Knowledge Strategy:
Aligning Knowledge Programs
to Business Strategy
KM World Workshop
Peter H. Jones, Ph.D.
Origin Technology in Business
KM World 2000
Tuesday, September 12, 2000
Copyright 2000 – Origin
The Knowledge Strategy Game
Strategy
Methods
&
Applications
Managing
Knowledge
Strategy
FOLLOW INSTRUCTIONS
ON TOP CARD
Team
Knowledge
SWOT
PRICE $200
Sharing
What
We’ve Learned
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Understanding
Knowledge
Strategy
The Resource
Strategy
Model
A Knowledge Strategy …
Got One Already?
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Understanding Knowledge Strategy

Tierney, (1999) “A company’s KM strategy should
reflect its competitive strategy.” With focus on
creating value for customers, turning a profit, and
managing people. (HBR)

Zack, (1999) “… the most important context for
guiding knowledge management is the firm’s
strategy. Knowledge is the fundamental basis of
competition. Competing successfully on knowledge
requires either aligning strategy to what the
organization knows, or developing the knowledge
and capabilities needed to support a desired
strategy.” (CMR)
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Types of Strategy
Survival vs. Advancement (von Krogh, Roos, Slocum, 1994)

Survival – maintaining current level of success,
mastering current markets and competitors

Advancement – Future success based on new
markets, nonreplicability – requires knowledge
creation
How do you plan/design strategy?

Formal strategy and planning – Traditional
strategy sets positions, targets, measures.
Alignment means “follow the leader.”

Learning and emergence – New thinking (not
always in practice) shows strengths in org
learning and preparing for conditions.
Alignment means “Learn and collaborate.”
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Strategic Drivers
Growth through share,
market strength,
distribution – external
market focus
Market
Growth
Customer
Intimacy
Operational
Effectiveness
Profit through productivity
and cost control – internal
development focus
Traditional KM driver,
but should not be the only one!
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Forging long-term, deep
relationships with
customers – external
focus, growing with
customer success
Strategic Drivers
Knowledge
Strategy
Business
Strategy
Product Innovation
Knowledge Creation
Intellectual Capital
Process Innovation
Knowledge Sharing
Developing Learning
Culture
Business Innovation
Customer Knowledge
Integration
Branding Knowledge
Product Sales
Time to Market
Distribution Networks
Pricing Strategy
Patent & Product
Leverage
Process streamlining
Supply chain mgt
Accounting &
Financing
Customer retention
Customer product needs
Revenue growth
Partnering / Alliancing
Market
Growth
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Operational
Effectiveness
Customer
Intimacy
What Drives Knowledge Strategy?
Business Strategy
 What knowledge does it take to compete?
 What are your critical knowledge gaps?
Product Innovation
 Can you design breakthrough products?
 “Spark innovation” through a participatory culture?
Organizational Complexity
 How can you adapt to speed & information overload?
 Build a quick-learning organization?
Customers and Markets
 Profound customer understanding
 Radically improved time to market
 Knowledge leverage in the marketplace
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Resource Strategy Model
Potential Entrants
Suppliers
Industry
Buyers
Porter’s 5 Forces strategic model
(SWOT approach) breaks when applied
to leverage of specific firms. Chaotic
business dynamics now require we
leverage unique strengths, not look at
external industry trends.
Substitute Products
Knowledge
Resources
Organization,
Capabilities, Core
Competencies
A resource strategy addresses
firm’s only competitive
differentiation - renewable
resources of knowledge, skills,
and capabilities (Penrose, Zack,
Teece, Quinn, Grant, Kogut).
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Firm’s Knowledge
Strategy
Strategic
Resources
(Partners, External
Network)
Customer
(A firm’s
resource)
Resource-View of Strategy

Uniqueness of firm gives it competitive strength
 Diversification exploits imperfections in markets
 Development of dynamic capabilities based on knowledge

In turbulent business environment – Focus on
what we can know – Strengths and Weaknesses

Organizational culture as an inimitable strength
(Barney, 1991)
 Beliefs, values, shared meaning
 Culture cannot be exported or replicated
 Social communities prevent overdependence on individuals
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Resource Strategy...

Knowledge-based
 Intangible, intellectual assets and renewable resources
 Unique advantages, competitive knowledge

Innovation and renewal
 Knowledge used to recombine traditional capabilities

Accelerates rate of new learning
 Learning speed most significant competitive advantage

Integrates customers & suppliers
 New webs of knowledge resources

Strategic planning differs from traditional
 Knowledge SWOT, Scenarios, Internal/External
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Managing Knowledge Strategy
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Four Enabling Dimensions
Knowledge
Resources
What do we know and where is it ?
Culture and
Learning
Practices
What processes leverage
that know-how?
How do we participate
with this know-how?
Collaborative
Technology
How do we support this know-how?
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Linkage to Balanced Scorecard
Business Strategy
Desired
Outcomes
Outcome Measures
Customer Goals
Internal Business Process Goals
Learning & Growth Goals
Knowledge Strategy
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Performance Drivers
Financial Goals
Desired
Behaviors
Planning from Knowledge Perspective

Cultural Assessment ….Readiness assessment

Knowledge Framework to embed Business Plan

Portfolio of Knowledge Management Projects

Champion for each project

‘Value from Knowledge’ Plan

Business steering team review and presentation

Phased Implementation
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Knowledge Strategy Methods
“Delegated Strategy Integration”
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Knowledge Strategy Methods
Knowledge SWOT
Business + Knowledge
Strengths, Weaknesses, Opportunities, Threats
1. Establish or affirm current Business Strategy
2. Evaluate internal drivers - impacts of current
knowledge by:

Resources

Practices

Culture and Learning

Technologies
3. Use these as basis for Strength and Weaknesses.
4. Evaluate external drivers – impacts on knowledge
5. Use these for Opportunities and Threats
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Knowledge Strategy Methods
Strategic Scenario Planning
Create shared models of potential future conditions to
guide dynamic strategy.
Why?
Scenarios provide robust tools for integrating very
complex business conditions applicable to strategy.
Also – people are good at remembering stories;
SWOT chart points fall away quickly.
How?
Team workshop approach, with broad participation.
You want new ideas, dissension, “out in leftfield”
Strategy as “serious play”
Source Scope of this workshop can’t cover scenarios. See:
Schwartz,The Art of the Long View
Ringland, Scenario Planning
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Knowledge Strategy Methods
Strategic Scenario Planning
Developing scenarios for adapting organization to
potential future trends and changes.
1. Establish participatory scenario team
- Future workshop, Team Design, other workshops
2. Set scope for scenarios
3. Generate sources for scenarios
4. Develop initial categories
5. Build miniscenarios as small groups
6. Group review of miniscenarios
7. Pull together themes and design 3 scenarios
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Aligned Knowledge Management

Business strategy guides your knowledge assets

Linking knowledge requirements to:
 Resources:
 Making information accessible to point of need
 Info usability with common categories & process
 Culture:
 Enabling, rewarding teams & experts for cross-sharing
 Developing culture of knowledge creation
 Practices:
 Embedding new best practices in organization
 Transparent leveraging of expert knowledge
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Knowledge Management
e-Community
Online Knowledge
Communities
Communities
of Practice
Strategic Knowledge
Management
Content Management Systems
Targeted, Vertical
Application
Strategy
Collaborative, Horizontal
Leading to Technology Solutions …
Information Portal
Information
Integration Portal
Internal
Application
Portal
Organizational
Enterprise
Scale and Accessibility
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Alliance
Extranets
Inter-Enterprise
Strategic Knowledge Resources
Knowledge
Resources
Core and complementary competencies
Organizational capabilities
Structured and unstructured information
Personal knowledge and unique skills
Customer relationships
Intellectual property
Collaborative
Technology
Infrastructure and standard systems
Groupware and email applications
Web-enabled portals and Internet
applications
Process management systems
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Strategic Knowledge Resources
Practices
Business processes
Organizational routines
Embedded and specialized processes
Practice communities
“How things are done”
Culture and
Learning
Core organizational values
Personal values and leadership
Organizational environment
Hiring and enculturation
“How we see ourselves”
Individual and group skill development
Organizational learning
Style of management, work, engagement
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Conclusions

Good strategy is dynamic and adaptable Knowledge Strategy is ongoing as well.

Requires leadership and will – organizational
change always requires focus on vision.

Traditional management may require education
for integrating knowledge into business strategy.

Other firms’ KS processes may not apply to yours
- No knowledge advantage can be claimed “out of the box”

Understand what’s worked for others, experiment,
listen to your people, your culture.
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Exercises
1. Knowledge SWOT - Group Exercise

Create groups by industry and strategic thrust

Discuss current initiatives and strategic drivers

Select ONE business initiative to work on as group

Identify SWOT drivers for this initiative

Develop Knowledge and Business SWOT
2. Identify Application Areas for SWOT:

Knowledge Resources

Culture and Learning

Practices

Technology
3. Informal Presentation and Discussion

Each group present SWOT analysis to group

Show applications/alignments per 4 dimensions
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Four Knowledge Enabling Areas
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