ABSTRACT:
This paper explores the concept of intellectual capital and how
organizations are using knowledge networks to build it. In the current
resource-scarce, results-driven climate, organizations are realizing that
intellectual capital - employees' brainpower, know-how, knowledge, and
processes - is a source of competitive advantage. Knowledge networks are
important in building and sharing intellectual capital. Knowledge networks have always been central
to organizational health. As workers develop effective ways of doing their
jobs, they share information with each other and knowledge networks grow
organically. Knowledge networks can be simply defined as who communicates with
whom, and who learns from whom. The
emerging trend is that organizations today are working to formalize and jump
start knowledge networks, so that best practices, ideas and innovations can be
efficiently refined and shared. Training and development professionals
contribute to this effort by creating course and performance support structures
that both nurture and take advantage of knowledge networks..
The Role Of Training And Development
In Using Knowledge Networks To Build Intellectual Capital
Workplaces are changing rapidly in today’s environment. Job
descriptions are revised as quickly as new workplace trends occur. In order to
fully navigate those transitions, training and development professionals must
learn how to effectively manage not only the change, but continue to value the
employees who must make those transitions. Two factors, intellectual captial
(IC) and knowledge networks (KN) play key roles in effectively managing those
changes and in influencing the workplace. By building upon existing knowledge
networks, training and development professionals will help increase not only
the intellectual capital of a company, but also the skill set of the employees
involved.
Defining Intellectual Capital And Its
Benefits
Before we can discuss the benefits to companies, we must first define what is meant by intellectual capital. The definition of IC needs to be broad enough to encompass the full range of knowledge-based resources, and specific enough to guide management decisions and organizational action (Zhou & Fink, 2003). Intellectual capital includes the company’s data, information, and wisdom as well as the tools that supplement the use of this information and knowledge (Department of the Navy, 2000; FAA, 2004). Additionally, IC may be the information members of the organization that can be assessed a financial value or that has been specified as a highly valuable asset. Information capital uses knowledge, applied experience, and professional skills to improve customer relationships and provide a competitive edge in the marketplace. (CHRPCanada, 2004).
The Components Of Intellectual
Capital
As organizations seek to grow and measure their intellectual capital, it has been necessary to build models that identify the many factors that contribute to organizational knowledge. The Skandia Intellectual Capital Model developed by Edvinsson (Zhou & Fink, 2003) is representative, and breaks intellectual capital into human capital, structural capital, customer relations capital, organizational capital, innovation capital, process capital, intellectual property and intangible assets.
The Importance Of Intellectual
Capital
Keeping in mind the definition of IC, why is it important to the workplace? In the transition from the industrial economy to the knowledge economy, intellectual capital is being recognized as the basis for success (Zhou & Fink, 2003). Tangible assets are less important than ever before. For example, the market value of Microsoft was 1reported to be 1.2 times its tangible asset value in 1996, and 13.3 times in 2000 (Zhou & Fink, 2003). In 2000, Marriott International sold off almost all hotel properties to focus on the core skill of hospitality management, placing more value in know-how than real estate. And in the current climate of high-stakes testing, schools and other education facilities are judged by the expertise of their staff.
According to Optima Media Group (2003), companies that measure intellectual capital report better alignment of knowledge management activities with business strategy, better focus on managing knowledge resources, improved communications with stakeholders and a deeper insight into sources of corporate value. Optima’s work has shown:
· Sears Roebuck uses a measurement model that is based on an evolving set of processes for data collection, analysis, modeling and experimentation. This has enabled managers to identify the key business drivers. The model has been attributed as having increased revenues by $200 million over 12 months.
· At DHL the introduction of the Performance Prism has enabled quarterly reviews to focus on business fundamentals instead of merely a set of numbers.
· The systematic approach to Intellectual Asset Management used at Dow Chemical Company, along with the TechFactor method of valuation, has generated over $125 million in additional revenues.
· SA Armstrong Limited, a Canadian engineering firm, aligns measures with business strategy and value creation through its Enterprise Capital Framework. With their desktop computer system, users can track measures through several levels of intellectual capital.
· Human capital at Ericsson is a key area of intellectual capital. Ericsson’s competency management model is designed to protect and grow human capital, develop job profiles, assess individuals against profiles and design programs for personal development.
· Celemi published its first intangible assets scorecard as part of its annual report in 1995. At this learning tools supplier, managers claim that the monitor helps ensure the company is growing in line with its strategic plan and alerts them to untapped potential (Optima Media Group 2003).
These examples show that companies that take a systematic approach to intellectual capital sustain a competitive advantage. Building intellectual capital requires that knowledge is gained, stored, transferred, and shared (Allee, 2000).
Knowledge Networks And Intellectual
Capital
Knowledge and learning are social in nature. In the workplace, tacit and
explicit knowledge are built and transferred through many types of interaction.
Tacit knowledge is what individuals bring to the workplace with them –
all their experiences, education and know-how (Allee, 2000). Explicit knowledge includes information that
is deliberately shared, documented and communicated. One school of thought
believes that there is no knowledge outside of people, that stored data is only
information until it is applied in context by people (Krebs, 1998).
The structures and relationships that allow workers to share information, brainstorm, refine ideas and create innovations are called knowledge networks. Workers in today’s economy add value to the organization by synthesizing and analyzing information, then planning and making decisions based on that information. The work that builds intellectual capital – especially customer relations capital, organizational capital, innovation capital, process capital, intellectual property and intangible assets (Zhou & Fink, 2003) – requires problem-solving skills and the ability to apply judgment. These skills and abilities develop over time, thus, workers require mechanisms to allow them to access sustained, appropriate support and contact with others at the moment of need in order to problem-solve and make decisions (McCabe & Leighton, 2002).
Organic Knowledge Networks
Communities in companies self-organize naturally around common problems, interests,
customers, and complex knowledge areas. It is within these networks where core
competencies of organizations are stored, shared, nurtured and enhanced.
Individual learning is facilitated by being a member of one or more of these
knowledge networks (Krebs, 1998). In
addition, many people also participate in external knowledge sharing groups,
such as electronic mailing lists and professional associations, interacting in
both the larger social system and the company. In effect, many people working for
a company’s success are not even part of the company. These informal
knowledge networks extend through organizations, economic clusters and
technology networks that may be either local or global (Allee, 2000).
The Benefits Of Knowledge Networks
Knowledge networks help individuals develop the
skills and competencies needed to do their jobs, provide a stable sense of
community with colleagues, provide ways for workers to stay current and
challenged, and foster a learning-focused sense of identity. The members of a
knowledge network have the opportunity to gain personal satisfaction as
contributors, along with a means to connect with power and influence with the
formal parts of the organization..
For the organization, knowledge networks push
strategy forward and enable faster problem solving. Knowledge
and expertise are distributed more rapidly in the larger population for
operational excellence, and ideas can be cross-fertilized to spur
innovation. In addition, knowledge
networks aid in developing, recruiting and retaining talent, and provide for
retention of knowledge when employees leave the company (Allee,
2000).
Training And Development
Practitioners And Knowledge Network Development
Because creating and supporting
knowledge networks requires an understanding of the conditions that lead to
their successful formation and the environment in which they can function and
grow (Allee,
2000), training and development practitioners are natural participants in the
process. Organizations often seek to engineer knowledge networks when they
require more skilled people than can be recruited or retained, a situation that
also spurs training initiatives. Knowledge networks are an extension of
training; they come into play when training and continuing education cannot
keep pace with the scope of knowledge required for high quality performance
(Gaines, 2003). Consider these aspects of knowledge networok development:
·
Knowledge network developers must take the time
to truly discover the educational needs in terms of technologies being used and
estimated timeframe of applying knowledge. (Fraser, 2004).
·
Detailed formats for knowledge exchange must be
created (Butschler, 2002).
·
Technologies used must make critical and
sometimes strategic impacts, with participants benefiting from the sharing of
not only book knowledge, but also production project experience (Fraser, 2004).
·
Knowledge networks need to support conversational interaction between people or groups,
social feedback and social networking, and build trust and break down knowledge
silos while retaining participant privacy
(Kaplan-Leiserson, 2003).
As the
knowledge transfer network grows, additional issues and concerns will emerge
and require adaptation. Periodic reassessment of the network's goals,
knowledge, and accomplishments is necessary, along with gathering lessons
learned and best practices for future iterations (Butschler, 2002).
All of these factors are familiar to training developers as analysis, design,
development, implementation and evaluation. Since we have seen that the
effective utilization of knowledge and learning requires both culture and
technology (Krebs, 1998), the best practice model for
building knowledge networks is a blend of ISD and knowledge management; KM
using ISD techniques (McCabe & Leighton, 2002).
The Process
Of Creating Knowledge Networks To Build Intellectual Capital
Knowledge networks can be seen as knowledge
management efforts that focus on learning communities (Allee, 2000). The first
step in creating knowledge networks is to identify organizational goals and how
increased knowledge flow can help to reach them (Butschler, 2002). Strategic
plans and other extant material are key to this effort. Analysis of training objectives provides
taxonomies that may be used to characterize organizational knowledge needs
(Gaines, 2003).
The next
step is a needs analysis of the organizational areas that most effect strategic
goals, to identify where information flows smoothly and effectively, and where
it bogs down. It is best to do this on an organizational level, a process
level, and an individual level (Butschler, 2002). Data is gathered, either
thorough surveying or brainstorming meetings, on knowledge acquisition and
sharing activities that are already part of the organization. These constructs
may be idiosyncratic to particular groups or individuals (Gaines, 2003). They
reveal who helps who learn and make sense of what is happening in this business
process. When these constructs are mapped, a picture emerges of how expertise
is shared. Nodes that are central in the map are experts that others seek out
for help when they need critical information and knowledge (Butschler, 2002).
These individuals are an invaluable resource for discovering what works in your
organization and for developing new knowledge network patterns to further
organizational goals and nurture intellectual capital.
Once existing knowledge exchange patterns are
mapped, the organic networks can be compared to desired knowledge exchange. By
applying human performance technology techniques to the identified performance gaps, training,
structure or human resource interventions can be planned. When decisions about
which current patterns can be left alone to thrive and which must be created or
encouraged have been made, strategies and structure can be developed and
tested. Infrastructures and technologies
are purchased or built in this production phase (Krebs,
1998).
In addition to developing effective processes and creating resources
(whether social or electronic) for communication, those who are intended to
benefit from the knowledge network must learn how to use the network to
interact with each other. Beyond
becoming adept at accessing the network’s structures, they need to
understand each other’s goals and priorities. Early teambuilding issues
will help form the network's identity and speed the process of making the
network an ingrained part of the work life of the members (Butschler, 2002). The social element of the interaction is
what makes the human component and the technology blend into a comprehensive
educational experience (Fraser, 2004).
Knowledge Network Strategies Available To T&D Professionals
Even
when technology is the focus and the medium for knowledge networks, the point
is facilitating peer conversation, experimentation, and shared experiences
(Allee, 2000). Some proven strategies for creating and nurturing
knowledge networks are mentoring, coaching, and communities of practice. These
strategies can be supported by a variety of technologies.
Mentoring
A facilitated mentoring process can create a
continuous learning climate, if aligned with other human performance
improvement strategies and integrated into organizational structure (
Coaching
Coaching features an employee learning by working
alongside an experienced co-worker or specialist who knows when and how to
intervene and transfer information. It is distinguished from mentoring in that
coaching tends to be focused on a specific task or skill, while mentoring is a
more general and encompassing relationship (Jacobs, 1999). Although individualized
coaching is often part of programs for executive and management development, it
can help all levels of employees identify and address their strengths and areas
that need inprovement. It is most successful when a structured, systematic
approach is used throughout the organization, but coaching design must be
flexible enough to address specific individual and organizational needs that
may emerge. The coach and trainee must agree on objectives, who is responsible
for doing what, and how success will be evaluated (Jacobs, 1999).
Successful coaches must learn to interact with trainees
in a way that is supportive and compelling. A coach must know how to overcome
the resistance the trainee may exhibit when confronted with discrepancies
between his or her self-evaluation and feedback from others and when asked to
make changes in his or her behavior (Nowack & Wimmer, 1997). Coaching
provides a low-risk relationship in which employees can hone performance as
well as explore new ideas and work methodologies that can then be exported to
the larger community (Zweibel,
2003).
Communities of
Practice
As workers move beyond routine processes into more complex challenges they rely heavily on peer networks as a primary knowledge resource to quickly access share information, strategies, tips, tricks and skills (John Seely Brown, VP and Chief Scientist at Parc Xerox, cited by Allee, 2000). These networks, characterized by a common sense of purpose, are known as communities of practice. They are different from teams because they are defined by knowledge rather than task, and their life cycles is defined by the value created for members, not by project deadlines. Goals are not imposed by any type of management, but negotiated among members. Members are usually self-selected with people participating because they personally identify with the topic and purpose of the group (Allee, 2000).
An
individual may belong to multiple communities of practice, both inside and
outside their organization. For example, a developer of online training
materials seeking a solution for a distribution problem may consult the members
of his or her work team (either in person or electronically) for ideas, then
send an email to a global authoring software support community and receive
suggestions and advice from peers around the world, some of whom may be
internationally recognized experts. The developer may then check the electronic
mailing list announcements for a local professional organization and discover a
seminar to attend that may provide insight into the problem. All of these
activities serve to build intellectual capital by bringing new ideas and
methodologies into the organization.
Knowledge Networks For Intellectual
Capital: The Future Of T&D
As the nature of the economy evolves and the need to develop intellectual capital grows, industry experts agree that involvement in knowledge network development is an avenue for professional success (or survival) for the T & D practitioner. According to Tamar Elkeles, vice president of learning and development at QUALCOMM, “There’s a convergence of training and information roles and if you’re solely focused on training, you’re missing the boat. You need to be broader and to do more than just help employees learn specific skills. In a learning organization, you need to help people learn about the company, the culture, the industry, the market, and so on.” (Galagan, 2003, pp. 30)
Allison Rossett, Professor of Educational Technology at San Diego State
University and member of Training magazine's HRD Hall of Fame, advocates a “big-tent conception
of technology for learning and support, where active education, information,
and advice surrounds people and boosts their performance by its very
presence” (Galagan, 2003, pp. 33).
What are the benefits to training and development professionals for
adopting this big-tent point of view? “We can continue to put knowledge
and information into people, and technology has made that much more
interesting, but there is more we can do,” says Pat McLagan of
McLagen International, an authority on competencies and organizational change. “Many organizations
today are trying to implement strategies that far exceed their capacity to
implement. If a knowledge specialist were in the room when those strategies we
re conceived, there would be better understanding of what strategic change
means in terms of learning and development and change management processes. I
believe there would be fewer failures in strategy implementation than there are
today.” (Galagan, 2003, pp.28) That type of value is what will define the most valuable players in the
training and development field in the intellectual capital market.
Conclusion
The development of knowledge networks provides great long term benefit to the organization. The net increase of intellectual capital leads to greater customer service, increased productivity, and higher output of relevant products. In the rapidly changing workplace, developing knowledge networks in order to increase intellectual capital is increasingly becoming an important aspect of the training and development profession.
References
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Contact the Authors:
Zane Berge, Associate Professor, UMBC, 1000 Hilltop Circle, Baltimore MD
21250; berge@umbc.edu