1. Center for Knowledge Management Development Academy of the Philippines Improving Bottomlines through Knowledge Management Elena Avedillo-Cruz VP & Managing Director Center for Knowledge Management Development Academy of the Philippines Philippine Exporters Confederation, Inc. 2 nd Quarterly General Membership Meeting July 13, 2010; 1:30 – 5:30 pm; Sofitel Hotel

2. Center for Knowledge Management Development Academy of the Philippines Outline Why the Need for KM? Why the Need for KM? –Philippine Quality Award (PQA) Performance Excellence Framework What is Knowledge? What is Knowledge? –Data, Information, Knowledge –Explicit vs. Tacit What is Knowledge Management? What is Knowledge Management? 2

3. Why the Need for KM?

4. Signs that you need to manage your knowledge in the organization People do not know who to approach or where to go when they need information to solve a problem People are constantly re- inventing the wheel & duplicating efforts Mistakes are frequently committed twice or repeatedly There is no clear direction as to where the organization is heading and the reason for its existence 4

5. Signs that you need to manage your knowledge in the organization “Story-telling” or oral communication of information and knowledge is common “Story-telling” or oral communication of information and knowledge is common Knowledge is lost when employees leave the organization Knowledge sharing, if any, is limited to a few people. Knowledge is either fiercely protected by individuals or shared reluctantly by individuals when told to do so 5

6. Knowledge - the Key to the Future “The only thing that gives an organization a competitive edge, the only that is sustainable is what it knows, how it uses what it knows, and how fast it can know something new!” Laurence Prusak Knowledge Organization 6

7. ORGANIZATIONAL PROFILE: ENVIRONMENT, RELATIONSHIPS, and CHALLENGES 4 Measurement, Analysis and Knowledge Management 5 Workforce Focus 6 Process Management 7 Results 2 Strategic Planning 3 Customer and Market Focus 1 Leadership Philippine Quality Award Criteria for Performance Excellence Framework: A Systems Perspective KEY Organizational Performance RESULTS CORE PROCESSES/ CAPABILITIES SYSTEMATIC KNOWLEDGE MANAGEMENT PROCESS Baldrige National Quality Program, Criteria for Performance Excellence 7

8. Center for Knowledge Management Development Academy of the Philippines Importance of KM Knowledge transfer has become increasingly important to any organization Knowledge transfer has become increasingly important to any organization Knowledge is now recognized as the most valuable intangible asset Knowledge is now recognized as the most valuable intangible asset Knowledge has become a key driver for competitive advantage: productivity, quality, and innovation (and more) Knowledge has become a key driver for competitive advantage: productivity, quality, and innovation (and more) 8

9. What is Knowledge?

10. Center for Knowledge Management Development Academy of the Philippines Knowledge vs. Data vs. Information Unorganized Numbers, Words, Sounds, Images (i.e. cycle time or turnaround time) Data Arranged/ Processed Into Meaningful Patterns (i.e. correlation between cycle time and customer satisfaction index) Information Put Into Productive Use, Made Actionable (i.e. process evaluation and improvement) DATAINFORMATIONKNOWLEDGE Knowledge Management, Robert J. Osterhoff, 2005 10

11. Center for Knowledge Management Development Academy of the Philippines Two Types of Knowledge Explicit Policy manuals Work processes, admin procedures Strategic plan Website Tacit Know how Experience Personal talent Intuitive Innovative Knowledge Documented Codified Archived Not Documented Difficult to identify Knowledge Knowledge Management, Robert J. Osterhoff, 2005 11

12. What is Knowledge Management?

13. Center for Knowledge Management Development Academy of the Philippines 13 APO KM Definition KM is an integrated approach of creating, sharing and applying knowledge to enhance organizational productivity, profitability and growth. 13

14. Center for Knowledge Management Development Academy of the Philippines What’s Really New About KM? Knowledge Management is the discipline of enabling individuals, teams, and entire organizations to collectively and systematically create, share, and apply knowledge to better achieve their objectives 14

15. Center for Knowledge Management Development Academy of the Philippines 15 The Bottom Line for KM What knowledge, if it could be better managed, would make a big difference to achieving our objectives?

16. 16 What is the APO KM Framework?

17. Center for Knowledge Management Development Academy of the Philippines 17  Commenced in September 2007  Representation from China, India, Japan, Malaysia, Philippines, Singapore, Thailand, and Vietnam  Developed a framework that is applicable to all APO member countries  Considerations  Easily understood by APO member countries  Can be applied in any country and industry APO KM Framework: Background

18. Center for Knowledge Management Development Academy of the Philippines 18  To emphasize the importance of KM for organizational success  To provide an easy-to-understand introduction to KM  To highlight critical factors for the successful implementation of KM  To assist SMEs of APO member countries in leveraging KM for their benefit APO KM Framework: Purpose

19. Center for Knowledge Management Development Academy of the Philippines APO KM Framework 19 Create Share Apply Identify Store OUTCOMES KNOWLEDGE PROCESS ACCELERATORS People Processes Leadership Technology Quality Profitability Productivity Growth Team Capability Organizational Capability Individual Capability Learning Innovation Learning Innovation Societal Capacity

20. Center for Knowledge Management Development Academy of the Philippines APO KM Framework Starting point of the KM framework is the Vision and Mission of the organization Starting point of the KM framework is the Vision and Mission of the organization KM meets the business objectives of the organization KM meets the business objectives of the organization There are three levels in the framework: There are three levels in the framework: Accelerators Accelerators Knowledge Process Knowledge Process Outcomes Outcomes 20

21. Center for Knowledge Management Development Academy of the Philippines 21 Accelerators Accelerators help to propel and speed up the KM initiative in the organization Accelerators help to propel and speed up the KM initiative in the organization Four accelerators can be identified: Four accelerators can be identified: Leadership Leadership Technology Technology People People Processes Processes ACCELERATORS People Processes Leadership Technology

22. Center for Knowledge Management Development Academy of the Philippines 22 Accelerator: Leadership Drives the KM initiative in the organization Drives the KM initiative in the organization Ensures alignment of KM strategies and projects with the mission and vision of the organization Ensures alignment of KM strategies and projects with the mission and vision of the organization Provides support and resources for the implementation of KM projects Provides support and resources for the implementation of KM projects

23. Center for Knowledge Management Development Academy of the Philippines 23 Accelerator : Technology Accelerates the knowledge process through effective tools and techniques to enable participation across time and distance (e.g. Groupware, collaborative workspaces) Accelerates the knowledge process through effective tools and techniques to enable participation across time and distance (e.g. Groupware, collaborative workspaces) Provides a platform for retention of organizational knowledge Provides a platform for retention of organizational knowledge

24. Center for Knowledge Management Development Academy of the Philippines 24 Accelerator: People People are users as well as generators of knowledge People are users as well as generators of knowledge They create and possess intellectual capital They create and possess intellectual capital Trust is a prerequisite for knowledge sharing Trust is a prerequisite for knowledge sharing

25. Center for Knowledge Management Development Academy of the Philippines 25 Accelerator: Processes Social and technological steps that enhance the contribution of knowledge in the organization Social and technological steps that enhance the contribution of knowledge in the organization Systematic and effective processes can contribute to improving organizational productivity, profitability, quality, and growth Systematic and effective processes can contribute to improving organizational productivity, profitability, quality, and growth

26. Center for Knowledge Management Development Academy of the Philippines 26 Knowledge Process Refers to knowledge development and conversion processes Refers to knowledge development and conversion processes Five steps in the knowledge process: Five steps in the knowledge process: Identify Identify Create Create Store Store Share Share Apply Apply

27. Center for Knowledge Management Development Academy of the Philippines 27 Knowledge Process Step – Identify Initial crucial step of the knowledge process Initial crucial step of the knowledge process Critical knowledge needed to build the core competencies of the organization is identified Critical knowledge needed to build the core competencies of the organization is identified The knowledge gaps in the organization are identified in this step The knowledge gaps in the organization are identified in this step

28. Center for Knowledge Management Development Academy of the Philippines 28 Knowledge Process Step – Create Addresses knowledge gaps through knowledge conversion and generation of new knowledge Addresses knowledge gaps through knowledge conversion and generation of new knowledge Many ways to create new knowledge: Many ways to create new knowledge: Individual level Individual level Team level Team level Organizational level Organizational level

29. Center for Knowledge Management Development Academy of the Philippines 29 Knowledge Process Step – Store Collection and preservation of organizational knowledge Collection and preservation of organizational knowledge Various forms of storage Various forms of storage Organized for easy retrieval Organized for easy retrieval

30. Center for Knowledge Management Development Academy of the Philippines 30 Knowledge Process Step – Share Regular and sustained exchange of knowledge Regular and sustained exchange of knowledge Fosters continuous learning to achieve business goals Fosters continuous learning to achieve business goals Mutual trust and benefit help foster a culture of sharing Mutual trust and benefit help foster a culture of sharing Technology can be used to enhance sharing Technology can be used to enhance sharing

31. Socialization Yokogawa (Thailand) Ltd.

32. After Action Review, Lessons Learned and Best Practice Yokogawa (Thailand) Ltd.

33. Center for Knowledge Management Development Academy of the Philippines 33 Knowledge Process Step – Apply The use and reuse of knowledge in the organization The use and reuse of knowledge in the organization Translates knowledge into action Translates knowledge into action Knowledge only adds value when it is used to improve products and services Knowledge only adds value when it is used to improve products and services

34. Center for Knowledge Management Development Academy of the Philippines 34 Learning & Innovation Knowledge process enables learning and innovation at all levels and areas in the organization Knowledge process enables learning and innovation at all levels and areas in the organization New products, services, processes, markets, technologies, and business models New products, services, processes, markets, technologies, and business models Build individual, team, and organizational capability leading to societal capacity Build individual, team, and organizational capability leading to societal capacity

35. Center for Knowledge Management Development Academy of the Philippines Expected outcomes: Expected outcomes: Individual capability Individual capability Team capability Team capability Organizational capability Organizational capability Societal capability Societal capability Leading to: Leading to: Productivity Productivity Quality products and services Quality products and services Profitability Profitability Growth Growth 35 Outcomes

36. Center for Knowledge Management Development Academy of the Philippines APO KM Framework 36 Create Share Apply Identify Store OUTCOMES KNOWLEDGE PROCESS ACCELERATORS People Processes Leadership Technology Quality Profitability Productivity Growth Team Capability Organizational Capability Individual Capability Learning Innovation Learning Innovation Societal Capacity

37. 37 What is the APO KM Implementation Approach?

38. Center for Knowledge Management Development Academy of the Philippines 38 4Ds

39. Center for Knowledge Management Development Academy of the Philippines Case Study Migakiya Syndicate: Cluster KM for Businesses Co-Creation among SMEs 39 Showcase the possibilities of KM for SMEs, which can share and create core knowledge and skills beyond their individual enterprises – and thus establish strong business clusters

40. Center for Knowledge Management Development Academy of the Philippines Organizational Profile Industry: Local consortium of small manufacturers specializing in metallic polishing in Niigata, Japan Industry: Local consortium of small manufacturers specializing in metallic polishing in Niigata, Japan Date of Establishment: 2003 Date of Establishment: 2003 Management : Chamber of Commerce and Industry in Tsubame, Japan Management : Chamber of Commerce and Industry in Tsubame, Japan Business Domain: Joint operation of metallic polishing Business Domain: Joint operation of metallic polishing Number of Member Companies: 47 (as of March, 2009) Number of Member Companies: 47 (as of March, 2009) 40

41. Center for Knowledge Management Development Academy of the Philippines Background of KM Initiative Shift from manufacture of Japanese nails to copperware and then to metallic Western tableware Shift from manufacture of Japanese nails to copperware and then to metallic Western tableware Half of Western tableware imported by the U.S. were made in Tsubame in the early 1970s Half of Western tableware imported by the U.S. were made in Tsubame in the early 1970s Lower labor cost (PR China) resulted in decline of Tsubame craftspeople doing metal polishing from 1,700 to 600 Lower labor cost (PR China) resulted in decline of Tsubame craftspeople doing metal polishing from 1,700 to 600 In 2001, managers of more than 30 metal-polishing companies in Tsubame consulted with CCI In 2001, managers of more than 30 metal-polishing companies in Tsubame consulted with CCI 41

42. Center for Knowledge Management Development Academy of the Philippines Background of KM Initiative Twice a month discussions for 6 months with CCI Twice a month discussions for 6 months with CCI Benchmarking visit to Chinese manufacturers of Western tableware in 2002 Benchmarking visit to Chinese manufacturers of Western tableware in 2002 Realization of metal polishing as their core competency, not tableware production Realization of metal polishing as their core competency, not tableware production Plan for consortium to market and operate metal- polishing industry Plan for consortium to market and operate metal- polishing industry Continued benchmarking with several similar business consortiums in Japan Continued benchmarking with several similar business consortiums in Japan 42

43. Center for Knowledge Management Development Academy of the Philippines Background of KM Initiative Three Big Obstacles 1. Information Flow Who chooses which companies will get orders – and how? 2. Production & Quality Management Who is in charge of quality, cost, and delivery of products/services, and will they manage this process? Who is in charge of quality, cost, and delivery of products/services, and will they manage this process? 3. Public Relations How will we market? Will anyone order metal-polishing services through the Internet? How will we market? Will anyone order metal-polishing services through the Internet? 43

44. Center for Knowledge Management Development Academy of the Philippines KM Implementation Collaborative KM: (1) The Model Website accepts orders from industries (1) The Model Website accepts orders from industries (2) Systems of Order Intake Manual for collective order intake (2) Systems of Order Intake Manual for collective order intake (3) Technological Innovation Identification of magnesium polishing as a potential area of needed knowledge and skills (3) Technological Innovation Identification of magnesium polishing as a potential area of needed knowledge and skills (4) Public Relations - Search Engine Optimization (SEO) (4) Public Relations - Search Engine Optimization (SEO) - News releases - News releases - Promo beer mug - Promo beer mug 44

45. Center for Knowledge Management Development Academy of the Philippines 45

46. Center for Knowledge Management Development Academy of the Philippines Results Achieved Gain of new business Gain of new business – metal polishing of digital cameras, cases for hard disks, motorbike parts, building products industry – revenue reached JPY20M 1 st yr and increased to JPY30M 2 nd yr and JPY100M in the last yr. Increase of craftspeople’s motivation Increase of craftspeople’s motivation – sharing knowledge and skills – improve technical capabilities – increase their own business 46

47. Center for Knowledge Management Development Academy of the Philippines Key Lessons See knowledge and skills from a different perspective See knowledge and skills from a different perspective – redefinition of their core knowledge and skills Build relations of trust before IT infrastructure Build relations of trust before IT infrastructure – trust contributes to successful KM, especially collaborative KM among multiple companies Form a business cluster among SMEs Form a business cluster among SMEs – sharing of specialties can boost capability of small firms and build up opportunities for larger businesses 47

48. Learning is not compulsory, neither is survival - W. Edwards Deming

49. 49