On The Use Of
A Diagnostic Tool For Knowledge Audits
Ravi
Sharma1, Naguib Chowdhury², Nanyang Technological University, Singapore¹
, PETRONAS, Malaysia²
ABSTRACT:
The research reported in this paper outlines the
construction and utilisation of a diagnostic tool for
performing what we call a material knowledge audit in an enterprise of medium
complexity. The tool was developed by
adapting some of the more applicable techniques suggested in the literature by
practitioners. It was then put on trial
in five organisations – a library, an IT
consulting firm, a research institute, a telecommunications service provider,
and a media agency – which were involved in knowledge intensive business
activities. The appendices list the
three main components of such a field trial-ed
diagnostic instrument. Our
investigations revealed the dearth of such diagnostic tools as well as the need
to continually refine knowledge audit techniques so that the practice evolves
from an art into a science.
Keywords: Strategic alignment, Gap analysis,
Knowledge mapping
1. Overview Of Knowledge Audits
Knowledge, as compared to information, in the modern organization has elements of variety and is incongruous and heterogeneous in nature. In academic research as well as trade forums, the understanding of what constitutes knowledge is often debated because of the multidimensionality associated with it (cf. Feldman & Sherman 2001). Only when the knowledge is captured and organised into proper formats, can it be made accessible and put to further use. In effect, capturing knowledge is of little use if it is not organised in such a way that it can be understood, indexed, accessed easily, cross-referenced, searched, linked, and generally manipulated for maximum benefit of all members of an enterprise. Hence the capture, storage, transfer and exploitation of knowledge plays a critical role throughout the knowledge cycle and the cost of not retrieving it is indeed high (Gantz 2007). Indeed the capability of an organisation to create new knowledge, disseminate it throughout the organisation and embody it in its products, services and systems is defined by Nonaka & Takeuchi (1995) as an essential aspect of knowledge management (KM).
But as Peter Drucker famously said: “We cannot manage what we do not know how to measure!” A Knowledge Audit (K-Audit) is hence a systematic examination and evaluation of organizational knowledge health, which looks at whether knowledge is exploited when needed. More specifically, it is an analysis of the organization’s knowledge needs, existing knowledge assets or resources, knowledge flows, future knowledge needs, knowledge gaps, and finally, the behavior of people in sharing and creating knowledge. In one way, a knowledge audit can reveal an organization’s knowledge strengths, weaknesses, opportunities, threats and risks (Cheung et al. 2007; Hylton 2002; Liebowitz et al. 2000; Schikkard & Toit 2004). A K-Audit, typically, also includes an examination of organization’s strategy, leadership, collaborative, learning culture, technology infrastructure in its various knowledge processes.
In order to transform an organization to a learning and development mode and ensure an effective knowledge management strategy, a K-Audit is conducted, which will provide a current state of knowledge capability of the organization and a direction of where and how to improve that capability in order to be competitive in this fast changing knowledge era (Zack 1999). This is in effect the biggest challenge to conducting such an audit (Liebowitz et al. 2002; NLH 2005) – when it involves identifying what knowledge is needed, what knowledge already exists, where the gaps lie, who needs the knowledge, and how it will be used.
We call this an exhaustive K-Audit when it involves an assessment of how the sum of explicit as well as tacit knowledge within an organisation is exploited throughout the knowledge-cycle and the people and business processes add to such knowledge (Hylton, 2002). When a K-Audit is more results-oriented and entails determining the organization's effectiveness and efficiency of knowledge capture, codification, and transfer in the key business processes (Liebowitz et al., 2000), we call it a material K-Audit. As Prabha et al (2007) point out, there is an information satisficing behaviour inherent in the organisation that tends to preclude a comprehensive, all-encompassing search on account that the effort may not be justifiable. Both exhaustive as well as material K-Audits therefore check the health status of knowledge asset and its utilization in an organization and provides the framework for the audited unit to gain measured knowledge of its existing and potential knowledge value. However, whereas an exhaustive audit involves considerable amounts of time and resources in order to achieve a definitive outcome (say for the purpose of an M&A or creating the first instance of a corporate knowledge inventory), a material audit (as with the use of the term in accounting) only looks at key business processes that lead to an identifiable impact of interest (for example, an audit of knowledge flows in the pricing decisions of new products might look at how knowledge is shared between product development, contract manufacturing, marketing and finance in this key business process). Thomas Stewart in “The Case against Knowledge Management” (cited in Foo & Sharma 2007), pointed out that companies waste billions on knowledge management because they fail to figure out what knowledge they need, or how to manage it in the context of application. It takes little imagination to work out that a knowledge audit would provide an evidence-based approach to help companies or organizations ‘figure out what knowledge they need, and how to manage it’. This was the motivation for the present research.
Conducting K-Audits is an important aspect of not just KM but also for the strategic planning, both on the enterprise and business-unit levels, to sustain competitive advantages. Hylton (2002) more formally states that: “The knowledge audit process involves a thorough investigation, examination and analysis of the entire ‘life-cycle’ of corporate knowledge: what knowledge exists and where it is, where and how it is being created and who owns it. It measures and assesses the level of efficiency of knowledge flow. From knowledge creation and capture, to storage and access, to use and dissemination, to knowledge sharing and even knowledge disposal, when the organisation is no longer in need of particular elements of explicit or codified knowledge. With respect to people, the K-Audit measures the efficiency of transfer of tacit knowledge skills, when particular skills or expertise is no longer needed.” It is hence the KM equivalent of the requirements determination phase undertaken during traditional systems analysis and design. This is a necessary first step which leads to the creation of a knowledge map - a visual representation of an organisation’s knowledge. Technically, a knowledge map is a logical abstraction of a corporate taxonomy (which includes implementation details) and it reveals possible answers to the key questions of a K-Audit.
There are two recommended approaches to knowledge mapping (NLH 2005): i) map knowledge resources and assets, showing what knowledge exists in the organisation and where it can be found; and ii) include knowledge flows, showing how that knowledge moves around the organisation from source to target. In both cases, the key is a diagrammatic schemata of corporate knowledge of the explicit as well as tacit nature and an accompanying realisation of the value-added during the course of the knowledge flows.
Building a knowledge map looks deceptively simple but perhaps requires more effort and resources than any other phase of developing a corporate taxonomy. It is a profound, soul-search that involves the highest level of strategic management and domain expertise to make judgments on fundamental business and knowledge strategies. Drawing from Drew (1999) “Boston Box” of four quadrants of analysis for a complete coverage of an organisation’s knowledge capital.
Figure 1: The Four Quadrants Of
The “
1. Quadrant 1 asks what the available knowledge resources such as stores (explicit knowledge resources) and expertise (tacit knowledge resources) are. In other words, the core competencies of the organization.
2. Quadrant 3 addresses the unexploited seepage in its knowledge capital repository – typically, hidden and undercapitalized resources, key leverage points in learning and development, and best practices perfected by certain departments.
3. Quadrant 2 takes the organizational learning impetus which seeks to position the organization to execute its strategic plans for growth. These are known gaps ascertained by benchmarking key performance indicators (eg quality, price, market share, innovation, brand name) and Competitive Intelligence of new R&D and innovation against competitors to determine competitive disadvantage.
4. Quadrant 4 refers to the blind spot of hidden opportunities and threats that may not be (as yet) apparent within the organisation’s leadership. Knowledge resources required to meet strategic objectives may not be available perhaps due to blocks in knowledge flows and networks and gaps and unmet needs for knowledge.
Daunting as this analysis may seem, is not a paradigm shift. The point being made is that the organisation of knowledge in the form of a K-Map carries with it criteria for evaluating possible gaps as well as leaks that need to be plugged. Drew (op. cit.) had captured some of these issues for some time now and the KM community has since developed an entire repertoire of tools for each of these quadrants (cf. Foo et al. 2007 for a textbook coverage of many of these tools).
2. Diagnostic Framework For A K-Audit
There is no universally accepted approach to conducting a K-audit - although a number of approaches have been developed such as stock or inventory-taking techniques; mapping of knowledge flows and networks; and mapping of knowledge resources (cf. KeKma; NLH 2005; KnowMap). The choice of approach depends on the business needs and objectives of the context. Regardless of the approach used, there are common instruments such as site observation, interviews, questionnaires, focus group, and workshops that may be applied. But there are issues and challenges facing their validity, reliability, replicability and usability in the field. The problems with using direct questions have been well discussed by Snowden (2003) - “They seek(s) answers within the expectation of the enquirer (K-auditor) and can not reveal hints and signs that fall outside his sphere of perception. They also ignore the context in which the knowledge is used. Things that work in a particular situation may not work in another scenario. Although asking indirect questions may eliminate this problem, how to phrase and frame the questions is critical to the audit result”. Hence it is imperative to establish a sequence of steps for a generically applicable K-Audit Tools which leads to a consistency of diagnosis.
Figure 2: CIKM’s Frid Framework. (www.cikm.com)
The Canadian Institute of Knowledge Management has proposed a FRID Framework that may be used to analyse gaps in knowledge stores and flows. Equally important, the framework also helps define the diagnostic changes that need to be made in order to address any gaps. In this sense, the term ‘knowledge audit’ is in some ways a bit of a misnomer, since the traditional concept of an audit is to check performance against standard processes and report any material variances, as in financial auditing. A K-Audit is a more of a qualitative evaluation. It is essentially a sound investigation into an organisation’s knowledge ‘health’ and the use of the Frid Framework helps focus on:
¨ What are the organisation’s knowledge needs?
¨ What knowledge assets or resources does it have and where are they?
¨ What gaps exist in its knowledge?
¨ How does knowledge flow around the organisation?
¨ What blockages are there to that flow e.g. to what extent do its people, processes and technology currently support or hamper the effective flow of knowledge?
And more strategically:
¨ How is the organisation’s knowledge creation, sharing and re-use when benchmarked against competitors or best practices?
¨ What are the flows that lead it to becoming a sustainable learning organisation and in so doing helps it stay ahead of the curve?
The result of such an intense diagnostic
examination is that the K-audit helps an organization to clearly identify what
knowledge is needed to support overall organizational goals and individual and
team activities. It gives tangible evidence of the extent to which knowledge is
being effectively managed and indicates where improvements are needed. It explains how knowledge moves around in,
and is used by, that organization. It
provides a map of what knowledge exists in the organization and where it exists,
revealing both gaps and duplication. It
provides an inventory of knowledge assets, allowing them to become more visible
and therefore more measurable and accountable. It provides vital information
for the development of effective knowledge management programmes
and initiatives that are directly relevant to the organization’s specific
knowledge needs and current situation.
It helps in leveraging customer knowledge.
3. A Synthesis Of
Principal Components
Drawing from the theories of Duffy’s KM Readiness Assessments,
Holt’s extensive review of the literature on change management (both of
which are covered in Foo et al. 2007) and the
experience of multiple groups of practitioners (Hylton
2002; KnowMap; Liebowitz et al.
2000; NLH 2005) and in concert with a graduate student colloquium in knowledge
strategies, we constructed the K-Audit tools and deployment method to be
described in this section. However, as
the discerning reader will appreciate, this was not as “clean” as
it appears; both the diagnostic tools as well as methods were subject to
iterative refinements suggested by practitioners during the field trials. Nevertheless, the consensus arising from all
the above activities was that the K-audit should be divided into components or
activities which result in a milestone for the purpose of diagnostics and
corrective measures. For our present purpose of developing and utilising a diagnostic tool, we have defined a K-Audit with the following components which are ideally
performed in sequence):
¨ Knowledge Needs analysis
¨ Knowledge Inventory analysis
¨ Knowledge Flow analysis
¨
Knowledge Mapping
Figure 3: Principal Components Of A K-Audit.
The sequence of these components is consistent with the generalised knowledge life-cycle suggested by Birkenshaw and Sheehan (2002) which hence support a view of knowledge creation and re-use as the fundamental goals of KM per se.
3.1. Knowledge Needs Analysis (K-Needs
Analysis)
The major goal of this task is to identify
precisely what knowledge the organization, its people and team possess
currently and what knowledge they would require in the future in order to meet
their objectives and goals. Knowledge need analysis can help any organization
to develop its future strategy. Tiwana (2002)
suggested the following to explain the Knowledge-Strategy Link: