By Robert McAnderson
In this age of digital technology and increasing globalisation, business leaders are more and more realising the importance of knowledge and information.
Although intangibles, knowledge and information are genuine assets. Often worth a great deal more than property and real estate. By providing sound intelligence about everything from internal procedures to changing markets and technologies ... competitor activity to product innovation ... good Knowledge Management (KM) invariably gives organisations a clear head start.
However, in this world of massive information overload, knowledge management is often associated with - and restricted to - managing information on corporate databases. While important, this is only part of the story.
According to Kakabadse, Kouzmin & Kakabadse (Cranfield School of Management. UK), in addition to information, KM encompasses "the creation of processes and behaviours that allow people to transform information into the organisation, and create and share knowledge".
"KM thus includes much more than simple information. The management of knowledge also encompasses people and technology, as well as organisational processes and culture", the study concludes.
Through effective use of knowledge management, organisations continue learning about their business environment. Unfortunately, many leaders focus inward, on managing their own businesses and interests. As a result, they often lose sight of important changes in the larger environment.
Managers who remain fixated inwards run the danger of losing out to more adaptive competition. In contrast leaders who employ knowledge management strategies know how to tweak and modify their organisation's strategies in anticipation of environmental changes.
KM strategies help business leaders develop their adaptive abilities. Such individuals have the power to pull out of deteriorating market situations before their companies suffer loss. Conversely, they are able to stay one step ahead of the competition by anticipating changing needs, trends or tastes.
Recent research suggests that, particularly in this age of specialisation, divisions are more regularly emerging between leaders and "knowledge workers". These include people such as researchers, software engineers and technology workers. To overcome this problem, management is urged to be increasingly proactive in ensuring dynamic interaction with its 'knowledge team'.
In contrast to traditional, military-style hierarchy where decisions are simply handed down from rank to rank, those versed in knowledge management are more able to create an atmosphere that encourages communication, problem understanding and negotiation.
Such insightful individuals can prevent disasters that cost time and money like the production manager for a Sydney car parts manufacturer who failed to see and interpret market data resulting in a two-week production halt and hefty loss of income.
Given the advantages offered by a firm grasp of knowledge management principles, the dearth of organisations that actively practice these strategies may come as a surprise. It is regularly observed, however, that knowledge management was closely related to the software and dotcom industry.
When the internet bubble exploded, KM suffered "guilt by association." Subsequent advances in IT and introduction of business information and efficiency tools - such as Enterprise Resource Planning (ERP) - is once again generating renewed interest in knowledge management.
"More people are now seeing how these advanced media and new attitudes are helping shift the balance of economic forces that define competitive advantage", explains Steve McGrath, Jigsaw's founder and MD.
In summary, a firm grasp of knowledge management principles allows management to be more adaptive, both to the constantly evolving needs of the marketplace as well the ever-changing structures of business worldwide.
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