KNOWLEDGE MANAGEMENT AND COMPETENCY MANAGEMENT

Knowledge management deals with the process of creating value from an organization's intellectual assets. In order to produce value, there needs to be some attributes or competencies to measure. A categorized list of possible critical success factors to determine knowledge management success in an organization, as previously discussed, is:

Adaptability/Agility

• Anticipate potential market opportunities for new products/services

• Rapidly commercialize new innovations

• Adapt quickly to unanticipated changes

• Anticipate surprises and crises

• Quickly adapt the organization's goals and objectives to industry/market changes

• Decrease market response times

• Be responsive to new market demands

• Learn, decide, and adapt faster than the competition

Creativity

• Innovate new products/services

• Identify new business opportunities

• Learn not to reinvent the wheel

• Quickly access and build on experience and ideas to fuel innovation

Institutional Memory Building

• Attract and retain employees

• Retain expertise of personnel

• Capture and share best practices

Organizational Internal Effectiveness

• Coordinate the development efforts of different units

• Increase the sense of belonging and community among employees in the organization

• Avoid overlapping development of corporate initiatives

• Streamline the organization's internal processes

• Reduce redundancy of information and knowledge

• Improve profits, grow revenues

• Shorten product development cycles

• Provide training, corporate learning

• Accelerate the transfer and use of existing know-how

• Improve communication and coordination across company units (i.e., reduce stovepiping)

Organizational External Effectiveness

• Reach to new information about the industry and market

• Increase customer satisfaction

• Support e-business initiatives

• Manage customer relationships

• Deliver competitive intelligence

• Enhance supply chain management

• Improve strategic alliances

The tutorial outline titled "KM Quick: A KM Tool for Government Practitioners," developed by the Federal Aviation Administration Knowledge Services Network and the Federal Knowledge Management Network (August 22, 2002, Washington, D.C.; http://www.km.gov), describes the twenty-first-century knowledge environment as one involving accelerating change, increasing uncertainty, a growing need for knowledge and learning, and exploding innovation. The knowledge imperative for the government, as discussed in the KM Quick tutorial outline, is that knowledge must be leveraged through e-government, a KM capacity throughout government must be built, learning how to learn across all government agencies and offices is needed, and applying KM to emerging challenges in government (e.g., Homeland Security) must be accomplished.

A white paper on "Skills Management in Knowledge-Intensive Organizations" (Intelligent Software Components, April 2002, http://www.isoco.com) asserts that organizations surviving in the "knowledge economy" must capitalize on the principal asset for the organization—namely, its intellectual capital. In this paper, people are viewed as sellers of knowledge, while departments, projects, profiles, and organizations are viewed as knowledge buyers. Together, they comprise a knowledge market where the goods to be traded are competencies.

This knowledge market approach is quite interesting. Other organizations have developed other types of models to look at "knowledge organizations." The company Tip Interactive (http://www.tipinteractive.com/elearningsuite/default.asp) looks at a performance improvement toolbox as an atom that has a knowledge nucleus. The electrons circling around the nucleus are competency development, performance management, knowledge management, e-learning, and employee orientation. Here, we see the importance of the pillars that we have been discussing as forming the foundation for an organization's human capital strategy.

In an earlier chapter, we discussed how the Public Service of Canada is using "competency-based management (CBM)," which combines elements of competency management and performance management. According to the "Framework for CBM in the Public Service of Canada" (http://www.tbs-sct.gc.ca/hr_connexions_rh/sigs/CBHRM/framework_cbm/fcbm1_e.html), CBM is the application of a set of competencies to the management of human resources to achieve both excellence in performance and results that are relevant to the organization's business strategies. CBM is based on the "what" and "how" of managing employee performance. Essentially, the work to be performed ("what") plus the performance of the worker ("how") equals results that should add value to the organization.

According to the Public Service of Canada's CBM Framework, there are certain conditions usually considered necessary for CBM to be successful. They include:

• The organization should have a culture that fosters participatory decision-making, innovation, individual flexibility, growth, excellence in performance, and continuous learning.

• All levels of management should assume a strong leadership and championship role for the long-term.

• Senior management needs to agree on a specific direction that is consistent across the organization.

• The project should have the commitment, participation, and long-term buy-in of key stakeholders.

• The culture of the organization should encourage managers to take ownership and drive the process throughout the implementation cycle.

• The organization needs to have a strong communication strategy in place to ensure that employees understand the reason for implementing CBM and how it can help contribute to results.

• Competencies need to be applied correctly—if not, they become meaningless.

Within the Public Service of Canada, competency profiles exist at various levels. The number of competencies vary across profiles, but most models tend to list between ten and thirty competencies (http://www.tbs-sct.gc.ca/hr_connexions_rh/sigs/CBHRM/framework_cbm/fcbmI_e.html). According to the Public Service of Canada, most organizations should have in place a measurement system capable of differentiating performance in terms of its efficiency and effectiveness.

As can be seen from the various competency models and frameworks described, an organization's human capital strategy needs to incorporate a competency management component. If an organization wants to build and nurture a knowledge sharing culture to maximize collaboration and synergy across the organization, various knowledge sharing competencies should also be part of the competency management model. For an organization to espouse knowledge management and become a "knowledge organization," these knowledge sharing competencies are critical to the fabric of the organization. For example, the World Bank (which wants to be known as "the Knowledge Bank") includes learning and knowledge sharing factors as part of their annual employee performance evaluation. These factors include being open to new ideas and continuous learning; sharing one's own knowledge, learning from others, and appling knowledge in daily work; and building partnerships for learning and knowledge sharing.

A number of organizations have already created knowledge sharing as a guiding principle for the organization. For example, the Public Service Commission in Canada has "Knowledge, Information, and Data Should be Shared" as one of its four guiding principles. Specifically, they indicate:

• Sharing will be rewarded. We will create an environment where people feel free to contribute what they know and to seek out knowledge from colleagues.

• Performance evaluations should be linked to how well a person contributes to generating, assessing, and transferring knowledge.

• Knowledge will be available to all employees except where there is a demonstrated need for confidentiality or protection of privacy.

• Our knowledge will be shared to support collaboration with other federal government departments, other levels of government, and our other partners.

• We will establish processes and tools to enable us to capture and share our knowledge in order to support collaboration.

Certainly, it is clear that knowledge management, competency management, and performance management go hand-in-hand and are critical components for an organization's human capital strategy.

The other missing pillar, which will be described in the next chapter, is change management.