Who knows what you know?

I’ll admit it: I like to reduce things to their ultimate conclusions.

Personal purchases--everything from houses to tooth paste--boil down to NPV calculations; ethical decisions reduce to questions of initiation of force; career choice is currently boiling down to how I think I’ll view my life looking back from the age of 90.

It’s no wonder, then, that I’m intrigued by the field of knowledge management.

Volumes have been written attempting to define KM, but to boil it down (as is my wont, after all), KM is simply about how to avoid reinventing the wheel.

Think of the possibilities of this concept carried to its extreme: anytime anyone ever solved a problem--from how to best implement SAP for a PC company to how to land the perfect mate--knowledge of the solution would be immediately available to everyone everywhere. Our entire race would be free at last to concentrate on breaking new ground, creating masterpieces, writing children’s books, etc.--forever unbound from the chains of tedium and repetition.

Unfortunately, we’re not quite there yet. But many companies that rely heavily on intellectual capital--and many that don’t--are finding competitive advantage through KM initiatives.

Andersen consulting is widely recognized as a leader in KM. Its Lotus Notes-based Knowledge Xchange (KX) database has well over 40,000 users and thousands of topical databases.

Andersen built this system in an impressively short timeframe: initially proposed in 1992, the system first rolled out in 1993 and by 1996, all consultants had access.

KX contains core methodologies, frameworks, industry and technology visions, best practices, architectures, and forums to discuss all of these topics and more. Users sift through all this knowledge using a complex search engine, a "yellow pages" utility that can sort them based on several criteria, or the KX Front Page, which allows a user to set up a personal www-like page that provides links to their most frequently used databases, as well as dynamically-updated news.

As you may have guessed, it’s virtually impossible to estimate the return on an investment like KX, but nonetheless Andersen is satisfied that the system adds value and continues to invest in its improvement.

Sandi Breaux, a "Know-How Manager" at Andersen’s Information and Technology Strategy practice, stresses the long-term qualitative value of knowledge management: "The ability to capture and share consultant knowledge across the firm takes the quality level of our client work to higher and higher levels," she told me in a recent interview.

Even in the strategy practice, where one would expect more wheel-reinventing to occur, KX helps consultants present a consistent face to the client. And, since KX allows knowledge sharing across practices, most new knowledge acquired in strategy work is available for the rest of the firm to leverage.

Ubiquitous knowledge availability has obvious advantages for a huge firm like Andersen, but what about smaller firms?

I got a perspective on this from Jim McGee, a founding partner and knowledge guru at Diamond Technology Partners.

DTP, as you almost certainly know, is a four-year-old, rapidly growing technology consulting firm. DTP is "virtually officed" and specializes in helping clients deal with high-tech change--attributes that, in my mind, made it a perfect candidate for KM.

Not quite, says Jim.

"A formal system would have gotten in the way of efficient knowledge transfer" in the firm’s evolution so far, simply due to its small size.

"Up until now, we’ve relied upon informal personal networks;" Jim explains, "from the beginning, we’ve had ‘knowledge leader’ partners that are experts in particular areas. We’ve been small enough so that you can just pick up the phone and call the expert you need."

DTP launched a Lotus Notes knowledgebase in 1995, but it was largely unsuccessful due not only to the simpler phone call alternative, but because the data it contained was too abstract.

Recognizing that its growth will inevitably render the phone call solution impractical, DTP is moving forward with a new KM system. According to Jim, this one will provide more practical, process-level knowledge, which will include the "audit trail" of engagement documents as well as contextual information gathered from "after action reviews," which DTP is starting to perform at the end of engagements.

DTP’s experience illustrates an important point--KM has to be tailored to the organization and its culture, or it can’t work.

Looking beyond the criteria of size, that tailoring can take many forms; it may seem intuitive that a consulting firm can benefit from an electronic knowledgebase, but can you manage knowledge at, say, a steel mill?

In fact, Chaparral Steel is a leader in knowledge management--of the human contact variety.

For example, only a couple small teams of operators are trained on a new process; they then disperse and work among the rest of the crews, diffusing what they’ve learned person-to-person.

Constant informal experimentation is also encouraged among all employees at Chaparral; little bureaucracy is in place to prevent dissemination of the results, and mistakes are tolerated.

Chaparral also encourages knowledge transfer in its management structure--by replacing absent foremen with senior line employees, under the supervision of another foremen--who mans a subordinate position.

Such practices foster "organic" knowledge management. Given Chaparral’s focus on KM as a tool to constantly improve the steelmaking process, an electronic knowledgebase would be of little use; here, KM is about facilitating the creation of new ideas, not leveraging old ones.

The Graduate Business School at UT has long been a center of KM research. Former IM department chair Tom Davenport has authored two books on the subject, Working Knowledge: How Organizations Manage What They Know with IBM’s Larry Prusak, and Information Ecology. Tom has since moved on to direct the Andersen Consulting Institute for Strategic Change, but his excellent MIS381N--Information and Knowledge Management class is being taught by IBM’s David Smith next semester (and you can still get a seat!). MIS381N--Information and Technology Transfer and Application, taught by the IC² Institute’s David Gibson, may also be of interest.