CKO Wanted - Evangelical Skills Necessary: A Review of the Chief Knowledge Officer Position
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Knowledge and Process Management Volume 8 Number 1 pp 29–38 (2001)
& Research Article
CKO Wanted — Evangelical Skills
Necessary: A Review of the Chief
Knowledge Officer Position
Nick Bontis*
DeGroote School of Business, McMaster University, Canada
One of the key challenges for business executives in the knowledge era is to manage
intellectual capital. Drawing upon: (1) the author’s personal experience as CKO of Knexa.com
– the world’s first knowledge exchange auction; and (2) the relatively nascent literature on the
roles and responsibilities of CKOs, this paper highlights five perspectives that a CKO must
embrace to be successful: (1) CKO as Knowledge Sharing Icon; (2) CKO as Trust Steward;
(3) CKO as Total Trainer; (4) CKO as Techno Nerd; and (5) CKO as Number-crunching
Accountant. Copyright # 2001 John Wiley & Sons, Ltd.
The following conversation was overheard by the Opinion Department as a Devil’s Advocate,
coffee machine between an executive at Knowing During those contemplative years, I became a
Nothing Inc. and a prospective client: well-respected sage. My Wisdom Supervisor felt
that I should broaden my horizons and moved
Patty: Congratulations, I read the announcement
me laterally to the Accounting and IT depart-
regarding your promotion in the Newspaper
ments where I was a Number-cruncher and then
today on my way over here. What does CKO
a Techno Nerd. I also had a brief stint in HR as a
stand for?
Trust Steward and then a Total Trainer Prior to
Stacy: Chief Knowledge Officer.
my return here. I had been Director of Opinion
Patty: Wow. . . I should be lucky to be doing
for a couple of years prior to my appointment as
business with you. You must be really smart.
CKO. I am really happy now.
Stacy: No. . . not really. I just have lot of knowl-
Patty: Uh . . . did I mention that I have to get
edge. back to my office within the hour?
Patty: You mean you don’t have to be smart to
be a CKO? That sounds a little strange. How did
you get the job?
Stacy: Well, I was originally hired as a Thinking INTRODUCTION
Analyst out of Pensive University. After an
intensive Training Internship and a few Con- The dialogue above represents a light-hearted
ceptualization Projects I was promoted to view of the field of knowledge management (KM)
Reflecting Associate. I successfully managed and the role that a CKO (Chief Knowledge Officer)
our Knowledge Map and was rewarded with a plays in it. Nevertheless, both KM and the role that
Concept Bonus. I then made a move into the CKOs play are critically important in today’s
turbulent and information-rich business environ-
ment. The purpose of this paper is to highlight the
*Correspondence to: Dr. Nick Bontis, DeGroote School multi-disciplined perspective that a CKO must
of Business, McMaster University, 1280 Main Street West,
MGD #207, Hamilton, Ontario, Canada L8S 4M4. embrace to be successful. The paper is divided into
E-mail: nbontis@mcmaster.ca five sections based on the following disciplines:
Copyright # 2001 John Wiley & Sons, Ltd.RESEARCH ARTICLE Knowledge and Process Management
$ CKO as Knowledge-sharing Icon management of this tension yields an innovative
$ CKO as Trust Steward culture.
$ CKO as Total Trainer The state of the Chief Knowledge Officer posi-
$ CKO as Techno Nerd and tion is very healthy. Corporate announcements of
$ CKO as Number-crunching Accountant CKO placements are commonplace. Many indivi-
duals now carry business cards with the word
Before CKOs begin to view their critical role in
knowledge somewhere in the title. Earl and Scott
organizations they must comprehend the role of
(1999) interviewed twenty CKOs in Europe and
knowledge in business. As Bhatt (1998) puts it:
North America and found that they had two
Knowledge is not a physically identifiable entity. principal competencies: they were technologists
It can be acquired, stored, manipulated, and (i.e. able to understand which technologies can
distributed, yet management cannot ensure its contribute to knowledge capture, storage and
validity . . . Knowledge derived from technology sharing), and they were environmentalists (i.e.
can provide advantage to business, but, even- social networking individuals who could encou-
tually, many competitors over time imitate the rage deliberate knowledge exchange). The two
use of technology . . . Knowledge derived from critical success factors that many of the CKOs
social relationships, however, can provide long- claimed they needed in the future were more
term competitive advantages to business. This is organizational slack time for dreaming, thinking
because people-centered knowledge is unique and talking and more higher-level support from
and context dependent which other firms cannot CEOs and board members. Notwithstanding this
easily imitate (p. 166). favorable perspective, Boyd (1998) warns that
many people believe that the CKO role is mean-
Therein lies the role of CKOs in today’s business ingless, unnecessary and should be avoided.
environment. It is a complex responsibility that While the whole world’s codified knowledge
juxtaposes both technological and social skills into base (i.e. all historical information in books and
an important blend. As such, a CKO is not a electronic files) doubled every 30 years in the
glorified information technologist. Furthermore, a earlier part of the twentieth century, that number
CKO is not a legitimized human resource execu- shrank to 7 years by the 1970s. Information library
tive. Rather, a CKO is an evangelist who preaches researchers remark that by the year 2010, all the
and exemplifies the important skills required to world’s codified knowledge will double every 11
leverage the knowledge embedded in every hours. The future security of the CKO is surely
person and system. safe in the light of such a prognostication. The
Evangelists are known for capturing the imagi- following statistics also add to the support for a
nation and support of their followers. A CKO’s job CKO as a mainstay in the corporate boardroom:
is to capture that same imagination from all
employees while providing a charismatic spark $ Over half a million knowledge-intensive high-
that creates new ideas and innovation. The crea- tech jobs remain unfilled in America (Kaufman
tion of knowledge — through personal self- and McCormick, 1998).
reflection, interaction with other humans, or inter- $ Four out of five managers believe managing
action with artifacts — is essentially a human knowledge is essential (Stewart, 1997).
process (Shariq, 1998). Knowledge management $ One in five Fortune 500 companies employ a
tools, processes, and software programs are con- CKO (Stewart, 1998).
sidered artifacts that embody human knowledge. $ 42% of Fortune 500 companies anticipate such
As such, knowledge, in its raw, intermediate or an executive to be operating within the next
final stage, is ultimately produced for human three years (Reynolds, 1998).
consumption. Therefore, a CKO oversees all $ 51% of Fortune 500 companies report knowl-
knowledge activities related to human behavior. edge management activities already underway
(Reynolds, 1998).
The largest constraint impacting on human beha-
vior is, and always will be, the availability of time. Recent research conducted at the Institute for
Unfortunately, all employees suffer from time Intellectual Capital Research also supports the
constraints. Limited organizational slack often hypothesis that the CKO position will soon
favors tasks that promote efficiency as opposed to flourish in the corporate world. Representatives
innovation. As a result, a CKO must demonstrate a from fifty-three of the top executive search firms in
special management style that caters for the pur- Canada and the USA were surveyed about their
suit of efficiency while at the same time support- perceptions regarding the future prevalence of
ing increased organizational slack. The effective CKOs. The responding headhunters conducted
30 N. BontisKnowledge and Process Management RESEARCH ARTICLE
specialized searches in a variety of areas including gains from increasing rates of return. For example,
accounting, finance, IT, engineering and top execu- if I have two diamonds and I give you one, we will
tives. Forty-five per cent of those surveyed were each have half of the original total. However, if I
indeed familiar with the position of CKO. More give you half of my knowledge, we may end up
importantly, 72% of the respondents expected a with over double the original total.
significant increase in CKO searches in the future. A CKO may also look to academic research for
The implication of these results is that although guidance in knowledge sharing. Mintzberg, Ahl-
searches for CKOs have not yet materialized in strand and Lampel (1998) suggest that knowledge
great numbers, the executive search industry is sharing is a fundamental behavior within the
preparing for increased demand. We are in the learning school of strategic management. Accord-
early trajectory of an evolutionary cycle. Another ingly, supporters of the learning school believe
explanation of the interim results is that most CKO that the complex and unpredictable nature of an
appointments thus far have been done internally organization’s environment precludes deliberate
where no external search firm was required. control. Mintzberg et al. (1998, 210–223) argue that
Further results from the study predicted that two theories within the learning school have
CKOs would have no particular functional align- emerged as particularly insightful: Nonaka and
ment but that their staff would be dispersed and Takeuchi’s (1995) theory of knowledge creation,
embedded in business processes. Forty-seven per and Crossan, Lane and White’s (1999) 4-I frame-
cent of the headhunters predicted that CKOs work of organizational learning. The former
would have working experience in IT and be emphasizes the flow of knowledge in organiza-
placed primarily in high-tech industries where tions and the latter explains the importance of
knowledge-intensive work is at a premium. learning processes across multiple levels of analy-
Even though consensus on the prevalence of sis. These two theories help fill the void created by
CKOs is still hotly debated, what is commonly other streams of literature (i.e. evolutionary theory,
appreciated is the complex role and varied back- resource-based view, and intellectual capital)
ground a successful candidate will need to pos- which emphasize the stock of knowledge in
sess. The following sections represent a brief organizations.
description of the various hats that a CKO must Crossan et al. (1999) emphasize knowledge
wear to be successful. processes that occur across the individual, group
and organizational levels of analysis. Individuals
interpret the environment and integrate their
CKO AS KNOWLEDGE-SHARING ICON learning among fellow group members. That
group knowledge is eventually institutionalized
Having the distinction of being called a CKO of an within the organization. Consequently, knowledge
organization requires an individual to represent all is shared among individuals, groups and organi-
that is good in knowledge management. Thus, the zational artifacts. A CKO must actively manage
CKO often acts as a symbol or icon that other both knowledge stocks and flows in order to
organizational members look up to for guidance. effectively leverage an organizational learning
A CKOs most important activity is to strategically system (Bontis, 1999b).
leverage the knowledge an organization creates. Ultimately, as the symbolic icon of knowledge-
Wijnhoven (1998) describes four reasons why we sharing activities, the CKO must have a strong
would want a CKO to promote knowledge-sharing willingness to communicate. This willingness must
activities: be as convincing externally as it is internally
(Hauser, 1998). External communication is neces-
$ They promote stability during environmental
sary to receive timely and pertinent information
turbulence
from the business environment. This includes all
$ They enable speedy delivery of productions or
stakeholders: suppliers, customers, shareholders,
services
government agencies, etc. Internal communication
$ They create high efficiency in the knowledge
strengthens the absorptive capacity (Cohen and
value chain by sharing resources synergistically
Levinthal, 1990) of an organization’s institutiona-
$ They enable the separation of work so that
lized learning processes (Crossan et al, 1999). This
specialization is feasible.
allows organizations to know what they know.
The theoretical justification for knowledge Bukowitz (1998) suggests that three gaps pre-
sharing rests on the fact that knowledge is not a vent people from actively sharing knowledge in a
scarce resource. Thus, it does not suffer from business environment: awareness gaps, commu-
decreasing rates of return. Rather, knowledge nications skills gaps, and culture gaps. Awareness
CKO Wanted — Evangelical Skills Necessary 31RESEARCH ARTICLE Knowledge and Process Management
opposed to a knowledge-hoarding culture. A CKO
is responsible for establishing a culture that
rewards and credits knowledge sharing. Therefore,
a key character trait in a CKO is trustworthiness.
CKO AS TRUST STEWARD
Figure 1 Two-by-two knowledge-awareness matrix Trust is a necessary condition for an innovative
organization (Hauser, 1998). It is also a prerequi-
site for brainstorming which allows employees to
gaps exist between what people know and what present all ideas, even if they initially seem crazy,
they are aware that they know. People generally to each other. We primarily work in a business
do not have the time to contemplate their own environment that equates knowledge with power.
stock of knowledge and consequently do not Thus, the incentive to freely divulge sensitive
appreciate what is important to contribute to the information and in fact share important knowl-
organization. The two-by-two matrix in Figure 1 edge with colleagues does not resonate well with
proposes the four areas of concentration that a our deepest desires for career advancement. Inter-
CKO must focus on to reduce awareness gaps. nal competition for fewer and fewer executive
The upper-left quadrant of the two-by-two slots pits managers against one another, and in
matrix is the starting point for a CKO because some companies withholding critical information
this knowledge is already contained in the organi- is still an excellent strategy for getting ahead
zation and does not require acquisition of new (Bukowitz, 1998). One of the main reasons for
knowledge whether it be by training or hiring of hoarding information is that we do not necessarily
new managers. The upper-right quadrant forces trust our co-workers and since our values may not
the CKO to take inventory of holes and gaps in be aligned we would rather not share our little
knowledge. The lower-left quadrant requires a secrets.
CKO to come to terms with the vast wealth of Sitkin and Stickel (1996) describe distrust in an
knowledge that is currently untapped in the organization as the road to hell. Their review of
organization. Finally, the lower-right quadrant the literature concludes that trust has been long
represents the so-called final frontier. It forces a recognized as a fundamental feature of successful
CKO to contemplate the competitive intelligence interpersonal and inter-group relations. Trust also
and knowledge resources that are currently exter- yields interpersonal and group solidarity. They
nal to the organization. warn:
The communications skills gap identifies the set
Distrust is engendered when an individual or
of skills required for individuals to speak and
group is perceived as not sharing key cultural
dialogue with one another. In an international
values. When a person challenges an organiza-
setting, a CKO faces the challenge of employees
tion’s fundamental assumptions and values, that
speaking many languages. In large multinational
person may be perceived as operating under
corporations where several organizational units
values so different from the group’s that the
reside in foreign countries, a CKO’s communica-
violator’s underlying world view becomes sus-
tions gap is even more pronounced. As an
pect . . . the person is now seen as a cultural
ambassador for knowledge sharing, a CKO is
outsider (p 198).
required to find common tools that cross national
boundaries. This includes a consistent set of A critical role for any CKO wishing to align
research, analysis, writing and publishing skills. values against knowledge hoarding is to identify
For example, Bukowitz (1998) reports that Arthur these cultural outsiders. A CKO does this by
Andersen developed its Global Best Practices closely examining the cues of such activity. Often,
KnowledgeSpace database allowing managers only certain members of work teams or depart-
from all over the world to communicate with one ments clearly express the behavior of individualism
another by sharing knowledge on client solutions over the collective at any cost. These individuals can
using a standard template. often be identified through the use of behavior
The culture gap is the most difficult to manage interviews and group case studies. They are often
because it involves aligning corporate and indivi- stereotyped as unfriendly and constantly suspi-
dual values. Trust remains the most important cious of others.
ingredient in pursuing a knowledge-sharing as When it comes to realigning the culture of trust,
32 N. BontisKnowledge and Process Management RESEARCH ARTICLE
the old adage ‘one bad apple . . .’ holds true. A edge embedded in human capital (Bontis, 1998).
CKO must identify the cultural outsiders and At the same time that individual knowledge is
assuage their negative impact on others who wish increased, old or obsolete knowledge should be
to create and nourish a more sharing environment. forgotten. Although this sounds theoretically pos-
Once the individual has been identified, a CKO’s sible, it is actually difficult to accomplish because
role becomes more paternalistic. Individuals who old habits die hard. Furthermore, you cannot
hoard knowledge do so because they are fearful of reformat the hard drive of an employee’s brain
the consequences of depleting their own knowl- and start fresh.
edge advantage. In this case, a CKO must alleviate A CKO should be critical about the training
fear so that the individual does not feel the need methodologies used by the HR staff. Research
for overprotection. The goal is to make the shows that LOD (learning on demand) or JIT (just-
individual appreciate the consequences of sharing in-time) training from the multimedia desktop
knowledge and appreciate the value of combining significantly increases mastery and retention of
disparate perspectives. content by 40–70% over traditional lecture-based
One alternative to help align individuals desires learning models (Trondsen and Vickery, 1998). An
to share knowledge deals with appropriate incen- audit of training methods should be conducted by
tive mechanisms. People need incentives to parti- the CKO in tandem with the HR staff to see that
cipate in the knowledge sharing process (Hansen modern and effective technologies are being used.
et al., 1999). One example includes providing Training and development staff also benefit from
employees with bonuses on their performance instant feedback and evaluation when LOD or JIT
evaluations based on contributions to corporate methodologies from the desktop are utilized.
databases and other sources of codified knowl- Furthermore, employees receive instant feedback
edge. Another incentive is to reward people on the and reinforcement while benefiting from reduced
degree of high-quality person-to-person dialogue anxiety and fear of failure.
one individual has with another during collabora- Not surprisingly, many of the leading high-tech
tive processes. Both of these incentive alternatives companies of Silicon Valley — such as 3Com,
are relatively simple and inexpensive to institute. Cisco, Hewlett-Packard and Sybase — are either
The CKO can work closely with the HR depart- embracing LOD/JIT training or planning to adopt
ment to amend job descriptions and performance it in the near future (Trondsen and Vickery, 1998).
evaluation forms to include such knowledge- Unfortunately, even the competition’s pursuit of
sharing activities. such programs may not be enough for a CKO to
Another challenge facing CKOs in geographi- convince the HR department of the need for
cally dispersed as well as virtual organizations is investment. In many cases, the CKO will meet
that these structures do not allow for the close with resistance from the CIO or other senior
personal monitoring required to diagnose trust information technology managers who recognize
issues among employees. In these instances, the the enormous resources that multimedia (espe-
CKO has the responsibility to raise this critical cially audio and video) steals away from already
issue with senior management. As the organiza- congested networks starving for more bandwidth.
tion increases in size and scope, a whole KM A complementary module to LOD/JIT training
department may be necessary. A decentralized programs is the Tango simulation administered by
structure of CKO disciples on location at various Celemi, a Swedish company. First developed by
sites can help. This is done by placing knowledge Dr. Karl-Erik Sveiby, the Tango simulation pro-
analysts, managers, or facilitators in disparate vides participants with an introduction to the
locations with direct reporting lines to the CKO. concepts of valuing and managing intangible
These individuals have the luxury of physically assets (Bontis and Girardi, 2000). Five or six
working closely with others while at the same time teams compete, as simulated organizations, for
maintaining a constant link to the CKO. up to a seven-year period (which actually takes
one to two full days). Organizations compete to
attract clients and knowledge workers, as well as
CKO AS TOTAL TRAINER other staff, to service those clients. Conventional
financial statements provide an indication of the
A CKO should work very closely with the HR relative success of organizations. However, Tango
department and especially the training and devel- demonstrates, as is increasingly obvious in real
opment staff. Each individual in an organization life, that conventional financial statements provide
represents a wellspring of knowledge that can be only one perspective of the health of knowledge-
leveraged. Training augments the stock of knowl- based organizations such as software, accounting
CKO Wanted — Evangelical Skills Necessary 33RESEARCH ARTICLE Knowledge and Process Management
and consulting firms. Conventional financial per- lodgings, meals, the instructor, the room, equip-
spectives are far from adequate for determining ment, and teaching materials. Opportunity costs
the health of many organizations that now gen- and the cost of time away from business are not
erate wealth from assets that are primarily intan- even included in the estimate.
gible. Thus, after completing financial statements, A CKO must scrutinize each and every training
Tango teams must assess the value of the intangi- investment dollar. One source of information is the
ble portion of their organization. The intangible Saratoga Institute in Santa Clara, California
value of each team’s organization can be boosted (www.saratoga-institute.com) which has been
through the delicate and challenging process of developing HR benchmarks for over 20 years. To
balancing investment among a variety of choices realize the true value of training, expenditures
such as: (1) acquiring the correct staff mix for should be measured, tracked, routinely bench-
implementing strategy; (2) ensuring that staff/ marked and evaluated. These numbers are often
client chemistry is aligned; (3) completing challen- very difficult to locate since they are hidden in
ging projects successfully; (4) undertaking research many business unit accounts. A task-force consist-
and development; and (5) adequately training ing of representatives from HR and Accounting in
staff. addition to the CKO is required to commence this
The most expensive route a CKO can follow to task.
meet the training needs of employees while still In addition to monetary expenditures, alterna-
providing a physical space for the socialization tive metrics that can be used to evaluate programs
process is the corporate university. Meister (1994) include (Ellis, 1998):
argues that modern corporate universities are not
$ Associate return and turnover rates
only state-of-the-art training facilities, but instru-
$ Time and expense needed to move a new hire
ments for cultural change. A significant proportion
to productivity
of Fortune 500 companies have already put corpo-
$ Money saved from more effective allocation of
rate universities in place. Employees enjoy the
training resources
opportunity to leave the daily office grind for days
$ Consolidation of previously duplicated efforts.
at a time in order to socialize and collaborate with
fellow-colleagues in a more friendly and enjoyable A CKO must enforce a stringent watch on
environment. training investment because it is the lifeblood of
With a more limited budget, a CKO can spear- new knowledge. More importantly, a CKO must
head the development of a virtual version of the remind employees that formal training via LOD/
corporate university. Creating knowledge through JIT multimedia desktops, or virtual corporate
assignments are traditional learning mechanisms universities is only the tip of the iceberg. Employ-
in academic universities. Relate these to corporate ees must take thoughtful examination of their
issues and you have the embryonic stages of daily experiences in order to take full advantage
knowledge creation. Capture the documents in of the knowledge that is available to them and to
databases that are networked to all organizational their organization.
members and a knowledge management process Current trends in workplace demographics
emerges. Create in-company structures that build make the knowledge capture responsibility for
on these processes and one begins to form a CKOs even more difficult. Approximately 10% of
learning organization. Develop programs and the US workforce (over 12 million individuals) is
accredit this learning and a corporate university considered a contingent worker (Matusik and Hill,
has emerged. Finally, use electronic publishing 1998). Members of this emerging and expanding
and communications technology to resource your workforce jump from project to project either
programs and a virtual corporate university is within or across industries often contracting their
born. services to the highest bidder. In an effort to seek
A CKO’s toughest task as a trainer arrives when challenging work and a flexible lifestyle, contin-
budget-allocation time draws near. Training and gent workers are now considered a critical
educational investments must add value in a resource in workforce planning.
measurable way or should be scrapped. If the Contingent workers bring with them systemic
CKO does not evaluate this first, the CFO will turnover that can be considered a negative or a
surely send a reminder. Costs associated with positive for knowledge management processes. A
increasing individual knowledge stocks are not CKO should influence the increased use of con-
trivial. Buckman Laboratories spends in excess of tingent workers when knowledge gains outweigh
$1000 per associate per day in each of its training losses. This is the case when special expertise can
facilities (Ellis, 1998). This includes transportation, be contracted and shared among permanent staff
34 N. BontisKnowledge and Process Management RESEARCH ARTICLE
bringing the learning curve higher for everyone form of HTML servers which allow knowledge
involved. Limited use of contingent workers managers to seek out information from a common
should be considered when a CKO deems that standard across platforms and operating systems
knowledge may be more readily disseminated to (Bair and O’Connor, 1998).
the public domain once a worker leaves and is free Document management tools allow documents
to work for the competition. to be stored in databases using attributes or
One final project that a CKO can spearhead is metadata to enable collaborative authoring and
the development of a knowledge map. Such a usage. Thus, documents can be searched for,
blueprint requires the participation of each and retrieved and routed based on more than just the
every member in an organization. A knowledge document’s contents. This allows a CKO to
map highlights the location (i.e. person, desk, correspond with other key members in HR or IT
filing cabinet, electronic address or directory, departments by sharing common documents that
library, etc.) of every knowledge resource in the can be constantly tracked. Furthermore, these
company. Whereas, the corporate yellow pages documents may include spreadsheets, graphics,
highlight individuals, the knowledge map high- as well as audio and video.
lights the content itself. Because it is important for Groupware was made famous by tools such as
a CKO to know what the organization knows, a Lotus Notes and Dataware Systems. These tools
knowledge map identifies the critical domains of focus on spreading individual knowledge to the
expertise that are critical for future success (Tissen, group level. They are responsible for housing the
Andriessen and Deprez, 1998). The first step for a corporate memory of an organization. Individuals
CKO is to translate the business strategy into key make their personal knowledge explicit by coding
knowledge domains. These knowledge domains thoughts, comments, ideas, and responses to a
are where knowledge management activities must variety of topics that are clustered and categorized
be focused. Projects that develop knowledge out- by content or group membership. An important
side these domains should not be given priority. consideration for any CKO wishing to support a
The knowledge map soon becomes a strategic tool groupware installation is that individuals must
for resource allocation as it maps directly onto the perceive a benefit in spending the time to code
overall business strategy of the firm. The goal for a their thoughts in such a system. Therefore, the
CKO is to formalize the knowledge map to a such human incentive is a very important component in
an extent that it becomes an invaluable tool for implementing such a technology. Without it,
strategy making used by the CEO and the board of people will just visit a desert of knowledge and
directors. quickly go back to their business. Individuals must
want to upload just as much information as they
download.
CKO AS TECHNO NERD Finally, integrated systems integrate all the
above-mentioned knowledge management tools
In today’s world of bits and bytes, a CKO would into one piece. They include information retrieval,
(and should) never survive without having a document management, groupware as well as
strong grasp and appreciation of technology. A expert identification, data mining and warehous-
CKO’s minimum responsibility is to be cognizant ing. The goal here is to make sure that duplication
of the operating functionality of the tools in the of work (and thought) is minimized (or elimi-
following four KM technology categories (Bair and nated). The last thing a CKO wants to see is two
O’Connor, 1998): analysts struggling with the same problem while
not knowing the other one exists.
$ Information retrieval
A techno-savvy CKO should also appreciate the
$ Document management
next wave of knowledge management tools that
$ Groupware and
are being currently developed due to the precipi-
$ Integrated systems.
tous drop in cost of computing capacity (Newton,
Information retrieval tools include e-mail mes- 1998). These include software modules that take
sages and threaded bulletin-board conversations advantage of artificial intelligence which can
that are mostly textual in content. The user automate many knowledge-seeking tasks based
typically searches key words to find the content on pre-determined algorithms. For example, a
that is needed. Unfortunately, individuals often lawyer may wish to find all available information
find themselves sifting through voluminous to help in a client’s case. Once the search
amounts of useless information trying to find that command is scripted, customized search agents
one key fact or figure. Databases can also take the can take advantage of free computer horsepower
CKO Wanted — Evangelical Skills Necessary 35RESEARCH ARTICLE Knowledge and Process Management
that is available during off-business hours to contemporary auditors remain unsatisfied. Beyond
search all related databases, intranets and Internet the calculation of goodwill when a business is
sites. When the lawyer arrives the next morning, a sold, and the use of voluntary disclosure notes to
customized display of information will have describe research and human resource activities,
already been searched, profiled, indexed and the measurement of intellectual capital is devoid of
available for consumption. structure and consistency. After all, the measur-
One of the first tasks a CKO can accomplish is able value of goodwill that arises when a company
the development of a knowledge management is sold was obviously there — in immeasurable
web site. The site acts as a central focal point for form — before it was sold (Edwards and Bell,
the rest of the organization on a variety of knowl- 1961). Since by its nature knowledge is ephemeral
edge management related topics such as: and context-specific, a solution to this issue may
never be found — at least with the current
$ Description and status of current KM projects
generally accepted accounting principles.
$ Information on current R&D work
In 1998 Arthur Andersen conducted a survey of
$ Services offered by the KM staff and the CKO
112 companies in Europe, 147 in North America
$ Potential services that can be offered to outside
and 109 in Asia, and found that 89% of the
clients
organizations sampled agreed or strongly agreed
$ Corporate yellow pages showing who knows
with the statement that ‘measuring intellectual
what
capital will be critical to the organization’s ability
$ A knowledge map detailing knowledge
to achieve business success’. This overwhelming
resources in the organizations
support was consistent among the three groups of
$ Testing and evaluation of KM tools and soft-
respondents. Furthermore, agreement was consis-
ware
tent regardless of company size. When asked what
Although traditionally the domain of CIOs, a area should be responsible for intellectual capital
CKO should also be involved with the IT in- measurement, roughly one third opted for a
vestment decision. According to Hansen, Nohria partnering effort between HR and the operating
and Tierney (1999), Andersen Consulting and units themselves. This particular survey did not
Ernst & Young have each spent more than $500 offer the choice for a CKO or the knowledge
million on IT to support their knowledge manage- management department.
ment strategies. Of course, not all companies Some firms such as Skandia (Bontis, 1996) have
are likely to invest such large sums of money. gone even farther and published intellectual
Hansen et al. (1999) argue that the level of capital addendums to their annual reports to
IT investment is directly related to which knowl- combat the issue of misleading financial state-
edge management strategy an organization adopts. ments. But a closer examination of these intellec-
If the firm primarily follows a codification tual capital metrics yields limited generalizability
model (i.e. employees are required to embed their and merely an indirect proxy of intellectual capital
knowledge in systems) then there must be invest- at best. Metrics such as those used by Skandia and
ment in a system that is similar to a large others in the financial services industry (Bontis,
electronic library (e.g. it must contain a large 1997) will continue to be developed and analyzed
cache of documents and include search engines). longitudinally. Bassi and Van Buren (1998) note
Alternatively, if the firm primarily follows a that even though the stock market is already
personalization model (i.e. knowledge is shared providing handsome rewards to companies that
among colleagues through dialogue) then there successfully leverage their intellectual capital, few
must be investment in IT systems that help people firms have formalized a measurement process. The
find one another (i.e. corporate yellow pages, significance and lack of progress on the issue are
expert guides). also clear from a recent survey of 431 organiza-
tions in the USA and Europe who ranked ‘measur-
ing the value and performance of knowledge
CKO AS NUMBER-CRUNCHING assets’ highest in importance more than any other
ACCOUNTANT issue except ‘changing people’s behaviour’ 43%
versus 54% respectively (Skyrme and Amidon,
Since ‘numbers speak louder than words’ (Mayo, 1997).
1999, p. 26), CKOs must also understand the world A CKO may well make use Tobin’s q as a proxy
of finance and accounting. While accountants have for intellectual capital (Bontis, 1999a). This ratio
since tackled the issue of measuring intangible measures the relationship between a company’s
assets such as brand valuation and copyrights, market value and its replacement value (i.e. the
36 N. BontisKnowledge and Process Management RESEARCH ARTICLE
cost of replacing its assets). The difference is said value. ASTD working paper, American Society of
to be the intellectual capital of the company. Often Training and Development: Washington, DC.
Bhatt G. 1998. Managing knowledge through people.
the ratio is well over 2 to 1 and can often reach as Knowledge and Process Management 5:3, 165–171.
high as 10 to 1 or higher for knowledge-intensive Bontis N. 1996. There’s a price on your head: Managing
firms such as high-tech software companies. intellectual capital strategically. Business Quarterly
Because a CKO cannot measure intellectual capital Summer.
in monetary terms internally, why not let the stock Bontis N. 1997. Royal Bank invests in knowledge-based
industries. Knowledge Inc. 2:8, 1–4.
market decide?
Bontis N. 1998. Intellectual capital: an exploratory study
There are a wealth of other tools that a CKO that develops measures and models. Management
may consider for knowledge measurement pur- Decision 36:2, 63–76.
poses (Bontis et al., 1999). Three measurement Bontis N. 1999a. Managing organizational knowledge by
systems currently popular among practitioners diagnosing intellectual capital: framing and advancing
include: (1) human resource accounting; (2) eco- the state of the field. International Journal of Technology
Management 18:5/6/7/8, 6433–462.
nomic value added; and (3) the balanced score- Bontis N. 1999b. Managing an organizational learning
card. Each with its own strengths and weaknesses, system by aligning stocks and flows of knowledge: An
a CKO would be well advised to learn about all empirical examination of intellectual capital, knowl-
knowledge measurement systems available. edge management and business performance. PhD
In the final analysis, current methodologies for dissertation, University of Western Ontario: London,
accounting for knowledge are still quite primitive Canada.
Bontis N, Dragonetti N, Jacobsen K, Roos G. 1999. The
and should not be reported externally. However, Knowledge Toolbox: A review of the tools available to
the internal use of such metrics is an important measure and manage intangible resources. European
benchmark for a variety of activities that the CKO, Management Journal 391–402.
and the KM department in general, may be Bontis N, Girardi J. 2000. Teaching intellectual capital
instituting. lessons: An evaluation of the Tango simulation.
International Journal of Technology Management (in
press).
Boyd S. 1998. The role of the Chief Knowledge Officer.
CONCLUSION Knowledge Management Review September/October.
Bukowitz W. 1998. At the core of a knowledge base.
Journal of Knowledge Management 1:3: 215–224.
The objective of this paper was to highlight the Cohen M, Levinthal D. 1990. Absorptive capacity: A new
complex roles that a successful CKO must play. perspective on learning and innovation. Administrative
The most successful CKOs will juggle these roles Science Quarterly 35: 128–152.
effortlessly rotating from accountant, to technolo- Crossan M, Lane HW, White RE. 1999. An organiza-
gist, to trainer and so on. Throughout each tional learning framework: from intuition to institu-
challenging project and difficult assignment, a tion. Academy of Management Review 24: 522–537.
Earl M, Scott I. 1999. What is a Chief Knowledge Officer.
CKO must maintain an evangelical approach to Sloan Management Review 40: 2.
knowledge management. The task may seem Edwards E, Bell P. 1961. The Theory of Measurement and
daunting to aspiring knowledge managers, and Business Income. University of California Press:Los
perhaps unrealistic to most CEOs. However, the Angeles.
importance of managing knowledge as the critical Ellis S. 1998. Buckman Laboratories Learning Center.
Journal of Knowledge Management 1:3, 189–196.
resource for sustainable competitive advantage in Hansen M, Nohria N, Tierney T. 1999. What’s your
the information age is unwavering. What is strategy for managing knowledge? Harvard Business
questionable is whether or not an organization’s Review March-April, 106–116.
senior executives perceive the need, early enough, Hauser M. 1998. Organizational culture and innovative-
to assign formal accountability to it. ness of firms — an integrative view. International
Journal of Technology Management 16:1/2/3, 239–255.
Kaufman L, McCormick J. 1998. The year of the
employee. Newsweek 20 July.
REFERENCES Matusik S, Hill C. 1998. The utilization of contingent
work, knowledge creation, and competitive advan-
Acs ZJ, Audretsch DB. 1993. Analyzing innovation out- tage. Academy of Management Review 23:4, 680–697.
put indicators. In The US Experience in New Concepts Mayo A. 1999. Making human capital meaningful.
in Innovative Output Measurement, Kleinknecht A, Knowledge Management Review 6: 26–29.
Bain D (eds). St Martin’s Press: London. Meister J. 1994. Corporate Quality Universities: Lessons in
Bair J, O’Connor E. 1998. The state of the product in building a world-class work force. ASTD: New York
knowledge management. Journal of Knowledge Manage- Mintzberg H, Ahlstrand B, Lampel J. 1998. Strategy
ment 2: 220–27. Safari: A guided tour through the wilds of strategic
Bassi LJ, Van Buren M. 1998. Investments in intellectual management. The Free Press: New York.
capital: Creating methods for measuring impact and Newton K. 1998. The high performance workplace:
CKO Wanted — Evangelical Skills Necessary 37RESEARCH ARTICLE Knowledge and Process Management Canadian research and policy. International Journal of Stewart TA. Intellectual Capital: The New Wealth of Technology Management 16: 1/2/3, 171–192. Organizations. Doubleday/Currency: New York. Nonaka I, Takeuchi H. 1995. The Knowledge-Creating Stewart TA. 1998. Is this job really necessary? Fortune Company. Oxford University Press: New York. 12 January. Reynolds H. 1998. Knowledge management leadership: Tissen R, Andriessen D, Deprez FL. 1998. Value-based Who leads the charge? KMWorld April. Knowledge Management. Addison-Wesley: Amsterdam. Shariq S. 1998. Sense making and artifacts: an explora- Trondsen E, Vickery K. 1998. Learning on demand. tion into the role of tools in knowledge management. Journal of Knowledge Management 1:3, 169–180. Journal of Knowledge Management 2:2, 10–19. Wijnhoven F. 1998. Knowledge logistics in business Sitkin S, Stickel D. 1996. The road to hell. In Trust in contexts: Analyzing and diagnosing knowledge shar- organizations, frontiers of theory and research, Kramer R, ing by logistic concepts. Knowledge and Process Manage- Tyler T (eds) Sage: Thousand Oaks, CA. ment 5:3, 143–157. Skyrme DJ, Amidon DM. 1997. Creating the Knowledge- based Business. Business Intelligence: London. 38 N. Bontis
You can also read
