KNOWLEDGE MANAGEMENT NOT A FAD

Rather than just the latest management fad, knowledge management has become a vital tool of trade for Australian business leaders. The role of knowledge and its management in Australian companies is proving the difference between obtaining that competitive advantage and failing to meet the challenges of the new business environment, according to a new report.

Knowledge Management in the New Business Environment is the latest research project of the Australian Business Foundation undertaken by Dr Richard Hall of the Australian Centre for Industrial Relations Research & Training (acirrt) of the University of Sydney.

The improved management of knowledge has a major part to play in the business success of both large and small enterprises in Australia according to Dr Hall.

"Of the 16 successful Australian organisations involved in the project, all saw knowledge and the effective management of knowledge as critical to their organisation's competitiveness", said Dr Hall.

"In the increasingly competitive global markets in which they operated, the traditional sources of competitive advantage – capital, access to the various factors of production, equipment and technology, production methods etc – are not as durable as they once were. The critical resource for these organisations is knowledge", he said.

The companies had clear strategic business objectives and a clear understanding of their competitive environment and harnessed knowledge to meet strategic goals.

Knowledge management was found to contribute to business performance by:

• Providing a better understanding of the business environment and the needs, preferences and business process of customers and end users;
• Supporting stronger strategic relationships with suppliers;
• Helping companies to enhance their position as leaders in their field, as innovators attuned to emerging trends and new developments;
• Achieving continuous improvements in costs, quality and timeliness of products and services; and
• Retaining key employees and their knowledge within the business.

The organisations implemented complementary initiatives, including the use of cross-divisional teams, expert circles, networks and communities of practice, to drive the success of knowledge management strategies.

Strong leadership was identified as instrumental in the success of embedding a knowledge culture in these organisations. CEOs demonstrating a passion for knowledge and an ability to inspire staff to 'go the extra mile' were present in many of the organisations studied.

All the organisations reported an intention to continue and intensify their knowledge management strategies, claiming a wide range of positive outcomes. Benefits identified included increasing and high levels of staff satisfaction, increased productivity, improved quality, reduced turnover and strong growth.

'The need for speed' was one of the most commonly noted imperatives. Many of the organisations face pressure to constantly reduce the time it takes to get new products or services to market, or the time it takes to deliver solutions, complete projects or satisfy orders.

"Knowing what you know and how to use it increases the speed to market", said Dr Hall.

"The real experiences of businesses with knowledge management strategies are illustrated in this report. They highlight that organisations which manage organisation and individual knowledge well will meet the challenges of today's faster and tougher business environment", said Narelle Kennedy, Chief Executive, Australian Business Foundation.

Australian Business Foundation, sponsored by leading industry organisation Australian Business Limited, is an independent, private sector think tank founded in 1997 in response to concerns about Australia's declining position on world competitiveness benchmarks and fuelled by the urgency for fresh insights and practical intelligence to boost Australia's capabilities and global competitiveness.

acirrt is one of Australia's leading multi-disciplinary research organisations. Established in 1989 and based in the School of Business at the University of Sydney, the Centre is a self-funding organisation that undertakes contract research, training and the provision of information services on the world of work.