Open for e-business

I'm not one to brag, but I found that an expert in the field validated many of the conclusions I drew in my first column on knowledge management. Thomas A. Stewart has written a number of books on the subject, the most recent, The Wealth of Knowledge: Intellectual Capital and the 21st Century Organization, published just this month by Currency Doubleday. I, by the way, am a business journalist, and I've written about knowledge management before but don't necessarily consider myself an expert in the field. (Let the record reflect that my column appeared on searchEBusiness on Jan. 7, while an excerpt from Stewart's book appeared on the Business 2.0 Web site the following day.)

Since I agree with Stewart and Stewart agrees with me, allow me to present what I consider to be the key points in Stewart's thesis.

The oft-repeated cliche explaining the value of knowledge management -- and I must plead guilty to using it -- is the image of reinventing the wheel. If only we know what we know, we can avoid repeating the cycle of developing well-worn products and processes.

But Stewart differentiates between companies that are "standardizers" and those that are "customizers." When innovation is central to a company's business proposition, he says, it would be wasteful to invest in a knowledge management system that allows the company to reuse knowledge.

On the other hand, if customers come to your company for the tried and true, the converse prevails. "Production strategies for which you mostly know what knowledge you need -- and for which the tasks are mostly well understood, the processes mostly routine, and the problems mostly familiar," explains Stewart, "lend themselves to a knowledge management strategy of codification, automation and librarianship."

Even then, efforts at implementing knowledge management technologies may prove to be illusory if the knowledge has not been reduced to documentary form. Knowledge management strategies must include knowledge sharing processes, including such low-tech devices as teamwork and mentoring.

"It's important to distinguish between information and knowledge," Stewart also writes. "Information tends to be transient; knowledge, abiding." Or, as one of my friends put it: "Information, combined with experience, yields knowledge." Knowledge, according to that definition, is a highly personalized, internalized asset.

Which yields yet another problem for the implementation of knowledge management technologies. "Information technology better suits information than knowledge," says Stewart. "It tries to change knowledge into information-like objects. When it succeeds, you have a problem." He quotes Amrit Tiwana, author of The Knowledge Management Toolkit, as saying, "Information does not necessarily translate into knowledge, for much knowledge is too tacit and too obliviously ingrained in people's heads to be codified -- let alone transferred electronically."

Just as personal knowledge is unique to individuals, so is institutional knowledge to the particular business. That's why any knowledge management process, to whatever extent it incorporates technology, must be unique to the implementing organization. Standardized systems and processes, in other words, are not likely to work.

But we can, if we try, squeeze out some generalizations that apply to a broad spectrum of situations and enterprises. What can be said, in general, of the place knowledge management strategy occupies in a business? "Knowledge should be managed within the context where value is created," says Stewart. And that can mean at the sub-enterprise, divisional level, if different company units "create value differently or use different knowledge."

But how to figure out where value is created -- now there's the rub. Stewart offers a number of signposts to answer that question. But in this day and age of uncertainty and intense competition, one of them jumped right out at me:

"What do your customers expect you to know?"

Peter A. Buxbaum has been writing about business and technology for more than 10 years. In addition to his regular contributions to searchEBusiness, his several hundred articles have appeared in Forbes, Chief Executive, Information Week, Line 56, Computerworld, Supply Chain Management Review, the American Journal of Transportation and more than a dozen other publications. He has also developed and taught seminars on international business at Penn State University.