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Knowledge Management in the new economy


New competitive strategies for successfully leading today's knowledge enterprise are captured in a ground-breaking global study by Korn/Ferry International and the University of Southern California's Center for Effective Organizations
The study reveals that there is still much to be done to bridge the gap between the rhetoric and reality of knowledge management: Only 35 percent of respondents say their company is actually incorporating new knowledge, methods and inventions.

The report, Strategies for the Knowledge Economy: From Rhetoric to Reality, is one of the most comprehensive studies to date that seeks to define knowledge management challenges and identify the current success of global firms in generating, retaining and leveraging knowledge.

Explains Windle B. Priem, President and CEO of Korn/Ferry International, ``Although companies are making large investments in technology and in hiring top talent, our study shows that they are still struggling with how to make the transition to a true knowledge enterprise. In fact, 61 percent of the respondents give their company low marks in generating new ideas and applications.''

``In an era marked by increasing executive mobility, changing competitive tactics and evolving corporate structures, leading the knowledge enterprise is about fostering a new set of behaviors at all levels of the organization,'' continues Mr. Priem. ``Not only is long-term corporate survival threatened, but also success in the near term. It is no surprise that successful knowledge management is rising quickly to the top of the leadership agenda.''

A Clear Strategy Needed

A clear strategy guides knowledge management investments and instills commitment in employees, who can plan their own development and feel that the company has a future. Yet 65 percent of the respondents say that their company doesn't have such a strategy in place.

``The CEO must communicate a strategy that gives employees an understanding of where the business is heading and what skills will be important in the future,'' explains Korn/Ferry's Mr. Priem. ``In a knowledge environment, it is important to have an inclusive culture of which every individual can feel a part.''

New Ways To Motivate

``Companies are asking whether knowledge workers can actually be led,'' says Mr. Priem. ``The study tells us that certainly knowledge workers cannot be ordered to share or to learn. But they will generally embrace the opportunity to be part of a learning organization if they can see how it will benefit themselves and help the company achieve its objectives.''

The study finds that the companies that are most successful in motivating their workforce to share knowledge are building knowledge-sharing explicitly into job responsibilities at all levels.

Explicit Rewards

Rewards attract and retain employees, foster organizational commitment and focus attention on the kinds of performance companies want to promote. In terms of remuneration, specific rewards should be created for knowledge-sharing.

``In order to motivate them to share their knowledge and to pull knowledge from elsewhere in the organization, employees need to have a real stake in the success of the enterprise,'' explains Professor David Finegold of the USC's Center for Effective Organizations at the Marshall School of Business. ``Employees must feel that sharing knowledge with co-workers outside their unit is a real part of their job that is recognized and rewarded, not something extrathat they do only after the real work for their unit is completed.''

About the Study

The study is based on in-depth research with 10 leading technology-intensive companies operating across a range of sectors inNorth America, Europe and Asia. The research includes analysis of a survey completed by more than 4,500 scientists,engineers and managers; interviews and focus groups with more than 500 business and technical leaders; and written documentation of the knowledge management, human resource practices and performance of these 10 companies.


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