Glossary of Knowledge Management Terms
Balanced Scorecard System (BCS)
Method of measuring performance of a firm beyond the typical financial
measures. Links corporate goals and direct performance measures in a framework
specific to a firm, and is one method of measuring the impact of knowledge
management. (2)
Best Practice
Those practices that have produced outstanding results in another situation
and that could be adapted for our situation. (2)
Calculated Intangible Value
An "elegant way to put a dollar value on intangible assets" uses a
measure of the company's ability to outperform an average competitor that has
similar tangible assets as the firm's value of intangible assets. Uses the
following steps 1. Calculate average pre-tax earnings for three years; 2. Go to
the balance sheet and get the average year-end tangible assets for three years;
3. Divide earnings by assets to get the return on assets. 4. For the same three
years, find the industry's average ROA; 5. Calculate the "excess
return" by multiplying the firm's assets by the industry ROA and
subtracting them from the firm's pretax earnings; 6) calculate the three year
average income tax rate and multiply it by the excess return, this results in
the premium attributable to intangible assets; 7) calculate the net present
value of the premium by dividing the premium by the company's cost of capital.
(7)
Case Based Reasoning
A branch of artificial intelligence that attempts to combine the power of
narrative with the codification of knowledge on computers. Involves extraction
of knowledge from a series of narratives, or cases, about the problem. (1)
Collaborative Tools
Tools such as groupware that enable both structured and free-flow sharing of
knowledge and best practices. An example is Lotus Notes. (2)
Communities of Practice
Also known as affinity groups:
A) Informal networks and forums, where tips are exchanged and ideas
generated. (7)
B) A group of professionals informally bound to one another through exposure
to a common class of problems, common pursuit of solutions, and thereby
themselves embodying a store of knowledge. (8)
Core Capabilities
A) Constitute a competitive advantage for a firm; they have built up over
time and cannot be easily imitated. They are distinct from both supplemental
and enabling capabilities, neither of which is sufficiently superior to those
of competitors to offer a sustainable advantage. (6);
B) Bestow a competitive advantage on a company - distinctive, firm specific
or organizational competencies; resource deployments; or invisible assets. (6)
Core Rigidities
Refers to the idea that a firm?s strengths are also ? simultaneously
? its weaknesses. The dimensions that distinguish a company competitively have
grown up over time as an accumulation of activities and decisions that focus on
one kind of knowledge at the expense of others. Companies, like people, cannot
be skilful at everything. Therefore, core capabilities both advantage and
disadvantage a company. (6)
Customer Capital
The value of an organization's relationships with the people with whom it
does business, or the value of its [the companies] franchise, its ongoing
relationships with the people or organizations to which it sells. (7)
Data
A) Set of discrete, objective facts about events. Data is transformed into
information by adding value through context, categorization, calculations,
corrections, and condensation. (1);
B) Facts and figures, without context and interpretation. (2)
Enabling Capabilities
Necessary [to enter a market] but not sufficient in themselves to
competitively distinguish a company. (6)
Enablers of Knowledge Management
Systems and infrastructures that ensure knowledge is created, captured,
shared, and leveraged. These include culture, technology, infrastructure, and
measurement. (2)
Experience
Refers to what we have done and what has happened to us in the past. (1)
Explicit Knowledge
Formal/codified . . . comes in the form of books, documents, white papers,
databases, and policy manuals. (2)
Human Capital
The capabilities of the individuals required to provide solutions to
customers. (7)
Information
A) A message, usually in the form of a document or an audible or visible
communication . . . meant to change the way the receiver perceives something,
to have an impact on his judgment and behaviour . . . it?s data that makes a
difference. (1);
B) Patterns in the data. (2)
Intellectual Capital
Refers to the commercial value of trademarks, licenses, brand names,
formulations, and patents. (2)
Knowledge
A) A fluid mix of framed experience, values, contextual information, and
expert insight that provides a framework for evaluating and incorporating new
experiences and information. It originates and is applied in the minds of
knowers. In organizations, it often becomes embedded not only in documents or
repositories but also in organizational routines, processes, practices, and
norms. Key concepts of knowledge are experience, truth, judgment, and rules of
thumb. (1);
B) Actionable information. (2);
C) A defined body of information . . . depending on the definition, the body
of information might consist of facts, opinions, ideas, theories, principles,
and models (or other frameworks) . . . also refers to a person?s state of being
with respect to some body of information. These states include ignorance,
awareness, familiarity, understanding, facility, and so on. (4);
D) The integration of ideas, experience, intuition, skill, and lessons
learned that has the potential to create value for a business, its employees,
its products and services, its customers and ultimately its shareholders by
informing decisions and improving actions. (5)
Knowledge Interrogators
Also known as corporate librarian and knowledge integrator; person
responsible for managing the content of organizational knowledge as well as its
technology. [they] keep the database orderly, categorize and format documents
and chucking the obsolete, and connect the users with the information they
seek. (7)
Knowledge Management
A) Make an organization?s knowledge stores more accessible and useful. (3);
B) A business activity with two primary aspects (1) treating the knowledge
component of business activities as an explicit concern of business reflected
in strategy, policy, and practice at all levels of the organization [and (2)]
making a direct connection between an organization?s intellectual assets ? both
explicit [recorded] and tacit [personal know-how] ? and positive business
results. (4);
C) Conscious strategy of getting the right knowledge to the right people at
the right time and helping people share and put information into action in ways
that strive to improve organizational performance. (2)
Learning Organization
Term popularised by Peter Senge's the Fifth Discipline meaning a corporate culture
that cherishes continuous improvement.
Market-to-Book Ratio
Common method of valuing knowledge intensive companies. Equal to (price per
share X total number of shares outstanding) divided by book equity, which is
the equity portion of a company's balance sheet. (7)
Rules of Thumb
Shortcuts to solutions to new problems that resemble problems previously
solved by experienced workers. (1)
Signature Skill
An ability by which a person prefers to identify himself or herself
professionally. (6)
Structural Capital
A) Legal rights to ownership technologies, inventions, data, publications,
and processes [that] can be patented, copyrighted, or shielded by trade-secret
laws. (7)
B) Strategy and culture, structures and systems, organizational routines and
procedures - assets that are often far more extensive and valuable than the
codified ones. (7)
Supplemental Capabilities
Those that add value to core capabilities but that could be imitated. (6)
Tacit Knowledge
A) [knowledge] developed and internalised by the knower over a long period
of time . . . incorporates so much accrued and embedded learning that its rules
may be impossible to separate from how an individual acts. (1);
B) informal/uncodified . . . found in the heads of employees, the experience
of customers, the memories of past vendors . . . highly experiential, difficult
to document in any detail, ephemeral and transitory. (2)
Technological Capability
Term used to encompass the system of activities, physical systems, skills
and knowledge bases, managerial systems of education and reward, and values
that create a special advantage for a company or line of business. (6)
Value Proposition
The logical link between action and payoff that knowledge management must
create to be effective. Customer intimacy, product-to-market excellence, and
operational excellence are examples. (2)
Sources
(1) Working Knowledge, Thomas H. Davenport and Laurence Prusak,
Harvard Business School Press, 1998
(2) If Only We Knew What We Know, Carla O'Dell and C. Jackson
Grayson, Jr., The Free Press, 1998
(3) Moore,
John, Knowledge Management 101
(4) Barkley, Rebecca O.
and Murray, Phillip C., What is Knowledge Management?
(5) http://www.km-review.com/knowledge/articles/01i.htm
(6) Wellsprings of Knowledge: Building and Sustaining the Sources of
Innovation, Dorothy Leonard, Harvard Business School Press, 1995.
(7) Intellectual Capital, Thomas A. Stewart, Doubleday, 1997
(8) Brook Manville with McKinsey & Co. as found in Intellectual
Capital