Saturday, January 7, 2012

Knowledge Markets

In Working Knowledge, by Thomas Davenport and Laurence Prusak (1998), knowledge transfer is viewed from the lens of market forces.  Knowledge moves upward as well as downward in organizations.  Following how knowledge is transferred from the bottom-up: knowledge is created by an individual, then externalized and shared with team members, then move upward to upper management.  If this new knowledge effects changes within the organization then this new knowledge could also be seen in the environment in which the organization operates.  The same can also be said about transferring knowledge from the top-down: changes in the environment (changes in government policy, new competitors, loss of suppliers, etc…) can change how management address business as usual forcing changes downward, making changes to teams and groups, thus effecting work at the individual level.  These market forces, according to Davenport and Prusak (1998), are the drivers of knowledge.

Understanding that these knowledge markets exist can help with the efficiency of transferring knowledge to those who need the knowledge to perform their work tasks, to solve complex problems, and to spark innovation.  Many organizations assume that by placing internet technologies in the hands of the employees knowledge will be transferred freely.  Davenport and Prusak (1998) identified this problem: "Companies install e-mail or collaborative software and expect knowledge to flow freely through the electronic pipeline. When it doesn't happen, they are more likely to blame the software or inadequate training than to face a fact of life: people rarely give away valuable possession (including knowledge) without expecting something in return" (p. 26).

Knowledge drivers determine whether newly created knowledge will be transferred as well as what knowledge is being requested.  Time, money, and knowledge are "finite resource" as Davenport and Prusak (1998) have identified.  With these resources being scarce, people have to juggle these three resources.  With time being a critical factor in one's business day, knowledge transfer is a rarity and reciprocity is usually one driver that can launch knowledge transfer.  Additional drivers, according to Davenport and Prusak (1998), although they didn't call them drivers they referred to them as the price system. are repute, altruism, and trust.

Trust is the most critical driver to knowledge transfer.  If you don't trust a knowledge source you are skeptical to sharing that knowledge until you are able to verify the source.  Davenport and Prusak (1998) indicated three ways in which trust must be established within organizations:
  1. Trust must be visible.
  2. Trust must be ubiquitous.
  3. Trustworthiness must start at the top (pp. 34-35).

For successful knowledge transfer to take place in your organization identify your knowledge markets.  Identify the drivers to knowledge transfer and remove any barriers to the knowledge transfer process.  If there is no knowledge market present, or at least identified, then create a knowledge market that incentivizes your employees to create and transfer knowledge.  Provide gift cards for transferring a specified amount of knowledge or incorporate the knowledge transfer into a quarterly bonus pool.  Aside from the monetary benefits, employees will soon see the rewards of having access to more knowledge that is beneficial to them as well as knowing who can provide them with the knowledge they need.  This will, in the long-run, provide a more effective and innovative workplace.

Davenport, T. H., & Prusak, L. (1998). Working Knowledge: How Organizations Manage What They Know. Boston, MA: Harvard Business School Press.
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