A simple exercise useful to introduce KM concepts to a workshop group is to ask each one the question: “What helps you do your job well?” (KM gurus such as Sveiby, Drucker, Nonaka and O’Dell say essentially the same thing: that “knowledge” is capacity for effective action, including information to support effective action). Each participant is provided with metacards or Post-Its to write down their answers. Answers are then collected, clustered and posted in front for everyone to study.
Among dozens of workshop groups for which we facilitated this exercise, the result is almost always the same four clusters below:
1. Skills, experiences, training, education, attitudes, leadership skills, self-motivation, health, etc.: we call this cluster HUMAN CAPITAL
2. Support systems, access to information, manuals, guidelines, vision/mission, empowering policies, learning procedures, business processes, etc.: we call this cluster STRUCTURAL CAPITAL (or some KM practitioners call this cluster PROCESS CAPITAL)
3. External linkages/networks, relationships with customers and suppliers, teamwork and trust within the organization, trust/reputation of the organization, support from peers, inspiration and recognition of bosses, etc.: we call this cluster RELATIONSHIP CAPITAL (or sometimes called STAKEHOLDER CAPITAL or more narrowly as CUSTOMER CAPITAL)
4. Technology/equipment, building and office space, facilities/furniture, financial resources, conducive workplace, physical accessibility, good pay and incentives, etc.: we call this cluster TANGIBLE ASSETS (meaning, they are included in the accounting system)
In 30 minutes, the group examines the clusters they made and is able to:
– See the 3 components of INTELLECTUAL CAPITAL, namely, Human, Structural and Relationship Capital;
– Learn that KNOWLEDGE ASSETS is almost synonymous with Intellectual Capital;
– Grasp how the meaning of “knowledge assets” differs from the many meanings of “knowledge” among laymen;
– Realize that Intellectual Capital is mostly INTANGIBLE (non-physical but generates value for the organization; not always entered in accounting systems or given money value);
– See that both tangible and especially intangible assets contribute to performance and value creation;
– Realize that accountants are seeing and measuring only one cluster: tangible assets;
– Recognize the link between KM and performance or value creation;
– See that improvement of performance is the result of good KM, and a basis for measuring KM impact (this is the concern of Project 3.4 on M&E of KM);
– Learn about KM terminologies;
– Recognize that many areas of management overlap with KM (HR is about managing Human Capital; ICT is about managing some of the Structural Capital; and CRM is about managing some of the Relationship Capital).
We also discover that good relationships (both within and outside the organization) are important for effective performance. Yet arguably, relationship is not exactly “knowledge” isn’t it? That is why a minority of KM practitioners refuse to acknowledge or agree with St. Onge that Customer Capital is part of Intellectual Capital, or at least claim that Stakeholder Capital is not a “Knowledge Asset” (please allow me to interchangeably use the economic term “capital” with the accounting term “asset” here). Despite this debate, it is clear that to achieve effective action, or to improve individual or organizational performance, we must manage relationships — whichever way we scope or define “knowledge”.
One way I say it, is that human capital is EMBODIED knowledge, structural capital is EMBEDDED knowledge and relationship capital is ENCULTURATED knowledge — or am I stretching the meaning of “knowledge” too much here?
Another issue crops up: “knowledge” is not entirely intangible because technology is embedded knowledge, and technology is NOT intangible. This is the reason that some KM practitioners use the popular People-Process-Technology model of KM. I am not comfortable with this KM model; I prefer the more complete People-Process-Relationship-Technology model. In any case, this is another debatable point.
But what is more interesting is that the workshop groups also notice a fifth cluster (examine the entries in bold italics above) that cuts across the four clusters. What the groups cannot agree on is how to label this cluster. Is it Motivational Factors? Is it Energy? What do we call it? (my CCLFI colleagues prefer the latter neutral term). This leads to another realization, which is really self-evident: that a knowledge worker may know HOW to do a job, but he or she may not WANT or be WILLING to do it. Managing knowledge assets is not enough; we also need to manage motivational factors. We need to pay attention to both the Head and the Heart to achieve more effective action.
My bottom line is this: we can accept, reject or change terminologies including the term “knowledge management” as long as we adequately cover all the pertinent factors that affect or contribute to good performance of a knowledge worker or to value creation by a private or public organization. Accordingly, it appears from the above data that “managing intangible assets” is more comprehensive than “managing knowledge assets” or “knowledge management”.
What do you think?
(I read a conference paper last July in Kuala Lumpur on this topic which you can download from http://www.cclfi.org/downloads. It is entitled “Some Stories about How Personality and Culture Come into Our Knowledge Management Practice”)