Posts Tagged ‘ Knowledge Management ’

Knowledge Capital vs Organizational Memory

Knowledge Capital is the set of intangible assets acquired through knowledge creation, extraction, sharing and learning processes performed either in isolation by a knowledge worker or collaboratively in groups to determine insights which are more robust to risk, and assumingly lead to better decision making.

Only a part of the Knowledge Capital is in Knowledge bases (explicit knowledge), the other is the sum total of managed expertise, where managed expertise is the talent pool whose value is correctly identified, whose expertise is regularly extracted and put to good use in a timely fashion across the organization.

Knowledge Capital is useable knowledge and hence knowledge workers who can tap into other experts to carry out their own activities in a ‘better’ way are treating these experts as an asset.

Knowledge Capital can be however, acquired over a time period by estbalishing certain structures and adopting certain practices or it can also be purchased as part of M&As.

Organizational Memory on the other hand, although might appear similar to Knowledge Capital. It is the art and science to institutionalize knowledge from experts and knowledge bases into the organizational culture. And this art and science cannot be acquired through M&As but has to be organically developed. This requires setting up the right environment where knowledge capital is acquired. This also includes setting up the right incentives and rewards for experts to directly contribute to the knowledge capital. It includes the motivation and mandate to utilize the knowledge capital and treat it as a critical asset in carrying out activities. It includes fostering a knowledge intensive culture where knowledge sharing is merit over credentials. Organizational Memory is sticky, hard to lose even when experts leave the organization, others can come in and easily be ramped up to replace the previous ones. That is, Organizational Memory directly contributes to the organization’s brand. The art and science of organizational Memories is often lost in M&As and what corporationns acquire is only the Knowledge Capital without the Memory, the soul.

This is why, many times, the acquired corporate loses its mojo, innovation drops, and the phrase big fish eats little fish (only to kill it) seems more appropriate regardless of the intentions of the M&A.

The art and science of Organizatonal Memories is where cultural and change management initiatives operate on and are the most critical processes and activities towards business improvement.

In Summary, Knowledge Capital is managed by Organizational Memory.

Changing a Practice through Experience Capitalization

Change is everywhere and happens all the time…well except for corporations, where changing a practice, procedure, process is a rare phenomenon and there is no consensus on how to bring about it. Too many variables, too many factors since change always rattles the culture which is hard to define, let alone adapt.

Among many techniques for change, including management controls, dictatorship, incentivization, germination and gamification, one instrument is Experience Capitalization.

A technique from Knowledge Management which enables Knowledge Capture, Transfer and Utilization all in one with defined outcomes leading to Lessons Learned and ‘Good Practices’ with the stakeholders ready to buy-in and adapt for change.

Doesn’t that just sound great! Well, that’s the target anyways….

The essence to enable change, one has to institutionalize shared knowledge among the stakeholders based on their experiences and consensus.

We know that Knowledge Transfer is a core function of successful innovative companies. The “Flow” enables us to co-create, institutionalize knowledge and get a real feel of knowledge worthiness.

Knowledge Transfer takes place for a host of reasons like succession planning, product training, new employee ramp up, brewing up best practices, abandoning bad practices but when knowledge is systematically converted into capital to enable process improvement and structural change, it is often called ‘Experience Capitalization’.

Although ‘Experience’ is known to be the least effective knowledge acquisition tool since it carries a high risk of not learning anything further, or of carrying the ‘wrong’ experience, one which is made due to bad habits of short term quick and dirty fixes but here the term ‘Experience Capitalization’ refers to collective, institutional learning which overcomes such ‘Competency Traps’. In most if not all cases, Organizational Learning is a better critical success factor. Here Experience Capitalization focuses on Organizational Learning.

The philosophy is that by capitalizing on (latent) experiences, changes can be brought about since it is the (latent) experiences which are ignored and sidelined without this process, blocking the impetus to change.

Experience capitalization is a learning process but differs from personal learning in that the expereince is summarized and belongs to the whole group, reached through a concensus and thus reducing the resistence to change. Another fundamental difference from other forms of Organizational Learning is that experience capitalization usually focuses on the experiences of the stakeholders only without involving third parties. This ensures that the summation of the experiences are ‘local’ to the stakeholders who have to undergo change. Experience Capitalization cannot be delegated but third parties can be invoked only as facilitators.

The Swiss Agency for Development and Coperation defines it as:

Experience capitalization refers to the transformation of (individual and institutional) knowledge into capital by those directly involved in order to change a collective, institutional practice. It aims at changing one’s own practices or structures.

Read more about Experience Capitalization at their website.