What’s Your Strategy For Managing Knowledge - Harvard Business Review

1. MORTEN T. HANSEN, NITHIN NOHRIA,
AND THOMAS TIERNEY

2.  1990’s foundation of industrialized economy shifted from natural
resources to intellectual assets
 Rise of networked computers
 Codify, store and share certain kinds of knowledge
 Executives lacked successful models that they could use as
models
 Study knowledge management in different industries
 Management Consulting
 Health Care Industry

3.  Knowledge is the core asset of consultancies
 First to pay attention to and invest in KM
 Aggressively explore use of IT to capture and
disseminate knowledge
 Their experience is relevant to companies that depend
on smart people and flow of ideas
 However, consultants do not take uniform approaches to
managing knowledge. They employ two different KM
strategies

4.  Codification
 The strategy centers on the computer
 Knowledge carefully codified and stored in databases
 Accessed and used easily by anyone in the company
 Personalization
 Knowledge closely tied to person who developed it
 Shared mainly through person-to-person contacts
 Purpose of computers: help communicate knowledge
 Choice of strategy
 The way the company serves its clients
 Economies of the business
 The people it hires

5.  Anderson Consulting and Ernst & Young
 Codification strategy
 “People-to-Documents” approach
 Extracted from the person who developed it
 Made independent of that person, reused
 Bain, Boston Consulting Group and McKinsey
 Personalization strategy
 Dialogue between individuals
 Brainstorming sessions and one-on-one conversations
 Deeper insights by going back and forth on problems
to be solved

7.  Access Health
 “Clinical decision architecture”
 Reuse structure leads to low prices
 Captured 50% of call-center market. Growing at 40% a
year
 Memorial Sloan-Kettering Cancer Center
 Highly developed personalized model
 Higher prices
 Consistently ranked as top cancer research and
treatment institution in the country

8.  Knowledge management strategy reflect
competitive strategy
 Creating customer value for customers
Ernst & Young and Anderson
Consulting
McKinsey, BCG and Bain
Always dealing with similar problems Problems don’t have clear solutions
Service offering is very clear Highly customized solutions
“Economics of reuse” “Expert economics”
Hires undergrads from top
universities and train them
Hire top-tier MBA grads

9. • Companies that use knowledge effectively: 80-20 split
 Downfall of CSC Index in the early 1990s
 Problem: mixing inventors with implementers
 Result: CSC Index unable to keep up with
competition like Anderson Consulting and Ernst &
Young
 Lesson: important to avoid straddling, but unwise
to focus on one exclusive strategy

10. Executives must be able answer the following questions ,
1. Why customers buy a company’s products/services
rather than those of its competitors
2. What value do customers expect from the company?
3. How does knowledge that resides in the company
add value for customers?
After giving answers to these questions clearly, managers
consider the following questions:
1. Standardized or customized products?
2. Mature or innovative products?
3. People rely on explicit or tacit knowledge to solve
problems?

11.  Companies that isolate KM risk losing its
benefits
 Do not isolate in departments like HR or IT
 Benefits higher if coordinated with HR, IT and competitive
strategy
 Responsibility of top management
 Actively choose a knowledge management approach that
supports a clear competitive strategy
 Strong leadership = benefit of customers and company