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well knowledge assets are the knowledge drivers of an organization's success
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and they can be unstructured tested knowledge so an example there would be the deep
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expertise of key personnel or knowledge assets can be structured explicit knowledge codified
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examples there would be patents copyrights intellectual property rights in codified form what is interesting with
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knowledge assets is that the more you structure the more you codify knowledge the easier it is
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to share that knowledge both internally and externally so an excel spreadsheet very structured
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knowledge can be shared in milliseconds via the internet whereas deep expertise or
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experience it takes more time to share it with other people the other thing that i think is important about
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knowledge assets is to think of the term assets like you would with physical assets there's some pieces of knowledge
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that are just not valuable from the point of view of the firm and there's others where that knowledge
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is basically fundamental to your ability to compete and this is where we start to
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distinguish between knowledge assets and let's say strategic knowledge assets which are the
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pieces of knowledge that make a difference in your ability to compete and prosper
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well it's interesting when it comes to physical assets you have a balance sheet
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that shows you what you own or process and it's more difficult more tricky when it comes to knowledge so with a
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knowledge map we intend to really identify the key knowledge resources that underpin
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an organization's competitive advantage and we map them along two dimensions one
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is the structure of knowledge unstructured or structured tested explicit and the second dimension is the level of
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diffusion is it undiffused do only a few people in the organization have that knowledge do
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many people in the organization have that knowledge or does the competition have access to
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that knowledge or is it available to the general public so those two dimensions structure and diffusion
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are important to map those critical knowledge resources a sort of simplified rendition of that
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is depicted in the diagram that we're looking at now so what you have is the two dimensions
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uh to keep it simple highly diffused or highly undiffused and then highly structured or codified
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and unquantified so that gives you sort of four blocks in which you can place your knowledge
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traditionally very little when you look at knowledge management there was a tendency to try to capture
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all the knowledge in an organization first of all this is not possible it's really hard to capture all the
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tested experience and put into a computer system but even if it were possible you'd serve a cognitive overload because
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it's just too much so what we propose is really focus on the knowledge assets that are critical
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for success that underpin performance so those critical knowledge assets should be mapped so that
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the management can decide how to further develop it to create growth and competitive
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advantage and sort of associated with that is the fact that you can take knowledge in the four blocks that we
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identified and each one of those blocks has specific implications for your ability to take that knowledge
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and go out and create and capture value from the marketplace well the strategic management of
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knowledge as we discussed just now links knowledge to competitive performance and
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growth now with the entrepreneurial management of knowledge we try to understand how innovation
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is created in organizations so how do organizations big and small create new ideas create
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new knowledge how is that knowledge then further develop in the pursuit of innovation
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how is it shared and applied in different contexts so this link to innovation which is really important
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is captured by this entrepreneurial management of knowledge with the research initiative we try to create
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research that has impact to really balance theory and practice so the outcome of
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the research initiative has been both academic publications and practitioner oriented publications
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and we've always also been able to build a new executive education program at wharton that deals with the strategic
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management of knowledge assets and going back to the 2x2 that we set up earlier each one of those blocks the top left
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through the inner bottom right has specific challenges associated with how you strategically deploy that
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knowledge and how you go about innovating so knowledge which is uh very codified and diffused out and
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everybody knows it the challenges are very very different from basically being able to go
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in the bottom left and capture the expertise of your key people in the organization
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and think about how you can use that knowledge to create competitive advantage with knowledge networks we try to
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understand the linkages between knowledge assets so how are they related and how do they
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interact a little example would be looking at a patent on a new technology that would be one
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knowledge asset and another knowledge asset would be the experience or expertise
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of a key engineer that developed that patent so two knowledge assets linked to one another that's a mini network so
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the question is when we want to be strategic about knowledge development and the sharing of
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knowledge can we give away one knowledge asset and hold on to another knowledge asset so
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looking at tesla for example last year which opened up its patents to competitors they might have given
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away the patents but they haven't given away the engineers that worked on the patents so
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it's very clever you give something but the competition not necessarily can do too much
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with it because another part of the knowledge network stays within the organization and is not
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shared so to me there's sort of two challenges one is as i look at my various knowledge
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assets can i think about ways of linking them because if i link two knowledge assets
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it allows me to come up with a new combination and that might be very very powerful and
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then the other one is how do i particularly with the more tacit types of knowledge how do i actually
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identify that knowledge and where we can get traction using that knowledge in the competitive marketplace
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well it's interesting that when we think about open innovation and sharing knowledge or giving away
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knowledge before you can decide what to share you have to know what you have so to me the first step in any
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open innovation initiative or strategic alliance initiative has to be looking inside and thinking about what
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are the critical knowledge pieces that i have and what are knowledge gaps what are
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knowledge assets that i don't have and might be able to source from the outside so i think it's really
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important to have a strategic knowledge map to then make informed decisions about who to partner
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with and what kind of knowledge to obtain from partners and if you think about the
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combination of two pieces of knowledge in some novel way in a way that's the essence of all what
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what most entrepreneurs do and the challenge then becomes is i have a piece of knowledge and i may
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underestimate its true value until i start thinking about who else might have knowledge that i can link up
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uh so i don't have to have the new knowledge myself what i need to do is find some way of
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identifying whether that knowledge would be useful for me to come up with some new
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combination there's a huge culture and political dimension when it comes to the sharing
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of knowledge and when we look at people and their motivations also in terms of their careers
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sometimes it's difficult to incentivize them to to share that knowledge i guess they are looking at
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innovative technology companies like for example google ways to incentivize people to work
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together if they enjoy what they're working on like one day a week you can do whatever you
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want to do but do it in teams so there are ways i think how to bring employees together
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and take them the fear of sharing their knowledge and make sure that they contribute to a
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common goal i think that's important to establish that goal and make everyone feel comfortable to
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work in a team this may be an opportunity to put up another chart and that sort of shows you that up in
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the top left hand corner of the chart is where value lies because what you have is undiffused knowledge so
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other people want it and you have it and what you have is highly codified knowledge which is kind of easy to
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replicate and to use and here's where the dilemma lies and that is that people up in that
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top left hand corner want to try to keep that value and unless you formally recognize that it's necessary
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for that knowledge to be spread in the organization so you can go forward and prosper as it
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were competitively it just ain't going to happen so unless you've got some kind of map that
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shows you where the valuable knowledge lies in terms of getting fairly uh early returns on it
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people are just not going to share it well the second point is that if you're up in that top left hand
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corner what you really need to do is have have identified that the knowledge is in
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that top left hand corner and so to prevent people from trying to retain the value of that knowledge by
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not sharing it you need to have that formally recognized in your reward system and that's a very interesting point in
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that within the company you would like to share all your knowledge but outside the company you have to be
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strategic and you don't want to necessarily share your knowledge with the competition
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so there is um yeah a difference between internal knowledge sharing and external knowledge sharing
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but once you have the map once you know what a structure was unstructured and how diffuse it is within
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you can make those strategic decisions okay so if you have a look at the chart what you have is you know in the
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simplified world uh is the four blocks and uh there are companies that uh historically
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have played in each one of those blocks and it might be interesting just to talk
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very briefly about that if you look at the bottom left-hand block this is where the essence of your knowledge is deep
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tacit expertise which is kind of hard to articulate and it's resident in the minds and
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and experience of experts uh typically what you'd find there's somebody like
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goldman sachs who's brilliant at being able to use their financial expertise
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to come up with new kinds of financial instruments that they can take into the marketplace and as the old
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new changes they keep on changing as well so the heart of their knowledge is to be able to tap that expertise
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a much more pragmatic example of that would be somebody like bain as a consulting firm
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which is particularly interested in deeply understanding and being able to develop solutions for
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the customers new solutions for new problems the top left hand side is uh is somebody
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who would be depending very much on using protected knowledge which is being patented
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so examples to this day of the most prolific companies in terms of patenting or people like ibm
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people like samsung people like canon and the essence of their knowledge is to keep on generating new protected patents
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as we move to the right and the knowledge gets more and more diffused the companies up at the top right are
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companies that are able to come up with new combinations of existing knowledge and i think a beautiful example and in
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fact the source of the concept of open innovation was mr lafley at procter gamble who
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uh basically you know said why do we have to create new knowledge ourselves why don't
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we go out and find solutions to the you know to the problems and this led to you know amazing products like the
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swiffer for heaven's sake he has a very very big business was just created from
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basically taking old mops and and detergents and doing it in new ways and then bottom right is perhaps the
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most interesting and that is uh is is companies that are constantly experimenting with trying to find new
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ways of applying their existing knowledge and our two favorite examples there is the
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german company buyer who for 110 years has been creating new uses for aspirin and every year they come up with new
00:14:32
uses for aspirin and then the second one is w al gore who basically took teflon and is constantly innovating around the
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use of teflon so it's uh you know every every corner or different places where you can play
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and extract knowledge and capitalize on it i think for senior management it's
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important to think about what kind of knowledge assets does my organization have
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is it in the bottom left the top left the bottom right the top right and then how do i want to
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strategically develop that knowledge and there are opportunities for growth in each
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of those quadrants well we've just published a harvard business review article
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about the topic we have created a three-day executive education program at wharton that
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helps people understand what is strategic about the development of knowledge we have
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experts like peter capelli talk about the management of tacit knowledge talent our advising for innovation
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karl ulrich talks about technical innovations so interesting mix of faculty where
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we discuss the challenges that come with managing knowledge strategically one of
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the things that i want to add to the to the pot here is is that martin when he did his dissertation on the topic
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actually developed a way of simulating the evolution of knowledge we're making some fundamental
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assumptions about the nature of the knowledge and then how that evolves using different types of strategy for
00:16:24
knowledge development and we continue to work on that simulation so that what you can do is if you have a
00:16:32
particular knowledge strategy in mind you can test it in the simulation and you know test 100 years
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of knowledge development in in a few minutes so it's a very very powerful way of
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beginning to look at the implications of making certain strategic moves in knowledge management
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you