There is an imbalance in the current discourse on knowledge work. The “knowledge society” and the “knowledge worker” tend to be discussed, but with the exception of Nonaka’s Ba theory, (von Krogh, Ichijo, Nonaka 2000) little is mentioned about the most important driver for improving the effectiveness of the knowledge worker; the space in which the knowledge worker works. The fact that knowledge is contextual, further underscores that professional development for knowledge workers must incorporate the context where knowledge is generated and shared, i.e. the organisation where the knowledge worker is employed, its resources, climate, its management and their activities and strategies and the physical office.

1 Executive Summary

I have over the years contributed three theories for organising effective knowledge work, which can be used to shed light on professional development for knowledge workers:

1 The Knowledge Perspective with sub theories of intangible assets and the knowledge organisation was first proposed in Sveiby 1986 and elaborated further in Sveiby 1989, 1994, 1997.

2 The theory about a knowledge-based strategy was proposed in Sveiby 1997 and further elaborated in Sveiby 2001.

3 The theory about Collaborative Climate is an approach for measuring effectiveness of knowledge work. The empirical research started in 1999 and the first paper was published 2002 (Sveiby & Simons).

1.1 Summary of Recommendations

The most effective way for professional development of knowledge workers is probably to focus on developing better management skills. Management of knowledge work and knowledge organisations is not much researched and it is consequently a poorly understood field. There exists little education in the field of managing knowledge work and knowledge environments.

Educational efforts should not be aimed at knowledge workers alone; this risks emphasising the inherent differences between knowledge workers and the other staff categories.

The professional’s Life Cycle should be taken into account when planning education aimed at knowledge workers.

The following educational efforts aimed at teaching knowledge workers and managers should be most effective:

§ Methods for effective person-to-person knowledge transfer and trust building.

§ Techniques for including learning in delivery to customers.

§ Methods for measuring knowledge flows from customers.

§ Methods to help reduce the risk of rifts between management and knowledge workers.

§ Methods for building simulations.

§ Methods for quality assurance of knowledge work.

§ Methods for transferring tacitly held expertise into templates and “expert systems”.

§ Education efforts involving knowledge business simulations for both managers and knowledge workers helping them “see the whole”.

Collaborative Climate is the human equivalent of the IT infrastructure. A poor collaborative climate reduces the bandwidth of communication so sharing and creativity are strangled. Likewise a good collaborative climate increases and leverages an individuals’ knowledge. Empirical findings include:

Ability to tap into the Knowledge networks appreciates with age. Can older knowledge workers be trained as mentors?

§ It takes much longer for new knowledge workers to become truly effective (> 5 years) in new environments than has been generally understood. Putting more effort into helping knowledge workers with up to 3-5 years of employment to build relationships and getting ‘logged into’ the human knowledge infrastructure should be very profitable investments.

Postgraduate education gives an advantage in accessing knowledge.
Contrary to conventional wisdom, small companies seem to have a worse collaborative climate than larger ones. Special PD efforts aimed at SMEs should be profitable for society as a whole.
Distance (both physical and geographical) reduces knowledge sharing. Efforts to make office environments more conducive to knowledge sharing should be effective.

2 Intangible Assets and the Knowledge Organisation

2.1 The primary resource – the knowledge worker

In 1999 Peter Drucker postulated that the most urgent management issue for the 21^st Century is to make the knowledge worker more ‘productive’. A term more conducive to value creation and knowledge work would probably be ‘effective’.

In the last few years more authors are surfacing arguing that the effectiveness of knowledge work has to with how the creation of new knowledge and transfer of existing knowledge is organised (Nonaka & Takeuchi 1995). Practitioners claim that underutilised knowledge is the largest hidden cost in organisations. (c.f. the CEO of HP Lew Platt lamenting: ‘if HP only knew what HP knows’).

People are the only true agents in business; all tangible physical products and assets as well as the intangible relations are results of human action, and depend ultimately on people for their continued existence. People are constantly extending themselves into the world by both tangible means, such as craft, houses, gardens and cars and intangible corporate associations, ideas, and relationships.

(McLuhan,1967), calls these intangible extensions “media”. Inspired by McLuhan, (Sveiby 1997) suggests that people in organisations create structures in order to express themselves. Structures are not objects. Structures should be seen as constructed in a constant process by people interacting with each other, (Weick 1983). If one looks for a structure one will not find it. What one will find are events linked together. These sequences, their pathways and their timing are the forms we tend to make into objects. Most “things” in organisations are such dynamic relationships, so verbs such as “knowing” and “organising” are better descriptions than the nouns knowledge and organisation.

People can use their competence to create value in two directions: by transferring and converting knowledge externally or internally to the organisation they belong to. When the managers of a manufacturer direct the efforts of their employees internally, they create tangible goods and intangible structures such as better processes and new designs for products. When they direct their attention outwards, they will in addition to delivery of goods and money also create intangible structures, such as customer relationships, brand awareness, reputation and new experiences for the customers.

2.1.1 Three Families of Intangible Assets [1]

The External structure can be seen as a family[2] of intangible relationships with customers and suppliers, which form the basis for the reputation (image) of the firm. Some of these relationships can be converted into legal property such as trademarks and brand names. The value of such intangible assets is primarily influenced by how well the company solves its customers´ problems, which involves an element of uncertainty. Reputations and relationships can be good or bad, and can change over time. They are partly independent of individuals.

When people direct their actions internally they create an Internal Structure. The family of Internal Structure can be seen to hold patents, concepts, models, templates, computer systems and other administrative more or less explicit processes. These are created and maintained by the employees and are generally “owned” by the organisation. The informal power play, the internal networks, the “culture” or the “spirit” can also be regarded as belonging to the internal structure.

It is important to include also the people in the Internal structure family, such as support staff, accounting, IT, HR and management in the Internal Structure family, since it is not possible to separate processes from it’s creators.

Internal structure is thus partly dependent, partly independent of individuals. Even if the most valuable individuals leave a company that depends heavily on them, such as a consultancy firm, at least part of both the internal and the external structures (e.g. the brand name) will probably remain intact and can serve as a platform for a new start, (Sveiby & Lloyd, 1987).

The Individual Competence family consists of the knowledge workers and their competence, i.e. professional/technical staff, the experts, the R&D people, the factory workers, sales and marketing – in short all those that have a direct contact with customers and whose work are directly influencing the customers view of the organisation and where it gains its revenues from.

The distinction between professional/technical staff and support/managerial staff is useful because their different roles determine both how they relate to each other and how they relate to the external world. The classification is particularly useful for strategy formulation, professional development and action planning. The divide between professional experts and administrative staff commonly found in knowledge-intensive firms (Sveiby 1987, 1992, 1997) is for instance explained by the theory as a power play and lack of knowledge sharing between the two primary forces in the knowledge organisation.

Components of Intangible Assets

Individual (Professional) Competence

Internal Structure

External Structure

Knowledge workers and their individual professional competencies and networks.

Support staff, management and the organisational processes and organisational capabilities they support, such as:

- Information in databases, software

- Manuals

- Market intelligence

Intellectual Property, such as

- Leaseholds, franchises

- Licenses, mineral rights

- Trademarks and patents

Customers and other partners and stakeholders and their knowledge and opinions about the knowledge workers, the company, its services and products.

Distribution relationships

and agreement

Source: Sveiby 1989

Table 1: Components of Intangible Assets according to Sveiby

2.1.2 Differences in Competencies Create Power Forces

A useful starting point for understanding the knowledge organisation is the distinction introduced above between the two kinds of competencies. Companies consisting largely of skilled knowledge workers, who use their creativity to solve complex problems for their customers, operate in a special way that reflects the forces which influence and control such organisations, and which the management must be learn to deal with. Such firms function in similar ways regardless of whether they are in the public or private sector.

There are four groups of "players" in the organisational power games; the elite knowledge workers (“Experts”), the Managers, the Support Staff, and the Leader. Let us look at each one of them.

Figure 1. The four personnel categories in knowledge organisations.

2.1.3 The Experts

The Experts are the elite knowledge workers. The behaviour of experts is so familiar and natural that even those who are not experts, copy it. A survey of physicians in England, for instance, found medical students start acting like "doctors" as soon as their applications for medical school are accepted!

Experts tend to focus on their jobs and their professions. Everything else tends to be subordinated to the task at hand; finding a solution to the problem. The stereotype experts are widely respected outside the firm. When customers call, it is the experts they want to talk to, not the CEO. The experts are in demand as speakers at symposia, and have contacts with professional colleagues all over the world. But they tend to be equipped with little organisational ability.

Self-assured, skilled knowledge workers can be found in all walks of life; lawyers, police officers, physicians, art directors, architects, strategy consultants, computer programmers, cost accountants, electronic engineers. And they are equally common in craft trades, many of whose practitioners enjoy the status of respected experts on plumbing, painting, carpentry, etc…

One thing is abundantly clear: the experts do not make life easy for leaders. Theatrical directors, for example, are always accusing actors of being neurotic, stupid, impossible to deal with, complicated, egotistical, insecure or just plain weird. But they say good things, too, about their actors; that they have strong personalities, independence of mind, and artistic creativity. (Sveiby 1992)

Musicians are said to be unbalanced, and childish personalities, but also proud, and self-assured. When musical and theatrical directors speak of musicians and actors, they seem to speak of wilful children, they both love and detest. They regard this as quite natural, make allowances for it and even take advantage of it, when exercising their leadership. (Sveiby 1992)

And professions subdivide themselves. The medical profession, for example, includes hundreds of different specialists. This often results in heated territorial disputes, and battles to secure resources for their own specialist areas. One of the least attractive habits of these professional bodies is their constant effort to restrict recruitment to their own fields, in order to preserve their scarcity. They have been doing it since the medieval guilds (from which unions and professional associations both evolved).

It is essential for leaders of companies who employ knowledge workers to be on the look-out for them. For it is those experts, with their distinctive qualities and motivation, who determine how a company dominated by knowledge workers or creative people will behave, when it lacks the right kind of leadership.

2.1.4 The Professional Life Cycle

What happens when knowledge workers grow in expertise? Based on personal observations and anecdotal evidence from professional services firms Sveiby (1987, 1997) suggests: that many professional people reach a ‘professional plateau’ after a number of years in the same profession. They feel they have learned everything there is to learn, they have heard all the questions before and they do not think their own ideas are fresh any more. A very experienced person might also start feeling annoyed by supervisors interfering.

Figure 2: The professional Life Cycle

Legend: OC= Organisational Culture, IS = Immediate Supervisor, EA= Employee Attitude,
WGS= Work Group Support.

Empirical data are now confirming this theory. Data from the collaborative climate research project cited below in chapter 4 suggest an S-shaped life cycle. Knowledge worker appreciation of their employer’s collaborative climate seems to peak after some 15 years of experience and then go down. Also the attitude towards the immediate supervisor deteriorates.

The fact that knowledge workers experience a plateau after some 15 years in a profession is probably a quite natural development and the insight has important implications for professional development models. An experienced, but de-motivated knowledge worker is a huge loss for society and a drain on effectiveness both for him/herself and for the organisation. Both organisations and individuals should regard the plateau as normal, plan for it instead of being surprised when it occurs.

2.1.5 The Managers

Managers are defined here as people appointed by superiors to lead an organisation towards a defined goal, within a given frame of reference and with given resources. There role is constrained within parameters defined by a higher authority. Managers are, in many ways, the opposite of knowledge workers as the term is used in this paper. While knowledge workers work solely with customers using their knowledge worker competence, managers oversee the work of others. They are capable of managing and organising, and have learned to work through people, and enjoy working with different sorts of people. Their main task is to lead activities, with the help of others and they are often functional heads.

Managers work through other people, as opposed to knowledge workers who tend to work with other people.

The team manager or project manager role is a very important one in knowledge organisations, but there are few dedicated team/project managers with no expert role at all. Team managers tend to regard their leadership role as ancillary to their professional function, mostly as leaders of teams of knowledge workers.

Traditional industry managers run functional departments, sections or groups. You find them everywhere in industry and the civil service but in knowledge organisations, people who are simply functional managers, are relatively scarce.

This playing down of the functional manager role is a fundamental difference between the traditional manufacturing company and the knowledge organisation. For example, the financial controller of a knowledge organisation tends to be the only member of his or her profession in the place, and thus has no fellow-professionals to share thoughts with. In private sector knowledge organisations, moreover, they are often the only upholders of "law and order", which means they are frequently coming into conflict with the knowledge workers.

In leaderless knowledge organisations the accounting function gets a low status and the controllers tend to be isolated downwards because of their police function and ignored upwards because their methodology is based on the manufacturing company and only measures the “tip of the iceberg”.

They know little about advertising, law, computer programming or architecture and the knowledge workers know little about performance measuring or administration, and care even less, because they are totally focused on their own professions.

Controllers and experts seldom have much serious “shop” to talk about; the dialogue risks being reduced to holiday rosters, time sheets, etc.., which is scarcely an auspicious beginning to a mutually meaningful dialogue. The only option open to a controller In leaderless knowledge organisations that are totally dominated by the values of the experts, is often to leave the company and go to work for a larger industrial organisation.

2.1.6 The Support Staff

The support staff are the low-level knowledge workers, book-keepers, personal assistants, secretaries, receptionists, and switch-board operators. Their function is to assist the knowledge workers and managers. They have no special qualifications of their own to give them status in the knowledge organisation.

Well motivated and qualified support staffs are essential for the efficiency of the organisation and of the knowledge workers. They are essential for servicing the customers. They are also an important element of the “glue” that keeps the knowledge organisation in at least some kind of law and order.

The power forces work against them, however. It does not matter how skilful a typist or letter editor a secretary is, he or she will not be properly appreciated in a knowledge organisation, because the only knowledge that counts, is knowledge relevant to the business idea. A computer wizard, in an advertising agency, may be recognized as the expert on the in-house computer system, but will have no more power than a secretary.

The situation is very different if the secretary works for an agency. In this case, secretarial skills are integral to the business idea. Experienced secretaries, in such firms, belong in the knowledge worker square of the organisational matrix.

Support staff in leaderless knowledge companies have to put up with bad bosses; perhaps former experts who don’t take their management functions seriously, or are not qualified to perform them, or discontented financial controllers, who feel left out of things. To make matters worse, the ranks of the support staff are often dominated by women, while those in power are men, so the tensions get fuelled by gender issues.

The support staff are the least well-informed group in the organisation, not because of any ill-will on the part of experts or deliberate attempts to exclude them, but simply because information is such an inefficient way of communicating knowledge.

The “real” exchanges of knowledge occur in conference rooms and corridors, in a language only the initiated understand. When two architects meet in a corridor, a thumbs-up gesture can be enough for one to let the other know she has won the order they talked about earlier. The gesture will trigger a number of connotations in the mind of the colleague, like “if we clinched the deal, I will have to reschedule tomorrow’s work plan”, “oh, I never believed we would, because we were competing against company XX and they are so strong in this field, did we price it too low?” “our competitiveness must have improved!”, etc.

The gesture means nothing to the receptionist, who was not privy to the previous dialogue. For the receptionist to understand the full implications of the gesture she would have to be given a lengthy explanation of what went on in there behind closed doors, which will take too much time to do.

Both may get the same message, but only one is informed.

2.1.7 The Leader

Knowledge workers are often “creative personalities”, with all that implies about themselves, and those around them. Such people are not easy-going, uncontroversial types; that is not in the nature of the creative personality. But is it their fault, if they do not fit into moulds that were not made for them, but for a society that is no longer?

There are those who say creative people can’t be led; that it is impossible to manage companies composed of insufferably egotistical, self-assured people, who do not know the meaning of the word "loyalty". But such companies must be led if they are to move in intended directions, and not align themselves, like compass needles, within the force fields all knowledge organisations spontaneously generate.

A long tradition of research in creativity and creative action, summarised in (Ford C. & Gioia D. ed., 1995) suggests that managerial approaches aimed at managing the environment rather than acting as supervisor or a “coaching” style (Sveiby, 1990) are more appropriate than command-control of individual behaviours. (Krogh, Ichijo, Nonaka, 2000) uses the term enabling to describe the managerial style required.

Leaders in successful knowledge organisations are usually former knowledge workers themselves, but they need not be outstanding experts. It is like in an orchestra or a theatre. The conductor is seldom a virtuoso on any instrument, and the director may not be a great actor, but professional competence is essential, if the leader is to bring out the best in the performers.

Leadership in a knowledge organisation is a balancing act between giving experts creative freedom, without letting the organisation become dependent on them .

Leaders who are not initiates of the profession, will be at the mercy of the key experts, and powerless to get them to do anything they do not agree with it.

2.1.8 The Leaderless Organisation

The importance of leadership is perhaps best understood when considering the opposite, a leaderless knowledge organisation. In a knowledge company with a “leader” not accepted by the experts the internal forces are given free rein, and the firm spontaneously aligns itself in accordance with its own internal power structure; in other words, the experts assume control. The leaderless company will speedily turn not only inefficient, but a terrible and neurotic place for most people to work.

The result is that the official executives spend their time attending "important meetings", where they make equally important "decisions", while the rest of the company carries on, regardless. Many putative “leaders” fondly imagine they are running their organizations when all they are doing is allowing them to run themselves. They do not understand the power play at work and are measuring the wrong things.

If an organisation has no customers, because it is an in-house department of a large organisation, or because, like so many public-sector bureaucracies, it is shielded from the ultimate customer, other pressure groups move in to fill the vacuum. In some cases it may be the experts and in others, the trades unions.

2.2 Implications for Professional Development

The most effective way for professional development of knowledge workers is probably to focus more on developing better management skills. Management of knowledge work and knowledge organisations is hardly researched at all and it is consequently a poorly understood field. Needless to say, there exists hardly any education in the field.

Educational efforts should not be aimed at knowledge workers alone; this risks emphasising the inherent differences between managers and knowledge workers.

The professional’s Life Cycle should be taken into account when planning education aimed at knowledge workers.

3 Ten Ways to Leverage Knowledge for Creating Value

In contrast to tangible goods, which tend to depreciate in value when they are used, knowledge grows when used and depreciates when not used. Building up competence in a language or a sport requires huge investments in training and managerial competence takes a long time on-the-job to learn. If one stops speaking the language it gradually dissipates.

Figure 3 The Firm from a Knowledge-based Perspective[3]

The manufacturing and transportation of physical goods from suppliers, via a factory to a buyer gave us the concept of the Value Chain. If we instead understand the organisation as creating value from knowledge together with its customers the Value Chain collapses and the relationship should better be seen as a Value Network (Allee, 2000); an interaction between people in different roles and relationships who create both intangible value (knowledge, ideas, feedback, etc) and tangible $-value.

In contrast to the Value Chain the intangible value in a Value Network grows each time a transfer takes place because knowledge does not physically leave the creator as a consequence of a transfer. The knowledge I learn from you adds to my knowledge, but it does not leave you. Thus, from an organisational viewpoint the knowledge has effectively doubled. Given the ideal context it is no exaggeration to state that knowledge shared is knowledge doubled.

From an individual’s point-of-view the perspective however, can be different. For him or her knowledge shared may be opportunity lost, if the effect of the sharing becomes lost career opportunities, extra work and no recognition. Fear of dismissal or competition are commonly cited reasons, why individuals do not share what they know or what they create. Given the actual context in many organisations the sad fact is that for the individual knowledge shared is opportunity lost.

The key to value creation lies with the effectiveness of knowledge transfers and conversions. The choice of the words “transfer” and “conversion” may suggest one-directional movements of knowledge. This is not the intention. The least effective methods for knowledge transfer are one-directional as demonstrated by the well-known “Learning Pyramid” from National Training Laboratories, Maine USA. Unfortunately, on-directional methods are also the most common in working life as well as in traditional education.

Knowledge transfer between two individuals is a bi-directional process, which tends to improve competence of both and teamwork tends to be a co-creation of knowledge involving the whole team.

Moreover, transfer of competence depends on conversion from tacit to explicit and back to tacit again in an endless spiral (Nonaka & Takeuchi, 1995). However, it helps strategy formulation and action planning to distinguish directional components of the activities, hence the choice of words.

One feature of a knowledge-based theory of the firm is that it challenges existing legal paradigms and perceptions about the boundaries of an organisation. What is indeed “the organisation” if customers and suppliers are included as families of the firm as in Figure 1? When the importance is placed on how effective the value creation is in the whole system, the issue of whether an individual is a formal employee, a customer, a contractor, a supplier or a customer becomes less of an issue as long as the relationship generates value. An ex-employee can for instance be more valuable as a customer than as an employee, a fact long exploited by the professional services firms.

Given the framework of three Intangible Assets above we can distinguish nine basic knowledge transfers/conversions, which have the potential to create value for an organisation. The aim of management should be to improve the capacity-to-act of people both inside and outside the organisation.

Figure 4. The Ten Knowledge Strategy Issues

The ten ways to leverage knowledge are:

1. Improve knowledge flows between individuals

2. Improve knowledge flows from individuals to external structure

3. Improve knowledge flows from external structure to individuals

4. Improve knowledge flows from individual competence into internal structure

5. Improve knowledge flows from internal structure to individual competence

6. Improve knowledge flows within the external structure

7. Improve knowledge flows from external to internal structure

8. Improve knowledge flows from internal to external structure

9. Improve knowledge flows within internal structure

10. Maximise Value Creation – See the Whole

3.1.1 Improve Knowledge Flows Between Individual Knowledge workers

The communication between knowledge workers within in the organisation determines what types of environments are most conducive to creativity and knowledge sharing. How willing are people to share their ideas and what they know? Activities focused on improving the collaborative climate (see below 4) through trust building, enabling team activities, induction programs, job rotation, master/apprentice schemes, etc. should have the best effect.

Examples: Oticon, the Danish hearing-aid manufacturer established in 1905, has re-designed whole work areas to create an atmosphere of openness, flexibility, creativity and sharing. The company emphasizes “live” interaction. Stand-up coffee bars encourage impromptu meetings, and dialogue rooms” with a table and chairs help employees relax while solving problems or sharing knowledge. Oticon even locked up elevators so there would be more “accidental” meetings in the stairwell. Even electronic mail is discouraged in favour of face-to-face communication.

3.1.2 Improve knowledge flows from Individuals to External Structure

By sharing their knowledge workers enhance the reputation of the organisation. They can help the customers learn about the products, getting rid of red tape, doing job rotation with customers, holding product seminars, providing customer education, etc. In doing so they cement relationships with customers and other stakeholders and add to the professional development of the knowledge workers.

Examples: Consultants at McKinsey, the US based consulting firm, are encouraged to spend time on publishing their research and methods in order to build the reputation of the firm. Baxter International and produces and sells healthcare products and has extended its offering to include service to hospitals. Baxter employees now mix drugs in intravenous solutions and act as brokers for other vendors.

3.1.3 Improve knowledge flows from External Structure to Individuals

Customers bring intangibles, not only money. Knowledge workers learn a lot from customer, supplier and community feedback such as ideas, new experiences, feedback and new technical knowledge. This is the counterpart of section 3.1.2 above. Organisations tend to have procedures in place that capture such knowledge (see section 3.1.7below), but they are scattered, not measured and hence do not systematically influence strategy formulation. Activities focused on creating and maintaining good personal relationships between the organisation’s own people and the people outside the organisation should have the best effect.

Examples: Knowledge workers at Betz Laboratories in Trevose, Pennsylvania, frequently participates in its customers’ quality management teams in order to gain a better understanding of, and even anticipate, customer needs. This knowledge is used to develop products that will boost customer sales. Betz measures value added from this knowledge by tracking its customers’ return on investment, and its own knowledge workers receive awards for outstanding efforts to increase these returns.

3.1.4 Improve knowledge flows from Competence to Internal Structure

Huge investments are currently being made in order to convert competence (often tacitly held) individual into data repositories. According to IDC worldwide KM services spending will increase at a compound annual growth rate (CAGR) of 41%, from $2.3 billion in 2000 to $12.7 billion in 2005, (IDC, 2001). The idea is that information in such repositories will be shared with the whole organisation.

However, this is only one of nine possible strategic activities aimed at improving knowledge worker effectiveness. To focus one’s investments on databases and document handling etc. will realise only a fraction of the value compared to a more holistic approach, comprising all nine knowledge transfers/conversions.

Example: The key to create value from database or intranet system is not the sophistication of the technology, but the climate in the firm and the level of involvement from all agents in the system. The US chemicals manufacturer Buckman Labs is well-known for nurturing a high collaborative climate despite the fact that its 1,300 associates are spread all over the world. The company has been using electronic means for capturing experiences and information since 1987. It’s new products to sales ratio went from ~25% to >35% when it began involving the customers in their intranet in 1994 (Buckman, 2001).

3.1.5 Improve knowledge flows from Internal Structure to Individual Competence

This is the counterpart of 3.1.4. above. IT systems can by definition only produce information. Competence “captured in a system” becomes information which in its turn needs to be made available to other individuals in such a way that they improve their capacity to act; otherwise the investment is a waste. The key to value creation is whether the information generates competence. The key question is: How can we improve knowledge worker competence by using systems, tools and templates?

Activities focused on improving the human-computer interface of systems, action-based learning processes, simulations and interactive e-learning environments ought to be the most effective.

Examples: IKEA, the Swedish furniture company, uses customised simulations for speeding up the learning of its warehouse employees.

3.1.6 Improve knowledge flows within the External Structure

What do the customers tell each other about the services/products of a supplier? How are the products used? The conversations among the constituencies can have an enormous impact on a success of a company. The company can support the competence growth of customers and influence how competence is transferred also between the stakeholders in the external structure.

Activities focused on partnering and alliances, improving the image of the organisation and the brand equity of its products and services; improving the quality of the offering; conducting product seminars and alumni programs.

Examples: Danish biomedical producer Novo actively engages in building local communities to improve the image of its products in its local community. Book publisher Berrett-Koehler runs seminars for its book buyers featuring its authors as speakers. Norwegian hospital Lovisenberg taps into the knowledge of its old patients by letting them meet new patients. This reduces fear and medical staff report lower drug consumption and savings on nurses’ and doctors’ time.

3.1.7 Improve knowledge flows from External to Internal Structure

How can competence from the customers, suppliers and other stakeholders improve the organisation’s systems, tools & processes and products? Activities range from empowering support staff to generate knowledge from customer complaints to R&D alliances.

Example: Frito-Lay, the US potato chips maker provides an interesting case of product differentiation of a commodity. The company uses its sales force to collect data about their customers. The data are analysed and fed back to their sales people empowering them with superior customer knowledge and competitive intelligence. Frito-Lay representatives not only use the information themselves, but they also give it away for “free” provided the shop buys their potato chips rather than their competitors’.

3.1.8 Improve knowledge flows from Internal to External Structure

How can the organisation’s systems, tools & processes and products improve the competence of the customers, suppliers and other stakeholders? This is the counterpart of 3.1.7. above.

Activities bypass the demands on knowledge worker capacity by using the organisation’s systems to service the customer, extranets, product tracking, help desks, e-business, etc.

Examples: Ernst & Young has created a tax and legal database, “Ernie”, which allows its clients to tap into the data sources used also by its own consultants.

Ritz Carlton, the hotel chain renowned for its service, has installed a customer information database with global access. All staff are required to fill in cards with information from every personal encounter with a guest. These data plus guest profiles are stored and made available to staff in order to ensure personal treatment of all guests.

3.1.9 Improve knowledge flows within Internal Structure

The internal structure is the supporting backbone of the knowledge workers. Activities focused on streamlining databases, building integrated IT systems, improving the office layout, etc. should have the highest impact.

Example: Again, this is a field dominated by Enterprise Systems and other company-wide IT solutions. KnowledgeCurve, PricewaterhouseCooper’s intranet, integrates several thousands of databases previously held individually or locally.

3.1.10 Maximise Value Creation – See the Whole

The nine Improve knowledge flows have the potential to exist in all organisations. However, they tend not to be coordinated, because management lack the full perspective that a knowledge-based theory may give them. Most organisations also have legacy systems and cultures that block the leverage. Therefore many of good initiatives go to waste or neutralize each other and hamper knowledge worker development.

Investment in a sophisticated IT system for information sharing is for instance a waste of money if the organisation’s climate is highly competitive – only junk will be shared. Reward systems that encourage individual competition will effectively block efforts to enhance knowledge sharing. Lack of standards and poor taxonomies reduce the value of document handling systems. A program for knowledge sharing with customers is neutralised by red tape protecting commercial secrets. Efforts to use ex-employees for building marketing relationships are useless if people leave the firm alienated or alumni programs are delegated to the administrative function. Data repositories do not improve individuals’ capacity to act unless the databases are made highly interactive.

3.2 Implications for Professional Development

The following educational efforts aimed at teaching knowledge workers and managers should be most effective:

Methods for effective person-to-person knowledge transfer and trust building.

Methods for creating a learning experience for customer delivery.

Methods for measuring knowledge flows from customers.

Methods to help reduce the risk of rifts between management and knowledge workers.

Methods for building simulations.

Methods for quality assurance of knowledge work.

Methods for transferring tacitly held expertise into templates and “expert systems”.

Education efforts involving knowledge business simulations for both managers and knowledge workers helping them “see the whole”.

4 Collaborative Climate – infrastructure for Knowledge Sharing

What is it that makes some knowledge transfer and – creation processes more effective in creating value than others? Clearly, process design, office design, information sharing software, etc help effectiveness and anecdotes about ‘best practice’ abound in knowledge management circles. But careful design and IT do not help if the willingness to share with each other is not there. Although Buckman Labs has invested heavily in IT infrastructure since the mid 1980s, earlier president Bob Buckman attributes his company’s more than doubling of introduction of new products from 14% of sales to 34% to an improved climate of trust and increased willingness to collaborate.

Figure 5: The internal Collaborative Climate may leverage or strangle the knowledge flows

Collaboration and trust are elements of an organisation’s culture, but the concept of culture is contested and too broad to be a good foundation for large-scale empirical studies.

In an empirical study covering over 8,000 respondents Sveiby & Simons (2002) narrowed down on one specific aspect of culture; the values, beliefs and assumptions that influence the behaviours and the willingness to share knowledge. We decided to call this aspect collaborative climate defined by behaviours that people can observe, ‘what people do around here’.

Collaborative Climate can thus be seen as the human equivalent of the IT infrastructure. A poor collaborative climate reduces the bandwidth of communication so sharing and creativity are strangled. Likewise a good collaborative climate increases and leverages an individuals’ knowledge.

The results from our first study are summarized below. The full paper is available on-line, see reference list.

4.1.1 Older is Better

Older people appreciate their collaborative climate more than younger people. This may be because they are more experienced in knowledge sharing than the juniors, with larger networks and easier access to knowledgeable colleagues. The finding has important implications for the effectiveness of knowledge work: Every year a knowledge worker spends below his/her potential can be seen as a lost opportunity or a ‘gap’ in terms of effectiveness. What can organisations and (in particular) individuals do to close the gap by reaching a more mature level earlier? Can older knowledge workers be trained as mentors?

Figure 6: Older is Better. Ability to tap into the Knowledge networks appreciate with age

Legend: OC= Organisational Culture, IS = Immediate Supervisor, EA= Employee Attitude,
WGS= Work Group Support.

4.1.2 Logging into the Knowledge Network Takes VERY Long

The appreciation of collaborative climate displays an interesting U-shape. The U suggests that new knowledge workers enter the organisation enthusiastic about the internal collaborative climate; they then grow more cynical. The disillusioned probably leave within the first five years, (in professional services firms staff turnover is highest 2 -4 years after employment).

The results suggest that it takes much longer for new knowledge workers to become truly effective in their new environment than has been generally understood and definitely more than accounted for in induction programs, which typically rarely last longer than 6 months.

The results also have important implications for the effectiveness of knowledge work. Putting more effort into helping knowledge workers up to 3-5 years of employment to build relationships and getting ‘logged into’ the human knowledge infrastructure should be very profitable investments. There is a lot of money involved here; probably much more than even the cost of staff turnover, which as a rule of thumb amounts to 2-3 times annual salary for a person that leaves.

4.1.3 Education Enhances Effectiveness

People with higher education tend to value the collaborative climate more. People with higher education find it easier to influence their own environment; they are less vulnerable to downsizing than lower educated people, they find access to knowledge easier and they can more easily interpret information shared. Those who feel powerless, on the other hand, may react by raising the barriers against collaboration.

The result highlights the effectiveness potential that lies in having highly educated employees. The climate may be very collaborative, but only those with higher education can experience it. The result also underscores the risk of a two-tier society in the future.

4.1.4 Big is Better

An interesting result from the study suggests that employee attitude peaks with mid sized firms and that the view on immediate supervisors gradually increase, while Overall Culture and Work Group support both drop slightly with increasing firm size. This goes against traditional common sense opinion is that small organisations (SMEs) have a more favourable collaborative climate; both because it easier to share in a smaller number of people and because the small size suggests a closer-knit community.

Why are not SMEs better at utilising their apparent natural size advantage? Could it be that managers of larger firms are better trained and are able to make up for the drawbacks of larger-sized firms? The findings support specific educational actions aimed at knowledge workers employed in SMEs.

4.1.5 Distance is Bad

The study confirms that distance is bad for collaboration. Thomas Allen’s (1977) earlier research that the probability of communicating with other people falls dramatically with distance in a university research setting. Initiatives to reduce distance (in a broad sense) should be profitable investments.

5 References

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