How to Count and Keep Your Midrange Knowledge Capital

Business Intelligence
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Knowledge is one of those really big words (even though it has only two syllables). It’s big because it can take on many different connotations and encompasses some concepts that are extremely hard to define. In the last couple of years, the IT community has embraced the concept of knowledge in a big way. While savvy managers have always known that having well-educated and highly motivated employees in technical positions is important to the success of any business, a new model that promises to create, leverage, and retain business knowledge has become a cornerstone of the new knowledge economy: knowledge management (KM). This term has been subject to extensive use and abuse, but there is no question that it is a big concept that can help businesses in terms of both day-to-day operations and maintaining a long-term competitive advantage.

I’m not going to expound on the academic and philosophical definitions of knowledge and KM. There have been literally hundreds of treatises from the academic community defining what knowledge and KM are. (See, for example.) Unfortunately, if you get 20 different academicians in the same room, you’d be lucky to get a consensus of three on the true definition of knowledge and KM. Let’s just agree on one thing: Information resides in your databases, but knowledge resides in your staff’s brains. I’m going to show you how to find, catalog, and retain the business knowledge you already have in the brains of your midrange computing enterprise. Creating a true KM environment may not be easy, but it is well within the grasp of any organization willing to adapt its business culture to the new knowledge economy.

The Many Faces of Midrange Knowledge Capital

Any midrange shop has a variety of knowledge capital, and, hopefully, the managerial staff recognizes this fact. I like to break the knowledge capital contained in the average midrange shop into three major categories:

• Operational knowledge—Like any car, the AS/400 and its networking infrastructure can be analyzed with sophisticated tools, but intuition and experience often provide insight that IBM manuals and performance analyzers can’t offer.

• Technical knowledge—This refers to the programming, analysis, and design of technical systems in use at your company. It can include both internally and externally developed systems.

• Business knowledge—This is probably the most elusive yet most valuable knowledge in your enterprise. Business knowledge is usually obtained only after spending much time and energy learning the unique aspects of your business. It is therefore more valuable and irreplaceable than operational and technical knowledge, which is more easily transferred between employees.

In an AS/400 shop, operational knowledge capital should lead to consistently good performance, smooth upgrades, tight security, and quick recovery from any abnormal situations. Although dozens of articles have been written about performance tuning and IBM provides several excellent manuals explaining how to tune your AS/400 with or without add-on performance tools, it takes a fair amount of experience to learn and apply the finer points of system tuning. Now that most shops use TCP/IP to access the Internet, a whole new dimension has been added to AS/400 operations. Keeping a variety of Web servers up and running is now mandatory for most businesses. Because each system is different, it’s not easy to apply what was learned at one location to a different scenario, so cross-training operations staff is mandatory for keeping operational knowledge capital within an organization. Having a knowledgeable operations staff can save time and money by avoiding poor batch or interactive performance, inadequate security, inactive Web servers, incomplete system upgrades, or, worst of all, the inability to recover from a system failure quickly and completely. Lots of AS/400s run for a year or more without any problems, but not having and preserving operational knowledge capital is the one method guaranteed to create a system problem.

Although technical knowledge capital seems as if it should be the most straightforward of IT knowledge, this is not always the case. If you’re running an enterprise resource planning (ERP) package and a programmer/analyst leaves, it may seem like all you need to do is find someone who has experience with the same software to replace that person. Likewise, if you’re writing your own applications by using RPG or a visual language and one of your programmers leaves, a replacement of similar or even more mature abilities might seem the easy solution. The same can be said for all different Web programmers, even though the intricacies of each business’s TCP/IP server configuration are notorious for their usually unnecessary complexity. Unfortunately, replacing a lost employee is really not the solution to losing knowledge capital. Each AS/400 shop has its own standards and methodology, both formal and informal. A programming staff should work as a team. The loss of any team member, whether the quarterback or the center, inevitably affects the whole team. That member’s replacement, however intelligent, needs to be integrated into the programming team over time. He needs to learn both formal and informal shop standards and become comfortable in the new environment. Again, cross-training staff certainly helps save technical knowledge capital, but the actual transference of that knowledge to new employees takes lots of time and energy.

Now comes the real problem: business knowledge capital. As I’ve pointed out, this is the hardest knowledge to capture, maintain, and transfer. Operational and technical knowledge capital both depend on business knowledge. An operations staff must know when interactive and batch demands on the system are highest for a particular business. Security and recoverability vary according to the nature of a business. Programmers, especially Web designers, should know the business goals of their company and maximize their systems to achieve those goals. Systems analysts must drill down to design the most effective system configuration to share and leverage the unique business knowledge present in their enterprise. Business knowledge capital is the bottom line: It can mean the difference

between just getting by and creating a competitive advantage in the marketplace with the resulting enterprise profitability.

Knowledge Capital: Better than Gold in a Knowledge Economy

Now that I have looked at the three major areas of midrange knowledge capital, the question of how a system can be designed to save this knowledge capital arises. While true knowledge capital resides in the cerebra of an enterprise’s employees, it’s difficult to extract if the employees don’t want to submit to radical brain surgery. The best way to keep and share knowledge is to retain all the company’s knowledge workers, but that is not a realistic goal.

Since humans currently lack the power of telepathy, vocal communication and written communication are the only ways to share knowledge. However, because of the capricious nature of vocal communication, I’m going to talk about ways to capture just the knowledge contained in the variety of documents knowledge workers use to communicate with one another. Just as enterprise information resides in many different databases, business knowledge usually resides in the many different documents and messages workers use in their daily communications. Documentation has a number of different formats:

• Formal business documentation, such as financial reports, procedural manuals, employee guidelines, and statements of business objectives

• Informal documentation that is contained in program creation/modification proposals, memos, and minutes from departmental meetings

• Free-form documentation contained in email, personal notes, and work diaries (i.e., to-do lists)

One of the biggest challenges in a knowledge economy is to design a system to save and share knowledge contained in the thousands of different documents exchanged daily within an enterprise. An employee may leave the business at any time, but that employee inevitably leaves behind a legacy contained in a multitude of documents. Any astute manager will make sure that as much knowledge capital as possible is saved in documents that are organized in an intelligible manner. Using a system such as OfficeVision/400 (soon to become unsupported software), Lotus Notes, or Microsoft Exchange can certainly empower the archiving and sharing of documents. But if your enterprise doesn’t have one of these solutions, how can you save the knowledge capital contained in the myriad documents exchanged daily? Plain old common sense can go a long way toward saving the business knowledge contained in documents of all sorts.

The first task in designing a system to archive knowledge is to encourage your employees to write down what they know. This may seem rather simplistic, but, in reality, it can be difficult to motivate knowledge workers to take the time to document and archive everything from formal program specifications to informal recommendations for improving business practices. Although documentation of all sorts may seem a mundane task to many knowledge workers, it is an essential part of finding and preserving enterprise knowledge capital.

Even if you can get your employees to document their ongoing projects as well as their new ideas, it’s often difficult to find the individual expertise hidden in their formal and informal documentation. Because knowledge discovery and archiving are so difficult to perform manually, several companies have made automatic KM discovery a major focus of their new products. Tacit Knowledge Systems ( has an intriguing product called KnowledgeMail (Plus), which can mine knowledge capital from all email sent within an organization. By June 2000, Lotus ( will roll out its new Raven KM

“discovery engine,” which will enhance its already robust messaging and work flow applications with special features targeted to find and save knowledge capital.

There are several other automatic KM solutions on the horizon, but none, including Raven, currently runs on the AS/400. Because of this, it’s essential that every midrange shop design an internal method of mining formal and informal documents for knowledge capital. You can easily do this by creating a DB2 database that includes records of operational, technical, and business knowledge. All employees probably have knowledge in multiple areas. They will also discover and use new knowledge, so keeping this database up-to-date is essential in understanding who is an expert in each area. Operational logs, project specifications and history, employee awards, and documentation of both formal and informal group collaboration should all be entered into this knowledge database. Although having collaborative tools such as Lotus Notes makes tracking and archiving knowledge capital easier, the absence of such tools should not preclude your organization from using your basic IT tools to track and catalog your knowledge capital.

Plant and Grow Your Knowledge Capital

Identifying and archiving your current knowledge capital is the first step in creating a competitive business in the new knowledge economy. The next level of commitment to the KM model should be to grow the knowledge capital you already have. As mentioned, the best way to preserve knowledge capital is to retain the knowledge experts you already have. By default, this task almost always falls on the shoulders of your human resource (HR) department. A progressive and proactive HR department can be the deciding factor in keeping the most important knowledge resources you have.

Businesses must recognize that they have a tenuous grasp on today’s knowledge workers. Many enterprises erroneously believe that they own the knowledge capital of their work force. While this may be true in a strictly legal sense, reality doesn’t hold up to this model. Right-to-work laws are the overriding factor when it comes to intellectual property, and there’s no shortage of new employment opportunities for knowledge workers.

The knowledge economy has created a new model for employees: the empowered worker. Most employees know that they have knowledge essential to their employers’ businesses and have no regrets about leaving a job environment that is sterile and static. If a business really wants to keep its knowledge workers, it must challenge them and stretch their abilities with exciting projects and especially with educational opportunities. Knowledge workers are well aware of the incredible pace of IT change and expect their employers to help them keep pace with this change. Whereas salary and benefits were once the most important aspects of employment, employees now expect their jobs to help them increase their IT knowledge rather than just pay the bills. The knowledge economy has changed the role of employee from laborer to volunteer. Today, knowledge workers want to feel as if they are business partners rather than mere servants. Education, both formal and informal, is one key to helping employees feel as if they are an important and valued asset of their company. This can take a variety of forms:

• Tutelage by senior employees

• Computer-based training (CBT)

• Just-In-Time (JIT) Web-based learning

• Traditional conferences and seminars

• Help obtaining formal certification

All these forms of education will help build an environment of knowledge creation and sharing, which is an integral part of keeping employees and their expertise with the company. Certification is particularly important in today’s IT environment, since it boosts both an employee’s self-esteem and that employee’s value to the employer. Web-based training, in conjunction with CBT, can be an inexpensive way to increase an employee’s knowledge and empowerment. Any company that wants to keep its knowledge workers happy and employed must take all these varieties of education seriously.

In this day of the virtual office, there is a variety of other perks that can help retain knowledge workers. Flexible work hours, mobile computing, job sharing, and the opportunity to take short sabbaticals can help businesses increase and retain their knowledge capital. Regardless of how assiduously a business tries to preserve its knowledge capital, when a knowledge worker leaves, company knowledge capital is lost, and replacing it is both time-consuming and expensive. In today’s knowledge economy, perspicacious enterprises should recognize the value of their knowledge capital and expect to spend a significant amount of time and money keeping their employees well educated and excited about working at their enterprises.

If You Can’t Keep Your Knowledge Capital, You May Pay Dearly

Even though KM and keeping and nurturing knowledge capital have become major forces in the modern IT shop, many companies still think that it’s cost-effective to hire consultants when their own knowledge workers can’t handle complex new projects alone. This reflects the old attitude that it is quicker and easier to pay outsiders an hourly fee to implement new technology than it is to take the time and energy to educate the company’s own staff. In addition, changing workforce demographics create more knowledge-based jobs, but there are less qualified knowledge workers available for these jobs because of Baby Boomer retirement.

This dynamic is putting pressure on corporations to hire retirees as consultants, just as it is pressuring the government to approve visas for more foreign workers. Because foreign workers must return to their countries when their visas expire, they may be the cheapest workers to pay, but their knowledge is, by nature, elusive and thus extremely expensive. The use of consultants may seem inevitable to some, but this strategy can often backfire. For example, using outside consultants may seem an expeditious path toward setting up a new e-business until you take a look at the real costs involved. Once the e- business is up and running, the consultants all disappear into the netherworld of IT, and, unless you take serious steps to prevent it, their knowledge goes with them. You may save some money in benefits and education, but who’s going to maintain and develop your Web site in the consultants’ absence?

If a business does decide to use consultants, a system of sharing their knowledge with permanent employees should be in place before their first step through the corporate door. The pressure to use consultants to complete large and complex projects may be overwhelming, but saving their knowledge when they leave should take precedence over just getting the job done. Once again, documentation, mentoring, and employee involvement are essential to retaining knowledge capital that consultants bring to an enterprise. If the project is completed on time and on budget but the knowledge that created that project leaves the building with the consultants, your company creates a knowledge vacuum that can be filled only by hiring more and more consultants. This is a sure way to spend money on knowledge that can’t be capitalized by your enterprise: a very expensive proposition.

The new knowledge economy has created a whole new model for obtaining and retaining IT staff. Businesses that recognize the need to create a corporate environment that nurtures and saves the knowledge of their employees will be far better off than those enterprises mired in the past culture of worker exploitation over empowerment. Making

your employees partners rather than captives can help you save and increase your knowledge capital. While software aimed at archiving knowledge capital can help your enterprise, continuing education, flexible employment parameters, and a creative environment may be the best investment you can make in the source of all knowledge capital: the people who make up your enterprise.