other types include learn portfolio, teaching portfolio or career portfolio.26 Learning log: Learning log contains written entries of stages and progress of studies and experiences or cases, mostly electronically. This tool serves as knowledge storing where on the one hand the group knowledge can be consolidated and on the other hand individual workers learn from the documented knowledge. Thus every employee is obliged or should be

22 23

Vgl. Mittelmann, A. (2011): S.60-61 See Appendix: Portfolio of Competencies 24 Vgl. Haefele,Hartmut (2005): E-Portfolio Hartmut Haefele, 25 Vgl. Council of Europe (2011): Council of Europe-European Language Portfolio 26 Vgl. Haefele,Hartmut (2005): E-Portfolio Hartmut Haefele


encouraged in a regular time period to document his experiences. For this there are various documentation software programs that allow an easy access and documentation. The learning log can be used as an accompanying instrument for the above described learning methods.27 Example: Knowledge Resource Map Hoffmann LaRoche HoffmannLa Roche a US pharmaceutical company- faces the problem to get timely approval of its invented medicine from the US Food and Drug Administration (FDA). The FDA realized some procedure failures which caused Hoffmann-LaRoche a lot of time to finally launch a product and experiences turnover loss. Thus, Hoffmann-LaRoche started to initiate a project in the R&D department that should shorten the approval procedure at the FDA. It considered the FDA as key client and analyzed every procedure from the drug development to the stage of receiving approval by the FDA. The relationship among the scientist within the company was examined and they could find out that to some extent the communication and the knowledge flow was not fluent. After the analysis the relationships, the independencies and the knowledge required for each field of work were illustrated on the knowledge resource map. Critical processes regarding the FDAs approval procedure were considered as well. Necessary action could be taken to overcome these gaps which helped finally to find ways to shorten the approval procedure.28
Knowledge broker: Knowledge agent or broker is assigned to administrate the knowledge of a department or function in an organization. They create personal user profiles, search specifically for know-how needed for a specific field and bundle information, for example, to establish project report to shorten the valuation time. They are viewed as internal service provider and take therefore orders to support the creation of knowledge within the organization. Generally, he play as an intermediate who directs request and prepares reports.29 Example: Siemens Business Service (SBS) Each consultant of the SBS takes weekly the role of a knowledge broker, who takes the responsibility to take orders and request to specific expertise field. If he is not able to find the answers he forwards the request to the respective expert. Each consultant spend a half day in a week as knowledge broker. He is also responsible to achieve individually agreed operative goals. This guarantees that each consultant who serves as knowledge broker has to accomplish the same amount of work.30

27 28

Vgl. Mittelmann, Angelika (2005): Wissensmanagement Methoden/Werkzeuge Vgl. Probst, G. (2003), S.73 29 Vgl. Herbst, D. (2000): S.86 30 Vgl. North, K (2011): S.275


3.2 Knowledge Acquisition 3.2.1 Learning Individual Learning: Micro learning: micro learning involves learning in small units regarding time and content. In general, this form of learning is realized on technology based devices such as mobile phones, PDA, personal computers which allows employee to arrange individually when to learn and what to learn. Micro learning is not appropriate for complex content rather for example train vocabulary.3132 Job rotation: Job rotation involves the change of task among employees within a specific work field or work process. This approach allows a vertical knowledge expansion. Employees learn all sub processes of a whole task or project. Allowing an employee to complete a new task with new competencies and new responsibility increases the learning effects. Gained experiences are exchanged with other employees who also participated in this job rotation program. This tool enables a broadened knowledge distribution.33 Example: Car Production In a car production line an employee can work weekly in an engine assembly, gearing assembly, interior equipment, and in electric and quality check. After completing each stage the Job rotation starts all over again.34 Mentoring: Mentoring involves learning in partnership. The knowledge transfer is aimed to a single person. In this learning process young junior staffs are assigned to older and experienced managers who develop their skills through continuous support and advices in order to prepare them well for the future position as managers. In some cases mentors spend some private time with their mentees to strengthen the relationship which in turn supports the information flow furthermore. The mentoring process starts with an initial dialog where both parties agree on their goals and what they require from each other. During the mentorship intermediate dialogs are conducted to reflect the progress. The mentorships end with a feedback round.35

Vgl. Micro Learning: See Appendix: Micro Learning 33 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge 34 Vgl. (2010): Job Rotation 35 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


Group Learning: Training: In a training knowledge is transferred through courses or seminars. This format of learning enables the development of knowledge and new skills and it fosters the willingness to learn through different coursework. In each class the learning objectives are defined commonly with the participants and are conducted accordingly. For practical relevance and for a sustainable learning effect the training should be realized directly at the workplace. 36 Coaching: Coaching is learning in a partnership where the coach does not give instruction but he prepares the task jointly with the learners the task with the aim to acquire new skills and to test them. This instrument may serve as a preparation for new task or projects in sessions. In each session previous results are reviewed and new implementation steps are discussed. In case of a specific qualification deficit the coach recommends right type of further training. In the end there will be a feedback round where the coach tells about the progress and the participants evaluate the learning effect.37 Activity learning: Activity learning is a tool where learning is based on experiences that are applied to develop and improve management skills and support the career. At the beginning of this activity the employees task in the finance, production, marketing and HR departments are examined. Based on the results relevant changes are discussed with other managers to improve efficiency. It is used to solve problems where solutions are not developed yet but created through actives performance. The activity learning contains the implementation of those changes as a result of these activities in the group.38 Example: BOND A Learning Practitioners Initiative was launched in 2002 at BOND a British nonprofit organization for international development. The pilot program aimed for staff development where nine personal from different NGOs worked in two groups for a period of one year. In workshops they learned in practical way to handle with some specific issues. The resume of the participants were satisfactory. It has been stated that the learning process was objective and that participant could obtain a better understanding of their work area and their roles.39

36 37

Vgl. Mittelmann,A. (2005): Wissensmanagement: Methoden und Werkzeuge Vgl. Mittelmann,A.(2005): Wissensmanagement: Methoden und Werkzeuge 38 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge 39 Vgl. Ramalingamn, B. (2006): S.49


Learning Partnership: Resulting from the study partner search profil the learn partnership is a temporary collaboration of two person on a voluntary basis in order to learn from each other. After finding the appropriate partner the learning objective and the milestones are defined jointly. Each learned progress is being implemented in the practical working environment and the results is recorded in the learning log. In regular intervals the learning partners meet and This helps to question crically the learnbehavior and add up qualification of each other.40 Study Partner Search Profile: Similar with a search ad in a newspaper this tool allows finding an appropriate study partner according to his goals, qualification and interest across the organization. Such an ad or profile contains details regarding his/her department, functions, the learning objectives and the learning offer. This tool is used in connection with the learning partnership described above.41

Project learning: The project learning approach deals with the inclusion of employees in projects. With new responsibilities and competencies they over take besides day to day work some task of a temporary project. The roles can range from project assistant to project leader. Including employee in new project expands the knowledge base.42 Think-Tanks: Think-tanks are new form of knowledge sharing and creation. There are various forms of organizing think tanks. In some organization think tanks are arranged as administrative department and R&D departments. Other types are maintaining own universities like Motorola or McDonalds that train and educate people and conduct research activities for the core business.43 Example: Motorola University: In the 80s Motorola realized the lack of education of its employees. Some of them could not even write or read properly. In order to ensure offering a comprehensive education Motorola joined firstly in Partnership with schools and universities. Deriving from this partnership founded the Motorola Training and Education Center and transformed it later in 1989 to Motorola University. The university specified to provide knowledge firstly regarding the whole organization, secondly the knowledge related to its daily work and thirdly knowledge that is relevant for the employee as an individual. Although the effect
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Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge Vgl. Probst, G., Raub, S., Romhardt, K. (2003):S.130

42 43


could be recognized years later, Motorola face quality increase that reduced the cost for further corrective measures, which outbalanced the investment in this form of education.44 3.2.2 Acquisition of knowledge internally: Generating knowledge in meetings and teams: Teams: Team work generates knowledge and different expertise and viewpoint can be exchanged among team members which are a good base for idea creation and problem solving. In particular team members with different skills and from different functions may contribute to efficiency. In addition, working in teams increases social competencies and mutual learning effect. 45 Work-Out-Meeting: Work-out meetings established by General Electric this approach improves the team development process and promote creativity for problem solution. At least 50 staff members are brought together and set up in teams to discuss about problems that has been identified through a prior staff interview conducted by the management. Those problems are prioritized according to their urgency. In a two days town meeting, the groups are obliged to deal with those problems. Each problem will be treated from different perspective in a group. Proposals are implemented in immediate terms by the management. If any of the proposal is denied the management is obliged to justify the denial. Due to the obligation and the deadline this method accounts as fast and effective. Furthermore it contributes from a mutual cognitive learning among team members. Example: General Electric GE invented this type cross organizational dialog approach in the 80s when it changes it corporate strategies to cope with growing markets. The company was highly involved in acquisitions and sales, which changed the company structure dramatically. In order to give a unified corporate culture GE initiated the work-out meeting where responsible persons across the hierarchy level participated and worked in small groups on solutions. Presented solutions were evaluated in immediate terms by the management who also explained about their approval and denials.46 Knowledge Meeting: Knowledge Meeting is another type of meeting in which new knowledge is generated or existing knowledge is transferred. The sponsor
44 45

Vgl. Gldenberg, S., (2003), S.293-294 Vgl. Herbst, D. (2000): S.105 46 Vgl. Probst, G., (2003), S.129-130


and the moderator agree for topics that should be dealt in the meeting. Based on the topics the relevant experts and other employees are invited who should receive the expertise. The participants are asked to prepare question they would like to know. Ideally the group consists of seven to nine persons. During the meeting the discussion are observed, controlled and summarized by the moderator. The summary will be published online and feedback is sent to the experts and the participants to reflect what skills they need to develop. 47 Open Space Technology: Open Space Technology is a moderation technique used in meetings that encourage participants for idea creation. Participants are allowed to express their concern and to make suggestion to the specified problem. They establish jointly an agenda with topics that need to be solved for this problem. Each participant can decide for himself which agenda topic he wants to join and to work for. Therefore the agenda is not totally fixed and can be modified during the three days conference. In the end each agenda topic has an own action plan. This tool facilitates a cognitive learning and is mainly applied for Assessment Centers, consensus creation and for problem solving. It is a flexible instrument that can be applied to any size of group. Besides, this approach may change the corporate culture by bringing member together and allow them to participate in an open discussion. Thus it facilitates a broad knowledge exchange and contributes to employee motivation.48 Quick Market Intelligence: Quick market Intelligence is an invention of the US supermarket-chain Walmart that serves for the collection of information, for interpretation and as a basis for decision making and for strategy implementation. Walmart used to report the experiences of a business trip of regional manager who, for example, visits branches of competitors and share his impression and experiences in a town meeting with purchaser, department leaders, and sales people. Deriving from the discussions suggestion for intervention and improvements, strategies and their implementation plans are created. Furthermore persons are assigned for fulfilling certain task in order to achieve the agreed plan. This tool promotes the team spirit across the organization and contributes to employee motivation. If necessary the town meeting is recorded on a video and distributed to the other regional manager, which is also practiced at Walmart. The tool facilitates knowledge sharing and creation and promotes single and mutual learning.49

47 48

Vgl. Mittelmann, A. (2011): S.104-107 Vgl. Pawlosky,P., Reinhardt, R. (2002): S.12-15 49 Vgl. Pawlosky,P., Reinhardt, R. (2002): S.9-10


Knowledge Caf: Knowledge caf is an informal format of meeting where participants may exchange their opinion or idea to a certain topic. This tool helps to extend the competencies, in particular the social competencies and is appropriate having a discussion round with a larger group of people. The knowledge caf is organized in a conference hall where round tables with five chairs are placed and coffee and other dishes are served to create and informal caf atmosphere. The participants might be members of the organization or experts of a certain knowledge field. Normally there are invited 15 to maximum 50 persons. The session comprises in general one and half to two hours. The facilitator opens the session brings up the topic and overview the discussion. Each group discusses the subject for 15 minutes. After each 15 minutes participants rotate from table to table. This method contributes that different perspective of an issue is being considered. After 45 minutes one participants of each table present their summary of their discussion. Key ideas are noted by the facilitator.50 Business Game: In a business game participants run through a scenario that represent the current or future situation. This makes participants to realize their own impact or consequences of certain action taking. The business game undergo through four phases: 1. Collection of information: All information regarding the initial situation are collected and analyzed. Every participant should have understood the illustrated situation and its framework. 2. Analysis of stakeholder group: The roles, tasks and functions of all stakeholders are analyzed and each participant choose a stakeholder group and develop their course of action for their stakeholders. 3. The Round: the different stakeholder groups get together and run through the strategies 4. Reflection: Experiences gained in this game are reflected and discussed how they can be transferred to the reality.51

Problem solving tools Best Practice Sharing: With the aim to improve the efficiency in the organization this method provides the best possible solution for a specific problem. The best possible solution is elected in a comparison with other possible solution that are

Vgl. Mittelmann,A. (2011): S.150-154


Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


available inside and outside the organization. A solution that meets only the standard quality does not count as the best practice but is considered as Good Practice. This approach updates existing procedures. Benchmarking helps to realize these comparisons systematically. Best Practice solution is generally defined by internal or external experts. Therefore best practices should be measurable and contribute to a sustainable improvement. In addition best practices should be repeatable in their application. This tool supports the search for the best solutions and therefore prevents time consuming strategy development. However, best practice solutions are rarely applicable for other types of problem due to different organizational and personal circumstances. Prerequisite for an effective best practice sharing is the support from the management and technical support by delegating responsibilities to carry out the Best Practice. Texas Instruments, for example, provides a best practice sharing tool where every employee in an organization can search for best practices solution for his/her work field.52 Example: Holcim Best-Practice Transfer plays a major role for efficiency improvement for the swiss company for cement manufacturing. Holcim characterize Best Practices as practical questions regarding Technology and on the other hand as practices regarding the behavior of persons. The goal was that Best Practice that were established in subsidiaries need to be made available for other subsidiaries. For this, The Holcim Services Asia (HSEA) was established that identified BestPractices in other companies in Asia that they distributed to Holcims subsidiaries in Asia. HSEA used different approaches to collect Best Practices. It sent in regular terms executive to the companies. Furthermore it created a Best Practice Team that search for external Best Practices. In addition, it evaluated internal Best Practices and rewards the progress. 53 Critical Incident Technique: Critical incident technique is an analysis of behavior including attitude, emotions, skills, knowledge and resources as a consequence of an incident occurred. The analysis collects all incidents that had any kind of impact based on following questions and examine the after effect:54 52 53

What were the events or circumstances that led to the critical incident? What were the behaviors of the agents that made these (events or circumstances) a critical incident? What were the outcomes of the critical incident?

Vgl. Lehner,Franz (2008): S.182 Vgl.Probst, G.,Raub, S., Romhardt, K.(2002): S167-168 54 Vgl.Serrat,O. (2010): S.2-3


What are the possible future outcomes if behaviors remain unchanged? What are the possible future outcomes if behaviors change based on lessons learned?

The after incident effect is examined through following questions: Why did I view the original situation in that way? What assumptions about it did I make? How else could I have interpreted it? What other action(s) might I have taken that could have been more helpful? What will I do if I am faced again with a similar situation?55

This method is frequently used to identify customers impressions. Customers are interviewed intensively regarding their most positive and negative incident with a product, service or a supplier to evaluate the overall customer satisfaction. It also helps to figure out the frequency of a certain problem. 56 Example: Expedia Expedia Inc., a world leading travel provider, experienced an increasing number of unsatisfied customer. They mostly forwarded their complaints to Better Business Bureau or posted online about lost reservation, incorrect hotel accommodation, and weak customer support and so on. According to a research Expedias score for customer satisfaction fell by 3.8 per cent. Therefore, Expedia conducted a survey, where customers had to state at least one positive and one negative critical incident they had experienced with Expedia. 94 individuals participated. The result was a collection of 64 positive and 40 negative critical incidents. Detailed analysis helped to categorize the type of positive and negative experiences, which had impact on customer loyalty and service recommendation. Expedia found out that two-third of the positive respondent increased the loyalty and were willing to recommend Expedia, while 67 percent of the negative respondent switched to other providers. Based on these results Expedia could take action like improving website and after sale service for binding customers.57 Creativity techniques: Creativity Thinking Technique: Invented by Walt Disney this tool involves the creation of an idea from three perspectives or in this case from three chairs 3. Each represents one characteristic. The role of a DREAMER ignores any kind of constraints and consequences and let his idea flow. He is responsible for the
55 56

Vgl.Serrat. O, (2010): S.2-3 Vgl. (2009-2010): Critical Incident Methode 57 Vgl. Serenko, A.,Stach, A.(2009), S.31-37


creative part. THE REALIST is more objective and includes all possible factors when he suggests an idea. THE CRITIC questions critically and highlights the weaknesses of an idea. All three characteristics are complementary for a good idea creation.58 Example: The process of evaluating idea An energy provider wanted to know the evaluation about the idea to introduce a dictionary with advices for energy saving on their webpage. In a meeting participants of the group took the role of the dreamer and collected following arguments: This idea generates new customers; customers will be inspired from this service; we might obtain new customers; cause mouth-to-mouth recommendation

In the process of being a dreamer all possible advantages were collected. In the following, the group switched to the role of a realist and presented following disadvantages: How much does the launch cost? Who is responsible for the editorial changes?

Such questions helped to plan counter action to overcome possible problems. When the group changed to the role of the critic they could not bring any arguments as only real dangers are considered.59 Six thinking hats: Six thinking hats is an idea creation method in which one idea is considered from six different viewpoints. This approach encourages a broader thinking of a subject outside the usual thinking way. The six perspectives include: White hat: Analyzes the benefits of the idea based on numbers. Persons wearing this hat see a problem neutrally and objectively. Black hat: Expresses all his concerns, difficulties and risks that an idea might brings. He is more cautious. This attitude helps to identify the weak point of a plan in order to establish plans to eliminate or to overcome them.


Vgl. Mittelmann,A. (2005): Wissensmanagement: Methoden und Werkzeuge Vgl. Die Schweizerische Post (n.V): S.2



Red hat: Expresses his guts feeling that comes up intuitively regarding the idea. It might include positive or negative emotions like good, exciting, nervous etc.; Yellow hat: sees the idea from an optimistic viewpoint. It associates the idea with positive impression and illustrates the advantages and benefits that arise from the idea. Green hat: is responsible for creativity and finding an appropriate solution to realize the concept. It approaches an idea with provocation and criticism. Blue hat: takes the lead role among all hats. He directs the meeting and intervenes when it is becoming dry and encourages the group to think like a green hat. He thinks thoroughly. He takes all factors that has been suggested by the other hats into consideration and makes the final decision. 60

Example: Constructing a new office-building A manager of Property Company suggests construct a new office building due to the blooming economy. Following arguments coming from the each of the six hats: white hat: analyzes data and plans the time a building should be completed. Red hat thinks that proposed building looks ugly and people will not rent it or buy it. Black hat worries that the government projection about a prospective economy might be wrong and the building remains empty for a long time. Yellow hat sees the proposal as a great deal and believes that the building can be sold before the recession. Green hat think a design like making prestige office would make the building attractive for any economic climate. Blue hat considers all arguments, combines them and make the final judgment.61 Brainstorming: Brainstorming is a creativity technique realized in a group for idea creation. In a brainstorming session participants are allowed to provide suggestions spontaneously. Each participant can question the suggested idea. These discussions and the visualization contribute to the learning effect. Furthermore social competencies like showing understandings or accepting others idea are widened. There are some other varieties of brainstorming such as the 6-3-5 method or brain writing, which are not considered further here since there are numerous creativity tools.62


Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge

61 62

Vgl. Six Thinking Hats (2011): Mind Tools. Essential Skills for an excellent career Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


Osborn Checklist: The Osborn Checklist is a list of question that gives new perspective regarding the application of an existing product. This method of idea creation encourages broadened view of an issue and creativity. The process encompasses two steps. In the first step all possible variations from the Osbornlist are written down. The second step involves the selection of feasible solutions. The application of this tool ranges from idea creation to the stage of product maturity. Example: The variations of the Osborn-list are followings based on an example of Birthday card: 1) Change of purpose: Is there any other possibility of usage? Can it be used somewhere else? The Birthday card is used at the same time as a puzzle or a voucher 2) Adaption: What is similar? What can be copied? The Birthday card can be used as an entry ticket or phone card 3) Modification: Can we change the meaning, color, movement, form, sound or the smell etc.? A Birthday Card with cinnamon smell or pop-up elements 4) Enlargement: Can we enlarge it? Or add something? Change the frequency? Make it higher, longer or thicker? Increase it in value or distance? Duplicate it? Make the Birthday card to a poster or a book. 5) Minimizing: Can we eliminate something? Making it smaller, shorter, lower, lighter, brighter or finer? Can we split it up or divide it? Can it be applied as miniature? Birthday card as a stamp with a loupe 6) Substitution: With what it can be replaced? Can we use other materials? Or change the process, position, location? Can we use elements from different countries? Birthdaycard being replaced by music cassetts or CD with birthday wishes. 7) Regrouping: What parts can be exchanged? Is a different order or sequence possible? Can we exchange the cause and the effect? The birthday wish is placed at the backside of the Birthday card or it can be used as an attachment. 8) Reversal: Can we make turn the idea for an opposite use? Or exchange roles? Or mirror inverted? Or rotate it to 180 degrees? Or exchange the positive with the negative? A card with condolence


9) Combination: Is it combinable with other idea or can it be related with other idea? Or can it be added to something as an entire concept? Or can it be split up in bricks? Birthday card with some hints regarding the gift or as an initial of a serial? 10) Transformation: Can we perforate it, aggregate it, expand, hardening or liquidate it? Or make it transparent, sheer or intransparent? Birthday wishes performed in a sketch on a video tape63 Morphological analysis: The morphological analysis is a creativity technique for a systematic combination of variables that provides various solutions for a problem by using different types of parameters. Different parameters are aligned among one another, which should be feasible. Then some values are placed to each parameter. As a next step in every line one value of each parameter is selected which leads to a combination of those values. This selection process is carried on several times. For each combination of values a number of ideas can be developed. An example: A table should be invented! Parameters with values: Number of legs: no legs, 1,2,3,4,..100 Material: wood, glas, plastic, cork Height: 0cm, 1cm, 2cm, 50cm, 1m, 2m Form: round, square format

A possible combination: no legs,glas,1m, round A possible idea: a hovering table that can be fixed at the roof with ropes.64 Scenario technique: Scenario technique is a method that helps to create possible and realistic outcome if certain success factors of a strategy is changed in a positive or negative direction. It allows seeing development in the distant future. This technique can be applied if other quantitative prognostic tools fail. A scenario technique goes typically through 5 stages: 1) Task and Problem analysis: In this phase analysis of the actual problem is made and the problem needs to be narrowed to its technical, time and space wise relevance.

63 64

Vgl. Mittelmann, Angelika (2005): Wissensmanagement Methoden/Werkzeuge Vgl. Labella, Mario (n.v): morphologischer Kasten, S.1-2


2) Impact analysis and determination of descriptors: Areas of influences are identified and respective influence factors are determined ( f.i vehicle per 1000 inhabitants). 3) Projection of trends trends and aggregation of factors: For each influence factor trends are projected for a short, medium and long-term horizon. In additions, factors aggregated in two groups, whereas one groups of factors have positive influences and the other group of factors have negative influences on the development. 4) Development of scenarios and interpretation of scenarios: After the environment analysis the scenarios can be developed fully. Typically the outcome involves the best case and the worst case scenario. 5) Measurements and action takings: Based on the scenarios appropriate strategies are formulated that support the desired course. This is accompanied with the creation of a list with counter actions in case of negative development. 65

Example: Daimler-Benz Group: Air Traffic 2015 For the project Air Traffic 2015 the R&D department of Daimler-Benz Group constructed a future laboratory of air traffic where experts from different department were brought together to exchange expertise from different viewpoint. They discussed about the influence factors of the air traffic, established coherences between them and created projections for the year 2015. They supposed following: They predicted an increasing number of passenger and freights that is not satisfied by the few operating airlines. Under the consideration of economical development the established the best and worst case scenarios: They constructed the best and the worst scenarios: a. Flying, the only way! 1) Low fare prices, attractive service and improved traffic infrastructure increase number of passengers 2) There is an wide range of air traffic network with comfortable service offers 3) Strong demand of aircraft 4) Flight security, airlines, and passengers are interacting well b. Flying is limited! 1) The attractive of flying decreased

Vgl. Mittelmann, A.(2005): Wissensmanagement Methoden/Werkzeuge


2) Difficult market condition leads decreasing fare prices 3) Lack of integrative traffic network 4) Stagnation in demand of air traffic66

Mind Mapping: Mind Mapping is a collection of ideas to a problem or topic that is structured graphically with branches and sub-branches. In a meeting participants name ideas or cues spontaneously that noted and structured in main ideas and sub ideas on a poster or flipchart. If there is any link between the groups of ideas those branches are connected with an arrow. This structure approach can be also realized with a computer software program. This tool is appropriate to record ideas, suggestion arising from any kind of creativity techniques described above.67 68 Tools supporting and motivating free creativity Suggestion Scheme: The suggestion scheme is a central place in a company that might be an office where employee from any hierarchy level can submit their proposals. Each proposal will be evaluated according to their usability and participants will be rewarded. However I most cases employee do not what happened to their suggestion or why it has been considered further. The employees cannot leverage from the learning effect. Example: Mettler Toledo Mettler Toledo, for example, modified the classical suggestion scheme. Each employee was encouraged to improve his work procedure once in a week. After realizing a positive effect he is asked to notify it to his supervisor. For this he has to fulfill a formular where h has to state what his suggestion includes and tick if his suggestion is cost saving, time saving or increases quality. This he has to put his and the name of his co-worker to helped to realize the idea. For name thats appear a premium amount is being saved in an account that will be paid out in form of a travel or for organizing a celebration. This approach fosters efficiency, motivation and teamwork.69 Spare time: Allowing employee some spare time can lead to idea creation. For some time an employee does not need to concentrate on his day-to-day work and can focus on projects where he can experiment and test out his creativity. This can happen in various forms. The free time can be granted in form of certain amount
66 67

Vgl. Probst, G., Raub,S., Romhardt, K. (2003), S.135-136 Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge 68 See Appendix: MindMap 69 Gldenberg, S., (2003), S.259-260


of hours, days or month. For example university professors take research semester to dedicate their time for research projects. The US based mining and manufacturing company 3M grant their R&D staff to spend 15 per cent of their time on some selected research project that will be evaluated by a group of expert. The result gives statements how far his project contributes in order to achieve certain goals. In a computer index the employee can find the appropriate contact person for support his project with advices. Furthermore quarterly published reports show the development and progress. Researchers demonstrate regularly their ideas and discuss it with their co-workers.70 Learning laboratories: Learning Laboratories is a practice field like a R&D department for testing new idea or strategies however for the other department like Marketing or Finance. Employees have the opportunity to do corrective actions to learn from their failure. Thus management processes or production chains are simulated. The trial illustrated material based with a prototype or virtually with a simulation program.71 Example: Ford Motor Company Already in 1991 Ford constructed a learning laboratory when Ford realized that past process are not more successfully. The production process was sub-divided and employees were encouraged to make suggestion to optimize the assembly line. This helped to create a learning culture.

3.2.3 Acquisition of knowledge externally With a focus on different stakeholder groups OLAP: Online Analytical Processing is software that provides business analysis, results of complex calculation, makes trend analysis, construct simulation models, delivers data warehouse reports. Thus this tool serves for planning, budgeting, forecasting, financial reporting and has become a vital instrument for business activities. This multidimensional analysis tool covers knowledge development, transfer and storing.7273 Relationship management: A relationship management involves all activities for creating and nurturing the relationship with an organizations stakeholder group

Vgl. Herbst,D.(2000): S.110-111 Gldenberg, S. (2003): S.266-268 72 Vgl. OLAP: OLAP Software and Education Wiki 73 See Appendix: OLAP


including customer, suppliers or competitors. Maintaining such relationship helps to build trust and exchange relevant knowledge to optimize the business process. A customer relationship management includes keeping contact with customers through after-sale service, help-desk, service hotline, complaint management, customer survey and customer dialog in order to receive necessary information about their goods and service and how they can be further developed or improved. In addition customers feel heard and integrated and which makes them to become to loyal customers. Relationship management should be realized in a way that it improves the business process and helps to gain competitive advantage.74 Recruiting: Recruiting is a hiring process. Thus knowledge is obtained externally method to obtain knowledge externally. In particular the selection process plays a vital role for selecting the right people with the right skills and competencies. Therefore prior the recruiting process the organization should be aware what kind of knowledge it needs to achieve the business objectives and reflect this exactly in the job profile to avoid the recruitment of persons with non-matching skills. Headhunting or diversity recruiting are modified forms of the traditional recruiting. 75 Experts: Experts are characterized by their outstanding experiences and skills which make them capable to apply their knowledge in new situation successfully. Experts create knowledge and can optimize business process. There are company which rents expert for certain fields on a daily basis such as The Brain Factory sending computer experts or Rent a Scientist which rents scientist to company that has no own R&D department.76 Cooperation and Business Alliances: Business Alliance is an agreement among companies mainly operating in the same segment for sharing risk and chances. Such agreements allow to reduce cost and to improve service. One of the popular alliances can be seen in the airline industry including Star Alliance or One World. There different types of alliances such as sales alliance or investment alliance. Thus alliances can be used to obtain market information and approaches of other companies.77 Similar effects can be achieved with cooperation. Many companies are nowadays engaged in cooperation for example with universities or research institutes to push research projects that may benefit their own business, for example, to develop a new product. Furthermore, such cooperations attract highly qualified people to join the company. Alliances and cooperation enables the generation and exchange of valuable knowledge. Porsche is highly involved in
74 75

Vgl. Beyer,Thilo (2001): S.1-3 Vgl. Probst,G., Raub, S., Romhardt, K. (2003): S.97-98 76 Vgl. Herbst, D., (2000): S.110-111 77 Vgl. Business Alliances (2011): Maps of World. Finance. Your Window to the World


research projects of universities. Pharmaceutical companies invest in research project of medical institutes for receiving further know-how to invent new drugs.

3.3 Knowledge Storing and Structuring Libraries and Archives: Libraries and archives enable stores and enables access to books, magazine, and other publications. These media can be found in structured way that can be searched via intranet. Virtual libraries store documents on electrical format. Physical or electronic libraries and archives save valuable knowledge and are a basis for knowledge distribution where employee can look up for certain information in order to fulfill his task efficiently. Argumentation cards: Argumentation cards record and visualize the course of a discussion. It contains the topic of the discussion, the arguments and the results. The arguments during a discussion are collected and are structured graphically according to their semantic relationship. This is frequently used in politics like in an election campaign. Argumentation cards can be used for any kind of meetings including knowledge meeting, storytelling, and interviews.79 80 Micro article: Micro article is a documentation that comprises maximum one page which describes a problem and records the experience out of it. The micro article is written in a story telling form, so the reader can see the context of the problem. This instrument allows an easy documentation of knowledge and facilitates a fast acquisition of new information. The structure of a micro article might look like following: 1) 2) 3) 4) 5) Topic : Described precisely with a headline Story: Should be kept short Insight: Experience that results from the problem Consequence: summarize the conclusion Follow-up questions (if necessary): Open question that gives impulse for further thoughts81

Lessons Learned: Lessons learned arises through positive and negative experiences gained in a project or through problem solving. It also includes decisions that are made during a project or to solve a problem and detailed process description. This knowledge helps to prevent mistakes or the repetition of
78 79

Vgl. Herbst,D. (2000): S.111-112 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge 80 See Appendix: Argumentation Card 81 Vgl. Mittelmann, Angelika (2005): Wissensmanagement Methoden/Werkzeuge


mistakes and may increase the chance of success. Furthermore it makes relevant information accessible for employee who can benefit from it for their activities as they might identify similar problems and therefore take appropriate actions. Lessons learned are normally collected in an After Action Review session and documented generally in a micro article. Only those experiences are marked as lessons learned who are applicable for future project and have impact on activities.82 After Action Review: In an After Action Review session experiences and task descriptions are gathered immediately subsequent to a project has been finished or a problem solved. This enables to learn from those projects in an immediate term and serves as a base for lesson learned. Typical question in such a meeting might be followings: What should have happened instead? What happened actually? Why there were deviations or differences? What can we learn from it?83

1) 2) 3) 4)

Example: Coop Switzerland The swiss retail company realized that the insights they gained from their various strategy projects are applicable for other ones. Therefore it conducted interviews and established based on that case studies to determine the success factors of past projects. The distribution of these case studies led to the change of the corporate culture 84 Data bank: Data bank is a system for data administration. Collected data are stored and makes them accessible. There are internal and external data banks that provide various number of information and can be used number of topics such as market data for analyzing the market development. An organization is abundant with data regarding orders, deliveries, transportation and so forth. Thus the challenge for a company is to use them wisely. Siemens uses the data bank system SIS that counts to one of most important instrument. It supports processes by providing actual information. Employees upload information about various topics.

82 83

Vgl.Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge Vgl.Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge 84 Vgl. Probst, G., Raub, S., Romhardt, K. (2002): S.134


The system stores them that can be accessed by all employees worldwide. The use of external or internal databank contributes highly in knowledge generation.85 Data Warehouse: Data warehouse is a central system that collects and organizes data on databanks. It combines information that is spread on several databank and makes different formats uniform. Furthermore it corrects wrong entries like different codification for the same client. These cleaned data serves as basis for different analysis by using OLAP or Data mining. It helps, for example, to establish customer profile that contains information regarding what a customer buys, his age, and other characteristics that can be found in different databanks. Applying data warehouse systems help an organization to generate knowledge about its current environment and to take necessary actions.86 Exit Interview: Exit interview is conducted between a manager and the leaving staff for knowledge capturing purposes. The experiences and the expertise which counts as tacit knowledge leave with the employee. For making this knowledge available for the successor and for other members of the organization it is important to make sure this knowledge will be documented. The exit interview may bring benefits for both participants as it provides the organization valuable knowledge and the employee may leave in goodwill as his work is reflected and appreciated. An exit interview makes sense only for staff who are leaving voluntarily rather for persons who got laid off by the organization. Prior the interview it should be cleared what kind of information needs to be obtained and to whom it would serve in the organization. To some extent it is useful to organize the exit interview in an overlap period between the leaver and his successor so the leaver can pass the knowledge directly and personally and may be in more practical way. Furthermore it is important to consider the most proper way to capture the knowledge, for example in form of files or email or in form of mentoring.87 Rapid Response Network: Developed by the consultant giant McKinsey Rapid Response Network administrates project experiences. Furthermore, on demand it delivers reports about certain projects and the respective contact person for specific issue related to a project. This system saves project experiences by requesting the participants automatically to document their lessons learned at the end of a project. Besides, it gives an overview of running projects that leads to the

85 86

Vgl. Herbst, D. (2000), S.119-120 Vgl. Herbst, D. (2000), S.120-122 87 Vgl. Ramalingam, B. (2006): S.76-77


prevention of double effort and contributes to more cooperation. As a communication tool it enables the direct contact with project members. 88 Example: McKinsey The consultant giant McKinsey faced a strong growth which resulted that around 2000 consultants were working in 50 offices worldwide. Through communication deficiency and the growing amount of project their efficiency was in danger. The overview about experts and projects were distracted. The computer system administrate document library and maintained profiles of the consultants. Two employees are responsible to take request that they forward it to the right expert or search for the right information in the system. They system enables to get in contact with the right expert who was involved in a similar expert. Thus many projects could be finished faster and with a higher success rate as consultants could learn from their colleagues expertise and experiences. Thus, Mc Kinsey reacted to the rapid growth and to cope with the internationalization process at the same it changes the IT infrastructure corporate wide.89 Data mining: Data mining is a process of structuring of distributed information into a collection of information to a topic. This serves as a basis for making future prognoses regarding customer needs derived from existing customer information. The outlook is more exact when there is a high number of information. Through a Data Warehouse system all data can be collected across the organization that is set together in a logical context. Therefore the usage of statistics plays a major role. Depending on the issue different types of analysis are applied.90 Text mining: Text mining is a technological analysis procedure that extracts a bundle of new and unstructured or undiscovered text documents on the internet and intranet and connects them in a logical structure. Similar to data mining it may discover relevant, whereas text mining search in structured data collection. Text mining makes information easily accessible and available. It allows eased and structured text search, identify duplicates and makes semantic analysis of document. It finds groups of document that are interrelated like a customer feedback. Companies such as Semio Corporation or IBM have developed their own software tools. Text mining is used for e-Mail management in order to keep overview, for market research to get statistical information,

88 89

Vgl. Probst,G., Raub, S., Romhardt, K.. (2003): S.74 Vgl. Probst, G.,Raub, S., Romhardt, K. (2003), S.153 90 Vgl. Franken,R., Gadatsch, A.(2002):S.28 undS.34-35


For automated help desk that recognize customer mail and forward to the respective department such as customer complaint service or the technical support.91

Content management: Content management technology distributes selectivly information in the internet, or intranet or websites. Thus, it makes publishing easier as it provides templates for online portals. The main functions among others are: content editing, tracking changes on webpage and accessing older versions, collaborative working, document management and Workflow management.92

3.4 Knowledge Sharing and Distribution: 3.4.1 Personal way of knowledge sharing and distribution Knowledge-Based feedback: The feedback round between manager and employee is a good basis to exchange knowledge regarding experience and results. Aside covering the typical topics including the review of past project, the current and the future task the manager can suggest some knowledge based activities such as the participation of seminars or the delegation to hold seminar in order to share knowledge with his co-workers. In a feedback talk the mangers might typically ask following questions: 1) What did you do last year to improve your skills? 2) What did you do to share your knowledge with other co-workers or to store it in the databank system? 3) How did you contribute to new product development or did you establish any suggestion system? Expert debriefing: Expert debriefing is a tool for knowledge storing and sharing where implicit knowledge of a leaving or retiring expert is transferred to its successor in a learning tandem. This also serves to appreciate the employee`s performance in the organization. The expert debriefing is carried out in several
91 92

Vgl. Spinakis,A. (n.V): Text mining: A powerful tool for Knowledge Management, S.1-4 Frost,A., (2011): KMT. A KM Resource Site


sessions. In a preliminary talk the manager and the expert agree about the purpose, the procedure and the results that the tandem should include. Furthermore the participant is informed about the framework. In the following a Jobmap is created. Similar to knowledge map, it gives an overview what knowledge is required for this job. It includes the job history, job task and knowledge areas. Deriving from the jobmap a study plan can be established that contains measurements which are prioritized jointly by the expert and its successor. The measures might include creating Wiki, Podcast, or Lessons Learned, participation on workshops etc. The study plan will be then evaluated objectively by the manager in order to make some necessary corrections. During the learning tandem a moderator accompanies the expert and its successor as an observer if the study plan is being carried out accordingly and he supports in complex measures. The integration of measures in the day-to-day work of the successor is a core element. 93 Alumnus: An alumnus can be employed temporarily as a trainer or consultant. Or they meet regularly with current employees for knowledge exchange. ABB use this approach to train their new entrants. Example: ABB Consulting The Swiss company ABB Consulting offers consultation services in different fields. In order to save the knowledge of experts the leaving or retiring staffs are employed as ghost-writer for their successor in the management or as competent mentor in the production department or in complex projects. ABB and the former expert stay in contact in order to request for advices anytime for which they will be rewarded.94 Learning day: In a learning day employees meet voluntarily to pass knowledge about n predefined subject. Very often a learning day is organized when an employee has participated in a workshop or seminar and informs his co-workers about the session who did not or could not join. For organizing effectively a learning day all participants agree at the beginning about the topics they want to learn and how regular they meet. If necessary an external expert can be added in this session too.95 Story Telling: Story Telling is one way of distributing complex issue without losing its context. Experiences and incidents are shared in an interesting way. For

Vgl. Mittelmann,A. (2011): S.95-98 Vgl. Probst,G., Raub, S., Romhardt, K. (2003), S.199 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge

94 95


creating stories a team selects past incidents or projects that had some impact on the business process. Such incidents are identified by interviewing involved members. The interview content is summarized in small and interesting stories and is reviewed by those interviewed persons. These stories are discussed in workshops by involved members and others participants from the organization who might be in a similar situation. This helps to prevent a repetition of mistakes and to learn from past experience. Story telling is applicable for every situation. It can be used for passing Lessons Learned, Best Practices, for changing the corporate culture or for distributing success stories gained, for example, in a contract closure or mergers. Implicit knowledge is made explicit and is therefore available for the organization. Furthermore it contributes to trust building and motivates employees. 96 Employees Breakfast: Employees Breakfast is an informal occasion where all company members meet in a predetermined period for a joint breakfast. In this session name cards are placed randomly on the randomly which makes sure that coworker who are friends do not sit next to each other but enables networking with other colleagues. This ensures that staff from different hierarchy level comes together and get into conversation about different topics including the companies problems or projects. Tools likes this contributes for a flat hierarchical organization structure.97 Example: E.ON The energy provider E.ON organizes various forms of activities that brings the organizations workforces closer. It provides among other joint lunch break or employee breakfast.98 Break room: Break room is a place where employees can meet and have informal conversation. This is not a real knowledge management tool rather an infrastructural measure but it brings staff across departments together and different types of knowledge can be exchanged. Furthermore it contributes to a liberal working atmosphere and can motivate people.99


Vgl. Lehner,F. (2008): S.182 Vgl.North,K. (2010) S.157 98 Vgl. E.ON (2011): Leistung wertschtzen 99 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


3.4.2 Non-personal way of Knowledge Sharing and distribution Communication forum: A forum is a platform, mostly online, for maintaining debates and discussion. It helps to create new knowledge and to exchange information on a web-based platform or in a conversation round. Any member can join the discussion to certain topics. Furthermore, anyone can start a new topic at anytime. Participants post a question and other answers to this question. Particularly, online-based forums allow anonymous postings that foster the freedom of opinion. In addition, the participation of different types of user in terms of gender, age and qualification contributes highly to the variety of experience and knowledge.100 FAQ: This is list of frequently asked questions with the respective answer of a certain topic. This form of knowledge documentation and transfer of knowledge is time saving since research for answer or solutions is not more needed. After collecting those questions that appears often and the right answers has been added the list has to be published at the appropriate place such as companys webpage or intranet or as a document in a file. Over time the list need to be updated with new questions or answer if required.101 Learn Card: Learn Card is a method that supports learning process by learning questions and their respective answers at the same time. Traditionally, there is a question on the front side of the card and the respective answer at the backside. This tool eases the documentation and the distribution of knowledge. It is useful for frequently asked question (FAQ) with simply answer and should be made available at the respective place like in a department or office depending on the main topic of questions.102 Manual: A manual, for example, for a software application, describes in a written form how a task can be accomplished. It is useful for highly complex tasks that require specified skills and knowledge and where a personal mentor is not available. For an eased application purposes a manual should be written in a clear and logical form. Adding pictures or other media would contribute for a better understanding.103 Communities of practice: Community of practice is a group of people whose member has same interest or problems and therefore get together to exchange
100 101

Vgl. Mittelmann, A.(2005): Wissensmanagement Methoden/Werkzeuge Vgl. Mittelmann, A.(2005): Wissensmanagement Methoden/Werkzeuge 102 Vgl. Mittelmann, A.(2005): Wissensmanagement Methoden/Werkzeuge

Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


knowledge and to solve specific problem. Depending on interests those communities differs from each other. Other than teams communities of practice are created on voluntary basis and are not necessarily determined by the management. Acting in community encourages the exchange of knowledge among members. Creating a community of practice undergoes three phases. In the first phase of birth includes clarifying following questions: A) what knowledge should the community focus on? Is it for a professional discipline or a specific issue? B) Who may contribute to the community and who should be assigned as facilitator, experts, the movers and shakers? C) What is the group interest? D) and the question of purpose of the community. In phase two there is a focus of growth and development. The purpose of this face is to keep the community vivid. Therefore the moderator should organize meetings, social events and rewards for members contribution. Furthermore, the roles in the community should rotate. Goals of the community should be aligned over time to the companys goals. The CoP encourages social relationship and the exchange of relevant information due to the shared concern or task. The growth of CoP includes the creation of knowledge map and other resources. But each activity realized in the CoP must be documented for future purposes. Phase three concerns the closure of community of practice. Every community of practice comes to an end. At this point it is crucial to indicate the appreciation through a celebration. Steps need to be taken to capture and transfer necessary knowledge. Example: Communities of practice at the UN agencies in India In order to capture tacit knowledge regarding the development practices in India the UN offices in India created the Community of Practice called Solution exchange that gives experts a platform to exchange knowledge and experiences. The members were from other NGOs, academia, government and private sector. Members are informed about new posts by emails. This platform allowed to build trust among members and to update them with new practices. The success resulted in creation of further communities of practices for example, Work and employment or AIDS, or Food and Nutrition. The number of members grew to 4,300. Questions that are posted in the community are distributed by mail that will be answered by other members, while the moderator searches for further information. The summary of the solution called Consolidated Reply are distributed within ten working days through the community. Furthermore, the communities are updated with news and maintain a webpage.104 Wiki: Wiki is an online software system that allows visitors in the internet to edit article about a topic of their choice. Wikipedia counts to the biggest and the most

Vgl. Ramalingam, B. (2006): S..44-47


famous online encyclopedia where any user can contribute with his knowledge. The easy application of the software makes this tool universal and can be also used for knowledge sharing and learning in organization. Employee may post article of their interest or knowledge field and hence build a basis for a company specific encyclopedia.105 Intranet: Intranet is the companys webpage which can be only accessed by the companys employee. The intranet may serve as a platform for information collection, communication and collaboration or for completing tasks. In general it is crucial when an intranet is implemented that its content is matching to the business purpose. Furthermore it gives space for documentation and uploading videos, maintain instant messaging and more. 106 Example: Siemens Intranet system Knowledge 2000
Siemens launched for its 8000 Sales personal the project Knowledge 2000,an intranet concept, in order to establish a corporate wide knowledge transfer. The main element was the comprehensive yellow page, a corporate wide expert index, in which employees were listed with their own websites with photos, phone number, email address, and their topics. Consultants, sales representatives, technicians are linked to virtual teams for a specific topic. In this respect the intranet serves as electronic dictionary. 107

Weblog: A weblog is a web application that offers a platform where people with common interest may express their opinion or concern about a certain topic through posts. A blog can be maintained by single or multiple contributors. It allows creating communities of interest. Today such blog pages can be created easily since different providers offer ready-made weblog pages such as googleblog or blogger,com. Ramalingam (2006, S.83) lists 16 types of blogs such as advice blog, political blog or personal blog. Example: World Bank searches through blogs in the internet to find out the opinion about some current development issue by the world community. It found in a blog called furious posts of people who expressed the dissatisfaction about the World Bank Presidential selection process. World Bank staff followed regularly the posts and could catch the opinion and the thoughts. Figuratively, such information helps to improve the processes.108 Business TV: Business TV can be used as a distribution channel. An expert explains an issue that is transmitted lives or recorded and is broadcasted to all
105 106

Vgl. Wikipedia Vgl. Ramalingam,B. (2006): S.67-68 107 Vgl. Herbst, D. (2000): S.82- 86 108 Vgl. Ramalingam, B. (2006): S.82-84


employees. Mercedes Benz uses this method for employee training. The business TV should be connected to a user group. A decoder is used for codification similar to pay-tv. Company information, distance courses, instructions for new products, repair instructions. Mercedes Benz used it to recover the broken trust of employees in the new A-model when it failed through an international security test. However this method of knowledge distribution is less flexible. Information cannot be adapted to the need of each employee. Employees newspaper: Employees newspaper belongs to the oldest and the most important instrument for internal communication. Employee can get know to each other and thus get closer to the company It includes offer for personal training and provide information for an eased decision making.109 Some typical and traditional tools for knowledge sharing may include telephone, video conference, eMail, Newsletter, notice board and so forth. However, as they are common tools they will not be further considered in this work. 3.5 Knowledge Management Valuation Knowledge Asset Road Map: Goals for an active knowledge management implementation can be recorded in an extensive knowledge road map. This visualizes the steps and the respective timeline for the implementation. Thus such implementation projects are supported by organizational and technical tools. These knowledge management goals are determined based on the business goals in order define the knowledge process that enable to achieve those business goals. Those projects can be defined partially. For example a goal can be saving the knowledge of customer problems, which means the organization can implement for an effective use of customer knowledge and the solution a Help-Desk-system to capture and store customer knowledge. In the next step the appropriate tool need to be determined that support the knowledge process. This map gives an overview regarding the present and future knowledge management activities on a time scale, which can be modified according to the business situation. Therefore a knowledge road map needs to be updated regularly. 110

109 110

Herbst, D.(2000): S.138 Vgl. Lehner, F. (2008):S.195-196


Illustration 1: Knowledge Asset Road Map


3.5.1 Tools that gives a snapshot of an organizations knowledge management Knowledge Intensity Portfolio: Knowledge intensity portfolio is a matrix with four fields in which an organization categorize itself how high or low they are knowledge intensive is in terms of the value chain and their goods and services. The value chain is highly knowledge intensive if the production of a products or service require high amount of knowledge like a customized production and low amount of knowledge if it is a in a standardized assembly line production process. In general customized production processes involve numerous people. Knowledge intensive goods or services are for example software products or ABS in vehicles that contain a high amount of knowledge. Thus, a company might have process intelligence or product intelligence or both. Facing low knowledge intensity in both categories implies a company receives value added only by physical effort. However, in most cases knowledge intensive products or service are not exactly definable. The classification tells where the organization has to intervene, where it has to develop and save knowledge. However there are no exact strategies for measures according to the classification.111

Lehner,F. (2008): S.193-194


Illustration 2: Knowledge Intensity Portfolio

Knowledge intensity in the value-chain

Process intelligence

Product & Process Intelligence

Value added through physical effort

Product Intelligence

Knowledge Intensity in the Production

Source: Lehner, F.( 2008), S193

Knowledge Management Profile: Knowledge management profile shows to which extent and manner knowledge is used in the organization. There are several categories that describe the use of knowledge management in opposite pair dimensions. The result is then visible in a knowledge profile diagram. The category acquisition of knowledge in an organization is analyzed if knowledge is obtained internally or externally, which is classified as Focus. Search implies if the search for knowledge acquisition is more opportunistic or focused. The category problem-solving describes if a problem is solved individually or in teams (location), and if is it using trial and error method or rather heuristic approach (procedure) and if problem solution are derived from experiences or based on theories (Activity) and if new solution is created or if existing one are further developed (scope). The category dissemination refers if knowledge sharing is formal or informal (process) and the amount of shared knowledge is narrow or wide (breadth). The category ownership explains on the one hand the degree of how their knowledge is being considered as their own (identity) and how


knowledge is distributed among the employees (Resource). The last category illustrates in which form knowledge is mainly stored, so implicit or explicit. These five categories can be modified and developed according to its application purposes or the situation. With this diagram the management sees the current situation of their organizations in terms of knowledge management and can create implementation plan for further improvements. It is recommended to update the knowledge management profile regularly. Table 1: Knowledge Management Profile

Knowledge Acquisition - Focus - Search Problem-solving - Location - Procedure - Activity - Scope Dissemination - Processes - Breadth Ownership - Identity - Resource Storage/Memory - Representation Source: Lehner,F.,2008, S.195

Internal opportunisitic individual trial and error experiential incremental informal narrow personal specialist tacit

x x x x x x x x x x

x external focused team heuristic abstract radical formal wide collective generalist explicit

The graph shows that knowledge in the organization is controlled by experts which are not well distributed within the organization. A possible solution for this might be a knowledge source map that lists all experts which helps to find the appropriate expert for a particular problem. In addition to this, a rewarding system can be implemented remunerate those who is who make the effort to document problem solutions. However, knowledge management profile might be interpreted differently and therefore other recommendations can be derived.112


Lehner,Franz (2008): Wissensmanagement-Grundlagen,Methoden und technische Untersttzung,S.194-195


3.5.2 Numerical evaluation of intellectual capital Market-to-book-ratio: The market-to-book-ratio determines the value of knowledge in a company based on the quotient between market value and book value. Or in other words the value is determined by the difference between the share price and the companys balance sheet. The assumption is that assets that can be recognized in the balance sheet can be considered as intangible goods However, the share prices changes daily due to speculative expectation or economical influences, which do not necessarily mean that the value of intangible asset changes as well. In addition, book value can be influenced by accounting approaches. The other limitation of this valuation approach is that it does not provide any further hints for action taking. Therefore it is recommended to take quotient rather than the difference between the market value and the book value. This way allows on the one hand a better comparison with the competitors from the same sector and on the other hand in terms of long term changes in the quotient a conclusion regarding the development can be made easily..113 Tobins Q: Developed by James Tobin this ratio is the quotient of the market value and the replacement cost of a good or company. If the quotient is below 1 means the market value is lower than replacement cost. A quotient above 1 indicates a high grade of investment in technology and employees. This ratio helps among others to measure the degree of intellectual capital of a company. However market value and the repurchase cost can be only determined if there exist empirical value. An example might be that an organization employs a researcher with a low salary and integrate him in a successful research team. The value of the technological solutions developed by the team exceeds the market value of all team members.114 3.5.3 Tools for controlling knowledge management Balanced Scorecard: Balanced Scorecard is an instrument to manage long term strategies and to direct short term changes. Business performance is determined by factors of finance, customers, business processes and employee development. Those indicators are listed for each perspective on a table, which is the scorecard. All four perspectives contribute to the balance of an organization (balanced). The basic idea of this concept is to break down the corporate vision into concrete defined indicators. Those indicators should be measureable for comparison and controlling purposes. Thus, the Balanced Scorecard enables to formulate concrete actions deriving from the companys vision and strategies. For each of the four
113 114

Vgl. Lehner,F. (2008): S.203-204 Vgl. Mittelmann, A. (2005): Wissensmanagement Methoden/Werkzeuge


perspective objectives, measures, targets and initiatives are created with the respective indicators. An example for this it can be for customer perspective: Finance Perspective: The financial perspective plays a leading role for the other three perspectives. All activities should be reflected positively on the financial indicators. Customer perspective: The customer perspective includes defining goals related to the customer and the market. Core indicators are market shares and customer acquisition, customer loyalty. Performance indicators are more company specific and are connected with product and service attributes such as quality, price and time. Furthermore, indicators for the degree of customer relationship, the image and reputation of an organization are defined. Process perspective: At this part of the scorecard characteristics of the core process are illustrated. Respective resources need to be directed which leads to an impact on financial result and which helps to achieve customer related goals. This perspective concerns the identification of customer needs and encourages product development and cost and time reduced production or service delivery. Learning and growth perspective: This perspective demonstrates which skills and capabilities of employees and information system need to be developed for achieving the strategy. The emphasis relies on qualification and motivation of employees and a reliable information system. The indicators here might be loyalty, employees satisfaction, and other indicators related to learning, training, motivation, flexibility, and teamwork.

Example: Strategic goal: improvement of cost performance ratio Indicator: evaluation of the customer Concrete goal: 60 percent of customer should perceive the company as number one.

Further actions could include improving employee qualification which leads to shortened production process. The effect can be in an increased customer satisfaction. Higher prices can be therefore realized and the company faces improved turnover numbers. The combination of indicators result the logical conjunctions among the 4 perspective: 1) Finance Perspective: Increase in turnover 2) Customer Perspective: Increase the number of satisfied customer


3) Process Perspective: Ensure call backs within a hour 4) Learn and growth Perspective: Offer training for employees for a better telephone support.115 Illustration 3: Balanced Scorecard


The concept of Balanced Scorecard can be also applied to control knowledge management activities. The creation of Balanced Scorecard involves knowledge identification, share and knowledge generation. This process should be based on the business objectives.116

Skandia Navigator: The Swedish financial service provider Skandia recognized the huge difference between its market value and the book value. Thus Skandias share price was much higher than the numbers from the balance sheet. This difference represents the intellectual capital that has a significant impact on a company. For understanding and controlling this capital Skandia created a knowledge valuation concept that builds up on 5 dimensions of indicators.117

115 116

Vgl. Herbst, D. (2000): S.145-150 Vgl. Lehner, F.,(2008):S.209-210 117 Vgl. Probst, G., Raub, S.,Romhardt, K. (2003), S.219


1) The financial focus analyzes the financial results of activities. Long-term goals and main part of conditions of the other four conditions are highly related to this focus. 2) The customer focus specifies how far an organization align its activites towards customers 3) The process focus involves the consideration of process for creating goods and services. It looks at the efficiency and quality of processing like customer service or work efficiency. 4) The renewal & development focus concentrates on activities that ensure development and sustainability. 5) The human focus includes activities that contribute in employee motivation and satisfaction which in turn reflect in improved results.118

Illustration 4: Skandia Navigator


3.5.4 Tools for a broader evaluation of intellectual capital Intellectual Capital Navigator: Intellectual Capital Navigator is another method to evaluate the intangible assets in an organization. Intangible goods are divided in three groups including human capital, structural capital, and customer capital. The market-to-book-ratio is also included as a evaluation yardstick. Each category can be evaluated by three indicators. Those indicators however need to be selected

Vgl. Value Based (2011) : Intangibles Valuation. Skandia Navigator


according to their contribution to realize the business strategy. This tool gives a snapshot of the current situation in terms of the use of intangible assets and where actions need to be taken. 119 Illustration 5: Intellectual Capital Navigator

Source: /Intelectual+Capital+Navigator.jpg

Knowledge Capital Index: The value of the intellectual capital is reflected in the market value of company. In the knowledge capital index the market value consists of two components, the financial capital and knowledge capital, whereas the knowledge capital is subdivided into human capital and structural capital that are further divided in sub categories. These sub categories are evaluated by indicators. The sub division for human capital includes competencies, willingness, learning aptitude and flexibility. The components for structural capital are relationship, organization and innovation. The component willingness can be further split up into the following categories motivation, behavior and values. For example a possible indicator for the sub component willingness might be the amount of hours for passing information within a project group.


Vgl. Lehner,F. (2008): S.206-208


However, the knowledge capital index cannot be compared with other companies indices as they might take other indicators and indices for evaluating the knowledge. Only final assessment of the competitors regarding their companys knowledge might help to compare. The knowledge balance index covers three areas: 1) the knowledge evaluation 2) the development of knowledge and 3) application of knowledge. There are only few literal resources in terms of practical application of the knowledge balance.120 Knowledge Balance: This approach makes business goals measurable related to the organizational knowledge base. The knowledge balance has four classes of indicators to evaluate for certain purposes as shown in the table. This prevents mixing up the indicators which allows recognizing the cause and effect correlation. The knowledge balance is divided in three categories including employees, internal and external structure. The initial step involves the evaluation of these categories of indicators of the first class. The evaluation gives an overview of the current knowledge base. Based on the knowledge management goals measures are adopted to improve the knowledge base. The effort of such measures is evaluated by the indicators of class two. Intermediate results deriving from those measures such a shortened production time are measured by the indicator in class three. The final result might be for example an increased customer satisfaction that is caught by the indicators in class four. The knowledge balance is recorded yearly for observing the development. Despite of the classification of indicators it is still difficult to identify the appropriate indicator to evaluate the knowledge management success on business process. A high number of indicators lead to the loss of overview and understandability. 121

120 121

Lehner,F. (2008): S.208-210 Lehner,F. (2008): S.210-212


Table 2: Knowledge Balance

Indicator classes 1)organisational knowledge base Purpose Explains the qualitative and quantitative existence of organisational knowledge Explains th process and effort to change the organisational knowledge base Measures the directs effect of the interventions Evaluates the business results in the respective period Examples Qualification, Competency of employees for problem solving, customer knowledge, process know-how Needed training days for an employee, rating for quality of education Response duration for a customer request, process quality Customer satisfaction, premium volume, number of customer of orders


3)Intermediate results and effects

4)results of the business activities

Source: North, et al.1998, S.165

Intangible Asset Monitor: The Intangible Asset Monitor offers monetary and nonmonetary factors for evaluating the knowledge management or in other words the intangible assets of an organization. This approach classifies intangible assets in 1) competencies of employees, 2) internal structure 3) and external structure. These categories are evaluated by the indicators growth, efficiency and stability. The combination of the categories with these indicators allows making a judgment firstly about the efficiency of the knowledge in the organization, secondly the sustainability of the knowledge and thirdly the expected development. In practice one or two indicators are used to assess the intangible asset of a company. However the allocation of right indicators to those three categories is in most cases not clear, which leads that the causes for the results of this monitor cannot be traced back. The analysis should be carried out yearly.


Table 3: Knowledge Asset Monitor

External Structure Growth Increase in market share, customer satisfaction index, quality index Internal Structure Growth IT investment, Index employees attitude towards management, corporate culture and customer Efficiency Share of employees in the administration, turnover per employee in the administration Stability Age of the company, share of new employees Competency Growth Share of turnover of important customer group, change of average job qualification, level of qualification Efficiency Change of value added per expert, change of share of experts Stability Fluctuation of experts

Efficiency Profit per customer, turnover per expert

Stability Frequency of repeat orders

Source: Lehner, 2008,S.205


4. The Systematization of KM-Tools on the Knowledge Ladder

4.1 The Knowledge Ladder: In order to understand why it makes sense to systematize the tools along the knowledge ladder it is necessary to know what the knowledge ladder is and it wants to imply. If knowledge in an organization is applied wisely it can contribute to sustainable competitive advantage. The knowledge ladder illustrates what steps need to be taking in the knowledge management in order to gain competitiveness. Starting from the very beginning stair signs, these are numbers, letters or forms that are turned into data through syntax that brings those signs in a specific order like in case of number 1, 2, 3, or in case of letters that are turned into words like computer. Thus data gives signs meaning. Such data are interpreted as information when they are put into a context like a 2 pen or 3 percent increase in profit. Information is knowledge if that information is used to fulfill a certain purpose, which means knowledge is the result of processing the information with consciousness. The use of information differs according to cultural context. However, employees need motivations and purpose to apply those skills and knowledge which lead to actions. If those are used wisely and appropriately into actions that lead to problem solutions or value added this is called the competency. Thus competency is the capability to use skills into impaction actions. And if this competence contributes to customer value and is considered unique and is not imitable by competitors and helps to position above other competitors then the company has a competitive advantage in comparison to its competitors which describes the competitiveness. Each stair represents the level of maturity that a company occupies regarding its knowledge management. There are four levels of maturity. In the first level of maturity organizations focus on information and data management, where knowledge exchange is not established to a greater extent. They have knowledge management based on technical support. Companies use knowledge management actively or specifically for improving for example customer or employees knowledge. Knowledge exchange is practiced extensively. The third level of maturity implies that companies realize professional knowledge organization, where knowledge is applied across the organization as knowledge management is integrated in business process. The use of knowledge management shows visible results like improves processes that produce less failures and shorten production time, and where employee are highly motivated, and customer face quality improvements. The fourth level of maturity demonstrates the ideal situation for a knowledge based management. It is characterized in addition that the organization


is actively looking for innovations and maintains an open and liberal corporate culture, which supports internal and external learning.122 An organization should reach each stair of the ladder to assure an appropriate development and implementation of knowledge for a sustainable competitive advantage. In order to recognize a gap or in other word what type of information or knowledge or skills are missing to achieve competitiveness the knowledge ladder is viewed top down. This approach is the strategical knowledge management since the objective for knowledge management should be adapted according to the business objectives. Knowledge Road Map is highly helpful to establish a plan for KM implementation. The operational knowledge management involves setting detailed measures for knowledge creation, share and use for each step. Thus each stair of the knowledge ladder is build on another, which means actions need to be taken on each stair in order to fulfill the following stairs that helps to reach competitiveness. Illustration 6: The Knowledge Ladder


North,K. (2011): S.36-42


4.2 The Components of the Knowledge Ladder The strategic knowledge management consists of components that include setting goals which need to be achieved in order to achieve the business goals and in turn, increase competitiveness. In the following each of those five components are explained that covers one by one the stairs of the knowledge ladder. This illustrates accomplishing the components goal help to climb the stairs. Illustration 7: The Components of the Knowledge Ladder

Source: North (2009): Power Point Prsentation

1. Component: Knowledge Strategy The strategic knowledge management begins with the conception knowledge management strategy based on the business strategy. The goal of this component comprises that knowledge and learning are substantial parts to reach the business goals. The business strategy is the basis for defining the core competencies and knowledge management goals. Measures are designed that supports the development of competencies and secures knowledge. Such measures may include in the first place the identification of core competencies which are communicated throughout the company. Furthermore, competency centers that ensures educational development of employees towards the core competencies.


The measures cover the achievement of the stairs competitiveness and competency on the knowledge ladder 2. Component: Learning and Development of Competencies In order to achieve the goals of the first component it is necessary to focus the knowledge management effort in educational expansion of the employees. The goal in this respect is to identify and evaluate the skills and competencies of the workforce and to provide educational support. Group learning should be integrated in the daily work-life. Steps for action taking may include the identification of competencies of employees and the key experts, for example, through competency matrix or knowledge source map. In addition competency centers that offer training, workshops or seminars need to be established or collaborations with educational institute need to be created. The organization should also enable opportunities for informal learning where employees show willingness to learn on voluntary basis and to integrate them in projects for skill expansion. These measures would contribute in increase of motivation. Freedom should be provided where employee might try and experiment on ideas or projects where they can learn from mistakes such as through business games or learning laboratories. Making mistakes should not be considered negatively but rather as a learning effect. Furthermore, the organization should also maintain idea management that forces employees to find solution for advancing the business processes. The measures for this component support all those activities where right skills are applied at the right time and in the right context. Thus competency development can be realized.

3. Component: Knowledge oriented culture and leadership Learning in an organization as desired in the second component, in particular on a voluntary basis can be only assured if there is a culture for knowledge sharing and in addition a management that supports the learning process thoroughly. Therefore, the primary goal in this respect is to foster a culture of knowledge sharing, whereas the executives show the direction for this. Therefore it is essential to create an open culture in order to strengthen the team spirit across the organization. For this purpose, steps including organizing informal occasions that bring all employees of every hierarchy level together such as the employee breakfast are highly promotional for an open culture. Organizations members meet in one place in an informal atmosphere and exchange information about


different topics. In addition, an employees effort for developing his skills and saving or sharing knowledge should be appreciated in a feedback dialog, where his efforts are documented. Tools should be used that encourages knowledge sharing such as job rotation or learning day. In order to overcome the barrier of facing lack of time for knowledge sharing that has been mentioned previously, the organization should schedule some spare time for its employees. This would increase information exchange and creativity among the staff. To support this process each effort that contributes to knowledge sharing should be rewarded. There are various methods like collecting points or miles which increases the motivation for an active knowledge management. The organization can also establish communication zones or modify the offices for a knowledge sharing environment. These activities involve the achievement of the stairs action taking and knowledge as measures are focused to develop knowledge and turn them into actions.

4. Component: Knowledge Identification In order to facilitate knowledge sharing relevant knowledge need to be identified in the organization. The objectives here are to recognize and to record who knows what. It should be assured that valuable knowledge stays in the organization once employees leave. In this respect knowledge resources in an organization can be recognized through knowledge source maps like yellow pages or other expert or expertise directory. Exit interview or mentoring or alumnus projects facilitate that expertise of leaving personnel are past forward to their successor or recorded properly. These activities shape the existing knowledge base on which further knowledge management effort can be realized. It gives a good gorund for knowledge sharing.

5. Component: The availability of information Without a reliable information base there is no ground for knowledge creation. Therefore the company should make sure that it provides necessary information and technological infrastructure that delivers structured information in the right context. Measures should be planned that include the collection and the updates of the information base. Therefore user supported information system that gives


customized information need to be implemented. In contrast, the adoption of comprehensive databases that connect different department is significant for an extensive knowledge creation and sharing across the organization. In a regular time interval it is necessary to clean the databases. The goals of this component cover the achievement of the stair information on the knowledge ladder. The first two stairs are already existence everywhere and in every organization. Hence, these are not considered further.

The top down approach along the knowledge ladder facilitate in the first place to set goals and milestones and to create knowledge management according to the business strategy. After setting intermediate goals to each of the stairs necessary methods and tools are implemented that helps to achieve them. The implementation and realization of those tools follows the bottom up approach along the knowledge ladder. The organization reaches each stair until it has developed its core competencies in a way that it leads to achievement the business goals.123 4.3 The Dimensions of systematization: This is the theoretical background for the systematization process. As previously explained the stairs signs and data do not need to be further considered. However, an organization needs to ensure a reliable information base which implies that focus needs to be paid on the stair information. And consistent information base permits to create knowledge deriving from insights and experiences to use the information. Knowledge makes problem solving or idea creation possible. Thus emphasis should be on knowledge creation, sharing and storing. Crucial in this respect is to take the right action at the right time. Therefore it is highly stressed that competencies developed properly. As these three stairs make essential impact the systematization will focus along the stairs information, knowledge and competencies. However these three stairs as one dimension are not sufficient for categorizing tools. North provides another dimension with three criteria including 1) Allow transparency of Information, Knowledge and Comptencies 2) Make Information, Knowledge and Competencies available 3) Exchange of Information, Knowledge and Competencies and learning


North, K. (2009): Gesamtkonzept Wissensmanagement


These criteria also represent sequence of action taking in knowledge management. First of all, transparency of the existing information, knowledge and competencies need to be established. This permits to evaluate where gaps exists regarding information, knowledge and competencies. The company can design a action plan to close the gaps along the stairs. However having a wide range of Information, Knowledge and Competencies are not sufficient. These components need to be made available across the organization, which represent the second step. Once the ground for a well defined information, knowledge and competency bases are established the exchange of information, knowledge, and competencies can be granted that reflect the third step of exchanging Information, Knowledge and competencies once they are provided. Each combination of the criteria with the stairs creates another context where different tools need to be applied. The table below shows and describes what tools need to be used when. The identification of the right tool is eased through supporting questions.124


North, K. (2011): Power Point Prsentation


Table 4: A guideline to systematize KM-tools

Sequence of KM actions Knowledge stairs Information 1.Allow transparency 2.Make available 3.Exchange and learning

Where can I find which Information? The tools here give a snapshot of an organizations information base. They illustrates the location (files, libraries, CD) where information are stored and describe what type of information can be found like customer profiles.

Which user of the organization needs which information in which format? Tools listed here create basis for the distribution of information. On the one hand, the users have the opportunity to select the information individually that they need, which is called the pullprinciple. On the other hand, there are tools which provide employees automatically with information regardless of the relevance to the respective user.

How can I exchange current Information? Here are tools that focus on providing platforms for exchanging information like market or company data


Who knows what or who is responsible for a specific issue? Tools here give an overview about the organizations experts for different topics with contact details. This allows a fast contact arrangement and

How can be knowledge edited context-wise? These tools makes possible that context-rich knowledge which are mostly implicit are saved and shared.

How can I exchange knowledge and experiences? These tools provide room and time to all relevant participants to share knowledge formally and informally and with external and internal



further processing of knowledge sharing Who is able to do what? Tools listed here illustrate graphically persons and their skills and competencies


How can I obtain competencies from others right away? Tools here provide methods to pass knowledge mostly in a situationrelated context and personally.

How can I or the team obtain competencies quickly? These tools make a quick learning possible in a practical way



Sequence of KM actions Stairs of the knowledge Ladder Information
Knowledge map Libraries and Archives Datawarehouse Datamining Textmining Newsletter Blogs, Wiki, Knowledge Broker OLAP FAQ Checklist Manual Employees Newspaper, Business TV Story Telling Micro Article Debriefing Quick Market Intelligence Work-out meeting Best Practice Sharing Knowledge Meeting Suggestion scheme Critical Incident technique Open-Space technology Argumentation Cards Coaching Mentoring Training Teams Recruiting Experts Alumnus Exit Interview Creativity techn Communication forum

Allow transparency

Make available

Exchange and learning


Knowledge Resource Map Knoweldge Development Card Portfolio &ePortfolio

CoP Lessons Learned Story Telling Learning Partnership Teams Spare time Cooperations &Alliances Knowledgebased feedback Learning Day Break Room Communication forum Employees Breakfast

Competenci es

Knowledge source map

E-learning Coaching Activity learning Project learning Job rotation Think Tank Business Game Learning labroratories


5. Conclusion
This work has been established as a part of the European commission supported Project under the Seventh Framework Programme Sustainable competitiveness of SMEs in turbulent economic and social environment- a network approach. The aim of this research project is to create a management concept for SMEs that includes the European innovation and learning approach and the Latin American survival strategies obtained in their past crisis. Four institutes lead the project by playing different roles. Those four universities are: 1) 2) 3) 4) Hochschule RheinMain in Germany Universidad Autnoma Madrid in Spain Universidade de Federal De Santa Catarina in Brasil Universidad Nacional de Rosario in Argentina

The project has duration of four years. At the time when this paper was created it was in the first phase where SME network and clusters need to be identified, media and tools need to be collected that enables provides SMEs dynamic capability and the development of dynamic capability is monitored125

As the project is in the initial stage the concept of systematization need to be tested out for its efficiency and the effects need to be monitored and evaluated. For that reason, this work is not able to assess the practicability of the KM toolbox for SMEs. It need to be outweighed if those tools are suitable for SMEs and if the toolbox have the ready-to-use-characteristic, which means if the SMEs are able to select the right tools.


Seventh Framwork Programme (2011): S.1-2


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Appendix: 1. Knowledge Recognition

Knowledge Map:


Knowledge Structure Card:



Knowledge Development Card:


Portfolio of Competencies:


Source: Mittelmann, A. (2011), S.61

Learning Log:



3.2 Knowledge Acquisition: Microlearning:


Source: Critical Incident analysis:


Mind Map:







3.3 Knowledge Storing and Structuring Argumentation Card:


Data Warehouse: