Knowledge Management
Chapters 7-8
By:
Mikhail Averbukh
Scott Brown
Brian Chase
Outline
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Chapter 7
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Chapter 8
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Research that Reinvents the Corporation
Managing Professional Intellect
Additional Research
Toyota Case
 Pitfalls of Social Networking
 Biotech Case
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Chapter 7 Outline
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Pioneering Research
Technology Gets Out Of The Way
Harvesting Local Innovation
Coproducing Innovation
Innovating with the Customer
PARC: Seedbed of the Computer
Revolution
How Xerox Redesigned It’s Copiers
Research that Reinvents the
Corporation
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Published in 1991
By John Seely Brown
Former Director of Xerox Research Center,
PARC (Palo Alto Research Center)
Real case study example
“The most important invention that will come out of the
corporate research lab in the future will be the corporation
itself”.
Pioneering Research
The Corporation Invention created by
PARC
 Pioneering Research Principles
 New work practices is as important as
new products
 Ubiquitous computing- Information
technology used in a broad range of
everyday objects.
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Pioneering Research
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Learning from innovation
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Can’t just produce innovation
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Ultimate innovation partner is the customer
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Tailoring innovation to the needs of the
customers.
Technology Gets Out of the Way
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Remote Interactive Communication (RIC)
IT’s transformation of the copier
Complex computing and communication
devices- Sensors that collect information
Artificial intelligence techniques
Customer - never see the machine fail
Xerox - way to listen to the customer
Technology Gets Out of the Way
 The
technology itself will become
invisible
 Example:
Photocopier
 Example: GPS devices in cars
 Example: Fuji’s interactive photo editing
machine at Walgreens
“A flexible, versatile device that is able to meet many
different customer needs”
Harvesting Local Innovation
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Getting involved in the anthropology of work
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PARC was studying work practices throughout
companies (Ex. Payroll)
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Employees were inventing innovative work
practices, while not even realizing it, to reach
their goals
Harvesting Local Innovation
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Customized user-system program
(CUSP)
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Allows users to modify the system
themselves
Buttons - people without a lot of training
in computers can make modifications
 Xerox tech reps learn most out in the
field
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Coproducing Innovation
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Communicate fresh insights so that others
can grasp their significance - tech transfer
Uncover features that need to change
Conceptual envisioning environment
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Envision new products before they are
actually built
Share understanding with partners to
coproduce new technologies and practices
Coproducing Innovation
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“Help employee’s grind a new set of
eyeglasses so they can ‘see the world in
a new way’”
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You can’t just tell people about a new
insight, you have to let them experience
it.
Coproducing Innovation
 Innovating
with the Customer
 “Research’s ultimate partner in
coproduction is the customer”
 Customers may be unaware of
their needs
 Product may not yet exist
PARC: Seedbed of the Computer
Revolution
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Basic research in computing and electronics
How complex organizations use information
Throughout the 1970s PARC innovations:
 Bit map - display with easy interface
 LAN - distributed computing
 Overlapping screen windows
 Point and click editing
 Smalltalk - first object oriented programming
language
Laser printing prototype - billion dollar business (1990)
How Xerox Redesigned It’s Copiers
In the early 1980’s users were finding
their Xerox copiers extremely difficult to
use
 Unreliability was not the real problem
 Knowing that trouble was inevitable
 Now the new copiers have enough
technology to where the functions of the
copiers are put into the context of the
task the user is trying to accomplish
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Chapter 8
Managing Professional Intellect
Making the most of the best
James Brian Quinn, Tuck School of Business
Philip Anderson, INSEAD
Sydney Finkelstein , Tuck School of Business
Managing Professional Intellect
In the post-industrial era, the success of
a corporation lies more in its intellectual
and systems capabilities than in it’s
physical assets
 Critical skill: managing human intellect
and converting it into useful products
and services
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Outline
 What
is Professional Intellect?
 Developing Professional Intellect
 Leveraging Professional Intellect
 Inverting organizations
 Creating Intellectual webs
What is professional Intellect?
4
levels
 Cognitive Knowledge
 Advanced Skills
 Systems Understanding
 Self-motivated Creativity
Level 1 of Professional Intellect
 Cognitive
Knowledge
 Know-what
 Mastery
of a discipline
 Achieved through extensive training
 Essential, but not sufficient for success
Level 2 of Professional Intellect
 Advanced
 Know
Skills
- how
 Ability to apply the rules of a discipline
to complex problems
 The most widespread value creating
professional skill level
Level 3 of Professional Intellect
 Systems
Understanding
 Know-why
 Deep
knowledge
 Understanding cause-and-effect
relationships
 Move beyond the execution of tasks
Level 4 of Professional Intellect
 Self-motivated
creativity
 Care-why
 Consists
of will, motivation, and
adaptability to success
 Not always necessary
 Organizations that nurture care-why’s
thrive
 Resides in the culture of an organization
Developing Professional
Intellect
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Recruit the best
the leverage of intellect
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Force intensive early development
repeated exposure to the complex problems
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Constantly increase professional
challenges
push professional beyond the comfort zone
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Evaluate the weed
internal competition and performance evaluations
Leveraging Professional
Intellect
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Boost problem-solving abilities by
capturing knowledge
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Overcome reluctance to share information
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Merrill Lynch knowledge base
Offer incentives
Organize around intellect
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ROI considerations
Inverting Organizations
Tailor solutions to the particular way
intellect creates value
 Example: Nova Care
 Critical professional intellect is in its
therapists
 NovaNet captures and enhances
organization’s system knowledge
 Work is organized around therapists
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Inverting Organizations
In Inverted organizations, field
experts become bosses
Individual Professionals
Person 1
Person 1 Person 1 Person 1 Person 1
Person 1 Person 1 Person 1 Person 1
Support Staff
Person 1 Person 1
Person 1
Person 1
CEO
Person 1 Person 1
Creating Intellectual Webs
Spider’s web : self-organizing network
 Brings people together to solve a
particular problem
 Many consulting firms, investment
banks, research consortia and medical
teams use this approach.
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Creating Intellectual Webs
In Spider’s Webs, a few experts
team up to meet a specific
challenge
Specialists
Client-relationship
managers
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Person 1
Managing Professional Intellect
Summary of the article
 The success of a corporation lies more in
its intellectual and systems capabilities
than in its physical assets
 The knowledge on how to manage
human intellect and how to convert it
into useful products and services is of
great importance
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Toyota Case
Created a knowledge network with suppliers
 Faced several dilemmas:
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Motivate self-interested people to participate
 Free Rider Problem
 Maximize efficiency of knowledge transfers
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 How
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to effectively transfer tacit knowledge
How do you address these problems?
Toyota Case
Provided Information to
suppliers
Heavily subsidized the
network with knowledge
and resources
Incentives
Threatened economic
sanctions to those who
did not contribute
Created a norm of
information sharing and
openness
Toyota Case
Results
Increased
efficiency
High level of
participation
No
economic
sanctions
needed to
date
Suppliers
participate
willingly
Pitfalls of Social Networking
The desire to protect “Personal Intellectual
Property”
 The need to maintain external professional
networking
 The social networking meme still need
socializing
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Meme – cultural information that represent an
idea that can be passed from one person to
another.
Buckman Case
Buckman Laboratories
K’Netix Knowledge
Network.
Started in 1992
Began with a
corporate culture
change that focused
on knowledge sharing.
Buckman Case
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Infrastructure – hardware/software that
enables communication
Infostructure – formal rules that govern
exchange on the network
Infoculture – stock of background knowledge
which is embedded in the social relations
surrounding work group processes.
Buckman Case
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Infrastructure
Used network for both intra and inter-company
communication.
 Contained virtual conference rooms, libraries,
bulletin boards, etc.
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Infostructure
Forum specialist organize and validate
information before uploaded to knowledge base.
 Region focused forums for each segment of
business.
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Buckman Case
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Infoculture
Allow employees at all levels to use network
to promote information sharing.
 Employees who share the most become the
most influential.
 Managers looks for employees who share
on the network.
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Summary
Knowledge networks require
corporate cultural change.
Incentives are needed to get people
to participate.
Consequences are needed to
address the free-rider problem.
Sources
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Creating and Managing a High Performance
Knowledge-Sharing Network: The Toyota Case.
Strategic Management Journal. By Jeffrey Dyer and
Knetaro Nobeoka. Issue 21, year 2000.
Three Potential Pitfalls of Corporate Social Networking.
Gartner Group, 4 December 2007. By Brian Prentice.
Knowledge management in practice: An exploratory
case study. Technology Analysis & Strategic
Management; September 1999. By Shan Pan and
Harry Scarbrough.