Additional Praise for The Complete Guide to Knowledge Management “ Whether an expert or neophyte in KM, you will benefi t from the trusted insights of Pasher and Ronen. Few have as much practical perspective into the art and science of this new functional discipline. Each chapter is a gem — complete with the Magnifi cent 7 insights which fuse the tactical and strategic, the theory and the practice, from idea to action. They have captured the kaleidoscopic landscape of intangible value and intellectual wealth into a strategy leading to innovation progress — the true competence of the decade. ” — Debra M. Amidon, Founder of ENTOVATION International Ltd; author of The Innovation Superhighway “ As a member of the community of practice in the fi eld of knowledge management and dissemination, I am pleased to take the tools offered in this book to my colleagues in higher education. The combination of theory and practice presented in the book serves for us as a springboard to real - life leadership positions. ” — Professor Nava Ben - Zvi, PhD, President of Hadassah College, Jerusalem “ This is a deeply innovative and practical book. Pasher and Ronen merge the core competencies of knowledge creation with those of management to deliver competitive advantage for the twenty- fi rst century. ” — Glenda Eoyang, founding Executive Director of the Human Systems Dynamics Institute “ Through learning landscapes, case- tellers, ‘ Magnifi cent 7 ’ summaries, and the like, Edna and Tuvya’ s Complete Guide to Knowledge Management leads you to a richly contextualized universe of knowledge - creation possibilities. Indeed, this book will challenge you personally to step into an assertive, resilient, and empowered knowledge- based lifestyle! ” — Blanca Garcia, Most Admired Knowledge City Awards ; Chair of The World Capital Institute “ This book excels by helping managers to understand and practice the social, cultural, and also the dynamic nature of knowledge in enterprises, and of their customers. This approach really defi nes the mechanisms of a knowledge society! ” — Dr. Otthein Herzog, Professor and CEO of InnovationsKontor Nordwest GmbH “ What I really enjoyed when reading this book were the great many examples that reminded me of situations I have experienced during my occupational career. But it also brought forward new ideas to me for my business. This book should be all- in - one a must read for those at the begin- ning of their careers. ” — Dr. Michael Lawo, Professor and Managing Director of Mobile - Solution Group GmbH, Bremen, Germany “ Bravo! At last, a practical and down- to - earth approach to KM, rich both in concrete examples and in challenging insights (like the ‘ Magnifi cent 7 ’ at the end of each chapter). ” — Dr. Charles M. Savage, author of Fifth Generation Management “ I found the book very unique and useful. The fusion of the different perspectives of the authors — a manager and a management consultant— and the fusion of theory with practice make it interesting to read and easy to use. As an Israeli manager, I am of course made very happy and proud by a book full of Israeli examples— especially those from RAFAEL, a leading R & D organization. ” — Major General (Ret.) Amiaz Sagis, Former Head of the Technology and Logistics Division in the Israel Defense Forces (IDF); CEO and Chairman of the Board of large Israeli corporations The Complete Guide to Knowledge Management The Complete Guide to Knowledge Management A Strategic Plan to Leverage Your Company’s Intellectual Capital EDNA PASHER AND TUVYA RONEN John Wiley & Sons, Inc. Copyright © 2011 by Edna Pasher and Tuvya Ronen. All rights reserved. Published by John Wiley & Sons, Inc., Hoboken, New Jersey. Published simultaneously in Canada. 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Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifi cally disclaim any implied warranties of merchantability or fi tness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profi t or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002. Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com. Library of Congress Cataloging-in-Publication Data Pasher, Edna. The complete guide to knowledge management : a strategic plan to leverage your company’s intellectual capital / Edna Pasher and Tuvya Ronen. p. cm. Includes index. ISBN 978-0-470-88129-3 (hardback); ISBN 978-1-118-00140-0 (ebk); ISBN 978-1-118-00139-4 (ebk); ISBN 978-1-118-00138-7 (ebk) 1. Knowledge management. 2. Intellectual capital–Management. I. Ronen, Tuvya. II. Title. HD30.2.P375 2011 658.4'038–dc22 2010051230 Printed in the United States of America 10 9 8 7 6 5 4 3 2 1 To Margalit, whose love, patience, and wisdom accompanied me in this journey for Knowledge Management as in all our travels on the roads of life. — Tuvya To Yossi Pasher, who has been supporting me to grow our intellectual capital and make my dreams come true, with love. — Edna Contents Acknowledgments ix Preface: Getting Started on Your Knowledge Management Journey xi CHAPTER 1 The Motivation toward Knowledge Management: Combining the Tactical with the Strategic 1 CHAPTER 2 Making the Business Case for Managing Intellectual Capital 15 CHAPTER 3 The Importance of Strategy in Knowledge Management 35 CHAPTER 4 The Role of Culture in a Successful Knowledge-Creating and Knowledge-Sharing Organization 47 CHAPTER 5 The Human Focus: Understanding and Managing Knowledge Workers 65 CHAPTER 6 Managing Interactions for Knowledge Creation and Sharing 89 CHAPTER 7 Capturing and Reusing Existing Knowledge 115 CHAPTER 8 The Customer Focus: Harnessing Customer Knowledge through Meaningful Interactions 135 CHAPTER 9 Measuring and Managing the Performance of Proper Knowledge Work 143 vii viii Contents CHAPTER 10 Innovating for a New Beginning 163 CONCLUSION Implementing Knowledge Management— A Step-by-Step Process 179 Appendix Defi ning Key Terms 187 Notes 191 Index 197 Acknowledgments We thank all of our friends in the Intellectual Capital Pioneers community, who opened our eyes to new possibilities. — Edna I would like to thank the people of Rafael, my mentors, colleagues, and personal friends during my professional career. Their friendship, dedica- tion, and knowledge were the inspiration for this book. I began this knowledge management journey to bring us some of the lessons learned in the outside world, to fi nd that we have much of our own to contribute to others. I especially thank those Rafael ’ s people, too many to mention by name, who were either the sources of various examples or helped in reviewing parts of the manuscript. I am grateful to my Ph.D. advisor, Professor Arthur Bryson from Stanford University, for inspiring my engineering work as well as being a role model of knowledge creating and sharing. — Tuvya We would like to thank Ruth Blatt, with whom we wrote the fi rst version of this book. We are grateful to Lynne Rabinoff, our literary agent, who found a home for our manuscript at John Wiley & Sons. In this home, we thank Susan McDermott and Claire Wesley, and we especially appreciate the great contribution of our development editor, Jennifer MacDonald, whose exper- tise, patience, and dedication transformed the manuscript into a real book. — Edna and Tuvya ix Preface Getting Started on Your Knowledge Management Journey elcome to the beginning of your knowledge management (KM) Wjourney. On this journey, you will travel with us, Tuvya and Edna, two KM experts searching for successful solutions to various KM issues in all types of markets and situations. This book takes the intangible and abstract topic of KM and makes it concrete and applicable. Most managers already know something about KM and are curious to learn more, but their initial backgrounds may differ considerably: Many have only heard knowledge management used as a buzzword; some may hold the common misconception that it is only about systematically record- ing existing knowledge; and still others have already realized its strategic value. All of them, however, share a common goal that renders them pro- spective experts: to fully understand KM, to know their role in implementing it, and to acquire the necessary skills and tools for doing it successfully. A Book for Managers This book is intended to prepare managers to be the leaders of KM in their organizations.