Networked knowledge: now, there are new ways of managing knowledge transfer that even the smallest SME can benefit from. (Knowledge Management).

Most large corporations have started to take knowledge management seriously, because to perform in today's competitive environment, the information a company holds can be a goldmine. Although not everyone has mastered it yet, KM is now understood to be a great competitive advantage.

Real Jacob, a professor in the management training department at the Ecole des Hautes Etudes Commerciales (HEC), is also scientific director of the knowledge management research arm of the Centre francophone d'informatisation des organisations (CEFRIO). In a research project on the challenge of knowledge management in the competitive era of the 21st century (Gerer les connaissances: un defi de la nouvelle competitivite du 21 e siecle Information, interaction, innovation) conducted jointly with Lucille Pariat, a researcher at the Institut de recherche sur les PME de 1'Universite du Quebec a Trois-Rivieres (UQTR), Jacob created a profile of best practices in knowledge management and skills development, and documented the behaviour of Quebec knowledge management leaders.

Knowledge management strategies and practices are now essential for a company to make the best use of explicit knowledge as well as the tacit knowledge circulating within internal and external networks. If no effort is made to manage knowledge, managers need to continually reinvent the wheel, enlist support from extremely expensive outside expertise, and build a history of events when they realize, to their regret, that there are large holes in their organizational memory.

To overcome this potential stumbling block lurking within organizations, Jacob's study examines knowledge management through experiments and case studies based both in Quebec and internationally.

In a summary of the study, Jacob reports that 79% of the CEOs surveyed in 1999 by the American Management Association believed that knowledge management was vital to the success of their company.

He went on to say that managing a company's knowledge is unfortunately not at all easily done. The problem stems first and foremost from the masses of information to be handled. The study notes that "according to the Gartner Group, the quantity of information available in the world is currently doubling every five years and organizations cannot keep up."

Jacob also reports that an extensive study conducted by Electronic Data Systems (EDS) of the 1,000 largest corporations in the U.S. recently showed that U.S. professionals devoted 60% of their time (three days a week) to researching and validating information. He also points out that the situation is further complicated by the fact that much of the information to be managed is stored in places that are not readily accessible... employees' brains.

"Innovation in fact arises from the right blend of 30% explicit knowledge and 70% tacit knowledge available to the organization. Explicit knowledge consists of information compiled in a form that is readily accessible and communicated -- for example, a manual," he notes in his research report.

SME networks

Managing the knowledge of an SME can be made easier if it is part of a network or group. Valotech, a group of 75 technology SMEs on Montreal's South Shore, for example, takes care of knowledge management for every company in the network, including business intelligence. The network continually relays the information it gathers to members through information transfer seminars, training workshops, and coaching by the group's major clients.

Valotech was created in 1992 in the form of a business club, and incorporated under the name of Valotech in October 1999 as a not-for-profit organization. "The catalyst for the formation of the club was the arrival of the Canadian Space Agency on the South Shore," says executive vice-president of Valotech, Michel Gariepy.

Club members felt that together they could benefit from the windfall created by this new research centre in their area. The corporate club's focus quickly expanded to include research in every field. "Its job was to look for technologies, either internally or externally, make deals with universities and research centres and then transfer the new information to member companies in one way or another," says Gariepy. Even if the individual companies specialized in different sectors, they shared some common problems, such as managing ultra-specialized, highly educated and skilled personnel.

Another example of this type of network is Bombardier Chair, where Jacob once worked. In this case, Chair subcontractors carry out their own knowledge management through a network.

Another model network, according to Jacob, is the 230 avionics SMEs in the Montreal region that are currently in the process of regrouping to better meet the needs of major clients. In these SME groupings, the network takes care of business intelligence and the transfer of knowledge to member companies.

Jacob also cites the Canam Manac initiative, the Acier Plus network, a company division that networks its major clients. "At first, we set up the technology and made it accessible to our best clients," says Jasmin Gosselin, vice-president communications for the Groupe Canam Manac inc. The focus of the group is customer service.

The Acier Plus network has existed since 1995 and, according to president and general manager Pierre Arcand, it was an opportunity to offer a business solution and unique added value to Acier's Canam clients. "Over and above Canam's basic product, metal beams and bridging, there was a need for drafting technology," says Arcand. The industry was lacking such technology and the network stepped in to fill the gap.

Today, the network offers much more than drafting software. "Over the years, the services and products have evolved tremendously," says Arcand. The Acier Plus network now offers management tools, design and marketing services, succession planning, supply programs that include member purchases, and even training through the Universite de l'Acier set up in 1998 to deal with a major shortage of senior draftspersons in North America. One aspect of knowledge management dealt with by the network is the transfer of expertise during replacement and succession planning.

In addition to serving as a means of enhancing Canam client loyalty, the network provided knowledge management at various levels for Acier Plus member clients. The composition of the network may differ from that of Valotech, but the objectives are essentially the same -- to manage knowledge in all its forms and improve training among group members.

Jacob believes it is far more worthwhile for an SME to manage knowledge within a network than working on its own. "SMEs with more than 100 employees need to be involved in the knowledge management process," he maintains. The most frequently used leverage for maximizing knowledge management within SMEs is the business network.

"Competitiveness and competition are really non-issues within these networks because there are always elements of greater interest," notes Jacob. Even if there's competition among the SMEs, the network can, for example, provide access to leading edge training, which none of the SMEs could afford on their own. The decision to collaborate with other companies on building a group tool, such as a training centre, paves the way for another type of competitiveness among the SMEs that know how to transform and use this training within their company. The content of specialized training is therefore part of the knowledge companies need to manage.

"Specialized training often results from a business intelligence process put in place by the network to rapidly transfer leading edge information to SMEs who then incorporate it just as quickly into their daily practices," says Jacob, who firmly believes that learning networks are essential for maximizing knowledge within small enterprises. More emphasis should be placed on the network approach.

There are other solutions for managing knowledge and, for some, it might mean participating in learning groups with peers as, for example, the Groupement des chefs d'entreprises du Quebec (Quebec CEO group) and its clubs. According to Jacob, when CEOs get together once a month to discuss CEO or management problems and share their tacit knowledge, that's a form of knowledge management. Another way for SMEs to seek out knowledge is to use mentors from large corporations. "Coaching, mentoring, continuous education, etc. are all strategies that can be used as leverage to make use of the knowledge available in an information market," says Jacob.

RELATED ARTICLE: Implementing a knowledge network

1. First, consider a few questions:

* What strategic expertise or unique knowledge do we have whose loss would compromise the success or competitiveness of our organization?

* Who holds this knowledge?

* What are we currently doing to ensure the quality and long-term survival of the expertise associated with this knowledge?

2. Think about the ideal composition of a group of people whose mission would be to safeguard and enhance the components of this knowledge base: their expertise, tools, procedures, documents, etc.

3. Define and allocate key roles for setting up and running a community: mentor, facilitator, coach, support, etc.

4. Develop strategies for recruiting future members, considering those with upstream knowledge (creators and producers) and those with downstream knowledge (users, beneficiaries, clients).

5. Obtain necessary resources to set up and equip a community of practice where members' collaborative efforts are facilitated by the use of technological tools such as groupware and telephone or video conferencing.

6. Inform, recruit and lead in an effort to build a critical mass of skilled employees divided into smaller communities that are directly connected to specific managerial concerns.

7. Establish a consensus within the community on the precise mission and modus operandi of the community. Familiarize members with tools, propose themes, spell out challenges. Elicit everyone's participation and sustain general enthusiasm.

8. For managers: allocate time for member participation. Acknowledge efforts made, and reward a community's contribution to the organization.

9. For participants: enjoy learning from one another within an informal, effective structure.

Louis Langelier, KLMNOP Canada Inc.

Julie Demers ([e-mail]) is Associate French Editor of CMA Management magazine.