2. 1990’s foundation of industrialized economy shifted from natural
resources to intellectual assets
Rise of networked computers
Codify, store and share certain kinds of knowledge
Executives lacked successful models that they could use as
models
Study knowledge management in different industries
Management Consulting
Health Care Industry
3. Knowledge is the core asset of consultancies
First to pay attention to and invest in KM
Aggressively explore use of IT to capture and
disseminate knowledge
Their experience is relevant to companies that depend
on smart people and flow of ideas
However, consultants do not take uniform approaches to
managing knowledge. They employ two different KM
strategies
4. Codification
The strategy centers on the computer
Knowledge carefully codified and stored in databases
Accessed and used easily by anyone in the company
Personalization
Knowledge closely tied to person who developed it
Shared mainly through person-to-person contacts
Purpose of computers: help communicate knowledge
Choice of strategy
The way the company serves its clients
Economies of the business
The people it hires
5. Anderson Consulting and Ernst & Young
Codification strategy
“People-to-Documents” approach
Extracted from the person who developed it
Made independent of that person, reused
Bain, Boston Consulting Group and McKinsey
Personalization strategy
Dialogue between individuals
Brainstorming sessions and one-on-one conversations
Deeper insights by going back and forth on problems
to be solved
6.
7. Access Health
“Clinical decision architecture”
Reuse structure leads to low prices
Captured 50% of call-center market. Growing at 40% a
year
Memorial Sloan-Kettering Cancer Center
Highly developed personalized model
Higher prices
Consistently ranked as top cancer research and
treatment institution in the country
8. Knowledge management strategy reflect
competitive strategy
Creating customer value for customers
Ernst & Young and Anderson
Consulting
McKinsey, BCG and Bain
Always dealing with similar problems Problems don’t have clear solutions
Service offering is very clear Highly customized solutions
“Economics of reuse” “Expert economics”
Hires undergrads from top
universities and train them
Hire top-tier MBA grads
9. • Companies that use knowledge effectively: 80-20 split
Downfall of CSC Index in the early 1990s
Problem: mixing inventors with implementers
Result: CSC Index unable to keep up with
competition like Anderson Consulting and Ernst &
Young
Lesson: important to avoid straddling, but unwise
to focus on one exclusive strategy
10. Executives must be able answer the following questions ,
1. Why customers buy a company’s products/services
rather than those of its competitors
2. What value do customers expect from the company?
3. How does knowledge that resides in the company
add value for customers?
After giving answers to these questions clearly, managers
consider the following questions:
1. Standardized or customized products?
2. Mature or innovative products?
3. People rely on explicit or tacit knowledge to solve
problems?
11. Companies that isolate KM risk losing its
benefits
Do not isolate in departments like HR or IT
Benefits higher if coordinated with HR, IT and competitive
strategy
Responsibility of top management
Actively choose a knowledge management approach that
supports a clear competitive strategy
Strong leadership = benefit of customers and company