M e a s u re m e n t S n a p s h o t
Strategies to measure effectiveness
Consider the culture when benchmarking KM processes
By Bernard Marr, Cranfield School of Management
Bernard Marr
is research fellow
at the Center for
Business
Performance at
Cranfield School
of Management
and visiting
professor of
intellectual
capital and
knowledge
management at
the University of
Basilicata in Italy.
Benchmarking has long been
seen as a tool for identifying and
adopting best practices to boost
performance. However,
transferring best practices from
one organization to another often
fails because the cultures are so
different. Here, Bernard Marr
outlines the lessons from a
research organization that
attempted to transfer best
practice from one part of the
organization to another.
GemScience, a leading R&D
organization that has been left
anonymous for this story, launched a
project to benchmark their
knowledge management practices.
The goal was to improve KM
effectiveness by identifying best
practices then implementing them
Defining KM assets and processes
There are six knowledge assets in an organization:
1. Stakeholder relationships: includes licensing
agreements, partnering agreements, contracts, and
distribution arrangements.
2. Human resources: skills, competence, commitment,
motivation and loyalty of employees.
3. Physical infrastructure: office layout and
information and communication technology such as
databases, e-mail, and intranets.
4. Culture: organizational values, employee
networking, and management philosophy.
5. Practices & routines: can be formal or informal –
process manuals with rules and procedures, and
tacit rules – “the way things are done around here.”
6. Intellectual property: patents, copyrights,
trademarks, brands, registered design, and trade
secrets.
Knowledge management processes maximize the value
of knowledge assets. They are: generation, codification
(making tacit knowledge explicit in the form of
databases, rules and procedures), application, storing,
mapping, sharing, and transfer. Together these
processes can be used to manage and grow an
organization’s intellectual capital.
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Volume 6 Issue 5
across the enterprise.
GemScience consists of eight
subsidiaries in five countries. Two
subsidiaries (ComScience and
TecScience) are based in the same
country and produce very similar
output for the same market. Also,
both have about 250 employees.
After conducting a performance
audit, GemScience determined that
ComScience outperformed
TecScience, and one of the reasons
identified was ComScience’s more
efficient KM processes. GemScience
believed that they were perfect
candidates for the benchmarking
exercise because of their similarities.
Strong leaders vs. sharing culture
The project was conducted in three
phases:
1. Assessing and comparing the
knowledge assets of the two
subsidiaries. Both had almost
identical knowledge assets (see
sidebox, this page).
2. Identifying knowledge processes
(see sidebox, this page).
3. Identifying best practice
knowledge processes and
transferring them as exactly as
possible from ComScience to
TecScience.
Phase two revealed that the teams in
ComScience had strong leaders who
generated much of the R&D output
themselves. These individuals were
able to consolidate ideas from their
subordinates into output. They were
backed by a culture of support from
their teams who worked towards the
ideas of their leader. Most team
members had regular communication
with the team leader, and most of
these communications took place
face to face and via e-mail. The
majority of knowledge sharing went
two ways, between leader and team
member, but there was less direct
knowledge sharing between team
members. In addition, ComScience
had a strong focus on codifying
knowledge and storing this
information for access by the leader.
The emphasis of the leader was to
apply this knowledge in order to
produce valuable output.
Worlds apart
The next phase was to try to transfer
these processes from ComScience to
TecScience. A task force was
established to oversee this process.
However, it soon became apparent
that the two subsidiaries worked on
very different models.
At ComScience, the culture
encourages employees, especially the
leaders, to convert aggregated
knowledge into intellectual property,
and then into products and services,
which generates financial success.
The way team members interact is
supported by practices and routines
such as the regular meetings and
shared databases. The physical
infrastructure influences the well
being of the team members in
ComScience.
At TecScience, team members
freely share knowledge within the
team as well as within the whole
subsidiary. The culture is open and
promotes transfer of knowledge
between internal and external
stakeholders. There are many more
ad hoc meetings between team
members, and output and solutions
are developed between the teams.
Team leaders have a more
coordinating role and are less
autocratic. Teams in TecScience
develop output, which is then turned
into processes, patented, and sold.
There are fewer direct services
delivered by the team leaders. The
predominant knowledge processes in
November/December 2003
© Melcrum Publishing Ltd. 2003. For more information, go to www.melcrum.com or e-mail us on info@melcrum.com
TecScience are knowledge transfers
between team members. Knowledge
is mapped in Yellow PagesTM
identifying who knows what.
Knowledge is shared more casually
and there’s little codification during
the R&D process.
The difference was demonstrated
through a diagram that mapped how
value is created from knowledge in
each of the two subsidiaries (see
Figure 1, below).
At this stage it was decided that it
was impossible to benchmark
knowledge processes between the
two subsidiaries, even though their
intellectual capital structure was
almost identical.
If knowledge management
processes at TecScience were to be
improved, they couldn’t take
ComScience as a guide. KM would
have to be approached in a way that
took into account the requirements
of teams – supporting relationships,
as well as taking the learning from
teams and converting it into
intellectual capital.
Understand the context
The failure to transfer knowledge
processes even between seemingly
Figure 1: Value creation pathways at ComScience and TecScience
Stakeholder
Relationships
Culture
Physical
Infrastructure
Human
Resources
Practices
& Routines
Financial
Success
Intellectual
Property
identical organizations reinforces the
idea that knowledge processes are
embedded in the unique context and
culture of organizations. Therefore,
any attempt to benchmark
knowledge management processes
must first understand whether the
corporate context will allow
benchmarking such practices.
Furthermore, the case illustrates
the highly dynamic nature of
knowledge assets, which implies that
measurement approaches need to
reflect this dynamism. In our
example, it was not until the failed
knowledge transfer and the
subsequent development of the value
creation maps that differences
became apparent. It’s therefore
advisable to understand the dynamic
knowledge creation and corporate
epistemology before any attempts to
transfer best practice.
Contact
Bernard Marr
Cranfield School of Management
E-mail: bernard.marr@cranfield.ac.uk
ComScience
Three ways teams create knowledge
Stakeholder
Relationships
Culture
Physical
Infrastructure
Human
Resources
Practices
& Routines
Financial
Success
Intellectual
Property
TecScience
Most knowledge maps show how knowledge assets such as intellectual
property or physical infrastructure lead to a business outcome such as
customer satisfaction. The innovation in the above diagram is that it also maps
how the relationships between knowledge assets lead to business outcomes.
The arrows represent how the knowledge assets inter-relate. For example, in
ComScience, culture (organizational values, employee networking, and a
management philosophy of individuality) strongly influences human resources
(the skills, competence and commitment of employees), which in turn has a
strong influence on creating intellectual capital (patents, trademarks, brands,
etc.), which translates into financial success. At TecScience, culture only weakly
influences human resources. It has more influence on stakeholder
relationships, which affects human resources.
The knowledge assets in ComScience and TecScience are the same and so is
the business goal – financial success. But the way the assets inter-relate to
create financial success aren’t the same, which is why it was so difficult to
transfer knowledge management practice from one organization to the other.
Understanding how an organization views knowledge
can help when deciding whether benchmarking KM will
be valuable between two organizations. There are three
different theories of knowledge creation:
1. Cognitivist: identification, collection, and
dissemination of knowledge in explicit form
according to strictly defined rules is the main KM
activity.
2. Connectionist: knowledge resides in connections
between teams and people. The organization is
seen as a group of self-organization networks that
communicate with each other to create knowledge.
3. Autopietic: Knowledge and information cannot be
transferred easily since they require internal
interpretation. Knowledge is unique to individuals
who develop it internally.
ComScience seems to be positioned somewhere
between cognitivists and autopietics, whereas
TecScience is much more connectionistic, which is why
the company found it so difficult to benchmark and
transfer knowledge processes between the two.
Volume 6 Issue 5 November/December 2003
© Melcrum Publishing Ltd. 2003. For more information, go to www.melcrum.com or e-mail us on info@melcrum.com
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