The paper brings the significance of strategic knowledge management for having a competitive business. A broad overview of knowledge management (KM) is provided with its impact on competitive advantage. The paper highlights the development of balanced and flexible metrics for KM on the total lifecycle. The main component of the paper is to illustrate the strategic planning of KM and its impact through a case study of an auto-component manufacturing organization. The strategic planning of the KM initiative has been done through a design workshop. An assessment of KM on fronts of people, process, and technology has been done through a survey in the case organization, before and after implementing the KM initiative.
Keywords: Strategic Knowledge Management; Competitive Advantage; Case Study Design Workshop; Survey
Knowledge understands the cognitive system processes. Nonaka & Takeuchi  explain that tacit knowledge is deeply embedded in people and is hard to imitate. It is developed through a continuous process of socialization and action learning. Knowledge is collective and individual experience, ground truth, complexity, and beliefs, which add value to the business. Management of these soft issues is a real challenge for maximizing the knowledge for the organization’s long-term growth . It is also the collective body of understanding an organization’s processes for managing planned and unplanned situations . The predictors of strategic knowledge management and flexibility have been identified as environmental uncertainty, leadership, and culture .
Jack Welch of GE has observed, “We soon discovered how essential it is for a multi-business company to become an open, learning organization. The ultimate competitive advantage lies in an organization’s ability to learn and to rapidly transform that learning into action. In GE’s boundary-less learning culture, the operative assumption is that someone, somewhere, has a better idea; and the operative compulsion is to find out who has that better idea, learn it, and put it into action fast.”
The paper is aimed to highlight the impact of KM on competitive advantage and corporate success. It takes the holistic view of KM and empathizes the need for developing balanced and flexible metrics using the life cycle approach. The paper presents a case study of an auto-component manufacturing firm to bring out the strategic planning of the KM initiative through a design workshop and assessment through a survey.
Inkpen  says that creating new organizational knowledge is becoming a managerial priority. New knowledge provides the basis for corporate renewal and sustainable competitive advantage. It has been realized by most organizations that self-sufficiency demands strategic focus, flexibility, and innovation. The key driver for corporate success today is innovation, which is driven by the fountain of collective knowledge and wisdom of the organization. A successful knowledge management exercise within a corporation is a prerequisite for better information management covering external and internal sources. The capability of the organization to develop a shared vision by working in collaborative teams not only of employees but of different stakeholders like customers, vendors, etc., is central to KM. The culture of sharing and informating, reward and recognition systems for acquiring new skills, diffusing the same company-wide, and applying new computer-assisted tools, technologies, and models to gain better insights and learning will go a long way in improving its competitive advantage. The new computer-assisted tools are non-destructive
in nature. They can be used to simulate the environment, and
different strategies could be tested in this simulated environment
to develop better insights. Life-long learning and constantly
renewing the corporation are critical elements for managing
knowledge. So far, the discipline of knowledge management has
not been institutionalized within organizations. However, some
companies have created board-level positions to manage the
intellectual resources of the organizations. Strategic knowledge
management is systematic and needs to be done continuously.
As with any other resource, knowledge resource needs to be
managed very carefully in the organization’s interest. In SAP-LAP
framework , new knowledge has a destabilizing effect resulting
in a change in the situation. Actors react or pre-empt by making
changes in the process to gain control and stability. Knowledge is
both a destabilizing and stabilizing agent.
Knowledge creates complexity, and knowledge is used to
manage complexity; hence it has a dual character of stability and
chaos. Companies will have to learn to take advantage of it in their
favor. The subject of knowledge management has gained a lot of
prominence both within academics and industry, as is evident
from the past literature. According to Lew Platt, CEO of HP, “If HP
knew what HP knows, we’d be three times more profitable.”
For a successful KM initiative, the right metrics need to be
developed at three levels: project identification with a high
payoff, the progress of project implementation, deployment, and
measurement of critical results. These should be continuously
reviewed and reassessed for desired results. Measure, manage
and grow is the central theme of KM initiative. Figure 1 shows the
holistic knowledge management system involving three phases
and critical variables.
For KM projects and initiatives, a particular concern is an
ability to (a) evaluate where a company is going with KM, and
(b) measure the defined strategic and operational benefits that
are being achieved. Figure 1: Holistic Approach for Strategic
Dimensions are the chief entities that need tracking and
are vital to the survival of an organization. For an organization
to achieve its strategic objectives of KM, dimensions like
people, process, technology, and performance are critical. The
measurement issues become very important when it comes to
business where every resource spent must be justified in terms
of benefits. In an environment of uncertainness caused by change
initiated, the issue of what can be measured can be changed, hold
The measurement program must be flexible to evolve and
enhance. A measurement program fails due to rigid designs
as they cannot be enhanced with new metrics for new needs.
Business of business measurement should be collectively arrived
at using basic principles of participation, empowerment, and
cross-functional development. KM should be integrated with
business strategy and measured as part of business processes.
Most organizations have financial dimensions included in their
performance measure; however, it requires a balanced approach
covering the entire life cycle of KM by including quantitative and
qualitative measures, operational and strategic, and financial and
A leading automotive component manufacturing company
case study is taken to gain insight into the KM initiative. The
company is known for quality, dynamism, and multi-faceted growth in the automotive component industry. The group is committed to rapidly expanding its product range and clientele
by continuously investing in contemporary and environmentfriendly
technology. The case is presented anonymously for the
sake of the confidentiality of the organization’s data.
The KM initiatives broadly rest on three strategic initiatives,
namely ‘people’, ’process’ and ’technology’, which are steered
by top management commitment and vision. The study covered
these areas separately; however, some of the issues may have
overlapping characteristics. As part of the study HR policies
covering training and development, performance management,
and promotion policies were studied in detail.
It has been attempted to synergize organizational learning that
links the islands of knowledge in central repositories and provide
knowledge maps and effective communication and sharing
mechanisms through virtual communities to provide economies
of knowledge. To this effect, a KM workshop was held by the
professors of IIT Delhi for a cross-section of executives to chalk out
the plan to formalize the KM process in the case organization. Best
practices in KM implementation, as reported in various published
cases in management journals and the Internet, were studied to
develop the most suitable model for the case organization. The
brainstorming technique also identified key value propositions
and deliverables during the workshop. The workshop broadly
touched upon the roadmap preparation, including objectives for
KM implementation at the maturity level.
The strategic planning of the KM initiative was carried out in
terms of its objective, mission, value proposition, and important
Objective of KM:
To develop a methodology and process for managing the
company’s knowledge resources.
Mission of KM
i. Reduce time to market
ii. Cost and quality
iii. Service to the customer/quick response to the customer
i. Increasing profits
ii. Reduction in overall defect rate
Drivers for KM Initiative
i. Inter unit sharing of the experiences and best practices
between group companies and different plants. This will help in
the reusability of knowledge and obviate the need to reinvent
again and again thereby improving the efficiency of operations
and waste reduction.
ii. Intra department sharing of improvements, experiences
and best practices. This horizontal deployment of best practices
will help in continuous improvement and knowledge up-gradation.
iii. To arm district marketing offices with sufficient technical
support to serve customers better and faster. It will also prevent
the need to refer every problem to headquarters.
iv. To avoid repetitive mistakes again and again.
v. To make available the right information anytime,
anywhere, knowledge about core business manufacturing
processes and knowledge maps to employees and partners. It
will help in bridging the gap between knowledge providers and
vi. Acquire new knowledge of technology related to
products, business processes, and materials and disseminate the
same across wider employee cross-sections.
vii. Need for continuous learning and testing the experience
and learning from the same on a continuous basis.
viii. Competitive pressure on main customer to reduce price,
delivery and introduce new models to retain its market leadership
A two-day design workshop was held to review the progress
made so far, identify the issues through a brainstorming session,
and suggest further actions for KM initiatives in the company. A
team consisting of four senior officials of the company deliberated
on the people architecture and identified motivation of employees,
promotion of KM as a facilitator of other ongoing initiatives like
TQM, TPM and identification and preparation of employees to
undertake specific roles like knowledge champion as key issues.
Creation of focused groups for imparting training in the area of
KM to junior and senior management grade, identification of
trainers for KM training, identification of best learning practices
in line with the company objectives, creation of communities or
knowledge clubs for shared learning, and identification of a group
like Quality System Department for taking the overall ownership
of KM initiatives in the company were the actions identified by this
As part of the implementation strategy, a pilot survey was
carried out to assess the KM level of the organization in terms
of people, process, and technology at different phases of the
program. A questionnaire (Knowledge Management Assessment Tool-KMAT) and interview sessions were used to capture the actual status. The score on the people dimension was 3.1 on a
5-point scale, whereas it was 2.75 on the process dimension.
The highest score on the people dimensions maybe because its
practices are influenced by the Japanese way of managing people
as its technical collaborator, and the primary customer follows the
Japanese management style. The KM level was again measured
using the same questionnaire and interview session after one year
of the start of the formal KM initiative. There was an improvement
reported on all the dimensions, as shown in Figure 2.
The overall average score of 2.75 on a 5-point scale implies
that the process of capturing (documentation and recording)
the knowledge acquired in the workplace needs to be improved.
Under the process part, the objective was to understand the
existing methods and processes of acquiring, creating, storing,
sharing, retrieving, and utilizing the knowledge. Also, it is
essential to find various documentation methods, the flow of
knowledge, assessment of knowledge gap, and mapping of the
processes that help partners share knowledge formally and
informally. The documentation process needs to be referenced
appropriately, cataloged, and summarized for easy access. The
records kept in different departments need to be integrated.
Knowledge is documented and shared during training and
problem-solving sessions of Quality Control Problem Solving
using 7 QC Tools, TQM meetings, Daily Work Management, Safety
awareness, TPM, and other structured meetings. Other sources
of knowledge are reading magazines and papers, friends in rival
companies, or similar discrete manufacturing organizations.
Other processes of knowledge capture and dissemination are
formal meetings like management committee meetings, informal
chats during lunchtime and teatime, group kaizen meetings
held every week, and Internet surfing by some employees. It is
carried out by interacting and regular contact with the customers,
suppliers, vendors, and dealers and also through direct contacts
with end-user customers, learning by workplace experience,
bulleting broads, newsletters, mailboxes, by attending seminars,
workshops, and association with various educational institutes,
At the senior level, though there is awareness for the need
to manage knowledge, in actual practice, the organization is
busy in routine tasks; formal means of training is the preferred
method of learning. An organization’s knowledge is fragmented
in isolated pockets and stays in people’s heads. However, it gets
diffused organization-wide through various initiatives and formal
Strategic Knowledge Management can act as a significant
initiative in a company to develop competitive business. It is
required to establish clear strategic intent and planning for the
KM initiative and to develop metrics for assessing its performance.
A Balanced Scorecard approach can be used to evaluate the
generation of competitiveness through effective knowledge