CONFIDENTIALAugust2001BuildingKnowledgeManagementCapabilitiesMcKinseyNonprofitPractice1CONTENTS•Whyknowledgemanagement(KM)isimportant•Frameworkforknowledgemanagement•McKinseyNonprofitPracticeexample2McKINSEYCOREBELIEFSONKNOWLEDGE-BASEDSTRATEGIESSource:StrategyasifKnowledgeMatteredBrookeManvilleandNathanielFoote,May19961.Knowledge-basedstrategiesbeginwithstrategy,notknowledge2.Knowledge-basedstrategiesarenotstrategiesunlessyoulinkthemtomeasuresofperformance3.Executingaknowledge-basedstrategyisnotaboutmanagingknowledge,itisaboutnurturingpeoplewithknowledge4.Organizationsleverageknowledgethroughnetworksofpeoplewhocollaborate,notthroughnetworksoftechnologythatinterconnect5.Peoplenetworksleverageknowledgethroughorganizational‘pull’,ratherthancentralisedinformation‘push’3LearningcultureandorientationFactsandinformationareavailableandusedKeylessonsarecapturedandleveragedBestpracticeissharedwidelyacrossthebusinessNewleadingedgethinkingiscreatedandsharedPossibleperformanceimpactUseoflearningSTAGESOFKMANDPERFORMANCE4COMMONSYMPTOMSOFKNOWLEDGECOMMONSYMPTOMSOFKNOWLEDGECOMMONSYMPTOMSOFKNOWLEDGECOMMONSYMPTOMSOFKNOWLEDGEMANAGEMENTPROBLEMSMANAGEMENTPROBLEMSMANAGEMENTPROBLEMSMANAGEMENTPROBLEMSSymptomConsequences•Emphasisongutfeelindecisionmaking•Over-relianceonafewkeyexperts•Frequentreinventionofthewheel•Failuretogeneratenewideasandinsights•Failuretoattract/retainoutstandingpeople•Insularityandinward-lookingfocus•Keydecisionsoftenturnouttobewrong•Littletransferofknowledgebetweenindividuals•Potentialbottlenecksinaccessingexistingknowledge•Lossofinstitutionalknowledge/memorywhentheyleave•Samemistakesrepeated;nolearningfrompastexperience•Slowtorolloutsuccessfulinnovation•Erosionofexistingcorecompetencies•Failuretogeneratenewcompetencies,intellectualassets•Viciouscircleofpoorerperformanceleadingtodecliningreputation,attractingweakertalent,andhencegeneratingpoorerperformance•Failuretoleverageexternalexpertise•Tendencytowardsorganizationalinertiaandintellectualsterility5BarrierstoeffectiveuseofknowledgeBARRIERSTOEFFECTIVEKMIncentives•Noincentivestoencourageknowledgebuildingandsharing•Focusonunit,notcollectiveperformance•Focusonshort-termresultsKnowledgeinfrastructure•Lackofclearleadership•PatchyavailabilityofITtools•Networksnotbroadened/deepenedovertimeInformationculture•Inadequatecodificationofknowledge•ImportanceofsharingnotrecognizedProblemsolvingculture•Lackofstandardization(whereuseful)•LackofproblemsolvingdisciplinePeople•Lackoftimetocodifyandsharelearning•Rapidjobrotationsorhighturnover•Lossofinstitutionalmemory•Littleencouragementofspecialistexpertise6CONTENTS•Whyknowledgemanagement(KM)isimportant•Frameworkforknowledgemanagement•McKinseyNonprofitPracticeexample7Acquire/createCodifyShareKMHAS3KEYCOMPONENTS•Clearlydefineknowledgeneedsandagenda•Designdatainputchannelandforumsforeaseofuse•Incentcontributionofknowledge•Tieknowledgecontributionstoperformancemanagement•Createcommunityofexpertsandidentify“FirstAlerts”•Createknowledgebasedontoday’slearningsforuseinfuturesituations•Developprocessforupdatingandmaintaininginformationandorganization•Provideaccesstoknowledgethroughmultiplechannels•OrganizeinformationviaeasilyunderstoodtaxonomyAgreeonwhatyouneedtoknowandincentcontributionofknowledgeEnsureknowledgeisuptodateon“whatyouknow”and“whoknowswhat”Establishwideaccesstopeopleanddatabasesandencouragewideuse8KEYDRIVERSOFEFFECTIVEKNOWLEDGECREATION•Maximizeeaseofinput•LeverageexistingcollectionmechanismsChannelsIncentives•Establishminimumstandardsforexpectedcontribution•Offerrewardsand/orrecognitionforoutstandingefforts(e.g.,mostdownloadeddocument)•Providequick,easyaccesstosubmittedknowledgeasatangibleresultofeffortsPerformancemanagement•Formallyintegrateknowledgecontributionsintotheevaluationprocess,withclearmetricsoutlinedandcommunicatedAcquire/createCodifyShare9EXAMPLESOFEFFECTIVEKNOWLEDGECREATIONTOOLS•McKinsey:“PracticeOlympics”motivatesknowledgecontributionthroughcompetitionbyofferingconsultingteamstheopportunitytoshowcasekeylearningsChannelsSource:McKinseyOrganizationPracticePerformancemanagement•BuckmanLaboratories:jobdescriptionsandperformancereviewsareexplicitaboutcontributingknowledge•McKinsey:knowledgedevelopmenthelpsestablishtheindividualasanexpert,whichisformallyintegratedintotheevaluationprocessforpartnerelectionIncentives•BuckmanLaboratories:topknowledgesharersarerecognizedatspecialcompanyevent•GeneralElectric:establishedculturethatdiscourageshoardingofknowledge;individualperformancereviewsstressskillsthatcontributetoculture10KEYDRIVERSOFEFFECTIVEKNOWLEDGECODIFICATION•Instituteacodificationefforttocategorize/prioritize/distributeinformationtomakeaccessaseasyandfastaspossible•Incorporatecodificationeffortsintoexistingprocesses(vs.creatingnewwork)•PerformperiodicpurgestopruneoutdatedorsupercededdocumentsInformationCodificationPeopleNetwork•Formalizethecommunityofexpertsthrougha“Firstalert”orsimilarmechanismtoleverageorganizationalknowledge•Integratedocumentandpeoplenetworkbyprovidingacontactmechanismtolinkusefuldocumentsto