New Economy Excellence Series, New Economy Energy: Unleashing Knowledge for Competitive Advantage

289 Pages·2001·9.74 MB·English

by  Sultan Kermally

The New Economy Excellence Series
New Economy Energy
Unleashing Knowledge for
Competitive Advantage
Sultan Kermally
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CONTENTS
About the author iv
Acknowledgements v
Introduction E-business energy: unleashing knowledge for
competitive advantage 1
Chapter 1 Knowledge management: the main drivers 13
Chapter 2 E-business, strategy and new business models:
creating value for customers and shareholders 35
Chapter 3 Strategic assets of a knowledge-driven organisation 61
Chapter 4 Knowledge management is about people 85
Chapter 5 Managing talent 109
Chapter 6 Capturing knowledge for competitive advantage 129
Chapter 7 The role of the Internet in knowledge creation, capture
and transfer 151
Chapter 8 Knowledge and innovation 175
Chapter 9 The learning organisation 193
Chapter 10 Intellectual property protection: the legal dimension of
knowledge management 217
Chapter 11 Knowledge management in practice 235
Chapter 12 Becoming a knowledge-driven organisation 255
Notes 273
Bibliography 275
Subject index 281
ABOUT THE AUTHOR
Sultan Kermally, M.A., B.Sc.(Soc.), LL.B. Ph.D., Dip. Fin. &
Accts., Dip. Marketing, is a management development consultant
and trainer designing and delivering courses in business strategy,
business economics, marketing, managing people, performance
and knowledge and personal development. He has conducted
training in the UK, the Netherlands, Belgium, France, Austria,
the Middle East, Hong Kong and Tajikistan.
For several years he held senior academic positions in Scotland
and senior management positions with Management Centre
Europe in Brussels, London Business School and The Economist
Intelligence Unit, where he was Senior Vice-President of the
Economist Conferences, Europe.
He has been involved in management education and
development for a number of years, including distance learning
management education courses. He has been tutoring with the
Open University and Open University Business School since their
inception. He is an associate lecturer in strategy and knowledge
management for the Open University Business School MBA
modules. He also teaches the organisational behaviour MBA
module for the Durham University Business School and is a core
tutor for FT Knowledge.
He is the author of Total Management Thinking, Management
Ideas and Managing Performance, all published by Butterworth-
Heinemann in association with the Institute of Management,
When Economics Means Business: the New Economics of the Information
Age, published by FT Pitman Publishing, and The Management
Tool Kit, published by Hawksmere.
For consultancy and training assignments he can be
contacted at 57 Southlands Road, Bromley, Kent, BR2 9QR.
Tel: +44 (0)20 8313 3378, fax: +44 (0)20 8460 1536; E-mail:
[email protected].
ACKNOWLEDGEMENTS
The theme of this book was suggested to me by Jeremy Kourdi,
Senior Vice-President of the Economist Conferences, and John
Moseley, Publishing Editor at Wiley. I am indebted to them for
giving me the opportunity to write a book in the New Economy
Excellence series and as a consequence prompted me to explore
the world of e-business.
When I was deciding to write this book I rehearsed my views
with my baby daughter Zara, who was then only 14 weeks old.
Her smiles and body language indicated her approval of my
views. However, all the shortcomings of this book are entirely
mine.
The book contains some cases, opinions and articles. For these
I would like to thank the following individuals, organisations and
publishers for their direct and indirect help: Professor Thomas
Davenport, Britton Manasco, Verna Lee, Elizabeth Lank, Kevin
Jones, Llan Greensberg; Teleos, Open University Business
School, The University of Edinburgh, The Economist Confer-
ences, Systematica, Knowledge Inc., WIPO, Insead, Pricewater-
houseCoopers, CIO.com, Bathwick Group, Kogan Page,
Butterworth-Heinemann, Webmergers Inc., Jossey-Bass,
McGraw-Hill; Business Week, Fortune, The Economist, The Sunday
Times, The Times, Financial Times, Harvard Business Review,
TechWeb, WebBusiness Magazine, Digital Britain, Business 2.0,
Performance & Innovation Unit Report, 1999, Human Resources,
Inter@active Week, Information Week.
The Wiley production team, especially Vivienne Wickham and
Sally Lansdell for their professional approach to editing. I am
particularly impressed with the way the book has been copy-
edited.
My thanks and love go to my wife Laura for her faith in my
ability to undertake the project and my daughter Zara for being
vi ACKNOWLEDGEMENTS
so good and cheery as to make it possible for me to hide away in
my study and work on this book; she has been an inspiration for
this project. My daughter Jenny, for her philosophical outlook on
life and her constant encouragement, my daughter Susan and her
husband Thomas Powell for their pride in my work, my son
Peter (Mwalimu) for his interest in my work, and my grandson
Matthew and my two granddaughters Eve and Anna for the joy
they have brought to my life.
Dedication
This book is dedicated to my wife Laura
my children Zara, Peter, Susan and Jenny,
and my three grand children
Matthew, Anna and Eve
E-business
energy:
unleashing
knowledge for
competitive
INTRODUCTION
Overview
The success of e-business depends on converting 'e'
into:
• energy: energy is required to deliver speed.
• enthusiasm: staff have to be enthused to share
knowledge.
• empathy: the business has to get under the skin of its
customers.
• enterprise: the leadership has to introduce an
entrepreneurial culture.
• evolution: the business has to evolve into partnership
networks.
2 E-BUSINESS ENERGY
Knowledge management and competitive
advantage
The importance of knowledge
Economies are increasingly based on knowledge. Finding
better ways of doing things has always been the main source
of long-term growth. What is new is that a growing chunk of
production in the modern economy is in the form of
intangibles, based on the exploitation of ideas rather than
material things, the so-called weightless economy. In 1900
only one-third of American workers were employed in the
service sector; now more than three-quarters are. More and
more goods, from Mercedes cars to Nike trainers, also have
increasing amounts of knowledge embedded in them, in the
form of design or customer service.1
Knowledge management: its impact on bottom-
line results
Under increasing competitive
pressures and with a strategy of KEY CONCEPT
gaining and maintaining
Knowledge in any organis-
competitive advantage, many ation comes in two formats:
one is located in employees'
organisations are focusing their
heads and is known as tacit
attention on managing knowledge. knowledge, and the other is
Knowledge is beginning to be presented in written (codi-
fied) format and known as
recognised as a key capability if an
explicit knowledge.
organisation is to compete suc-
cessfully in a global environment.
The benefits of knowledge management relate to the
following areas:
• Meeting customers' expectations.
• Enhancing employees' competencies.
• Adding shareholder value.
• Generating innovation.
KNOWLEDGE MANAGEMENT AND COMPETITIVE ADVANTAGE 3
• Minimising risks.
• Bringing about business transformation.
• Reducing costs.
One of the key aspects of managing knowledge is facilitating
the transfer of knowledge throughout an organisation.
Knowledge in any organisation comes in two formats: one is
located in employees' heads and is known as tacit knowledge,
and the other is presented in written (codified) format and
known as explicit knowledge. The transfer of both types of
knowledge is important in enabling organisations to build
their capabilities.
How is knowledge transferred?
A transfer from tacit knowledge to tacit knowledge takes
place between people through conversation, dialogue and
meetings. A transfer from tacit to explicit knowledge takes
place through creation of documents, messages, memos and
reports. A transfer from explicit to explicit knowledge takes
place through creating directories or maps. Finally, a transfer
from explicit to tacit knowledge takes place through
documents and data. The modes of transfer and knowledge
creation are examined in detail in the later chapters.
Finding the person with the knowledge one needs and then
successfully transferring it from that person to another are
difficult processes. (Professor Thomas Davenport)
What are the benefits of knowledge transfer and
knowledge sharing?
Transferring problem-solving skill
Employees who are involved in working on and managing
projects do not have to reinvent wheels if they have access to